1.1 	A bill for an act
1.2 	relating to taxation; making changes to conform with certain federal tax law 
1.3 	changes; adopting federal adjusted gross income as the starting point for calculating 
1.4 	individual income tax; making policy and technical changes to various tax-related 
1.5 	provisions including provisions related to the individual income tax, corporate 
1.6 	franchise tax, estate tax, sales and use tax, gross revenues tax, gross receipts tax, 
1.7 	property tax, partnership tax, tobacco tax, minerals tax, and other miscellaneous 
1.8 	tax provisions; making changes to the property tax refund program; providing for 
1.9 	registration and taxation of unmanned aircraft; modifying provisions related to 
1.10 	local government aid and credits; modifying referendum dates; appropriating 
1.11 	money;amending Minnesota Statutes 2016, sections 116J.8737, subdivisions 5, 
1.12 	12; 123A.455, subdivision 1; 126C.01, subdivision 3; 162.145, subdivision 3; 
1.13 	174.03, subdivision 1b; 197.603, subdivision 2; 216B.36; 237.19; 270.12, 
1.14 	subdivisions 2, 3; 270.41, subdivision 3; 270.96, subdivision 1; 270A.03, 
1.15 	subdivision 7; 270B.08, subdivision 2; 270C.85, subdivision 2; 270C.89, 
1.16 	subdivision 2; 270C.91; 272.02, subdivisions 27, 49, 81, by adding a subdivision; 
1.17 	272.025, subdivision 3; 273.032; 273.061, subdivision 9; 273.11, subdivision 12; 
1.18 	273.1115, subdivision 2; 273.112, subdivision 6; 273.113, subdivision 3; 273.119, 
1.19 	subdivision 2; 273.1231, subdivisions 3, 4; 273.124, subdivisions 1, 3a, 8, 9, 14, 
1.20 	17, 21, by adding a subdivision; 273.1245, subdivision 2; 273.125, subdivision 3; 
1.21 	273.128, subdivision 1; 273.13, subdivision 35, by adding a subdivision; 273.136, 
1.22 	subdivision 2; 273.1384, subdivision 3; 273.18; 274.14; 274.16; 275.025, 
1.23 	subdivision 3, by adding subdivisions; 276A.01, subdivision 4; 282.01, subdivision 
1.24 	6; 287.21, subdivision 1; 289A.08, subdivisions 1, 6, 7; 289A.25, subdivision 1; 
1.25 	289A.31, subdivision 2; 289A.37, subdivision 6; 289A.38, subdivisions 7, 10; 
1.26 	289A.42; 289A.50, subdivision 1; 289A.60, subdivision 24; 290.01, subdivisions 
1.27 	6, 22, by adding subdivisions; 290.0131, subdivisions 1, 3, by adding subdivisions; 
1.28 	290.0132, subdivisions 1, 7, by adding subdivisions; 290.0133, subdivision 6, by 
1.29 	adding a subdivision; 290.0134, by adding subdivisions; 290.0136; 290.05, 
1.30 	subdivision 3; 290.06, subdivisions 1, 2c, 2d, by adding a subdivision; 290.067, 
1.31 	subdivision 2a; 290.0671, subdivision 7; 290.0672, subdivision 2; 290.0681, 
1.32 	subdivisions 3, 4; 290.0685, subdivision 1, by adding a subdivision; 290.0802, 
1.33 	subdivisions 2, 3; 290.091, subdivision 3; 290.0921, subdivision 8; 290.0922, 
1.34 	subdivision 1; 290.095, subdivision 4; 290.21, by adding a subdivision; 290.34, 
1.35 	by adding a subdivision; 290.92, subdivisions 1, 28; 290A.03, subdivisions 4, 12; 
1.36 	290A.04, subdivisions 2h, 4, by adding a subdivision; 290A.05; 290A.08; 290A.09; 
1.37 	290B.04, subdivision 1; 290B.09, subdivision 1; 291.03, subdivisions 8, 10; 295.50, 
1.38 	subdivisions 4, 9b, by adding subdivisions; 297A.61, subdivision 18; 297A.67, 
1.39 	subdivision 12, by adding subdivisions; 297A.68, subdivisions 17, 25, 29, 44; 
2.1 	297A.70, subdivisions 3, 7, 16, by adding subdivisions; 297A.71, subdivisions 22, 
2.2 	45, by adding subdivisions; 297A.77, by adding a subdivision; 297A.84; 297A.85; 
2.3 	297A.993, by adding a subdivision; 297B.01, subdivision 14; 297B.03; 297F.01, 
2.4 	subdivisions 19, 23, by adding a subdivision; 297F.17, subdivision 6; 297G.16, 
2.5 	subdivision 7; 298.225, subdivision 1; 298.28, subdivisions 3, 9a; 360.013, by 
2.6 	adding subdivisions; 360.55, by adding a subdivision; 360.62; 412.221, subdivision 
2.7 	2; 426.19, subdivision 2; 447.045, subdivisions 2, 3, 4, 6, 7; 452.11; 455.24; 455.29; 
2.8 	469.171, subdivision 4; 469.177, subdivision 1; 469.1812, subdivision 1, by adding 
2.9 	subdivisions; 469.190, subdivisions 1, 5; 469.316, subdivision 1; 469.317; 469.319, 
2.10 	subdivision 4; 471.57, subdivision 3; 471.571, subdivision 3; 471.572, subdivision 
2.11 	4; 473F.02, subdivision 4; 473F.05; 473H.05, subdivision 1; 473H.08, subdivisions 
2.12 	1, 4, by adding a subdivision; 474A.02, subdivision 22b; 477A.013, subdivision 
2.13 	13; 477A.016; Minnesota Statutes 2017 Supplement, sections 126C.17, subdivision 
2.14 	9; 205.10, subdivision 3a; 205A.05, subdivision 1a; 270A.03, subdivision 5; 
2.15 	270C.445, subdivision 6; 270C.89, subdivision 1; 271.21, subdivision 2; 272.115, 
2.16 	subdivision 1; 273.0755; 273.13, subdivisions 22, 23, 25, 34; 273.1384, subdivision 
2.17 	2; 273.1387, subdivision 3; 274.01, subdivision 1; 275.025, subdivision 1; 276.04, 
2.18 	subdivision 3; 278.01, subdivision 1; 289A.02, subdivision 7; 289A.12, subdivision 
2.19 	14; 289A.31, subdivision 1; 289A.35; 289A.37, subdivision 2; 290.01, subdivisions 
2.20 	4a, 19, 31; 290.0131, subdivision 10; 290.0132, subdivisions 21, 26; 290.0133, 
2.21 	subdivision 12; 290.0137; 290.05, subdivision 1; 290.067, subdivisions 1, 2b; 
2.22 	290.0671, subdivision 1; 290.0672, subdivision 1; 290.0681, subdivisions 1, 2; 
2.23 	290.0684, subdivisions 1, 2; 290.0686, subdivision 1; 290.091, subdivision 2; 
2.24 	290.17, subdivisions 2, 4; 290.31, subdivision 1; 290A.03, subdivisions 3, 8, 13, 
2.25 	15; 291.005, subdivision 1; 291.03, subdivisions 9, 11; 297A.61, subdivision 3; 
2.26 	297A.67, subdivisions 6, 34; 297A.70, subdivisions 4, 20; 297A.75, subdivisions 
2.27 	1, 2, 3; 297B.01, subdivision 16; 297E.02, subdivision 3; 298.227; 462D.03, 
2.28 	subdivision 2; 462D.06, subdivisions 1, 2; 475.59, subdivision 2; 477A.015; 
2.29 	477A.03, subdivision 2a; Laws 1986, chapter 379, sections 1, subdivision 1; 2, 
2.30 	subdivision 1; Laws 2008, chapter 366, article 5, sections 26, as amended; 33, as 
2.31 	amended; Laws 2011, First Special Session chapter 7, article 4, section 10, 
2.32 	subdivision 3; Laws 2017, First Special Session chapter 1, article 3, section 32; 
2.33 	article 8, section 3; article 10, section 4; proposing coding for new law in Minnesota 
2.34 	Statutes, chapters 16A; 16B; 117; 222; 289A; 290; 416; 459; 469; repealing 
2.35 	Minnesota Statutes 2016, sections 10A.322, subdivision 4; 13.4967, subdivision 
2.36 	2; 273.1315; 275.29; 289A.38, subdivisions 7, 8, 9; 290.01, subdivision 29a; 
2.37 	290.0131, subdivisions 7, 11, 12, 13; 290.0132, subdivisions 8, 19, 20; 290.0133, 
2.38 	subdivisions 13, 14; 290.06, subdivision 23; 290.0921, subdivisions 1, 2, 3a, 4, 6; 
2.39 	290.10, subdivision 2; 477A.085; Minnesota Statutes 2017 Supplement, sections 
2.40 	327C.01, subdivision 13; 327C.16; Minnesota Rules, part 4503.1400, subpart 4.
2.41 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.42 	ARTICLE 1
2.43 	FEDERAL TAX CONFORMITY

2.44 	Section 1. Minnesota Statutes 2017 Supplement, section 270A.03, subdivision 5, is 
2.45 	amended to read:
2.46 		Subd. 5.Debt. (a) "Debt" means a legal obligation of a natural person to pay a fixed and 
2.47 	certain amount of money, which equals or exceeds $25 and which is due and payable to a 
2.48 	claimant agency. The term includes criminal fines imposed under section 609.10 or 609.125, 
2.49 	fines imposed for petty misdemeanors as defined in section 609.02, subdivision 4a, and 
3.1 	restitution. A debt may arise under a contractual or statutory obligation, a court order, or 
3.2 	other legal obligation, but need not have been reduced to judgment.
3.3 	A debt includes any legal obligation of a current recipient of assistance which is based 
3.4 	on overpayment of an assistance grant where that payment is based on a client waiver or 
3.5 	an administrative or judicial finding of an intentional program violation; or where the debt 
3.6 	is owed to a program wherein the debtor is not a client at the time notification is provided 
3.7 	to initiate recovery under this chapter and the debtor is not a current recipient of food support, 
3.8 	transitional child care, or transitional medical assistance.
3.9 	(b) A debt does not include any legal obligation to pay a claimant agency for medical 
3.10 	care, including hospitalization if the income of the debtor at the time when the medical care 
3.11 	was rendered does not exceed the following amount:
3.12 	(1) for an unmarried debtor, an income of $12,560$13,180 or less;
3.13 	(2) for a debtor with one dependent, an income of $16,080$16,878 or less;
3.14 	(3) for a debtor with two dependents, an income of $19,020$19,959 or less;
3.15 	(4) for a debtor with three dependents, an income of $21,580$22,643 or less;
3.16 	(5) for a debtor with four dependents, an income of $22,760$23,887 or less; and
3.17 	(6) for a debtor with five or more dependents, an income of $23,730$24,900 or less.
3.18 	For purposes of this paragraph, "debtor" means the individual whose income, together 
3.19 	with the income of the individual's spouse, other than a separated spouse, brings the 
3.20 	individual within the income provisions of this paragraph. For purposes of this paragraph, 
3.21 	a spouse, other than a separated spouse, shall be considered a dependent.
3.22 	(c) The commissioner shall adjust the income amounts in paragraph (b) by the percentage 
3.23 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
3.24 	that in section 1(f)(3)(B) the word "2014""2017" shall be substituted for the word "1992." 
3.25 	For 2016, the commissioner shall then determine the percent change from the 12 months 
3.26 	ending on August 31, 2014, to the 12 months ending on August 31, 2015, and in each 
3.27 	subsequent year, from the 12 months ending on August 31, 2014, to the 12 months ending 
3.28 	on August 31 of the year preceding the taxable year. "2016." The determination of the 
3.29 	commissioner pursuant to this subdivision shall not be considered a "rule" and shall not be 
3.30 	subject to the Administrative Procedure Act contained in chapter 14. The income amount 
3.31 	as adjusted must be rounded to the nearest $10 amount. If the amount ends in $5, the amount 
3.32 	is rounded up to the nearest $10 amount.
4.1 	(d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of the 
4.2 	dollar amount of the premium authorized under section 256L.15, subdivision 1a.

4.3 	EFFECTIVE DATE. This section is effective for taxable year beginning after December 
4.4 	31, 2017.

4.5 	Sec. 2. Minnesota Statutes 2017 Supplement, section 289A.02, subdivision 7, is amended 
4.6 	to read:
4.7 		Subd. 7.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
4.8 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
4.9 	16, 2016 March 31, 2018.

4.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
4.11 	31, 2017.

4.12 	Sec. 3. Minnesota Statutes 2016, section 289A.08, subdivision 1, is amended to read:
4.13 		Subdivision 1.Generally; individuals. (a) A taxpayer must file a return for each taxable 
4.14 	year the taxpayer is required to file a return under section 6012 of the Internal Revenue 
4.15 	Code or meets the requirements under paragraph (d) to file a return, except that:
4.16 	(1) an individual who is not a Minnesota resident for any part of the year is not required 
4.17 	to file a Minnesota income tax return if the individual's gross income derived from Minnesota 
4.18 	sources as determined under sections 290.081, paragraph (a), and 290.17, is less than the 
4.19 	filing requirements for a single individual who is a full year resident of Minnesota; and
4.20 	(2) an individual who is a Minnesota resident is not required to file a Minnesota income 
4.21 	tax return if the individual's gross income derived from Minnesota sources as determined 
4.22 	under section 290.17, less the subtractions allowed under section 290.0132, subdivisions 
4.23 	12 and 15, is less than the filing requirements for a single individual who is a full-year 
4.24 	resident of Minnesota.
4.25 	(b) The decedent's final income tax return, and other income tax returns for prior years 
4.26 	where the decedent had gross income in excess of the minimum amount at which an 
4.27 	individual is required to file and did not file, must be filed by the decedent's personal 
4.28 	representative, if any. If there is no personal representative, the return or returns must be 
4.29 	filed by the transferees, as defined in section 270C.58, subdivision 3, who receive property 
4.30 	of the decedent.
4.31 	(c) The term "gross income," as it is used in this section, has the same meaning given it 
4.32 	in section 290.01, subdivision 20.
5.1 	(d) The commissioner of revenue shall annually determine the gross income levels at 
5.2 	which individuals are required to file a return for each taxable year based on the amounts 
5.3 	that may be deducted under section 290.0803.

5.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
5.5 	31, 2017.

5.6 	Sec. 4. Minnesota Statutes 2016, section 289A.08, subdivision 7, is amended to read:
5.7 		Subd. 7.Composite income tax returns for nonresident partners, shareholders, and 
5.8 	beneficiaries. (a) The commissioner may allow a partnership with nonresident partners to 
5.9 	file a composite return and to pay the tax on behalf of nonresident partners who have no 
5.10 	other Minnesota source income. This composite return must include the names, addresses, 
5.11 	Social Security numbers, income allocation, and tax liability for the nonresident partners 
5.12 	electing to be covered by the composite return.
5.13 	(b) The computation of a partner's tax liability must be determined by multiplying the 
5.14 	income allocated to that partner by the highest rate used to determine the tax liability for 
5.15 	individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard 
5.16 	deductions, or personal exemptions are not allowed.
5.17 	(c) The partnership must submit a request to use this composite return filing method for 
5.18 	nonresident partners. The requesting partnership must file a composite return in the form 
5.19 	prescribed by the commissioner of revenue. The filing of a composite return is considered 
5.20 	a request to use the composite return filing method.
5.21 	(d) The electing partner must not have any Minnesota source income other than the 
5.22 	income from the partnership and other electing partnerships. If it is determined that the 
5.23 	electing partner has other Minnesota source income, the inclusion of the income and tax 
5.24 	liability for that partner under this provision will not constitute a return to satisfy the 
5.25 	requirements of subdivision 1. The tax paid for the individual as part of the composite return 
5.26 	is allowed as a payment of the tax by the individual on the date on which the composite 
5.27 	return payment was made. If the electing nonresident partner has no other Minnesota source 
5.28 	income, filing of the composite return is a return for purposes of subdivision 1.
5.29 	(e) This subdivision does not negate the requirement that an individual pay estimated 
5.30 	tax if the individual's liability would exceed the requirements set forth in section 289A.25. 
5.31 	The individual's liability to pay estimated tax is, however, satisfied when the partnership 
5.32 	pays composite estimated tax in the manner prescribed in section 289A.25.
6.1 	(f) If an electing partner's share of the partnership's gross income from Minnesota sources 
6.2 	is less than the filing requirements for a nonresident under this subdivision, the tax liability 
6.3 	is zero. However, a statement showing the partner's share of gross income must be included 
6.4 	as part of the composite return.
6.5 	(g) The election provided in this subdivision is only available to a partner who has no 
6.6 	other Minnesota source income and who is either (1) a full-year nonresident individual or 
6.7 	(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the 
6.8 	Internal Revenue Code.
6.9 	(h) A corporation defined in section 290.9725 and its nonresident shareholders may 
6.10 	make an election under this paragraph. The provisions covering the partnership apply to 
6.11 	the corporation and the provisions applying to the partner apply to the shareholder.
6.12 	(i) Estates and trusts distributing current income only and the nonresident individual 
6.13 	beneficiaries of the estates or trusts may make an election under this paragraph. The 
6.14 	provisions covering the partnership apply to the estate or trust. The provisions applying to 
6.15 	the partner apply to the beneficiary.
6.16 	(j) For the purposes of this subdivision, "income" means the partner's share of federal 
6.17 	adjusted gross income from the partnership modified by the additions provided in section 
6.18 	290.0131, subdivisions 8 to 11 10, 15, and 17, and the subtractions provided in: (1) section 
6.19 	290.0132, subdivision 9, to the extent the amount is assignable or allocable to Minnesota 
6.20 	under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed 
6.21 	under section 290.0132, subdivision 9, is only allowed on the composite tax computation 
6.22 	to the extent the electing partner would have been allowed the subtraction.

6.23 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
6.24 	31, 2017.

6.25 	Sec. 5. Minnesota Statutes 2017 Supplement, section 289A.12, subdivision 14, is amended 
6.26 	to read:
6.27 		Subd. 14. Reporting exempt interest and exempt-interest dividends. (a) A regulated 
6.28 	investment company paying $10 or more in exempt-interest dividends to an individual who 
6.29 	is a resident of Minnesota, or any person receiving $10 or more of exempt interest or 
6.30 	exempt-interest dividends and paying as nominee to an individual who is a resident of 
6.31 	Minnesota, must make a return indicating the amount of the exempt interest or 
6.32 	exempt-interest dividends, the name, address, and Social Security number of the recipient, 
6.33 	and any other information that the commissioner specifies. The return must be provided to 
7.1 	the recipient by February 15 of the year following the year of the payment. The return 
7.2 	provided to the recipient must include a clear statement, in the form prescribed by the 
7.3 	commissioner, that the exempt interest or exempt-interest dividends must be included in 
7.4 	the computation of Minnesota taxable income. By June 1 of each year, the payer must file 
7.5 	a copy of the return with the commissioner.
7.6 	(b) For purposes of this subdivision, the following definitions apply.
7.7 	(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in section 
7.8 	852(b)(5) of the Internal Revenue Code, but does not include the portion of exempt-interest 
7.9 	dividends that are not required to be added to federal taxable adjusted gross income under 
7.10 	section 290.0131, subdivision 2, paragraph (b).
7.11 	(2) "Regulated investment company" means regulated investment company as defined 
7.12 	in section 851(a) of the Internal Revenue Code or a fund of the regulated investment company 
7.13 	as defined in section 851(g) of the Internal Revenue Code.
7.14 	(3) "Exempt interest" means income on obligations of any state other than Minnesota, 
7.15 	or a political or governmental subdivision, municipality, or governmental agency or 
7.16 	instrumentality of any state other than Minnesota, and exempt from federal income taxes 
7.17 	under the Internal Revenue Code or any other federal statute.

7.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
7.19 	31, 2017.

7.20 	Sec. 6. Minnesota Statutes 2017 Supplement, section 289A.35, is amended to read:
7.21 	289A.35 ASSESSMENTS ON RETURNS.
7.22 	(a) The commissioner may audit and adjust the taxpayer's computation of federal adjusted 
7.23 	gross income, federal taxable income, items of federal tax preferences, or federal credit 
7.24 	amounts to make them conform with the provisions of chapter 290 or section 298.01. If a 
7.25 	return has been filed, the commissioner shall enter the liability reported on the return and 
7.26 	may make any audit or investigation that is considered necessary.
7.27 	(b) Upon petition by a taxpayer, and when the commissioner determines that it is in the 
7.28 	best interest of the state, the commissioner may allow S corporations and partnerships to 
7.29 	receive orders of assessment issued under section 270C.33, subdivision 4, on behalf of their 
7.30 	owners, and to pay liabilities shown on such orders. In such cases, the owners' liability must 
7.31 	be calculated using the method provided in section 289A.08, subdivision 7, paragraph (b).
8.1 	(c) A taxpayer may petition the commissioner for the use of the method described in 
8.2 	paragraph (b) after the taxpayer is notified that an audit has been initiated and before an 
8.3 	order of assessment has been issued.
8.4 	(d) A determination of the commissioner under paragraph (b) to grant or deny the petition 
8.5 	of a taxpayer cannot be appealed to the Tax Court or any other court.
8.6 	(e) The commissioner may audit and adjust the taxpayer's computation of tax under 
8.7 	chapter 291. In the case of a return filed pursuant to section 289A.10, the commissioner 
8.8 	shall notify the estate no later than nine months after the filing date, as provided by section 
8.9 	289A.38, subdivision 2, whether the return is under examination or the return has been 
8.10 	processed as filed.

8.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.12 	31, 2017.

8.13 	Sec. 7. Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to 
8.14 	read:
8.15 		Subd. 14a.Surviving spouse. The term "surviving spouse" means an individual who is 
8.16 	a surviving spouse under section 2(a) of the Internal Revenue Code for the taxable year.

8.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.18 	31, 2017.

8.19 	Sec. 8. Minnesota Statutes 2017 Supplement, section 290.01, subdivision 19, is amended 
8.20 	to read:
8.21 		Subd. 19.Net income. (a) For a corporation taxable under section 290.02, an estate, or 
8.22 	a trust, the term "net income" means the federal taxable income, as defined in section 63 of 
8.23 	the Internal Revenue Code of 1986, as amended through the date named in this subdivision, 
8.24 	incorporating the federal effective dates of changes to the Internal Revenue Code and any 
8.25 	elections made by the taxpayer in accordance with the Internal Revenue Code in determining 
8.26 	federal taxable income for federal income tax purposes, and with the modifications provided 
8.27 	in sections 290.0131 to 290.0136.
8.28 	(b) For an individual, the term "net income" means federal adjusted gross income with 
8.29 	the modifications provided in sections 290.0131, 290.0132, 290.0135, and 290.0136.
8.30 	(c) In the case of a regulated investment company or a fund thereof, as defined in section 
8.31 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
9.1 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
9.2 	except that:
9.3 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
9.4 	Revenue Code does not apply;
9.5 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue 
9.6 	Code must be applied by allowing a deduction for capital gain dividends and exempt-interest 
9.7 	dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; 
9.8 	and
9.9 	(3) the deduction for dividends paid must also be applied in the amount of any 
9.10 	undistributed capital gains which the regulated investment company elects to have treated 
9.11 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
9.12 	(d) The net income of a real estate investment trust as defined and limited by section 
9.13 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
9.14 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
9.15 	(e) The net income of a designated settlement fund as defined in section 468B(d) of the 
9.16 	Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal 
9.17 	Revenue Code.
9.18 	(f) For a taxpayer with a valid election under section 965(h) of the Internal Revenue 
9.19 	Code, including any successor in interest, net income for the taxable year includes the ratable 
9.20 	amount of deferred foreign income on which the taxpayer makes a federal tax payment in 
9.21 	that year.
9.22 	(g) The Internal Revenue Code of 1986, as amended through December 16, 2016 March 
9.23 	31, 2018, shall be in effect for taxable years beginning after December 31, 1996.
9.24 	(h) Except as otherwise provided, references to the Internal Revenue Code in this 
9.25 	subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of 
9.26 	determining net income for the applicable year.

9.27 	EFFECTIVE DATE. This section is effective the day following final enactment, except 
9.28 	the changes incorporated by federal changes are effective retroactively at the same time as 
9.29 	the changes were effective for federal purposes and the changes amending the new paragraph 
9.30 	(a) and adding paragraph (b) are effective for taxable years beginning after December 31, 
9.31 	2017.

10.1 	Sec. 9. Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to 
10.2 	read:
10.3 		Subd. 21a.Adjusted gross income. The terms "adjusted gross income" and "federal 
10.4 	adjusted gross income" mean adjusted gross income, as defined in section 62 of the Internal 
10.5 	Revenue Code, as amended through the date named in subdivision 19, incorporating the 
10.6 	federal effective date of changes to the Internal Revenue Code and any elections made by 
10.7 	the taxpayer under the Internal Revenue Code in determining federal adjusted gross income 
10.8 	for federal income tax purposes.

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

10.10 	Sec. 10. Minnesota Statutes 2016, section 290.01, subdivision 22, is amended to read:
10.11 		Subd. 22.Taxable net income. For tax years beginning after December 31, 1986 2017, 
10.12 	the term "taxable net income" means:
10.13 	(1) for resident individuals the same as, net income less the deductions allowed under 
10.14 	section 290.0803;
10.15 	(2) for individuals who were not residents of Minnesota for the entire year, the same as
10.16 	net income less the deductions allowed under section 290.0803, except that the tax is imposed 
10.17 	only on the Minnesota apportioned share of that income as determined pursuant to section 
10.18 	290.06, subdivision 2c, paragraph (e);
10.19 	(3) for all other taxpayers, the part of net income that is allocable to Minnesota by 
10.20 	assignment or apportionment under one or more of sections 290.17, 290.191, 290.20, and 
10.21 	290.36.

10.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
10.23 	31, 2017.

10.24 	Sec. 11. Minnesota Statutes 2017 Supplement, section 290.01, subdivision 31, is amended 
10.25 	to read:
10.26 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
10.27 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
10.28 	16, 2016 March 31, 2018. Internal Revenue Code also includes any uncodified provision 
10.29 	in federal law that relates to provisions of the Internal Revenue Code that are incorporated 
10.30 	into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1, 
10.31 	subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as 
10.32 	amended through March 18, 2010.

11.1 	EFFECTIVE DATE. This section is effective the day following final enactment and 
11.2 	applies to the same taxable years as the changes incorporated by federal changes are effective 
11.3 	for federal purposes, including any provisions that are retroactive to taxable years beginning 
11.4 	after December 31, 2016.

11.5 	Sec. 12. Minnesota Statutes 2016, section 290.0131, subdivision 1, is amended to read:
11.6 		Subdivision 1.Definition; scope. (a) For the purposes of this section, "addition" means 
11.7 	an amount that must be added to federal taxable adjusted gross income, or for estates and 
11.8 	trusts, federal taxable income, in computing net income for the taxable year to which the 
11.9 	amounts relate.
11.10 	(b) The additions in this section apply to individuals, estates, and trusts.
11.11 	(c) Unless specifically indicated or unless the context clearly indicates otherwise, only 
11.12 	amounts that were deducted or excluded in computing federal taxable adjusted gross income, 
11.13 	or for estates and trusts, federal taxable income, are an addition under this section.

11.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.15 	31, 2017.

11.16 	Sec. 13. Minnesota Statutes 2016, section 290.0131, subdivision 3, is amended to read:
11.17 		Subd. 3.Income, sales and use, motor vehicle sales, or excise taxes paid. (a) For trusts 
11.18 	and estates, the amount of income, sales and use, motor vehicle sales, or excise taxes paid 
11.19 	or accrued within the taxable year under this chapter and the amount of taxes based on net 
11.20 	income, sales and use, motor vehicle sales, or excise taxes paid to any other state or to any 
11.21 	province or territory of Canada is an addition to the extent deducted under section 63(d) of 
11.22 	the Internal Revenue Code.
11.23 	(b) The addition under paragraph (a) may not be more than the amount by which the 
11.24 	state itemized deduction exceeds the amount of the standard deduction as defined in section 
11.25 	63(c) of the Internal Revenue Code. For the purpose of this subdivision, income, sales and 
11.26 	use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed under 
11.27 	subdivision 12.

11.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.29 	31, 2017.

12.1 	Sec. 14. Minnesota Statutes 2017 Supplement, section 290.0131, subdivision 10, is amended 
12.2 	to read:
12.3 		Subd. 10.Section 179 expensing. Effective for property placed in service in taxable 
12.4 	years beginning before January 1, 2018, 80 percent of the amount by which the deduction 
12.5 	allowed under the dollar limits of section 179 of the Internal Revenue Code exceeds the 
12.6 	deduction allowable by section 179 of the Internal Revenue Code, as amended through 
12.7 	December 31, 2003, is an addition.

12.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
12.9 	31, 2017.

12.10 	Sec. 15. Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision 
12.11 	to read:
12.12 		Subd. 15.Foreign-derived intangible income. The amount of foreign-derived intangible 
12.13 	income deducted under section 250 of the Internal Revenue Code for the taxable year is an 
12.14 	addition.

12.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
12.16 	31, 2017.

12.17 	Sec. 16. Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision 
12.18 	to read:
12.19 		Subd. 16.529 plan distributions for K-12 expenses. The lesser of the following amounts 
12.20 	is an addition:
12.21 	(1) the total distributions for the taxable year from a qualified plan under section 529 of 
12.22 	the Internal Revenue Code, owned by the taxpayer, that are expended for qualified higher 
12.23 	education expenses under section 529(c)(7) of the Internal Revenue Code (expenses for 
12.24 	tuition for elementary or secondary public, private, or religious school); or
12.25 	(2) the total amount required to be reported to the taxpayer by any trustee of a qualified 
12.26 	tuition plan under section 529 of the Internal Revenue Code as earnings on Internal Revenue 
12.27 	Service Form 1099Q for the taxable year.

12.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
12.29 	31, 2017.

13.1 	Sec. 17. Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision 
13.2 	to read:
13.3 		Subd. 17.Qualified business income addition. For a trust or estate, the amount deducted 
13.4 	under section 199A of the Internal Revenue Code in computing the federal taxable income 
13.5 	of the trust or estate is an addition.

13.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
13.7 	31, 2017.

13.8 	Sec. 18. Minnesota Statutes 2016, section 290.0132, subdivision 1, is amended to read:
13.9 		Subdivision 1.Definition; scope. (a) For the purposes of this section, "subtraction" 
13.10 	means an amount that shall is allowed to be subtracted from federal taxable adjusted gross
13.11 	income, or for estates and trusts, federal taxable income, in computing net income for the 
13.12 	taxable year to which the amounts relate.
13.13 	(b) The subtractions in this section apply to individuals, estates, and trusts.
13.14 	(c) Unless specifically indicated or unless the context clearly indicates otherwise, no 
13.15 	amount deducted, subtracted, or otherwise excluded in computing federal taxable adjusted 
13.16 	gross income, or for estates and trusts, federal taxable income, is a subtraction under this 
13.17 	section.

13.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
13.19 	31, 2017.

13.20 	Sec. 19. Minnesota Statutes 2016, section 290.0132, subdivision 7, is amended to read:
13.21 		Subd. 7.Charitable contributions for taxpayers who do not itemize. To the extent 
13.22 	not deducted or not deductible under section 408(d)(8)(E) of the Internal Revenue Code in 
13.23 	determining federal taxable income by Forana resident individual who does not itemize 
13.24 	deductions for federal income tax purposes under section 290.0803 for the taxable year, an 
13.25 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
13.26 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code
13.27 	290.0803, subdivision 5, is a subtraction. The subtraction under this subdivision must not 
13.28 	include a distribution that is excluded from federal adjusted gross income and that is not 
13.29 	deductible under section 408(d)(8)(E) of the Internal Revenue Code.

13.30 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
13.31 	31, 2017.

14.1 	Sec. 20. Minnesota Statutes 2017 Supplement, section 290.0132, subdivision 21, is amended 
14.2 	to read:
14.3 		Subd. 21.Military service pension; retirement pay.  To the extent included in federal 
14.4 	taxable adjusted gross income, compensation received from a pension or other retirement 
14.5 	pay from the federal government for service in the military, as computed under United 
14.6 	States Code, title 10, sections 1401 to 1414, 1447 to 1455, and 12733, is a subtraction. The 
14.7 	subtraction is limited to individuals who do not claim the credit under section 290.0677.

14.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
14.9 	31, 2017.

14.10 	Sec. 21. Minnesota Statutes 2017 Supplement, section 290.0132, subdivision 26, is amended 
14.11 	to read:
14.12 		Subd. 26.Social Security benefits. (a) A portion of Social Security benefits is allowed 
14.13 	as a subtraction. The subtraction equals the lesser of Social Security benefits or a maximum 
14.14 	subtraction subject to the limits under paragraphs (b), (c), and (d).
14.15 	(b) For married taxpayers filing a joint return and surviving spouses, the maximum 
14.16 	subtraction equals $4,500 $4,590. The maximum subtraction is reduced by 20 percent of 
14.17 	provisional income over $77,000 $78,530. In no case is the subtraction less than zero.
14.18 	(c) For single or head-of-household taxpayers, the maximum subtraction equals $3,500
14.19 	$3,570. The maximum subtraction is reduced by 20 percent of provisional income over 
14.20 	$60,200 $61,400. In no case is the subtraction less than zero.
14.21 	(d) For married taxpayers filing separate returns, the maximum subtraction equals $2,250
14.22 	one-half the maximum subtraction for joint returns under paragraph (b). The maximum 
14.23 	subtraction is reduced by 20 percent of provisional income over $38,500 one-half the 
14.24 	maximum subtraction for joint returns under paragraph (b). In no case is the subtraction 
14.25 	less than zero.
14.26 	(e) For purposes of this subdivision, "provisional income" means modified adjusted 
14.27 	gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of 
14.28 	the Social Security benefits received during the taxable year, and "Social Security benefits" 
14.29 	has the meaning given in section 86(d)(1) of the Internal Revenue Code.
14.30 	(f) The commissioner shall adjust the maximum subtraction and threshold amounts in 
14.31 	paragraphs (b) to (d) by the percentage determined pursuant to the provisions of section 
14.32 	1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) of the Internal Revenue 
14.33 	Code the word "2016" "2017" shall be substituted for the word "1992." For 2018, the 
15.1 	commissioner shall then determine the percentage change from the 12 months ending on 
15.2 	August 31, 2016, to the 12 months ending on August 31, 2017, and in each subsequent year, 
15.3 	from the 12 months ending on August 31, 2016, to the 12 months ending on August 31 of 
15.4 	the year preceding the taxable year. "2016." The determination of the commissioner pursuant 
15.5 	to this subdivision must not be considered a rule and is not subject to the Administrative 
15.6 	Procedure Act contained in chapter 14, including section 14.386. The maximum subtraction 
15.7 	and threshold amounts as adjusted must be rounded to the nearest $10 amount. If the amount 
15.8 	ends in $5, the amount is rounded up to the nearest $10 amount.

15.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.10 	31, 2017.

15.11 	Sec. 22. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
15.12 	to read:
15.13 		Subd. 27.Global intangible low-taxed income. The taxpayer's global intangible 
15.14 	low-taxed income included under section 951A of the Internal Revenue Code for the taxable 
15.15 	year is a subtraction.

15.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.17 	31, 2017.

15.18 	Sec. 23. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
15.19 	to read:
15.20 		Subd. 28.Deferred foreign income of nonresidents. For a nonresident individual the 
15.21 	amount of deferred foreign income recognized because of section 965 of the Internal Revenue 
15.22 	Code is a subtraction.

15.23 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
15.24 	after December 31, 2016, and before January 1, 2019.

15.25 	Sec. 24. Minnesota Statutes 2016, section 290.0133, subdivision 6, is amended to read:
15.26 		Subd. 6.Special deductions. (a) The amount of any special deductions under sections 
15.27 	241 to 247 of the Internal Revenue Code and 965the amount of foreign derived intangible 
15.28 	income deducted under section 250 of the Internal Revenue Code is an addition.
15.29 	(b) The addition under this subdivision is reduced by the amount of the deduction under 
15.30 	section 245A of the Internal Revenue Code that represents amounts included in federal 
15.31 	taxable income in a prior taxable year under section 965 of the Internal Revenue Code.

16.1 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
16.2 	after December 31, 2016.

16.3 	Sec. 25. Minnesota Statutes 2017 Supplement, section 290.0133, subdivision 12, is amended 
16.4 	to read:
16.5 		Subd. 12.Section 179 expensing. Effective for property placed in service in taxable 
16.6 	years beginning before January 1, 2018, 80 percent of the amount by which the deduction 
16.7 	allowed under the dollar limits of section 179 of the Internal Revenue Code exceeds the 
16.8 	deduction allowable by section 179 of the Internal Revenue Code, as amended through 
16.9 	December 31, 2003, is an addition.

16.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.11 	31, 2017.

16.12 	Sec. 26. Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision 
16.13 	to read:
16.14 		Subd. 17.Global intangible low-taxed income. The taxpayer's global intangible 
16.15 	low-taxed income included under section 951A of the Internal Revenue Code for the taxable 
16.16 	year is a subtraction.

16.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.18 	31, 2017.

16.19 	Sec. 27. Minnesota Statutes 2016, section 290.0136, is amended to read:
16.20 	290.0136 CERTAIN PREFERRED STOCK LOSSES.
16.21 	A taxpayer must compute net income by treating losses from the sale or transfer of 
16.22 	certain preferred stock, which the taxpayer treated as ordinary losses pursuant to Division 
16.23 	A, title III, section 301 of Public Law 110-343, as capital losses. The amount of net income 
16.24 	under section 290.01, subdivision 19; taxable net income under section 290.01, subdivision 
16.25 	22; taxable income under section 290.01, subdivision 29; the numerator and denominator 
16.26 	in section 290.06, subdivision 2c, paragraph (e); individual alternative minimum taxable 
16.27 	income under section 290.091, subdivision 2; corporate alternative minimum taxable income 
16.28 	under section 290.0921, subdivision 3; and net operating losses under section 290.095 must 
16.29 	be computed for each taxable year as if those losses had been treated by the taxpayer as 
16.30 	capital losses under the Internal Revenue Code, including the limitations under section 1211 
16.31 	of the Internal Revenue Code.

17.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.2 	31, 2017.

17.3 	Sec. 28. Minnesota Statutes 2016, section 290.05, subdivision 3, is amended to read:
17.4 		Subd. 3.Taxes imposed on exempt entities. (a) An organization exempt from taxation 
17.5 	under subdivision 2 shall, nevertheless, be subject to tax under this chapter to the extent 
17.6 	provided in the following provisions of the Internal Revenue Code:
17.7 	(1) section 527 (dealing with political organizations);
17.8 	(2) section 528 (dealing with certain homeowners associations);
17.9 	(3) sections 511 to 515 (dealing with unrelated business income);
17.10 	(4) section 521 (dealing with farmers' cooperatives); and
17.11 	(5) section 6033(e)(2) (dealing with lobbying expense); but notwithstanding this 
17.12 	subdivision, shall be considered an organization exempt from income tax for the purposes 
17.13 	of any law which refers to organizations exempt from income taxes.
17.14 	(b) The tax shall be imposed on the taxable income of political organizations or 
17.15 	homeowner associations or the unrelated business taxable income, as defined in section 512 
17.16 	of the Internal Revenue Code, of organizations defined in section 511 of the Internal Revenue 
17.17 	Code, provided that the tax is not imposed on:
17.18 	(1) advertising revenues from a newspaper published by an organization described in 
17.19 	section 501(c)(4) of the Internal Revenue Code; or
17.20 	(2) revenues from lawful gambling authorized under chapter 349 that are expended for 
17.21 	purposes that qualify for the deduction for charitable contributions under section 170 of the 
17.22 	Internal Revenue Code, disregarding the limitation under section 170(b)(2), but only to the 
17.23 	extent the contributions are not deductible in computing federal taxable income.
17.24 	The tax shall be at the corporate rates. The tax shall only be imposed on income and 
17.25 	deductions assignable to this state under sections 290.17 to 290.20. To the extent deducted 
17.26 	in computing federal taxable income, the deductions contained in section 290.21 shall not 
17.27 	be allowed in computing Minnesota taxable net income.
17.28 	(c) The tax shall be imposed on organizations subject to federal tax under section 
17.29 	6033(e)(2) of the Internal Revenue Code, in an amount equal to the corporate tax rate 
17.30 	multiplied by the amount of lobbying expenses taxed under section 6033(e)(2) which are 
17.31 	attributable to lobbying the Minnesota state government.
18.1 	(d) In calculating unrelated business taxable income under section 512 of the Internal 
18.2 	Revenue Code, the amount of any net operating loss deduction claimed under section 172 
18.3 	of the Internal Revenue Code is an addition. Taxpayers making an addition under this 
18.4 	paragraph may deduct a net operating loss for the taxable year in the same manner as a 
18.5 	corporation under section 290.095, in a form and manner prescribed by the commissioner, 
18.6 	and may calculate the loss without the application of the limitation provided for under 
18.7 	section 512(a)(6) of the Internal Revenue Code.

18.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
18.9 	31, 2017.

18.10 	Sec. 29. Minnesota Statutes 2016, section 290.06, subdivision 1, is amended to read:
18.11 		Subdivision 1.Computation, corporations. (a) The franchise tax imposed upon 
18.12 	corporations shall be computed by applying to their taxable income the rate of 9.8 9.06
18.13 	percent.
18.14 	(b) Notwithstanding paragraph (a), the rate for taxable years beginning after December 
18.15 	31, 2017, and before January 1, 2020, is 9.64 percent.

18.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
18.17 	31, 2017.

18.18 	Sec. 30. Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
18.19 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
18.20 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
18.21 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
18.22 	their taxable net income the following schedule of rates:
18.23 	(1) On the first $35,480 $37,850, 5.35 percent;
18.24 	(2) On all over $35,480 $37,850, but not over $140,960, 7.05 $150,380, 6.75 percent;
18.25 	(3) On all over $140,960 $150,380, but not over $250,000 $266,700, 7.85 percent;
18.26 	(4) On all over $250,000 $266,700, 9.85 percent.
18.27 	Married individuals filing separate returns, estates, and trusts must compute their income 
18.28 	tax by applying the above rates to their taxable income, except that the income brackets 
18.29 	will be one-half of the above amounts.
18.30 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
18.31 	computed by applying to taxable net income the following schedule of rates:
19.1 	(1) On the first $24,270 $25,890, 5.35 percent;
19.2 	(2) On all over $24,270 $25,890, but not over $79,730, 7.05 $85,060, 6.75 percent;
19.3 	(3) On all over $79,730 $85,060, but not over $150,000 $160,020, 7.85 percent;
19.4 	(4) On all over $150,000 $160,020, 9.85 percent.
19.5 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
19.6 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
19.7 	computed by applying to taxable net income the following schedule of rates:
19.8 	(1) On the first $29,880 $31,880, 5.35 percent;
19.9 	(2) On all over $29,880 $31,880, but not over $120,070, 7.05 $128,090, 6.75 percent;
19.10 	(3) On all over $120,070 $128,090, but not over $200,000 $213,360, 7.85 percent;
19.11 	(4) On all over $200,000 $213,360, 9.85 percent.
19.12 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
19.13 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
19.14 	amount determined by the commissioner must be computed in accordance with tables 
19.15 	prepared and issued by the commissioner of revenue based on income brackets of not more 
19.16 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
19.17 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
19.18 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
19.19 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
19.20 	individual's Minnesota income tax as provided in this subdivision. After the application of 
19.21 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
19.22 	by a fraction in which:
19.23 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
19.24 	defined in section 62 of the Internal Revenue Code and increased by the additions required 
19.25 	under section 290.0131, subdivisions 2 and 6 to 11 10, and reduced by the Minnesota 
19.26 	assignable portion of the subtraction for United States government interest under section 
19.27 	290.0132, subdivision 2, and the subtractions under section 290.0132, subdivisions 9, 10, 
19.28 	14, 15, 17, and 18, 27, and 28, after applying the allocation and assignability provisions of 
19.29 	section 290.081, clause (a), or 290.17; and
19.30 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
19.31 	62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131, 
20.1 	subdivisions 2 and 6 to 11 10, and reduced by the amounts specified in section 290.0132, 
20.2 	subdivisions 2, 9, 10, 14, 15, 17, and 18, 27, and 28.
20.3 	(f) For taxable years beginning after December 31, 2017, and before January 1, 2019, 
20.4 	a rate of 6.95 percent applies instead of the 6.75 percent rate in paragraphs (a) to (c) and 
20.5 	for taxable years beginning after December 31, 2018, and before January 1, 2020, a rate of 
20.6 	6.9 percent applies.

20.7 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
20.8 	31, 2017.

20.9 	Sec. 31. Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:
20.10 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
20.11 	December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for 
20.12 	which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage 
20.13 	determined under paragraph (b). For the purpose of making the adjustment as provided in 
20.14 	this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets 
20.15 	as they existed for taxable years beginning after December 31, 2012, and before January 1, 
20.16 	2014. The rate applicable to any rate bracket must not be changed. The dollar amounts 
20.17 	setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate 
20.18 	brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in 
20.19 	$5, it must be rounded up to the nearest $10 amount.
20.20 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
20.21 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
20.22 	1(f)(3)(B) the word "2012" "2017" shall be substituted for the word "1992." For 2014, the 
20.23 	commissioner shall then determine the percent change from the 12 months ending on August 
20.24 	31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
20.25 	the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the 
20.26 	year preceding the taxable year. "2016." The determination of the commissioner pursuant 
20.27 	to this subdivision shall not be considered a "rule" and shall not be subject to the 
20.28 	Administrative Procedure Act contained in chapter 14.
20.29 	No later than December 15 of each year, the commissioner shall announce the specific 
20.30 	percentage that will be used to adjust the tax rate brackets.

20.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
20.32 	31, 2017.

21.1 	Sec. 32. Minnesota Statutes 2017 Supplement, section 290.067, subdivision 1, is amended 
21.2 	to read:
21.3 		Subdivision 1.Amount of credit. (a) A taxpayer may take as a credit against the tax 
21.4 	due from the taxpayer and a spouse, if any, under this chapter an amount equal to the 
21.5 	dependent care credit for which the taxpayer is eligible pursuant to the provisions of section 
21.6 	21 of the Internal Revenue Code except that in determining whether the child qualified as 
21.7 	a dependent, income received as a Minnesota family investment program grant or allowance 
21.8 	to or on behalf of the child must not be taken into account in determining whether the child 
21.9 	received more than half of the child's support from the taxpayer, and the provisions of 
21.10 	section 32(b)(1)(D) of the Internal Revenue Code do not apply.
21.11 	(b) If a child who has not attained the age of six years at the close of the taxable year is 
21.12 	cared for at a licensed family day care home operated by the child's parent, the taxpayer is 
21.13 	deemed to have paid employment-related expenses. If the child is 16 months old or younger 
21.14 	at the close of the taxable year, the amount of expenses deemed to have been paid equals 
21.15 	the maximum limit for one qualified individual under section 21(c) and (d) of the Internal 
21.16 	Revenue Code. If the child is older than 16 months of age but has not attained the age of 
21.17 	six years at the close of the taxable year, the amount of expenses deemed to have been paid 
21.18 	equals the amount the licensee would charge for the care of a child of the same age for the 
21.19 	same number of hours of care.
21.20 	(c) If a married couple:
21.21 	(1) has a child who has not attained the age of one year at the close of the taxable year;
21.22 	(2) files a joint tax return for the taxable year; and
21.23 	(3) does not participate in a dependent care assistance program as defined in section 129 
21.24 	of the Internal Revenue Code, in lieu of the actual employment related expenses paid for 
21.25 	that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i) 
21.26 	the combined earned income of the couple or (ii) the amount of the maximum limit for one 
21.27 	qualified individual under section 21(c) and (d) of the Internal Revenue Code will be deemed 
21.28 	to be the employment related expense paid for that child. The earned income limitation of 
21.29 	section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These 
21.30 	deemed amounts apply regardless of whether any employment-related expenses have been 
21.31 	paid.
21.32 	(d) If the taxpayer is not required and does not file a federal individual income tax return 
21.33 	for the tax year, no credit is allowed for any amount paid to any person unless:
22.1 	(1) the name, address, and taxpayer identification number of the person are included on 
22.2 	the return claiming the credit; or
22.3 	(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue 
22.4 	Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name 
22.5 	and address of the person are included on the return claiming the credit.
22.6 	In the case of a failure to provide the information required under the preceding sentence, 
22.7 	the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence 
22.8 	in attempting to provide the information required.
22.9 	(e) In the case of a nonresident, part-year resident, or a person who has earned income 
22.10 	not subject to tax under this chapter including earned income excluded pursuant to section 
22.11 	290.0132, subdivision 10, the credit determined under section 21 of the Internal Revenue 
22.12 	Code must be allocated based on the ratio by which the earned income of the claimant and 
22.13 	the claimant's spouse from Minnesota sources bears to the total earned income of the claimant 
22.14 	and the claimant's spouse.
22.15 	(f) For residents of Minnesota, the subtractions for military pay under section 290.0132, 
22.16 	subdivisions 11 and 12, are not considered "earned income not subject to tax under this 
22.17 	chapter."
22.18 	(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the 
22.19 	Internal Revenue Code is not considered "earned income not subject to tax under this 
22.20 	chapter."
22.21 	(h) For taxpayers with federal adjusted gross income in excess of $50,000 $50,990, the 
22.22 	credit is equal to the lesser of the credit otherwise calculated under this subdivision, or the 
22.23 	amount equal to $600 minus five percent of federal adjusted gross income in excess of 
22.24 	$50,000 $50,990 for taxpayers with one qualified individual, or $1,200 minus five percent 
22.25 	of federal adjusted gross income in excess of $50,000 $50,990 for taxpayers with two or 
22.26 	more qualified individuals, but in no case is the credit less than zero.

22.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
22.28 	31, 2017.

22.29 	Sec. 33. Minnesota Statutes 2016, section 290.067, subdivision 2a, is amended to read:
22.30 		Subd. 2a.Income. (a) For purposes of this section, "income" means the sum of the 
22.31 	following:
23.1 	(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; 
23.2 	and
23.3 	(2) the sum of the following amounts to the extent not included in clause (1):
23.4 	(i) all nontaxable income;
23.5 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
23.6 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
23.7 	carryover allowed under section 469(b) of the Internal Revenue Code;
23.8 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
23.9 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
23.10 	Code;
23.11 	(iv) cash public assistance and relief;
23.12 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
23.13 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
23.14 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
23.15 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
23.16 	gross income in the years when the payments were made;
23.17 	(vi) interest received from the federal or a state government or any instrumentality or 
23.18 	political subdivision thereof;
23.19 	(vii) workers' compensation;
23.20 	(viii) nontaxable strike benefits;
23.21 	(ix) the gross amounts of payments received in the nature of disability income or sick 
23.22 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
23.23 	or otherwise;
23.24 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
23.25 	1986, as amended through December 31, 1995;
23.26 	(xi) contributions made by the claimant to an individual retirement account, including 
23.27 	a qualified voluntary employee contribution; simplified employee pension plan; 
23.28 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
23.29 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
23.30 	Revenue Code;
23.31 	(xii) nontaxable scholarship or fellowship grants;
24.1 	(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
24.2 	(xiv)(xiii) the amount of deduction allowed under section 220 or 223 of the Internal 
24.3 	Revenue Code;
24.4 	(xv) (xiv) the amount deducted for tuition expenses under section 222 of the Internal 
24.5 	Revenue Code; and
24.6 	(xvi) (xv) the amount deducted for certain expenses of elementary and secondary school 
24.7 	teachers under section 62(a)(2)(D) of the Internal Revenue Code.; and
24.8 	(xvi) alimony received to the extent not included in the recipient's income.
24.9 	In the case of an individual who files an income tax return on a fiscal year basis, the 
24.10 	term "federal adjusted gross income" means federal adjusted gross income reflected in the 
24.11 	fiscal year ending in the next calendar year. Federal adjusted gross income may not be 
24.12 	reduced by the amount of a net operating loss carryback or carryforward or a capital loss 
24.13 	carryback or carryforward allowed for the year.
24.14 	(b) "Income" does not include:
24.15 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
24.16 	(2) amounts of any pension or annuity that were exclusively funded by the claimant or 
24.17 	spouse if the funding payments were not excluded from federal adjusted gross income in 
24.18 	the years when the payments were made;
24.19 	(3) surplus food or other relief in kind supplied by a governmental agency;
24.20 	(4) relief granted under chapter 290A;
24.21 	(5) child support payments received under a temporary or final decree of dissolution or 
24.22 	legal separation; and
24.23 	(6) restitution payments received by eligible individuals and excludable interest as 
24.24 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
24.25 	Public Law 107-16.

24.26 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
24.27 	31, 2017.

24.28 	Sec. 34. Minnesota Statutes 2017 Supplement, section 290.067, subdivision 2b, is amended 
24.29 	to read:
24.30 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount of 
24.31 	the income threshold at which the maximum credit begins to be reduced under subdivision 
25.1 	1 by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
25.2 	Revenue Code, except that in section 1(f)(3)(B) the word "2016" "2017" shall be substituted 
25.3 	for the word "1992." For 2018, the commissioner shall then determine the percent change 
25.4 	from the 12 months ending on August 31, 2016, to the 12 months ending on August 31, 
25.5 	2017, and in each subsequent year, from the 12 months ending on August 31, 2016, to the 
25.6 	12 months ending on August 31 of the year preceding the taxable year. "2016." The 
25.7 	determination of the commissioner pursuant to this subdivision must not be considered a 
25.8 	"rule" and is not subject to the Administrative Procedure Act contained in chapter 14. The 
25.9 	threshold amount as adjusted must be rounded to the nearest $10 amount. If the amount 
25.10 	ends in $5, the amount is rounded up to the nearest $10 amount.

25.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
25.12 	31, 2017.

25.13 	Sec. 35. Minnesota Statutes 2017 Supplement, section 290.0671, subdivision 1, is amended 
25.14 	to read:
25.15 		Subdivision 1.Credit allowed. (a) An individual who is a resident of Minnesota is 
25.16 	allowed a credit against the tax imposed by this chapter equal to a percentage of earned 
25.17 	income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the 
25.18 	Internal Revenue Code, except that a taxpayer with no qualifying children who has attained 
25.19 	the age of 21, but not attained age 65 before the close of the taxable year and is otherwise 
25.20 	eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit.
25.21 	(b) For individuals with no qualifying children, the credit equals 2.10 percent of the first 
25.22 	$6,180 $6,480 of earned income. The credit is reduced by 2.01 percent of earned income 
25.23 	or adjusted gross income, whichever is greater, in excess of $8,130 $8,530, but in no case 
25.24 	is the credit less than zero.
25.25 	(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first 
25.26 	$11,120 $11,670 of earned income. The credit is reduced by 6.02 percent of earned income 
25.27 	or adjusted gross income, whichever is greater, in excess of $21,190 $22,340, but in no case 
25.28 	is the credit less than zero.
25.29 	(d) For individuals with two or more qualifying children, the credit equals 11 percent 
25.30 	of the first $18,240$19,130 of earned income. The credit is reduced by 10.82 percent of 
25.31 	earned income or adjusted gross income, whichever is greater, in excess of $25,130 $26,360, 
25.32 	but in no case is the credit less than zero.
26.1 	(e) For a part-year resident, the credit must be allocated based on the percentage calculated 
26.2 	under section 290.06, subdivision 2c, paragraph (e).
26.3 	(f) For a person who was a resident for the entire tax year and has earned income not 
26.4 	subject to tax under this chapter, including income excluded under section 290.0132, 
26.5 	subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross 
26.6 	income reduced by the earned income not subject to tax under this chapter over federal 
26.7 	adjusted gross income. For purposes of this paragraph, the following clauses are not 
26.8 	considered "earned income not subject to tax under this chapter":
26.9 	(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
26.10 	(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
26.11 	(3) income derived from an Indian reservation by an enrolled member of the reservation 
26.12 	while living on the reservation.
26.13 	(g) For tax years beginning after December 31, 2013 2018, the $8,130 $8,530 in paragraph 
26.14 	(b), the $21,190 $22,340 in paragraph (c), and the $25,130 $26,360 in paragraph (d), after 
26.15 	being adjusted for inflation under subdivision 7, are each increased by $5,000$5,700 for 
26.16 	married taxpayers filing joint returns. For tax years beginning after December 31, 2013
26.17 	2018, the commissioner shall annually adjust the $5,000 $5,700 by the percentage determined 
26.18 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
26.19 	1(f)(3)(B), the word "2008" "2017" shall be substituted for the word "1992." For 2014, the 
26.20 	commissioner shall then determine the percent change from the 12 months ending on August 
26.21 	31, 2008, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
26.22 	the 12 months ending on August 31, 2008, to the 12 months ending on August 31 of the 
26.23 	year preceding the taxable year. "2016." The earned income thresholds as adjusted for 
26.24 	inflation must be rounded to the nearest $10. If the amount ends in $5, the amount is rounded 
26.25 	up to the nearest $10. The determination of the commissioner under this subdivision is not 
26.26 	a rule under the Administrative Procedure Act.
26.27 	(h) The commissioner shall construct tables showing the amount of the credit at various 
26.28 	income levels and make them available to taxpayers. The tables shall follow the schedule 
26.29 	contained in this subdivision, except that the commissioner may graduate the transition 
26.30 	between income brackets.

26.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
26.32 	31, 2017.

27.1 	Sec. 36. Minnesota Statutes 2016, section 290.0671, subdivision 7, is amended to read:
27.2 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the credit 
27.3 	and the income thresholds at which the maximum credit begins to be reduced in subdivision 
27.4 	1 must be adjusted for inflation. The commissioner shall adjust by the percentage determined 
27.5 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
27.6 	1(f)(3)(B) the word "2013" "2017" shall be substituted for the word "1992." For 2015, the 
27.7 	commissioner shall then determine the percent change from the 12 months ending on August 
27.8 	31, 2013, to the 12 months ending on August 31, 2014, and in each subsequent year, from 
27.9 	the 12 months ending on August 31, 2013, to the 12 months ending on August 31 of the 
27.10 	year preceding the taxable year. "2016." The earned income thresholds as adjusted for 
27.11 	inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount 
27.12 	is rounded up to the nearest $10 amount. The determination of the commissioner under this 
27.13 	subdivision is not a rule under the Administrative Procedure Act.

27.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
27.15 	31, 2017.

27.16 	Sec. 37. Minnesota Statutes 2017 Supplement, section 290.0672, subdivision 1, is amended 
27.17 	to read:
27.18 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
27.19 	the meanings given.
27.20 	(b) "Long-term care insurance" means a policy that:
27.21 	(1) qualifies for a deduction under section 213 of the Internal Revenue Code, disregarding 
27.22 	the adjusted gross income test; or meets the requirements given in section 62A.46; or provides 
27.23 	similar coverage issued under the laws of another jurisdiction; and
27.24 	(2) has a lifetime long-term care benefit limit of not less than $100,000; and
27.25 	(3) has been offered in compliance with the inflation protection requirements of section 
27.26 	62S.23.
27.27 	(c) "Qualified beneficiary" means the taxpayer or the taxpayer's spouse.
27.28 	(d) "Premiums deducted in determining federal taxable net income" means the lesser of 
27.29 	(1) long-term care insurance premiums that qualify as deductions under section 213 of the 
27.30 	Internal Revenue Code; and (2) the total amount deductible for medical care expenses under 
27.31 	section 213 of the Internal Revenue Code 290.0803.

28.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
28.2 	31, 2017.

28.3 	Sec. 38. Minnesota Statutes 2016, section 290.0672, subdivision 2, is amended to read:
28.4 		Subd. 2.Credit. A taxpayer is allowed a credit against the tax imposed by this chapter 
28.5 	for long-term care insurance policy premiums paid during the tax year. The credit for each 
28.6 	policy equals 25 percent of premiums paid to the extent not deducted in determining federal
28.7 	taxable net income. A taxpayer may claim a credit for only one policy for each qualified 
28.8 	beneficiary. A maximum of $100 applies to each qualified beneficiary. The maximum total 
28.9 	credit allowed per year is $200 for married couples filing joint returns and $100 for all other 
28.10 	filers. For a nonresident or part-year resident, the credit determined under this section must 
28.11 	be allocated based on the percentage calculated under section 290.06, subdivision 2c, 
28.12 	paragraph (e).

28.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
28.14 	31, 2017.

28.15 	Sec. 39. Minnesota Statutes 2017 Supplement, section 290.0681, subdivision 1, is amended 
28.16 	to read:
28.17 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
28.18 	the meanings given.
28.19 	(b) "Account" means the historic credit administration account in the special revenue 
28.20 	fund.
28.21 	(c) "Office" means the State Historic Preservation Office of the Department of 
28.22 	Administration.
28.23 	(d) "Project" means rehabilitation of a certified historic structure, as defined in section 
28.24 	47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is allowed a 
28.25 	federal credit.
28.26 	(e) "Federal credit" means the credit allowed under section 47(a)(2) 47(a) of the Internal 
28.27 	Revenue Code, except that the amount allowed is deemed to be allocated in the taxable year 
28.28 	that the project is placed in service.
28.29 	(f) "Placed in service" has the meaning used in section 47 of the Internal Revenue Code.
28.30 	(g) "Qualified rehabilitation expenditures" has the meaning given in section 47 of the 
28.31 	Internal Revenue Code.

29.1 	EFFECTIVE DATE. This section is effective for applications for allocation certificates 
29.2 	submitted after December 31, 2017.

29.3 	Sec. 40. Minnesota Statutes 2017 Supplement, section 290.0681, subdivision 2, is amended 
29.4 	to read:
29.5 		Subd. 2.Credit or grant allowed; certified historic structure. (a) A credit is allowed 
29.6 	against the tax imposed under this chapter equal to not more than 100 percent of the credit 
29.7 	allowed under section 47(a)(2) 47(a) of the Internal Revenue Code for a project. The credit 
29.8 	is payable in an amount equal to one-fifth of the total credit amount allowed in the five 
29.9 	taxable years beginning with the year the project is placed in service. To qualify for the 
29.10 	credit:
29.11 	(1) the project must receive Part 3 certification and be placed in service during the taxable 
29.12 	year; and
29.13 	(2) the taxpayer must be allowed the federal credit and be issued a credit certificate for 
29.14 	the taxable year as provided in subdivision 4.
29.15 	(b) The commissioner of administration may pay a grant in lieu of the credit. The grant 
29.16 	equals 90 percent of the credit that would be allowed for the project. The grant is payable 
29.17 	in an amount equal to one-fifth of 90 percent of the credit that would be allowed for the 
29.18 	project in the five taxable years beginning with the year the project is placed in service.
29.19 	(c) In lieu of the credit under paragraph (a), an insurance company may claim a credit 
29.20 	against the insurance premiums tax imposed under chapter 297I.

29.21 	EFFECTIVE DATE. This section is effective for applications for allocation certificates 
29.22 	submitted after December 31, 2017.

29.23 	Sec. 41. Minnesota Statutes 2016, section 290.0681, subdivision 3, is amended to read:
29.24 		Subd. 3.Applications; allocations. (a) To qualify for a credit or grant under this section, 
29.25 	the developer of a project must apply to the office before the rehabilitation begins. The 
29.26 	application must contain the information and be in the form prescribed by the office. The 
29.27 	office may collect a fee for application of up to 0.5 percent of qualified rehabilitation 
29.28 	expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to 
29.29 	offset costs associated with personnel and administrative expenses related to administering 
29.30 	the credit and preparing the economic impact report in subdivision 9. Application fees are 
29.31 	deposited in the account. The application must indicate if the application is for a credit or 
30.1 	a grant in lieu of the credit or a combination of the two and designate the taxpayer qualifying 
30.2 	for the credit or the recipient of the grant.
30.3 	(b) Upon approving an application for credit, the office shall issue allocation certificates 
30.4 	that:
30.5 	(1) verify eligibility for the credit or grant;
30.6 	(2) state the amount of credit or grant anticipated with the project, with the credit amount 
30.7 	equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated 
30.8 	in the application;
30.9 	(3) state that the credit or grant allowed may increase or decrease if the federal credit 
30.10 	the project receives at the time it is placed in service is different than the amount anticipated 
30.11 	at the time the allocation certificate is issued; and
30.12 	(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or 
30.13 	grant recipient is entitled to receive one-fifth of the total amount of either the credit or the 
30.14 	grant at the time the project is placed in service, provided that date is within three calendar 
30.15 	years following the issuance of the allocation certificate.
30.16 	(c) The office, in consultation with the commissioner, shall determine if the project is 
30.17 	eligible for a credit or a grant under this section and must notify the developer in writing 
30.18 	of its determination. Eligibility for the credit is subject to review and audit by the 
30.19 	commissioner.
30.20 	(d) The federal credit recapture and repayment requirements under section 50 of the 
30.21 	Internal Revenue Code do not apply to the credit allowed under this section.
30.22 	(e) Any decision of the office under paragraph (c) may be challenged as a contested case 
30.23 	under chapter 14. The contested case proceeding must be initiated within 45 days of the 
30.24 	date of written notification by the office.

30.25 	EFFECTIVE DATE. This section is effective for applications for allocation certificates 
30.26 	submitted after December 31, 2017.

30.27 	Sec. 42. Minnesota Statutes 2016, section 290.0681, subdivision 4, is amended to read:
30.28 		Subd. 4.Credit certificates; grants. (a)(1) The developer of a project for which the 
30.29 	office has issued an allocation certificate must notify the office when the project is placed 
30.30 	in service. Upon verifying that the project has been placed in service, and was allowed a 
30.31 	federal credit, the office must issue a credit certificate to the taxpayer designated in the 
31.1 	application or must issue a grant to the recipient designated in the application. The credit 
31.2 	certificate must state the amount of the credit.
31.3 	(2) The credit amount equals the federal credit allowed for the project.
31.4 	(3) The grant amount equals 90 percent of the federal credit allowed for the project.
31.5 	(b) The recipient of a credit certificate may assign the certificate to another taxpayer
31.6 	before the first one-fifth payment is claimed, which is then allowed the credit under this 
31.7 	section or section 297I.20, subdivision 3. An assignment is not valid unless the assignee 
31.8 	notifies the commissioner within 30 days of the date that the assignment is made. The 
31.9 	commissioner shall prescribe the forms necessary for notifying the commissioner of the 
31.10 	assignment of a credit certificate and for claiming a credit by assignment.
31.11 	(c) Credits passed through to partners, members, shareholders, or owners pursuant to 
31.12 	subdivision 5 are not an assignment of a credit certificate under this subdivision.
31.13 	(d) A grant agreement between the office and the recipient of a grant may allow the 
31.14 	grant to be issued to another individual or entity.

31.15 	EFFECTIVE DATE. This section is effective for applications for allocation certificates 
31.16 	submitted after December 31, 2017.

31.17 	Sec. 43. Minnesota Statutes 2017 Supplement, section 290.0684, subdivision 1, is amended 
31.18 	to read:
31.19 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
31.20 	the meanings given them.
31.21 	(b) "Contribution" means the amount contributed to one or more qualified accounts 
31.22 	except that the amount:
31.23 	(1) is reduced by any withdrawals or distributions, other than transfers or rollovers to 
31.24 	another qualified account, from a qualified account during the taxable year; and
31.25 	(2) excludes the amount of any transfers or rollovers from a qualified account made 
31.26 	during the taxable year.
31.27 	(c) "Federal adjusted gross income" has the meaning given under section 62(a) of the 
31.28 	Internal Revenue Code.
31.29 	(d) "Qualified account" means an account qualifying under section 529529(e)(3) of the 
31.30 	Internal Revenue Code.
32.1 	(e) (d) "Qualified higher education expenses" has the meaning given in section 529 of 
32.2 	the Internal Revenue Code, except section 529(c)(7) of the Internal Revenue Code does not 
32.3 	apply to the definition of qualified higher education expenses.

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

32.5 	Sec. 44. Minnesota Statutes 2017 Supplement, section 290.0684, subdivision 2, is amended 
32.6 	to read:
32.7 		Subd. 2.Credit allowed. (a) An individual who is a resident of Minnesota is allowed a 
32.8 	credit against the tax imposed by this chapter. The credit is not allowed to an individual 
32.9 	who is eligible to be claimed as a dependent, as defined in sections 151 and 152 of the 
32.10 	Internal Revenue Code. The credit may not exceed the liability for tax under this chapter.
32.11 	(b) The amount of the credit allowed equals 50 percent of contributions for the taxable 
32.12 	year. The maximum credit is $500, subject to the phaseout in paragraphs (c) and (d). In no 
32.13 	case is the credit less than zero.
32.14 	(c) For individual filers, the maximum credit is reduced by two percent of adjusted gross 
32.15 	income in excess of $75,000 $76,490.
32.16 	(d) For married couples filing a joint return, the maximum credit is phased out as follows:
32.17 	(1) for married couples with adjusted gross income in excess of $75,000 $76,490, but 
32.18 	not more than $100,000 $101,990, the maximum credit is reduced by one percent of adjusted 
32.19 	gross income in excess of $75,000 $76,490;
32.20 	(2) for married couples with adjusted gross income in excess of $100,000 $101,990, but 
32.21 	not more than $135,000 $137,680, the maximum credit is $250; and
32.22 	(3) for married couples with adjusted gross income in excess of $135,000 $137,680, the 
32.23 	maximum credit is $250, reduced by one percent of adjusted gross income in excess of 
32.24 	$135,000 $137,680.
32.25 	(e) The income thresholds in paragraphs (c) and (d) used to calculate the maximum 
32.26 	credit must be adjusted for inflation. The commissioner shall adjust the income thresholds 
32.27 	by the percentage determined under the provisions of section 1(f) of the Internal Revenue 
32.28 	Code, except that in section 1(f)(3)(B) the word "2016" "2017" is substituted for the word 
32.29 	"1992." For 2018, the commissioner shall then determine the percent change from the 12 
32.30 	months ending on August 31, 2016, to the 12 months ending on August 31, 2017, and in 
32.31 	each subsequent year, from the 12 months ending on August 31, 2016, to the 12 months 
32.32 	ending on August 31 of the year preceding the taxable year. "2016." The income thresholds 
33.1 	as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in 
33.2 	$5, the amount is rounded up to the nearest $10 amount. The determination of the 
33.3 	commissioner under this subdivision is not subject to chapter 14, including section 14.386.

33.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
33.5 	31, 2017.

33.6 	Sec. 45. Minnesota Statutes 2016, section 290.0802, subdivision 2, is amended to read:
33.7 		Subd. 2.Subtraction. (a) A qualified individual is allowed a subtraction from federal 
33.8 	taxable adjusted gross income of the individual's subtraction base amount. The excess of 
33.9 	the subtraction base amount over the taxable net income computed without regard to the 
33.10 	subtraction for the elderly or disabled under section 290.0132, subdivision 5, may be used 
33.11 	to reduce the amount of a lump sum distribution subject to tax under section 290.032.
33.12 	(b)(1) The initial subtraction base amount equals
33.13 	(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,
33.14 	(ii) $9,600 for a single taxpayer, and
33.15 	(iii) $6,000 for a married taxpayer filing a separate federal return.
33.16 	(2) The qualified individual's initial subtraction base amount, then, must be reduced by 
33.17 	the sum of nontaxable retirement and disability benefits and one-half of the amount of 
33.18 	adjusted gross income in excess of the following thresholds:
33.19 	(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified 
33.20 	individuals,
33.21 	(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one 
33.22 	spouse is a qualified individual, and
33.23 	(iii) $9,000 for a married taxpayer filing a separate federal return.
33.24 	(3) In the case of a qualified individual who is under the age of 65, the maximum amount 
33.25 	of the subtraction base may not exceed the taxpayer's disability income.
33.26 	(4) The resulting amount is the subtraction base amount.

33.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
33.28 	31, 2017.

34.1 	Sec. 46. [290.0803] INDIVIDUALS; DEDUCTIONS AND EXEMPTIONS 
34.2 	ALLOWED.
34.3 		Subdivision 1.Deduction allowed. Individuals are allowed to deduct the sum of the 
34.4 	following amounts in computing taxable net income for the taxable year:
34.5 	(1) the standard or itemized deductions, as provided under subdivision 2 or 3; and
34.6 	(2) the exemption allowance computed under subdivision 9.
34.7 		Subd. 2.Standard deduction. (a) An individual may elect to claim a standard deduction 
34.8 	in lieu of the itemized deductions allowed under subdivision 3 for the taxable year equal to 
34.9 	the following amount:
34.10 	(1) for a married joint filer or a surviving spouse, $14,000;
34.11 	(2) for a head of household filer, $10,300; or
34.12 	(3) for any other filer, $7,000; plus
34.13 	(4) the additional amount for the taxpayer under paragraph (b).
34.14 	(b) The additional amount equals the sum of the following amounts:
34.15 	(1) $1,300 if the taxpayer has attained age 65 before the close of the taxable year or 
34.16 	$1,600 for such a taxpayer who is not married or a surviving spouse;
34.17 	(2) $1,300 for the spouse of the taxpayer if the spouse has attained the age of 65 before 
34.18 	the close of the taxable year and qualifies under subdivision 9, clause (2);
34.19 	(3) $1,300 if the taxpayer is blind at the close of the taxable year or $1,600 for such a 
34.20 	taxpayer who is not married or a surviving spouse; and
34.21 	(4) $1,300 for the spouse of the taxpayer if the spouse is blind as of the close of the 
34.22 	taxable year and qualifies under subdivision 9, clause (2).
34.23 	(c) For an individual who is a dependent, as defined in section 152 of the Internal Revenue 
34.24 	Code, of another taxpayer for a taxable year beginning in the calendar year in which the 
34.25 	individual's taxable year begins, the standard deduction for that individual is limited to the 
34.26 	greater of:
34.27 	(1) $500; or
34.28 	(2) the sum of $250 and that individual's earned income, as defined in section 32(c) of 
34.29 	the Internal Revenue Code.
35.1 	(d) The standard deduction is zero for (1) a married individual filing a separate return 
35.2 	if either spouse itemizes deductions, and (2) an individual making a return for a period of 
35.3 	less than twelve months on account of changes in the annual accounting period.
35.4 		Subd. 3.Itemized deductions. (a) An individual is allowed itemized deductions for the 
35.5 	taxable year equal to the sum of the following amounts:
35.6 	(1) taxes paid, as provided in subdivision 4;
35.7 	(2) charitable contributions, as provided in subdivision 5;
35.8 	(3) interest, as provided in subdivision 6;
35.9 	(4) medical expenses, as provided in subdivision 7;
35.10 	(5) miscellaneous deductions, as provided in subdivision 8; and
35.11 	(6) losses allowable under section 165(a) of the Internal Revenue Code, other than losses 
35.12 	allowable under that section in computing adjusted gross income, and except that the 
35.13 	provisions of section 165(h)(5) of the Internal Revenue Code apply regardless of the taxable 
35.14 	year; reduced by
35.15 	(7) the amount of the disallowed itemized deductions computed under paragraph (b).
35.16 	(b) The amount of disallowed itemized deductions equals the lesser of:
35.17 	(1) three percent of the excess of the taxpayer's adjusted gross income, over the applicable 
35.18 	amount; or
35.19 	(2) 80 percent of the amount of the itemized deductions, excluding:
35.20 	(i) medical expense deduction under subdivision 7;
35.21 	(ii) any interest deduction under subdivision 6, for investment interest as defined in 
35.22 	section 163(d) of the Internal Revenue Code; and
35.23 	(iii) losses allowable under section 165(c)(2) or (3), or (d), of the Internal Revenue Code, 
35.24 	and allowed under paragraph (a), clause (6).
35.25 	(c) "Applicable amount" means $190,050, or $95,025 for a married individual filing a 
35.26 	separate return.
35.27 	(d) No amount deducted in computing federal adjusted gross income is allowed as an 
35.28 	itemized deduction under this section.
35.29 		Subd. 4.Taxes paid. (a) The taxes paid deduction equals the sum of the following 
35.30 	amounts for the taxable year:
36.1 	(1) state and local real and personal property taxes in an amount not to exceed $30,000;
36.2 	(2) foreign income, war profits, and excess profits taxes to the extent not reduced by the 
36.3 	federal foreign tax credit; and
36.4 	(3) for individuals who are allowed a federal foreign tax credit for taxes that do not 
36.5 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
36.6 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
36.7 	foreign taxes reported in claiming the foreign tax credit.
36.8 	(b) For purposes of this subdivision, the following terms have the meanings given them:
36.9 	(1) "carryover of subnational foreign taxes" equals the carryover allowed under section 
36.10 	904(c) of the Internal Revenue Code minus national level foreign taxes to the extent they 
36.11 	exceed the federal foreign tax credit;
36.12 	(2) "federal foreign tax credit" means the credit allowed under section 27 of the Internal 
36.13 	Revenue Code; and
36.14 	(3) "foreign, income, war profits, and excess profits taxes" and "state and local real and 
36.15 	personal property taxes" have the meanings given in section 164 of the Internal Revenue 
36.16 	Code.
36.17 		Subd. 5.Charitable contributions. The charitable contribution equals the amount of 
36.18 	the charitable contribution deduction allowable to the taxpayer under section 170 of the 
36.19 	Internal Revenue Code, except that the following rules apply:
36.20 	(1) the provisions of section 170(b)(1)(G) apply regardless of the taxable year; and
36.21 	(2) for taxable years beginning after December 31, 2017, determination of carryover 
36.22 	amounts must be made by applying the rules under section 170 of the Internal Revenue 
36.23 	Code based on the charitable contribution deductions claimed and allowable under this 
36.24 	section.
36.25 		Subd. 6.Interest deduction. The interest deduction equals the amount allowed to the 
36.26 	taxpayer as interest paid or accrued during the taxable year under section 163 of the Internal 
36.27 	Revenue Code with the following exceptions:
36.28 	(1) qualified residence interest excludes home equity interest; and
36.29 	(2) acquisition indebtedness must not exceed $750,000 ($375,000 for a married separate 
36.30 	return) for indebtedness incurred on or after December 16, 2017.
36.31 	The definitions of terms under section 163 of the Internal Revenue Code apply for purposes 
36.32 	of this subdivision.
37.1 		Subd. 7.Medical expenses. The medical expense deduction equals the deduction allowed 
37.2 	for the taxable year under section 213 of the Internal Revenue Code.
37.3 		Subd. 8.Miscellaneous deduction. The miscellaneous deduction equals the sum of the 
37.4 	following amounts for the taxable year:
37.5 	(1) impairment-related work expenses allowed under section 67(d) of the Internal Revenue 
37.6 	Code;
37.7 	(2) the deduction for estate tax under section 691(c) of the Internal Revenue Code;
37.8 	(3) any deduction allowable in connection with personal property used in a short sale 
37.9 	as described under section 67(b)(8);
37.10 	(4) the deduction under section 1341 of the Internal Revenue Code;
37.11 	(5) the deduction under section 72(b)(3) of the Internal Revenue Code;
37.12 	(6) the deduction under section 171 of the Internal Revenue Code; and
37.13 	(7) the deduction under section 216 of the Internal Revenue Code.
37.14 		Subd. 9.Exemption allowance. (a) The exemption allowance is computed as follows:
37.15 	(1) the exemption amount for the taxpayer; plus
37.16 	(2) an additional exemption amount for the spouse of the taxpayer:
37.17 	(i) for a joint return; or
37.18 	(ii) if a joint return is not made by the taxpayer and spouse, and if the spouse, for the 
37.19 	calendar year in which the taxable year of the taxpayer begins, has no gross income and is 
37.20 	not the dependent of another taxpayer; plus
37.21 	(3) an exemption amount for each individual who is a dependent, as defined in section 
37.22 	152 of the Internal Revenue Code, of the taxpayer for the taxable year; minus
37.23 	(4) the disallowed exemption amount under paragraph (d), but the remainder may not 
37.24 	be less than zero.
37.25 	(b) The exemption amount equals $4,150.
37.26 	(c) The disallowed personal exemption amount equals the number of personal exemptions 
37.27 	allowed under paragraph (a) multiplied by (i) the exemption amount under paragraph (b) 
37.28 	and (ii) the applicable percentage.
37.29 	(d) For a married individual filing a separate return, "applicable percentage" means two 
37.30 	percentage points for each $1,250, or fraction of that amount, by which the taxpayer's federal 
38.1 	adjusted gross income for the taxable year exceeds the threshold amount. For all other filers, 
38.2 	applicable percentage means two percentage points for each $2,500, or fraction of that 
38.3 	amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds 
38.4 	the threshold amount. The applicable percentage must not exceed 100 percent.
38.5 	(e) "Threshold amount" means:
38.6 	(1) $285,050 for a joint return or a surviving spouse;
38.7 	(2) $237,550 for a head of a household;
38.8 	(3) $190,050 for an individual who is not married and who is not a surviving spouse or 
38.9 	head of a household; and
38.10 	(4) $142,500 for a married individual filing a separate return.
38.11 		Subd. 10.Indexing. (a) For taxable years beginning after December 31, 2018, the 
38.12 	commissioner must annually adjust the dollar amounts in subdivisions 2, 3, and 9, except 
38.13 	the amounts in paragraph (d) of subdivision 9, for inflation as provided in paragraph (b).
38.14 	(b) Each dollar amount is increased by an amount equal to:
38.15 	(1) that dollar amount, multiplied by
38.16 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
38.17 	Code for the calendar year in which the taxable year begins, by substituting "calendar year 
38.18 	2017" for "calendar year 2016" in subparagraph (B) of section 1(f)(3).
38.19 		Subd. 11.Nonresidents; itemized deduction rules. For an individual who is not a 
38.20 	resident of this state for the entire taxable year, the following rules apply to limit the 
38.21 	otherwise allowable itemized deductions under this section:
38.22 	(1) the taxes paid deduction under subdivision 4 is limited to real and personal property 
38.23 	taxes imposed by this state or its political subdivisions;
38.24 	(2) the charitable contribution deduction under subdivision 5 does not apply;
38.25 	(3) the interest deduction under subdivision 6 is limited to:
38.26 	(i) qualified residence interest paid on loans secured by a mortgage or lien on a residence 
38.27 	located in this state; or
38.28 	(ii) interest paid or accrued on indebtedness properly allocable to property held for 
38.29 	investment located in this state;
38.30 	(4) the miscellaneous deduction under subdivision 8 is limited to expenses related to:
39.1 	(i) the production of income in this state;
39.2 	(ii) property located in this state; or
39.3 	(iii) taxes paid to this state or its political subdivisions; and
39.4 	(5) the deduction for losses under subdivision 3, paragraph (a), clause (6), is limited to 
39.5 	losses attributable to property located in this state.

39.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
39.7 	31, 2017.

39.8 	Sec. 47. Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended 
39.9 	to read:
39.10 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
39.11 	terms have the meanings given.
39.12 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
39.13 	year:
39.14 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
39.15 	55(b)(2) of the Internal Revenue Code;
39.16 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
39.17 	taxable income, but excluding:
39.18 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
39.19 	and
39.20 	(ii) the medical expense deduction;
39.21 	(iii) the casualty, theft, and disaster loss deduction; and
39.22 	(iv) the impairment-related work expenses of a disabled person;
39.23 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
39.24 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
39.25 	to the extent not included in federal alternative minimum taxable income, the excess of the 
39.26 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
39.27 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
39.28 	without regard to the depletion deduction for the taxable year);
39.29 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
39.30 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
39.31 	Code determined without regard to subparagraph (E);
40.1 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
40.2 	of interest income as provided by section 290.0131, subdivision 2; and
40.3 	(6) the amount of addition required by section 290.0131, subdivisions 9 to 11 10;
40.4 	(7) the deduction allowed under section 199A of the Internal Revenue Code;
40.5 	less the sum of the amounts determined under the following:
40.6 	(i) interest income as defined in section 290.0132, subdivision 2;
40.7 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
40.8 	3, to the extent included in federal alternative minimum taxable income;
40.9 	(iii) the amount of investment interest paid or accrued within the taxable year on 
40.10 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
40.11 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
40.12 	in computing federal adjusted gross income;
40.13 	(iv) amounts subtracted from federal taxable adjusted gross income as provided by 
40.14 	section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 28; and
40.15 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
40.16 	paragraph (c).
40.17 	In the case of an estate or trust, alternative minimum taxable income must be computed 
40.18 	as provided in section 59(c) of the Internal Revenue Code, except that alternative minimum 
40.19 	taxable income must be increased by the amount of the addition under section 290.0131, 
40.20 	subdivision 17.
40.21 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
40.22 	the Internal Revenue Code.
40.23 	(c) "Net minimum tax" means the minimum tax imposed by this section.
40.24 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
40.25 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
40.26 	under this chapter.
40.27 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
40.28 	after subtracting the exemption amount determined under subdivision 3.

40.29 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
40.30 	31, 2017.

41.1 	Sec. 48. Minnesota Statutes 2016, section 290.091, subdivision 3, is amended to read:
41.2 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative minimum 
41.3 	tax, the exemption amount is, for taxable years beginning after December 31, 2005, $60,000
41.4 	$75,760 for married couples filing joint returns, $30,000 $37,880 for married individuals 
41.5 	filing separate returns, estates, and trusts, and $45,000 $56,820 for unmarried individuals.
41.6 	(b) The exemption amount determined under this subdivision is subject to the phase out 
41.7 	under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum 
41.8 	taxable income as determined under this section must be substituted in the computation of 
41.9 	the phase out.
41.10 	(c) For taxable years beginning after December 31, 2006 2018, the exemption amount 
41.11 	under paragraph (a) must be adjusted for inflation. The commissioner shall adjust the 
41.12 	exemption amount by the percentage determined pursuant to the provisions of section 1(f) 
41.13 	of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2005" "2017"
41.14 	shall be substituted for the word "1992." For 2007, the commissioner shall then determine 
41.15 	the percent change from the 12 months ending on August 31, 2005, to the 12 months ending 
41.16 	on August 31, 2006, and in each subsequent year, from the 12 months ending on August 
41.17 	31, 2005, to the 12 months ending on August 31 of the year preceding the taxable year.
41.18 	"2016." The exemption amount as adjusted must be rounded to the nearest $10. If the amount 
41.19 	ends in $5, it must be rounded up to the nearest $10 amount. The determination of the 
41.20 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

41.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
41.22 	31, 2017.

41.23 	Sec. 49. Minnesota Statutes 2016, section 290.0921, subdivision 8, is amended to read:
41.24 		Subd. 8.Carryover credit. (a) A corporation is allowed a credit against qualified regular 
41.25 	tax for qualified alternative minimum tax previously paid. The credit is allowable only if 
41.26 	the corporation has no tax liability under this section for the taxable year and if the 
41.27 	corporation has an alternative minimum tax credit carryover from a previous year. The 
41.28 	credit allowable in a taxable year equals the lesser of
41.29 	(1) the excess of the qualified regular tax for the taxable year over the amount computed 
41.30 	under subdivision 1, clause (1), for the taxable year; or
41.31 	(2) the carryover credit to the taxable year.
41.32 	(b) For purposes of this subdivision, the following terms have the meanings given.
42.1 	(1) "Qualified alternative minimum tax" equals the amount determined under subdivision 
42.2 	1 for the a taxable year beginning before December 31, 2017.
42.3 	(2) "Qualified regular tax" means the tax imposed under section 290.06, subdivision 1.
42.4 	(c) The qualified alternative minimum tax for a taxable year is an alternative minimum 
42.5 	tax credit carryover to each of the taxable years succeeding the taxable year. The entire 
42.6 	amount of the credit must be carried to the earliest taxable year to which the amount may 
42.7 	be carried. Any unused portion of the credit must be carried to the following taxable year. 
42.8 	No credit may be carried to a taxable year in which alternative minimum tax was paid.
42.9 	(d) An acquiring corporation may carry over this credit from a transferor or distributor 
42.10 	corporation in a corporate acquisition. The provisions of section 381 of the Internal Revenue 
42.11 	Code apply in determining the amount of the carryover, if any.

42.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
42.13 	31, 2017.

42.14 	Sec. 50. Minnesota Statutes 2016, section 290.0922, subdivision 1, is amended to read:
42.15 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
42.16 	regard to this section, the franchise tax imposed on a corporation required to file under 
42.17 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation under 
42.18 	section 290.9725 for the taxable year includes a tax equal to the following amounts:

42.19
42.20	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts is:
		the tax equals:
	
42.2242.21
			less than
		$
	930,000
990,000
		$
	0
		
42.2442.23
		$
	930,000
990,000
	to
	$
	1,869,999
1,989,999
		$
	190
200
		
42.2642.25
		$
	1,870,000
1,990,000
	to
	$
	9,339,999
9,959,999
		$
	560
600
		
42.2842.27
		$
	9,340,000
9,960,000
	to
	$
	18,679,999
19,929,999
		$
	1,870
1,990
		
42.3042.29
		$
	18,680,000
19,930,000
	to
	$
	37,359,999
39,859,999
		$
	3,740
3,990
		
42.3242.31
		$
	37,360,000
39,860,000
	or
	more
			$
	9,340
9,960
		
42.33 	(b) A tax is imposed for each taxable year on a corporation required to file a return under 
42.34 	section 289A.12, subdivision 3, that is treated as an "S" corporation under section 290.9725
42.35 	and on a partnership required to file a return under section 289A.12, subdivision 3, other 
42.36 	than a partnership that derives over 80 percent of its income from farming. The tax imposed 
43.1 	under this paragraph is due on or before the due date of the return for the taxpayer due under 
43.2 	section 289A.18, subdivision 1. The commissioner shall prescribe the return to be used for 
43.3 	payment of this tax. The tax under this paragraph is equal to the following amounts:

43.4
43.5
43.6
43.7	If the sum of the S corporation's 
or partnership's Minnesota 
property, payrolls, and sales or 
receipts is:
			the tax equals:
	
43.943.8
			less than
		$
	930,000
990,000
		$
	0
		
43.1143.10
		$
	930,000
990,000
	to
	$
	1,869,999
1,989,999
		$
	190
200
		
43.1343.12
		$
	1,870,000
1,990,000
	to
	$
	9,339,999
9,959,999
		$
	560
600
		
43.1543.14
		$
	9,340,000
9,960,000
	to
	$
	18,679,999
19,929,999
		$
	1,870
1,990
		
43.1743.16
		$
	18,680,000
19,930,000
	to
	$
	37,359,999
39,859,999
		$
	3,740
3,990
		
43.1943.18
		$
	37,360,000
39,860,000
	or
	more
			$
	9,340
9,960
		
43.20 	(c) The commissioner shall adjust the dollar amounts of both the tax and the property, 
43.21 	payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage 
43.22 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
43.23 	that in section 1(f)(3)(B) the word "2012" "2017" must be substituted for the word "1992." 
43.24 	For 2014, the commissioner shall determine the percentage change from the 12 months 
43.25 	ending on August 31, 2012, to the 12 months ending on August 31, 2013, and in each 
43.26 	subsequent year, from the 12 months ending on August 31, 2012, to the 12 months ending 
43.27 	on August 31 of the year preceding the taxable year. "2016." The determination of the 
43.28 	commissioner pursuant to this subdivision is not a "rule" subject to the Administrative 
43.29 	Procedure Act contained in chapter 14. The tax amounts as adjusted must be rounded to the 
43.30 	nearest $10 amount and the threshold amounts must be adjusted to the nearest $10,000 
43.31 	amount. For tax amounts that end in $5, the amount is rounded up to the nearest $10 amount 
43.32 	and for the threshold amounts that end in $5,000, the amount is rounded up to the nearest 
43.33 	$10,000.

43.34 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
43.35 	31, 2017.

44.1 	Sec. 51. Minnesota Statutes 2016, section 290.095, subdivision 4, is amended to read:
44.2 		Subd. 4.Computation and modifications. The following modifications shall be made 
44.3 	in computing a net operating loss in any taxable year and also in computing the taxable net 
44.4 	income for any taxable year before a net operating loss deduction shall be allowed:
44.5 	(a) No deduction shall be allowed for or with respect to losses connected with income 
44.6 	producing activities if the income therefrom would not be required to be either assignable 
44.7 	to this state or included in computing the taxpayer's taxable net income.
44.8 	(b) A net operating loss deduction shall not be allowed.
44.9 	(c) The amount deductible on account of losses from sales or exchanges of capital assets 
44.10 	shall not exceed the amount includable on account of gains from sales or exchanges of 
44.11 	capital assets.
44.12 	(d) Renegotiation of profits for a prior taxable year under the renegotiation laws of the 
44.13 	United States of America, including renegotiation of the profits with a subcontractor, shall 
44.14 	not enter into the computation.
44.15 	(e) Federal income and excess profits taxes shall not be allowed as a deduction.
44.16 	(f) The 80-percent limitation under section 172(a)(2) of the Internal Revenue Code does 
44.17 	not apply to the computations for corporate taxpayers under this section.

44.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
44.19 	31, 2017.

44.20 	Sec. 52. Minnesota Statutes 2017 Supplement, section 290.17, subdivision 2, is amended 
44.21 	to read:
44.22 		Subd. 2.Income not derived from conduct of a trade or business. The income of a 
44.23 	taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
44.24 	business must be assigned in accordance with paragraphs (a) to (f):
44.25 	(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in section 
44.26 	3401(a) and, (f), and (i) of the Internal Revenue Code is assigned to this state if, and to the 
44.27 	extent that, the work of the employee is performed within it; all other income from such 
44.28 	sources is treated as income from sources without this state.
44.29 	Severance pay shall be considered income from labor or personal or professional services.
45.1 	(2) In the case of an individual who is a nonresident of Minnesota and who is an athlete 
45.2 	or entertainer, income from compensation for labor or personal services performed within 
45.3 	this state shall be determined in the following manner:
45.4 	(i) the amount of income to be assigned to Minnesota for an individual who is a 
45.5 	nonresident salaried athletic team employee shall be determined by using a fraction in which 
45.6 	the denominator contains the total number of days in which the individual is under a duty 
45.7 	to perform for the employer, and the numerator is the total number of those days spent in 
45.8 	Minnesota. For purposes of this paragraph, off-season training activities, unless conducted 
45.9 	at the team's facilities as part of a team imposed program, are not included in the total number 
45.10 	of duty days. Bonuses earned as a result of play during the regular season or for participation 
45.11 	in championship, play-off, or all-star games must be allocated under the formula. Signing 
45.12 	bonuses are not subject to allocation under the formula if they are not conditional on playing 
45.13 	any games for the team, are payable separately from any other compensation, and are 
45.14 	nonrefundable; and
45.15 	(ii) the amount of income to be assigned to Minnesota for an individual who is a 
45.16 	nonresident, and who is an athlete or entertainer not listed in item (i), for that person's athletic 
45.17 	or entertainment performance in Minnesota shall be determined by assigning to this state 
45.18 	all income from performances or athletic contests in this state.
45.19 	(3) For purposes of this section, amounts received by a nonresident as "retirement income" 
45.20 	as defined in section (b)(1) of the State Income Taxation of Pension Income Act, Public 
45.21 	Law 104-95, are not considered income derived from carrying on a trade or business or 
45.22 	from wages or other compensation for work an employee performed in Minnesota, and are 
45.23 	not taxable under this chapter.
45.24 	(b) Income or gains from tangible property located in this state that is not employed in 
45.25 	the business of the recipient of the income or gains must be assigned to this state.
45.26 	(c) Income or gains from intangible personal property not employed in the business of 
45.27 	the recipient of the income or gains must be assigned to this state if the recipient of the 
45.28 	income or gains is a resident of this state or is a resident trust or estate.
45.29 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
45.30 	original cost of partnership tangible property in this state to the original cost of partnership 
45.31 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
45.32 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale of 
45.33 	the partnership interest is allocated to this state in accordance with the sales factor of the 
46.1 	partnership for its first full tax period immediately preceding the tax period of the partnership 
46.2 	during which the partnership interest was sold.
46.3 	Gain on the sale of an interest in a single member limited liability company that is 
46.4 	disregarded for federal income tax purposes is allocable to this state as if the single member 
46.5 	limited liability company did not exist and the assets of the limited liability company are 
46.6 	personally owned by the sole member.
46.7 	Gain on the sale of goodwill or income from a covenant not to compete that is connected 
46.8 	with a business operating all or partially in Minnesota is allocated to this state to the extent 
46.9 	that the income from the business in the year preceding the year of sale was allocable to 
46.10 	Minnesota under subdivision 3.
46.11 	When an employer pays an employee for a covenant not to compete, the income allocated 
46.12 	to this state is in the ratio of the employee's service in Minnesota in the calendar year 
46.13 	preceding leaving the employment of the employer over the total services performed by the 
46.14 	employee for the employer in that year.
46.15 	(d) Income from winnings on a bet made by an individual while in Minnesota is assigned 
46.16 	to this state. In this paragraph, "bet" has the meaning given in section 609.75, subdivision 
46.17 	2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).
46.18 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
46.19 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
46.20 	(f) For the purposes of this section, working as an employee shall not be considered to 
46.21 	be conducting a trade or business.

46.22 	EFFECTIVE DATE. This section is effective for wages paid after December 31, 2017.

46.23 	Sec. 53. Minnesota Statutes 2016, section 290.21, is amended by adding a subdivision to 
46.24 	read:
46.25 		Subd. 9.Deferred foreign income. The income of domestic corporations that is included 
46.26 	in net income under section 965 of the Internal Revenue Code is dividend income.

46.27 	EFFECTIVE DATE. This section is effective retroactively for each taxpayer's last 
46.28 	taxable year beginning before January 1, 2018.

47.1 	Sec. 54. Minnesota Statutes 2016, section 290.34, is amended by adding a subdivision to 
47.2 	read:
47.3 		Subd. 5.Insurance companies; interest expense limitation. To be consistent with the 
47.4 	federal treatment of the interest expense limitation under section 163(j) of the Internal 
47.5 	Revenue Code for an affiliated group that includes an insurance company taxable under 
47.6 	chapter 297I and exempt from taxation under section 290.05, subdivision 1, clause (c), the 
47.7 	rules under this subdivision apply. In that case, the interest expense limitation under section 
47.8 	163(j) must be computed for the corporation subject to tax under this chapter using the 
47.9 	adjusted taxable income of the insurance companies that are part of the affiliated group and 
47.10 	taxed under chapter 297I.

47.11 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
47.12 	31, 2017.

47.13 	Sec. 55. Minnesota Statutes 2016, section 290.92, subdivision 1, is amended to read:
47.14 		Subdivision 1.Definitions. (1) Wages. For purposes of this section, the term "wages" 
47.15 	means the same as that term is defined in section 3401(a) and, (f), and (i) of the Internal 
47.16 	Revenue Code.
47.17 	(2) Payroll period. For purposes of this section the term "payroll period" means a period 
47.18 	for which a payment of wages is ordinarily made to the employee by the employee's 
47.19 	employer, and the term "miscellaneous payroll period" means a payroll period other than a 
47.20 	daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll 
47.21 	period.
47.22 	(3) Employee. For purposes of this section the term "employee" means any resident 
47.23 	individual performing services for an employer, either within or without, or both within and 
47.24 	without the state of Minnesota, and every nonresident individual performing services within 
47.25 	the state of Minnesota, the performance of which services constitute, establish, and determine 
47.26 	the relationship between the parties as that of employer and employee. As used in the 
47.27 	preceding sentence, the term "employee" includes an officer of a corporation, and an officer, 
47.28 	employee, or elected official of the United States, a state, or any political subdivision thereof, 
47.29 	or the District of Columbia, or any agency or instrumentality of any one or more of the 
47.30 	foregoing.
47.31 	(4) Employer. For purposes of this section the term "employer" means any person, 
47.32 	including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies, 
47.33 	and corporations transacting business in or deriving any income from sources within the 
48.1 	state of Minnesota for whom an individual performs or performed any service, of whatever 
48.2 	nature, as the employee of such person, except that if the person for whom the individual 
48.3 	performs or performed the services does not have control of the payment of the wages for 
48.4 	such services, the term "employer," except for purposes of paragraph (1), means the person 
48.5 	having control of the payment of such wages. As used in the preceding sentence, the term 
48.6 	"employer" includes any corporation, individual, estate, trust, or organization which is 
48.7 	exempt from taxation under section 290.05 and further includes, but is not limited to, officers 
48.8 	of corporations who have control, either individually or jointly with another or others, of 
48.9 	the payment of the wages.
48.10 	(5) Number of withholding exemptions claimed. For purposes of this section, the term 
48.11 	"number of withholding exemptions claimed" means the number of withholding exemptions 
48.12 	claimed in a withholding exemption certificate in effect under subdivision 5, except that if 
48.13 	no such certificate is in effect, the number of withholding exemptions claimed shall be 
48.14 	considered to be zero.

48.15 	EFFECTIVE DATE. This section is effective for wages paid after July 1, 2018.

48.16 	Sec. 56. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 3, is amended 
48.17 	to read:
48.18 		Subd. 3.Income. (a) "Income" means the sum of the following:
48.19 	(1) federal adjusted gross income as defined in the Internal Revenue Code; and
48.20 	(2) the sum of the following amounts to the extent not included in clause (1):
48.21 	(i) all nontaxable income;
48.22 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
48.23 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
48.24 	carryover allowed under section 469(b) of the Internal Revenue Code;
48.25 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
48.26 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
48.27 	Code;
48.28 	(iv) cash public assistance and relief;
48.29 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
48.30 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
48.31 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
49.1 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
49.2 	gross income in the years when the payments were made;
49.3 	(vi) interest received from the federal or a state government or any instrumentality or 
49.4 	political subdivision thereof;
49.5 	(vii) workers' compensation;
49.6 	(viii) nontaxable strike benefits;
49.7 	(ix) the gross amounts of payments received in the nature of disability income or sick 
49.8 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
49.9 	or otherwise;
49.10 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
49.11 	1986, as amended through December 31, 1995;
49.12 	(xi) contributions made by the claimant to an individual retirement account, including 
49.13 	a qualified voluntary employee contribution; simplified employee pension plan; 
49.14 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
49.15 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
49.16 	Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for 
49.17 	the claimant and spouse;
49.18 	(xii) to the extent not included in federal adjusted gross income, distributions received 
49.19 	by the claimant or spouse from a traditional or Roth style retirement account or plan;
49.20 	(xiii) nontaxable scholarship or fellowship grants;
49.21 	(xiv) the amount of deduction allowed under section 199 of the Internal Revenue Code
49.22 	alimony received to the extent not included in the recipient's income;
49.23 	(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue 
49.24 	Code;
49.25 	(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue 
49.26 	Code; and
49.27 	(xvii) the amount deducted for certain expenses of elementary and secondary school 
49.28 	teachers under section 62(a)(2)(D) of the Internal Revenue Code.
49.29 	In the case of an individual who files an income tax return on a fiscal year basis, the 
49.30 	term "federal adjusted gross income" shall mean federal adjusted gross income reflected in 
49.31 	the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced 
50.1 	by the amount of a net operating loss carryback or carryforward or a capital loss carryback 
50.2 	or carryforward allowed for the year.
50.3 	(b) "Income" does not include:
50.4 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
50.5 	(2) amounts of any pension or annuity which was exclusively funded by the claimant 
50.6 	or spouse and which funding payments were not excluded from federal adjusted gross 
50.7 	income in the years when the payments were made;
50.8 	(3) to the extent included in federal adjusted gross income, amounts contributed by the 
50.9 	claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed 
50.10 	the retirement base amount reduced by the amount of contributions excluded from federal 
50.11 	adjusted gross income, but not less than zero;
50.12 	(4) surplus food or other relief in kind supplied by a governmental agency;
50.13 	(5) relief granted under this chapter;
50.14 	(6) child support payments received under a temporary or final decree of dissolution or 
50.15 	legal separation; or
50.16 	(7) restitution payments received by eligible individuals and excludable interest as 
50.17 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
50.18 	Public Law 107-16.
50.19 	(c) The sum of the following amounts may be subtracted from income:
50.20 	(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
50.21 	(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
50.22 	(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
50.23 	(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
50.24 	(5) for the claimant's fifth dependent, the exemption amount; and
50.25 	(6) if the claimant or claimant's spouse was disabled or attained the age of 65 on or 
50.26 	before December 31 of the year for which the taxes were levied or rent paid, the exemption 
50.27 	amount.
50.28 	(d) For purposes of this subdivision, the following terms have the meanings given them:
50.29 	(1) "exemption amount" means the exemption amount under section 151(d) of the Internal 
50.30 	Revenue Code 290.0803, subdivision 9, for the taxable year for which the income is reported;
51.1 	(2) "retirement base amount" means the deductible amount for the taxable year for the 
51.2 	claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for 
51.3 	inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard 
51.4 	to whether the claimant or spouse claimed a deduction; and
51.5 	(3) "traditional or Roth style retirement account or plan" means retirement plans under 
51.6 	sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.

51.7 	EFFECTIVE DATE. This section is effective for property tax refunds based on property 
51.8 	taxes payable after December 31, 2018, and rent paid after December 31, 2017.

51.9 	Sec. 57. Minnesota Statutes 2016, section 290A.03, subdivision 12, is amended to read:
51.10 		Subd. 12.Gross rent. (a) "Gross rent" means rental paid for the right of occupancy, at 
51.11 	arm's length, of a homestead, exclusive of charges for any medical services furnished by 
51.12 	the landlord as a part of the rental agreement, whether expressly set out in the rental 
51.13 	agreement or not.
51.14 	(b) The gross rent of a resident of a nursing home or intermediate care facility is $350
51.15 	$490 per month. The gross rent of a resident of an adult foster care home is $550 $760 per 
51.16 	month. Beginning for rent paid in 2002 2019, the commissioner shall annually adjust for 
51.17 	inflation the gross rent amounts stated in this paragraph. The adjustment must be made in 
51.18 	accordance with section 1(f) of the Internal Revenue Code, except that for purposes of this 
51.19 	paragraph the percentage increase shall be determined from the year ending on June 30, 
51.20 	2001 2017, to the year ending on June 30 of the year in which the rent is paid. The 
51.21 	commissioner shall round the gross rents to the nearest $10 amount. If the amount ends in 
51.22 	$5, the commissioner shall round it up to the next $10 amount. The determination of the 
51.23 	commissioner under this paragraph is not a rule under the Administrative Procedure Act.
51.24 	(c) If the landlord and tenant have not dealt with each other at arm's length and the 
51.25 	commissioner determines that the gross rent charged was excessive, the commissioner may 
51.26 	adjust the gross rent to a reasonable amount for purposes of this chapter.
51.27 	(d) Any amount paid by a claimant residing in property assessed pursuant to section 
51.28 	273.124, subdivision 3, 4, 5, or 6 for occupancy in that property shall be excluded from 
51.29 	gross rent for purposes of this chapter. However, property taxes imputed to the homestead 
51.30 	of the claimant or the dwelling unit occupied by the claimant that qualifies for homestead 
51.31 	treatment pursuant to section 273.124, subdivision 3, 4, 5, or 6 shall be included within the 
51.32 	term "property taxes payable" as defined in subdivision 13, notwithstanding the fact that 
51.33 	ownership is not in the name of the claimant.

52.1 	EFFECTIVE DATE. This section is effective for refunds based on rent paid after 
52.2 	December 31, 2017, and property taxes payable after December 31, 2018.

52.3 	Sec. 58. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 15, is amended 
52.4 	to read:
52.5 		Subd. 15.Internal Revenue Code.  "Internal Revenue Code" means the Internal Revenue 
52.6 	Code of 1986, as amended through December 16, 2016 March 31, 2018.

52.7 	EFFECTIVE DATE. This section is effective for property tax refunds based on property 
52.8 	taxes payable after December 31, 2018, and rent paid after December 31, 2017.

52.9 	Sec. 59. Minnesota Statutes 2016, section 290A.04, subdivision 4, is amended to read:
52.10 		Subd. 4.Inflation adjustment. (a) Beginning for property tax refunds payable in calendar 
52.11 	year 2002, the commissioner shall annually adjust the dollar amounts of the income thresholds 
52.12 	and the maximum refunds under subdivisions 2 and 2a for inflation. The commissioner 
52.13 	shall make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
52.14 	Code, except that for purposes of this subdivision using the Consumer Price Index for All 
52.15 	Urban Consumers. The percentage increase shall be determined as provided in this 
52.16 	subdivision.
52.17 	(b) In adjusting the dollar amounts of the income thresholds and the maximum refunds 
52.18 	under subdivision 2 for inflation, the percentage increase shall be determined from the year 
52.19 	ending on June 30, 2013, to the year ending on June 30 of the year preceding that in which 
52.20 	the refund is payable.
52.21 	(c) In adjusting the dollar amounts of the income thresholds and the maximum refunds 
52.22 	under subdivision 2a for inflation, the percentage increase shall be determined from the 
52.23 	year ending on June 30, 2013, to the year ending on June 30 of the year preceding that in 
52.24 	which the refund is payable.
52.25 	(d) The commissioner shall use the appropriate percentage increase to annually adjust 
52.26 	the income thresholds and maximum refunds under subdivisions 2 and 2a for inflation 
52.27 	without regard to whether or not the income tax brackets are adjusted for inflation in that 
52.28 	year. The commissioner shall round the thresholds and the maximum amounts, as adjusted 
52.29 	to the nearest $10 amount. If the amount ends in $5, the commissioner shall round it up to 
52.30 	the next $10 amount.
53.1 	(e) The commissioner shall annually announce the adjusted refund schedule at the same 
53.2 	time provided under section 290.06. The determination of the commissioner under this 
53.3 	subdivision is not a rule under the Administrative Procedure Act.

53.4 	EFFECTIVE DATE. This section is effective for refunds based on rent paid after 
53.5 	December 31, 2018, and property taxes payable after December 31, 2019.

53.6 	Sec. 60. Minnesota Statutes 2017 Supplement, section 291.005, subdivision 1, is amended 
53.7 	to read:
53.8 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following terms 
53.9 	used in this chapter shall have the following meanings:
53.10 	(1) "Commissioner" means the commissioner of revenue or any person to whom the 
53.11 	commissioner has delegated functions under this chapter.
53.12 	(2) "Federal gross estate" means the gross estate of a decedent as required to be valued 
53.13 	and otherwise determined for federal estate tax purposes under the Internal Revenue Code, 
53.14 	increased by the value of any property in which the decedent had a qualifying income interest 
53.15 	for life and for which an election was made under section 291.03, subdivision 1d, for 
53.16 	Minnesota estate tax purposes, but was not made for federal estate tax purposes.
53.17 	(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, 
53.18 	as amended through December 16, 2016 March 31, 2018.
53.19 	(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
53.20 	excluding therefrom any property included in the estate which has its situs outside Minnesota, 
53.21 	and (b) including any property omitted from the federal gross estate which is includable in 
53.22 	the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.
53.23 	(5) "Nonresident decedent" means an individual whose domicile at the time of death 
53.24 	was not in Minnesota.
53.25 	(6) "Personal representative" means the executor, administrator or other person appointed 
53.26 	by the court to administer and dispose of the property of the decedent. If there is no executor, 
53.27 	administrator or other person appointed, qualified, and acting within this state, then any 
53.28 	person in actual or constructive possession of any property having a situs in this state which 
53.29 	is included in the federal gross estate of the decedent shall be deemed to be a personal 
53.30 	representative to the extent of the property and the Minnesota estate tax due with respect 
53.31 	to the property.
54.1 	(7) "Resident decedent" means an individual whose domicile at the time of death was 
54.2 	in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply 
54.3 	to determinations of domicile under this chapter.
54.4 	(8) "Situs of property" means, with respect to:
54.5 	(i) real property, the state or country in which it is located;
54.6 	(ii) tangible personal property, the state or country in which it was normally kept or 
54.7 	located at the time of the decedent's death or for a gift of tangible personal property within 
54.8 	three years of death, the state or country in which it was normally kept or located when the 
54.9 	gift was executed;
54.10 	(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue 
54.11 	Code, owned by a nonresident decedent and that is normally kept or located in this state 
54.12 	because it is on loan to an organization, qualifying as exempt from taxation under section 
54.13 	501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is 
54.14 	deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
54.15 	(iv) intangible personal property, the state or country in which the decedent was domiciled 
54.16 	at death or for a gift of intangible personal property within three years of death, the state or 
54.17 	country in which the decedent was domiciled when the gift was executed.
54.18 	For a nonresident decedent with an ownership interest in a pass-through entity with 
54.19 	assets that include real or tangible personal property, situs of the real or tangible personal 
54.20 	property, including qualified works of art, is determined as if the pass-through entity does 
54.21 	not exist and the real or tangible personal property is personally owned by the decedent. If 
54.22 	the pass-through entity is owned by a person or persons in addition to the decedent, ownership 
54.23 	of the property is attributed to the decedent in proportion to the decedent's capital ownership 
54.24 	share of the pass-through entity.
54.25 	(9) "Pass-through entity" includes the following:
54.26 	(i) an entity electing S corporation status under section 1362 of the Internal Revenue 
54.27 	Code;
54.28 	(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
54.29 	(iii) a single-member limited liability company or similar entity, regardless of whether 
54.30 	it is taxed as an association or is disregarded for federal income tax purposes under Code 
54.31 	of Federal Regulations, title 26, section 301.7701-3; or
55.1 	(iv) a trust to the extent the property is includible in the decedent's federal gross estate; 
55.2 	but excludes
55.3 	(v) an entity whose ownership interest securities are traded on an exchange regulated 
55.4 	by the Securities and Exchange Commission as a national securities exchange under section 
55.5 	6 of the Securities Exchange Act, United States Code, title 15, section 78f.

55.6 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
55.7 	dying after December 31, 2017.

55.8 	Sec. 61. Minnesota Statutes 2016, section 297A.68, subdivision 25, is amended to read:
55.9 		Subd. 25.Sale of property used in a trade or business. (a) The sale of tangible personal 
55.10 	property primarily used in a trade or business is exempt if the sale is not made in the normal 
55.11 	course of business of selling that kind of property and if one of the following conditions is 
55.12 	satisfied:
55.13 	(1) the sale occurs in a transaction subject to or described in section 118, 331, 332, 336, 
55.14 	337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the Internal Revenue Code, as amended 
55.15 	through December 16, 2016;
55.16 	(2) the sale is between members of a controlled group as defined in section 1563(a) of 
55.17 	the Internal Revenue Code;
55.18 	(3) the sale is a sale of farm machinery;
55.19 	(4) the sale is a farm auction sale;
55.20 	(5) the sale is a sale of substantially all of the assets of a trade or business; or
55.21 	(6) the total amount of gross receipts from the sale of trade or business property made 
55.22 	during the calendar month of the sale and the preceding 11 calendar months does not exceed 
55.23 	$1,000.
55.24 	The use, storage, distribution, or consumption of tangible personal property acquired as 
55.25 	a result of a sale exempt under this subdivision is also exempt.
55.26 	(b) For purposes of this subdivision, the following terms have the meanings given.
55.27 	(1) A "farm auction" is a public auction conducted by a licensed auctioneer if substantially 
55.28 	all of the property sold consists of property used in the trade or business of farming and 
55.29 	property not used primarily in a trade or business.
55.30 	(2) "Trade or business" includes the assets of a separate division, branch, or identifiable 
55.31 	segment of a trade or business if, before the sale, the income and expenses attributable to 
56.1 	the separate division, branch, or identifiable segment could be separately ascertained from 
56.2 	the books of account or record (the lease or rental of an identifiable segment does not qualify 
56.3 	for the exemption).
56.4 	(3) A "sale of substantially all of the assets of a trade or business" must occur as a single 
56.5 	transaction or a series of related transactions within the 12-month period beginning on the 
56.6 	date of the first sale of assets intended to qualify for the exemption provided in paragraph 
56.7 	(a), clause (5).

56.8 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
56.9 	made after December 31, 2017.

56.10 	Sec. 62. Minnesota Statutes 2016, section 297B.03, is amended to read:
56.11 	297B.03 EXEMPTIONS.
56.12 	There is specifically exempted from the provisions of this chapter and from computation 
56.13 	of the amount of tax imposed by it the following:
56.14 	(1) purchase or use, including use under a lease purchase agreement or installment sales 
56.15 	contract made pursuant to section 465.71, of any motor vehicle by the United States and its 
56.16 	agencies and instrumentalities and by any person described in and subject to the conditions 
56.17 	provided in section 297A.67, subdivision 11;
56.18 	(2) purchase or use of any motor vehicle by any person who was a resident of another 
56.19 	state or country at the time of the purchase and who subsequently becomes a resident of 
56.20 	Minnesota, provided the purchase occurred more than 60 days prior to the date such person 
56.21 	began residing in the state of Minnesota and the motor vehicle was registered in the person's 
56.22 	name in the other state or country;
56.23 	(3) purchase or use of any motor vehicle by any person making a valid election to be 
56.24 	taxed under the provisions of section 297A.90;
56.25 	(4) purchase or use of any motor vehicle previously registered in the state of Minnesota 
56.26 	when such transfer constitutes a transfer within the meaning of section 118, 331, 332, 336, 
56.27 	337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal Revenue Code, 
56.28 	as amended through December 16, 2016;
56.29 	(5) purchase or use of any vehicle owned by a resident of another state and leased to a 
56.30 	Minnesota-based private or for-hire carrier for regular use in the transportation of persons 
56.31 	or property in interstate commerce provided the vehicle is titled in the state of the owner or 
57.1 	secured party, and that state does not impose a sales tax or sales tax on motor vehicles used 
57.2 	in interstate commerce;
57.3 	(6) purchase or use of a motor vehicle by a private nonprofit or public educational 
57.4 	institution for use as an instructional aid in automotive training programs operated by the 
57.5 	institution. "Automotive training programs" includes motor vehicle body and mechanical 
57.6 	repair courses but does not include driver education programs;
57.7 	(7) purchase of a motor vehicle by an ambulance service licensed under section 144E.10
57.8 	when that vehicle is equipped and specifically intended for emergency response or for 
57.9 	providing ambulance service;
57.10 	(8) purchase of a motor vehicle by or for a public library, as defined in section 134.001, 
57.11 	subdivision 2, as a bookmobile or library delivery vehicle;
57.12 	(9) purchase of a ready-mixed concrete truck;
57.13 	(10) purchase or use of a motor vehicle by a town for use exclusively for road 
57.14 	maintenance, including snowplows and dump trucks, but not including automobiles, vans, 
57.15 	or pickup trucks;
57.16 	(11) purchase or use of a motor vehicle by a corporation, society, association, foundation, 
57.17 	or institution organized and operated exclusively for charitable, religious, or educational 
57.18 	purposes, except a public school, university, or library, but only if the vehicle is:
57.19 	(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
57.20 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
57.21 	for carrying more than nine persons including the driver; and
57.22 	(ii) intended to be used primarily to transport tangible personal property or individuals, 
57.23 	other than employees, to whom the organization provides service in performing its charitable, 
57.24 	religious, or educational purpose;
57.25 	(12) purchase of a motor vehicle for use by a transit provider exclusively to provide 
57.26 	transit service is exempt if the transit provider is either (i) receiving financial assistance or 
57.27 	reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 
57.28 	473.388, or 473.405;
57.29 	(13) purchase or use of a motor vehicle by a qualified business, as defined in section 
57.30 	469.310, located in a job opportunity building zone, if the motor vehicle is principally 
57.31 	garaged in the job opportunity building zone and is primarily used as part of or in direct 
57.32 	support of the person's operations carried on in the job opportunity building zone. The 
57.33 	exemption under this clause applies to sales, if the purchase was made and delivery received 
58.1 	during the duration of the job opportunity building zone. The exemption under this clause 
58.2 	also applies to any local sales and use tax;
58.3 	(14) purchase of a leased vehicle by the lessee who was a participant in a lease-to-own 
58.4 	program from a charitable organization that is:
58.5 	(i) described in section 501(c)(3) of the Internal Revenue Code; and
58.6 	(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4; and
58.7 	(15) purchase of a motor vehicle used exclusively as a mobile medical unit for the 
58.8 	provision of medical or dental services by a federally qualified health center, as defined 
58.9 	under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget 
58.10 	Reconciliation Act of 1990.

58.11 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
58.12 	made after December 31, 2017.

58.13 	Sec. 63. Minnesota Statutes 2017 Supplement, section 462D.06, subdivision 1, is amended 
58.14 	to read:
58.15 		Subdivision 1.Subtraction. (a) As provided in section 290.0132, subdivision 25, an 
58.16 	account holder is allowed a subtraction from the federal taxable adjusted gross income equal 
58.17 	to interest or dividends earned on the first-time home buyer savings account during the 
58.18 	taxable year.
58.19 	(b) The subtraction under paragraph (a) is allowed each year for the taxable years 
58.20 	including and following the taxable year in which the account was established. No person 
58.21 	other than the account holder is allowed a subtraction under this section.

58.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
58.23 	31, 2017.

58.24 	Sec. 64. Minnesota Statutes 2017 Supplement, section 462D.06, subdivision 2, is amended 
58.25 	to read:
58.26 		Subd. 2.Addition. (a) As provided in section 290.0131, subdivision 14, an account 
58.27 	holder must add to federal taxable adjusted gross income the following amounts:
58.28 	(1) the amount in excess of the total contributions for all taxable years that is withdrawn 
58.29 	and used for other than eligible costs, or for a transfer permitted under section 462D.04, 
58.30 	subdivision 2; and
59.1 	(2) the amount remaining in the first-time home buyer savings account at the close of 
59.2 	the tenth taxable year that exceeds the total contributions to the account for all taxable years.
59.3 	(b) For an account that received a transfer under section 462D.04, subdivision 2, the 
59.4 	ten-year period under paragraph (a), clause (2), ends at the close of the earliest taxable year 
59.5 	that applies to either account under that clause.

59.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
59.7 	31, 2017.

59.8 	Sec. 65. Minnesota Statutes 2016, section 469.316, subdivision 1, is amended to read:
59.9 		Subdivision 1.Application. An individual, estate, or trust operating a trade or business 
59.10 	in a job opportunity building zone, and an individual, estate, or trust making a qualifying 
59.11 	investment in a qualified business operating in a job opportunity building zone qualifies for 
59.12 	the exemptions from taxes imposed under chapter 290, as provided in this section. The 
59.13 	exemptions provided under this section apply only to the extent that the income otherwise 
59.14 	would be taxable under chapter 290. Subtractions under this section from federal adjusted 
59.15 	gross income, federal taxable income, alternative minimum taxable income, or any other 
59.16 	base subject to tax are limited to the amount that otherwise would be included in the tax 
59.17 	base absent the exemption under this section. This section applies only to taxable years 
59.18 	beginning during the duration of the job opportunity building zone.

59.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
59.20 	31, 2017.

59.21 	Sec. 66. Minnesota Statutes 2016, section 469.317, is amended to read:
59.22 	469.317 CORPORATE FRANCHISE TAX EXEMPTION.
59.23 	(a) A qualified business is exempt from taxation under section 290.02, the alternative 
59.24 	minimum tax under section 290.0921, and the minimum fee under section 290.0922, on the 
59.25 	portion of its income attributable to operations within the zone. This exemption is determined 
59.26 	as follows:
59.27 	(1)(b) For purposes of the tax imposed under section 290.02, the exemption is determined 
59.28 	by multiplying its taxable net income by its zone percentage and by its relocation payroll 
59.29 	percentage and subtracting the result in determining taxable income;.
59.30 	(2) for purposes of the alternative minimum tax under section 290.0921, by multiplying 
59.31 	its alternative minimum taxable income by its zone percentage and by its relocation payroll 
59.32 	percentage and reducing alternative minimum taxable income by this amount; and
60.1 	(3)(c) For purposes of the minimum fee under section 290.0922, the exemption is 
60.2 	determined by excluding property and payroll in the zone from the computations of the fee 
60.3 	or by exempting the entity under section 290.0922, subdivision 2, clause (7).
60.4 	(b) (d) No subtraction is allowed under this section in excess of 20 percent of the sum 
60.5 	of the corporation's job opportunity building zone payroll and the adjusted basis of the 
60.6 	property at the time that the property is first used in the job opportunity building zone by 
60.7 	the corporation.
60.8 	(c) (e) This section applies only to taxable years beginning during the duration of the 
60.9 	job opportunity building zone.

60.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
60.11 	31, 2017.

60.12 	Sec. 67. ESTIMATED TAXES; EXCEPTIONS.
 60.13 	No addition to tax, penalties, or interest may be made under Minnesota Statutes, section 
60.14 	289A.25 or 289A.26, for any period before September 15, 2018, with respect to an 
60.15 	underpayment of estimated tax, to the extent that the underpayment was created or increased 
60.16 	by the inclusion of deferred foreign income in federal taxable income under section 965 of 
60.17 	the Internal Revenue Code under this article.

60.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
60.19 	31, 2016.

60.20 	Sec. 68.  REPEALER.
 60.21 	Minnesota Statutes 2016, sections 290.01, subdivision 29a; 290.0131, subdivisions 7, 
60.22 	11, 12, and 13; 290.0132, subdivisions 8, 19, and 20; 290.0133, subdivisions 13 and 14; 
60.23 	290.0921, subdivisions 1, 2, 3a, 4, and 6; and 290.10, subdivision 2, are repealed.

60.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
60.25 	31, 2017.

60.26 	ARTICLE 2
60.27 	INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

60.28 	Section 1. Minnesota Statutes 2016, section 116J.8737, subdivision 5, is amended to read:
60.29 		Subd. 5.Credit allowed. (a)(1) A qualified investor or qualified fund is eligible for a 
60.30 	credit equal to 25 percent of the qualified investment in a qualified small business. 
61.1 	Investments made by a pass-through entity qualify for a credit only if the entity is a qualified 
61.2 	fund. The commissioner must not allocate more than $15,000,000 $10,000,000 in credits 
61.3 	to qualified investors or qualified funds for taxable years beginning after December 31, 
61.4 	2013 2017, and before January 1, 2017, and must not allocate more than $10,000,000 in 
61.5 	credits to qualified investors or qualified funds for taxable years beginning after December 
61.6 	31, 2016, and before January 1, 2018 2019; and
61.7 	(2) for taxable years beginning after December 31, 2014, and before January 1, 2018,
61.8 	50 percent must be allocated to credits for qualifying investments in qualified greater 
61.9 	Minnesota businesses and minority- or women-owned qualified small businesses in 
61.10 	Minnesota. Any portion of a taxable year's credits that is reserved for qualifying investments 
61.11 	in greater Minnesota businesses and minority- or women-owned qualified small businesses 
61.12 	in Minnesota that is not allocated by September 30 of the taxable year is available for 
61.13 	allocation to other credit applications beginning on October 1. Any portion of a taxable 
61.14 	year's credits that is not allocated by the commissioner does not cancel and may be carried 
61.15 	forward to subsequent taxable years until all credits have been allocated.
61.16 	(b) The commissioner may not allocate more than a total maximum amount in credits 
61.17 	for a taxable year to a qualified investor for the investor's cumulative qualified investments 
61.18 	as an individual qualified investor and as an investor in a qualified fund; for married couples 
61.19 	filing joint returns the maximum is $250,000, and for all other filers the maximum is 
61.20 	$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits 
61.21 	over all taxable years for qualified investments in any one qualified small business.
61.22 	(c) The commissioner may not allocate a credit to a qualified investor either as an 
61.23 	individual qualified investor or as an investor in a qualified fund if, at the time the investment 
61.24 	is proposed:
61.25 	(1) the investor is an officer or principal of the qualified small business; or
61.26 	(2) the investor, either individually or in combination with one or more members of the 
61.27 	investor's family, owns, controls, or holds the power to vote 20 percent or more of the 
61.28 	outstanding securities of the qualified small business.
61.29 	A member of the family of an individual disqualified by this paragraph is not eligible for a 
61.30 	credit under this section. For a married couple filing a joint return, the limitations in this 
61.31 	paragraph apply collectively to the investor and spouse. For purposes of determining the 
61.32 	ownership interest of an investor under this paragraph, the rules under section 267(c) and 
61.33 	267(e) of the Internal Revenue Code apply.
62.1 	(d) Applications for tax credits for 2010 must be made available on the department's 
62.2 	Web site by September 1, 2010, and the department must begin accepting applications by 
62.3 	September 1, 2010. Applications for subsequent years must be made available by November 
62.4 	1 of the preceding year.
62.5 	(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. 
62.6 	Tax credits must be allocated to qualified investors or qualified funds in the order that the 
62.7 	tax credit request applications are filed with the department. The commissioner must approve 
62.8 	or reject tax credit request applications within 15 days of receiving the application. The 
62.9 	investment specified in the application must be made within 60 days of the allocation of 
62.10 	the credits. If the investment is not made within 60 days, the credit allocation is canceled 
62.11 	and available for reallocation. A qualified investor or qualified fund that fails to invest as 
62.12 	specified in the application, within 60 days of allocation of the credits, must notify the 
62.13 	commissioner of the failure to invest within five business days of the expiration of the 
62.14 	60-day investment period.
62.15 	(f) All tax credit request applications filed with the department on the same day must 
62.16 	be treated as having been filed contemporaneously. If two or more qualified investors or 
62.17 	qualified funds file tax credit request applications on the same day, and the aggregate amount 
62.18 	of credit allocation claims exceeds the aggregate limit of credits under this section or the 
62.19 	lesser amount of credits that remain unallocated on that day, then the credits must be allocated 
62.20 	among the qualified investors or qualified funds who filed on that day on a pro rata basis 
62.21 	with respect to the amounts claimed. The pro rata allocation for any one qualified investor 
62.22 	or qualified fund is the product obtained by multiplying a fraction, the numerator of which 
62.23 	is the amount of the credit allocation claim filed on behalf of a qualified investor and the 
62.24 	denominator of which is the total of all credit allocation claims filed on behalf of all 
62.25 	applicants on that day, by the amount of credits that remain unallocated on that day for the 
62.26 	taxable year.
62.27 	(g) A qualified investor or qualified fund, or a qualified small business acting on their 
62.28 	behalf, must notify the commissioner when an investment for which credits were allocated 
62.29 	has been made, and the taxable year in which the investment was made. A qualified fund 
62.30 	must also provide the commissioner with a statement indicating the amount invested by 
62.31 	each investor in the qualified fund based on each investor's share of the assets of the qualified 
62.32 	fund at the time of the qualified investment. After receiving notification that the investment 
62.33 	was made, the commissioner must issue credit certificates for the taxable year in which the 
62.34 	investment was made to the qualified investor or, for an investment made by a qualified 
62.35 	fund, to each qualified investor who is an investor in the fund. The certificate must state 
63.1 	that the credit is subject to revocation if the qualified investor or qualified fund does not 
63.2 	hold the investment in the qualified small business for at least three years, consisting of the 
63.3 	calendar year in which the investment was made and the two following years. The three-year 
63.4 	holding period does not apply if:
63.5 	(1) the investment by the qualified investor or qualified fund becomes worthless before 
63.6 	the end of the three-year period;
63.7 	(2) 80 percent or more of the assets of the qualified small business is sold before the end 
63.8 	of the three-year period;
63.9 	(3) the qualified small business is sold before the end of the three-year period;
63.10 	(4) the qualified small business's common stock begins trading on a public exchange 
63.11 	before the end of the three-year period; or
63.12 	(5) the qualified investor dies before the end of the three-year period.
63.13 	(h) The commissioner must notify the commissioner of revenue of credit certificates 
63.14 	issued under this section.

63.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
63.16 	31, 2017.

63.17 	Sec. 2. Minnesota Statutes 2016, section 116J.8737, subdivision 12, is amended to read:
63.18 		Subd. 12.Sunset. This section expires for taxable years beginning after December 31, 
63.19 	2017 2018, except that reporting requirements under subdivision 6 and revocation of credits 
63.20 	under subdivision 7 remain in effect through 2019 2020 for qualified investors and qualified 
63.21 	funds, and through 2021 2022 for qualified small businesses, reporting requirements under 
63.22 	subdivision 9 remain in effect through 2022 2023, and the appropriation in subdivision 11 
63.23 	remains in effect through 2021 2022.

63.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
63.25 	31, 2017.

63.26 	Sec. 3. Minnesota Statutes 2017 Supplement, section 290.01, subdivision 4a, is amended 
63.27 	to read:
63.28 		Subd. 4a.Financial institution. (a) "Financial institution" means:
63.29 	(1) any corporation or other business entity registered (i) under state law as a bank 
63.30 	holding company; (ii) under the federal Bank Holding Company Act of 1956, as amended; 
64.1 	or (iii) as a savings and loan holding company under the federal National Housing Act, as 
64.2 	amended;
64.3 	(2) a national bank organized and existing as a national bank association pursuant to the 
64.4 	provisions of United States Code, title 12, chapter 2;
64.5 	(3) a savings association or federal savings bank as defined in United States Code, title 
64.6 	12, section 1813(b)(1);
64.7 	(4) any bank or thrift institution incorporated or organized under the laws of any state;
64.8 	(5) any corporation organized under United States Code, title 12, sections 611 to 631;
64.9 	(6) any agency or branch of a foreign depository as defined under United States Code, 
64.10 	title 12, section 3101;
64.11 	(7) any corporation or other business entity that is more than 50 percent owned, directly 
64.12 	or indirectly, by any person or business entity described in clauses (1) to (6), other than an 
64.13 	insurance company taxable under chapter 297I;
64.14 	(8) a corporation or other business entity that derives more than 50 percent of its total 
64.15 	gross income for financial accounting purposes from finance leases. For the purposes of 
64.16 	this clause, "gross income" means the average from the current tax year and immediately 
64.17 	preceding two years and excludes gross income from incidental or occasional transactions. 
64.18 	For purposes of this clause, "finance lease" means any lease transaction that is the functional 
64.19 	equivalent of an extension of credit and that transfers substantially all the benefits and risks 
64.20 	incident to the ownership of property, including any direct financing lease or leverage lease 
64.21 	that meets the criteria of Financial Accounting Standards Board Statement No. 13, accounting 
64.22 	for leases, or any other lease that is accounted for as financing by a lessor under generally 
64.23 	accepted accounting principles; or
64.24 	(9) any other person or business entity, other than an insurance company taxable under 
64.25 	chapter 297I, that derives more than 50 percent of its gross income from activities that an 
64.26 	entity described in clauses (2) to (6) or (8) is authorized to transact. For the purposes of this 
64.27 	clause, gross income does not include income from nonrecurring, extraordinary items.
64.28 	(b) The commissioner is authorized to exclude any person from the application of 
64.29 	paragraph (a), clause (9), if the person proves by clear and convincing evidence that the 
64.30 	person's income-producing activity is not in substantial competition with any person described 
64.31 	in paragraph (a), clauses (2) to (6) or (8).

64.32 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
64.33 	after December 31, 2016.

65.1 	Sec. 4. Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to 
65.2 	read:
65.3 		Subd. 5c.Disqualified captive insurance company. (a) "Disqualified captive insurance 
65.4 	company" means a company that:
65.5 	(1)(i) is licensed as a captive insurance company under the laws of any state or foreign 
65.6 	country; or
65.7 	(ii) derives 80 percent or more of its total premiums for the taxable year from entities 
65.8 	that are members of the unitary business, as that term is used in section 290.17; and
65.9 	(2)(i) receives less than 50 percent of its gross receipts for the taxable year from 
65.10 	premiums; or
65.11 	(ii) pays less than 0.25 percent of its total premiums for the taxable year in tax under 
65.12 	chapter 297I or a comparable tax of another state or country.
65.13 	(b) For purposes of this subdivision, "premiums" means amounts paid for arrangements 
65.14 	that constitute insurance for federal income tax purposes, but excludes return premiums, 
65.15 	premiums for reinsurance assumed from other insurance companies, and any other premiums 
65.16 	that are or would be exempt from taxation under section 297I.05 as a result of their type or 
65.17 	character, if the insurance was for business in Minnesota.

65.18 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
65.19 	after December 31, 2016.

65.20 	Sec. 5. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
65.21 	to read:
65.22 		Subd. 29.Disallowed section 280E expenses; medical cannabis manufacturers. The 
65.23 	amount of expenses of a medical cannabis manufacturer, as defined under section 152.22, 
65.24 	subdivision 7, related to the business of medical cannabis under sections 152.21 to 152.37, 
65.25 	and not allowed for federal income tax purposes under section 280E of the Internal Revenue 
65.26 	Code is a subtraction.

65.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
65.28 	31, 2017.

66.1 	Sec. 6. Minnesota Statutes 2016, section 290.0133, is amended by adding a subdivision 
66.2 	to read:
66.3 		Subd. 15.Prepared food donation. The amount of charitable contributions under section 
66.4 	170 of the Internal Revenue Code used to claim the credit under section 290.06, subdivision 
66.5 	39, is an addition.

66.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
66.7 	31, 2017.

66.8 	Sec. 7. Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision 
66.9 	to read:
66.10 		Subd. 18.Disallowed section 280E expenses; medical cannabis manufacturers. The 
66.11 	amount of expenses of a medical cannabis manufacturer, as defined under section 152.22, 
66.12 	subdivision 7, related to the business of medical cannabis under sections 152.21 to 152.37, 
66.13 	and not allowed for federal income tax purposes under section 280E of the Internal Revenue 
66.14 	Code is a subtraction.

66.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
66.16 	31, 2017.

66.17 	Sec. 8. Minnesota Statutes 2017 Supplement, section 290.05, subdivision 1, is amended 
66.18 	to read:
66.19 		Subdivision 1.Exempt entities. The following corporations, individuals, estates, trusts, 
66.20 	and organizations shall be exempted from taxation under this chapter, provided that every 
66.21 	such person or corporation claiming exemption under this chapter, in whole or in part, must 
66.22 	establish to the satisfaction of the commissioner the taxable status of any income or activity:
66.23 	(a) corporations, individuals, estates, and trusts engaged in the business of mining or 
66.24 	producing iron ore and mining, producing, or refining other ores, metals, and minerals, the 
66.25 	mining, production, or refining of which is subject to the occupation tax imposed by section 
66.26 	298.01; but if any such corporation, individual, estate, or trust engages in any other business 
66.27 	or activity or has income from any property not used in such business it shall be subject to 
66.28 	this tax computed on the net income from such property or such other business or activity. 
66.29 	Royalty shall not be considered as income from the business of mining or producing iron 
66.30 	ore within the meaning of this section;
67.1 	(b) the United States of America, the state of Minnesota or any political subdivision of 
67.2 	either agencies or instrumentalities, whether engaged in the discharge of governmental or 
67.3 	proprietary functions; and
67.4 	(c) any insurance company, as defined in section 290.17, subdivision 4, paragraph (j), 
67.5 	but including any insurance company licensed and domiciled in another state that grants, 
67.6 	on a reciprocal basis, exemption from retaliatory taxes other than a disqualified captive 
67.7 	insurance company.

67.8 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
67.9 	after December 31, 2016.

67.10 	Sec. 9. Minnesota Statutes 2016, section 290.06, is amended by adding a subdivision to 
67.11 	read:
67.12 		Subd. 39.Prepared food donation credit. (a) A qualifying taxpayer is allowed a credit 
67.13 	against the tax imposed by this chapter equal to 20 percent of the taxpayer's eligible charitable 
67.14 	food donation. The credit may not exceed the taxpayer's liability for tax and may not be 
67.15 	carried forward to any other taxable year.
67.16 	(b) For purposes of this subdivision, the following terms have the meanings given:
67.17 	(1) "eligible charitable food donation" means a contribution of prepared food allowable 
67.18 	as a charitable deduction for the taxable year under section 170(a) of the Internal Revenue 
67.19 	Code, subject to the limitations of section 170(b) of the Internal Revenue Code, and 
67.20 	determined without regard to whether or not the taxpayer itemizes deductions;
67.21 	(2) "prepared food" means food that meets all quality and labeling standards imposed 
67.22 	by federal, state, and local laws and regulations even though the food may not be readily 
67.23 	marketable due to appearance, age, freshness, grade, size, surplus, or other conditions, and 
67.24 	includes:
67.25 	(i) food that is cooked or heated by the qualifying taxpayer;
67.26 	(ii) two or more ingredients mixed together to be eaten as a single item; and
67.27 	(iii) any ingredients supplied for ingestion or chewing by humans that are consumed for 
67.28 	their taste or nutritional value; and
67.29 	(3) "qualifying taxpayer" means an individual or entity that makes a charitable food 
67.30 	donation in Minnesota and is engaged in a trade or business that includes regularly selling 
67.31 	prepared food.
68.1 	(c) A food donation for which a credit is claimed under this section may not be deducted 
68.2 	as a charitable contribution deduction under section 290.0803.
68.3 	(d) Credits allowed to a partnership, a limited liability company taxed as a partnership, 
68.4 	an S corporation, or multiple owners of property are passed through to the partners, members, 
68.5 	shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or 
68.6 	owner based on their share of the entity's income for the taxable year.

68.7 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
68.8 	31, 2017.

68.9 	Sec. 10. Minnesota Statutes 2016, section 290.0685, subdivision 1, is amended to read:
68.10 		Subdivision 1.Credit allowed. (a) An eligible individual is allowed a credit against the 
68.11 	tax imposed by this chapter equal to $2,000 for each birth for which a certificate of birth 
68.12 	resulting in stillbirth has been issued under section 144.2151 stillbirth. The credit under this 
68.13 	section is allowed only in the taxable year in which the stillbirth occurred and if the child 
68.14 	would have been a dependent of the taxpayer as defined in section 152 of the Internal 
68.15 	Revenue Code.
68.16 	(b) For a nonresident or part-year resident, the credit must be allocated based on the 
68.17 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).

68.18 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
68.19 	after December 31, 2015.

68.20 	Sec. 11. Minnesota Statutes 2016, section 290.0685, is amended by adding a subdivision 
68.21 	to read:
68.22 		Subd. 1a.Definitions. (a) For purposes of this section, the following terms have the 
68.23 	meanings given, unless the context clearly indicates otherwise.
68.24 	(b) "Certificate of birth resulting in stillbirth" means the printed certificate of birth 
68.25 	resulting in stillbirth issued under section 144.2151 or for a stillbirth occurring in another 
68.26 	state or country a similar certificate issued under that state's or country's law.
68.27 	(c) "Eligible individual" means an individual who is:
68.28 	(1)(i) a resident; or
68.29 	(ii) the nonresident spouse of a resident who is a member of armed forces of the United 
68.30 	States or the United Nations; and
69.1 	(2)(i) the individual who gave birth resulting in stillbirth and is listed as a parent on the 
69.2 	certificate of birth resulting in stillbirth;
69.3 	(ii) if no individual meets the requirements of clause (i) for a stillbirth that occurs in this 
69.4 	state, then the first parent listed on the certificate of birth resulting in stillbirth; or
69.5 	(iii) the individual who gave birth resulting in stillbirth for a birth outside of this state 
69.6 	for which no certificate of birth resulting in stillbirth was issued.
69.7 	(d) "Stillbirth" means a birth for which a fetal death report would be required under 
69.8 	section 144.222, subdivision 1, if the birth occurred in this state.

69.9 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
69.10 	after December 31, 2015.

69.11 	Sec. 12. Minnesota Statutes 2017 Supplement, section 290.0686, subdivision 1, is amended 
69.12 	to read:
69.13 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
69.14 	the meanings given them.
69.15 	(b) "Master's degree program" means a graduate-level program at an accredited university 
69.16 	leading to a master of arts or science degree in either a core content area directly related to 
69.17 	a qualified teacher's licensure field or special education. Except for a special education 
69.18 	program authorized under paragraph (e), the master's degree program may not include 
69.19 	pedagogy or a pedagogy component. To be eligible under this credit, a licensed elementary 
69.20 	school teacher must pursue and complete a master's degree program in either a core content 
69.21 	area in which the teacher provides direct classroom instruction or a special education 
69.22 	program.
69.23 	(c) "Qualified teacher" means a person who:
69.24 	(1) holds a teaching license issued by the licensing division in the Department of 
69.25 	Education on behalf of the Professional Educator Licensing and Standards Board both when 
69.26 	the teacher begins the master's degree program and when the teacher completes the master's 
69.27 	degree program;
69.28 	(2) began a master's degree program after June 30, 2017; and
69.29 	(3) completes the master's degree program during the taxable year.
69.30 	(d) "Core content area" means the academic subject of reading, English or language arts, 
69.31 	mathematics, science, foreign languages, civics and government, economics, arts, history, 
69.32 	or geography.
70.1 	(e) "Special education" means a program of study directly related to licensure in 
70.2 	developmental disabilities, early childhood special education, emotional or behavioral 
70.3 	disorders, autism spectrum disorders, or learning disabilities.

70.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
70.5 	31, 2017.

70.6 	Sec. 13. [290.0687] TAX CREDIT; RAILROAD CROSSING IMPROVEMENTS.
70.7 		Subdivision 1.Credit allowed. An individual or entity operating a railroad is allowed 
70.8 	a credit against the liability for tax equal to 50 percent of the expenditures during the taxable 
70.9 	year on qualified costs.
70.10 		Subd. 2.Definitions. (a) For purposes of this section, the following terms have the 
70.11 	meanings given them.
70.12 	(b) "Crossing" means a grade crossing as defined in section 219.16.
70.13 	(c) "Liability for tax" means the sum of the tax imposed under sections 290.06, 
70.14 	subdivision 1 or 2c; and 290.091 for the taxable year, reduced by the sum of the 
70.15 	nonrefundable credits allowed under this chapter.
70.16 	(d) "Qualified costs" means amounts expended to improve a priority crossing that:
70.17 	(1) increase the safety of the crossing by installing, facilitating the installation of, or 
70.18 	improving the quality of active traffic signals or controls or by assisting in implementing 
70.19 	grade separation for the crossing;
70.20 	(2) would qualify for depreciation deductions under section 167(a) of the Internal Revenue 
70.21 	Code without regard to whether the improvements are property of the taxpayer; and
70.22 	(3) are not required by law to be made by the railroad.
70.23 	(e) "Railroad" means a rail carrier as defined in United States Code, title 49, section 
70.24 	20102, as amended.
70.25 	(f) "Priority crossing" means a crossing that is designated by the commissioner of 
70.26 	transportation under subdivision 5.
70.27 		Subd. 3.Carryover. The credit for a taxable year must not exceed the taxpayer's liability 
70.28 	for tax. If the credit for a taxable year exceeds the liability for tax, the excess is a carryover 
70.29 	to each of the 15 succeeding taxable years. The entire amount of the excess unused credit 
70.30 	for the taxable year must be carried first to the earliest of the taxable years to which the 
70.31 	credit may be carried and then to each successive year to which the credit may be carried. 
71.1 	The amount of the unused credit that may be added under this subdivision must not exceed 
71.2 	the liability for tax less the credit for the taxable year.
71.3 		Subd. 4.Partnerships and S corporations. For a railroad operated as a partnership, a 
71.4 	limited liability company taxed as a partnership, or an S corporation, the credit under this 
71.5 	section is passed through to each partner, member, or shareholder in proportion to their 
71.6 	share of the entity's net income for the taxable year.
71.7 		Subd. 5.Designation of priority crossings. (a) By October 1, 2018, the commissioner 
71.8 	of transportation shall designate a list of at least 15 priority crossings that qualify for the 
71.9 	tax credit under this section and publish the list on the Web site of the Department of 
71.10 	Transportation. The list establishes priority crossings, expenditures for which qualify for 
71.11 	the tax credit under this section. The commissioner may revise the list of priority crossings 
71.12 	as the commissioner determines appropriate, based on changing conditions and circumstances.
71.13 	(b) In establishing a list of priority crossings, the commissioner of transportation shall 
71.14 	use a methodology for evaluating the priority for and cost-effectiveness of expenditures for 
71.15 	improving public safety following or similar to the methods used in preparing the study 
71.16 	required by Laws 2014, chapter 312, article 10, section 10, with any modifications or 
71.17 	improvements the commissioner determines appropriate.
71.18 	(c) Actions of the commissioner of transportation in establishing a list of priority crossings 
71.19 	under this subdivision are not an administrative rule subject to the Administrative Procedure 
71.20 	Act in chapter 14, including section 14.386.

71.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
71.22 	31, 2017, and applies to expenditures made after October 1, 2018.

71.23 	Sec. 14. Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended 
71.24 	to read:
71.25 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
71.26 	terms have the meanings given.
71.27 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
71.28 	year:
71.29 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
71.30 	55(b)(2) of the Internal Revenue Code;
71.31 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
71.32 	taxable income, but excluding:
72.1 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
72.2 	(ii) the medical expense deduction;
72.3 	(iii) the casualty, theft, and disaster loss deduction; and
72.4 	(iv) the impairment-related work expenses of a disabled person;
72.5 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
72.6 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
72.7 	to the extent not included in federal alternative minimum taxable income, the excess of the 
72.8 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
72.9 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
72.10 	without regard to the depletion deduction for the taxable year);
72.11 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
72.12 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
72.13 	Code determined without regard to subparagraph (E);
72.14 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
72.15 	of interest income as provided by section 290.0131, subdivision 2; and
72.16 	(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;
72.17 	less the sum of the amounts determined under the following:
72.18 	(i) interest income as defined in section 290.0132, subdivision 2;
72.19 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
72.20 	3, to the extent included in federal alternative minimum taxable income;
72.21 	(iii) the amount of investment interest paid or accrued within the taxable year on 
72.22 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
72.23 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
72.24 	in computing federal adjusted gross income;
72.25 	(iv) amounts subtracted from federal taxable income as provided by section 290.0132, 
72.26 	subdivisions 7, 9 to 15, 17, 21, 24, and 26, and 29; and
72.27 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
72.28 	paragraph (c).
72.29 	In the case of an estate or trust, alternative minimum taxable income must be computed 
72.30 	as provided in section 59(c) of the Internal Revenue Code.
73.1 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
73.2 	the Internal Revenue Code.
73.3 	(c) "Net minimum tax" means the minimum tax imposed by this section.
73.4 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
73.5 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
73.6 	under this chapter.
73.7 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
73.8 	after subtracting the exemption amount determined under subdivision 3.

73.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
73.10 	31, 2017.

73.11 	Sec. 15. Minnesota Statutes 2017 Supplement, section 290.17, subdivision 4, is amended 
73.12 	to read:
73.13 		Subd. 4.Unitary business principle. (a) If a trade or business conducted wholly within 
73.14 	this state or partly within and partly without this state is part of a unitary business, the entire 
73.15 	income of the unitary business is subject to apportionment pursuant to section 290.191. 
73.16 	Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary business is 
73.17 	considered to be derived from any particular source and none may be allocated to a particular 
73.18 	place except as provided by the applicable apportionment formula. The provisions of this 
73.19 	subdivision do not apply to business income subject to subdivision 5, income of an insurance 
73.20 	company, or income of an investment company determined under section 290.36.
73.21 	(b) The term "unitary business" means business activities or operations which result in 
73.22 	a flow of value between them. The term may be applied within a single legal entity or 
73.23 	between multiple entities and without regard to whether each entity is a sole proprietorship, 
73.24 	a corporation, a partnership or a trust.
73.25 	(c) Unity is presumed whenever there is unity of ownership, operation, and use, evidenced 
73.26 	by centralized management or executive force, centralized purchasing, advertising, 
73.27 	accounting, or other controlled interaction, but the absence of these centralized activities 
73.28 	will not necessarily evidence a nonunitary business. Unity is also presumed when business 
73.29 	activities or operations are of mutual benefit, dependent upon or contributory to one another, 
73.30 	either individually or as a group.
73.31 	(d) Where a business operation conducted in Minnesota is owned by a business entity 
73.32 	that carries on business activity outside the state different in kind from that conducted within 
73.33 	this state, and the other business is conducted entirely outside the state, it is presumed that 
74.1 	the two business operations are unitary in nature, interrelated, connected, and interdependent 
74.2 	unless it can be shown to the contrary.
74.3 	(e) Unity of ownership does not exist when two or more corporations are involved unless 
74.4 	more than 50 percent of the voting stock of each corporation is directly or indirectly owned 
74.5 	by a common owner or by common owners, either corporate or noncorporate, or by one or 
74.6 	more of the member corporations of the group. For this purpose, the term "voting stock" 
74.7 	shall include membership interests of mutual insurance holding companies formed under 
74.8 	section 66A.40.
74.9 	(f) The net income and apportionment factors under section 290.191 or 290.20 of foreign 
74.10 	corporations and other foreign entities, but excluding a disqualified captive insurance 
74.11 	company, which are part of a unitary business shall not be included in the net income or 
74.12 	the apportionment factors of the unitary business; except that the income and apportionment 
74.13 	factors of a foreign entity, other than an entity treated as a C corporation for federal income 
74.14 	tax purposes, that are included in the federal taxable income, as defined in section 63 of the 
74.15 	Internal Revenue Code as amended through the date named in section 290.01, subdivision 
74.16 	19, of a domestic corporation, domestic entity, or individual must be included in determining 
74.17 	net income and the factors to be used in the apportionment of net income pursuant to section 
74.18 	290.191 or 290.20. A foreign corporation or other foreign entity which is not included on 
74.19 	a combined report and which is required to file a return under this chapter shall file on a 
74.20 	separate return basis.
74.21 	(g) For purposes of determining the net income of a unitary business and the factors to 
74.22 	be used in the apportionment of net income pursuant to section 290.191 or 290.20, there 
74.23 	must be included only the income and apportionment factors of domestic corporations or 
74.24 	other domestic entities that are determined to be part of the unitary business pursuant to this 
74.25 	subdivision, notwithstanding that foreign corporations or other foreign entities might be 
74.26 	included in the unitary business; except that the income and apportionment factors of a 
74.27 	foreign entity, other than an entity treated as a C corporation for federal income tax purposes, 
74.28 	that is included in the federal taxable income, as defined in section 63 of the Internal Revenue 
74.29 	Code as amended through the date named in section 290.01, subdivision 19, of a domestic 
74.30 	corporation, domestic entity, or individual must be included in determining net income and 
74.31 	the factors to be used in the apportionment of net income pursuant to section 290.191 or 
74.32 	290.20.
74.33 	(h) Each corporation or other entity, except a sole proprietorship, that is part of a unitary 
74.34 	business must file combined reports as the commissioner determines. On the reports, all 
74.35 	intercompany transactions between entities included pursuant to paragraph (g) must be 
75.1 	eliminated and the entire net income of the unitary business determined in accordance with 
75.2 	this subdivision is apportioned among the entities by using each entity's Minnesota factors 
75.3 	for apportionment purposes in the numerators of the apportionment formula and the total 
75.4 	factors for apportionment purposes of all entities included pursuant to paragraph (g) in the 
75.5 	denominators of the apportionment formula. Except as otherwise provided by paragraph 
75.6 	(f), all sales of the unitary business made within this state pursuant to section 290.191 or 
75.7 	290.20 must be included on the combined report of a corporation or other entity that is a 
75.8 	member of the unitary business and is subject to the jurisdiction of this state to impose tax 
75.9 	under this chapter.
75.10 	(i) If a corporation has been divested from a unitary business and is included in a 
75.11 	combined report for a fractional part of the common accounting period of the combined 
75.12 	report:
75.13 	(1) its income includable in the combined report is its income incurred for that part of 
75.14 	the year determined by proration or separate accounting; and
75.15 	(2) its sales, property, and payroll included in the apportionment formula must be prorated 
75.16 	or accounted for separately.
75.17 	(j) For purposes of this subdivision, "insurance company" means an insurance company, 
75.18 	as defined in section 290.01, subdivision 5b, that is:
75.19 	(1) licensed to engage in the business of insurance in Minnesota pursuant to chapter 
75.20 	60A; or
75.21 	(2) domiciled and licensed to engage in the business of insurance in another state or 
75.22 	country that imposes retaliatory taxes, fines, deposits, penalties, licenses, or fees and that 
75.23 	does not grant, on a reciprocal basis, exemption from such retaliatory taxes to insurance 
75.24 	companies or their agents domiciled in Minnesota.
75.25 	(k) For purposes of this subdivision, "retaliatory taxes" means taxes imposed on insurance 
75.26 	companies organized in another state or country that result from the fact that an insurance 
75.27 	company organized in the taxing jurisdiction and doing business in the other jurisdiction is 
75.28 	subject to taxes, fines, deposits, penalties, licenses, or fees in an amount exceeding that 
75.29 	imposed by the taxing jurisdiction upon an insurance company organized in the other state 
75.30 	or country and doing business to the same extent in the taxing jurisdiction not a disqualified 
75.31 	captive insurance company.

75.32 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
75.33 	after December 31, 2016.

76.1 	Sec. 16. Minnesota Statutes 2016, section 291.03, subdivision 8, is amended to read:
76.2 		Subd. 8.Definitions. (a) For purposes of this section, the following terms have the 
76.3 	meanings given in this subdivision.
76.4 	(b) "Family member" means a family member as defined in section 2032A(e)(2) of the 
76.5 	Internal Revenue Code, or a trust whose present beneficiaries are all family members as 
76.6 	defined in section 2032A(e)(2) of the Internal Revenue Code.
76.7 	(c) "Qualified heir" means a family member who acquired qualified property upon the 
76.8 	death of the decedent and satisfies the requirement under subdivision 9, clause (7) (8), or 
76.9 	subdivision 10, clause (5), for the property.
76.10 	(d) "Qualified property" means qualified small business property under subdivision 9 
76.11 	and qualified farm property under subdivision 10.

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

76.13 	Sec. 17. Minnesota Statutes 2017 Supplement, section 291.03, subdivision 9, is amended 
76.14 	to read:
76.15 		Subd. 9.Qualified small business property. Property satisfying all of the following 
76.16 	requirements is qualified small business property:
76.17 	(1) The value of the property was included in the federal adjusted taxable estate.
76.18 	(2) The property consists of the assets of a trade or business or shares of stock or other 
76.19 	ownership interests in a corporation or other entity engaged in a trade or business. Shares 
76.20 	of stock in a corporation or an ownership interest in another type of entity do not qualify 
76.21 	under this subdivision if the shares or ownership interests are traded on a public stock 
76.22 	exchange at any time during the three-year period ending on the decedent's date of death. 
76.23 	For purposes of this subdivision, an ownership interest includes the interest the decedent is 
76.24 	deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
76.25 	(3) During the taxable year that ended before the decedent's death, the trade or business 
76.26 	must not have been a passive activity within the meaning of section 469(c) of the Internal 
76.27 	Revenue Code, and the decedent or the decedent's spouse must have materially participated 
76.28 	in the trade or business within the meaning of section 469(h) of the Internal Revenue Code, 
76.29 	excluding section 469(h)(3) of the Internal Revenue Code and any other provision provided 
76.30 	by United States Treasury Department regulation that substitutes material participation in 
76.31 	prior taxable years for material participation in the taxable year that ended before the 
76.32 	decedent's death.
77.1 	(4) The gross annual sales of the trade or business were $10,000,000 or less for the last 
77.2 	taxable year that ended before the date of the death of the decedent.
77.3 	(5) The property does not include:
77.4 	(i) cash;
77.5 	(ii) cash equivalents;
77.6 	(iii) publicly traded securities; or
77.7 	(iv) any assets not used in the operation of the trade or business.
77.8 	(6) For property consisting of shares of stock or other ownership interests in an entity, 
77.9 	the value of items described in clause (5) must be excluded in the valuation of the decedent's 
77.10 	interest in the entity.
77.11 	(7) The decedent or the decedent's spouse continuously owned the property, or an 
77.12 	undivided or joint interest in the property, including property the decedent or the decedent's 
77.13 	spouse is deemed to own under sections 2036, 2037, and 2038, 2040, or 2044 of the Internal 
77.14 	Revenue Code, or under subdivision 1d, for the three-year period ending on the date of 
77.15 	death of the decedent. In the case of a sole proprietor, if the property replaced similar property 
77.16 	within the three-year period, the replacement property will be treated as having been owned 
77.17 	for the three-year period ending on the date of death of the decedent. For the purposes of 
77.18 	the three-year holding period under this clause, any ownership by the decedent's spouse, 
77.19 	whether the spouse predeceases or survives the decedent, is attributed to the decedent.
77.20 	(8) For three years following the date of death of the decedent, the trade or business is 
77.21 	not a passive activity within the meaning of section 469(c) of the Internal Revenue Code, 
77.22 	and a family member materially participates in the operation of the trade or business within 
77.23 	the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3) 
77.24 	of the Internal Revenue Code and any other provision provided by United States Treasury 
77.25 	Department regulation that substitutes material participation in prior taxable years for 
77.26 	material participation in the three years following the date of death of the decedent.
77.27 	(9) The estate and the qualified heir elect to treat the property as qualified small business 
77.28 	property and agree, in the form prescribed by the commissioner, to pay the recapture tax 
77.29 	under subdivision 11, if applicable.

77.30 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
77.31 	dying after December 31, 2017.

78.1 	Sec. 18. Minnesota Statutes 2016, section 291.03, subdivision 10, is amended to read:
78.2 		Subd. 10.Qualified farm property. Property satisfying all of the following requirements 
78.3 	is qualified farm property:
78.4 	(1) The value of the property was included in the federal adjusted taxable estate.
78.5 	(2) The property consists of agricultural land and is owned by a person or entity that is 
78.6 	either not subject to or is in compliance with section 500.24.
78.7 	(3) For property taxes payable in the taxable year of the decedent's death, the property 
78.8 	is classified as class 2a property under section 273.13, subdivision 23, and is classified as 
78.9 	agricultural homestead, agricultural relative homestead, or special agricultural homestead 
78.10 	under section 273.124.
78.11 	(4) The decedent or the decedent's spouse continuously owned the property, or an 
78.12 	undivided or joint interest in the property, including property the decedent or the decedent's 
78.13 	spouse is deemed to own under sections 2036, 2037, and 2038, 2040, or 2044 of the Internal 
78.14 	Revenue Code, or under subdivision 1d, for the three-year period ending on the date of 
78.15 	death of the decedent either by ownership of the agricultural land or pursuant to holding an 
78.16 	interest in an entity that is not subject to or is in compliance with section 500.24. For the 
78.17 	purposes of the three-year holding period under this clause, any ownership by the decedent's 
78.18 	spouse, whether the spouse predeceases or survives the decedent, is attributed to the decedent.
78.19 	(5) The property is classified for property tax purposes as class 2a property under section 
78.20 	273.13, subdivision 23, for three years following the date of death of the decedent.
78.21 	(6) The estate and the qualified heir elect to treat the property as qualified farm property 
78.22 	and agree, in a form prescribed by the commissioner, to pay the recapture tax under 
78.23 	subdivision 11, if applicable.

78.24 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
78.25 	dying after December 31, 2017.

78.26 	Sec. 19. Minnesota Statutes 2017 Supplement, section 291.03, subdivision 11, is amended 
78.27 	to read:
78.28 		Subd. 11.Recapture tax. (a) If, within three years after the decedent's death and before 
78.29 	the death of the qualified heir, the qualified heir disposes of any interest in the qualified 
78.30 	property, other than by a disposition to a family member, or a family member ceases to 
78.31 	satisfy the requirement under subdivision 9, clause (7) (8); or 10, clause (5), an additional 
78.32 	estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir 
79.1 	replaces qualified small business property excluded under subdivision 9 with similar property, 
79.2 	then the qualified heir will not be treated as having disposed of an interest in the qualified 
79.3 	property.
79.4 	(b) The amount of the additional tax equals the amount of the exclusion claimed by the 
79.5 	estate under subdivision 8, paragraph (d), multiplied by 16 percent.
79.6 	(c) The additional tax under this subdivision is due on the day which is six months after 
79.7 	the date of the disposition or cessation in paragraph (a).
79.8 	(d) The tax under this subdivision does not apply to the acquisition of title or possession 
79.9 	of the qualified property by a federal, state, or local government unit, or any other entity 
79.10 	with the power of eminent domain for a public purpose, as defined in section 117.025, 
79.11 	subdivision 11, within the three-year holding period.
79.12 	(e) This subdivision shall not apply as a result of any of the following:
79.13 	(1) a portion of qualified farm property consisting of less than one-fifth of the acreage 
79.14 	of the property is reclassified as class 2b property under section 273.13, subdivision 23, and 
79.15 	the qualified heir has not substantially altered the reclassified property during the three-year 
79.16 	holding period; or
79.17 	(2) a portion of qualified farm property classified as 2a property at the death of the 
79.18 	decedent pursuant to section 273.13, subdivision 23, paragraph (a), consisting of a residence, 
79.19 	garage, and immediately surrounding one acre of land is reclassified as 4bb property during 
79.20 	the three-year holding period, and the qualified heir has not substantially altered the property.
79.21 	(f) This paragraph applies only to estates of decedents dying after December 31, 2011, 
79.22 	and before January 1, 2017, for which no tax liability was reported on the final estate tax 
79.23 	return. For purposes of estates qualifying under this paragraph, the amount of the exclusion 
79.24 	claimed by the estate for purposes of calculating the tax under paragraph (b) is deemed to 
79.25 	be the minimum amount of the exclusion necessary to reduce the amount of estate tax to 
79.26 	zero, without regard to the amount of the exclusion actually claimed on the final estate tax 
79.27 	return. The provisions of this paragraph expire effective January 1, 2021.

79.28 	EFFECTIVE DATE. The provisions of this section are effective retroactively for estates 
79.29 	of decedents dying after December 31, 2011, and amended returns and claims for refund 
79.30 	of recapture tax may be filed without regard to any applicable statute of limitation.

80.1 	ARTICLE 3
80.2 	SALES AND USE TAXES

80.3 	Section 1. Minnesota Statutes 2016, section 295.50, subdivision 4, is amended to read:
80.4 		Subd. 4.Health care provider. (a) "Health care provider" means:
80.5 	(1) a person whose health care occupation is regulated or required to be regulated by 
80.6 	the state of Minnesota furnishing any or all of the following goods or services directly to a 
80.7 	patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services, 
80.8 	drugs, laboratory, diagnostic or therapeutic services;
80.9 	(2) a person who provides goods and services not listed in clause (1) that qualify for 
80.10 	reimbursement under the medical assistance program provided under chapter 256B;
80.11 	(3) a staff model health plan company;
80.12 	(4) an ambulance service required to be licensed; or
80.13 	(5) a person who sells or repairs hearing aids and related equipment or prescription 
80.14 	eyewear; or
80.15 	(6) a massage therapist.
80.16 	(b) Health care provider does not include:
80.17 	(1) hospitals; medical supplies distributors, except as specified under paragraph (a), 
80.18 	clause (5); nursing homes licensed under chapter 144A or licensed in any other jurisdiction; 
80.19 	wholesale drug distributors; pharmacies; surgical centers; bus and taxicab transportation, 
80.20 	or any other providers of transportation services other than ambulance services required to 
80.21 	be licensed; supervised living facilities for persons with developmental disabilities, licensed 
80.22 	under Minnesota Rules, parts 4665.0100 to 4665.9900; housing with services establishments 
80.23 	required to be registered under chapter 144D; board and lodging establishments providing 
80.24 	only custodial services that are licensed under chapter 157 and registered under section 
80.25 	157.17 to provide supportive services or health supervision services; adult foster homes as 
80.26 	defined in Minnesota Rules, part 9555.5105; day training and habilitation services for adults 
80.27 	with developmental disabilities as defined in section 252.41, subdivision 3; boarding care 
80.28 	homes, as defined in Minnesota Rules, part 4655.0100; and adult day care centers as defined 
80.29 	in Minnesota Rules, part 9555.9600;
80.30 	(2) home health agencies as defined in Minnesota Rules, part 9505.0175, subpart 15; a 
80.31 	person providing personal care services and supervision of personal care services as defined 
80.32 	in Minnesota Rules, part 9505.0335; a person providing home care nursing services as 
81.1 	defined in Minnesota Rules, part 9505.0360; and home care providers required to be licensed 
81.2 	under chapter 144A;
81.3 	(3) a person who employs health care providers solely for the purpose of providing 
81.4 	patient services to its employees;
81.5 	(4) an educational institution that employs health care providers solely for the purpose 
81.6 	of providing patient services to its students if the institution does not receive fee for service 
81.7 	payments or payments for extended coverage; and
81.8 	(5) a person who receives all payments for patient services from health care providers, 
81.9 	surgical centers, or hospitals for goods and services that are taxable to the paying health 
81.10 	care providers, surgical centers, or hospitals, as provided under section 295.53, subdivision 
81.11 	1, clause (3) or (4), or from a source of funds that is exempt from tax under this chapter.

81.12 	EFFECTIVE DATE. This section is effective for gross revenues received after June 
81.13 	30, 2018.

81.14 	Sec. 2. Minnesota Statutes 2016, section 295.50, is amended by adding a subdivision to 
81.15 	read:
81.16 		Subd. 8a.Massage therapist. "Massage therapist" means a person providing massage 
81.17 	therapy services who registers with the commissioner to pay the tax imposed under section 
81.18 	295.52 prior to the calendar quarter in which the massage therapy services are provided.

81.19 	EFFECTIVE DATE. This section is effective for gross revenues received after June 
81.20 	30, 2018.

81.21 	Sec. 3. Minnesota Statutes 2016, section 295.50, is amended by adding a subdivision to 
81.22 	read:
81.23 		Subd. 8b.Massage therapy services. (a) "Massage therapy services" or "massage 
81.24 	therapy" means a health care service provided by a massage therapist that involves systematic 
81.25 	and structured touch and palpation and pressure and movement of the muscles, tendons, 
81.26 	ligaments, and fascia, in order to reduce muscle tension, relieve soft tissue pain, improve 
81.27 	circulation, increase flexibility, increase activity of the parasympathetic branch of the 
81.28 	autonomic nervous system, or promote general wellness.
81.29 	(b) Massage therapy services or massage therapy excludes services described in paragraph 
81.30 	(a) that are provided by a licensed health care facility or professional or upon written referral 
81.31 	from a licensed health care facility or professional for treatment of illness, injury, or disease.

82.1 	EFFECTIVE DATE. This section is effective for gross revenues received after June 
82.2 	30, 2018.

82.3 	Sec. 4. Minnesota Statutes 2016, section 295.50, subdivision 9b, is amended to read:
82.4 		Subd. 9b.Patient services. (a) "Patient services" means inpatient and outpatient services 
82.5 	and other goods and services provided by hospitals, surgical centers, or health care providers. 
82.6 	They include the following health care goods and services provided to a patient or consumer:
82.7 	(1) bed and board;
82.8 	(2) nursing services and other related services;
82.9 	(3) use of hospitals, surgical centers, or health care provider facilities;
82.10 	(4) medical social services;
82.11 	(5) drugs, biologicals, supplies, appliances, and equipment;
82.12 	(6) other diagnostic or therapeutic items or services;
82.13 	(7) medical or surgical services;
82.14 	(8) items and services furnished to ambulatory patients not requiring emergency care; 
82.15 	and
82.16 	(9) emergency services; and
82.17 	(10) massage therapy services.
82.18 	(b) "Patient services" does not include:
82.19 	(1) services provided to nursing homes licensed under chapter 144A;
82.20 	(2) examinations for purposes of utilization reviews, insurance claims or eligibility, 
82.21 	litigation, and employment, including reviews of medical records for those purposes;
82.22 	(3) services provided to and by community residential mental health facilities licensed 
82.23 	under Minnesota Rules, parts 9520.0500 to 9520.0670, and to and by residential treatment 
82.24 	programs for children with severe emotional disturbance licensed or certified under chapter 
82.25 	245A;
82.26 	(4) services provided to and by community support programs and family community 
82.27 	support programs approved under Minnesota Rules, parts 9535.1700 to 9535.1760, or 
82.28 	certified as mental health rehabilitative services under chapter 256B;
82.29 	(5) services provided to and by community mental health centers as defined in section 
82.30 	245.62, subdivision 2;
83.1 	(6) services provided to and by assisted living programs and congregate housing 
83.2 	programs;
83.3 	(7) hospice care services;
83.4 	(8) home and community-based waivered services under sections 256B.0915, 256B.49, 
83.5 	and 256B.501;
83.6 	(9) targeted case management services under sections 256B.0621; 256B.0625, 
83.7 	subdivisions 20, 20a, 33, and 44; and 256B.094; and
83.8 	(10) services provided to the following: supervised living facilities for persons with 
83.9 	developmental disabilities licensed under Minnesota Rules, parts 4665.0100 to 4665.9900; 
83.10 	housing with services establishments required to be registered under chapter 144D; board 
83.11 	and lodging establishments providing only custodial services that are licensed under chapter 
83.12 	157 and registered under section 157.17 to provide supportive services or health supervision 
83.13 	services; adult foster homes as defined in Minnesota Rules, part 9555.5105; day training 
83.14 	and habilitation services for adults with developmental disabilities as defined in section 
83.15 	252.41, subdivision 3; boarding care homes as defined in Minnesota Rules, part 4655.0100; 
83.16 	adult day care services as defined in section 245A.02, subdivision 2a; and home health 
83.17 	agencies as defined in Minnesota Rules, part 9505.0175, subpart 15, or licensed under 
83.18 	chapter 144A.

83.19 	EFFECTIVE DATE. This section is effective for gross revenues received after June 
83.20 	30, 2018.

83.21 	Sec. 5. Minnesota Statutes 2017 Supplement, section 297A.61, subdivision 3, is amended 
83.22 	to read:
83.23 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited to, 
83.24 	each of the transactions listed in this subdivision. In applying the provisions of this chapter, 
83.25 	the terms "tangible personal property" and "retail sale" include the taxable services listed 
83.26 	in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision of these taxable 
83.27 	services, unless specifically provided otherwise. Services performed by an employee for 
83.28 	an employer are not taxable. Services performed by a partnership or association for another 
83.29 	partnership or association are not taxable if one of the entities owns or controls more than 
83.30 	80 percent of the voting power of the equity interest in the other entity. Services performed 
83.31 	between members of an affiliated group of corporations are not taxable. For purposes of 
83.32 	the preceding sentence, "affiliated group of corporations" means those entities that would 
84.1 	be classified as members of an affiliated group as defined under United States Code, title 
84.2 	26, section 1504, disregarding the exclusions in section 1504(b).
84.3 	(b) Sale and purchase include:
84.4 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
84.5 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
84.6 	(2) the leasing of or the granting of a license to use or consume, for a consideration in 
84.7 	money or by exchange or barter, tangible personal property, other than a manufactured 
84.8 	home used for residential purposes for a continuous period of 30 days or more.
84.9 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
84.10 	tangible personal property for a consideration for consumers who furnish either directly or 
84.11 	indirectly the materials used in the production, fabrication, printing, or processing.
84.12 	(d) Sale and purchase include the preparing for a consideration of food. Notwithstanding 
84.13 	section 297A.67, subdivision 2, taxable food includes, but is not limited to, the following:
84.14 	(1) prepared food sold by the retailer;
84.15 	(2) soft drinks;
84.16 	(3) candy; and
84.17 	(4) dietary supplements.
84.18 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, gas, 
84.19 	water, or steam for use or consumption within this state.
84.20 	(f) A sale and a purchase includes the transfer for a consideration of prewritten computer 
84.21 	software whether delivered electronically, by load and leave, or otherwise.
84.22 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
84.23 	services:
84.24 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
84.25 	events, and the making available of amusement devices, tanning facilities, reducing salons, 
84.26 	steam baths, health clubs, and spas or athletic facilities;
84.27 	(2) lodging and related services by a hotel, rooming house, resort, campground, motel, 
84.28 	or trailer camp, including furnishing the guest of the facility with access to telecommunication 
84.29 	services, and the granting of any similar license to use real property in a specific facility, 
84.30 	other than the renting or leasing of it for a continuous period of 30 days or more under an 
84.31 	enforceable written agreement that may not be terminated without prior notice and including 
85.1 	accommodations intermediary services provided in connection with other services provided 
85.2 	under this clause;
85.3 	(3) nonresidential parking services, whether on a contractual, hourly, or other periodic 
85.4 	basis, except for parking at a meter;
85.5 	(4) the granting of membership in a club, association, or other organization if:
85.6 	(i) the club, association, or other organization makes available for the use of its members 
85.7 	sports and athletic facilities, without regard to whether a separate charge is assessed for use 
85.8 	of the facilities; and
85.9 	(ii) use of the sports and athletic facility is not made available to the general public on 
85.10 	the same basis as it is made available to members.
85.11 	Granting of membership means both onetime initiation fees and periodic membership dues. 
85.12 	Sports and athletic facilities include golf courses; tennis, racquetball, handball, and squash 
85.13 	courts; basketball and volleyball facilities; running tracks; exercise equipment; swimming 
85.14 	pools; and other similar athletic or sports facilities;
85.15 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
85.16 	material used in road construction; and delivery of concrete block by a third party if the 
85.17 	delivery would be subject to the sales tax if provided by the seller of the concrete block. 
85.18 	For purposes of this clause, "road construction" means construction of:
85.19 	(i) public roads;
85.20 	(ii) cartways; and
85.21 	(iii) private roads in townships located outside of the seven-county metropolitan area 
85.22 	up to the point of the emergency response location sign; and
85.23 	(6) services as provided in this clause:
85.24 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
85.25 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
85.26 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
85.27 	include services provided by coin operated facilities operated by the customer;
85.28 	(ii) motor vehicle washing, waxing, and cleaning services, including services provided 
85.29 	by coin operated facilities operated by the customer, and rustproofing, undercoating, and 
85.30 	towing of motor vehicles;
85.31 	(iii) building and residential cleaning, maintenance, and disinfecting services and pest 
85.32 	control and exterminating services;
86.1 	(iv) detective, security, burglar, fire alarm, and armored car services; but not including 
86.2 	services performed within the jurisdiction they serve by off-duty licensed peace officers as 
86.3 	defined in section 626.84, subdivision 1, or services provided by a nonprofit organization 
86.4 	or any organization at the direction of a county for monitoring and electronic surveillance 
86.5 	of persons placed on in-home detention pursuant to court order or under the direction of the 
86.6 	Minnesota Department of Corrections;
86.7 	(v) pet grooming services;
86.8 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
86.9 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor plant 
86.10 	care; tree, bush, shrub, and stump removal, except when performed as part of a land clearing 
86.11 	contract as defined in section 297A.68, subdivision 40; and tree trimming for public utility 
86.12 	lines. Services performed under a construction contract for the installation of shrubbery, 
86.13 	plants, sod, trees, bushes, and similar items are not taxable;
86.14 	(vii) massages, except when provided by a licensed health care facility or professional 
86.15 	or upon written referral from a licensed health care facility or professional for treatment of 
86.16 	illness, injury, or disease; and
86.17 	(viii) the furnishing of lodging, board, and care services for animals in kennels and other 
86.18 	similar arrangements, but excluding veterinary and horse boarding services.
86.19 	(h) A sale and a purchase includes the furnishing for a consideration of tangible personal 
86.20 	property or taxable services by the United States or any of its agencies or instrumentalities, 
86.21 	or the state of Minnesota, its agencies, instrumentalities, or political subdivisions.
86.22 	(i) A sale and a purchase includes the furnishing for a consideration of 
86.23 	telecommunications services, ancillary services associated with telecommunication services, 
86.24 	and pay television services. Telecommunication services include, but are not limited to, the 
86.25 	following services, as defined in section 297A.669: air-to-ground radiotelephone service, 
86.26 	mobile telecommunication service, postpaid calling service, prepaid calling service, prepaid 
86.27 	wireless calling service, and private communication services. The services in this paragraph 
86.28 	are taxed to the extent allowed under federal law.
86.29 	(j) A sale and a purchase includes the furnishing for a consideration of installation if the 
86.30 	installation charges would be subject to the sales tax if the installation were provided by 
86.31 	the seller of the item being installed.
86.32 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer to a 
86.33 	customer when (1) the vehicle is rented by the customer for a consideration, or (2) the motor 
87.1 	vehicle dealer is reimbursed pursuant to a service contract as defined in section 59B.02, 
87.2 	subdivision 11.
87.3 	(l) A sale and a purchase includes furnishing for a consideration of specified digital 
87.4 	products or other digital products or granting the right for a consideration to use specified 
87.5 	digital products or other digital products on a temporary or permanent basis and regardless 
87.6 	of whether the purchaser is required to make continued payments for such right. Wherever 
87.7 	the term "tangible personal property" is used in this chapter, other than in subdivisions 10 
87.8 	and 38, the provisions also apply to specified digital products, or other digital products, 
87.9 	unless specifically provided otherwise or the context indicates otherwise.
87.10 	(m) The sale of the privilege of admission under section 297A.61, subdivision 3, 
87.11 	paragraph (g), clause (1), to a place of amusement, recreational area, or athletic event 
87.12 	includes all charges included in the privilege of admission's sales price, without deduction 
87.13 	for amenities that may be provided, unless the amenities are separately stated and the 
87.14 	purchaser of the privilege of admission is entitled to add or decline the amenities, and the 
87.15 	amenities are not otherwise taxable.

87.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
87.17 	30, 2018.

87.18 	Sec. 6. Minnesota Statutes 2017 Supplement, section 297A.67, subdivision 34, is amended 
87.19 	to read:
87.20 		Subd. 34.Precious metal bullion and bullion coin. (a) Precious metal bullion is exempt. 
87.21 	For purposes of this subdivision,:
87.22 	(1) "precious metal bullion" means bars or rounds that consist of 99.9 percent or more 
87.23 	by weight of either gold, silver, platinum, or palladium and are marked with weight, purity, 
87.24 	and content.; and
87.25 	(2) "bullion coin" means a coin as described in section 80G.01, subdivision 2.
87.26 	(b) The exemption under this subdivision does not apply to sales and purchases of 
87.27 	jewelry, works of art, or scrap metal.
87.28 	(c) The intent of this subdivision is to eliminate the difference in tax treatment between 
87.29 	the sale of precious metal bullion and bullion coin and the sale of stock, bullion ETFs, 
87.30 	bonds, and other investment instruments.

87.31 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
87.32 	30, 2018.

88.1 	Sec. 7. Minnesota Statutes 2016, section 297A.67, is amended by adding a subdivision to 
88.2 	read:
88.3 		Subd. 37.Massage therapy. Massage therapy services subject to tax under section 
88.4 	295.52 or provided upon referral from a professional or licensed health care facility for 
88.5 	treatment of illness, injury, or disease are exempt.

88.6 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
88.7 	30, 2018.

88.8 	Sec. 8. Minnesota Statutes 2016, section 297A.67, is amended by adding a subdivision to 
88.9 	read:
88.10 		Subd. 38.Certain herbicides. Purchases of herbicides authorized for use pursuant to 
88.11 	an invasive aquatic plant management permit as defined under section 103G.615 are exempt 
88.12 	if purchased by a lakeshore property owner, an association of lakeshore property owners 
88.13 	organized under chapter 317A, or by a contractor hired by a lakeshore owner or association 
88.14 	to provide invasive aquatic plant management under the permit. For purposes of this 
88.15 	subdivision, "herbicides" means all herbicides that meet the following requirements:
88.16 	(1) are labeled for use in water;
88.17 	(2) are registered for use in this state by the Minnesota Department of Agriculture under 
88.18 	section 18B.26; and
88.19 	(3) are listed as one of the herbicides proposed for use on the invasive aquatic plant 
88.20 	management permit.

88.21 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
88.22 	30, 2018.

88.23 	Sec. 9. Minnesota Statutes 2016, section 297A.67, is amended by adding a subdivision to 
88.24 	read:
88.25 		Subd. 39.Ticket purchasing rights to collegiate events. The sale of the privilege of 
88.26 	admission under section 297A.61, subdivision 3, paragraph (g), clause (1), does not include 
88.27 	consideration paid for the right to purchase a ticket to a collegiate athletic event in a preferred 
88.28 	area, and the sale of the right to purchase a ticket is exempt provided that:
88.29 	(1) the consideration paid for the right to purchase in the preferred area is used entirely 
88.30 	to support student scholarship costs;
89.1 	(2) the consideration paid for the right to purchase in the preferred area is separately 
89.2 	stated from the admission price; and
89.3 	(3) the admission price is equal to or greater than the highest priced general admission 
89.4 	ticket for the closest seat not in the preferred area.

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

89.6 	Sec. 10. Minnesota Statutes 2016, section 297A.68, subdivision 29, is amended to read:
89.7 		Subd. 29.Prizes. (a) Tangible personal property that will be given as prizes to players 
89.8 	in games of skill or chance is exempt if:
89.9 	(1) the games are conducted at events such as community festivals, fairs, and carnivals 
89.10 	and if the events last less than six days.; or
89.11 	(2) the property is awarded as prizes in connection with lawful gambling as defined in 
89.12 	section 349.12.
89.13 	(b) This exemption does not apply to property awarded as prizes in connection with 
89.14 	lawful gambling as defined in section 349.12 or the State Lottery.

89.15 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
89.16 	30, 2018.

89.17 	Sec. 11. Minnesota Statutes 2016, section 297A.70, subdivision 7, is amended to read:
89.18 		Subd. 7.Hospitals, outpatient surgical centers, and critical access dental providers.
 89.19 	(a) Sales, except for those listed in paragraph (d), to a hospital are exempt, if the items 
89.20 	purchased are used in providing hospital services. For purposes of this subdivision, "hospital" 
89.21 	means a hospital organized and operated for charitable purposes within the meaning of 
89.22 	section 501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any 
89.23 	other jurisdiction, and "hospital services" are services authorized or required to be performed 
89.24 	by a "hospital" under chapter 144.
89.25 	(b) Sales, except for those listed in paragraph (d), to an outpatient surgical center are 
89.26 	exempt, if the items purchased are used in providing outpatient surgical services. For purposes 
89.27 	of this subdivision, "outpatient surgical center" means an outpatient surgical center organized 
89.28 	and operated for charitable purposes within the meaning of section 501(c)(3) of the Internal 
89.29 	Revenue Code, and licensed under chapter 144 or by any other jurisdiction. For the purposes 
89.30 	of this subdivision, "outpatient surgical services" means: (1) services authorized or required 
89.31 	to be performed by an outpatient surgical center under chapter 144; and (2) urgent care. For 
90.1 	purposes of this subdivision, "urgent care" means health services furnished to a person 
90.2 	whose medical condition is sufficiently acute to require treatment unavailable through, or 
90.3 	inappropriate to be provided by, a clinic or physician's office, but not so acute as to require 
90.4 	treatment in a hospital emergency room.
90.5 	(c) Sales, except for those listed in paragraph (d), to a critical access dental provider are 
90.6 	exempt, if the items purchased are used in providing critical access dental care services. 
90.7 	For the purposes of this subdivision, "critical access dental provider" means a dentist or 
90.8 	dental clinic that qualifies under section 256B.76, subdivision 4, paragraph (b), and, in the 
90.9 	previous calendar year, had no more than 15 percent of its patients covered by private dental 
90.10 	insurance.
90.11 	(d) This exemption does not apply to the following products and services:
90.12 	(1) purchases made by a clinic, physician's office, or any other medical facility not 
90.13 	operating as a hospital, outpatient surgical center, qualifying medical facility, or critical 
90.14 	access dental provider, even though the clinic, office, or facility may be owned and operated 
90.15 	by a hospital, outpatient surgical center, qualifying medical facility, or critical access dental 
90.16 	provider;
90.17 	(2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and prepared 
90.18 	food, candy, and soft drinks;
90.19 	(3) building and construction materials used in constructing buildings or facilities that 
90.20 	will not be used principally by the hospital, outpatient surgical center, qualifying medical 
90.21 	facility, or critical access dental provider;
90.22 	(4) building, construction, or reconstruction materials purchased by a contractor or a 
90.23 	subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 
90.24 	maximum price covering both labor and materials for use in the construction, alteration, or 
90.25 	repair of a hospital, outpatient surgical center, qualifying medical facility, or critical access 
90.26 	dental provider; or
90.27 	(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11.
90.28 	(e) A limited liability company also qualifies for exemption under this subdivision if 
90.29 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
90.30 	purchased qualify for the exemption.
90.31 	(f) An entity that contains both a hospital and a nonprofit unit may claim this exemption 
90.32 	on purchases made for both the hospital and nonprofit unit provided that:
90.33 	(1) the nonprofit unit would have qualified for exemption under subdivision 4; and
91.1 	(2) the items purchased would have qualified for the exemption.
91.2 	(g) Sales, except for those listed in paragraph (d), to a qualifying medical facility are 
91.3 	exempt, if the items are purchased or used in providing medical services. For purposes of 
91.4 	this subdivision, "qualifying medical facility" means a medical facility as defined in section 
91.5 	469.1812, subdivision 2a, that has been granted an abatement of the state general tax under 
91.6 	section 469.1817.

91.7 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
91.8 	30, 2018.

91.9 	Sec. 12. Minnesota Statutes 2017 Supplement, section 297A.70, subdivision 20, is amended 
91.10 	to read:
91.11 		Subd. 20.Ice arenas and rinks. Sales to organizations that exist primarily for the purpose 
91.12 	of operating ice arenas or rinks that are (1) part of either the Duluth Heritage Sports Center
91.13 	or the David M. Thaler Sports Center; and (2) are used for youth and high school programs,
91.14 	are exempt if the organization is a private, nonprofit corporation exempt from federal income 
91.15 	taxation under section 501(c)(3) of the Internal Revenue Code.

91.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
91.17 	30, 2018.

91.18 	Sec. 13. Minnesota Statutes 2016, section 297A.70, is amended by adding a subdivision 
91.19 	to read:
91.20 		Subd. 21.Lawful gambling equipment. The lease or purchase of gambling equipment, 
91.21 	as defined in section 349.12, subdivision 18, by an organization licensed to conduct lawful 
91.22 	gambling under chapter 349 is exempt.

91.23 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
91.24 	30, 2018.

91.25 	Sec. 14. Minnesota Statutes 2016, section 297A.70, is amended by adding a subdivision 
91.26 	to read:
91.27 		Subd. 22.Nonprofit conservation clubs. Sales to nonprofit conservation clubs are 
91.28 	exempt. For purposes of this subdivision, a "nonprofit conservation club" means an 
91.29 	organization exempt under section 501(c)(3) of the Internal Revenue Code that provides 
91.30 	instruction, training, and facilities for shooting handguns or rifles.

92.1 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
92.2 	30, 2018.

92.3 	Sec. 15. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision 
92.4 	to read:
92.5 		Subd. 51.Public safety facilities. Materials and supplies used in and equipment 
92.6 	incorporated into construction or remodeling of the following public safety facilities are 
92.7 	exempt:
92.8 	(1) the construction of a new fire station, which includes firefighting and public safety 
92.9 	training facilities, in the city of Inver Grove Heights;
92.10 	(2) the construction of a new fire station or the remodeling and expansion of an existing 
92.11 	fire station in the city of Virginia;
92.12 	(3) the construction of a new fire station on the campus of the Minnetonka City Hall; 
92.13 	and
92.14 	(4) the remodeling and expansion of an existing police and fire station in Minnetonka 
92.15 	to accommodate its use as a police station.

92.16 	EFFECTIVE DATE. This section is effective for sales and purchases made after the 
92.17 	day following final enactment and before January 1, 2021.

92.18 	Sec. 16. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision 
92.19 	to read:
92.20 		Subd. 52.Second Harvest Heartland. Materials and supplies used or consumed in and 
92.21 	equipment incorporated into construction and rehabilitation of the Second Harvest Heartland 
92.22 	regional charitable food warehouse, distribution, and office facility in Hennepin County are 
92.23 	exempt. The tax must be imposed and collected as if the rate under section 297A.62, 
92.24 	subdivision 1, applied and then refunded in the manner provided in section 297A.75.

92.25 	EFFECTIVE DATE. This section is effective for sales and purchases made after January 
92.26 	1, 2018, and before January 1, 2022.

92.27 	Sec. 17. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision 
92.28 	to read:
92.29 		Subd. 53.Nonprofit snowmobile clubs. Building materials and supplies used by a 
92.30 	nonprofit snowmobile club to construct, reconstruct, or maintain or improve state or 
92.31 	grant-in-aid snowmobile trails are exempt. A nonprofit snowmobile club is eligible for the 
93.1 	exemption under this subdivision if it received, in the current year or in the previous 
93.2 	three-year period, a state grant-in-aid grant administered by the Department of Natural 
93.3 	Resources by applying for the grant with a local unit of government sponsor.

93.4 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
93.5 	30, 2018.

93.6 	Sec. 18. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision 
93.7 	to read:
93.8 		Subd. 54.Medical facility in underserved area. Materials and supplies used or 
93.9 	consumed in, and equipment incorporated into, the construction or improvement of real 
93.10 	property that has been granted an abatement of the state general tax under section 469.1817 
93.11 	are exempt.

93.12 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
93.13 	30, 2018.

93.14 	Sec. 19. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision 
93.15 	to read:
93.16 		Subd. 55.Properties destroyed by fire. Building materials and supplies used in, and 
93.17 	equipment incorporated into, the construction or replacement of real property affected by, 
93.18 	and capital equipment to replace equipment destroyed in, the fire on March 11, 2018, in the 
93.19 	city of Mazeppa are exempt. The tax must be imposed and collected as if the rate under 
93.20 	section 297A.62, subdivision 1, applied and then refunded in the manner provided in section 
93.21 	297A.75. For purposes of this subdivision, "capital equipment" includes durable equipment 
93.22 	used in a restaurant for food storage, preparation, and serving.

93.23 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
93.24 	made after March 11, 2018, and before January 1, 2021.

93.25 	Sec. 20. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision 
93.26 	to read:
93.27 		Subd. 56.Former Duluth Central High School. Materials and supplies used in and 
93.28 	equipment incorporated into a private redevelopment project on the site of the former Duluth 
93.29 	Central High School are exempt, provided the resulting development is subject to property 
93.30 	taxes. The tax must be imposed and collected as if the rate under section 297A.62 applied 
93.31 	and then refunded in the manner provided in section 297A.75. The commissioner must not 
93.32 	pay more than $5,000,000 in refunds for purchases exempt under this section. Refunds must 
94.1 	be processed and issued in the order that complete and accurate applications are received 
94.2 	by the commissioner.

94.3 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
94.4 	made after June 30, 2018, and before January 1, 2020.

94.5 	Sec. 21. Minnesota Statutes 2017 Supplement, section 297A.75, subdivision 1, is amended 
94.6 	to read:
94.7 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the following 
94.8 	exempt items must be imposed and collected as if the sale were taxable and the rate under 
94.9 	section 297A.62, subdivision 1, applied. The exempt items include:
94.10 	(1) building materials for an agricultural processing facility exempt under section 
94.11 	297A.71, subdivision 13;
94.12 	(2) building materials for mineral production facilities exempt under section 297A.71, 
94.13 	subdivision 14;
94.14 	(3) building materials for correctional facilities under section 297A.71, subdivision 3;
94.15 	(4) building materials used in a residence for disabled veterans exempt under section 
94.16 	297A.71, subdivision 11;
94.17 	(5) elevators and building materials exempt under section 297A.71, subdivision 12;
94.18 	(6) materials and supplies for qualified low-income housing under section 297A.71, 
94.19 	subdivision 23;
94.20 	(7) materials, supplies, and equipment for municipal electric utility facilities under 
94.21 	section 297A.71, subdivision 35;
94.22 	(8) equipment and materials used for the generation, transmission, and distribution of 
94.23 	electrical energy and an aerial camera package exempt under section 297A.68, subdivision 
94.24 	37;
94.25 	(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph 
94.26 	(a), clause (10);
94.27 	(10) materials, supplies, and equipment for construction or improvement of projects and 
94.28 	facilities under section 297A.71, subdivision 40;
94.29 	(11) materials, supplies, and equipment for construction, improvement, or expansion 
94.30 	of:
95.1 	(i) an aerospace defense manufacturing facility exempt under Minnesota Statutes 2014, 
95.2 	section 297A.71, subdivision 42;
95.3 	(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 
95.4 	45;
95.5 	(iii) a research and development facility exempt under Minnesota Statutes 2014, section 
95.6 	297A.71, subdivision 46; and
95.7 	(iv) an industrial measurement manufacturing and controls facility exempt under 
95.8 	Minnesota Statutes 2014, section 297A.71, subdivision 47;
95.9 	(12) enterprise information technology equipment and computer software for use in a 
95.10 	qualified data center exempt under section 297A.68, subdivision 42;
95.11 	(13) materials, supplies, and equipment for qualifying capital projects under section 
95.12 	297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
95.13 	(14) items purchased for use in providing critical access dental services exempt under 
95.14 	section 297A.70, subdivision 7, paragraph (c);
95.15 	(15) items and services purchased under a business subsidy agreement for use or 
95.16 	consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 
95.17 	44;
95.18 	(16) building materials, equipment, and supplies for constructing or replacing real 
95.19 	property exempt under section 297A.71, subdivision subdivisions 49 and 55; and
95.20 	(17) building materials, equipment, and supplies for constructing or replacing real 
95.21 	property exempt under section 297A.71, subdivision 50, paragraph (b).;
95.22 	(18) materials, equipment, and supplies for a regional charitable food warehouse, 
95.23 	distribution, and office facility exempt under section 297A.71, subdivision 52; and
95.24 	(19) materials and supplies used in and equipment incorporated into a private 
95.25 	redevelopment project exempt under section 297A.71, subdivision 56.

95.26 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
95.27 	30, 2018.

96.1 	Sec. 22. Minnesota Statutes 2017 Supplement, section 297A.75, subdivision 2, is amended 
96.2 	to read:
96.3 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
96.4 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must 
96.5 	be paid to the applicant. Only the following persons may apply for the refund:
96.6 	(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;
96.7 	(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;
96.8 	(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits 
96.9 	provided in United States Code, title 38, chapter 21;
96.10 	(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead 
96.11 	property;
96.12 	(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;
96.13 	(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a 
96.14 	joint venture of municipal electric utilities;
96.15 	(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying 
96.16 	business;
96.17 	(8) for subdivision 1, clauses (9), (10), and (13), the applicant must be the governmental 
96.18 	entity that owns or contracts for the project or facility; and
96.19 	(9) for subdivision 1, clause (16), clauses (16) to (19), the applicant must be the owner 
96.20 	or developer of the building or project; and.
96.21 	(10) for subdivision 1, clause (17), the applicant must be the owner or developer of the 
96.22 	building or project.

96.23 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
96.24 	30, 2018.

96.25 	Sec. 23. Minnesota Statutes 2017 Supplement, section 297A.75, subdivision 3, is amended 
96.26 	to read:
96.27 		Subd. 3.Application. (a) The application must include sufficient information to permit 
96.28 	the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor, 
96.29 	or builder, under subdivision 1, clauses (3) to (13) or (15) to (17) (19), the contractor, 
96.30 	subcontractor, or builder must furnish to the refund applicant a statement including the cost 
96.31 	of the exempt items and the taxes paid on the items unless otherwise specifically provided 
97.1 	by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under 
97.2 	this section.
97.3 	(b) An applicant may not file more than two applications per calendar year for refunds 
97.4 	for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

97.5 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
97.6 	30, 2018.

97.7 	Sec. 24. Minnesota Statutes 2017 Supplement, section 297E.02, subdivision 3, is amended 
97.8 	to read:
97.9 		Subd. 3.Collection; disposition. (a) Taxes imposed by this section are due and payable 
97.10 	to the commissioner when the gambling tax return is required to be filed. Distributors must 
97.11 	file their monthly sales figures with the commissioner on a form prescribed by the 
97.12 	commissioner. Returns covering the taxes imposed under this section must be filed with 
97.13 	the commissioner on or before the 20th day of the month following the close of the previous 
97.14 	calendar month. The commissioner shall prescribe the content, format, and manner of returns 
97.15 	or other documents pursuant to section 270C.30. The proceeds, along with the revenue 
97.16 	received from all license fees and other fees under sections 349.11 to 349.191, 349.211, 
97.17 	and 349.213, must be paid to the commissioner of management and budget for deposit in 
97.18 	the general fund.
97.19 	(b) The sales tax imposed by chapter 297A on the sale of pull-tabs and tipboards by the 
97.20 	distributor is imposed on the retail sales price. The retail sale of pull-tabs or tipboards by 
97.21 	the organization is exempt from taxes imposed by chapter 297A and is exempt from all 
97.22 	local taxes and license fees except a fee authorized under section 349.16, subdivision 8.
97.23 	(c) One-half of one percent of the revenue deposited in the general fund under paragraph 
97.24 	(a), is appropriated to the commissioner of human services for the compulsive gambling 
97.25 	treatment program established under section 245.98. One-half of one percent of the revenue 
97.26 	deposited in the general fund under paragraph (a), is appropriated to the commissioner of 
97.27 	human services for a grant to the state affiliate recognized by the National Council on 
97.28 	Problem Gambling to increase public awareness of problem gambling, education and training 
97.29 	for individuals and organizations providing effective treatment services to problem gamblers 
97.30 	and their families, and research relating to problem gambling. Money appropriated by this 
97.31 	paragraph must supplement and must not replace existing state funding for these programs.

97.32 	EFFECTIVE DATE. This section is effective July 1, 2018.

98.1 	Sec. 25. Laws 2017, First Special Session chapter 1, article 3, section 32, the effective 
98.2 	date, is amended to read:

98.3 	EFFECTIVE DATE. Paragraph (a) is effective retroactively for sales and purchases 
98.4 	made after September 30, 2016, and before January 1, 2019 2022. Paragraph (b) is effective 
98.5 	for sales and purchases made after September 30, 2016, and before July 1, 2017.

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

98.7 	Sec. 26. MUNICIPALLY OWNED WATER TREATMENT FACILITY; CITY OF 
98.8 	ELKO NEW MARKET.
 98.9 		Subdivision 1.Exemption. Materials and supplies used in and equipment incorporated 
98.10 	into a water treatment facility owned and operated by the city of Elko New Market are 
98.11 	exempt from taxation under Minnesota Statutes, chapter 297A, regardless of whether 
98.12 	purchased by the city or a contractor, subcontractor, or builder. All purchases for this facility 
98.13 	must be made after June 1, 2014, and before June 1, 2016.
98.14 		Subd. 2.Refund. The tax on purchases exempt under subdivision 1 must be imposed 
98.15 	and collected as if the rate under Minnesota Statutes, section 297A.62, applied, and then 
98.16 	refunded in the manner provided in Minnesota Statutes, section 297A.75. The applicant 
98.17 	must be the city of Elko New Market. If sales tax has been paid on sales and purchases 
98.18 	exempt under this section prior to the effective date of this section, the city of Elko New 
98.19 	Market may apply directly to the commissioner of revenue for a refund. The application 
98.20 	must be in the form and manner required by the commissioner and provide sufficient 
98.21 	information so the commissioner can verify the amount paid. If the tax was paid by a 
98.22 	contractor, subcontractor, or builder, the contractor, subcontractor, or builder must furnish 
98.23 	to the refund applicant a statement including the cost of the exempt items and the taxes paid 
98.24 	on the items. Interest must be paid on the refund at the rate in Minnesota Statutes, section 
98.25 	270C.405, from 90 days after the refund claim is filed with the commissioner.
98.26 		Subd. 3.Appropriation. The amount required to make the refunds under this section 
98.27 	is appropriated to the commissioner of revenue.

98.28 	EFFECTIVE DATE. This section is effective retroactively for purchases made after 
98.29 	June 1, 2014, and before June 1, 2016.

99.1 	Sec. 27. SALES TAX RATE ADJUSTMENT IF TAX IS IMPOSED ON REMOTE 
99.2 	SELLERS.
 99.3 		Subdivision 1.Definitions. (a) For purposes of this subdivision, the following terms 
99.4 	have the meanings given.
99.5 	(b) "Day the state begins enforcing a duty to collect and remit sales tax on retailers 
99.6 	without a physical presence in this state, and marketplace providers under Minnesota Statutes, 
99.7 	section 297A.66, subdivision 4," means the earliest of:
99.8 	(i) the first day of a calendar quarter at least 60 days after a decision is made by the 
99.9 	United States Supreme Court modifying its decision in Quill Corp. v. North Dakota, 504 
99.10 	U.S. 298 (1992) so that a state may require retailers with economic presence nexus and 
99.11 	without a physical presence in the state to collect and remit sales tax; or
99.12 	(ii) the first day of a calendar quarter at least 60 days after a federal law​ is enacted 
99.13 	authorizing a state to impose a requirement to collect and remit sales tax on​ retailers without 
99.14 	a physical presence in the state.
99.15 		Subd. 2.Rate adjustment. (a) The commissioner of revenue must make an adjustment 
99.16 	to the sales tax rates in Minnesota Statutes, section 297A.62, subdivisions 1 and 1a, effective 
99.17 	for the first day of the calendar quarter beginning 15 months after the day the state begins 
99.18 	enforcing a duty to collect and remit sales tax on retailers without a physical presence in 
99.19 	this state, and marketplace providers under Minnesota Statutes, section 297A.66, subdivision 
99.20 	4. The adjustment must be equal to the reduction necessary to make the total collections 
99.21 	under the sales tax revenue neutral as calculated in paragraph (b).
99.22 	(b) The adjustment factor for each tax rate must be equal to the ratio by which:
99.23 	(1) the revenues collected under Minnesota Statutes, chapter 297A, in the 12-month 
99.24 	period immediately preceding the day the state begins enforcing a duty to collect and remit 
99.25 	sales tax on retailers without a physical presence in this state, and marketplace providers 
99.26 	under Minnesota Statutes, section 297A.66, subdivision 4, multiplied by the projected 
99.27 	growth rate in sales tax revenues between the same 12-month period and the time period in 
99.28 	clause (2), calculated from data used in preparing the February 2018 forecast; compared to
99.29 	(2) the revenues collected under Minnesota Statutes, chapter 297A, in the 12-month 
99.30 	period beginning on the day the state begins enforcing a duty to collect and remit sales tax 
99.31 	on retailers without a physical presence in this state, and marketplace providers under 
99.32 	Minnesota Statutes, section 297A.66, subdivision 4. The ratio cannot be less than one.
100.1 	(c) The adjusted rates must be rounded to the nearest one thousandth of one percent and 
100.2 	are effective for the first calendar quarter at least 15 months after the day the state begins 
100.3 	enforcing a duty to collect and remit sales tax on retailers without a physical presence in 
100.4 	this state, and marketplace providers under Minnesota Statutes, section 297A.66, subdivision 
100.5 	4. The commissioner of revenue must publish the new tax rates in the State Register at least 
100.6 	30 days prior to the rate change going into effect.
100.7 	(d) After the commissioner of revenue publishes the new tax rates in the State Register, 
100.8 	the revisor of statutes must update the tax rates in Minnesota Statutes, section 297A.62, 
100.9 	subdivisions 1 and 1a, in the next edition of Minnesota Statutes.

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

100.11 	ARTICLE 4
100.12 	PROPERTY TAXES

100.13 	Section 1. Minnesota Statutes 2016, section 272.02, subdivision 49, is amended to read:
100.14 		Subd. 49.Agricultural historical society property. Property is exempt from taxation 
100.15 	if it is owned by a nonprofit charitable or educational organization that qualifies for 
100.16 	exemption under section 501(c)(3) of the Internal Revenue Code and meets the following 
100.17 	criteria:
100.18 	(1) the property is primarily used for storing and exhibiting tools, equipment, and artifacts 
100.19 	useful in providing an understanding of local or regional agricultural history. Primary use 
100.20 	is determined each year based on the number of days the property is used solely for storage 
100.21 	and exhibition purposes;
100.22 	(2) the property is limited to a maximum of 20 40 acres per owner per county, but 
100.23 	includes the land and any taxable structures, fixtures, and equipment on the land;
100.24 	(3) the property is not used for a revenue-producing activity for more than ten days in 
100.25 	each calendar year; and
100.26 	(4) the property is not used for residential purposes on either a temporary or permanent 
100.27 	basis.

100.28 	EFFECTIVE DATE. This section is effective for assessments beginning in 2018.

101.1 	Sec. 2. Minnesota Statutes 2016, section 272.02, is amended by adding a subdivision to 
101.2 	read:
101.3 		Subd. 102.Licensed child care facility. Property used as a licensed child care facility 
101.4 	that accepts families participating in the child care assistance program under chapter 119B, 
101.5 	and that is owned and operated as part of their mission by a church organization that qualifies 
101.6 	for tax exemption under section 272.02, subdivision 6, is exempt. For the purposes of this 
101.7 	subdivision, "licensed child care facility" means a child care center licensed under Minnesota 
101.8 	Rules, chapter 9503, or a facility used to provide licensed family day care or group family 
101.9 	day care as defined under Minnesota Rules, chapter 9502.

101.10 	EFFECTIVE DATE. This section is effective beginning with assessment year 2018, 
101.11 	for taxes payable in 2019.

101.12 	Sec. 3. Minnesota Statutes 2016, section 273.124, subdivision 8, is amended to read:
101.13 		Subd. 8.Homestead owned by or leased to family farm corporation, joint farm 
101.14 	venture, limited liability company, or partnership. (a) Each family farm corporation; 
101.15 	each joint family farm venture; and each limited liability company or partnership which 
101.16 	operates a family farm; is entitled to class 1b under section 273.13, subdivision 22, paragraph 
101.17 	(b), or class 2a assessment for one homestead occupied by a shareholder, member, or partner 
101.18 	thereof who is residing on the land, and actively engaged in farming of the land owned by 
101.19 	the family farm corporation, joint family farm venture, limited liability company, or 
101.20 	partnership. Homestead treatment applies even if:
101.21 	(1) legal title to the property is in the name of the family farm corporation, joint family 
101.22 	farm venture, limited liability company, or partnership, and not in the name of the person 
101.23 	residing on it.; or
101.24 	(2) the family farm is operated by a family farm corporation, joint family farm venture, 
101.25 	partnership, or limited liability company other than the family farm corporation, joint family 
101.26 	farm venture, partnership, or limited liability company that owns the land, provided that:
101.27 	(i) the shareholder, member, or partner of the family farm corporation, joint family farm 
101.28 	venture, partnership, or limited liability company that owns the land and that is residing on 
101.29 	and actively engaged in farming the land is a shareholder, member, or partner of the family 
101.30 	farm corporation, joint family farm venture, partnership, or limited liability company that 
101.31 	is operating the farm;
101.32 	(ii) each shareholder, member, or partner of the family farm corporation, joint family 
101.33 	farm venture, partnership, or limited liability company that is operating the farm is also a 
102.1 	shareholder, member, or partner of the family farm corporation, joint family farm venture, 
102.2 	partnership, or limited liability company that owns the land; and
102.3 	(iii) a majority of the shareholders, members, or partners of each family farm corporation, 
102.4 	joint family farm venture, partnership, or limited liability company are persons or spouses 
102.5 	of persons who are related to each other within the second degree of kindred according to 
102.6 	the rules of civil law.
102.7 	"Family farm corporation," "family farm," and "partnership operating a family farm" 
102.8 	have the meanings given in section 500.24, except that the number of allowable shareholders, 
102.9 	members, or partners under this subdivision shall not exceed 12. "Limited liability company" 
102.10 	has the meaning contained in sections 322B.03, subdivision 28, or 322C.0102, subdivision 
102.11 	12, and 500.24, subdivision 2, paragraphs (l) and (m). "Joint family farm venture" means 
102.12 	a cooperative agreement among two or more farm enterprises authorized to operate a family 
102.13 	farm under section 500.24.
102.14 	(b) In addition to property specified in paragraph (a), any other residences owned by 
102.15 	family farm corporations, joint family farm ventures, limited liability companies, or 
102.16 	partnerships described in paragraph (a) which are located on agricultural land and occupied 
102.17 	as homesteads by its shareholders, members, or partners who are actively engaged in farming 
102.18 	on behalf of that corporation, joint farm venture, limited liability company, or partnership 
102.19 	must also be assessed as class 2a property or as class 1b property under section 273.13.
102.20 	(c) Agricultural property that is owned by a member, partner, or shareholder of a family 
102.21 	farm corporation or joint family farm venture, limited liability company operating a family 
102.22 	farm, or by a partnership operating a family farm and leased to the family farm corporation, 
102.23 	limited liability company, partnership, or joint farm venture, as defined in paragraph (a), is 
102.24 	eligible for classification as class 1b or class 2a under section 273.13, if the owner is actually 
102.25 	residing on the property, and is actually engaged in farming the land on behalf of that 
102.26 	corporation, joint farm venture, limited liability company, or partnership. This paragraph 
102.27 	applies without regard to any legal possession rights of the family farm corporation, joint 
102.28 	family farm venture, limited liability company, or partnership under the lease.
102.29 	(d) Nonhomestead agricultural property that is owned by a family farm corporation, 
102.30 	joint farm venture, limited liability company, or partnership; and located not farther than 
102.31 	four townships or cities, or combination thereof, from agricultural land that is owned, and 
102.32 	used for the purposes of a homestead by an individual who is a shareholder, member, or 
102.33 	partner of the corporation, venture, company, or partnership; is entitled to receive the first 
102.34 	tier homestead classification rate on any remaining market value in the first homestead class 
103.1 	tier that is in excess of the market value of the shareholder's, member's, or partner's class 2 
103.2 	agricultural homestead property, if the owner, or someone acting on the owner's behalf 
103.3 	notifies the county assessor by July 1 that the property may be eligible under this paragraph 
103.4 	for the current assessment year, for taxes payable in the following year. As used in this 
103.5 	paragraph, "agricultural property" means property classified as 2a under section 273.13, 
103.6 	along with any contiguous property classified as 2b under section 273.13, if the contiguous 
103.7 	2a and 2b properties are under the same ownership.

103.8 	EFFECTIVE DATE. This section is effective for assessments beginning in 2018.

103.9 	Sec. 4. Minnesota Statutes 2016, section 273.124, subdivision 14, is amended to read:
103.10 		Subd. 14.Agricultural homesteads; special provisions.  (a) Real estate of less than ten 
103.11 	acres that is the homestead of its owner must be classified as class 2a under section 273.13, 
103.12 	subdivision 23, paragraph (a), if:
103.13 	(1) the parcel on which the house is located is contiguous on at least two sides to (i) 
103.14 	agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 
103.15 	Service, or (iii) land administered by the Department of Natural Resources on which in lieu 
103.16 	taxes are paid under sections 477A.11 to 477A.14;
103.17 	(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20 
103.18 	acres;
103.19 	(3) the noncontiguous land is located not farther than four townships or cities, or a 
103.20 	combination of townships or cities from the homestead; and
103.21 	(4) the agricultural use value of the noncontiguous land and farm buildings is equal to 
103.22 	at least 50 percent of the market value of the house, garage, and one acre of land.
103.23 	Homesteads initially classified as class 2a under the provisions of this paragraph shall 
103.24 	remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 
103.25 	properties, as long as the homestead remains under the same ownership, the owner owns a 
103.26 	noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 
103.27 	value qualifies under clause (4). Homestead classification under this paragraph is limited 
103.28 	to property that qualified under this paragraph for the 1998 assessment.
103.29 	(b)(i) Agricultural property shall be classified as the owner's homestead, to the same 
103.30 	extent as other agricultural homestead property, if all of the following criteria are met:
103.31 	(1) the agricultural property consists of at least 40 acres including undivided government 
103.32 	lots and correctional 40's;
104.1 	(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner 
104.2 	or of the owner's spouse, is actively farming the agricultural property, either on the person's 
104.3 	own behalf as an individual or on behalf of a partnership operating a family farm, family 
104.4 	farm corporation, joint family farm venture, or limited liability company of which the person 
104.5 	is a partner, shareholder, or member;
104.6 	(3) both the owner of the agricultural property and the person who is actively farming 
104.7 	the agricultural property under clause (2), are Minnesota residents;
104.8 	(4) neither the owner nor the spouse of the owner claims another agricultural homestead 
104.9 	in Minnesota; and
104.10 	(5) neither the owner nor the person actively farming the agricultural property lives 
104.11 	farther than four townships or cities, or a combination of four townships or cities, from the 
104.12 	agricultural property, except that if the owner or the owner's spouse is required to live in 
104.13 	employer-provided housing, the owner or owner's spouse, whichever is actively farming 
104.14 	the agricultural property, may live more than four townships or cities, or combination of 
104.15 	four townships or cities from the agricultural property.
104.16 	The relationship under this paragraph may be either by blood or marriage.
104.17 	(ii) Agricultural property held by a trustee under a trust is eligible for agricultural 
104.18 	homestead classification under this paragraph if the qualifications in clause (i) are met, 
104.19 	except that "owner" means the grantor of the trust.
104.20 	(iii) Property containing the residence of an owner who owns qualified property under 
104.21 	clause (i) shall be classified as part of the owner's agricultural homestead, if that property 
104.22 	is also used for noncommercial storage or drying of agricultural crops.
104.23 	(iv) (iii) As used in this paragraph, "agricultural property" means class 2a property and 
104.24 	any class 2b property that is contiguous to and under the same ownership as the class 2a 
104.25 	property.
104.26 	(c) Noncontiguous land shall be included as part of a homestead under section 273.13, 
104.27 	subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached 
104.28 	land is located in the same township or city, or not farther than four townships or cities or 
104.29 	combination thereof from the homestead. Any taxpayer of these noncontiguous lands must 
104.30 	notify the county assessor that the noncontiguous land is part of the taxpayer's homestead, 
104.31 	and, if the homestead is located in another county, the taxpayer must also notify the assessor 
104.32 	of the other county.
105.1 	(d) Agricultural land used for purposes of a homestead and actively farmed by a person 
105.2 	holding a vested remainder interest in it must be classified as a homestead under section 
105.3 	273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other 
105.4 	dwellings on the land used for purposes of a homestead by persons holding vested remainder 
105.5 	interests who are actively engaged in farming the property, and up to one acre of the land 
105.6 	surrounding each homestead and reasonably necessary for the use of the dwelling as a home, 
105.7 	must also be assessed class 2a.
105.8 	(e) Agricultural land and buildings that were class 2a homestead property under section 
105.9 	273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as 
105.10 	agricultural homesteads for subsequent assessments if:
105.11 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
105.12 	homestead as a result of the April 1997 floods;
105.13 	(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or 
105.14 	Wilkin;
105.15 	(3) the agricultural land and buildings remain under the same ownership for the current 
105.16 	assessment year as existed for the 1997 assessment year and continue to be used for 
105.17 	agricultural purposes;
105.18 	(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles 
105.19 	of one of the parcels of agricultural land that is owned by the taxpayer; and
105.20 	(5) the owner notifies the county assessor that the relocation was due to the 1997 floods, 
105.21 	and the owner furnishes the assessor any information deemed necessary by the assessor in 
105.22 	verifying the change in dwelling. Further notifications to the assessor are not required if the 
105.23 	property continues to meet all the requirements in this paragraph and any dwellings on the 
105.24 	agricultural land remain uninhabited.
105.25 	(f) Agricultural land and buildings that were class 2a homestead property under section 
105.26 	273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified 
105.27 	agricultural homesteads for subsequent assessments if:
105.28 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
105.29 	homestead as a result of damage caused by a March 29, 1998, tornado;
105.30 	(2) the property is located in the county of Blue Earth, Brown, Cottonwood, LeSueur, 
105.31 	Nicollet, Nobles, or Rice;
105.32 	(3) the agricultural land and buildings remain under the same ownership for the current 
105.33 	assessment year as existed for the 1998 assessment year;
106.1 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles of 
106.2 	one of the parcels of agricultural land that is owned by the taxpayer; and
106.3 	(5) the owner notifies the county assessor that the relocation was due to a March 29, 
106.4 	1998, tornado, and the owner furnishes the assessor any information deemed necessary by 
106.5 	the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 
106.6 	owner must notify the assessor by December 1, 1998. Further notifications to the assessor 
106.7 	are not required if the property continues to meet all the requirements in this paragraph and 
106.8 	any dwellings on the agricultural land remain uninhabited.
106.9 	(g) Agricultural property of a family farm corporation, joint family farm venture, family 
106.10 	farm limited liability company, or partnership operating a family farm as described under 
106.11 	subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead 
106.12 	property, if all of the following criteria are met:
106.13 	(1) the property consists of at least 40 acres including undivided government lots and 
106.14 	correctional 40's;
106.15 	(2) a shareholder, member, or partner of that entity is actively farming the agricultural 
106.16 	property;
106.17 	(3) that shareholder, member, or partner who is actively farming the agricultural property 
106.18 	is a Minnesota resident;
106.19 	(4) neither that shareholder, member, or partner, nor the spouse of that shareholder, 
106.20 	member, or partner claims another agricultural homestead in Minnesota; and
106.21 	(5) that shareholder, member, or partner does not live farther than four townships or 
106.22 	cities, or a combination of four townships or cities, from the agricultural property.
106.23 	Homestead treatment applies under this paragraph even if:
106.24 	(i) the shareholder, member, or partner of that entity is actively farming the agricultural 
106.25 	property on the shareholder's, member's, or partner's own behalf; or
106.26 	(ii) the family farm is operated by a family farm corporation, joint family farm venture, 
106.27 	partnership, or limited liability company other than the family farm corporation, joint family 
106.28 	farm venture, partnership, or limited liability company that owns the land, provided that:
106.29 	(A) the shareholder, member, or partner of the family farm corporation, joint family 
106.30 	farm venture, partnership, or limited liability company that owns the land that is actively 
106.31 	farming the land is a shareholder, member, or partner of the family farm corporation, joint 
106.32 	family farm venture, partnership, or limited liability company that is operating the farm;
107.1 	(B) each shareholder, member, or partner of the family farm corporation, joint family 
107.2 	farm venture, partnership, or limited liability company that is operating the farm is also a 
107.3 	shareholder, member, or partner of the family farm corporation, joint family farm venture, 
107.4 	partnership, or limited liability company that owns the land; and
107.5 	(C) a majority of the shareholders, members, or partners of each family farm corporation, 
107.6 	joint family farm venture, partnership, or limited liability company are persons or spouses 
107.7 	of persons who are related to each other within the second degree of kindred according to 
107.8 	the rules of civil law.
107.9 	Homestead treatment applies under this paragraph for property leased to a family farm 
107.10 	corporation, joint farm venture, limited liability company, or partnership operating a family 
107.11 	farm if legal title to the property is in the name of an individual who is a member, shareholder, 
107.12 	or partner in the entity.
107.13 	(h) To be eligible for the special agricultural homestead under this subdivision, an initial 
107.14 	full application must be submitted to the county assessor where the property is located. 
107.15 	Owners and the persons who are actively farming the property shall be required to complete 
107.16 	only a one-page abbreviated version of the application in each subsequent year provided 
107.17 	that none of the following items have changed since the initial application:
107.18 	(1) the day-to-day operation, administration, and financial risks remain the same;
107.19 	(2) the owners and the persons actively farming the property continue to live within the 
107.20 	four townships or city criteria and are Minnesota residents;
107.21 	(3) the same operator of the agricultural property is listed with the Farm Service Agency;
107.22 	(4) a Schedule F or equivalent income tax form was filed for the most recent year;
107.23 	(5) the property's acreage is unchanged; and
107.24 	(6) none of the property's acres have been enrolled in a federal or state farm program 
107.25 	since the initial application.
107.26 	The owners and any persons who are actively farming the property must include the 
107.27 	appropriate Social Security numbers, and sign and date the application. If any of the specified 
107.28 	information has changed since the full application was filed, the owner must notify the 
107.29 	assessor, and must complete a new application to determine if the property continues to 
107.30 	qualify for the special agricultural homestead. The commissioner of revenue shall prepare 
107.31 	a standard reapplication form for use by the assessors.
108.1 	(i) Agricultural land and buildings that were class 2a homestead property under section 
108.2 	273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified 
108.3 	agricultural homesteads for subsequent assessments if:
108.4 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
108.5 	homestead as a result of damage caused by the August 2007 floods;
108.6 	(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele, 
108.7 	Wabasha, or Winona;
108.8 	(3) the agricultural land and buildings remain under the same ownership for the current 
108.9 	assessment year as existed for the 2007 assessment year;
108.10 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles of 
108.11 	one of the parcels of agricultural land that is owned by the taxpayer; and
108.12 	(5) the owner notifies the county assessor that the relocation was due to the August 2007 
108.13 	floods, and the owner furnishes the assessor any information deemed necessary by the 
108.14 	assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 
108.15 	owner must notify the assessor by December 1, 2008. Further notifications to the assessor 
108.16 	are not required if the property continues to meet all the requirements in this paragraph and 
108.17 	any dwellings on the agricultural land remain uninhabited.
108.18 	(j) Agricultural land and buildings that were class 2a homestead property under section 
108.19 	273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as 
108.20 	agricultural homesteads for subsequent assessments if:
108.21 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
108.22 	homestead as a result of the March 2009 floods;
108.23 	(2) the property is located in the county of Marshall;
108.24 	(3) the agricultural land and buildings remain under the same ownership for the current 
108.25 	assessment year as existed for the 2008 assessment year and continue to be used for 
108.26 	agricultural purposes;
108.27 	(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles 
108.28 	of one of the parcels of agricultural land that is owned by the taxpayer; and
108.29 	(5) the owner notifies the county assessor that the relocation was due to the 2009 floods, 
108.30 	and the owner furnishes the assessor any information deemed necessary by the assessor in 
108.31 	verifying the change in dwelling. Further notifications to the assessor are not required if the 
109.1 	property continues to meet all the requirements in this paragraph and any dwellings on the 
109.2 	agricultural land remain uninhabited.

109.3 	EFFECTIVE DATE. This section is effective beginning for property taxes payable in 
109.4 	2019.

109.5 	Sec. 5. Minnesota Statutes 2016, section 273.124, subdivision 21, is amended to read:
109.6 		Subd. 21.Trust property; homestead. Real or personal property, including agricultural 
109.7 	property, held by a trustee under a trust is eligible for classification as homestead property 
109.8 	if the property satisfies the requirements of paragraph (a), (b), (c), or (d), or (e).
109.9 	(a) The grantor or surviving spouse of the grantor of the trust occupies and uses the 
109.10 	property as a homestead.
109.11 	(b) A relative or surviving relative of the grantor who meets the requirements of 
109.12 	subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1, paragraph 
109.13 	(d), in the case of agricultural property, occupies and uses the property as a homestead.
109.14 	(c) A family farm corporation, joint farm venture, limited liability company, or partnership 
109.15 	operating a family farm in which the grantor or the grantor's surviving spouse is a 
109.16 	shareholder, member, or partner rents the property; and, either (1) a shareholder, member, 
109.17 	or partner of the corporation, joint farm venture, limited liability company, or partnership 
109.18 	occupies and uses the property as a homestead; or (2) the property is at least 40 acres, 
109.19 	including undivided government lots and correctional 40's, and a shareholder, member, or 
109.20 	partner of the tenant-entity is actively farming the property on behalf of the corporation, 
109.21 	joint farm venture, limited liability company, or partnership.
109.22 	(d) A person who has received homestead classification for property taxes payable in 
109.23 	2000 on the basis of an unqualified legal right under the terms of the trust agreement to 
109.24 	occupy the property as that person's homestead and who continues to use the property as a 
109.25 	homestead; or, a person who received the homestead classification for taxes payable in 2005 
109.26 	under paragraph (c) who does not qualify under paragraph (c) for taxes payable in 2006 or 
109.27 	thereafter but who continues to qualify under paragraph (c) as it existed for taxes payable 
109.28 	in 2005.
109.29 	(e) The qualifications under subdivision 14, paragraph (b), clause (i), are met. For 
109.30 	purposes of this paragraph, "owner" means the grantor of the trust or the surviving spouse 
109.31 	of the grantor.
109.32 	(f) For purposes of this subdivision, the following terms have the meanings given them:
110.1 	(1) "agricultural property" means the house, garage, other farm buildings and structures, 
110.2 	and agricultural land;
110.3 	(2) "agricultural land" has the meaning given in section 273.13, subdivision 23, except 
110.4 	that the phrases "owned by same person" or "under the same ownership" as used in that 
110.5 	subdivision mean and include contiguous tax parcels owned by:
110.6 	(i) an individual and a trust of which the individual, the individual's spouse, or the 
110.7 	individual's deceased spouse is the grantor; or
110.8 	(ii) different trusts of which the grantors of each trust are any combination of an 
110.9 	individual, the individual's spouse, or the individual's deceased spouse; and
110.10 	For purposes of this subdivision, (3) "grantor" is defined as means the person creating 
110.11 	or establishing a testamentary, inter Vivos, revocable or irrevocable trust by written 
110.12 	instrument or through the exercise of a power of appointment.
110.13 	(g) Noncontiguous land is included as part of a homestead under this subdivision, only 
110.14 	if the homestead is classified as class 2a, as defined in section 273.13, subdivision 23, and 
110.15 	the detached land is located in the same township or city, or not farther than four townships 
110.16 	or cities or combination thereof from the homestead. Any taxpayer of these noncontiguous 
110.17 	lands must notify the county assessor by December 15 for taxes payable in the following 
110.18 	year that the noncontiguous land is part of the taxpayer's homestead, and, if the homestead 
110.19 	is located in another county, the taxpayer must also notify the assessor of the other county.

110.20 	EFFECTIVE DATE. This section is effective beginning for property taxes payable in 
110.21 	2019.

110.22 	Sec. 6. Minnesota Statutes 2016, section 273.124, is amended by adding a subdivision to 
110.23 	read:
110.24 		Subd. 23.Fractional homesteads. In the case of property that is classified as part 
110.25 	homestead and part nonhomestead solely because not all the owners occupy or farm the 
110.26 	property, not all the owners have qualifying relatives occupying or farming the property, 
110.27 	or not all the spouses of owners occupy the property, the portions of property classified as 
110.28 	part homestead and part nonhomestead must correspond to the ownership percentages that 
110.29 	each owner has in the property, as determined by the land records in the county recorder's 
110.30 	office or registrar of titles. If the ownership percentages of each owner cannot be determined 
110.31 	by reference to the land records, the portions of property classified as part homestead and 
110.32 	part nonhomestead must correspond to the ownership percentages each owner would have 
110.33 	if they each owned an equal share of the property.

111.1 	EFFECTIVE DATE. This section is effective for assessments beginning in 2018.

111.2 	Sec. 7. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 22, is amended 
111.3 	to read:
111.4 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) and 
111.5 	(c), real estate which is residential and used for homestead purposes is class 1a. In the case 
111.6 	of a duplex or triplex in which one of the units is used for homestead purposes, the entire 
111.7 	property is deemed to be used for homestead purposes. The market value of class 1a property 
111.8 	must be determined based upon the value of the house, garage, and land.
111.9 	The first $500,000 of market value of class 1a property has a net classification rate of 
111.10 	one percent of its market value; and the market value of class 1a property that exceeds 
111.11 	$500,000 has a classification rate of 1.25 percent of its market value.
111.12 	(b) Class 1b property includes homestead real estate or homestead manufactured homes 
111.13 	used for the purposes of a homestead by:
111.14 	(1) any person who is blind as defined in section 256D.35, or the blind person and the 
111.15 	blind person's spouse;
111.16 	(2) any person who is permanently and totally disabled or by the disabled person and 
111.17 	the disabled person's spouse; or
111.18 	(3) the surviving spouse of a permanently and totally disabled veteran homesteading a 
111.19 	property classified under this paragraph for taxes payable in 2008.
111.20 	Property is classified and assessed under clause (2) only if the government agency or 
111.21 	income-providing source certifies, upon the request of the homestead occupant, that the 
111.22 	homestead occupant satisfies the disability requirements of this paragraph, and that the 
111.23 	property is not eligible for the valuation exclusion under subdivision 34.
111.24 	Property is classified and assessed under paragraph (b) only if the commissioner of 
111.25 	revenue or the county assessor certifies that the homestead occupant satisfies the requirements 
111.26 	of this paragraph.
111.27 	Permanently and totally disabled for the purpose of this subdivision means a condition 
111.28 	which is permanent in nature and totally incapacitates the person from working at an 
111.29 	occupation which brings the person an income. The first $50,000 market value of class 1b 
111.30 	property has a net classification rate of .45 percent of its market value. The remaining market 
111.31 	value of class 1b property is classified as class 1a or class 2a property, whichever is 
111.32 	appropriate.
112.1 	(c) Class 1c property is commercial use real and personal property that abuts public 
112.2 	water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by 
112.3 	the Department of Natural Resources, and is devoted to temporary and seasonal residential 
112.4 	occupancy for recreational purposes but not devoted to commercial purposes for more than 
112.5 	250 days in the year preceding the year of assessment, and that includes a portion used as 
112.6 	a homestead by the owner, which includes a dwelling occupied as a homestead by a 
112.7 	shareholder of a corporation that owns the resort, a partner in a partnership that owns the 
112.8 	resort, or a member of a limited liability company that owns the resort even if, whether the 
112.9 	title to the homestead is held by the corporation, partnership, or limited liability company, 
112.10 	or by a shareholder of a corporation that owns the resort, a partner in a partnership that owns 
112.11 	the resort, or a member of a limited liability company that owns the resort. For purposes of 
112.12 	this paragraph, property is devoted to a commercial purpose on a specific day if any portion 
112.13 	of the property, excluding the portion used exclusively as a homestead, is used for residential 
112.14 	occupancy and a fee is charged for residential occupancy. Class 1c property must contain 
112.15 	three or more rental units. A "rental unit" is defined as a cabin, condominium, townhouse, 
112.16 	sleeping room, or individual camping site equipped with water and electrical hookups for 
112.17 	recreational vehicles. Class 1c property must provide recreational activities such as the 
112.18 	rental of ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski 
112.19 	equipment; provide marina services, launch services, or guide services; or sell bait and 
112.20 	fishing tackle. Any unit in which the right to use the property is transferred to an individual 
112.21 	or entity by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c 
112.22 	even though it may remain available for rent. A camping pad offered for rent by a property 
112.23 	that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental 
112.24 	agreement, as long as the use of the camping pad does not exceed 250 days. If the same 
112.25 	owner owns two separate parcels that are located in the same township, and one of those 
112.26 	properties is classified as a class 1c property and the other would be eligible to be classified 
112.27 	as a class 1c property if it was used as the homestead of the owner, both properties will be 
112.28 	assessed as a single class 1c property; for purposes of this sentence, properties are deemed 
112.29 	to be owned by the same owner if each of them is owned by a limited liability company, 
112.30 	and both limited liability companies have the same membership. The portion of the property 
112.31 	used as a homestead is class 1a property under paragraph (a). The remainder of the property 
112.32 	is classified as follows: the first $600,000 of market value is tier I, the next $1,700,000 of 
112.33 	market value is tier II, and any remaining market value is tier III. The classification rates 
112.34 	for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners 
112.35 	of real and personal property devoted to temporary and seasonal residential occupancy for 
112.36 	recreation purposes in which all or a portion of the property was devoted to commercial 
113.1 	purposes for not more than 250 days in the year preceding the year of assessment desiring 
113.2 	classification as class 1c, must submit a declaration to the assessor designating the cabins 
113.3 	or units occupied for 250 days or less in the year preceding the year of assessment by January 
113.4 	15 of the assessment year. Those cabins or units and a proportionate share of the land on 
113.5 	which they are located must be designated as class 1c as otherwise provided. The remainder 
113.6 	of the cabins or units and a proportionate share of the land on which they are located must 
113.7 	be designated as class 3a commercial. The owner of property desiring designation as class 
113.8 	1c property must provide guest registers or other records demonstrating that the units for 
113.9 	which class 1c designation is sought were not occupied for more than 250 days in the year 
113.10 	preceding the assessment if so requested. The portion of a property operated as a (1) 
113.11 	restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 
113.12 	nonresidential facility operated on a commercial basis not directly related to temporary and 
113.13 	seasonal residential occupancy for recreation purposes does not qualify for class 1c.
113.14 	(d) Class 1d property includes structures that meet all of the following criteria:
113.15 	(1) the structure is located on property that is classified as agricultural property under 
113.16 	section 273.13, subdivision 23;
113.17 	(2) the structure is occupied exclusively by seasonal farm workers during the time when 
113.18 	they work on that farm, and the occupants are not charged rent for the privilege of occupying 
113.19 	the property, provided that use of the structure for storage of farm equipment and produce 
113.20 	does not disqualify the property from classification under this paragraph;
113.21 	(3) the structure meets all applicable health and safety requirements for the appropriate 
113.22 	season; and
113.23 	(4) the structure is not salable as residential property because it does not comply with 
113.24 	local ordinances relating to location in relation to streets or roads.
113.25 	The market value of class 1d property has the same classification rates as class 1a property 
113.26 	under paragraph (a).

113.27 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019.

113.28 	Sec. 8. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 23, is amended 
113.29 	to read:
113.30 		Subd. 23.Class 2. (a) An agricultural homestead consists of class 2a agricultural land 
113.31 	that is homesteaded, along with any class 2b rural vacant land that is contiguous to the class 
113.32 	2a land under the same ownership. The market value of the house and garage and immediately 
113.33 	surrounding one acre of land has the same classification rates as class 1a or 1b property 
114.1 	under subdivision 22. The value of the remaining land including improvements up to the 
114.2 	first tier valuation limit of agricultural homestead property has a classification rate of 0.5 
114.3 	percent of market value. The remaining property over the first tier has a classification rate 
114.4 	of one percent of market value. For purposes of this subdivision, the "first tier valuation 
114.5 	limit of agricultural homestead property" and "first tier" means the limit certified under 
114.6 	section 273.11, subdivision 23.
114.7 	(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 
114.8 	are agricultural land and buildings. Class 2a property has a classification rate of one percent 
114.9 	of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a 
114.10 	property must also include any property that would otherwise be classified as 2b, but is 
114.11 	interspersed with class 2a property, including but not limited to sloughs, wooded wind 
114.12 	shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement, 
114.13 	and other similar land that is impractical for the assessor to value separately from the rest 
114.14 	of the property or that is unlikely to be able to be sold separately from the rest of the property.
114.15 	An assessor may classify the part of a parcel described in this subdivision that is used 
114.16 	for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
114.17 	(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that 
114.18 	are unplatted real estate, rural in character and not used for agricultural purposes, including 
114.19 	land used for growing trees for timber, lumber, and wood and wood products, that is not 
114.20 	improved with a structure. The presence of a minor, ancillary nonresidential structure as 
114.21 	defined by the commissioner of revenue does not disqualify the property from classification 
114.22 	under this paragraph. Any parcel of 20 acres or more improved with a structure that is not 
114.23 	a minor, ancillary nonresidential structure must be split-classified, and ten acres must be 
114.24 	assigned to the split parcel containing the structure. Class 2b property has a classification 
114.25 	rate of one percent of market value unless it is part of an agricultural homestead under 
114.26 	paragraph (a), or qualifies as class 2c under paragraph (d).
114.27 	(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 
114.28 	acres statewide per taxpayer that is being managed under a forest management plan that 
114.29 	meets the requirements of chapter 290C, but is not enrolled in the sustainable forest resource 
114.30 	management incentive program. It has a classification rate of .65 percent, provided that the 
114.31 	owner of the property must apply to the assessor in order for the property to initially qualify 
114.32 	for the reduced rate and provide the information required by the assessor to verify that the 
114.33 	property qualifies for the reduced rate. If the assessor receives the application and information 
114.34 	before May 1 in an assessment year, the property qualifies beginning with that assessment 
114.35 	year. If the assessor receives the application and information after April 30 in an assessment 
115.1 	year, the property may not qualify until the next assessment year. The commissioner of 
115.2 	natural resources must concur that the land is qualified. The commissioner of natural 
115.3 	resources shall annually provide county assessors verification information on a timely basis. 
115.4 	The presence of a minor, ancillary nonresidential structure as defined by the commissioner 
115.5 	of revenue does not disqualify the property from classification under this paragraph.
115.6 	(e) Agricultural land as used in this section means:
115.7 	(1) contiguous acreage of ten acres or more, used during the preceding year for 
115.8 	agricultural purposes; or
115.9 	(2) contiguous acreage used during the preceding year for an intensive livestock or 
115.10 	poultry confinement operation, provided that land used only for pasturing or grazing does 
115.11 	not qualify under this clause.
115.12 	"Agricultural purposes" as used in this section means the raising, cultivation, drying, or 
115.13 	storage of agricultural products for sale, or the storage of machinery or equipment used in 
115.14 	support of agricultural production by the same farm entity. For a property to be classified 
115.15 	as agricultural based only on the drying or storage of agricultural products, the products 
115.16 	being dried or stored must have been produced by the same farm entity as the entity operating 
115.17 	the drying or storage facility. "Agricultural purposes" also includes (i) enrollment in a local 
115.18 	conservation program or the Reinvest in Minnesota program under sections 103F.501 to 
115.19 	103F.535 or the federal Conservation Reserve Program as contained in Public Law 99-198 
115.20 	or a similar state or federal conservation program if the property was classified as agricultural 
115.21 	(i) (A) under this subdivision for taxes payable in 2003 because of its enrollment in a 
115.22 	qualifying program and the land remains enrolled or (ii) (B) in the year prior to its enrollment, 
115.23 	or (ii) use of land, not to exceed the greater of three acres or ten percent of the total land 
115.24 	area, to provide environmental benefits such as buffer strips, old growth forest restoration 
115.25 	or retention, or retention ponds to prevent soil erosion. For purposes of this section, a "local 
115.26 	conservation program" means a program administered by a town, statutory or home rule 
115.27 	charter city, or county, including a watershed district, water management organization, or 
115.28 	soil and water conservation district, in which landowners voluntarily enroll land and receive 
115.29 	incentive payments equal to at least $50 per acre in exchange for use or other restrictions 
115.30 	placed on the land. In order for property to qualify under the local conservation program 
115.31 	provision, a taxpayer must apply to the assessor by February 1 of the assessment year and 
115.32 	must submit the information required by the assessor, including but not limited to a copy 
115.33 	of the program requirements, the specific agreement between the land owner and the local 
115.34 	agency, if applicable, and a map of the conservation area. Agricultural classification shall 
116.1 	not be based upon the market value of any residential structures on the parcel or contiguous 
116.2 	parcels under the same ownership.
116.3 	"Agricultural purposes" also includes land consisting of a holding pond designed to 
116.4 	prevent runoff onto a divided four-lane expressway that is located at least 150 feet above 
116.5 	the expressway, as certified by the local soil and water conservation district in accordance 
116.6 	with USDA Field Office Technical Guide conservation practice standards, provided that 
116.7 	the land is located outside the metropolitan area as defined in section 473.121, and was 
116.8 	classified as agricultural in assessment year 2017.
116.9 	"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous 
116.10 	portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion 
116.11 	of, a set of contiguous tax parcels under that section that are owned by the same person.
116.12 	(f) Agricultural land under this section also includes:
116.13 	(1) contiguous acreage that is less than ten acres in size and exclusively used in the 
116.14 	preceding year for raising or cultivating agricultural products; or
116.15 	(2) contiguous acreage that contains a residence and is less than 11 acres in size, if the 
116.16 	contiguous acreage exclusive of the house, garage, and surrounding one acre of land was 
116.17 	used in the preceding year for one or more of the following three uses:
116.18 	(i) for an intensive grain drying or storage operation, or for intensive machinery or 
116.19 	equipment storage activities used to support agricultural activities on other parcels of property 
116.20 	operated by the same farming entity;
116.21 	(ii) as a nursery, provided that only those acres used intensively to produce nursery stock 
116.22 	are considered agricultural land; or
116.23 	(iii) for intensive market farming; for purposes of this paragraph, "market farming" 
116.24 	means the cultivation of one or more fruits or vegetables or production of animal or other 
116.25 	agricultural products for sale to local markets by the farmer or an organization with which 
116.26 	the farmer is affiliated.
116.27 	"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as 
116.28 	described in section 272.193, or all of a set of contiguous tax parcels under that section that 
116.29 	are owned by the same person.
116.30 	(g) Land shall be classified as agricultural even if all or a portion of the agricultural use 
116.31 	of that property is the leasing to, or use by another person for agricultural purposes.
117.1 	Classification under this subdivision is not determinative for qualifying under section 
117.2 	273.111.
117.3 	(h) The property classification under this section supersedes, for property tax purposes 
117.4 	only, any locally administered agricultural policies or land use restrictions that define 
117.5 	minimum or maximum farm acreage.
117.6 	(i) The term "agricultural products" as used in this subdivision includes production for 
117.7 	sale of:
117.8 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
117.9 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees, 
117.10 	and apiary products by the owner;
117.11 	(2) aquacultural products for sale and consumption, as defined under section 17.47, if 
117.12 	the aquaculture occurs on land zoned for agricultural use;
117.13 	(3) the commercial boarding of horses, which may include related horse training and 
117.14 	riding instruction, if the boarding is done on property that is also used for raising pasture 
117.15 	to graze horses or raising or cultivating other agricultural products as defined in clause (1);
117.16 	(4) property which is owned and operated by nonprofit organizations used for equestrian 
117.17 	activities, excluding racing;
117.18 	(5) game birds and waterfowl bred and raised (i) on a game farm licensed under section 
117.19 	97A.105, provided that the annual licensing report to the Department of Natural Resources, 
117.20 	which must be submitted annually by March 30 to the assessor, indicates that at least 500 
117.21 	birds were raised or used for breeding stock on the property during the preceding year and 
117.22 	that the owner provides a copy of the owner's most recent schedule F; or (ii) for use on a 
117.23 	shooting preserve licensed under section 97A.115;
117.24 	(6) insects primarily bred to be used as food for animals;
117.25 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not sold 
117.26 	for timber, lumber, wood, or wood products; and
117.27 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
117.28 	Department of Agriculture under chapter 28A as a food processor.
117.29 	(j) If a parcel used for agricultural purposes is also used for commercial or industrial 
117.30 	purposes, including but not limited to:
117.31 	(1) wholesale and retail sales;
117.32 	(2) processing of raw agricultural products or other goods;
118.1 	(3) warehousing or storage of processed goods; and
118.2 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), and 
118.3 	(3),
118.4 	the assessor shall classify the part of the parcel used for agricultural purposes as class 1b, 
118.5 	2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its use. 
118.6 	The grading, sorting, and packaging of raw agricultural products for first sale is considered 
118.7 	an agricultural purpose. A greenhouse or other building where horticultural or nursery 
118.8 	products are grown that is also used for the conduct of retail sales must be classified as 
118.9 	agricultural if it is primarily used for the growing of horticultural or nursery products from 
118.10 	seed, cuttings, or roots and occasionally as a showroom for the retail sale of those products. 
118.11 	Use of a greenhouse or building only for the display of already grown horticultural or nursery 
118.12 	products does not qualify as an agricultural purpose.
118.13 	(k) The assessor shall determine and list separately on the records the market value of 
118.14 	the homestead dwelling and the one acre of land on which that dwelling is located. If any 
118.15 	farm buildings or structures are located on this homesteaded acre of land, their market value 
118.16 	shall not be included in this separate determination.
118.17 	(l) Class 2d airport landing area consists of a landing area or public access area of a 
118.18 	privately owned public use airport. It has a classification rate of one percent of market value. 
118.19 	To qualify for classification under this paragraph, a privately owned public use airport must 
118.20 	be licensed as a public airport under section 360.018. For purposes of this paragraph, "landing 
118.21 	area" means that part of a privately owned public use airport properly cleared, regularly 
118.22 	maintained, and made available to the public for use by aircraft and includes runways, 
118.23 	taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing 
118.24 	area also includes land underlying both the primary surface and the approach surfaces that 
118.25 	comply with all of the following:
118.26 	(i) the land is properly cleared and regularly maintained for the primary purposes of the 
118.27 	landing, taking off, and taxiing of aircraft; but that portion of the land that contains facilities 
118.28 	for servicing, repair, or maintenance of aircraft is not included as a landing area;
118.29 	(ii) the land is part of the airport property; and
118.30 	(iii) the land is not used for commercial or residential purposes.
118.31 	The land contained in a landing area under this paragraph must be described and certified 
118.32 	by the commissioner of transportation. The certification is effective until it is modified, or 
118.33 	until the airport or landing area no longer meets the requirements of this paragraph. For 
119.1 	purposes of this paragraph, "public access area" means property used as an aircraft parking 
119.2 	ramp, apron, or storage hangar, or an arrival and departure building in connection with the 
119.3 	airport.
119.4 	(m) Class 2e consists of land with a commercial aggregate deposit that is not actively 
119.5 	being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 
119.6 	located in a county that has elected to opt-out of the aggregate preservation program as 
119.7 	provided in section 273.1115, subdivision 6. It has a classification rate of one percent of 
119.8 	market value. To qualify for classification under this paragraph, the property must be at 
119.9 	least ten contiguous acres in size and the owner of the property must record with the county 
119.10 	recorder of the county in which the property is located an affidavit containing:
119.11 	(1) a legal description of the property;
119.12 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
119.13 	actively being mined but is present on the entire parcel enrolled;
119.14 	(3) documentation that the conditional use under the county or local zoning ordinance 
119.15 	of this property is for mining; and
119.16 	(4) documentation that a permit has been issued by the local unit of government or the 
119.17 	mining activity is allowed under local ordinance. The disclosure must include a statement 
119.18 	from a registered professional geologist, engineer, or soil scientist delineating the deposit 
119.19 	and certifying that it is a commercial aggregate deposit.
119.20 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
119.21 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use as 
119.22 	a construction aggregate; and "actively mined" means the removal of top soil and overburden 
119.23 	in preparation for excavation or excavation of a commercial deposit.
119.24 	(n) When any portion of the property under this subdivision or subdivision 22 begins to 
119.25 	be actively mined, the owner must file a supplemental affidavit within 60 days from the 
119.26 	day any aggregate is removed stating the number of acres of the property that is actively 
119.27 	being mined. The acres actively being mined must be (1) valued and classified under 
119.28 	subdivision 24 in the next subsequent assessment year, and (2) removed from the aggregate 
119.29 	resource preservation property tax program under section 273.1115, if the land was enrolled 
119.30 	in that program. Copies of the original affidavit and all supplemental affidavits must be 
119.31 	filed with the county assessor, the local zoning administrator, and the Department of Natural 
119.32 	Resources, Division of Land and Minerals. A supplemental affidavit must be filed each 
119.33 	time a subsequent portion of the property is actively mined, provided that the minimum 
120.1 	acreage change is five acres, even if the actual mining activity constitutes less than five 
120.2 	acres.
120.3 	(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are not 
120.4 	rules and are exempt from the rulemaking provisions of chapter 14, and the provisions in 
120.5 	section 14.386 concerning exempt rules do not apply.

120.6 	EFFECTIVE DATE. This section is effective for assessment year 2018 and thereafter.

120.7 	Sec. 9. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 25, is amended 
120.8 	to read:
120.9 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more units 
120.10 	and used or held for use by the owner or by the tenants or lessees of the owner as a residence 
120.11 	for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a 
120.12 	also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt 
120.13 	under section 272.02, and contiguous property used for hospital purposes, without regard 
120.14 	to whether the property has been platted or subdivided. The market value of class 4a property 
120.15 	has a classification rate of 1.25 percent.
120.16 	(b) Class 4b includes:
120.17 	(1) residential real estate containing less than four units that does not qualify as class 
120.18 	4bb, other than seasonal residential recreational property;
120.19 	(2) manufactured homes not classified under any other provision;
120.20 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm 
120.21 	classified under subdivision 23, paragraph (b) containing two or three units; and
120.22 	(4) unimproved property that is classified residential as determined under subdivision 
120.23 	33.
120.24 	The market value of class 4b property has a classification rate of 1.25 percent.
120.25 	(c) Class 4bb includes:
120.26 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
120.27 	residential recreational property;
120.28 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
120.29 	nonhomestead farm classified under subdivision 23, paragraph (b); and
120.30 	(3) a condominium-type storage unit having an individual property identification number 
120.31 	that is not used for a commercial purpose.
121.1 	Class 4bb property has the same classification rates as class 1a property under subdivision 
121.2 	22.
121.3 	Property that has been classified as seasonal residential recreational property at any time 
121.4 	during which it has been owned by the current owner or spouse of the current owner does 
121.5 	not qualify for class 4bb.
121.6 	(d) Class 4c property includes:
121.7 	(1) except as provided in subdivision 22, paragraph (c), real and personal property 
121.8 	devoted to commercial temporary and seasonal residential occupancy for recreation purposes, 
121.9 	for not more than 250 days in the year preceding the year of assessment. For purposes of 
121.10 	this clause, property is devoted to a commercial purpose on a specific day if any portion of 
121.11 	the property is used for residential occupancy, and a fee is charged for residential occupancy. 
121.12 	Class 4c property under this clause must contain three or more rental units. A "rental unit" 
121.13 	is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site 
121.14 	equipped with water and electrical hookups for recreational vehicles. A camping pad offered 
121.15 	for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c 
121.16 	under this clause regardless of the term of the rental agreement, as long as the use of the 
121.17 	camping pad does not exceed 250 days. In order for a property to be classified under this 
121.18 	clause, either: (i) the business located on the property must provide recreational activities, 
121.19 	at least 40 percent of the annual gross lodging receipts related to the property must be from 
121.20 	business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid 
121.21 	bookings by lodging guests during the year must be for periods of at least two consecutive 
121.22 	nights; or (B) at least 20 percent of the annual gross receipts must be from charges for 
121.23 	providing recreational activities, or; (ii) the business must contain 20 or fewer rental units, 
121.24 	and must be located in a township or a city with a population of 2,500 or less located outside 
121.25 	the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion 
121.26 	of a state trail administered by the Department of Natural Resources; or (iii) the facility 
121.27 	must consist of no more than five sleeping rooms and must provide an area or areas to 
121.28 	prepare meals and to conduct indoor craft or hobby activities. For purposes of item (i)(A), 
121.29 	a paid booking of five or more nights shall be counted as two bookings. Class 4c property 
121.30 	also includes commercial use real property used exclusively for recreational purposes in 
121.31 	conjunction with other class 4c property classified under this clause and devoted to temporary 
121.32 	and seasonal residential occupancy for recreational purposes, up to a total of two acres, 
121.33 	provided the property is not devoted to commercial recreational use for more than 250 days 
121.34 	in the year preceding the year of assessment and is located within two miles of the class 4c 
121.35 	property with which it is used. In order for a property to qualify for classification under this 
122.1 	clause, the owner must submit a declaration to the assessor designating the cabins or units 
122.2 	occupied for 250 days or less in the year preceding the year of assessment by January 15 
122.3 	of the assessment year. Those cabins or units and a proportionate share of the land on which 
122.4 	they are located must be designated class 4c under this clause as otherwise provided. The 
122.5 	remainder of the cabins or units and a proportionate share of the land on which they are 
122.6 	located will be designated as class 3a. The owner of property desiring designation as class 
122.7 	4c property under this clause must provide guest registers or other records demonstrating 
122.8 	that the units for which class 4c designation is sought were not occupied for more than 250 
122.9 	days in the year preceding the assessment if so requested. The portion of a property operated 
122.10 	as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) 
122.11 	other nonresidential facility operated on a commercial basis not directly related to temporary 
122.12 	and seasonal residential occupancy for recreation purposes does not qualify for class 4c. 
122.13 	For the purposes of this paragraph, "recreational activities" means renting ice fishing houses, 
122.14 	boats and motors, snowmobiles, downhill or cross-country ski equipment; providing marina 
122.15 	services, launch services, or guide services; or selling bait and fishing tackle;
122.16 	(2) qualified property used as a golf course if:
122.17 	(i) it is open to the public on a daily fee basis. It may charge membership fees or dues, 
122.18 	but a membership fee may not be required in order to use the property for golfing, and its 
122.19 	green fees for golfing must be comparable to green fees typically charged by municipal 
122.20 	courses; and
122.21 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
122.22 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with 
122.23 	the golf course is classified as class 3a property;
122.24 	(3) real property up to a maximum of three acres of land owned and used by a nonprofit 
122.25 	community service oriented organization and not used for residential purposes on either a 
122.26 	temporary or permanent basis, provided that:
122.27 	(i) the property is not used for a revenue-producing activity for more than six days in 
122.28 	the calendar year preceding the year of assessment; or
122.29 	(ii) the organization makes annual charitable contributions and donations at least equal 
122.30 	to the property's previous year's property taxes and the property is allowed to be used for 
122.31 	public and community meetings or events for no charge, as appropriate to the size of the 
122.32 	facility.
122.33 	For purposes of this clause:
123.1 	(A) "charitable contributions and donations" has the same meaning as lawful gambling 
123.2 	purposes under section 349.12, subdivision 25, excluding those purposes relating to the 
123.3 	payment of taxes, assessments, fees, auditing costs, and utility payments;
123.4 	(B) "property taxes" excludes the state general tax;
123.5 	(C) a "nonprofit community service oriented organization" means any corporation, 
123.6 	society, association, foundation, or institution organized and operated exclusively for 
123.7 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
123.8 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
123.9 	Revenue Code; and
123.10 	(D) "revenue-producing activities" shall include but not be limited to property or that 
123.11 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
123.12 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
123.13 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
123.14 	insurance business, or office or other space leased or rented to a lessee who conducts a 
123.15 	for-profit enterprise on the premises.
123.16 	Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The 
123.17 	use of the property for social events open exclusively to members and their guests for periods 
123.18 	of less than 24 hours, when an admission is not charged nor any revenues are received by 
123.19 	the organization shall not be considered a revenue-producing activity.
123.20 	The organization shall maintain records of its charitable contributions and donations 
123.21 	and of public meetings and events held on the property and make them available upon 
123.22 	request any time to the assessor to ensure eligibility. An organization meeting the requirement 
123.23 	under item (ii) must file an application by May 1 with the assessor for eligibility for the 
123.24 	current year's assessment. The commissioner shall prescribe a uniform application form 
123.25 	and instructions;
123.26 	(4) postsecondary student housing of not more than one acre of land that is owned by a 
123.27 	nonprofit corporation organized under chapter 317A and is used exclusively by a student 
123.28 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
123.29 	miles of the border of a college campus;
123.30 	(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding 
123.31 	manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as 
123.32 	defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision 
123.33 	3a, and (iii) class I manufactured home parks as defined in section 327C.01, subdivision 
123.34 	13;
124.1 	(6) real property that is actively and exclusively devoted to indoor fitness, health, social, 
124.2 	recreational, and related uses, is owned and operated by a not-for-profit corporation, and is 
124.3 	located within the metropolitan area as defined in section 473.121, subdivision 2;
124.4 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt under 
124.5 	section 272.01, subdivision 2, and the land on which it is located, provided that:
124.6 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
124.7 	Airports Commission, or group thereof; and
124.8 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased 
124.9 	premise, prohibits commercial activity performed at the hangar.
124.10 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be 
124.11 	filed by the new owner with the assessor of the county where the property is located within 
124.12 	60 days of the sale;
124.13 	(8) a privately owned noncommercial aircraft storage hangar not exempt under section 
124.14 	272.01, subdivision 2, and the land on which it is located, provided that:
124.15 	(i) the land abuts a public airport; and
124.16 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement 
124.17 	restricting the use of the premises, prohibiting commercial use or activity performed at the 
124.18 	hangar; and
124.19 	(9) residential real estate, a portion of which is used by the owner for homestead purposes, 
124.20 	and that is also a place of lodging, if all of the following criteria are met:
124.21 	(i) rooms are provided for rent to transient guests that generally stay for periods of 14 
124.22 	or fewer days;
124.23 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated in 
124.24 	the basic room rate;
124.25 	(iii) meals are not provided to the general public except for special events on fewer than 
124.26 	seven days in the calendar year preceding the year of the assessment; and
124.27 	(iv) the owner is the operator of the property.
124.28 	The market value subject to the 4c classification under this clause is limited to five rental 
124.29 	units. Any rental units on the property in excess of five, must be valued and assessed as 
124.30 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
124.31 	be classified as class 1a property under subdivision 22;
125.1 	(10) real property up to a maximum of three acres and operated as a restaurant as defined 
125.2 	under section 157.15, subdivision 12, provided it: (i) is located on a lake as defined under 
125.3 	section 103G.005, subdivision 15, paragraph (a), clause (3); and (ii) is either devoted to 
125.4 	commercial purposes for not more than 250 consecutive days, or receives at least 60 percent 
125.5 	of its annual gross receipts from business conducted during four consecutive months. Gross 
125.6 	receipts from the sale of alcoholic beverages must be included in determining the property's 
125.7 	qualification under item (ii). The property's primary business must be as a restaurant and 
125.8 	not as a bar. Gross receipts from gift shop sales located on the premises must be excluded. 
125.9 	Owners of real property desiring 4c classification under this clause must submit an annual 
125.10 	declaration to the assessor by February 1 of the current assessment year, based on the 
125.11 	property's relevant information for the preceding assessment year;
125.12 	(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used as 
125.13 	a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the public 
125.14 	and devoted to recreational use for marina services. The marina owner must annually provide 
125.15 	evidence to the assessor that it provides services, including lake or river access to the public 
125.16 	by means of an access ramp or other facility that is either located on the property of the 
125.17 	marina or at a publicly owned site that abuts the property of the marina. No more than 800 
125.18 	feet of lakeshore may be included in this classification. Buildings used in conjunction with 
125.19 	a marina for marina services, including but not limited to buildings used to provide food 
125.20 	and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle, are classified 
125.21 	as class 3a property; and
125.22 	(12) real and personal property devoted to noncommercial temporary and seasonal 
125.23 	residential occupancy for recreation purposes.
125.24 	Class 4c property has a classification rate of 1.5 percent of market value, except that (i) 
125.25 	each parcel of noncommercial seasonal residential recreational property under clause (12) 
125.26 	has the same classification rates as class 4bb property, (ii) manufactured home parks assessed 
125.27 	under clause (5), item (i), have the same classification rate as class 4b property, the market 
125.28 	value of manufactured home parks assessed under clause (5), item (ii), have a classification 
125.29 	rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by 
125.30 	shareholders in the cooperative corporation or association and a classification rate of one 
125.31 	percent if 50 percent or less of the lots are so occupied, and class I manufactured home 
125.32 	parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent, 
125.33 	(iii) commercial-use seasonal residential recreational property and marina recreational land 
125.34 	as described in clause (11), has a classification rate of one percent for the first $500,000 of 
125.35 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
126.1 	property described in clause (4) has a classification rate of one percent, (v) the market value 
126.2 	of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent, 
126.3 	(vi) that portion of the market value of property in clause (9) qualifying for class 4c property 
126.4 	has a classification rate of 1.25 percent, and (vii) property qualifying for classification under 
126.5 	clause (3) that is owned or operated by a congressionally chartered veterans organization 
126.6 	has a classification rate of one percent. The commissioner of veterans affairs must provide 
126.7 	a list of congressionally chartered veterans organizations to the commissioner of revenue 
126.8 	by June 30, 2017, and by January 1, 2018, and each year thereafter.
126.9 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
126.10 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion of 
126.11 	the units in the building qualify as low-income rental housing units as certified under section 
126.12 	273.128, subdivision 3, only the proportion of qualifying units to the total number of units 
126.13 	in the building qualify for class 4d. The remaining portion of the building shall be classified 
126.14 	by the assessor based upon its use. Class 4d also includes the same proportion of land as 
126.15 	the qualifying low-income rental housing units are to the total units in the building. For all 
126.16 	properties qualifying as class 4d, the market value determined by the assessor must be based 
126.17 	on the normal approach to value using normal unrestricted rents.
126.18 	(f) The first tier of market value of class 4d property has a classification rate of 0.75 
126.19 	percent. The remaining value of class 4d property has a classification rate of 0.25 percent. 
126.20 	For the purposes of this paragraph, the "first tier of market value of class 4d property" means 
126.21 	the market value of each housing unit up to the first tier limit. For the purposes of this 
126.22 	paragraph, all class 4d property value must be assigned to individual housing units. The 
126.23 	first tier limit is $100,000 for assessment year 2014. For subsequent years, the limit is 
126.24 	adjusted each year by the average statewide change in estimated market value of property 
126.25 	classified as class 4a and 4d under this section for the previous assessment year, excluding 
126.26 	valuation change due to new construction, rounded to the nearest $1,000, provided, however, 
126.27 	that the limit may never be less than $100,000. Beginning with assessment year 2015, the 
126.28 	commissioner of revenue must certify the limit for each assessment year by November 1 
126.29 	of the previous year.

126.30 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019.

126.31 	Sec. 10. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 34, is amended 
126.32 	to read:
126.33 		Subd. 34.Homestead of disabled veteran or family caregiver. (a) All or a portion of 
126.34 	the market value of property owned by a veteran and serving as the veteran's homestead 
127.1 	under this section is excluded in determining the property's taxable market value if the 
127.2 	veteran has a service-connected disability of 70 percent or more as certified by the United 
127.3 	States Department of Veterans Affairs. To qualify for exclusion under this subdivision, the 
127.4 	veteran must have been honorably discharged from the United States armed forces, as 
127.5 	indicated by United States Government Form DD214 or other official military discharge 
127.6 	papers.
127.7 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded, 
127.8 	except as provided in clause (2); and
127.9 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
127.10 	excluded.
127.11 	(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), clause 
127.12 	(2), predeceases the veteran's spouse, and if upon the death of the veteran the spouse holds 
127.13 	the legal or beneficial title to the homestead and permanently resides there, the exclusion 
127.14 	shall carry over to the benefit of the veteran's spouse for the current taxes payable year and 
127.15 	for eight additional taxes payable years or until such time as the spouse remarries, or sells, 
127.16 	transfers, or otherwise disposes of the property, whichever comes first, except as otherwise 
127.17 	provided in paragraph (n). Qualification under this paragraph requires an application under 
127.18 	paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's 
127.19 	marital status, ownership of the property, or use of the property as a permanent residence.
127.20 	(d) If the spouse of a member of any branch or unit of the United States armed forces 
127.21 	who dies due to a service-connected cause while serving honorably in active service, as 
127.22 	indicated on United States Government Form DD1300 or DD2064, holds the legal or 
127.23 	beneficial title to a homestead and permanently resides there, the spouse is entitled to the 
127.24 	benefit described in paragraph (b), clause (2), for eight taxes payable years, or until such 
127.25 	time as the spouse remarries or sells, transfers, or otherwise disposes of the property, 
127.26 	whichever comes first, except as otherwise provided in paragraph (n).
127.27 	(e) If a veteran meets the disability criteria of paragraph (a) but does not own property 
127.28 	classified as homestead in the state of Minnesota, then the homestead of the veteran's primary 
127.29 	family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify 
127.30 	for under paragraph (b).
127.31 	(f) In the case of an agricultural homestead, only the portion of the property consisting 
127.32 	of the house and garage and immediately surrounding one acre of land qualifies for the 
127.33 	valuation exclusion under this subdivision.
128.1 	(g) A property qualifying for a valuation exclusion under this subdivision is not eligible 
128.2 	for the market value exclusion under subdivision 35, or classification under subdivision 22, 
128.3 	paragraph (b).
128.4 	(h) To qualify for a valuation exclusion under this subdivision a property owner must 
128.5 	apply to the assessor by July 1 December 15 of the first assessment year for which the 
128.6 	exclusion is sought. For an application received after July 1 December 15, the exclusion 
128.7 	shall become effective for the following assessment year. Except as provided in paragraph 
128.8 	(c), the owner of a property that has been accepted for a valuation exclusion must notify 
128.9 	the assessor if there is a change in ownership of the property or in the use of the property 
128.10 	as a homestead. When a property qualifying for a market value exclusion under this 
128.11 	subdivision is sold or transferred, the exclusion must be removed for taxes payable in the 
128.12 	following year, provided that the new owner may file a claim for an exclusion if eligible.
128.13 	(i) A first-time application by a qualifying spouse for the market value exclusion under 
128.14 	paragraph (d) must be made any time within two years of the death of the service member.
128.15 	(j) For purposes of this subdivision:
128.16 	(1) "active service" has the meaning given in section 190.05;
128.17 	(2) "own" means that the person's name is present as an owner on the property deed;
128.18 	(3) "primary family caregiver" means a person who is approved by the secretary of the 
128.19 	United States Department of Veterans Affairs for assistance as the primary provider of 
128.20 	personal care services for an eligible veteran under the Program of Comprehensive Assistance 
128.21 	for Family Caregivers, codified as United States Code, title 38, section 1720G; and
128.22 	(4) "veteran" has the meaning given the term in section 197.447.
128.23 	(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion 
128.24 	under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit 
128.25 	under paragraph (b), clause (2), for eight taxes payable years or until the spouse remarries 
128.26 	or sells, transfers, or otherwise disposes of the property, except as otherwise provided in 
128.27 	paragraph (n), if:
128.28 	(1) the spouse files a first-time application within two years of the death of the service 
128.29 	member or by June 1, 2019, whichever is later;
128.30 	(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the 
128.31 	homestead and permanently resides there;
128.32 	(3) the veteran met the honorable discharge requirements of paragraph (a); and
129.1 	(4) the United States Department of Veterans Affairs certifies that:
129.2 	(i) the veteran met the total (100 percent) and permanent disability requirement under 
129.3 	paragraph (b), clause (2); or
129.4 	(ii) the spouse has been awarded dependency and indemnity compensation.
129.5 	(l) The purpose of this provision of law providing a level of homestead property tax 
129.6 	relief for gravely disabled veterans, their primary family caregivers, and their surviving 
129.7 	spouses is to help ease the burdens of war for those among our state's citizens who bear 
129.8 	those burdens most heavily.
129.9 	(m) By July 1, the county veterans service officer must certify the disability rating and 
129.10 	permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.
129.11 	(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds 
129.12 	the legal or beneficial title to the property may continue to receive the exclusion for a 
129.13 	property other than the property for which the exclusion was initially granted until the spouse 
129.14 	remarries or sells, transfers, or otherwise disposes of the property, provided that:
129.15 	(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed 
129.16 	under this paragraph;
129.17 	(2) the spouse holds the legal or beneficial title to the property for which the continuation 
129.18 	of the exclusion is sought under this paragraph, and permanently resides there;
129.19 	(3) the estimated market value of the property for which the exclusion is sought under 
129.20 	this paragraph is less than or equal to the estimated market value of the property that first 
129.21 	received the exclusion, based on the value of each property on the date of the sale of the 
129.22 	property that first received the exclusion; and
129.23 	(4) the spouse has not previously received the benefit under this paragraph for a property 
129.24 	other than the property for which the exclusion is sought.
129.25 	The exclusion for a spouse under this paragraph and paragraph (c), (d), or (k) may not 
129.26 	exceed a total of eight taxes payable years.

129.27 	EFFECTIVE DATE. This section is effective beginning with assessments in 2018, for 
129.28 	taxes payable in 2019.

129.29 	Sec. 11. Minnesota Statutes 2016, section 273.13, subdivision 35, is amended to read:
129.30 		Subd. 35.Homestead market value exclusion. (a) Prior to determining a property's 
129.31 	net tax capacity under this section, property classified as class 1a or 1b under subdivision 
130.1 	22, and the portion of property classified as class 2a under subdivision 23 consisting of the 
130.2 	house, garage, and surrounding one acre of land, shall be eligible for a market value exclusion 
130.3 	as determined under paragraph (b).
130.4 	(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market 
130.5 	value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400 
130.6 	minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or 
130.7 	more, there is no valuation exclusion. The valuation exclusion shall be rounded to the nearest 
130.8 	whole dollar, and may not be less than zero.
130.9 	(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior 
130.10 	to determining the amount of the valuation exclusion under this subdivision.
130.11 	(d) In the case of a property that is classified as part homestead and part nonhomestead, 
130.12 	(i) the exclusion shall apply only to the homestead portion of the property, but (ii) if a portion 
130.13 	of a property is classified as nonhomestead solely because not all the owners occupy the 
130.14 	property, not all the owners have qualifying relatives occupying the property, or solely 
130.15 	because not all the spouses of owners occupy the property, the exclusion amount shall be 
130.16 	initially computed as if that nonhomestead portion were also in the homestead class and 
130.17 	then prorated to the owner-occupant's percentage of ownership, as determined by section 
130.18 	273.124, subdivision 23. For the purpose of this section, when an owner-occupant's spouse 
130.19 	does not occupy the property, the percentage of ownership for the owner-occupant spouse 
130.20 	is one-half of the couple's ownership percentage.

130.21 	EFFECTIVE DATE. This section is effective for taxes payable in 2019 and thereafter.

130.22 	Sec. 12. Minnesota Statutes 2017 Supplement, section 273.1384, subdivision 2, is amended 
130.23 	to read:
130.24 		Subd. 2.Agricultural homestead market value credit. Property classified as agricultural 
130.25 	homestead under section 273.13, subdivision 23, paragraph (a), is eligible for an agricultural 
130.26 	credit. The credit is computed using the property's agricultural credit market value, defined 
130.27 	for this purpose as the property's market value excluding the market value of the house, 
130.28 	garage, and immediately surrounding one acre of land. The credit is equal to 0.3 percent of 
130.29 	the first $115,000 of the property's agricultural credit market value plus 0.1 percent of the 
130.30 	property's agricultural credit market value in excess of $115,000, subject to a maximum 
130.31 	credit of $490. In the case of property that is classified as part homestead and part 
130.32 	nonhomestead solely because not all the owners occupy or farm the property, not all the 
130.33 	owners have qualifying relatives occupying or farming the property, or solely because not 
130.34 	all the spouses of owners occupy the property, the credit is computed on the amount of 
131.1 	agricultural credit market value corresponding to the owner-occupant's percentage of 
131.2 	homestead. the percentage of homestead is equal to 100 divided by the number of owners 
131.3 	of the property, or, in the case of a trust, the number of grantors of the trust that owns the 
131.4 	property ownership, as determined by section 273.124, subdivision 23.

131.5 	EFFECTIVE DATE. This section is effective for taxes payable in 2019 and thereafter.

131.6 	Sec. 13. Minnesota Statutes 2016, section 275.025, is amended by adding a subdivision 
131.7 	to read:
131.8 		Subd. 6.Natural gas pipeline. (a) Personal property that is part of an intrastate natural 
131.9 	gas transportation or distribution pipeline system is exempt from the state general levy if:
131.10 	(1) construction of the pipeline system began after January 1, 2018; and
131.11 	(2) the property is located in an area:
131.12 	(i) outside the seven-county metropolitan area, as defined in section 473.121, subdivision 
131.13 	3; and
131.14 	(ii) in which households or businesses lacked access to natural gas distribution systems 
131.15 	as of January 1, 2018.
131.16 	(b) The exemption under this subdivision applies for a period not to exceed 12 years, 
131.17 	provided that once a property no longer qualifies, it may not subsequently qualify for the 
131.18 	exemption under this subdivision.
131.19 	(c) The net tax capacity of property defined under this subdivision must be included in 
131.20 	the definition of commercial-industrial tax capacity for the purpose of determining the state 
131.21 	general levy tax rate under subdivision 4.

131.22 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

131.23 	Sec. 14. Minnesota Statutes 2016, section 275.025, is amended by adding a subdivision 
131.24 	to read:
131.25 		Subd. 7.Medical facility in underserved area. The state general levy for any property 
131.26 	qualifying under section 469.1817 is abated. The net tax capacity of the property must be 
131.27 	included in the definition of commercial-industrial tax capacity for the purposes of 
131.28 	determining the state general levy tax rate under subdivision 4.

131.29 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019.

132.1 	Sec. 15. Minnesota Statutes 2016, section 282.01, subdivision 6, is amended to read:
132.2 		Subd. 6.Duties of commissioner after sale. (a) When any sale has been made by the 
132.3 	county auditor under sections 282.01 to 282.13, the auditor shall immediately certify to the 
132.4 	commissioner of revenue such information relating to such sale, on such forms as the 
132.5 	commissioner of revenue may prescribe as will enable the commissioner of revenue to 
132.6 	prepare an appropriate deed if the sale is for cash, or keep necessary records if the sale is 
132.7 	on terms; and not later than October 31 of each year the county auditor shall submit to the 
132.8 	commissioner of revenue a statement of all instances wherein any payment of principal, 
132.9 	interest, or current taxes on lands held under certificate, due or to be paid during the preceding 
132.10 	calendar years, are still outstanding at the time such certificate is made. When such statement 
132.11 	shows that a purchaser or the purchaser's assignee is in default, the commissioner of revenue 
132.12 	may instruct the county board of the county in which the land is located to cancel said 
132.13 	certificate of sale in the manner provided by subdivision 5, provided that upon 
132.14 	recommendation of the county board, and where the circumstances are such that the 
132.15 	commissioner of revenue after investigation is satisfied that the purchaser has made every 
132.16 	effort reasonable to make payment of both the annual installment and said taxes, and that 
132.17 	there has been no willful neglect on the part of the purchaser in meeting these obligations, 
132.18 	then the commissioner of revenue may extend the time for the payment for such period as 
132.19 	the commissioner may deem warranted, not to exceed one year. On payment in full of the 
132.20 	purchase price, appropriate conveyance in fee, in such form as may be prescribed by the 
132.21 	attorney general, shall be issued by the commissioner of revenue, which conveyance must 
132.22 	be recorded by the county and shall have the force and effect of a patent from the state 
132.23 	subject to easements and restrictions of record at the date of the tax judgment sale, including, 
132.24 	but without limitation, permits for telephone and electric power lines either by underground 
132.25 	cable or conduit or otherwise, sewer and water lines, highways, railroads, and pipe lines for 
132.26 	gas, liquids, or solids in suspension.
132.27 	(b) The commissioner of revenue shall issue an appropriate conveyance in fee (1) upon 
132.28 	the approval from the county auditor, or (2) when approval from the county auditor is given 
132.29 	based upon written confirmation from a licensed closing agent, title insurer, or title insurance 
132.30 	agent as specified in section 82.641. For purposes of this paragraph, "written confirmation" 
132.31 	means a written commitment or approval that the funding for the conveyance is held in an 
132.32 	escrow account available for disbursement upon delivery of a conveyance. The conveyance 
132.33 	issued by the commissioner of revenue shall not be effective as a conveyance until it is 
132.34 	recorded. The conveyance shall be issued to the county auditor where the land is located. 
132.35 	Upon receipt of the conveyance, the county auditor shall hold the conveyance until the 
133.1 	conveyance is requested from a licensed closing agent, title insurer, or title insurance agent 
133.2 	to settle and close on the conveyance. If a request for the conveyance is not made within 
133.3 	30 days of the date the conveyance is issued by the commissioner of revenue, the county 
133.4 	auditor shall return the conveyance to the commissioner. If the conveyance is delivered to 
133.5 	the licensed closing agent, title insurer, or title insurance agent and the closing does not 
133.6 	occur within ten days of the request, the licensed closing agent, title insurer, or title insurance 
133.7 	agent shall immediately return the conveyance to the county auditor and, upon receipt, the 
133.8 	county auditor shall return the conveyance to the commissioner of revenue. The commissioner 
133.9 	of revenue shall cancel and destroy all conveyances returned by the county auditor pursuant 
133.10 	to this subdivision. The licensed closing agent, title insurer, or title insurance agent must 
133.11 	promptly record the conveyance after the closing and must deliver an attested or certified 
133.12 	copy to the county auditor and to the grantee or grantees named on the conveyance.

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

133.14 	Sec. 16. Minnesota Statutes 2016, section 469.171, subdivision 4, is amended to read:
133.15 		Subd. 4.Restriction. The tax reductions provided by this section shall not apply to (1) 
133.16 	a facility the primary purpose of which is one of the following: retail food and beverage 
133.17 	services, automobile sales or service, or the provision of recreation or entertainment, or a 
133.18 	private or commercial golf course, country club, massage parlor, tennis club, skating facility 
133.19 	including roller skating, skateboard, and ice skating, racquet sports facility, including any 
133.20 	handball or racquetball court, hot tub facility, suntan facility, or racetrack; (2) property of 
133.21 	a public utility; (3) property used in the operation of a financial institution; (4) property 
133.22 	owned by a fraternal or veterans' organization; or (5) property of a business operating under 
133.23 	a franchise agreement that requires the business to be located in the state; except that tax 
133.24 	reductions may be provided to a retail food or beverage facility or an automobile sales or 
133.25 	service facility, or a business a retail food or beverage facility operating under a franchise 
133.26 	agreement that requires the business to be located in this state except for such a franchised 
133.27 	retail food or beverage facility.

133.28 	EFFECTIVE DATE. This section is effective the day following final enactment and 
133.29 	confirms the legislative intent of the amendment made by Laws 2012, chapter 294, article 
133.30 	2, section 25.

133.31 	Sec. 17. Minnesota Statutes 2016, section 469.1812, subdivision 1, is amended to read:
133.32 		Subdivision 1.Scope. For purposes of sections 469.1812 to 469.1815 469.1817, the 
133.33 	following terms have the meanings given.

134.1 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019.

134.2 	Sec. 18. Minnesota Statutes 2016, section 469.1812, is amended by adding a subdivision 
134.3 	to read:
134.4 		Subd. 2a.Medical facility. "Medical facility" means:
134.5 	(1) an office, clinic, building, or portion of a building, the primary use of which is the 
134.6 	provision of primary or specialty health care services to patients on an outpatient basis, by 
134.7 	one or more state-licensed or registered health care providers;
134.8 	(2) a birth center licensed under section 144.615;
134.9 	(3) a hospital licensed under sections 144.50 to 144.56;
134.10 	(4) an urgent care clinic which provides treatment for medical conditions that are not 
134.11 	life-threatening or potentially permanently disabling and do not require critical or emergency 
134.12 	interventions; or
134.13 	(5) an outpatient surgical center licensed under section 144.55.

134.14 	EFFECTIVE DATE. This section is effective the day following final enactment for 
134.15 	taxes payable beginning in 2019 and for sales and purchases made after June 30, 2018.

134.16 	Sec. 19. Minnesota Statutes 2016, section 469.1812, is amended by adding a subdivision 
134.17 	to read:
134.18 		Subd. 2b.Medically underserved county. "Medically underserved county" means a 
134.19 	county, any portion of which is designated by the federal secretary of health and human 
134.20 	services as a medically underserved area or medically underserved population, as defined 
134.21 	under Code of Federal Regulations, title 42, section 51C.102. By December 15 of each year, 
134.22 	the commissioner of health must certify to the commissioner of revenue the counties that 
134.23 	are medically underserved. By December 31 of each year, the commissioner of revenue 
134.24 	must certify the list of medically underserved counties to county assessors, for assessments 
134.25 	in the following year.

134.26 	EFFECTIVE DATE. This section is effective beginning with assessment year 2018 
134.27 	for taxes payable in 2019. For assessment year 2018, the certification required to be made 
134.28 	by the commissioner of health must be made by June 1, 2018, and the certification required 
134.29 	to be made by the commissioner of revenue must be made by June 15, 2018.

135.1 	Sec. 20. [469.1817] MEDICALLY UNDERSERVED TAX ABATEMENT AREAS.
135.2 		Subdivision 1.Qualification. The state general tax under section 275.025 must be abated 
135.3 	for any property or portion thereof containing a medical facility that has been granted an 
135.4 	abatement under section 469.1813, provided that:
135.5 	(1) the facility is located in a medically underserved county at the time the abatement 
135.6 	resolution is adopted;
135.7 	(2) the facility is not located in a metropolitan county as defined under section 473.121, 
135.8 	subdivision 4;
135.9 	(3) the resolution of one or more governing bodies granting the abatement specifies that 
135.10 	the facility addresses an underserved need for medical services in the area; and
135.11 	(4) both the county and the city or town are abating all taxes on the property containing 
135.12 	the facility for at least 15 years.
135.13 		Subd. 2.Duration. The state general tax is abated for 15 years.

135.14 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019.

135.15 	Sec. 21. Minnesota Statutes 2016, section 473H.08, subdivision 1, is amended to read:
135.16 		Subdivision 1.Till expiration started. Agricultural preserves shall continue until either 
135.17 	the landowner or, the authority, or a state agency or governmental unit initiates expiration 
135.18 	as provided in this section.

135.19 	EFFECTIVE DATE. This section is effective the day following final enactment and 
135.20 	applies to any agricultural preserve where the previously required eight-year termination 
135.21 	period under Minnesota Statutes, section 473H.08, has not yet expired.

135.22 	Sec. 22. Minnesota Statutes 2016, section 473H.08, is amended by adding a subdivision 
135.23 	to read:
135.24 		Subd. 3a.Expiration for park and trail purposes. (a) An agricultural preserve expires 
135.25 	immediately when a state agency or other governmental unit purchases the property or 
135.26 	obtains an easement over the property for the purpose of creating or expanding a public 
135.27 	trail or public park. This subdivision applies only to the portion of the agricultural preserve 
135.28 	acquired for trail or park purposes, and any portion of the property not acquired for trail or 
135.29 	park purposes shall remain an agricultural preserve.
136.1 	(b) The acquiring state agency or governmental unit shall give notice to the authority as 
136.2 	provided in subdivision 5. The notice must specify the portion of the property being removed 
136.3 	from the agricultural preserve and the date on which that portion expires.

136.4 	EFFECTIVE DATE. This section is effective the day following final enactment and 
136.5 	applies to any agricultural preserve where the previously required eight-year termination 
136.6 	period under Minnesota Statutes, section 473H.08, has not yet expired.

136.7 	Sec. 23. Minnesota Statutes 2016, section 473H.08, subdivision 4, is amended to read:
136.8 		Subd. 4.Notice to others. Upon receipt of the notice provided in subdivision 2 or 3a, 
136.9 	or upon notice served by the authority as provided in subdivision 3, the authority shall 
136.10 	forward the original notice to the county recorder for recording, or to the registrar of titles 
136.11 	if the land is registered, and shall notify the county auditor, county assessor, the Metropolitan 
136.12 	Council, and the county soil and water conservation district of the date of expiration. 
136.13 	Designation as an agricultural preserve and all benefits and limitations accruing through 
136.14 	sections 473H.02 to 473H.17 for the preserve shall cease on the date of expiration. The 
136.15 	restrictive covenant contained in the application shall terminate on the date of expiration.

136.16 	EFFECTIVE DATE. This section is effective the day following final enactment and 
136.17 	applies to any agricultural preserve where the previously required eight-year termination 
136.18 	period under Minnesota Statutes, section 473H.08, has not yet expired.

136.19 	Sec. 24. Laws 2008, chapter 366, article 5, section 33, the effective date, as amended by 
136.20 	Laws 2013, chapter 143, article 4, section 35, is amended to read:

136.21 	EFFECTIVE DATE. This section is effective for taxes levied in 2008, payable in 2009, 
136.22 	and is repealed effective for taxes levied in 2018 2023, payable in 2019 2024, and thereafter.

136.23 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019.

136.24 	Sec. 25. ABATEMENT; NONPROFIT PROPERTY.
 136.25 	Property taxes payable in 2018 are abated for property that:
136.26 	(1) is located in a city of the first class;
136.27 	(2) contains a structure of between 9,000 and 10,000 square feet originally built in 1937;
136.28 	(3) is owned by an institution of purely public charity exempt from federal income 
136.29 	taxation under section 501(c)(3) of the Internal Revenue Code; and
136.30 	(4) is developed and operated as a nonprofit community mental health center.

137.1 	EFFECTIVE DATE. This section is effective for taxes payable in 2018.

137.2 	ARTICLE 5
137.3 	PROPERTY TAX REFORM

137.4 	Section 1. Minnesota Statutes 2016, section 123A.455, subdivision 1, is amended to read:
137.5 		Subdivision 1.Definitions. "Split residential property parcel" means a parcel of real 
137.6 	estate that is located within the boundaries of more than one school district and that is 
137.7 	classified as residential property under:
137.8 	(1) section 273.13, subdivision 22, paragraph (a) or (b);
137.9 	(2) section 273.13, subdivision 25, paragraph (b), clause (1); or
137.10 	(3) section 273.13, subdivision 25, paragraph (c).

137.11 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

137.12 	Sec. 2. Minnesota Statutes 2016, section 126C.01, subdivision 3, is amended to read:
137.13 		Subd. 3.Referendum market value. "Referendum market value" means the market 
137.14 	value of all taxable property, excluding property classified as class 2, 4c(4), or 4c(12)or 
137.15 	4h under section 273.13. The portion of class 2a property consisting of the house, garage, 
137.16 	and surrounding one acre of land of an agricultural homestead is included in referendum 
137.17 	market value. For the purposes of this subdivision, in the case of class 1a, 1b, or 2a property
137.18 	qualifying for the exclusion under section 273.13, subdivision 35, "market value" means 
137.19 	the value prior to the exclusion under section 273.13, subdivision 35. Any class of property, 
137.20 	or any portion of a class of property, that is included in the definition of referendum market 
137.21 	value and that has a classification rate of less than one percent under section 273.13 shall 
137.22 	have a referendum market value equal to its market value times its classification rate, 
137.23 	multiplied by 100.

137.24 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

137.25 	Sec. 3. Minnesota Statutes 2016, section 270.12, subdivision 2, is amended to read:
137.26 		Subd. 2.Meeting dates; duties. The board shall meet annually between April 15 May 
137.27 	1 and June 30 July 1 at the office of the commissioner of revenue and examine and compare 
137.28 	the returns of the assessment of the property in the several counties, and equalize the same 
137.29 	so that all the taxable property in the state shall be assessed at its market value, subject to 
137.30 	the following rules:
138.1 	(1) The board shall add to or deduct from the aggregate valuation of the real property 
138.2 	of every county, which the board believes to be valued below or above its market value in 
138.3 	money, such percent as will bring the same to its market value;
138.4 	(2) If the board believes the valuation for a part of a class determined by a range of 
138.5 	market value under clause (6) or otherwise, a class, or classes of the real property of any 
138.6 	town or district in any county, or the valuation for a part of a class, a class, or classes of the 
138.7 	real property of any county not in towns or cities, should be raised or reduced, without 
138.8 	raising or reducing the other real property of such county, or without raising or reducing it 
138.9 	in the same ratio, the board may add to, or take from, the valuation of a part of a class, a 
138.10 	class, or classes in any one or more of such towns or cities, or of the property not in towns 
138.11 	or cities, such percent as the board believes will raise or reduce the same to its market value;
138.12 	(3) The board shall add to or take from the aggregate valuation of any part of a class, a 
138.13 	class, or classes of personal property of any county, town, or city, which the board believes 
138.14 	to be valued below or above the market value thereof, such percent as will raise the same 
138.15 	to its market value;
138.16 	(4) The board shall not reduce the aggregate valuation of all the property of the state, 
138.17 	as returned by the several county auditors, more than one percent on the whole valuation 
138.18 	thereof;
138.19 	(5) When it would be of assistance in equalizing values the board may require any county 
138.20 	auditor to furnish statements showing assessments of real and personal property of any 
138.21 	individuals, firms, or corporations within the county. The board shall consider and equalize 
138.22 	such assessments and may increase the assessment of individuals, firms, or corporations 
138.23 	above the amount returned by the county board of equalization when it shall appear to be 
138.24 	undervalued, first giving notice to such persons of the intention of the board so to do, which 
138.25 	notice shall fix a time and place of hearing. The board shall not decrease any such assessment 
138.26 	below the valuation placed by the county board of equalization;
138.27 	(6) In equalizing values pursuant to this section, the board shall utilize a 12-month 
138.28 	assessment/sales ratio study conducted by the Department of Revenue containing only sales 
138.29 	that are filed in the county auditor's office under section 272.115, by November 1 of the 
138.30 	previous year and that occurred between October 1 of the year immediately preceding the 
138.31 	previous year and September 30 of the previous year.
138.32 	The assessment/sales ratio study may separate the values of residential property into 
138.33 	market value categories. The board may adjust the market value categories and the number 
138.34 	of categories as necessary to create an adequate sample size for each market value category. 
139.1 	The board may determine the adequate sample size. To the extent practicable, the 
139.2 	methodology used in preparing the assessment/sales ratio study must be consistent with the 
139.3 	most recent Standard on Assessment Sales Ratio Studies published by the Assessment 
139.4 	Standards Committee of the International Association of Assessing Officers. The board 
139.5 	may determine the geographic area used in preparing the study to accurately equalize values. 
139.6 	A sales ratio study separating residential property into market value categories may not be 
139.7 	used as the basis for a petition under chapter 278.
139.8 	The sales prices used in the study must be discounted for terms of financing. The board 
139.9 	shall use the median ratio as the statistical measure of the level of assessment for any 
139.10 	particular category of property; and
139.11 	(7) The board shall receive from each county the estimated market values on the 
139.12 	assessment date falling within the study period for all parcels by a medium as prescribed 
139.13 	by the commissioner of revenue.

139.14 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

139.15 	Sec. 4. Minnesota Statutes 2016, section 270.12, subdivision 3, is amended to read:
139.16 		Subd. 3.Jurisdictions in two or more counties. When a taxing jurisdiction lies in two 
139.17 	or more counties, if the sales ratio studies prepared by the Department of Revenue show 
139.18 	that the average levels of assessment in the several portions of the taxing jurisdictions in 
139.19 	the different counties differ by more than five percent, the board may order the apportionment 
139.20 	of the levy. When the sales ratio studies prepared by the Department of Revenue show that 
139.21 	the average levels of assessment in the several portions of the taxing jurisdictions in the 
139.22 	different counties differ by more than ten percent, the board shall order the apportionment 
139.23 	of the levy unless (a) the proportion of total adjusted tax capacity in one of the counties is 
139.24 	less than ten percent of the total adjusted tax capacity in the taxing jurisdiction and the 
139.25 	average level of assessment in that portion of the taxing jurisdiction is the level which differs 
139.26 	by more than five percent from the assessment level in any one of the other portions of the 
139.27 	taxing jurisdiction; (b) significant changes have been made in the level of assessment in the 
139.28 	taxing jurisdiction which have not been reflected in the sales ratio study, and those changes 
139.29 	alter the assessment levels in the portions of the taxing jurisdiction so that the assessment 
139.30 	level now differs by five percent or less; or (c) commercial, industrial, mineral, or public 
139.31 	utility property predominates in one county within the taxing jurisdiction and another class 
139.32 	of property predominates in another county within that same taxing jurisdiction. If one or 
139.33 	more of these factors are present, the board may order the apportionment of the levy.
140.1 	Notwithstanding any other provision, the levy for the Metropolitan Mosquito Control 
140.2 	District, Metropolitan Council, metropolitan transit district, and metropolitan transit area 
140.3 	must be apportioned without regard to the percentage difference.
140.4 	If, pursuant to this subdivision, the board apportions the levy, then that levy 
140.5 	apportionment among the portions in the different counties shall be made in the same 
140.6 	proportion as the adjusted tax capacity as determined by the commissioner in each portion 
140.7 	is to the total adjusted tax capacity of the taxing jurisdiction.
140.8 	For the purposes of this section, the average level of assessment in a taxing jurisdiction 
140.9 	or portion thereof shall be the aggregate assessment sales ratio. Tax capacities as determined 
140.10 	by the commissioner shall be the tax capacities as determined for the year preceding the 
140.11 	year in which the levy to be apportioned is levied.
140.12 	Actions pursuant to this subdivision shall be commenced subsequent to the annual 
140.13 	meeting on April 15 May 1 of the State Board of Equalization, but notice of the action shall 
140.14 	be given to the affected jurisdiction and the appropriate county auditors by the following 
140.15 	June 30 July 1.
140.16 	Apportionment of a levy pursuant to this subdivision shall be considered as a remedy 
140.17 	to be taken after equalization pursuant to subdivision 2, and when equalization within the 
140.18 	jurisdiction would disturb equalization within other jurisdictions of which the several portions 
140.19 	of the jurisdiction in question are a part.

140.20 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

140.21 	Sec. 5. Minnesota Statutes 2016, section 270.96, subdivision 1, is amended to read:
140.22 		Subdivision 1.Assessors. Each assessor shall notify the county auditor of the 
140.23 	contamination value under section 270.91 by the separate tax rate categories under 
140.24 	subdivisions 2, 3, and 4 for each parcel of property within the assessor's jurisdiction. The 
140.25 	assessor shall provide notice of the contamination value to the property owner by the later 
140.26 	of JuneMay 1 of the assessment year or 30 days after the reduction in market value is finally 
140.27 	granted.

140.28 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

140.29 	Sec. 6. Minnesota Statutes 2016, section 270C.91, is amended to read:
140.30 	270C.91 RECORD OF PROCEEDINGS CHANGING NET TAX CAPACITY; 
140.31 	DUTIES OF COUNTY AUDITOR.
141.1 	A record of all proceedings of the commissioner affecting any change in the net tax 
141.2 	capacity of any property, as revised by the State Board of Equalization, shall be kept by the 
141.3 	commissioner and a copy thereof, duly certified, shall be mailed each year to the auditor of 
141.4 	each county wherein such property is situated, on or before June 30 July 1 or 30 days after 
141.5 	submission of the abstract required by section 270C.89, whichever is later. This record shall 
141.6 	specify the amounts or amount, or both, added to or deducted from the net tax capacity of 
141.7 	the real property of each of the several towns and cities, and of the real property not in towns 
141.8 	or cities, also the percent or amount of both, added to or deducted from the several classes 
141.9 	of personal property in each of the towns and cities, and also the amount added to or deducted 
141.10 	from the assessment of any person. The county auditor shall add to or deduct from such 
141.11 	tract or lot, or portion thereof, of any real property in the county the required percent or 
141.12 	amount, or both, on the net tax capacity thereof as it stood after equalized by the county 
141.13 	board, adding in each case a fractional sum of 50 cents or more, and deducting in each case 
141.14 	any fractional sum of less than 50 cents, so that no net tax capacity of any separate tract or 
141.15 	lot shall contain any fraction of a dollar; and add to, or deduct from, the several classes of 
141.16 	personal property in the county the required percent or amount, or both, on the net tax 
141.17 	capacity thereof as it stood after equalized by the county board, adding or deducting in 
141.18 	manner aforesaid any fractional sum so that no net tax capacity of any separate class of 
141.19 	personal property shall contain a fraction of a dollar, and add to or deduct from assessment 
141.20 	of any person, as they stood after equalization by the county board, the required amounts 
141.21 	to agree with the assessments as returned by the commissioner.

141.22 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

141.23 	Sec. 7. Minnesota Statutes 2017 Supplement, section 271.21, subdivision 2, is amended 
141.24 	to read:
141.25 		Subd. 2.Jurisdiction. At the election of the taxpayer, the Small Claims Division shall 
141.26 	have jurisdiction only in the following matters:
141.27 	(a) cases involving valuation, assessment, or taxation of real or personal property, if:
141.28 	(i) the issue is a denial of a current year application for the homestead classification for 
141.29 	the taxpayer's property;
141.30 	(ii) only one parcel is included in the petition, the entire parcel is classified as homestead 
141.31 	class 1a or 1b 1 under section 273.13, and the parcel contains no more than one dwelling 
141.32 	unit;
142.1 	(iii) the entire property is classified as agricultural homestead class 2a or 1b, a portion 
142.2 	of which may be classified as homestead class 1, under section 273.13; or
142.3 	(iv) the assessor's estimated market value of the property included in the petition is less 
142.4 	than $300,000; or
142.5 	(b) any case not involving valuation, assessment, or taxation of real and personal property 
142.6 	in which the amount in controversy does not exceed $15,000, including penalty and interest.

142.7 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

142.8 	Sec. 8. Minnesota Statutes 2016, section 272.025, subdivision 3, is amended to read:
142.9 		Subd. 3.Filing dates. (a) The statement required by subdivision 1, paragraph (a), must 
142.10 	be filed with the assessor by February May 1 of the assessment year, however, any taxpayer 
142.11 	who has filed the statement required by subdivision 1 more than 12 months prior to February 
142.12 	1, 1983, or February 1 of each third year after 1983, shall file a statement by February 1, 
142.13 	1983, and by February May 1 of each third year thereafter.
142.14 	(b) For churches and houses of worship, and property solely used for educational purposes 
142.15 	by academies, colleges, universities, or seminaries of learning, no statement is required after 
142.16 	the statement filed for the assessment year in which the exemption began.
142.17 	(c) This section does not apply to existing churches and houses of worship, and property 
142.18 	solely used for educational purposes by academies, colleges, universities, or seminaries of 
142.19 	learning that were exempt for taxes payable in 2011.

142.20 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

142.21 	Sec. 9. Minnesota Statutes 2016, section 273.11, subdivision 12, is amended to read:
142.22 		Subd. 12.Community land trusts. (a) A community land trust, as defined under chapter 
142.23 	462A, is (i) a community-based nonprofit corporation organized under chapter 317A, which 
142.24 	qualifies for tax exempt status under 501(c)(3), or (ii) a "city" as defined in section 462C.02, 
142.25 	subdivision 6, which has received funding from the Minnesota housing finance agency for 
142.26 	purposes of the community land trust program. The Minnesota Housing Finance Agency 
142.27 	shall set the criteria for community land trusts.
142.28 	(b) All occupants of a community land trust building must have a family income of less 
142.29 	than 80 percent of the greater of (1) the state median income, or (2) the area or county 
142.30 	median income, as most recently determined by the Department of Housing and Urban 
142.31 	Development. Before the community land trust can rent or sell a unit to an applicant, the 
143.1 	community land trust shall verify to the satisfaction of the administering agency or the city 
143.2 	that the family income of each person or family applying for a unit in the community land 
143.3 	trust building is within the income criteria provided in this paragraph. The administering 
143.4 	agency or the city shall verify to the satisfaction of the county assessor that the occupant 
143.5 	meets the income criteria under this paragraph. The property tax benefits under paragraph 
143.6 	(c) shall be granted only to property owned or rented by persons or families within the 
143.7 	qualifying income limits. The family income criteria and verification is only necessary at 
143.8 	the time of initial occupancy in the property.
143.9 	(c) A unit which is owned by the occupant and used as a homestead by the occupant 
143.10 	qualifies for homestead treatment as class 1a 1 under section 273.13, subdivision 22. A unit 
143.11 	which is rented by the occupant and used as a homestead by the occupant shall be class 4a 
143.12 	or 4bnonhomestead class 1 property, under section 273.13, subdivision 25, whichever is 
143.13 	applicable. Any remaining portion of the property not used for residential purposes shall 
143.14 	be classified by the assessor in the appropriate class based upon the use of that portion of 
143.15 	the property owned by the community land trust. The land upon which the building is located 
143.16 	shall be assessed at the same classification rate as the units within the building, provided 
143.17 	that if the building contains some units assessed as homestead class 1a 1 and some units 
143.18 	assessed as class 4a or 4b nonhomestead class 1, the market value of the land will be assessed 
143.19 	in the same proportions as the value of the building.

143.20 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

143.21 	Sec. 10. Minnesota Statutes 2016, section 273.1115, subdivision 2, is amended to read:
143.22 		Subd. 2.Requirement. Real estate is entitled to valuation under this section only if all 
143.23 	of the following requirements are met:
143.24 	(1) the property is classified as class 1a, 1b 1, 2a, or 2b property under section 273.13, 
143.25 	subdivisions 22 and 23, or the property is classified as class 2e under section 273.13, 
143.26 	subdivision 23, and immediately before being classified as class 2e was classified as class 
143.27 	1a or 1b 1;
143.28 	(2) the property is at least ten contiguous acres, when the application is filed under 
143.29 	subdivision 3;
143.30 	(3) the owner has filed a completed application for deferment as specified in subdivision 
143.31 	3 with the county assessor in the county in which the property is located;
143.32 	(4) there are no delinquent taxes on the property; and
143.33 	(5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).

144.1 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

144.2 	Sec. 11. Minnesota Statutes 2016, section 273.112, subdivision 6, is amended to read:
144.3 		Subd. 6.Application. Application for deferment of taxes and assessment under this 
144.4 	section shall be made at least 60 days prior to January 2 by November 1 of the year prior 
144.5 	to each year for which deferment of taxes and assessment is sought. Such application shall 
144.6 	be filed with the assessor of the taxing district in which the real property is located on such 
144.7 	form as may be prescribed by the commissioner of revenue. The assessor may require proof 
144.8 	by affidavit or other written verification that the property qualifies under subdivision 3. In 
144.9 	the case of property operated by private clubs pursuant to subdivision 3, clause (c)(3), in 
144.10 	order to qualify for valuation and tax deferment under this section, the taxpayer must submit 
144.11 	to the assessor proof by affidavit or other written verification that the bylaws or rules and 
144.12 	regulations of the club meet the eligibility requirements provided under this section. The 
144.13 	signed affidavit or other written verification shall be sufficient demonstration of eligibility 
144.14 	for the assessor unless the county attorney determines otherwise.
144.15 	The county assessor shall refer any question regarding the eligibility for valuation and 
144.16 	deferment under this section to the county attorney for advice and opinion under section 
144.17 	388.051, subdivision 1. Upon request of the county attorney, the taxpayer shall furnish 
144.18 	information that the county attorney considers necessary in order to determine eligibility 
144.19 	under this section.
144.20 	Real estate is not entitled to valuation and deferment under this section unless the county 
144.21 	assessor has filed with the assessor's tax records prior to October 16 1 a statement that the 
144.22 	application has been accepted.

144.23 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

144.24 	Sec. 12. Minnesota Statutes 2016, section 273.1231, subdivision 4, is amended to read:
144.25 		Subd. 4.Homestead property.  "Homestead property" means a homestead dwelling that 
144.26 	is classified as class 1a, 1b, or 2a 1 property or a manufactured home or sectional home 
144.27 	used as a homestead and taxed pursuant to section 273.125, subdivision 8, paragraph (b), 
144.28 	(c), or (d).

144.29 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

145.1 	Sec. 13. Minnesota Statutes 2016, section 273.124, subdivision 1, is amended to read:
145.2 		Subdivision 1.General rule. (a) Class 1 residential real estate under section 273.13, 
145.3 	subdivision 22, that is occupied and used for the purposes of a homestead by its owner, who 
145.4 	must be a Minnesota resident, is a residential homestead. In the case of a duplex or triplex 
145.5 	in which one of the units is used for homestead purposes, the entire property is deemed to 
145.6 	be used for homestead purposes.
145.7 	Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and used 
145.8 	as a homestead by its owner, who must be a Minnesota resident, is an agricultural homestead.
145.9 	Dates for establishment of a homestead and homestead treatment provided to particular 
145.10 	types of property are as provided in this section.
145.11 	Property held by a trustee under a trust is eligible for homestead classification if the 
145.12 	requirements under this chapter are satisfied.
145.13 	The assessor shall require proof, as provided in subdivision 13, of the facts upon which 
145.14 	classification as a homestead may be determined. Notwithstanding any other law, the assessor 
145.15 	may at any time require a homestead application to be filed in order to verify that any 
145.16 	property classified as a homestead continues to be eligible for homestead status. 
145.17 	Notwithstanding any other law to the contrary, the Department of Revenue may, upon 
145.18 	request from an assessor, verify whether an individual who is requesting or receiving 
145.19 	homestead classification has filed a Minnesota income tax return as a resident for the most 
145.20 	recent taxable year for which the information is available.
145.21 	When there is a name change or a transfer of homestead property, the assessor may 
145.22 	reclassify the property in the next assessment unless a homestead application is filed to 
145.23 	verify that the property continues to qualify for homestead classification.
145.24 	(b) For purposes of this section, homestead property shall include property which is used 
145.25 	for purposes of the homestead but is separated from the homestead by a road, street, lot, 
145.26 	waterway, or other similar intervening property. The term "used for purposes of the 
145.27 	homestead" shall include but not be limited to uses for gardens, garages, or other outbuildings 
145.28 	commonly associated with a homestead, but shall not include vacant land held primarily 
145.29 	for future development. In order to receive homestead treatment for the noncontiguous 
145.30 	property, the owner must use the property for the purposes of the homestead, and must apply 
145.31 	to the assessor, both by the deadlines given in subdivision 9. After initial qualification for 
145.32 	the homestead treatment, additional applications for subsequent years are not required.
146.1 	(c) Residential real estate that is occupied and used for purposes of a homestead by a 
146.2 	relative of the owner is a homestead but only to the extent of the homestead treatment that 
146.3 	would be provided if the related owner occupied the property. For purposes of this paragraph 
146.4 	and paragraph (g), "relative" means a parent, stepparent, child, stepchild, grandparent, 
146.5 	grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship may be by blood 
146.6 	or marriage. Property that has been classified as seasonal residential recreational property 
146.7 	at any time during which it has been owned by the current owner or spouse of the current 
146.8 	owner will not be reclassified as a homestead unless it is occupied as a homestead by the 
146.9 	owner; this prohibition also applies to property that, in the absence of this paragraph, would 
146.10 	have been classified as seasonal residential recreational property at the time when the 
146.11 	residence was constructed. Neither the related occupant nor the owner of the property may 
146.12 	claim a property tax refund under chapter 290A for a homestead occupied by a relative. In 
146.13 	the case of a residence located on agricultural land, only the house, garage, and immediately 
146.14 	surrounding one acre of land shall be classified as a homestead under this paragraph, except 
146.15 	as provided in paragraph (d).
146.16 	(d) Agricultural property that is occupied and used for purposes of a homestead by a 
146.17 	relative of the owner, is a homestead, only to the extent of the homestead treatment that 
146.18 	would be provided if the related owner occupied the property, and only if all of the following 
146.19 	criteria are met:
146.20 	(1) the relative who is occupying the agricultural property is a grandchild, child, sibling, 
146.21 	or parent of the owner of the agricultural property or of the spouse of the owner;
146.22 	(2) the owner of the agricultural property must be a Minnesota resident;
146.23 	(3) the owner of the agricultural property must not receive homestead treatment on any 
146.24 	other agricultural property in Minnesota; and
146.25 	(4) the owner of the agricultural property is limited to only one agricultural homestead 
146.26 	per family under this paragraph.
146.27 	Neither the related occupant nor the owner of the property may claim a property tax 
146.28 	refund under chapter 290A for a homestead occupied by a relative qualifying under this 
146.29 	paragraph. For purposes of this paragraph, "agricultural property" means the house, garage, 
146.30 	other farm buildings and structures, and agricultural land.
146.31 	Application must be made to the assessor by the owner of the agricultural property to 
146.32 	receive homestead benefits under this paragraph. The assessor may require the necessary 
146.33 	proof that the requirements under this paragraph have been met.
147.1 	(e) In the case of property owned by a property owner who is married, the assessor must 
147.2 	not deny homestead treatment in whole or in part if only one of the spouses occupies the 
147.3 	property and the other spouse is absent due to: (1) marriage dissolution proceedings, (2) 
147.4 	legal separation, (3) employment or self-employment in another location, or (4) other 
147.5 	personal circumstances causing the spouses to live separately, not including an intent to 
147.6 	obtain two homestead classifications for property tax purposes. To qualify under clause (3), 
147.7 	the spouse's place of employment or self-employment must be at least 50 miles distant from 
147.8 	the other spouse's place of employment, and the homesteads must be at least 50 miles distant 
147.9 	from each other.
147.10 	(f) The assessor must not deny homestead treatment in whole or in part if:
147.11 	(1) in the case of a property owner who is not married, the owner is absent due to 
147.12 	residence in a nursing home, boarding care facility, or an elderly assisted living facility 
147.13 	property as defined in section 273.13, subdivision 25a, and the property is not otherwise 
147.14 	occupied; or
147.15 	(2) in the case of a property owner who is married, the owner or the owner's spouse or 
147.16 	both are absent due to residence in a nursing home, boarding care facility, or an elderly 
147.17 	assisted living facility property as defined in section 273.13, subdivision 25a, and the property 
147.18 	is not occupied or is occupied only by the owner's spouse.
147.19 	(g) If an individual is purchasing property with the intent of claiming it as a homestead 
147.20 	and is required by the terms of the financing agreement to have a relative shown on the deed 
147.21 	as a co-owner, the assessor shall allow a full homestead classification. This provision only 
147.22 	applies to first-time purchasers, whether married or single, or to a person who had previously 
147.23 	been married and is purchasing as a single individual for the first time. The application for 
147.24 	homestead benefits must be on a form prescribed by the commissioner and must contain 
147.25 	the data necessary for the assessor to determine if full homestead benefits are warranted.
147.26 	(h) If residential or agricultural real estate is occupied and used for purposes of a 
147.27 	homestead by a child of a deceased owner and the property is subject to jurisdiction of 
147.28 	probate court, the child shall receive relative homestead classification under paragraph (c) 
147.29 	or (d) to the same extent they would be entitled to it if the owner was still living, until the 
147.30 	probate is completed. For purposes of this paragraph, "child" includes a relationship by 
147.31 	blood or by marriage.
147.32 	(i) If a single-family home, duplex, or triplex classified as either residential homestead 
147.33 	or agricultural homestead is also used to provide licensed child care, the portion of the 
147.34 	property used for licensed child care must be classified as a part of the homestead property.

148.1 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

148.2 	Sec. 14. Minnesota Statutes 2016, section 273.124, subdivision 3a, is amended to read:
148.3 		Subd. 3a.Manufactured home park cooperative. (a) When a manufactured home park 
148.4 	is owned by a corporation or association organized under chapter 308A or 308B, and each 
148.5 	person who owns a share or shares in the corporation or association is entitled to occupy a 
148.6 	lot within the park, the corporation or association may claim homestead treatment for the 
148.7 	park. Each lot must be designated by legal description or number, and each lot is limited to 
148.8 	not more than one-half acre of land.
148.9 	(b) The manufactured home park shall be entitled to homestead treatment if all of the 
148.10 	following criteria are met:
148.11 	(1) the occupant or the cooperative corporation or association is paying the ad valorem 
148.12 	property taxes and any special assessments levied against the land and structure either 
148.13 	directly, or indirectly through dues to the corporation or association; and
148.14 	(2) the corporation or association organized under chapter 308A or 308B is wholly 
148.15 	owned by persons having a right to occupy a lot owned by the corporation or association.
148.16 	(c) A charitable corporation, organized under the laws of Minnesota with no outstanding 
148.17 	stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status, 
148.18 	qualifies for homestead treatment with respect to a manufactured home park if its members 
148.19 	hold residential participation warrants entitling them to occupy a lot in the manufactured 
148.20 	home park.
148.21 	(d) "Homestead treatment" under this subdivision means the classification rate provided 
148.22 	for class 4c 1 property classified under section 273.13, subdivision 25, paragraph (d), clause 
148.23 	(5), item (ii). 273.13, subdivision 22, and the homestead market value exclusion under 
148.24 	section 273.13, subdivision 35, does not apply and the property taxes assessed against the 
148.25 	park shall not be included in the determination of taxes payable for rent paid under section 
148.26 	290A.03.

148.27 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

148.28 	Sec. 15. Minnesota Statutes 2016, section 273.124, subdivision 8, is amended to read:
148.29 		Subd. 8.Homestead owned by or leased to family farm corporation, joint farm 
148.30 	venture, limited liability company, or partnership. (a) Each family farm corporation; 
148.31 	each joint family farm venture; and each limited liability company or partnership which 
148.32 	operates a family farm; is entitled to class 1b under section 273.13, subdivision 22, paragraph 
149.1 	(b), or class 2a assessment for one homestead occupied by a shareholder, member, or partner 
149.2 	thereof who is residing on the land, and actively engaged in farming of the land owned by 
149.3 	the family farm corporation, joint family farm venture, limited liability company, or 
149.4 	partnership. Homestead treatment applies even if:
149.5 	(1) legal title to the property is in the name of the family farm corporation, joint family 
149.6 	farm venture, limited liability company, or partnership, and not in the name of the person 
149.7 	residing on it.; or
149.8 	(2) the family farm is operated by a family farm corporation, joint family farm venture, 
149.9 	partnership, or limited liability company other than the family farm corporation, joint family 
149.10 	farm venture, partnership, or limited liability company that owns the land, provided that:
149.11 	(i) the shareholder, member, or partner of the family farm corporation, joint family farm 
149.12 	venture, partnership, or limited liability company that owns the land and that is residing on 
149.13 	and actively engaged in farming the land is a shareholder, member, or partner of the family 
149.14 	farm corporation, joint family farm venture, partnership, or limited liability company that 
149.15 	is operating the farm;
149.16 	(ii) each shareholder, member, or partner of the family farm corporation, joint family 
149.17 	farm venture, partnership, or limited liability company that is operating the farm is also a 
149.18 	shareholder, member, or partner of the family farm corporation, joint family farm venture, 
149.19 	partnership, or limited liability company that owns the land; and
149.20 	(iii) a majority of the shareholders, members, or partners of each family farm corporation, 
149.21 	joint family farm venture, partnership, or limited liability company are persons or spouses 
149.22 	of persons who are related to each other within the second degree of kindred according to 
149.23 	the rules of civil law.
149.24 	"Family farm corporation," "family farm," and "partnership operating a family farm" 
149.25 	have the meanings given in section 500.24, except that the number of allowable shareholders, 
149.26 	members, or partners under this subdivision shall not exceed 12. "Limited liability company" 
149.27 	has the meaning contained in sections 322B.03, subdivision 28, or 322C.0102, subdivision 
149.28 	12, and 500.24, subdivision 2, paragraphs (l) and (m). "Joint family farm venture" means 
149.29 	a cooperative agreement among two or more farm enterprises authorized to operate a family 
149.30 	farm under section 500.24.
149.31 	(b) In addition to property specified in paragraph (a), any other residences owned by 
149.32 	family farm corporations, joint family farm ventures, limited liability companies, or 
149.33 	partnerships described in paragraph (a) which are located on agricultural land and occupied 
149.34 	as homesteads by its shareholders, members, or partners who are actively engaged in farming 
150.1 	on behalf of that corporation, joint farm venture, limited liability company, or partnership 
150.2 	must also be assessed as class 2a property or as class 1b property under section 273.13.
150.3 	(c) Agricultural property that is owned by a member, partner, or shareholder of a family 
150.4 	farm corporation or joint family farm venture, limited liability company operating a family 
150.5 	farm, or by a partnership operating a family farm and leased to the family farm corporation, 
150.6 	limited liability company, partnership, or joint farm venture, as defined in paragraph (a), is 
150.7 	eligible for classification as class 1b or class 2a under section 273.13, if the owner is actually 
150.8 	residing on the property, and is actually engaged in farming the land on behalf of that 
150.9 	corporation, joint farm venture, limited liability company, or partnership. This paragraph 
150.10 	applies without regard to any legal possession rights of the family farm corporation, joint 
150.11 	family farm venture, limited liability company, or partnership under the lease.
150.12 	(d) Nonhomestead agricultural property that is owned by a family farm corporation, 
150.13 	joint farm venture, limited liability company, or partnership; and located not farther than 
150.14 	four townships or cities, or combination thereof, from agricultural land that is owned, and 
150.15 	used for the purposes of a homestead by an individual who is a shareholder, member, or 
150.16 	partner of the corporation, venture, company, or partnership; is entitled to receive the first 
150.17 	tier homestead classification rate on any remaining market value in the first homestead class 
150.18 	tier that is in excess of the market value of the shareholder's, member's, or partner's class 2 
150.19 	agricultural homestead property, if the owner, or someone acting on the owner's behalf 
150.20 	notifies the county assessor by July May 1 that the property may be eligible under this 
150.21 	paragraph for the current assessment year, for taxes payable in the following year. As used 
150.22 	in this paragraph, "agricultural property" means property classified as 2a under section 
150.23 	273.13, along with any contiguous property classified as 2b under section 273.13, if the 
150.24 	contiguous 2a and 2b properties are under the same ownership.

150.25 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

150.26 	Sec. 16. Minnesota Statutes 2016, section 273.124, subdivision 9, is amended to read:
150.27 		Subd. 9.Homestead established after assessment date. Any property that was not 
150.28 	used for the purpose of a homestead on the assessment date, but which was used for the 
150.29 	purpose of a homestead on December 1 of a year, constitutes class 1 or class 2a.
150.30 	Any taxpayer meeting the requirements of this subdivision must notify the county 
150.31 	assessor, or the assessor who has the powers of the county assessor under section 273.063, 
150.32 	in writing, by December 15 31 of the year of occupancy in order to qualify under this 
150.33 	subdivision. The assessor must not deny full homestead treatment to a property that is 
151.1 	partially homesteaded on January 2 but occupied for the purpose of a full homestead on 
151.2 	December 1 of a year.
151.3 	The county assessor and the county auditor may make the necessary changes on their 
151.4 	assessment and tax records to provide for proper homestead classification as provided in 
151.5 	this subdivision.
151.6 	If homestead classification has not been requested as of December 15 31, the assessor 
151.7 	will classify the property as nonhomestead for the current assessment year for taxes payable 
151.8 	in the following year, provided that the owner of any property qualifying under this 
151.9 	subdivision, which has not been accorded the benefits of this subdivision, may be entitled 
151.10 	to receive homestead classification by proper application as provided in section 375.192.
151.11 	The county assessor may publish in a newspaper of general circulation within the county 
151.12 	a notice requesting the public to file an application for homestead as soon as practicable 
151.13 	after acquisition of a homestead, but no later than December 15.
151.14 	The county assessor shall publish in a newspaper of general circulation within the county 
151.15 	no later than December 1 of each year a notice informing the public of the requirement to 
151.16 	file an application for homestead by December 15 31.
151.17 	In the case of manufactured homes assessed as personal property, the homestead must 
151.18 	be established, and a homestead classification requested, by May 29 1 of the assessment 
151.19 	year. The assessor may include information on these deadlines for manufactured homes 
151.20 	assessed as personal property in the published notice or notices.

151.21 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

151.22 	Sec. 17. Minnesota Statutes 2016, section 273.124, subdivision 17, is amended to read:
151.23 		Subd. 17.Owner-occupied motel property. For purposes of class 1a 1 determinations, 
151.24 	a homestead includes that portion of property defined as a motel under chapter 157, provided 
151.25 	that the person residing in the motel property is using that property as a homestead, is part 
151.26 	owner, and is actively engaged in the operation of the motel business. Homestead treatment 
151.27 	applies even if legal title to the property is in the name of a corporation or partnership and 
151.28 	not in the name of the person residing in the motel. The homestead is limited to that portion 
151.29 	of the motel actually occupied by the person.
151.30 	A taxpayer meeting the requirements of this subdivision must notify the county assessor, 
151.31 	or the assessor who has the powers of the county assessor under section 273.063, in writing, 
151.32 	in order to qualify under this subdivision for 1a homestead class 1 classification.

152.1 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

152.2 	Sec. 18. Minnesota Statutes 2016, section 273.125, subdivision 3, is amended to read:
152.3 		Subd. 3.Tax statements; penalties; collections. Not later than July 15 1 in the year of 
152.4 	assessment the county treasurer shall mail to the taxpayer a statement of tax due on a 
152.5 	manufactured home. The taxes are due on the last day of August, or 20 days after the 
152.6 	postmark date on the envelope containing the property tax statement, whichever is later, 
152.7 	except that if the tax exceeds $50, one-half of the amount due may be paid on August 31, 
152.8 	or 20 days after the postmark date on the envelope containing the property tax statement, 
152.9 	whichever is later, and the remainder on November 15. Taxes remaining unpaid after the 
152.10 	due date are delinquent, and a penalty of eight percent must be assessed and collected as 
152.11 	part of the unpaid taxes. The tax statement must contain a sentence notifying the taxpayer 
152.12 	that the title to the manufactured home cannot be transferred unless the property taxes are 
152.13 	paid.

152.14 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

152.15 	Sec. 19. Minnesota Statutes 2016, section 273.128, subdivision 1, is amended to read:
152.16 		Subdivision 1.Requirement. Low-income rental property classified as class 4d 4i under 
152.17 	section 273.13, subdivision 25, is entitled to valuation under this section if at least 20 percent 
152.18 	of the units in the rental housing property meet any of the following qualifications:
152.19 	(1) the units are subject to a housing assistance payments contract under Section 8 of 
152.20 	the United States Housing Act of 1937, as amended;
152.21 	(2) the units are rent-restricted and income-restricted units of a qualified low-income 
152.22 	housing project receiving tax credits under section 42(g) of the Internal Revenue Code;
152.23 	(3) the units are financed by the Rural Housing Service of the United States Department 
152.24 	of Agriculture and receive payments under the rental assistance program pursuant to section 
152.25 	521(a) of the Housing Act of 1949, as amended; or
152.26 	(4) the units are subject to rent and income restrictions under the terms of financial 
152.27 	assistance provided to the rental housing property by the federal government or the state of 
152.28 	Minnesota, or a local unit of government, as evidenced by a document recorded against the 
152.29 	property.
152.30 	The restrictions must require assisted units to be occupied by residents whose household 
152.31 	income at the time of initial occupancy does not exceed 60 percent of the greater of area or 
152.32 	state median income, adjusted for family size, as determined by the United States Department 
153.1 	of Housing and Urban Development. The restriction must also require the rents for assisted 
153.2 	units to not exceed 30 percent of 60 percent of the greater of area or state median income, 
153.3 	adjusted for family size, as determined by the United States Department of Housing and 
153.4 	Urban Development.

153.5 	EFFECTIVE DATE. This section is effective beginning for property taxes payable in 
153.6 	2020.

153.7 	Sec. 20. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 22, is amended 
153.8 	to read:
153.9 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) and 
153.10 	(c), real estate which is residential and used for homestead purposes is class 1a. In the case 
153.11 	of a duplex or triplex in which one of the units is used for homestead purposes, the entire 
153.12 	property is deemed to be used for homestead purposes. The market value of class 1a property 
153.13 	must be determined based upon the value of the house, garage, and land.
153.14 	Class 1 property is residential real estate containing fewer than four dwelling units. The 
153.15 	first $500,000 of taxable market value of class 1a 1 property has a net classification rate of 
153.16 	one percent of its market value;, and the taxable market value of class 1a 1 property that 
153.17 	exceeds $500,000 has a classification rate of 1.25 percent of its market value.
153.18 	(b) Class 1b property includes homestead real estate or homestead manufactured homes 
153.19 	used for the purposes of a homestead by:
153.20 	(1) any person who is blind as defined in section 256D.35, or the blind person and the 
153.21 	blind person's spouse;
153.22 	(2) any person who is permanently and totally disabled or by the disabled person and 
153.23 	the disabled person's spouse; or
153.24 	(3) the surviving spouse of a permanently and totally disabled veteran homesteading a 
153.25 	property classified under this paragraph for taxes payable in 2008.
153.26 	Property is classified and assessed under clause (2) only if the government agency or 
153.27 	income-providing source certifies, upon the request of the homestead occupant, that the 
153.28 	homestead occupant satisfies the disability requirements of this paragraph, and that the 
153.29 	property is not eligible for the valuation exclusion under subdivision 34.
153.30 	Property is classified and assessed under paragraph (b) only if the commissioner of 
153.31 	revenue or the county assessor certifies that the homestead occupant satisfies the requirements 
153.32 	of this paragraph.
154.1 	Permanently and totally disabled for the purpose of this subdivision means a condition 
154.2 	which is permanent in nature and totally incapacitates the person from working at an 
154.3 	occupation which brings the person an income. The first $50,000 market value of class 1b 
154.4 	property has a net classification rate of .45 percent of its market value. The remaining market 
154.5 	value of class 1b property is classified as class 1a or class 2a property, whichever is 
154.6 	appropriate.
154.7 	(c) Class 1c property is commercial use real and personal property that abuts public 
154.8 	water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by 
154.9 	the Department of Natural Resources, and is devoted to temporary and seasonal residential 
154.10 	occupancy for recreational purposes but not devoted to commercial purposes for more than 
154.11 	250 days in the year preceding the year of assessment, and that includes a portion used as 
154.12 	a homestead by the owner, which includes a dwelling occupied as a homestead by a 
154.13 	shareholder of a corporation that owns the resort, a partner in a partnership that owns the 
154.14 	resort, or a member of a limited liability company that owns the resort even if the title to 
154.15 	the homestead is held by the corporation, partnership, or limited liability company. For 
154.16 	purposes of this paragraph, property is devoted to a commercial purpose on a specific day 
154.17 	if any portion of the property, excluding the portion used exclusively as a homestead, is 
154.18 	used for residential occupancy and a fee is charged for residential occupancy. Class 1c 
154.19 	property must contain three or more rental units. A "rental unit" is defined as a cabin, 
154.20 	condominium, townhouse, sleeping room, or individual camping site equipped with water 
154.21 	and electrical hookups for recreational vehicles. Class 1c property must provide recreational 
154.22 	activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill 
154.23 	or cross-country ski equipment; provide marina services, launch services, or guide services; 
154.24 	or sell bait and fishing tackle. Any unit in which the right to use the property is transferred 
154.25 	to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies 
154.26 	for class 1c even though it may remain available for rent. A camping pad offered for rent 
154.27 	by a property that otherwise qualifies for class 1c is also class 1c, regardless of the term of 
154.28 	the rental agreement, as long as the use of the camping pad does not exceed 250 days. If 
154.29 	the same owner owns two separate parcels that are located in the same township, and one 
154.30 	of those properties is classified as a class 1c property and the other would be eligible to be 
154.31 	classified as a class 1c property if it was used as the homestead of the owner, both properties 
154.32 	will be assessed as a single class 1c property; for purposes of this sentence, properties are 
154.33 	deemed to be owned by the same owner if each of them is owned by a limited liability 
154.34 	company, and both limited liability companies have the same membership. The portion of 
154.35 	the property used as a homestead is class 1a property under paragraph (a). The remainder 
154.36 	of the property is classified as follows: the first $600,000 of market value is tier I, the next 
155.1 	$1,700,000 of market value is tier II, and any remaining market value is tier III. The 
155.2 	classification rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 
155.3 	percent. Owners of real and personal property devoted to temporary and seasonal residential 
155.4 	occupancy for recreation purposes in which all or a portion of the property was devoted to 
155.5 	commercial purposes for not more than 250 days in the year preceding the year of assessment 
155.6 	desiring classification as class 1c, must submit a declaration to the assessor designating the 
155.7 	cabins or units occupied for 250 days or less in the year preceding the year of assessment 
155.8 	by January 15 of the assessment year. Those cabins or units and a proportionate share of 
155.9 	the land on which they are located must be designated as class 1c as otherwise provided. 
155.10 	The remainder of the cabins or units and a proportionate share of the land on which they 
155.11 	are located must be designated as class 3a commercial. The owner of property desiring 
155.12 	designation as class 1c property must provide guest registers or other records demonstrating 
155.13 	that the units for which class 1c designation is sought were not occupied for more than 250 
155.14 	days in the year preceding the assessment if so requested. The portion of a property operated 
155.15 	as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) 
155.16 	other nonresidential facility operated on a commercial basis not directly related to temporary 
155.17 	and seasonal residential occupancy for recreation purposes does not qualify for class 1c.
155.18 	(d) Class 1d property includes structures that meet all of the following criteria:
155.19 	(1) the structure is located on property that is classified as agricultural property under 
155.20 	section 273.13, subdivision 23;
155.21 	(2) the structure is occupied exclusively by seasonal farm workers during the time when 
155.22 	they work on that farm, and the occupants are not charged rent for the privilege of occupying 
155.23 	the property, provided that use of the structure for storage of farm equipment and produce 
155.24 	does not disqualify the property from classification under this paragraph;
155.25 	(3) the structure meets all applicable health and safety requirements for the appropriate 
155.26 	season; and
155.27 	(4) the structure is not salable as residential property because it does not comply with 
155.28 	local ordinances relating to location in relation to streets or roads.
155.29 	The market value of class 1d property has the same classification rates as class 1a property 
155.30 	under paragraph (a).

155.31 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

156.1 	Sec. 21. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 23, is amended 
156.2 	to read:
156.3 		Subd. 23.Class 2. (a) An agricultural homestead consists of class 2a agricultural land 
156.4 	and buildings that is are homesteaded, along with any class 2b rural vacant land that is 
156.5 	contiguous to the class 2a land under the same ownership. The market value of the house 
156.6 	and garage and immediately surrounding one acre of land has the same classification rates 
156.7 	as class 1a or 1b property under subdivision 22. The value of the remaining land including 
156.8 	improvements up to the first tier valuation limit of agricultural homestead property has a 
156.9 	classification rate of 0.5 percent of market value. The remaining property over the first tier 
156.10 	has a classification rate of one percent of market value. For purposes of this subdivision, 
156.11 	the "first tier valuation limit of agricultural homestead property" and "first tier" means the 
156.12 	limit certified under section 273.11, subdivision 23.
156.13 	(b) Class 2a agricultural land consists of parcels of property, or portions thereof, that 
156.14 	are agricultural land and buildings. Class 2a property has a classification rate of one percent 
156.15 	of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a 
156.16 	property must also include any property that would otherwise be classified as 2b, but is 
156.17 	interspersed with class 2a property, including but not limited to sloughs, wooded wind 
156.18 	shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement, 
156.19 	and other similar land that is impractical for the assessor to value separately from the rest 
156.20 	of the property or that is unlikely to be able to be sold separately from the rest of the property.
156.21 	An assessor may classify the part of a parcel described in this subdivision that is used 
156.22 	for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
156.23 	(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that 
156.24 	are unplatted real estate, rural in character and not used for agricultural purposes, including 
156.25 	land used for growing trees for timber, lumber, and wood and wood products, that is not 
156.26 	improved with a structure. The presence of a minor, ancillary nonresidential structure as 
156.27 	defined by the commissioner of revenue does not disqualify the property from classification 
156.28 	under this paragraph. Any parcel of 20 acres or more improved with a structure that is not 
156.29 	a minor, ancillary nonresidential structure must be split-classified, and ten acres must be 
156.30 	assigned to the split parcel containing the structure. Class 2b property has a classification 
156.31 	rate of one percent of market value unless it is part of an agricultural homestead under 
156.32 	paragraph (a), or qualifies as class 2c under paragraph (d).
156.33 	(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920 
156.34 	acres statewide per taxpayer that is being managed under a forest management plan that 
157.1 	meets the requirements of chapter 290C, but is not enrolled in the sustainable forest resource 
157.2 	management incentive program. It has a classification rate of .65 percent, provided that the 
157.3 	owner of the property must apply to the assessor in order for the property to initially qualify 
157.4 	for the reduced rate and provide the information required by the assessor to verify that the 
157.5 	property qualifies for the reduced rate. If the assessor receives the application and information 
157.6 	before May 1 in an assessment year, the property qualifies beginning with that assessment 
157.7 	year. If the assessor receives the application and information after April 30 in an assessment 
157.8 	year, the property may not qualify until the next assessment year. The commissioner of 
157.9 	natural resources must concur that the land is qualified. The commissioner of natural 
157.10 	resources shall annually provide county assessors verification information on a timely basis. 
157.11 	The presence of a minor, ancillary nonresidential structure as defined by the commissioner 
157.12 	of revenue does not disqualify the property from classification under this paragraph.
157.13 	(e) Agricultural land as used in this section means:
157.14 	(1) contiguous acreage of ten acres or more, used during the preceding year for 
157.15 	agricultural purposes; or
157.16 	(2) contiguous acreage used during the preceding year for an intensive livestock or 
157.17 	poultry confinement operation, provided that land used only for pasturing or grazing does 
157.18 	not qualify under this clause.
157.19 	"Agricultural purposes" as used in this section means the raising, cultivation, drying, or 
157.20 	storage of agricultural products for sale, or the storage of machinery or equipment used in 
157.21 	support of agricultural production by the same farm entity. For a property to be classified 
157.22 	as agricultural based only on the drying or storage of agricultural products, the products 
157.23 	being dried or stored must have been produced by the same farm entity as the entity operating 
157.24 	the drying or storage facility. "Agricultural purposes" also includes (i) enrollment in a local 
157.25 	conservation program or the Reinvest in Minnesota program under sections 103F.501 to 
157.26 	103F.535 or the federal Conservation Reserve Program as contained in Public Law 99-198 
157.27 	or a similar state or federal conservation program if the property was classified as agricultural 
157.28 	(i) (A) under this subdivision for taxes payable in 2003 because of its enrollment in a 
157.29 	qualifying program and the land remains enrolled or (ii) (B) in the year prior to its enrollment, 
157.30 	or (ii) use of land, not to exceed the greater of three acres or ten percent of the total land 
157.31 	area, to provide environmental benefits such as buffer strips, old growth forest restoration 
157.32 	or retention, or retention ponds to prevent soil erosion. For purposes of this section, a "local 
157.33 	conservation program" means a program administered by a town, statutory or home rule 
157.34 	charter city, or county, including a watershed district, water management organization, or 
157.35 	soil and water conservation district, in which landowners voluntarily enroll land and receive 
158.1 	incentive payments equal to at least $50 per acre in exchange for use or other restrictions 
158.2 	placed on the land. In order for property to qualify under the local conservation program 
158.3 	provision, a taxpayer must apply to the assessor by February 1 of the assessment year and 
158.4 	must submit the information required by the assessor, including but not limited to a copy 
158.5 	of the program requirements, the specific agreement between the land owner and the local 
158.6 	agency, if applicable, and a map of the conservation area. Agricultural classification shall 
158.7 	not be based upon the market value of any residential structures on the parcel or contiguous 
158.8 	parcels under the same ownership.
158.9 	"Agricultural purposes" also includes land consisting of a holding pond designed to 
158.10 	prevent runoff onto a divided four-lane expressway that is located at least 150 feet above 
158.11 	the expressway, as certified by the local soil and water conservation district in accordance 
158.12 	with USDA Field Office Technical Guide conservation practice standards, provided that 
158.13 	the land is located outside the metropolitan area as defined in section 473.121, and was 
158.14 	classified as agricultural in assessment year 2017.
158.15 	"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous 
158.16 	portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion 
158.17 	of, a set of contiguous tax parcels under that section that are owned by the same person.
158.18 	(f) Agricultural land under this section also includes:
158.19 	(1) contiguous acreage that is less than ten acres in size and exclusively used in the 
158.20 	preceding year for raising or cultivating agricultural products; or
158.21 	(2) contiguous acreage that contains a residence and is less than 11 acres in size, if the 
158.22 	contiguous acreage exclusive of the house, garage, and surrounding one acre of land was 
158.23 	used in the preceding year for one or more of the following three uses:
158.24 	(i) for an intensive grain drying or storage operation, or for intensive machinery or 
158.25 	equipment storage activities used to support agricultural activities on other parcels of property 
158.26 	operated by the same farming entity;
158.27 	(ii) as a nursery, provided that only those acres used intensively to produce nursery stock 
158.28 	are considered agricultural land; or
158.29 	(iii) for intensive market farming; for purposes of this paragraph, "market farming" 
158.30 	means the cultivation of one or more fruits or vegetables or production of animal or other 
158.31 	agricultural products for sale to local markets by the farmer or an organization with which 
158.32 	the farmer is affiliated.
159.1 	"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as 
159.2 	described in section 272.193, or all of a set of contiguous tax parcels under that section that 
159.3 	are owned by the same person.
159.4 	(g) Land shall be classified as agricultural even if all or a portion of the agricultural use 
159.5 	of that property is the leasing to, or use by another person for agricultural purposes.
159.6 	Classification under this subdivision is not determinative for qualifying under section 
159.7 	273.111.
159.8 	(h) The property classification under this section supersedes, for property tax purposes 
159.9 	only, any locally administered agricultural policies or land use restrictions that define 
159.10 	minimum or maximum farm acreage.
159.11 	(i) The term "agricultural products" as used in this subdivision includes production for 
159.12 	sale of:
159.13 	(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing 
159.14 	animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains, bees, 
159.15 	and apiary products by the owner;
159.16 	(2) aquacultural products for sale and consumption, as defined under section 17.47, if 
159.17 	the aquaculture occurs on land zoned for agricultural use;
159.18 	(3) the commercial boarding of horses, which may include related horse training and 
159.19 	riding instruction, if the boarding is done on property that is also used for raising pasture 
159.20 	to graze horses or raising or cultivating other agricultural products as defined in clause (1);
159.21 	(4) property which is owned and operated by nonprofit organizations used for equestrian 
159.22 	activities, excluding racing;
159.23 	(5) game birds and waterfowl bred and raised (i) on a game farm licensed under section 
159.24 	97A.105, provided that the annual licensing report to the Department of Natural Resources, 
159.25 	which must be submitted annually by March 30 to the assessor, indicates that at least 500 
159.26 	birds were raised or used for breeding stock on the property during the preceding year and 
159.27 	that the owner provides a copy of the owner's most recent schedule F; or (ii) for use on a 
159.28 	shooting preserve licensed under section 97A.115;
159.29 	(6) insects primarily bred to be used as food for animals;
159.30 	(7) trees, grown for sale as a crop, including short rotation woody crops, and not sold 
159.31 	for timber, lumber, wood, or wood products; and
160.1 	(8) maple syrup taken from trees grown by a person licensed by the Minnesota 
160.2 	Department of Agriculture under chapter 28A as a food processor.
160.3 	(j) If a parcel used for agricultural purposes is also used for commercial or industrial 
160.4 	purposes, including but not limited to:
160.5 	(1) wholesale and retail sales;
160.6 	(2) processing of raw agricultural products or other goods;
160.7 	(3) warehousing or storage of processed goods; and
160.8 	(4) office facilities for the support of the activities enumerated in clauses (1), (2), and 
160.9 	(3),
160.10 	the assessor shall classify the part of the parcel used for agricultural purposes as class 1b,
160.11 	2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its use. 
160.12 	The grading, sorting, and packaging of raw agricultural products for first sale is considered 
160.13 	an agricultural purpose. A greenhouse or other building where horticultural or nursery 
160.14 	products are grown that is also used for the conduct of retail sales must be classified as 
160.15 	agricultural if it is primarily used for the growing of horticultural or nursery products from 
160.16 	seed, cuttings, or roots and occasionally as a showroom for the retail sale of those products. 
160.17 	Use of a greenhouse or building only for the display of already grown horticultural or nursery 
160.18 	products does not qualify as an agricultural purpose.
160.19 	(k) The assessor shall determine and list separately on the records the market value of 
160.20 	the homestead dwelling and the one acre of land on which that dwelling is located. If any 
160.21 	farm buildings or structures are located on this homesteaded acre of land, their market value 
160.22 	shall not be included in this separate determination.
160.23 	(l) (k) Class 2d airport landing area consists of a landing area or public access area of a 
160.24 	privately owned public use airport. It has a classification rate of one percent of market value. 
160.25 	To qualify for classification under this paragraph, a privately owned public use airport must 
160.26 	be licensed as a public airport under section 360.018. For purposes of this paragraph, "landing 
160.27 	area" means that part of a privately owned public use airport properly cleared, regularly 
160.28 	maintained, and made available to the public for use by aircraft and includes runways, 
160.29 	taxiways, aprons, and sites upon which are situated landing or navigational aids. A landing 
160.30 	area also includes land underlying both the primary surface and the approach surfaces that 
160.31 	comply with all of the following:
161.1 	(i) the land is properly cleared and regularly maintained for the primary purposes of the 
161.2 	landing, taking off, and taxiing of aircraft; but that portion of the land that contains facilities 
161.3 	for servicing, repair, or maintenance of aircraft is not included as a landing area;
161.4 	(ii) the land is part of the airport property; and
161.5 	(iii) the land is not used for commercial or residential purposes.
161.6 	The land contained in a landing area under this paragraph must be described and certified 
161.7 	by the commissioner of transportation. The certification is effective until it is modified, or 
161.8 	until the airport or landing area no longer meets the requirements of this paragraph. For 
161.9 	purposes of this paragraph, "public access area" means property used as an aircraft parking 
161.10 	ramp, apron, or storage hangar, or an arrival and departure building in connection with the 
161.11 	airport.
161.12 	(m) (l) Class 2e consists of land with a commercial aggregate deposit that is not actively 
161.13 	being mined and is not otherwise classified as class 2a or 2b, provided that the land is not 
161.14 	located in a county that has elected to opt-out of the aggregate preservation program as 
161.15 	provided in section 273.1115, subdivision 6. It has a classification rate of one percent of 
161.16 	market value. To qualify for classification under this paragraph, the property must be at 
161.17 	least ten contiguous acres in size and the owner of the property must record with the county 
161.18 	recorder of the county in which the property is located an affidavit containing:
161.19 	(1) a legal description of the property;
161.20 	(2) a disclosure that the property contains a commercial aggregate deposit that is not 
161.21 	actively being mined but is present on the entire parcel enrolled;
161.22 	(3) documentation that the conditional use under the county or local zoning ordinance 
161.23 	of this property is for mining; and
161.24 	(4) documentation that a permit has been issued by the local unit of government or the 
161.25 	mining activity is allowed under local ordinance. The disclosure must include a statement 
161.26 	from a registered professional geologist, engineer, or soil scientist delineating the deposit 
161.27 	and certifying that it is a commercial aggregate deposit.
161.28 	For purposes of this section and section 273.1115, "commercial aggregate deposit" 
161.29 	means a deposit that will yield crushed stone or sand and gravel that is suitable for use as 
161.30 	a construction aggregate; and "actively mined" means the removal of top soil and overburden 
161.31 	in preparation for excavation or excavation of a commercial deposit.
161.32 	(n) (m) When any portion of the property under this subdivision or subdivision 22 begins 
161.33 	to be actively mined, the owner must file a supplemental affidavit within 60 days from the 
162.1 	day any aggregate is removed stating the number of acres of the property that is actively 
162.2 	being mined. The acres actively being mined must be (1) valued and classified under 
162.3 	subdivision 24 in the next subsequent assessment year, and (2) removed from the aggregate 
162.4 	resource preservation property tax program under section 273.1115, if the land was enrolled 
162.5 	in that program. Copies of the original affidavit and all supplemental affidavits must be 
162.6 	filed with the county assessor, the local zoning administrator, and the Department of Natural 
162.7 	Resources, Division of Land and Minerals. A supplemental affidavit must be filed each 
162.8 	time a subsequent portion of the property is actively mined, provided that the minimum 
162.9 	acreage change is five acres, even if the actual mining activity constitutes less than five 
162.10 	acres.
162.11 	(o) (n) The definitions prescribed by the commissioner under paragraphs (c) and (d) are 
162.12 	not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions 
162.13 	in section 14.386 concerning exempt rules do not apply.

162.14 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

162.15 	Sec. 22. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 25, is amended 
162.16 	to read:
162.17 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more units 
162.18 	and used or held for use by the owner or by the tenants or lessees of the owner as a residence 
162.19 	for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a 
162.20 	also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt 
162.21 	under section 272.02, and contiguous property used for hospital purposes, without regard 
162.22 	to whether the property has been platted or subdivided. The market value of class 4a property 
162.23 	has a classification rate of 1.25 percent.
162.24 	(b) Class 4b includes:
162.25 	(1) residential real estate containing less than four units that does not qualify as class 
162.26 	4bb, other than seasonal residential recreational property;
162.27 	(2) manufactured homes not classified under any other provision;
162.28 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm 
162.29 	classified under subdivision 23, paragraph (b) containing two or three units; and
162.30 	(4) unimproved property that is classified residential as determined under subdivision 
162.31 	33.
162.32 	The market value of class 4b property has a classification rate of 1.25 percent.
163.1 	(c) Class 4bb includes:
163.2 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
163.3 	residential recreational property;
163.4 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
163.5 	nonhomestead farm classified under subdivision 23, paragraph (b); and
163.6 	(3) a condominium-type storage unit having an individual property identification number 
163.7 	that is not used for a commercial purpose.
163.8 	Class 4bb property has the same classification rates as class 1a property under subdivision 
163.9 	22.
163.10 	Property that has been classified as seasonal residential recreational property at any time 
163.11 	during which it has been owned by the current owner or spouse of the current owner does 
163.12 	not qualify for class 4bb.
163.13 	(d) Class 4c property includes: (1) except as provided in subdivision 22, paragraph (c),
163.14 	real and personal property devoted to commercial temporary and seasonal residential 
163.15 	occupancy for recreation purposes, for not more than 250 days in the year preceding the 
163.16 	year of assessment. For purposes of this clause paragraph, property is devoted to a 
163.17 	commercial purpose on a specific day if any portion of the property is used for residential 
163.18 	occupancy, and a fee is charged for residential occupancy. Class 4c 4b property under this 
163.19 	clause paragraph must contain three or more rental units. A "rental unit" is defined as a 
163.20 	cabin, condominium, townhouse, sleeping room, or individual camping site equipped with 
163.21 	water and electrical hookups for recreational vehicles. A camping pad offered for rent by 
163.22 	a property that otherwise qualifies for class 4c 4b under this clause is also class 4c under 
163.23 	this clause paragraph regardless of the term of the rental agreement, as long as the use of 
163.24 	the camping pad does not exceed 250 days. In order for a property to be classified under 
163.25 	this clause, either (i) the business located on the property must provide recreational activities, 
163.26 	at least 40 percent of the annual gross lodging receipts related to the property must be from 
163.27 	business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid 
163.28 	bookings by lodging guests during the year must be for periods of at least two consecutive 
163.29 	nights; or (B) at least 20 percent of the annual gross receipts must be from charges for 
163.30 	providing recreational activities, or (ii) the business must contain 20 or fewer rental units, 
163.31 	and must be located in a township or a city with a population of 2,500 or less located outside 
163.32 	the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion 
163.33 	of a state trail administered by the Department of Natural Resources. For purposes of item 
163.34 	(i)(A), a paid booking of five or more nights shall be counted as two bookings. Class 4c 4b
164.1 	property also includes commercial use real property used exclusively for recreational 
164.2 	purposes in conjunction with other class 4c 4b property classified under this clause paragraph
164.3 	and devoted to temporary and seasonal residential occupancy for recreational purposes, up 
164.4 	to a total of two acres, provided the property is not devoted to commercial recreational use 
164.5 	for more than 250 days in the year preceding the year of assessment and is located within 
164.6 	two miles of the class 4c 4b property with which it is used. In order for a property to qualify 
164.7 	for classification under this clause paragraph, the owner must submit a declaration to the 
164.8 	assessor designating the cabins or units occupied for 250 days or less in the year preceding 
164.9 	the year of assessment by January 15 of the assessment year. Those cabins or units and a 
164.10 	proportionate share of the land on which they are located must be designated class 4c 4b
164.11 	under this clause paragraph as otherwise provided. The remainder of the cabins or units and 
164.12 	a proportionate share of the land on which they are located will be designated as class 3a. 
164.13 	The owner of property desiring designation as class 4c 4b property under this clause
164.14 	paragraph must provide guest registers or other records demonstrating that the units for 
164.15 	which class 4c 4b designation is sought were not occupied for more than 250 days in the 
164.16 	year preceding the assessment if so requested. The portion of a property operated as a (1) 
164.17 	restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other 
164.18 	nonresidential facility operated on a commercial basis not directly related to temporary and 
164.19 	seasonal residential occupancy for recreation purposes does not qualify for class 4c 4b. For 
164.20 	the purposes of this paragraph paragraphs (b) to (d), "recreational activities" means renting 
164.21 	ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; 
164.22 	providing marina services, launch services, or guide services; or selling bait and fishing 
164.23 	tackle;.
164.24 	(c) Class 4b(1) property is property that (1) meets the requirements of class 4b in 
164.25 	paragraph (b); (2) abuts public water as defined in section 103G.005, subdivision 15, or 
164.26 	abuts a state trail administered by the Department of Natural Resources; and (3) includes a 
164.27 	portion used as a homestead by the owner, or occupied as a homestead by a shareholder of 
164.28 	a corporation that owns the resort, a partner in a partnership that owns the resort, or a member 
164.29 	of a limited liability company that owns the resort whether the title to the homestead is held 
164.30 	by the corporation, partnership, or limited liability company, or by a shareholder of a 
164.31 	corporation that owns the resort, a partner in a partnership that owns the resort, or a member 
164.32 	of a limited liability company that owns the resort. Any unit in which the right to use the 
164.33 	property is transferred to an individual or entity by deeded interest, or the sale of shares or 
164.34 	stock, no longer qualifies for class 4b(1) even though it may remain available for rent. If 
164.35 	the same owner owns two separate parcels that are located in the same township, and one 
164.36 	of those properties is classified as a class 4b(1) property and the other would be eligible to 
165.1 	be classified as a class 4b(1) property if it was used as the homestead of the owner, both 
165.2 	properties will be assessed as a single class 4b(1) property; for purposes of this sentence, 
165.3 	properties are deemed to be owned by the same owner if each of them is owned by a limited 
165.4 	liability company, and both limited liability companies have the same membership. The 
165.5 	first $600,000 of market value is tier I, with a class rate of 0.5 percent; the next $1,700,000 
165.6 	of market value is tier II, with a class rate of one percent; and any remaining value is tier 
165.7 	III, with a class rate of 1.25 percent. The portion of the property used as a homestead is 
165.8 	class 1 under subdivision 22.
165.9 	(d) Class 4b(2) is property that does not qualify as class 4b(1) but meets the requirements 
165.10 	of class 4b in paragraph (b), and either: (1) the business located on the property provides 
165.11 	recreational activities, at least 40 percent of the annual gross lodging receipts are from 
165.12 	business conducted during 90 consecutive days, and either (i) at least 60 percent of all paid 
165.13 	bookings by lodging guests during the year are for periods of at least two consecutive nights; 
165.14 	or (ii) at least 20 percent of the annual gross receipts are from charges for providing 
165.15 	recreational activities; (2) the business contains 20 or fewer rental units, and is located in 
165.16 	a township or a city with a population of 2,500 or less located outside the metropolitan area, 
165.17 	as defined under section 473.121, subdivision 2, that contains a portion of a state trail 
165.18 	administered by the Department of Natural Resources; or (3) the facility must consist of no 
165.19 	more than five sleeping rooms and must provide an area or areas to prepare meals and to 
165.20 	conduct indoor craft or hobby activities. For purposes of item (1)(i), a paid booking of five 
165.21 	or more nights shall be counted as two bookings. Class 4b(2) property has a class rate of 
165.22 	one percent on the first $500,000 of market value and 1.25 percent on the portion over 
165.23 	$500,000.
165.24 	(2) (e) Class 4c property is (1) real property that is actively and exclusively devoted to 
165.25 	indoor fitness, health, social, recreational, and related uses, is owned and operated by a 
165.26 	not-for-profit corporation, and is located within the metropolitan area as defined in section 
165.27 	473.121, subdivision 2; or (2) qualified property used as a golf course if:
165.28 	(i) it is open to the public on a daily fee basis. It may charge membership fees or dues, 
165.29 	but a membership fee may not be required in order to use the property for golfing, and its 
165.30 	green fees for golfing must be comparable to green fees typically charged by municipal 
165.31 	courses; and
165.32 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
165.33 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with 
165.34 	the golf course is classified as class 3a property;.
166.1 	Class 4c property has a class rate of 1.25 percent.
166.2 	(3)(f) Class 4d property is real property up to a maximum of three acres of land owned 
166.3 	and used by a nonprofit community service oriented organization and not used for residential 
166.4 	purposes on either a temporary or permanent basis, provided that:
166.5 	(i) (1) the property is not used for a revenue-producing activity for more than six days 
166.6 	in the calendar year preceding the year of assessment; or
166.7 	(ii) (2) the organization makes annual charitable contributions and donations at least 
166.8 	equal to the property's previous year's property taxes and the property is allowed to be used 
166.9 	for public and community meetings or events for no charge, as appropriate to the size of 
166.10 	the facility.
166.11 	For purposes of this clause paragraph:
166.12 	(A) (i) "charitable contributions and donations" has the same meaning as lawful gambling 
166.13 	purposes under section 349.12, subdivision 25, excluding those purposes relating to the 
166.14 	payment of taxes, assessments, fees, auditing costs, and utility payments;
166.15 	(B) (ii) "property taxes" excludes the state general tax;
166.16 	(C) (iii) a "nonprofit community service oriented organization" means any corporation, 
166.17 	society, association, foundation, or institution organized and operated exclusively for 
166.18 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
166.19 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
166.20 	Revenue Code; and
166.21 	(D) (iv) "revenue-producing activities" shall include but not be limited to property or 
166.22 	that portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
166.23 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
166.24 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
166.25 	insurance business, or office or other space leased or rented to a lessee who conducts a 
166.26 	for-profit enterprise on the premises.
166.27 	Any portion of the property not qualifying under either item (i)clause (1) or (ii)(2) is 
166.28 	class 3a. The use of the property for social events open exclusively to members and their 
166.29 	guests for periods of less than 24 hours, when an admission is not charged nor any revenues 
166.30 	are received by the organization shall not be considered a revenue-producing activity.
166.31 	The organization shall maintain records of its charitable contributions and donations 
166.32 	and of public meetings and events held on the property and make them available upon 
166.33 	request any time to the assessor to ensure eligibility. An organization meeting the requirement 
167.1 	under item (ii) clause (2) must file an application by May 1 with the assessor for eligibility 
167.2 	for the current year's assessment. The commissioner shall prescribe a uniform application 
167.3 	form and instructions;.
167.4 	Class 4d property has a class rate of 1.5 percent, except that class 4d property owned or 
167.5 	operated by a congressionally chartered veterans organization has a classification rate of 
167.6 	one percent. The commissioner of veterans affairs must provide a list of congressionally 
167.7 	chartered veterans organizations to the commissioner of revenue by January 1, 2018, and 
167.8 	each year thereafter.
167.9 	(4) postsecondary student housing of not more than one acre of land that is owned by a 
167.10 	nonprofit corporation organized under chapter 317A and is used exclusively by a student 
167.11 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
167.12 	miles of the border of a college campus;
167.13 	(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding 
167.14 	manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as 
167.15 	defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision 
167.16 	3a, and (iii) class I manufactured home parks as defined in section 327C.01, subdivision 
167.17 	13;
167.18 	(6) real property that is actively and exclusively devoted to indoor fitness, health, social, 
167.19 	recreational, and related uses, is owned and operated by a not-for-profit corporation, and is 
167.20 	located within the metropolitan area as defined in section 473.121, subdivision 2;
167.21 	(7) a(g) Class 4e property is (1) leased or privately owned noncommercial aircraft 
167.22 	storage hangar not exempt under section 272.01, subdivision 2, and the land on which it is 
167.23 	located, provided that:
167.24 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
167.25 	Airports Commission, or group thereof; and
167.26 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased 
167.27 	premise, prohibits commercial activity performed at the hangar.; or
167.28 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be 
167.29 	filed by the new owner with the assessor of the county where the property is located within 
167.30 	60 days of the sale;
167.31 	(8)(2) a privately owned noncommercial aircraft storage hangar not exempt under section 
167.32 	272.01, subdivision 2, and the land on which it is located, provided that:
167.33 	(i) the land abuts a public airport; and
168.1 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement 
168.2 	restricting the use of the premises, prohibiting commercial use or activity performed at the 
168.3 	hangar; and.
168.4 	Class 4e property has a class rate of 1.5 percent.
168.5 	If a hangar classified under clause (1), item (i), is sold after June 30, 2000, a bill of sale 
168.6 	must be filed by the new owner with the assessor of the county where the property is located 
168.7 	within 60 days of the sale.
168.8 	(9) residential real estate, a portion of which is used by the owner for homestead purposes, 
168.9 	and that is also a place of lodging, if all of the following criteria are met:
168.10 	(i) rooms are provided for rent to transient guests that generally stay for periods of 14 
168.11 	or fewer days;
168.12 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated in 
168.13 	the basic room rate;
168.14 	(iii) meals are not provided to the general public except for special events on fewer than 
168.15 	seven days in the calendar year preceding the year of the assessment; and
168.16 	(iv) the owner is the operator of the property.
168.17 	The market value subject to the 4c classification under this clause is limited to five rental 
168.18 	units. Any rental units on the property in excess of five, must be valued and assessed as 
168.19 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
168.20 	be classified as class 1a property under subdivision 22;
168.21 	(10) (h) Class 4f property is real property up to a maximum of three acres and operated 
168.22 	as a restaurant as defined under section 157.15, subdivision 12, provided it: (i) (1) is located 
168.23 	on a lake as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and 
168.24 	(ii) (2) is either devoted to commercial purposes for not more than 250 consecutive days, 
168.25 	or receives at least 60 percent of its annual gross receipts from business conducted during 
168.26 	four consecutive months. Gross receipts from the sale of alcoholic beverages must be 
168.27 	included in determining the property's qualification under item (ii) clause (2). The property's 
168.28 	primary business must be as a restaurant and not as a bar. Gross receipts from gift shop 
168.29 	sales located on the premises must be excluded. Owners of real property desiring 4c
168.30 	classification under this clause paragraph must submit an annual declaration to the assessor 
168.31 	by February 1 of the current assessment year, based on the property's relevant information 
168.32 	for the preceding assessment year;. Class 4f has a class rate of 1.25 percent.
169.1 	(11) (i) Class 4g property is lakeshore and riparian property and adjacent land, not to 
169.2 	exceed six acres, used as a marina, as defined in section 86A.20, subdivision 5, which is 
169.3 	made accessible to the public and devoted to recreational use for marina services. The marina 
169.4 	owner must annually provide evidence to the assessor that it provides services, including 
169.5 	lake or river access to the public by means of an access ramp or other facility that is either 
169.6 	located on the property of the marina or at a publicly owned site that abuts the property of 
169.7 	the marina. No more than 800 feet of lakeshore may be included in this classification. 
169.8 	Buildings used in conjunction with a marina for marina services, including but not limited 
169.9 	to buildings used to provide food and beverage services, fuel, boat repairs, or the sale of 
169.10 	bait or fishing tackle, are classified as class 3a property; and. Class 4g property has a class 
169.11 	rate of one percent on the first $500,000 of market value and 1.25 percent on the portion 
169.12 	over $500,000.
169.13 	(12) (j) Class 4h property is real and personal property devoted to noncommercial 
169.14 	temporary and seasonal residential occupancy for recreation purposes. Class 4h property 
169.15 	has a class rate of one percent on the first $500,000 of market value and 1.25 percent on 
169.16 	the portion over $500,000.
169.17 	Class 4c property has a classification rate of 1.5 percent of market value, except that (i) 
169.18 	each parcel of noncommercial seasonal residential recreational property under clause (12) 
169.19 	has the same classification rates as class 4bb property, (ii) manufactured home parks assessed 
169.20 	under clause (5), item (i), have the same classification rate as class 4b property, the market 
169.21 	value of manufactured home parks assessed under clause (5), item (ii), have a classification 
169.22 	rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by 
169.23 	shareholders in the cooperative corporation or association and a classification rate of one 
169.24 	percent if 50 percent or less of the lots are so occupied, and class I manufactured home 
169.25 	parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent, 
169.26 	(iii) commercial-use seasonal residential recreational property and marina recreational land 
169.27 	as described in clause (11), has a classification rate of one percent for the first $500,000 of 
169.28 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
169.29 	property described in clause (4) has a classification rate of one percent, (v) the market value 
169.30 	of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent, 
169.31 	(vi) that portion of the market value of property in clause (9) qualifying for class 4c property 
169.32 	has a classification rate of 1.25 percent, and (vii) property qualifying for classification under 
169.33 	clause (3) that is owned or operated by a congressionally chartered veterans organization 
169.34 	has a classification rate of one percent. The commissioner of veterans affairs must provide 
170.1 	a list of congressionally chartered veterans organizations to the commissioner of revenue 
170.2 	by June 30, 2017, and by January 1, 2018, and each year thereafter.
170.3 	(e) (k) Class 4d 4i property is qualifying low-income rental housing certified to the 
170.4 	assessor by the Housing Finance Agency under section 273.128, subdivision 3. If only a 
170.5 	portion of the units in the building qualify as low-income rental housing units as certified 
170.6 	under section 273.128, subdivision 3, only the proportion of qualifying units to the total 
170.7 	number of units in the building qualify for class 4d 4i. The remaining portion of the building 
170.8 	shall be classified by the assessor based upon its use. Class 4d 4i also includes the same 
170.9 	proportion of land as the qualifying low-income rental housing units are to the total units 
170.10 	in the building. For all properties qualifying as class 4d 4i, the market value determined by 
170.11 	the assessor must be based on the normal approach to value using normal unrestricted rents.
170.12 	(f) (l) The first tier of market value of class 4d 4i property has a classification rate of 
170.13 	0.75 percent. The remaining value of class 4d 4i property has a classification rate of 0.25 
170.14 	percent. For the purposes of this paragraph, the "first tier of market value of class 4d 4i
170.15 	property" means the market value of each housing unit up to the first tier limit. For the 
170.16 	purposes of this paragraph, all class 4d 4i property value must be assigned to individual 
170.17 	housing units. The first tier limit is $100,000 for assessment year 2014. For subsequent 
170.18 	years, the limit is adjusted each year by the average statewide change in estimated market 
170.19 	value of property classified as class 4a and 4d 4i under this section for the previous 
170.20 	assessment year, excluding valuation change due to new construction, rounded to the nearest 
170.21 	$1,000, provided, however, that the limit may never be less than $100,000. Beginning with 
170.22 	assessment year 2015, the commissioner of revenue must certify the limit for each assessment 
170.23 	year by November 1 of the previous year.

170.24 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

170.25 	Sec. 23. Minnesota Statutes 2016, section 273.13, subdivision 35, is amended to read:
170.26 		Subd. 35.Homestead market value exclusion. (a) Prior to determining a property's 
170.27 	net tax capacity under this section, homestead property classified as class 1a or 1b 1 under 
170.28 	subdivision 22, and the portion of property classified as class 2a under subdivision 23 
170.29 	consisting of the house, garage, and surrounding one acre of land, shall be eligible for a 
170.30 	market value exclusion as determined under paragraph (b).
170.31 	(b) For a homestead valued at $76,000 or less, the exclusion is 40 percent of market 
170.32 	value. For a homestead valued between $76,000 and $413,800, the exclusion is $30,400 
170.33 	minus nine percent of the valuation over $76,000. For a homestead valued at $413,800 or 
171.1 	more, there is no valuation exclusion. The valuation exclusion shall be rounded to the nearest 
171.2 	whole dollar, and may not be less than zero.
171.3 	(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior 
171.4 	to determining the amount of the valuation exclusion under this subdivision.
171.5 	(d) In the case of a property that is classified as part homestead and part nonhomestead, 
171.6 	(i) the exclusion shall apply only to the homestead portion of the property, but (ii) if a portion 
171.7 	of a property is classified as nonhomestead solely because not all the owners occupy the 
171.8 	property, not all the owners have qualifying relatives occupying the property, or solely 
171.9 	because not all the spouses of owners occupy the property, the exclusion amount shall be 
171.10 	initially computed as if that nonhomestead portion were also in the homestead class and 
171.11 	then prorated to the owner-occupant's percentage of ownership. For the purpose of this 
171.12 	section, when an owner-occupant's spouse does not occupy the property, the percentage of 
171.13 	ownership for the owner-occupant spouse is one-half of the couple's ownership percentage.

171.14 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

171.15 	Sec. 24. Minnesota Statutes 2016, section 273.13, is amended by adding a subdivision to 
171.16 	read:
171.17 		Subd. 36.Clarification of residential classification. Class 1 property under subdivision 
171.18 	22 includes the following types of property, which are not required to be recorded separately 
171.19 	by the assessor:
171.20 	(1) residential structures containing fewer than four dwelling units plus one acre of land 
171.21 	for each structure located on agricultural land, but excluding any farm buildings or structures 
171.22 	located on the acre of land;
171.23 	(2) unimproved property that is classified residential as determined under subdivision 
171.24 	33;
171.25 	(3) manufactured home park land along with any ancillary structures;
171.26 	(4) manufactured homes not classified under any other provision;
171.27 	(5) postsecondary student housing of not more than one acre of land that is owned by a 
171.28 	nonprofit corporation organized under chapter 317A and is used exclusively by a student 
171.29 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
171.30 	miles of the border of a college campus;
171.31 	(6) an owner-occupied dwelling unit within a property classified as class 4a under 
171.32 	subdivision 25;
172.1 	(7) a condominium-type storage unit having an individual property identification number 
172.2 	that is not used for a commercial purpose;
172.3 	(8) structures on property classified as agricultural under section 273.13, subdivision 
172.4 	23, that are occupied exclusively by seasonal farm workers during the time when they work 
172.5 	on the farm, provided that use of the structures for storage of farm equipment or produce 
172.6 	does not disqualify the structures from classification under this clause, and further provided 
172.7 	that:
172.8 	(i) the occupants are not charged rent for the privilege of occupying the property;
172.9 	(ii) the structures meet all applicable health and safety requirements for the appropriate 
172.10 	season; and
172.11 	(iii) the structures are not salable as residential property because they do not comply 
172.12 	with local ordinances relating to location in relation to streets or roads; and
172.13 	(9) residential real estate, a portion of which is occupied by the owner, plus up to five 
172.14 	additional lodging units, if all of the following criteria are met:
172.15 	(i) the lodging units are provided for rent to transient guests that generally stay for periods 
172.16 	of 14 days or less;
172.17 	(ii) meals are provided to persons who rent lodging units, the cost of which is incorporated 
172.18 	in the basic room rate;
172.19 	(iii) meals are not provided to the general public except for special events on less than 
172.20 	seven days in the calendar year preceding the year of assessment; and
172.21 	(iv) the owner is the operator of the property.
172.22 	Any additional lodging units in a property described in clause (9) are class 3a.

172.23 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

172.24 	Sec. 25. Minnesota Statutes 2017 Supplement, section 274.01, subdivision 1, is amended 
172.25 	to read:
172.26 		Subdivision 1.Ordinary board; meetings, deadlines, grievances. (a) The town board 
172.27 	of a town, or the council or other governing body of a city, is the local board of appeal and 
172.28 	equalization except (1) in cities whose charters provide for a board of equalization or (2) 
172.29 	in any city or town that has transferred its local board of review power and duties to the 
172.30 	county board as provided in subdivision 3. The county assessor shall fix a day and time 
172.31 	when the local board of equalization shall meet in the assessment districts of the county. 
173.1 	Notwithstanding any law or city charter to the contrary, a city board of equalization shall 
173.2 	be referred to as a local board of appeal and equalization. On or before February 15 March 
173.3 	1 of each year the assessor shall give written notice of the time to the city or town clerk. 
173.4 	Notwithstanding the provisions of any charter to the contrary, the meetings must be held 
173.5 	between April 1 and May 31 June 1 each year. The clerk shall give published and posted 
173.6 	notice of the meeting at least ten days before the date of the meeting.
173.7 	The board shall meet either at a central location within the county or at the office of the 
173.8 	clerk to review the assessment and classification of property in the town or city. No changes 
173.9 	in valuation or classification which are intended to correct errors in judgment by the county 
173.10 	assessor may be made by the county assessor after the board has adjourned in those cities 
173.11 	or towns that hold a local board of review; however, corrections of errors that are merely 
173.12 	clerical in nature or changes that extend homestead treatment to property are permitted after 
173.13 	adjournment until the tax extension date for that assessment year. The changes must be fully 
173.14 	documented and maintained in the assessor's office and must be available for review by any 
173.15 	person. A copy of the changes made during this period in those cities or towns that hold a 
173.16 	local board of review must be sent to the county board no later than December 31 of the 
173.17 	assessment year.
173.18 	(b) The board shall determine whether the taxable property in the town or city has been 
173.19 	properly placed on the list and properly valued by the assessor. If real or personal property 
173.20 	has been omitted, the board shall place it on the list with its market value, and correct the 
173.21 	assessment so that each tract or lot of real property, and each article, parcel, or class of 
173.22 	personal property, is entered on the assessment list at its market value. No assessment of 
173.23 	the property of any person may be raised unless the person has been duly notified of the 
173.24 	intent of the board to do so. On application of any person feeling aggrieved, the board shall 
173.25 	review the assessment or classification, or both, and correct it as appears just. The board 
173.26 	may not make an individual market value adjustment or classification change that would 
173.27 	benefit the property if the owner or other person having control over the property has refused 
173.28 	the assessor access to inspect the property and the interior of any buildings or structures as 
173.29 	provided in section 273.20. A board member shall not participate in any actions of the board 
173.30 	which result in market value adjustments or classification changes to property owned by 
173.31 	the board member, the spouse, parent, stepparent, child, stepchild, grandparent, grandchild, 
173.32 	brother, sister, uncle, aunt, nephew, or niece of a board member, or property in which a 
173.33 	board member has a financial interest. The relationship may be by blood or marriage.
173.34 	(c) A local board may reduce assessments upon petition of the taxpayer but the total 
173.35 	reductions must not reduce the aggregate assessment made by the county assessor by more 
174.1 	than one percent. If the total reductions would lower the aggregate assessments made by 
174.2 	the county assessor by more than one percent, none of the adjustments may be made. The 
174.3 	assessor shall correct any clerical errors or double assessments discovered by the board 
174.4 	without regard to the one percent limitation.
174.5 	(d) A local board does not have authority to grant an exemption or to order property 
174.6 	removed from the tax rolls.
174.7 	(e) A majority of the members may act at the meeting, and adjourn from day to day until 
174.8 	they finish hearing the cases presented. The assessor shall attend and take part in the 
174.9 	proceedings, but must not vote. The county assessor, or an assistant delegated by the county 
174.10 	assessor shall attend the meetings. The board shall list separately all omitted property added 
174.11 	to the list by the board and all items of property increased or decreased, with the market 
174.12 	value of each item of property, added or changed by the board. The county assessor shall 
174.13 	enter all changes made by the board.
174.14 	(f) Except as provided in subdivision 3, if a person fails to appear in person, by counsel, 
174.15 	or by written communication before the board after being duly notified of the board's intent 
174.16 	to raise the assessment of the property, or if a person feeling aggrieved by an assessment 
174.17 	or classification fails to apply for a review of the assessment or classification, the person 
174.18 	may not appear before the county board of appeal and equalization for a review. This 
174.19 	paragraph does not apply if an assessment was made after the local board meeting, as 
174.20 	provided in section 273.01, or if the person can establish not having received notice of 
174.21 	market value at least five days before the local board meeting.
174.22 	(g) The local board must complete its work and adjourn within 20 days from the time 
174.23 	of convening stated in the notice of the clerk, unless a longer period is approved by the 
174.24 	commissioner of revenue. No action taken after that date is valid. All complaints about an 
174.25 	assessment or classification made after the meeting of the board must be heard and 
174.26 	determined by the county board of equalization. A nonresident may, at any time, before the 
174.27 	meeting of the board file written objections to an assessment or classification with the county 
174.28 	assessor. The objections must be presented to the board at its meeting by the county assessor 
174.29 	for its consideration.

174.30 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

174.31 	Sec. 26. Minnesota Statutes 2016, section 275.025, subdivision 3, is amended to read:
174.32 		Subd. 3.Seasonal residential recreational tax capacity. For the purposes of this section, 
174.33 	"seasonal residential recreational tax capacity" means the tax capacity of tier III of class 1c 
175.1 	under section 273.13, subdivision 22 4b(1), and all class 4c(1), 4c(3)(ii), and 4c(12) 4b(2), 
175.2 	4d(2), and 4h property under section 273.13, subdivision 25 273.13, except that the first 
175.3 	$76,000 of market value of each noncommercial class 4c(12) 4h property has a tax capacity 
175.4 	for this purpose equal to 40 percent of its tax capacity under section 273.13.

175.5 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

175.6 	Sec. 27. Minnesota Statutes 2017 Supplement, section 276.04, subdivision 3, is amended 
175.7 	to read:
175.8 		Subd. 3.Mailing of tax statements. The county treasurer shall mail to taxpayers 
175.9 	statements of their personal property taxes due not later than March 31 April 1, except in 
175.10 	the case of manufactured homes and sectional structures taxed as personal property. 
175.11 	Statements of the real property taxes due shall be mailed not later than March 31 April 1. 
175.12 	The validity of the tax shall not be affected by failure of the treasurer to mail the statement. 
175.13 	The taxpayer is defined as the owner who is responsible for the payment of the tax.

175.14 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

175.15 	Sec. 28. Minnesota Statutes 2016, section 276A.01, subdivision 4, is amended to read:
175.16 		Subd. 4.Residential property. "Residential property" means the following categories 
175.17 	of property, as defined in section 273.13, excluding that portion of the property that is 
175.18 	exempt from taxation pursuant to section 272.02:
175.19 	(1) class 1a, 1b, and 2a 1 property, limited to the homestead dwelling, a garage, and the 
175.20 	one acre of land on which the dwelling is located;
175.21 	(2) that portion of class 3 property used exclusively for residential occupancy; and
175.22 	(3) property valued and assessed as class 4a or 4i under section 273.13, subdivision 25, 
175.23 	except for hospitals and property valued and assessed under section 273.13, subdivision 25, 
175.24 	paragraph (d), clauses (1) and (3).

175.25 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

175.26 	Sec. 29. Minnesota Statutes 2017 Supplement, section 278.01, subdivision 1, is amended 
175.27 	to read:
175.28 		Subdivision 1.Determination of validity. (a) Any person having personal property, or 
175.29 	any estate, right, title, or interest in or lien upon any parcel of land, who claims that such 
175.30 	property has been partially, unfairly, or unequally assessed in comparison with other property 
175.31 	in the (1) city, or (2) county, or (3) in the case of a county containing a city of the first class, 
176.1 	the portion of the county excluding the first class city, or that the parcel has been assessed 
176.2 	at a valuation greater than its real or actual value, or that the tax levied against the same is 
176.3 	illegal, in whole or in part, or has been paid, or that the property is exempt from the tax so 
176.4 	levied, may have the validity of the claim, defense, or objection determined by the district 
176.5 	court of the county in which the tax is levied or by the Tax Court by serving one copy of a 
176.6 	petition for such determination upon the county auditor, one copy on the county attorney, 
176.7 	one copy on the county treasurer, and three copies on the county assessor. The county 
176.8 	assessor shall immediately forward one copy of the petition to the appropriate governmental 
176.9 	authority in a home rule charter or statutory city or town in which the property is located if 
176.10 	that city or town employs its own certified assessor. A copy of the petition shall also be 
176.11 	forwarded by the assessor to the school board of the school district in which the property 
176.12 	is located.
176.13 	(b) In counties where the office of county treasurer has been combined with the office 
176.14 	of county auditor, the county may elect to require the petitioner to serve the number of 
176.15 	copies as determined by the county. The county assessor shall immediately forward one 
176.16 	copy of the petition to the appropriate governmental authority in a home rule charter or 
176.17 	statutory city or town in which the property is located if that city or town employs its own 
176.18 	certified assessor. A list of petitioned properties, including the name of the petitioner, the 
176.19 	identification number of the property, and the estimated market value, shall be sent on or 
176.20 	before the first day of July by the county auditor/treasurer to the school board of the school 
176.21 	district in which the property is located.
176.22 	(c) For all counties, the petitioner must file the copies with proof of service, in the office 
176.23 	of the court administrator of the district court on or before April 30 May 1 of the year in 
176.24 	which the tax becomes payable. A petition for determination under this section may be 
176.25 	transferred by the district court to the Tax Court. An appeal may also be taken to the Tax 
176.26 	Court under chapter 271 at any time following receipt of the valuation notice that county 
176.27 	assessors or city assessors having the powers of a county assessor are required by section 
176.28 	273.121 to send to persons whose property is to be included on the assessment roll that year, 
176.29 	but prior to May 1 of the year in which the taxes are payable.

176.30 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

176.31 	Sec. 30. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 13, is amended 
176.32 	to read:
176.33 		Subd. 13.Property taxes payable. "Property taxes payable" means the property tax 
176.34 	exclusive of special assessments, penalties, and interest payable on a claimant's homestead 
177.1 	after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, 
177.2 	and any other state paid property tax credits in any calendar year, and after any refund 
177.3 	claimed and allowable under section 290A.04, subdivision 2h or 2k, that is first payable in 
177.4 	the year that the property tax is payable. In the case of a claimant who makes ground lease 
177.5 	payments, "property taxes payable" includes the amount of the payments directly attributable 
177.6 	to the property taxes assessed against the parcel on which the house is located. Regardless 
177.7 	of the limitations in section 280A(c)(5) of the Internal Revenue Code, "property taxes 
177.8 	payable" must be apportioned or reduced for the use of a portion of the claimant's homestead 
177.9 	for a business purpose if the claimant deducts any business depreciation expenses for the 
177.10 	use of a portion of the homestead or deducts expenses under section 280A of the Internal 
177.11 	Revenue Code for a business operated in the claimant's homestead. For homesteads which 
177.12 	are manufactured homes as defined in section 273.125, subdivision 8, and for homesteads 
177.13 	which are including manufactured homes located in a manufactured home community owned 
177.14 	by a cooperative organized under chapter 308A or 308B, and park trailers taxed as 
177.15 	manufactured homes under section 168.012, subdivision 9, "property taxes payable" shall 
177.16 	also include 17 percent of the gross rent paid in the preceding year for the site on which the 
177.17 	homestead is located. When a homestead is owned by two or more persons as joint tenants 
177.18 	or tenants in common, such tenants shall determine between them which tenant may claim 
177.19 	the property taxes payable on the homestead. If they are unable to agree, the matter shall 
177.20 	be referred to the commissioner of revenue whose decision shall be final. Property taxes 
177.21 	are considered payable in the year prescribed by law for payment of the taxes.
177.22 	In the case of a claim relating to "property taxes payable," the claimant must have owned 
177.23 	and occupied the homestead on January 2 of the year in which the tax is payable and (i) the 
177.24 	property must have been classified as homestead property pursuant to section 273.124, on 
177.25 	or before December 15 of the assessment year to which the "property taxes payable" relate; 
177.26 	or (ii) the claimant must provide documentation from the local assessor that application for 
177.27 	homestead classification has been made on or before December 15 of the year in which the 
177.28 	"property taxes payable" were payable and that the assessor has approved the application.

177.29 	EFFECTIVE DATE. This section is effective beginning with claims based on taxes 
177.30 	payable in 2020.

177.31 	Sec. 31. Minnesota Statutes 2016, section 290A.04, subdivision 2h, is amended to read:
177.32 		Subd. 2h.Additional refund. (a) If the gross property taxes payable on a homestead, 
177.33 	net of any refund under subdivision 2k, increase more than 12 percent over the property 
177.34 	taxes payable in the prior year on the same property that is owned and occupied by the same 
178.1 	owner on January 2 of both years, and the amount of that increase is $100 or more, a claimant 
178.2 	who is a homeowner shall be allowed an additional refund equal to 60 percent of the amount 
178.3 	of the increase over the greater of 12 percent of the prior year's property taxes payable or 
178.4 	$100. This subdivision shall not apply to any increase in the gross property taxes payable 
178.5 	attributable to improvements made to the homestead after the assessment date for the prior 
178.6 	year's taxes. This subdivision shall not apply to any increase in the gross property taxes 
178.7 	payable attributable to the termination of valuation exclusions under section 273.11, 
178.8 	subdivision 16.
178.9 	The maximum refund allowed under this subdivision is $1,000.
178.10 	(b) For purposes of this subdivision "gross property taxes payable" means property taxes 
178.11 	payable determined without regard to the refund allowed under this subdivision.
178.12 	(c) In addition to the other proofs required by this chapter, each claimant under this 
178.13 	subdivision shall file with the property tax refund return a copy of the property tax statement 
178.14 	for taxes payable in the preceding year or other documents required by the commissioner.
178.15 	(d) Upon request, the appropriate county official shall make available the names and 
178.16 	addresses of the property taxpayers who may be eligible for the additional property tax 
178.17 	refund under this section. The information shall be provided on a magnetic computer disk. 
178.18 	The county may recover its costs by charging the person requesting the information the 
178.19 	reasonable cost for preparing the data. The information may not be used for any purpose 
178.20 	other than for notifying the homeowner of potential eligibility and assisting the homeowner, 
178.21 	without charge, in preparing a refund claim.

178.22 	EFFECTIVE DATE. This section is effective beginning with claims based on taxes 
178.23 	payable in 2020.

178.24 	Sec. 32. Minnesota Statutes 2016, section 290A.04, is amended by adding a subdivision 
178.25 	to read:
178.26 		Subd. 2k.Additional refund for homeowners who are blind or disabled. (a) A 
178.27 	homeowner who is blind or disabled or whose spouse is blind or disabled is eligible for an 
178.28 	additional refund equal to 0.9 percent of the property's taxable market value, but not to 
178.29 	exceed $425. For the purposes of this subdivision, "blind or disabled" means a person who 
178.30 	is:
178.31 	(1) blind as defined in section 256D.35;
178.32 	(2) permanently and totally disabled; or
179.1 	(3) the surviving spouse of a veteran who was permanently and totally disabled and who 
179.2 	homesteaded a property classified 1b under Minnesota Statutes 2016, section 273.13, 
179.3 	subdivision 22, for taxes payable in 2008, provided that the surviving spouse continues to 
179.4 	homestead the same property as in 2008.
179.5 	(b) A person qualifies under paragraph (a), clause (2), only if the government agency 
179.6 	or income-providing source certifies that the person satisfies the disability requirements of 
179.7 	paragraph (d). An owner of property qualifying for the valuation exclusion under section 
179.8 	273.13, subdivision 34, is not eligible for the refund under this subdivision.
179.9 	(c) The commissioner of revenue may require an applicant who has not previously 
179.10 	received a refund under this subdivision to submit whatever documentation is required to 
179.11 	determine eligibility under this subdivision. The application and any supplementary 
179.12 	information received from the property owner pursuant to this subdivision shall be subject 
179.13 	to chapter 270B. An applicant who has previously received refunds under this subdivision 
179.14 	is not required to submit proof of eligibility, except that the applicant may be required to 
179.15 	affirmatively state that no change in eligibility status has occurred.
179.16 	(d) "Permanently and totally disabled" for the purpose of this subdivision means a 
179.17 	condition that is permanent in nature and totally incapacitates the person from working at 
179.18 	an occupation that brings the person an income.
179.19 	(e) An applicant whose homestead qualified for class 1b under Minnesota Statutes 2016, 
179.20 	section 273.13, subdivision 22, for assessment year 2017 due to the applicant's disability is 
179.21 	automatically eligible for a refund under this section.

179.22 	EFFECTIVE DATE. This section is effective beginning with claims based on taxes 
179.23 	payable in 2020.

179.24 	Sec. 33. Minnesota Statutes 2016, section 473F.02, subdivision 4, is amended to read:
179.25 		Subd. 4.Residential property. "Residential property" means the following categories 
179.26 	of property, as defined in section 273.13, excluding that portion of such property exempt 
179.27 	from taxation pursuant to section 272.02:
179.28 	(a) (1) class 1, 1b, 2a, 4a, 4b, 4c, and 4d 4i property except resorts and property classified 
179.29 	under section 273.13, subdivision 25, paragraph (d), clause (3); and
179.30 	(b) (2) that portion of class 3a, 3b, and 5 property used exclusively for residential 
179.31 	occupancy.

179.32 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

180.1 	Sec. 34. Minnesota Statutes 2016, section 473F.05, is amended to read:
180.2 	473F.05 NET TAX CAPACITY.
180.3 	On or before August 5 1 of each year, the assessors within each county in the area shall 
180.4 	determine and certify to the county auditor the net tax capacity in that year of 
180.5 	commercial-industrial property subject to taxation within each municipality in the county, 
180.6 	determined without regard to section 469.177, subdivision 3.

180.7 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

180.8 	Sec. 35. Minnesota Statutes 2016, section 473H.05, subdivision 1, is amended to read:
180.9 		Subdivision 1.Before June May 1 for next year's taxes. An owner or owners of certified 
180.10 	long-term agricultural land may apply to the authority with jurisdiction over the land on 
180.11 	forms provided by the commissioner of agriculture for the creation of an agricultural preserve 
180.12 	at any time. Land for which application is received prior to June May 1 of any year shall 
180.13 	be assessed pursuant to section 473H.10 for taxes payable in the following year. Land for 
180.14 	which application is received on or after June May 1 of any year shall be assessed pursuant 
180.15 	to section 473H.10 in the following year. The application shall be executed and acknowledged 
180.16 	in the manner required by law to execute and acknowledge a deed and shall contain at least 
180.17 	the following information and such other information as the commissioner deems necessary:
180.18 	(a) Legal description of the area proposed to be designated and parcel identification 
180.19 	numbers if so designated by the county auditor and the certificate of title number if the land 
180.20 	is registered;
180.21 	(b) Name and address of owner;
180.22 	(c) An affidavit by the authority evidencing that the land is certified long-term agricultural 
180.23 	land at the date of application;
180.24 	(d) A statement by the owner covenanting that the land shall be kept in agricultural use, 
180.25 	and shall be used in accordance with the provisions of sections 473H.02 to 473H.17 which 
180.26 	exist on the date of application and providing that the restrictive covenant shall be binding 
180.27 	on the owner or the owner's successor or assignee, and shall run with the land.

180.28 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

180.29 	Sec. 36. GRACE PERIOD; TAXPAYER NOTICE.
 180.30 		Subdivision 1.Benefit loss; due dates. For the first year in which sections 3, 4, 5, 6, 8, 
180.31 	11, 15, 16, 18, 24, 25, 27, 29, 33, 34, and 35 are effective, no property tax benefit, 
181.1 	classification, or deferment may lapse, be denied, or terminate solely because an application, 
181.2 	notification, request, or filing is not provided or made by the required due date, provided 
181.3 	that the application, notification, request, or filing would have been provided or made by 
181.4 	the required due date in effect for the immediately preceding calendar year.
181.5 		Subd. 2.Commissioner to provide notice. By July 1, 2019, the commissioner of revenue 
181.6 	must develop and implement a plan to notify all taxing jurisdictions, property owners, and 
181.7 	taxpayers affected by the due date changes in sections 3, 4, 5, 6, 8, 11, 15, 16, 18, 24, 25, 
181.8 	27, 29, 33, 35, and 36 of the new due dates that are effective beginning the following year. 
181.9 	The commissioner may consult with each county in the state in developing the plan, and 
181.10 	may request from a county data and other assistance that the commissioner deems necessary 
181.11 	to administer this subdivision but may not delegate taxpayer notification responsibilities to 
181.12 	a county.

181.13 	Sec. 37. SCHOOL PROPERTY TAX REFORM.
 181.14 	(a) A school property tax working group is established as provided in this section. The 
181.15 	goals of the working group are to develop one or more legislative proposals for reform of 
181.16 	Minnesota's property tax system that would:
181.17 	(1) evaluate the farmland tax burden from the costs of school capital investments;
181.18 	(2) simplify the tax system used for school district levies;
181.19 	(3) coordinate interactions with the state general levy; and
181.20 	(4) accomplish the objectives of this paragraph with optimal levels of state aid and local 
181.21 	property tax.
181.22 	(b) The 16-member working group shall consist of the following members:
181.23 	(1) two state representatives, both appointed by the chair of the house of representatives 
181.24 	Taxes Committee, one from the majority party and one from the largest minority party;
181.25 	(2) two state representatives, both appointed by the chair of the house of representatives 
181.26 	Education Finance Committee, one from the majority party and one from the largest minority 
181.27 	party;
181.28 	(3) four senators appointed by the Subcommittee on Committees of the Senate Rules 
181.29 	and Administration Committee, two from the majority party and two from the largest 
181.30 	minority party;
181.31 	(4) one person appointed by the Minnesota School Boards Association;
182.1 	(5) one person appointed by the Minnesota Rural Education Association;
182.2 	(6) one person appointed by the Association of Metropolitan School Districts;
182.3 	(7) one person appointed by Schools for Equity in Education;
182.4 	(8) one person appointed by the Minnesota Farm Bureau;
182.5 	(9) one person appointed by the Minnesota Farmers Union;
182.6 	(10) one person appointed by the Minnesota Chamber of Commerce; and
182.7 	(11) one person appointed by Minnesota Lakes and Rivers Advocates.
182.8 	(c) The commissioner of revenue and the commissioner of education, or their designees, 
182.9 	shall serve as ex-officio members of the working group.
182.10 	(d) All appointments must be made before July 1, 2018. The majority party appointee 
182.11 	of the house of representatives Taxes Committee chair shall chair the initial meeting, and 
182.12 	the working group shall elect a chair at that initial meeting. The working group will meet 
182.13 	at the call of the chair. Members of the working group shall serve without compensation. 
182.14 	The commissioner of revenue must provide administrative support to the working group. 
182.15 	Minnesota Statutes, chapter 13D, does not apply to meetings of the working group. Meetings 
182.16 	of the working group must be open to the public and the working group must provide notice 
182.17 	of a meeting to potentially interested persons at least five days before the meeting. A meeting 
182.18 	of the working group occurs when a quorum is present.
182.19 	(e) The working group shall make its advisory recommendations to the chairs of the 
182.20 	house of representatives and senate Taxes and Education Finance Committees on or before 
182.21 	January 1, 2019, at which time the working group shall be finished and this section expires.

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

182.23 	Sec. 38. REVISOR'S INSTRUCTION.
 182.24 	In Minnesota Statutes and Minnesota Rules, the revisor of statutes shall make 
182.25 	cross-reference changes that are needed as a result of the repealers in this article. The revisor 
182.26 	shall make any necessary technical and grammatical changes to preserve the meaning of 
182.27 	the text.

182.28 	Sec. 39.  REPEALER.
 182.29 	(a) Minnesota Statutes 2016, section 273.1315, is repealed.
183.1 	(b) Minnesota Statutes 2017 Supplement, sections 327C.01, subdivision 13; and 327C.16,
183.2 	are repealed.

183.3 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2020.

183.4 	ARTICLE 6
183.5 	AIDS AND CREDITS

183.6 	Section 1. Minnesota Statutes 2016, section 290B.04, subdivision 1, is amended to read:
183.7 		Subdivision 1.Initial application. (a) A taxpayer meeting the program qualifications 
183.8 	under section 290B.03 may apply to the commissioner of revenue for the deferral of taxes. 
183.9 	Applications are due on or before July November 1 for deferral of any of the following 
183.10 	year's property taxes. A taxpayer may preapply for an early notification of approval or denial 
183.11 	at any time. The commissioner must notify a taxpayer in writing of the reasons for an 
183.12 	application denial and that the application may be amended and resubmitted by the due date 
183.13 	specified in this subdivision. A taxpayer may apply in the year in which the taxpayer becomes 
183.14 	65 years old, provided that no deferral of property taxes will be made until the calendar 
183.15 	year after the taxpayer becomes 65 years old. The application, which shall be prescribed 
183.16 	by the commissioner of revenue, shall include the following items and any other information 
183.17 	which the commissioner deems necessary:
183.18 	(1) the name, address, and Social Security number of the owner or owners;
183.19 	(2) a copy of the property tax statement for the current payable year for the homesteaded 
183.20 	property;
183.21 	(3) the initial year of ownership and occupancy as a homestead;
183.22 	(4) the owner's household income for the previous calendar year; and
183.23 	(5) information on any mortgage loans or other amounts secured by mortgages or other 
183.24 	liens against the property, for which purpose the commissioner may require the applicant 
183.25 	to provide a copy of the mortgage note, the mortgage, or a statement of the balance owing 
183.26 	on the mortgage loan provided by the mortgage holder. The commissioner may require the 
183.27 	appropriate documents in connection with obtaining and confirming information on unpaid 
183.28 	amounts secured by other liens.
183.29 	The application must state that program participation is voluntary. The application must 
183.30 	also state that the deferred amount depends directly on the applicant's household income, 
183.31 	and that program participation includes authorization for the annual deferred amount, the 
184.1 	cumulative deferral and interest that appear on each year's notice prepared by the county 
184.2 	under subdivision 6, is public data.
184.3 	The application must state that program participants may claim the property tax refund 
184.4 	based on the full amount of property taxes eligible for the refund, including any deferred 
184.5 	amounts. The application must also state that property tax refunds will be used to offset any 
184.6 	deferral and interest under this program, and that any other amounts subject to revenue 
184.7 	recapture under section 270A.03, subdivision 7, will also be used to offset any deferral and 
184.8 	interest under this program.
184.9 	(b) As part of the initial application process, the commissioner may require the applicant 
184.10 	to obtain at the applicant's own cost and submit:
184.11 	(1) if the property is registered property under chapter 508 or 508A, a copy of the original 
184.12 	certificate of title in the possession of the county registrar of titles (sometimes referred to 
184.13 	as "condition of register"); or
184.14 	(2) if the property is abstract property, a report prepared by a licensed abstracter showing 
184.15 	the last deed and any unsatisfied mortgages, liens, judgments, and state and federal tax lien 
184.16 	notices which were recorded on or after the date of that last deed with respect to the property 
184.17 	or to the applicant.
184.18 	The certificate or report under clauses (1) and (2) need not include references to any 
184.19 	documents filed or recorded more than 40 years prior to the date of the certification or report. 
184.20 	The certification or report must be as of a date not more than 30 days prior to submission 
184.21 	of the application.
184.22 	The commissioner may also require the county recorder or county registrar of the county 
184.23 	where the property is located to provide copies of recorded documents related to the applicant 
184.24 	or the property, for which the recorder or registrar shall not charge a fee. The commissioner 
184.25 	may use any information available to determine or verify eligibility under this section. The 
184.26 	household income from the application is private data on individuals as defined in section 
184.27 	13.02, subdivision 12.

184.28 	EFFECTIVE DATE. This section is effective beginning with assessments in 2020.

184.29 	Sec. 2. Minnesota Statutes 2016, section 477A.013, subdivision 13, is amended to read:
184.30 		Subd. 13.Certified aid adjustments. (a) A city that received an aid base increase under 
184.31 	Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall have its 
184.32 	total aid under subdivision 9 increased by an amount equal to $150,000 for aids payable in 
184.33 	2014 through 2018.
185.1 	(b) (a) A city that received an aid base increase under Minnesota Statutes 2012, section 
185.2 	477A.011, subdivision 36, paragraph (r), shall have its total aid under subdivision 9 increased 
185.3 	by an amount equal to $160,000 for aids payable in 2014 and thereafter.
185.4 	(c) A city that received a temporary aid increase under Minnesota Statutes 2012, section 
185.5 	477A.011, subdivision 36, paragraph (o), shall have its total aid under subdivision 9 increased 
185.6 	by an amount equal to $1,000,000 for aids payable in 2014 only.
185.7 	(b) For aids payable in 2019 only, a city shall have its total aid under subdivision 9 
185.8 	increased by an amount equal to its aid decrease between aids payable in 2016 and 2017 if:
185.9 	(1) the city's aid decreased by more than $50,000 between aids payable in 2016 and 
185.10 	2017 under this section; and
185.11 	(2) the city's unmet need amount calculated for aids payable in 2017 exceeded its aids 
185.12 	payable in 2016.
185.13 	(c) The city of Lilydale shall have its total aid under subdivision 9 increased by $150,000 
185.14 	for aids payable in 2019 only.

185.15 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2019.

185.16 	Sec. 3. Minnesota Statutes 2017 Supplement, section 477A.015, is amended to read:
185.17 	477A.015 PAYMENT DATES.
185.18 	(a) The commissioner of revenue shall make the payments of local government aid to 
185.19 	affected taxing authorities in two installments on July 20 and December 26 annually.
185.20 	(b) Notwithstanding paragraph (a), for aids payable in 2019 only, the commissioner of 
185.21 	revenue shall make payments of the aid payable under section 477A.013, subdivision 9, in 
185.22 	three installments as follows: (1) 14.6 17.2156 percent of the aid shall be paid on June 15, 
185.23 	2019; (2) 35.4 32.7844 percent of the aid shall be paid on July 20, 2019; and (3) 50 percent 
185.24 	of the aid shall be paid on December 26, 2019.
185.25 	(c) When the commissioner of public safety determines that a local government has 
185.26 	suffered financial hardship due to a natural disaster, the commissioner of public safety shall 
185.27 	notify the commissioner of revenue, who shall make payments of aids under sections 
185.28 	477A.011 to 477A.014, which are otherwise due on December 26, as soon as is practical 
185.29 	after the determination is made but not before July 20.
185.30 	(d) The commissioner may pay all or part of the payments of aids under sections 
185.31 	477A.011 to 477A.014, which are due on December 26 at any time after August 15 if a 
185.32 	local government requests such payment as being necessary for meeting its cash flow needs.

186.1 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2019.

186.2 	Sec. 4. Minnesota Statutes 2016, section 477A.016, is amended to read:
186.3 	477A.016 NEW TAXES PROHIBITED.
186.4 	(a) No county, city, town or other taxing authority shall increase a present tax or impose 
186.5 	a new tax on sales or income.
186.6 	(b) No county, city, town, or other taxing authority shall increase a present excise tax 
186.7 	or fee or impose a new excise tax or fee on either:
186.8 	(1) the manufacture, distribution, wholesale, or retail sale of food, based on volume of 
186.9 	product sold, product sales value, or the type of product manufactured, distributed, or sold; 
186.10 	or
186.11 	(2) any container used for transporting, protecting, or consuming food.
186.12 	(c) For purposes of this section:
186.13 	(1) "food" has the meaning given in section 34A.01, subdivision 4; and
186.14 	(2) "container" means a bottle, cup, can, bag, or other packaging that is made from 
186.15 	plastic, aluminum, glass, cardboard, or other material.
186.16 	(d) This section does not apply to reasonable license fees lawfully imposed by a county, 
186.17 	city, town, or other licensing authority in the exercise of its regulatory authority to license 
186.18 	a trade, profession, or business.

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

186.20 	Sec. 5. Minnesota Statutes 2017 Supplement, section 477A.03, subdivision 2a, is amended 
186.21 	to read:
186.22 		Subd. 2a.Cities. For aids payable in 2016 and 2017, the total aid paid under section 
186.23 	477A.013, subdivision 9, is $519,398,012. For aids payable in 2018, 2020, and thereafter, 
186.24 	the total aid paid under section 477A.013, subdivision 9, is $534,398,012. For aids payable 
186.25 	in 2019 only, the total aid paid under section 477A.013, subdivision 9, is $534,645,272.

186.26 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2019 
186.27 	and thereafter.

187.1 	Sec. 6. LAKE MILLE LACS AREA PROPERTY TAX ABATEMENT.
 187.2 		Subdivision 1.Abatements authorized. (a) Notwithstanding Minnesota Statutes, section 
187.3 	375.192, the county boards of Aitkin, Crow Wing, and Mille Lacs Counties may grant an 
187.4 	abatement of local property taxes for taxes payable in 2018, provided that:
187.5 	(1) the property is classified as 1c, 3a (excluding utility real and personal property), 
187.6 	4c(1), 4c(10), or 4c(11);
187.7 	(2) on or before December 31, 2018, the taxpayer submits a written application to the 
187.8 	county auditor in the county in which abatement is sought; and
187.9 	(3) the taxpayer meets qualification requirements established in subdivision 3.
187.10 		Subd. 2.Appeals. An appeal may not be taken to the Tax Court from any order of the 
187.11 	county board made pursuant to the exercise of the discretionary authority granted in this 
187.12 	section.
187.13 		Subd. 3.Qualification requirements. To qualify for abatements under this section, a 
187.14 	taxpayer must:
187.15 	(1) be located within one of the following municipalities surrounding Lake Mille Lacs:
187.16 	(i) in Crow Wing County, the city of Garrison, township of Garrison, or township of 
187.17 	Roosevelt;
187.18 	(ii) in Aitkin County, the township of Hazelton, township of Wealthwood, township of 
187.19 	Malmo, or township of Lakeside; or
187.20 	(iii) in Mille Lacs County, the city of Isle, city of Wahkon, city of Onamia, township of 
187.21 	East Side, township of Isle Harbor, township of South Harbor, or township of Kathio;
187.22 	(2) document a reduction in gross receipts of five percent or greater between any two 
187.23 	calendar years beginning in 2010 or later; and
187.24 	(3) be a business in one of the following industries, as defined within the North American 
187.25 	Industry Classification System: accommodation, restaurants, bars, amusement and recreation, 
187.26 	food and beverages retail, sporting goods, miscellaneous retail, general retail, museums, 
187.27 	historical sites, health and personal care, gas station, general merchandise, business and 
187.28 	professional membership, movies, or nonstore retailer, as determined by the county in 
187.29 	consultation with the commissioner of employment and economic development.
187.30 		Subd. 4.State general levy in relief area. The counties of Aitkin, Crow Wing, and 
187.31 	Mille Lacs must refund the state general levy levied upon a property classified as 1c, 3a 
188.1 	(excluding utility real and personal property), or 4c(1) that is located in the area described 
188.2 	by subdivision 3, clause (1), for taxes payable in 2018.
188.3 		Subd. 5.Certification and transfer of funds. (a) By February 1, 2019, a county granting 
188.4 	a refund as required under subdivision 4 must certify the total amount of state general tax 
188.5 	refunded to Mille Lacs County and the commissioner of revenue. By March 1, 2019, Mille 
188.6 	Lacs County must transfer an amount equal to the amount certified under this paragraph to 
188.7 	the county making the certification.
188.8 	(b) By February 1, 2019, a county that has received an application for an abatement 
188.9 	authorized under subdivision 1 must certify to Mille Lacs County the total amount of 
188.10 	abatements for which applications have been received and approved. By March 1, 2019, 
188.11 	Mille Lacs County must transfer an amount equal to the amount certified under this paragraph 
188.12 	to the county making the certification. By April 30, 2019, the county must issue refunds of 
188.13 	local property tax amounts to qualified taxpayers.
188.14 		Subd. 6.Commissioner of revenue; appropriation. An amount sufficient to make the 
188.15 	transfers required under subdivision 5 in fiscal year 2019 is appropriated from the general 
188.16 	fund to the commissioner of revenue for transfer to Mille Lacs County. This is a onetime 
188.17 	appropriation.
188.18 		Subd. 7.Report to legislature. The commissioner of revenue must make a written report 
188.19 	to the chairs and ranking minority members of the legislative committees with jurisdiction 
188.20 	over taxes stating the amount of abatements and refunds given under this section by taxing 
188.21 	jurisdictions by February 1, 2020. The counties must provide the commissioner with the 
188.22 	information necessary to make the report.
188.23 		Subd. 8.Refund eligibility. Only a taxpayer making all payments of property taxes for 
188.24 	taxes payable in 2018 is eligible to receive a refund under subdivisions 4 and 5.

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

188.26 	Sec. 7.  REPEALER.
 188.27 	Minnesota Statutes 2016, section 477A.085, is repealed.

188.28 	EFFECTIVE DATE. This section is effective beginning with aids payable in 2018.

189.1 	ARTICLE 7
189.2 	REFERENDUM

189.3 	Section 1. Minnesota Statutes 2017 Supplement, section 126C.17, subdivision 9, is amended 
189.4 	to read:
189.5 		Subd. 9.Referendum revenue. (a) The revenue authorized by section 126C.10, 
189.6 	subdivision 1, may be increased in the amount approved by the voters of the district at a 
189.7 	referendum called for the purpose. The referendum may be called by the board. The 
189.8 	referendum must be conducted one or two calendar years before the increased levy authority, 
189.9 	if approved, first becomes payable. Only one election to approve an increase may be held 
189.10 	in a calendar year. Unless the referendum is conducted by mail under subdivision 11, 
189.11 	paragraph (a), the referendum must be held on the first Tuesday after the first Monday in 
189.12 	November. The ballot must state the maximum amount of the increased revenue per adjusted 
189.13 	pupil unit. The ballot may state a schedule, determined by the board, of increased revenue 
189.14 	per adjusted pupil unit that differs from year to year over the number of years for which the 
189.15 	increased revenue is authorized or may state that the amount shall increase annually by the 
189.16 	rate of inflation. The ballot must state the cumulative amount per pupil of any local optional 
189.17 	revenue, board-approved referendum authority, and previous voter-approved referendum 
189.18 	authority, if any, that the board expects to certify for the next school year. For this purpose, 
189.19 	the rate of inflation shall be the annual inflationary increase calculated under subdivision 
189.20 	2, paragraph (b). The ballot may state that existing referendum levy authority is expiring. 
189.21 	In this case, the ballot may also compare the proposed levy authority to the existing expiring 
189.22 	levy authority, and express the proposed increase as the amount, if any, over the expiring 
189.23 	referendum levy authority. The ballot must designate the specific number of years, not to 
189.24 	exceed ten, for which the referendum authorization applies. The ballot, including a ballot 
189.25 	on the question to revoke or reduce the increased revenue amount under paragraph (c), must 
189.26 	abbreviate the term "per adjusted pupil unit" as "per pupil." The notice required under section 
189.27 	275.60 may be modified to read, in cases of renewing existing levies at the same amount 
189.28 	per pupil as in the previous year:
189.29 	"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING TO 
189.30 	EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS SCHEDULED 
189.31 	TO EXPIRE."
189.32 	The ballot may contain a textual portion with the information required in this subdivision 
189.33 	and a question stating substantially the following:
190.1 	"Shall the increase in the revenue proposed by (petition to) the board of ......., School 
190.2 	District No. .., be approved?"
190.3 	If approved, an amount equal to the approved revenue per adjusted pupil unit times the 
190.4 	adjusted pupil units for the school year beginning in the year after the levy is certified shall 
190.5 	be authorized for certification for the number of years approved, if applicable, or until 
190.6 	revoked or reduced by the voters of the district at a subsequent referendum.
190.7 	(b) The board must deliver by mail at least 15 days but no more than 30 days before the 
190.8 	day of the referendum to each taxpayer a notice of the referendum and the proposed revenue 
190.9 	increase. The board need not mail more than one notice to any taxpayer. For the purpose 
190.10 	of giving mailed notice under this subdivision, owners must be those shown to be owners 
190.11 	on the records of the county auditor or, in any county where tax statements are mailed by 
190.12 	the county treasurer, on the records of the county treasurer. Every property owner whose 
190.13 	name does not appear on the records of the county auditor or the county treasurer is deemed 
190.14 	to have waived this mailed notice unless the owner has requested in writing that the county 
190.15 	auditor or county treasurer, as the case may be, include the name on the records for this 
190.16 	purpose. The notice must project the anticipated amount of tax increase in annual dollars 
190.17 	for typical residential homesteads, agricultural homesteads, apartments, and 
190.18 	commercial-industrial property within the school district.
190.19 	The notice must state the cumulative and individual amounts per pupil of any local 
190.20 	optional revenue, board-approved referendum authority, and voter-approved referendum 
190.21 	authority, if any, that the board expects to certify for the next school year.
190.22 	The notice for a referendum may state that an existing referendum levy is expiring and 
190.23 	project the anticipated amount of increase over the existing referendum levy in the first 
190.24 	year, if any, in annual dollars for typical residential homesteads, agricultural homesteads, 
190.25 	apartments, and commercial-industrial property within the district.
190.26 	The notice must include the following statement: "Passage of this referendum will result 
190.27 	in an increase in your property taxes." However, in cases of renewing existing levies, the 
190.28 	notice may include the following statement: "Passage of this referendum extends an existing 
190.29 	operating referendum at the same amount per pupil as in the previous year."
190.30 	(c) A referendum on the question of revoking or reducing the increased revenue amount 
190.31 	authorized pursuant to paragraph (a) may be called by the board. A referendum to revoke 
190.32 	or reduce the revenue amount must state the amount per adjusted pupil unit by which the 
190.33 	authority is to be reduced. Revenue authority approved by the voters of the district pursuant 
190.34 	to paragraph (a) must be available to the school district at least once before it is subject to 
191.1 	a referendum on its revocation or reduction for subsequent years. Only one revocation or 
191.2 	reduction referendum may be held to revoke or reduce referendum revenue for any specific 
191.3 	year and for years thereafter.
191.4 	(d) The approval of 50 percent plus one of those voting on the question is required to 
191.5 	pass a referendum authorized by this subdivision.
191.6 	(e) At least 15 days before the day of the referendum, the district must submit a copy of 
191.7 	the notice required under paragraph (b) to the commissioner and to the county auditor of 
191.8 	each county in which the district is located. Within 15 days after the results of the referendum 
191.9 	have been certified by the board, or in the case of a recount, the certification of the results 
191.10 	of the recount by the canvassing board, the district must notify the commissioner of the 
191.11 	results of the referendum.

191.12 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
191.13 	referendum authorized on or after that date.

191.14 	Sec. 2. Minnesota Statutes 2017 Supplement, section 205.10, subdivision 3a, is amended 
191.15 	to read:
191.16 		Subd. 3a.Uniform election dates. (a) Except as allowed in paragraphprovided in 
191.17 	paragraphs (b) and (c) and subdivision 4, a special election held in a city or town must be 
191.18 	held on one of the following dates: the second Tuesday in February, the second Tuesday in 
191.19 	April, the second Tuesday in May, the second Tuesday in August, or the first Tuesday after 
191.20 	the first Monday in November. A home rule charter city must not designate additional dates 
191.21 	in its charter.
191.22 	(b) A special election may be held on a date other than those designated in paragraph 
191.23 	(a) if the special election is held in response to an emergency or disaster. "Emergency" 
191.24 	means an unforeseen combination of circumstances that calls for immediate action to prevent 
191.25 	a disaster from developing or occurring. "Disaster" means a situation that creates an actual 
191.26 	or imminent serious threat to the health and safety of persons or a situation that has resulted 
191.27 	or is likely to result in catastrophic loss to property or the environment.
191.28 	(c) Except as provided in paragraph (b), a referendum or reverse referendum held by a 
191.29 	city or town related to (1) imposing or modifying a levy, (2) issuing bonds, certificates of 
191.30 	indebtedness, or capital notes, or (3) purchasing real property, must only be held on the first 
191.31 	Tuesday after the first Monday in November.

191.32 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
191.33 	referendum authorized on or after that date.

192.1 	Sec. 3. Minnesota Statutes 2017 Supplement, section 205A.05, subdivision 1a, is amended 
192.2 	to read:
192.3 		Subd. 1a.Uniform election dates. (a) Except as allowed in paragraph provided in 
192.4 	paragraphs (b) and (c), a special election held in a school district must be held on one of 
192.5 	the following dates: the second Tuesday in February, the second Tuesday in April, the 
192.6 	second Tuesday in May, the second Tuesday in August, or the first Tuesday after the first 
192.7 	Monday in November.
192.8 	(b) A special election may be held on a date other than those designated in paragraph 
192.9 	(a) if the special election is held in response to an emergency or disaster. "Emergency" 
192.10 	means an unforeseen combination of circumstances that calls for immediate action to prevent 
192.11 	a disaster from developing or occurring. "Disaster" means a situation that creates an actual 
192.12 	or imminent serious threat to the health and safety of persons or a situation that has resulted 
192.13 	or is likely to result in catastrophic loss to property or the environment.
192.14 	(c) Except as provided in paragraph (b), a referendum or reverse referendum held by a 
192.15 	school district related to (1) imposing or modifying a levy, (2) issuing bonds, certificates 
192.16 	of indebtedness, or capital notes, or (3) purchasing real property, must only be held on the 
192.17 	first Tuesday after the first Monday in November.

192.18 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
192.19 	referendum authorized on or after that date.

192.20 	Sec. 4. Minnesota Statutes 2016, section 216B.36, is amended to read:
192.21 	216B.36 MUNICIPAL REGULATORY AND TAXING POWERS.
192.22 		Subdivision 1.Municipal authority to regulate public utilities. Any public utility 
192.23 	furnishing the utility services enumerated in section 216B.02 or occupying streets, highways, 
192.24 	or other public property within a municipality may be required to obtain a license, permit, 
192.25 	right, or franchise in accordance with the terms, conditions, and limitations of regulatory 
192.26 	acts of the municipality, including the placing of distribution lines and facilities underground. 
192.27 	Under the license, permit, right, or franchise, the utility may be obligated by any municipality 
192.28 	to pay to the municipality fees to raise revenue or defray increased municipal costs accruing 
192.29 	as a result of utility operations, or both. A fee that raises revenue under a license, permit, 
192.30 	right, or franchise agreement entered into or renewed on or after August 1, 2018, is subject 
192.31 	to the requirements of subdivision 2. The fee may include but is not limited to a sum of 
192.32 	money based upon gross operating revenues or gross earnings from its operations in the 
192.33 	municipality so long as the public utility shall continue to operate in the municipality, unless 
193.1 	upon request of the public utility it is expressly released from the obligation at any time by 
193.2 	such municipality. Notwithstanding the definition of "public utility" in section 216B.02, 
193.3 	subdivision 4, a municipality may require payment of a fee under this section by a cooperative 
193.4 	electric association organized under chapter 308A that furnishes utility services within the 
193.5 	municipality. All existing licenses, permits, franchises, and other rights acquired by any 
193.6 	public utility or municipality prior to April 11, 1974, including the payment of existing 
193.7 	franchise fees, shall not be impaired or affected in any respect by the passage of this chapter, 
193.8 	except with respect to matters of rate and service regulation, service area assignments, 
193.9 	securities, and indebtedness that are vested in the jurisdiction of the commission by this 
193.10 	chapter. However, in the event that a court of competent jurisdiction determines, or the 
193.11 	parties by mutual agreement determine, that an existing license, permit, franchise, or other 
193.12 	right has been abrogated or impaired by this chapter, or its execution, the municipality 
193.13 	affected shall impose and the public utility shall collect an excise tax on the utility charges 
193.14 	which from year to year yields an amount which is reasonably equivalent to that amount of 
193.15 	revenue which then would be due as a fee, charges or other thing or service of value to the 
193.16 	municipality under the franchise, license, or permit. The authorization shall be over and 
193.17 	above taxing limitations including, but not limited to, those of section 477A.016. Franchises 
193.18 	granted pursuant to this section shall be exempt from the provisions of chapter 80C. For 
193.19 	purposes of this section, a public utility shall include a cooperative electric association.
193.20 		Subd. 2.Five-year renewal; reverse referendum. (a) A municipality may impose a 
193.21 	fee under subdivision 1 to raise revenue beyond what is needed to defray increased municipal 
193.22 	costs due to utility operations for up to a five-year period, following the procedures in this 
193.23 	subdivision.
193.24 	(b) The municipality must include in its ordinance or license, permit, or franchise 
193.25 	agreement with the public utility what constitutes a cost to the city.
193.26 	(c) The municipality must identify in its ordinance or license, permit, or franchise 
193.27 	agreement the uses of the portion of the fee that is for purposes other than to defray city 
193.28 	costs. The municipality must publish a notice that explains:
193.29 	(1) the fee and its intended uses;
193.30 	(2) that the public utility is likely to pass the fee on to customers and how much that 
193.31 	may increase customers' utility bills;
193.32 	(3) that alternatives to the revenue-raising portion of the fee are to raise the revenue 
193.33 	from another source available to the municipality or forego planned uses of the revenue; 
193.34 	and
194.1 	(4) what revenue raised from another source will cost those paying it.
194.2 	The notice must be published at least once each week for two consecutive weeks in the 
194.3 	official publication of the municipality and must remain posted on the municipality's Web 
194.4 	site throughout the notice period. The notice must also be sent to all affected ratepayers by 
194.5 	either first class mail by the municipality or by including the notice in the affected ratepayers' 
194.6 	billings.
194.7 	(d) Following publication and before imposing the fee, the municipality must provide 
194.8 	an opportunity at its next regular meeting for public comment relating to the issue. No 
194.9 	sooner than 90 days after the public comment opportunity, the municipality may proceed 
194.10 	with imposing the fee, unless a petition is filed as provided in paragraph (e).
194.11 	(e) Within 90 days after the meeting held by the municipality at which public comment 
194.12 	was accepted, a petition requesting a referendum may be filed with the chief clerical officer 
194.13 	of the municipality. The petition must be signed by at least five percent of the registered 
194.14 	voters in the municipality. The petition must meet the requirements of the secretary of state, 
194.15 	as provided in section 204B.071, and any rules adopted to implement that section. If the 
194.16 	petition is sufficient, the question of whether the municipality may impose a fee that raises 
194.17 	revenue as provided in subdivision 1 must be placed on the ballot at the next general election. 
194.18 	If a majority of the voters voting on the question votes in favor of using the fee to raise 
194.19 	revenue, the municipality may proceed with imposing the fee.
194.20 	(f) If a license, permit, right, or franchise agreement is entered into or renewed before 
194.21 	August 1, 2018, and by its terms and the ordinance authorizing it, will be in effect after 
194.22 	August 1, 2023, the municipality must follow the procedures in this subdivision to provide 
194.23 	notice, a public hearing, and opportunity for a petition for a referendum by August 1, 2023.
194.24 	(g) Except as provided in paragraph (f), this subdivision applies to a license, permit, 
194.25 	right, or franchise agreement entered into or renewed on or after August 1, 2018.

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

194.27 	Sec. 5. Minnesota Statutes 2016, section 237.19, is amended to read:
194.28 	237.19 MUNICIPAL TELECOMMUNICATIONS SERVICES.
194.29 	Any municipality shall have the right to own and operate a telephone exchange within 
194.30 	its own borders, subject to the provisions of this chapter. It may construct such plant, or 
194.31 	purchase an existing plant by agreement with the owner, or where it cannot agree with the 
194.32 	owner on price, it may acquire an existing plant by condemnation, as hereinafter provided, 
194.33 	but in no case shall a municipality construct or purchase such a plant or proceed to acquire 
195.1 	an existing plant by condemnation until such action by it is authorized by a majority of the 
195.2 	electors voting upon the proposition at a general an election or a special election called for 
195.3 	that purpose held on the first Tuesday after the first Monday in November in either an 
195.4 	even-numbered or odd-numbered year, and if the proposal is to construct a new exchange 
195.5 	where an exchange already exists, it shall not be authorized to do so unless 65 percent of 
195.6 	those voting thereon vote in favor of the undertaking. A municipality that owns and operates 
195.7 	a telephone exchange may enter into a joint venture as a partner or shareholder with a 
195.8 	telecommunications organization to provide telecommunications services within its service 
195.9 	area.

195.10 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
195.11 	referendum authorized on or after that date.

195.12 	Sec. 6. Minnesota Statutes 2016, section 412.221, subdivision 2, is amended to read:
195.13 		Subd. 2.Contracts. The council shall have power to make such contracts as may be 
195.14 	deemed necessary or desirable to make effective any power possessed by the council. The 
195.15 	city may purchase personal property through a conditional sales contract and real property 
195.16 	through a contract for deed under which contracts the seller is confined to the remedy of 
195.17 	recovery of the property in case of nonpayment of all or part of the purchase price, which 
195.18 	shall be payable over a period of not to exceed five years. When the contract price of property 
195.19 	to be purchased by contract for deed or conditional sales contract exceeds 0.24177 percent 
195.20 	of the estimated market value of the city, the city may not enter into such a contract for at 
195.21 	least ten days after publication in the official newspaper of a council resolution determining 
195.22 	to purchase property by such a contract; and, if before the end of that time a petition asking 
195.23 	for an election on the proposition signed by voters equal to ten percent of the number of 
195.24 	voters at the last regular city election is filed with the clerk, the city may not enter into such 
195.25 	a contract until the proposition has been approved by a majority of the votes cast on the 
195.26 	question at a regular or specialan election held on the first Tuesday after the first Monday 
195.27 	in November of either an even-numbered or odd-numbered year.

195.28 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
195.29 	referendum authorized on or after that date.

195.30 	Sec. 7. [416.17] VOTER APPROVAL REQUIRED; LEASES OF PUBLIC 
195.31 	BUILDINGS.
195.32 		Subdivision 1.Reverse referendum; certain leases. (a) Before executing a qualified 
195.33 	lease, a municipality must publish notice of its intention to execute the lease and the date 
196.1 	and time of a hearing to obtain public comment on the matter. The notice must be published 
196.2 	in the official newspaper of the municipality or in a newspaper of general circulation in the 
196.3 	municipality and must include a statement of the amount of the obligations to be issued by 
196.4 	the authority and the maximum amount of annual rent to be paid by the municipality under 
196.5 	the qualified lease. The notice must be published at least 14, but not more than 28, days 
196.6 	before the date of the hearing.
196.7 	(b) A municipality may enter a lease subject to paragraph (a) only upon obtaining the 
196.8 	approval of a majority of the voters voting on the question of issuing the obligations, if a 
196.9 	petition requesting a vote on the issuance is signed by voters equal to ten percent of the 
196.10 	votes cast in the municipality in the last state general election and is filed with the county 
196.11 	auditor within 30 days after the public hearing.
196.12 		Subd. 2.Definitions. (a) For purposes of this section, the following terms have the 
196.13 	meanings given them.
196.14 	(b) "Authority" includes any of the following governmental units, the boundaries of 
196.15 	which include all or part of the geographic area of the municipality:
196.16 	(1) a housing and redevelopment authority, as defined in section 469.002, subdivision 
196.17 	2;
196.18 	(2) a port authority, as defined in section 469.048;
196.19 	(3) an economic development authority, as established under section 469.091; or
196.20 	(4) an entity established or exercising powers under a special law with powers similar 
196.21 	to those of an entity described in clauses (1) to (3).
196.22 	(c) "Municipality" means a statutory or home rule charter city, a county, or a town 
196.23 	described in section 368.01, but does not include a city of the first class, however organized, 
196.24 	as defined in section 410.01.
196.25 	(d) "Qualified lease" means a lease for use of public land, all or part of a public building, 
196.26 	or other public facilities consisting of real property for a term of three or more years as a 
196.27 	lessee if the property to be leased to the municipality was acquired or improved with the 
196.28 	proceeds of obligations, as defined in section 475.51, subdivision 3, issued by an authority.

196.29 	EFFECTIVE DATE. This section is effective the day following final enactment and 
196.30 	applies to qualified leases entered into after July 1, 2018.

197.1 	Sec. 8. Minnesota Statutes 2016, section 426.19, subdivision 2, is amended to read:
197.2 		Subd. 2.Referendum in certain cases. Before the pledge of any such revenues to the 
197.3 	payment of any such bonds, warrants or certificates of indebtedness, except bonds, warrants 
197.4 	or certificates of indebtedness to construct, reconstruct, enlarge or equip a municipal liquor 
197.5 	store shall be made, the governing body shall submit to the voters of the city the question 
197.6 	of whether such revenues shall be so pledged and such pledge shall not be binding on the 
197.7 	city until it shall have been approved by a majority of the voters voting on the question at 
197.8 	either a general an election or special election called for that purpose held on the first Tuesday 
197.9 	after the first Monday in November of either an even-numbered or odd-numbered year. No 
197.10 	election shall be required for pledge of such revenues for payment of bonds, warrants or 
197.11 	certificates of indebtedness to construct, reconstruct, enlarge or equip a municipal liquor 
197.12 	store.

197.13 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
197.14 	referendum authorized on or after that date.

197.15 	Sec. 9. Minnesota Statutes 2016, section 447.045, subdivision 2, is amended to read:
197.16 		Subd. 2.Statutory city; on-sale and off-sale store. If the voters of a statutory city 
197.17 	operating an on-sale and off-sale municipal liquor store, at a general or special an election
197.18 	held on the first Tuesday after the first Monday in November of either an even-numbered 
197.19 	or odd-numbered year, vote in favor of contributing from its liquor dispensary fund toward 
197.20 	the construction of a community hospital, the city council may appropriate not more than 
197.21 	$60,000 from the fund to any incorporated nonprofit hospital association to build a 
197.22 	community hospital in the statutory city. The hospital must be governed by a board including 
197.23 	two or more members of the statutory city council and be open to all residents of the statutory 
197.24 	city on equal terms. This appropriation must not exceed one-half the total cost of construction 
197.25 	of the hospital. The council must not appropriate the money unless the average net earnings 
197.26 	of the on-sale and off-sale municipal liquor store have been at least $10,000 for the last five 
197.27 	completed fiscal years before the date of the appropriation.

197.28 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
197.29 	referendum authorized on or after that date.

197.30 	Sec. 10. Minnesota Statutes 2016, section 447.045, subdivision 3, is amended to read:
197.31 		Subd. 3.Statutory city; off-sale or on- and off-sale store. (a) If a statutory city operates 
197.32 	an off-sale, or an on- and off-sale municipal liquor store it may provide for a vote at a general 
197.33 	or special an election held on the first Tuesday after the first Monday in November of either 
198.1 	an even-numbered or odd-numbered year on the question of contributing from the city liquor 
198.2 	dispensary fund to build, maintain, and operate a community hospital. If the vote is in favor, 
198.3 	the city council may appropriate money from the fund to an incorporated hospital association 
198.4 	for a period of four years. The appropriation must be from the net profits or proceeds of the 
198.5 	municipal liquor store. It must not exceed $4,000 a year for hospital construction and 
198.6 	maintenance or $1,000 a year for operation. The hospital must be open to all residents of 
198.7 	the community on equal terms.
198.8 	(b) The council must not appropriate the money unless the average net earnings of the 
198.9 	off-sale, or on- and off-sale municipal liquor store have been at least $8,000 for the last two 
198.10 	completed years before the date of the appropriation.

198.11 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
198.12 	referendum authorized on or after that date.

198.13 	Sec. 11. Minnesota Statutes 2016, section 447.045, subdivision 4, is amended to read:
198.14 		Subd. 4.Fourth class city operating store. If a city of the fourth class operates a 
198.15 	municipal liquor store, it may provide for a vote at a general or special an election held on 
198.16 	the first Tuesday after the first Monday in November of either an even-numbered or 
198.17 	odd-numbered year on the question of contributing from the profit in the city liquor 
198.18 	dispensary fund to build, equip, and maintain a community hospital within the city limits. 
198.19 	If the vote is in favor, the city council may appropriate not more than $200,000 from profits 
198.20 	in the fund for the purpose. The hospital must be open to all residents of the city on equal 
198.21 	terms.
198.22 	The city may issue certificates of indebtedness in anticipation of and payable only from 
198.23 	profits from the operation of municipal liquor stores.

198.24 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
198.25 	referendum authorized on or after that date.

198.26 	Sec. 12. Minnesota Statutes 2016, section 447.045, subdivision 6, is amended to read:
198.27 		Subd. 6.Statutory city; fourth class. If a fourth class statutory city operates a municipal 
198.28 	liquor store, it may provide for a vote at a general or special an election held on the first 
198.29 	Tuesday after the first Monday in November of either an even-numbered or odd-numbered 
198.30 	year on the question of contributing from the city liquor dispensary fund not more than 
198.31 	$15,000 a year for five years to build and maintain a community hospital. If the vote is in 
199.1 	favor the council may appropriate the money from the fund to an incorporated community 
199.2 	hospital association in the city.

199.3 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
199.4 	referendum authorized on or after that date.

199.5 	Sec. 13. Minnesota Statutes 2016, section 447.045, subdivision 7, is amended to read:
199.6 		Subd. 7.Statutory city; any store. If a statutory city operates a municipal liquor store, 
199.7 	it may provide for a vote at a general or special an election held on the first Tuesday after 
199.8 	the first Monday in November of either an even-numbered or odd-numbered year on the 
199.9 	question of contributing from the statutory city liquor dispensary fund toward the acquisition, 
199.10 	construction, improvement, maintenance, and operation of a community hospital. If the 
199.11 	vote is in favor, the council may appropriate money from time to time out of the net profits 
199.12 	or proceeds of the municipal liquor store to an incorporated nonprofit hospital association 
199.13 	in the statutory city. The hospital association must be governed by a board of directors 
199.14 	elected by donors of $50 or more, who each have one vote. The hospital must be open to 
199.15 	all residents of the community on equal terms.

199.16 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
199.17 	referendum authorized on or after that date.

199.18 	Sec. 14. Minnesota Statutes 2016, section 452.11, is amended to read:
199.19 	452.11 SUBMISSION TO VOTERS.
199.20 	No city of the first class shall acquire or construct any public utility under the terms of 
199.21 	sections 452.08 to 452.13 unless the proposition to acquire or construct same has first been 
199.22 	submitted to the qualified electors of the city at a general city election or at a special election 
199.23 	called for that purpose, held on the first Tuesday after the first Monday in November of 
199.24 	either an even-numbered or odd-numbered year and has been approved by a majority vote 
199.25 	of all electors voting upon the proposition.
199.26 	The question of issuing public utility certificates as provided in section 452.09 may, at 
199.27 	the option of the council, be submitted at the same election as the question of the acquisition 
199.28 	or construction of the public utility.

199.29 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
199.30 	referendum authorized on or after that date.

200.1 	Sec. 15. Minnesota Statutes 2016, section 455.24, is amended to read:
200.2 	455.24 SUBMISSION TO VOTERS.
200.3 	Before incurring any expense under the powers conferred by section 455.23, the approval 
200.4 	of the voters of the city shall first be had at a general or special an election held therein on 
200.5 	the first Tuesday after the first Monday in November of either an even-numbered or 
200.6 	odd-numbered year. If a majority of the voters of the city participating at the election shall 
200.7 	vote in favor of the construction of the system of poles, wires and cables herein authorized 
200.8 	to be made, the council shall proceed with the construction.

200.9 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
200.10 	referendum authorized on or after that date.

200.11 	Sec. 16. Minnesota Statutes 2016, section 455.29, is amended to read:
200.12 	455.29 MUNICIPALITIES MAY EXTEND ELECTRIC SERVICE.
200.13 	Except as otherwise restricted by chapter 216B, the governing body, or the commission 
200.14 	or board charged with the operation of the public utilities, if one exists therein, of any 
200.15 	municipality in the state owning and operating an electric light and power plant for the 
200.16 	purpose of the manufacture and sale of electrical power or for the purchase and redistribution 
200.17 	of electrical power, may, upon a two-thirds vote of the governing body, or the commission 
200.18 	or board, in addition to all other powers now possessed by such municipality, sell electricity 
200.19 	to customers, singly or collectively, outside of such municipality, within the state but not 
200.20 	to exceed a distance of 30 miles from the corporate limits of the municipality. Before any 
200.21 	municipality shall have the power to extend its lines and sell electricity outside of the 
200.22 	municipality as provided by sections 455.29 and 455.30, the governing body shall first 
200.23 	submit to the voters of the municipality, at a general or special an election held on the first 
200.24 	Tuesday after the first Monday in November of either an even-numbered or odd-numbered 
200.25 	year, the general principle of going outside the municipality and fixing the maximum amount 
200.26 	of contemplated expenditures reasonably expected to be made for any and all extensions 
200.27 	then or thereafter contemplated. Three weeks' published notice shall be given of such election 
200.28 	as required by law, and if a majority of those voting upon the proposition favors the same, 
200.29 	then the municipality shall thereafter be considered as having chosen to enter the general 
200.30 	business of extending its electric light and power facilities beyond the corporate limits of 
200.31 	the municipality. It shall not be necessary to submit to a vote of the people the question of 
200.32 	any specific enlargement, extension, or improvement of any outside lines; provided the 
200.33 	voters of the municipality have generally elected to exercise the privileges afforded by 
200.34 	sections 455.29 and 455.30, and, provided, that each and any specific extension, enlargement, 
201.1 	or improvement project is within the limit of the maximum expenditure authorized at the 
201.2 	election. In cities operating under a home rule charter, where a vote of the people is not 
201.3 	now required in order to extend electric light and power lines, no election shall be required 
201.4 	under the provisions of any act. At any election held to determine the attitude of the voters 
201.5 	upon this principle, the question shall be simply stated upon the ballot provided therefor, 
201.6 	and shall be substantially in the following form: "Shall the city of ..................... undertake 
201.7 	the general proposition of extending its electric light and power lines beyond the limits of 
201.8 	the municipality, and limit the maximum expenditures for any and all future extensions to 
201.9 	the sum of $....................?" For this purpose every municipality is authorized and empowered 
201.10 	to extend the lines, wires, and fixtures of its plant to such customers and may issue certificates 
201.11 	of indebtedness therefor in an amount not to exceed the actual cost of the extensions and 
201.12 	for a term not to exceed the reasonable life of the extensions. These certificates of 
201.13 	indebtedness shall in no case be made a charge against the municipality, but shall be payable 
201.14 	and paid out of current revenues of the plant other than taxes.

201.15 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
201.16 	referendum authorized on or after that date.

201.17 	Sec. 17. Minnesota Statutes 2016, section 469.190, subdivision 1, is amended to read:
201.18 		Subdivision 1.Authorization. Notwithstanding section 477A.016 or any other law, a 
201.19 	statutory or home rule charter city may by ordinance, and a town may by the affirmative 
201.20 	vote of the electors at the annual town meeting, or at a special town meeting, impose a tax 
201.21 	of up to three percent on the gross receipts from the furnishing for consideration of lodging 
201.22 	at a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing 
201.23 	of it for a continuous period of 30 days or more. A statutory or home rule charter city may 
201.24 	by ordinance impose the tax authorized under this subdivision on the camping site receipts 
201.25 	of a municipal campground.

201.26 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
201.27 	referendum authorized on or after that date.

201.28 	Sec. 18. Minnesota Statutes 2016, section 469.190, subdivision 5, is amended to read:
201.29 		Subd. 5.Reverse referendum. If the county board passes a resolution under subdivision 
201.30 	4 to impose the tax, the resolution must be published for two successive weeks in a newspaper 
201.31 	of general circulation within the unorganized territory, together with a notice fixing a date 
201.32 	for a public hearing on the proposed tax.
202.1 	The hearing must be held not less than two weeks nor more than four weeks after the 
202.2 	first publication of the notice. After the public hearing, the county board may determine to 
202.3 	take no further action, or may adopt a resolution authorizing the tax as originally proposed 
202.4 	or approving a lesser rate of tax. The resolution must be published in a newspaper of general 
202.5 	circulation within the unorganized territory. The voters of the unorganized territory may 
202.6 	request a referendum on the proposed tax by filing a petition with the county auditor within 
202.7 	30 days after the resolution is published. The petition must be signed by voters who reside 
202.8 	in the unorganized territory. The number of signatures must equal at least five percent of 
202.9 	the number of persons voting in the unorganized territory in the last general election. If such 
202.10 	a petition is timely filed, the resolution is not effective until it has been submitted to the 
202.11 	voters residing in the unorganized territory at a general or special an election held on the 
202.12 	first Tuesday after the first Monday in November of either an even-numbered or 
202.13 	odd-numbered year and a majority of votes cast on the question of approving the resolution 
202.14 	are in the affirmative. The commissioner of revenue shall prepare a suggested form of 
202.15 	question to be presented at the referendum.

202.16 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
202.17 	referendum authorized on or after that date.

202.18 	Sec. 19. Minnesota Statutes 2016, section 471.57, subdivision 3, is amended to read:
202.19 		Subd. 3.May use fund for other purposes upon vote. The council of any municipality 
202.20 	which has established a public works reserve fund by an ordinance designating the specific 
202.21 	improvement or type of capital improvement for which the fund may be used may submit 
202.22 	to the voters of the municipality at any regular or specialan election held on the first Tuesday 
202.23 	after the first Monday in November of either an even-numbered or odd-numbered year the 
202.24 	question of using the fund for some other purpose. If a majority of the votes cast on the 
202.25 	question are in favor of such diversion from the original purpose of the fund, it may be used 
202.26 	for any purpose so approved by the voters.

202.27 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
202.28 	referendum authorized on or after that date.

202.29 	Sec. 20. Minnesota Statutes 2016, section 471.571, subdivision 3, is amended to read:
202.30 		Subd. 3.Expenditure from fund, limitation. No expenditure for any one project in 
202.31 	excess of 60 percent of one year's levy or $25,000, whichever is greater, may be made from 
202.32 	such permanent improvement or replacement fund in any year without first obtaining the 
202.33 	approval of a majority of the voters voting at a general or special municipal election held 
203.1 	on the first Tuesday after the first Monday in November of either an even-numbered or 
203.2 	odd-numbered year at which the question of making such expenditure has been submitted. 
203.3 	In submitting any proposal to the voters for approval, the amount proposed to be spent and 
203.4 	the purpose thereof shall be stated in the proposal submitted. The proceeds of such levies 
203.5 	may be pledged for the payment of any bonds issued pursuant to law for any purposes 
203.6 	authorized hereby and annual payments upon such bonds or interest may be made without 
203.7 	additional authorization.

203.8 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
203.9 	referendum authorized on or after that date.

203.10 	Sec. 21. Minnesota Statutes 2016, section 471.572, subdivision 4, is amended to read:
203.11 		Subd. 4.Use of fund for a specific purpose. If the city has established a reserve fund, 
203.12 	it may submit to the voters at a regular or special an election held on the first Tuesday after 
203.13 	the first Monday in November of either an even-numbered or odd-numbered year the question 
203.14 	of whether use of the fund should be restricted to a specific improvement or type of capital 
203.15 	improvement. If a majority of the votes cast on the question are in favor of the limitation 
203.16 	on the use of the reserve fund, it may be used only for the purpose approved by the voters.

203.17 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
203.18 	referendum authorized on or after that date.

203.19 	Sec. 22. Minnesota Statutes 2017 Supplement, section 475.59, subdivision 2, is amended 
203.20 	to read:
203.21 		Subd. 2.Election date. An election to approve issuance of bonds under this section held 
203.22 	by a municipality or school district must be held on a date authorized in section 205.10, 
203.23 	subdivision 3a, or 205A.05, subdivision 1a. An election under this section held by a town 
203.24 	may be held on the same day as the annual town meeting or on the first Tuesday after the 
203.25 	first Monday in November of either an even-numbered or odd-numbered year.

203.26 	EFFECTIVE DATE. This section is effective August 1, 2018, and applies to any 
203.27 	referendum authorized on or after that date.

203.28 	ARTICLE 8
203.29 	MISCELLANEOUS

203.30 	Section 1. [16A.1246] NO SPENDING FOR CERTAIN RAIL PROJECTS.
204.1 	(a) Except as provided in paragraph (b), no appropriation or other state money, whether 
204.2 	in the general or another fund, must be expended or used for any costs related to studying 
204.3 	the feasibility of, planning for, designing, engineering, acquiring property or constructing 
204.4 	facilities for or related to, or development or operation of intercity or interregional passenger 
204.5 	rail facilities or operations between the city of Rochester or locations in its metropolitan 
204.6 	area and any location in the metropolitan area, as defined in section 473.121, subdivision 
204.7 	2.
204.8 	(b) The restrictions under this section do not apply to:
204.9 	(1) funds obtained from contributions, grants, or other voluntary payments made by 
204.10 	nongovernmental entities from private sources; or
204.11 	(2) amounts specifically appropriated for a project or costs subject to paragraph (a), but 
204.12 	only after enactment of a law that explicitly adds the project for which the expenditures are 
204.13 	made to the statewide freight and passenger rail plan under section 174.03, subdivision 1b.

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

204.15 	Sec. 2. [16B.2965] PROPERTY LEASED FOR RAIL PROJECTS.
204.16 	(a) If a state official leases, loans, or otherwise makes available state lands, air rights, 
204.17 	or any other state property for use in connection with passenger rail facilities, as described 
204.18 	in section 16A.1246, the lease or other agreement must include or be secured by a security 
204.19 	bond or equivalent guarantee that allows the state to recover any costs it incurs in connection 
204.20 	with the rail project from a responsible third party or secure source of capital, if the passenger 
204.21 	rail facilities are not constructed, do not go into operation, or are abandoned, whether or 
204.22 	not the facilities began operations. The security bond or equivalent guarantee must remain 
204.23 	in place for the term of lease, loan, or other agreement that makes state property available 
204.24 	for use by the project. These costs include restoring state property to its original condition.
204.25 	(b) For purposes of this section, "state official" includes the commissioner, the 
204.26 	commissioner of transportation, or any other state official with authority to enter a lease or 
204.27 	other agreement providing for use by a nonstate entity of state property.

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

204.29 	Sec. 3. [117.028] CONDEMNATION FOR CERTAIN RAIL FACILITIES 
204.30 	PROHIBITED.
204.31 	Notwithstanding section 222.27 or any other law to the contrary, no condemning authority 
204.32 	may take property for the development or construction of or for facilities related to intercity 
205.1 	or interregional passenger rail facilities or operations between the city of Rochester or 
205.2 	locations in its metropolitan area and any location in the metropolitan area, as defined in 
205.3 	section 473.121, subdivision 2.

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

205.5 	Sec. 4. Minnesota Statutes 2016, section 174.03, subdivision 1b, is amended to read:
205.6 		Subd. 1b.Statewide freight and passenger rail plan. (a) The commissioner shall 
205.7 	develop a comprehensive statewide freight and passenger rail plan to be included and revised 
205.8 	as a part of the statewide multimodal transportation plan.
205.9 	(b) Before the initial version of the plan is adopted, the commissioner shall provide a 
205.10 	copy for review and comment to the chairs and ranking minority members of the senate and 
205.11 	house of representatives committees with jurisdiction over transportation policy and finance. 
205.12 	Notwithstanding paragraph (a), the commissioner may adopt the next revision of the statewide 
205.13 	transportation plan, scheduled to be completed in calendar year 2009, prior to completion 
205.14 	of the initial version of the comprehensive statewide freight and passenger rail plan. The 
205.15 	statewide freight and passenger rail plan must not include prioritization, planning, or 
205.16 	references, other than references for historical purposes, to intercity passenger rail between 
205.17 	the city of Rochester or locations in its metropolitan area and any location in the metropolitan 
205.18 	area, as defined in section 473.121, subdivision 2. Before February 1, 2019, the commissioner 
205.19 	shall revise the statewide freight and passenger rail plan to meet the requirements of this 
205.20 	paragraph.

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

205.22 	Sec. 5. Minnesota Statutes 2016, section 197.603, subdivision 2, is amended to read:
205.23 		Subd. 2.Records; data privacy. Pursuant to chapter 13 the county veterans service 
205.24 	officer is the responsible authority with respect to all records in the officer's custody. The 
205.25 	data on clients' applications for assistance is private data on individuals, as defined in section 
205.26 	13.02, subdivision 12. The county veterans service officer may disclose to the county assessor 
205.27 	private data necessary to determine a client's eligibility for the disabled veteran's homestead 
205.28 	market value exclusion under section 273.13, subdivision 34.

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

206.1 	Sec. 6. [222.271] PASSENGER RAIL PROJECTS; ENVIRONMENTAL 
206.2 	INSURANCE REQUIRED.
206.3 		Subdivision 1.Scope. (a) This section applies to any person that seeks a federal or state 
206.4 	permit or other formal legal authorization to construct or operate a passenger rail project 
206.5 	with an estimated capital cost exceeding $1,000,000,000.
206.6 	(b) This section does not apply to a person whose only action within the scope of 
206.7 	paragraph (a) is an application for a building permit.
206.8 		Subd. 2.Definitions. (a) For purposes of this section, unless the context clearly indicates 
206.9 	otherwise, the following definitions apply.
206.10 	(b) "Commissioner" means the commissioner of the Pollution Control Agency.
206.11 	(c) "Insurance" means a commercial insurance policy, a security bond, or an equivalent 
206.12 	guarantee that provides assurance of the project's ability to pay claims for any liability under 
206.13 	chapter 115B or similar provisions of common law or federal law resulting from construction 
206.14 	or operation of the passenger rail project.
206.15 	(d) "Passenger rail project" or "project" means a railroad or a line or lines of a railway 
206.16 	located within or partly within Minnesota intended to provide passenger service, regardless 
206.17 	of whether freight service is also provided, by a common carrier other than a federal or state 
206.18 	government unit, a political subdivision of the state, or the National Railroad Passenger 
206.19 	Corporation created under the Rail Passenger Service Act of 1970, Public Law 91-518.
206.20 	(e) "Person" includes a corporation, limited liability company, partnership, other entity, 
206.21 	or an individual.
206.22 		Subd. 3.Environmental insurance required. (a) Any person subject to this section 
206.23 	must obtain and maintain insurance that is adequate to cover potential claims and meets the 
206.24 	other requirements of this section, as approved by the commissioner under paragraph (b). 
206.25 	The insurance must not contain dollar limits on liability, or if it does contain a dollar limit 
206.26 	the limit must be not less than a reasonable estimate of the potential exposure of the project 
206.27 	for environmental remediation or impairment damages. Any dollar limit must be adjusted 
206.28 	if the scope, size, or cost of the project increases materially. The insurance must cover any 
206.29 	liability incurred during and after the construction and operation of the project and must 
206.30 	not contain exclusions, limitations, or other restrictions that are not standard in comprehensive 
206.31 	environmental remediation insurance or in environmental impairment insurance, as 
206.32 	applicable.
207.1 	(b) In order to satisfy the requirements of this section, the commissioner must determine 
207.2 	that the insurance is adequate and that it meets the other requirements of this section. The 
207.3 	commissioner may require that the project provide any supporting documentation to 
207.4 	determine that insurance is adequate and meets the other requirements of this section and 
207.5 	that the project has the financial ability to maintain insurance during the project's operations.

207.6 	EFFECTIVE DATE. This section is effective for passenger rail projects for which 
207.7 	application for a permit or other formal legal authorization to construct is made after the 
207.8 	day following final enactment.

207.9 	Sec. 7. Minnesota Statutes 2016, section 270A.03, subdivision 7, is amended to read:
207.10 		Subd. 7.Refund. "Refund" means an individual income tax refund or political 
207.11 	contribution refund, pursuant to chapter 290, or a property tax credit or refund, pursuant to 
207.12 	chapter 290A, or a sustainable forest payment to a claimant under chapter 290C.
207.13 	For purposes of this chapter, lottery prizes, as set forth in section 349A.08, subdivision 
207.14 	8, and amounts granted to persons by the legislature on the recommendation of the joint 
207.15 	senate-house of representatives Subcommittee on Claims shall be treated as refunds.
207.16 	In the case of a joint property tax refund payable to spouses under chapter 290A, the 
207.17 	refund shall be considered as belonging to each spouse in the proportion of the total refund 
207.18 	that equals each spouse's proportion of the total income determined under section 290A.03, 
207.19 	subdivision 3. In the case of a joint income tax refund under chapter 289A, the refund shall 
207.20 	be considered as belonging to each spouse in the proportion of the total refund that equals 
207.21 	each spouse's proportion of the total taxable income determined under section 290.01, 
207.22 	subdivision 29. The commissioner shall remit the entire refund to the claimant agency, 
207.23 	which shall, upon the request of the spouse who does not owe the debt, determine the amount 
207.24 	of the refund belonging to that spouse and refund the amount to that spouse. For court fines, 
207.25 	fees, and surcharges and court-ordered restitution under section 611A.04, subdivision 2, 
207.26 	the notice provided by the commissioner of revenue under section 270A.07, subdivision 2, 
207.27 	paragraph (b), serves as the appropriate legal notice to the spouse who does not owe the 
207.28 	debt.

207.29 	EFFECTIVE DATE. This section is effective for political contribution refund claims 
207.30 	based on contributions made on or after July 1, 2018.

208.1 	Sec. 8. Minnesota Statutes 2016, section 273.1245, subdivision 2, is amended to read:
208.2 		Subd. 2.Disclosure. The assessor shall disclose the data described in subdivision 1 to 
208.3 	the commissioner of revenue as provided by law. The assessor shall also disclose all or 
208.4 	portions of the data described in subdivision 1 to:
208.5 	(1) the county treasurer solely for the purpose of proceeding under the Revenue Recapture 
208.6 	Act to recover personal property taxes owing.; and
208.7 	(2) the county veterans service officer for the purpose of determining a person's eligibility 
208.8 	for the disabled veteran's homestead market value exclusion under section 273.13, subdivision 
208.9 	34.

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

208.11 	Sec. 9. Minnesota Statutes 2016, section 289A.50, subdivision 1, is amended to read:
208.12 		Subdivision 1.General right to refund. (a) Subject to the requirements of this section 
208.13 	and section 289A.40, a taxpayer who has paid a tax in excess of the taxes lawfully due and 
208.14 	who files a written claim for refund will be refunded or credited the overpayment of the tax 
208.15 	determined by the commissioner to be erroneously paid.
208.16 	(b) The claim must specify the name of the taxpayer, the date when and the period for 
208.17 	which the tax was paid, the kind of tax paid, the amount of the tax that the taxpayer claims 
208.18 	was erroneously paid, the grounds on which a refund is claimed, and other information 
208.19 	relative to the payment and in the form required by the commissioner. An income tax, estate 
208.20 	tax, or corporate franchise tax return, or amended return claiming an overpayment constitutes 
208.21 	a claim for refund.
208.22 	(c) When, in the course of an examination, and within the time for requesting a refund, 
208.23 	the commissioner determines that there has been an overpayment of tax, the commissioner 
208.24 	shall refund or credit the overpayment to the taxpayer and no demand is necessary. If the 
208.25 	overpayment exceeds $1, the amount of the overpayment must be refunded to the taxpayer. 
208.26 	If the amount of the overpayment is less than $1, the commissioner is not required to refund. 
208.27 	In these situations, the commissioner does not have to make written findings or serve notice 
208.28 	by mail to the taxpayer.
208.29 	(d) If the amount allowable as a credit for withholding, estimated taxes, or dependent 
208.30 	care exceeds the tax against which the credit is allowable, the amount of the excess is 
208.31 	considered an overpayment. The refund allowed by section 290.06, subdivision 23, is also 
208.32 	considered an overpayment. The requirements of section 270C.33 do not apply to the 
208.33 	refunding of such an overpayment shown on the original return filed by a taxpayer.
209.1 	(e) If the entertainment tax withheld at the source exceeds by $1 or more the taxes, 
209.2 	penalties, and interest reported in the return of the entertainment entity or imposed by section 
209.3 	290.9201, the excess must be refunded to the entertainment entity. If the excess is less than 
209.4 	$1, the commissioner need not refund that amount.
209.5 	(f) If the surety deposit required for a construction contract exceeds the liability of the 
209.6 	out-of-state contractor, the commissioner shall refund the difference to the contractor.
209.7 	(g) An action of the commissioner in refunding the amount of the overpayment does not 
209.8 	constitute a determination of the correctness of the return of the taxpayer.
209.9 	(h) There is appropriated from the general fund to the commissioner of revenue the 
209.10 	amount necessary to pay refunds allowed under this section.

209.11 	EFFECTIVE DATE. This section is effective for political contribution refund claims 
209.12 	based on contributions made on or after July 1, 2018.

209.13 	Sec. 10. Minnesota Statutes 2016, section 290.01, subdivision 6, is amended to read:
209.14 		Subd. 6.Taxpayer. The term "taxpayer" means any person or corporation subject to a 
209.15 	tax imposed by this chapter. For purposes of section 290.06, subdivision 23, the term 
209.16 	"taxpayer" means an individual eligible to vote in Minnesota under section 201.014.

209.17 	EFFECTIVE DATE. This section is effective for political contribution refund claims 
209.18 	based on contributions made on or after July 1, 2018.

209.19 	Sec. 11. Minnesota Statutes 2016, section 297A.993, is amended by adding a subdivision 
209.20 	to read:
209.21 		Subd. 2a.Hennepin County. (a) Upon submission of a resolution adopted by the city 
209.22 	board to the Hennepin County Board, Hennepin County must remit to the city 50 percent 
209.23 	of the tax revenue collected under subdivision 1 within the boundaries of the city. The 
209.24 	payment to the city must be made at least annually. Notwithstanding subdivision 2, the city 
209.25 	must use the tax proceeds to plan, engineer, and construct improvements to county highways 
209.26 	and bridges within the boundaries of the city. Two or more cities may enter into a joint 
209.27 	powers agreement to jointly use the funds received by the cities on a project within the 
209.28 	boundaries of the joint powers agreement's member cities. For a city located partially in 
209.29 	Hennepin County, the city must use the tax proceeds on projects located within the portion 
209.30 	of the city that is within Hennepin County boundaries.
209.31 	(b) For purposes of this subdivision, "city" means a home rule charter or statutory city 
209.32 	that:
210.1 	(1) is located wholly or partially within Hennepin County;
210.2 	(2) has a population of 60,000 or greater; and
210.3 	(3) does not have within the city boundaries a current light rail transit line or a light rail 
210.4 	transit line in planning or development.
210.5 	(c) This section expires on July 1, 2038, or when the tax under subdivision 2 is terminated, 
210.6 	whichever is earlier.

210.7 	Sec. 12. Minnesota Statutes 2016, section 298.225, subdivision 1, is amended to read:
210.8 		Subdivision 1.Guaranteed distribution. (a) Except as provided under paragraph (c), 
210.9 	the distribution of the taconite production tax as provided in section 298.28, subdivisions 
210.10 	3 to 5, 6, paragraph (b), 7, and 8, shall equal the lesser of the following amounts:
210.11 	(1) the amount distributed pursuant to this section and section 298.28, with respect to 
210.12 	1983 production if the production for the year prior to the distribution year is no less than 
210.13 	42,000,000 taxable tons. If the production is less than 42,000,000 taxable tons, the amount 
210.14 	of the distributions shall be reduced proportionately at the rate of two percent for each 
210.15 	1,000,000 tons, or part of 1,000,000 tons by which the production is less than 42,000,000 
210.16 	tons; or
210.17 	(2)(i) for the distributions made pursuant to section 298.28, subdivisions 4, paragraphs 
210.18 	(b) and (c), and 6, paragraph (c), 31.2 percent of the amount distributed pursuant to this 
210.19 	section and section 298.28, with respect to 1983 production;
210.20 	(ii) for the distributions made pursuant to section 298.28, subdivision 5, paragraphs (b) 
210.21 	and (d), 75 percent of the amount distributed pursuant to this section and section 298.28, 
210.22 	with respect to 1983 production provided that the aid guarantee for distributions under 
210.23 	section 298.28, subdivision 5, paragraph (b), shall be reduced by five cents per taxable ton 
210.24 	for production years 2014 and thereafter.
210.25 	(b) The distribution of the taconite production tax as provided in section 298.28, 
210.26 	subdivision 2, shall equal the following amount:
210.27 	(1) if the production for the year prior to the distribution year is at least 42,000,000 
210.28 	taxable tons, the amount distributed pursuant to this section and section 298.28 with respect 
210.29 	to 1999 production; or
210.30 	(2) if the production for the year prior to the distribution year is less than 42,000,000 
210.31 	taxable tons, the amount distributed pursuant to this section and section 298.28 with respect 
211.1 	to 1999 production, reduced proportionately at the rate of two percent for each 1,000,000 
211.2 	tons or part of 1,000,000 tons by which the production is less than 42,000,000 tons.
211.3 	(c) The distribution of the taconite production tax under section 298.28, subdivision 3, 
211.4 	paragraph (a), guaranteed under this section is equal to the amount distributed under section 
211.5 	298.28, with respect to 1983 production.

211.6 	EFFECTIVE DATE. This section is effective for distributions in 2019 and thereafter.

211.7 	Sec. 13. Minnesota Statutes 2017 Supplement, section 298.227, is amended to read:
211.8 	298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
211.9 	An amount equal to that distributed pursuant to each taconite producer's taxable 
211.10 	production and qualifying sales under section 298.28, subdivision 9a, shall be held by the 
211.11 	commissioner of Iron Range resources and rehabilitation in a separate taconite economic 
211.12 	development fund for each taconite and direct reduced ore producer. Money from the fund 
211.13 	for each producer shall be released by the commissioner after review by a joint committee 
211.14 	consisting of an equal number of representatives of the salaried employees and the 
211.15 	nonsalaried production and maintenance employees of that producer. The District 11 director 
211.16 	of the United States Steelworkers of America, on advice of each local employee president, 
211.17 	shall select the employee members. In nonorganized operations, the employee committee 
211.18 	shall be elected by the nonsalaried production and maintenance employees. The review 
211.19 	must be completed no later than six months after the producer presents a proposal for 
211.20 	expenditure of the funds to the committee. The funds held pursuant to this section may be 
211.21 	released only for workforce development and associated public facility improvement, 
211.22 	concurrent reclamation, or for acquisition of plant and stationary mining equipment and 
211.23 	facilities for the producer or for research and development in Minnesota on new mining, or 
211.24 	taconite, iron, or steel production technology, but only if the producer provides a matching 
211.25 	expenditure equal to the amount of the distribution to be used for the same purpose beginning 
211.26 	with distributions in 2014. Effective for proposals for expenditures of money from the fund 
211.27 	beginning May 26, 2007, the commissioner may not release the funds before the next 
211.28 	scheduled meeting of the board. If a proposed expenditure is not approved by the 
211.29 	commissioner, after consultation with the advisory board, the funds must be deposited in 
211.30 	the Taconite Environmental Protection Fund under sections 298.222 to 298.225. If a taconite 
211.31 	production facility is sold after operations at the facility had ceased, any money remaining 
211.32 	in the fund for the former producer may be released to the purchaser of the facility on the 
211.33 	terms otherwise applicable to the former producer under this section. If a producer fails to 
211.34 	provide matching funds for a proposed expenditure within six months after the commissioner 
212.1 	approves release of the funds, the funds are available for release to another producer in 
212.2 	proportion to the distribution provided and under the conditions of this section may be 
212.3 	released by the commissioner for deposit in the taconite area environmental protection fund 
212.4 	created in section 298.223. Any portion of the fund which is not released by the commissioner 
212.5 	within one year of its deposit in the fund shall be divided betweendistributed to the taconite 
212.6 	environmental protection fund created in section 298.223 and the Douglas J. Johnson 
212.7 	economic protection trust fund created in section 298.292 for placement in their respective 
212.8 	special accounts. Two-thirds of the unreleased funds shall be distributed to the taconite 
212.9 	environmental protection fund and one-third to the Douglas J. Johnson economic protection 
212.10 	trust fund.

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

212.12 	Sec. 14. Minnesota Statutes 2016, section 298.28, subdivision 3, is amended to read:
212.13 		Subd. 3.Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed under 
212.14 	subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid account 
212.15 	to be distributed as provided in section 298.282. The amount allocated to the taconite 
212.16 	municipal aid account must be annually increased in the same proportion as the increase in 
212.17 	the implicit price deflator as provided in section 298.24, subdivision 1.
212.18 	(b) An amount must be allocated to towns or cities that is annually certified by the county 
212.19 	auditor of a county containing a taconite tax relief area as defined in section 273.134, 
212.20 	paragraph (b), within which there is (1) an organized township if, as of January 2, 1982, 
212.21 	more than 75 percent of the assessed valuation of the township consists of iron ore or (2) a 
212.22 	city if, as of January 2, 1980, more than 75 percent of the assessed valuation of the city 
212.23 	consists of iron ore.
212.24 	(c) The amount allocated under paragraph (b) will be the portion of a township's or city's 
212.25 	certified levy equal to the proportion of (1) the difference between 50 percent of January 
212.26 	2, 1982, assessed value in the case of a township and 50 percent of the January 2, 1980, 
212.27 	assessed value in the case of a city and its current assessed value to (2) the sum of its current 
212.28 	assessed value plus the difference determined in (1), provided that the amount distributed 
212.29 	shall not exceed $55 per capita in the case of a township or $75 per capita in the case of a 
212.30 	city. For purposes of this limitation, population will be determined according to the 1980 
212.31 	decennial census conducted by the United States Bureau of the Census. If the current assessed 
212.32 	value of the township exceeds 50 percent of the township's January 2, 1982, assessed value, 
212.33 	or if the current assessed value of the city exceeds 50 percent of the city's January 2, 1980, 
212.34 	assessed value, this paragraph shall not apply. For purposes of this paragraph, "assessed 
213.1 	value," when used in reference to years other than 1980 or 1982, means the appropriate net 
213.2 	tax capacities multiplied by 10.2.
213.3 	(d) In addition to other distributions under this subdivision, three cents per taxable ton 
213.4 	for distributions in 2009 must be allocated for distribution to towns that are entirely located 
213.5 	within the taconite tax relief area defined in section 273.134, paragraph (b). For distribution 
213.6 	in 2010 through 2014 and for distribution in 2018 and subsequent years, the three-cent 
213.7 	amount must be annually increased in the same proportion as the increase in the implicit 
213.8 	price deflator as provided in section 298.24, subdivision 1. The amount available under this 
213.9 	paragraph will be distributed to eligible towns on a per capita basis, provided that no town 
213.10 	may receive more than $50,000 in any year under this paragraph. Any amount of the 
213.11 	distribution that exceeds the $50,000 limitation for a town under this paragraph must be 
213.12 	redistributed on a per capita basis among the other eligible towns, to whose distributions 
213.13 	do not exceed $50,000.

213.14 	EFFECTIVE DATE. This section is effective for distributions in 2019 and thereafter.

213.15 	Sec. 15. Minnesota Statutes 2016, section 298.28, subdivision 9a, is amended to read:
213.16 		Subd. 9a.Taconite economic development fund. (a) 25.1 cents per ton for distributions 
213.17 	in 2002 and thereafter must be paid to the taconite economic development fund. No 
213.18 	distribution shall be made under this paragraph in 2004 or any subsequent year in which 
213.19 	total industry production falls below 30 million tons. Distribution shall only be made to a 
213.20 	Minnesota taconite pellet producer's fund under section 298.227 if the producer timely pays 
213.21 	its tax under section 298.24 by the dates provided under section 298.27, or pursuant to the 
213.22 	due dates provided by an administrative agreement with the commissioner.
213.23 	(b) An amount equal to 50 percent of the tax under section 298.24 for concentrate sold 
213.24 	in the form of pellet chips and fines not exceeding 5/16 inch in size and not including crushed 
213.25 	pellets shall be paid to the taconite economic development fund. The amount paid shall not 
213.26 	exceed $700,000 annually for all companies Minnesota taconite pellet producers. If the 
213.27 	initial amount to be paid to the fund exceeds this amount, each company's Minnesota taconite 
213.28 	pellet producer's payment shall be prorated so the total does not exceed $700,000.

213.29 	EFFECTIVE DATE. This section is effective retroactively from December 31, 2016.

214.1 	Sec. 16. Minnesota Statutes 2016, section 360.013, is amended by adding a subdivision 
214.2 	to read:
214.3 		Subd. 62.Unmanned aircraft. "Unmanned aircraft" means an aircraft, as defined in 
214.4 	subdivision 37, that is operated without the possibility of human intervention from within 
214.5 	or on the aircraft.

214.6 	EFFECTIVE DATE. This section is effective July 1, 2018.

214.7 	Sec. 17. Minnesota Statutes 2016, section 360.013, is amended by adding a subdivision 
214.8 	to read:
214.9 		Subd. 63.Unmanned aircraft system. "Unmanned aircraft system" means an unmanned 
214.10 	aircraft and all of its associated elements, including components and communication links, 
214.11 	that are required to control and operate the aircraft.

214.12 	EFFECTIVE DATE. This section is effective July 1, 2018.

214.13 	Sec. 18. Minnesota Statutes 2016, section 360.55, is amended by adding a subdivision to 
214.14 	read:
214.15 		Subd. 9.Unmanned aircraft systems. (a) Any unmanned aircraft system in which the 
214.16 	unmanned aircraft weighs less than 55 pounds at takeoff, including payload and anything 
214.17 	affixed to the aircraft, either:
214.18 	(1) must be registered in the state for an annual fee of $25; or
214.19 	(2) is not subject to registration or an annual fee if the unmanned aircraft system is owned 
214.20 	and operated solely for recreational purposes.
214.21 	(b) An unmanned aircraft system that meets the requirements under paragraph (a) is 
214.22 	exempt from aircraft registration tax under sections 360.511 to 360.67.

214.23 	EFFECTIVE DATE. This section is effective July 1, 2018.

214.24 	Sec. 19. Minnesota Statutes 2016, section 360.62, is amended to read:
214.25 	360.62 TAX REFUND.
214.26 	Except as provided herein the tax upon any aircraft which has been paid for any year, 
214.27 	shall be refunded only for errors made in computing the tax or fees or for the error on the 
214.28 	part of an owner who may in error have registered an aircraft that was not before, nor at the 
214.29 	time of such registration, nor at any time thereafter during the tax period, subject to such 
214.30 	tax in this state; provided that after more than 24 months after such tax was paid no refund 
215.1 	shall be made for any tax paid on any aircraft. Refunds as provided by sections 360.511 to 
215.2 	360.67 shall be made in the manner provided by Laws 1947, chapter 416. The former owner 
215.3 	of a transferred aircraft by an assignment in writing endorsed upon the former owner's 
215.4 	registration certificate and delivered to the commissioner within the time provided herein 
215.5 	may sell and assign to the new owner thereof the right to have the tax paid by the former 
215.6 	owner accredited to such new owner who duly registers such aircraft. Any owner whose 
215.7 	aircraft shall be is destroyed or permanently removed from the state shall be is entitled to 
215.8 	a refund for the unused portion of the tax paid upon the destroyed or removed aircraft so 
215.9 	destroyed or removed from the state, such. The refund to must be computed pro rata by the 
215.10 	month, and to be equal to the monthly tax rate multiplied by the number of full calendar 
215.11 	months remaining in the fiscal year, or multiplied by the number of full calendar months 
215.12 	remaining in that period between January 1, 1966, to and including June 30, 1967, whichever 
215.13 	period is applicable. An unmanned aircraft system that is destroyed or permanently removed 
215.14 	from the state is not entitled to a tax refund under this section.
215.15 	In order to secure such refund, the aircraft owner shall submit a signed statement that 
215.16 	such aircraft has either been sold out of state or destroyed, the date of such sale or destruction, 
215.17 	and such other information as the commissioner may require. Any false statement willfully 
215.18 	and knowingly made in regard thereto shall be deemed a perjury and punished accordingly. 
215.19 	No refund shall be made if application is not made within 12 months after the date the 
215.20 	aircraft was sold out of state or destroyed.

215.21 	EFFECTIVE DATE. This section is effective July 1, 2018.

215.22 	Sec. 20. [459.36] NO SPENDING OF PUBLIC MONEY FOR CERTAIN RAIL 
215.23 	PROJECTS.
215.24 	(a) Except as provided in paragraph (b), a governmental unit must not spend or use any 
215.25 	money for any costs related to studying the feasibility of, planning for, designing, 
215.26 	engineering, acquiring property or constructing facilities for or related to, or development 
215.27 	or operation of intercity or interregional passenger rail facilities or operations between the 
215.28 	city of Rochester, or locations in its metropolitan area, and any location in the metropolitan 
215.29 	area, as defined in section 473.121, subdivision 2.
215.30 	(b) The restrictions under this section do not apply to:
215.31 	(1) funds the governmental unit obtains from contributions, grants, or other voluntary 
215.32 	payments made by nongovernmental entities from private sources;
216.1 	(2) expenditures for costs of public infrastructure, including public utilities, parking 
216.2 	facilities, a multimode transit hub, or similar projects located within the area of the 
216.3 	development district, as defined under section 469.40, and reflected in the development 
216.4 	plan adopted before the enactment of this section, that are intended to serve, and that are 
216.5 	made following the completed construction and commencement of operation of privately 
216.6 	financed and operated intercity or interregional passenger rail facilities; or
216.7 	(3) expenditures made after enactment of a law that explicitly adds the intercity or 
216.8 	interregional passenger rail project for which the expenditures are made to the statewide 
216.9 	freight and passenger rail plan under section 174.03, subdivision 1b.
216.10 	(c) For purposes of this section, "governmental unit" means any of the following, located 
216.11 	in development regions 10 and 11, as designated under section 462.385, subdivision 1:
216.12 	(1) statutory or home rule charter city;
216.13 	(2) county;
216.14 	(3) special taxing district, as defined in section 275.066;
216.15 	(4) metropolitan planning organization; or
216.16 	(5) destination medical center entity, which includes the Destination Medical Center 
216.17 	Corporation and agency, as those terms are defined in section 469.40, and any successor or 
216.18 	related entity.

216.19 	EFFECTIVE DATE. This section is effective the day following final enactment without 
216.20 	local approval under Minnesota Statutes, section 645.023, subdivision 1, clause (c).

216.21 	Sec. 21. Minnesota Statutes 2016, section 474A.02, subdivision 22b, is amended to read:
216.22 		Subd. 22b.Public facilities project. "Public facilities project" means any publicly owned 
216.23 	facility, or a facility owned by a nonprofit organization that is used for district heating or 
216.24 	cooling, whether publicly or privately owned, that is eligible to be financed with the proceeds 
216.25 	of public facilities bonds as defined under section 474A.02, subdivision 23a.

216.26 	Sec. 22. Laws 1986, chapter 379, section 1, subdivision 1, is amended to read:
216.27 		Subdivision 1.Liquor and food tax authorized. (a) Notwithstanding Minnesota Statutes, 
216.28 	section 477A.016, or any ordinance, city charter, or other provision of law, the city of St. 
216.29 	Cloud may, by ordinance, impose a sales tax supplemental to the general sales tax imposed 
216.30 	in Minnesota Statutes, chapter 297A, the proceeds of which shall be used in accordance 
216.31 	with subdivision 2. The tax imposed by the city may be not more than one percent on the 
217.1 	gross receipts from all retail on-sales of intoxicating liquor and fermented malt beverages 
217.2 	sold at licensed on-sale liquor establishments located within its geographic boundaries, or 
217.3 	not more than one percent on the gross receipts from the retail sale of food and beverages 
217.4 	not subject to the liquor tax by a restaurant or place of refreshment located within its 
217.5 	geographic boundaries, or both. For purposes of this act, the city shall define the terms 
217.6 	"restaurant" and "place of refreshment" by resolution. The governing body of the city may 
217.7 	adopt an ordinance establishing a convention center taxing district. The ordinance shall 
217.8 	describe with particularity the area within the city to be included in the district. If the city 
217.9 	establishes a convention center taxing district, the sales taxes authorized under this 
217.10 	subdivision may be imposed only upon the sales occurring at on-sale liquor establishments, 
217.11 	restaurants, or other places of refreshment located within the district.
217.12 	(b) Notwithstanding Minnesota Statutes, section 477A.016, or any ordinance, city charter, 
217.13 	or other provision of law, the city of St. Cloud may, if approved by the voters at a general 
217.14 	election, increase by ordinance the tax allowed under paragraph (a) by up to one-half of 
217.15 	one percent. The election must be held before the governing body of the city considers the 
217.16 	ordinance. The proceeds of the increased tax must be used for remodeling, improvements, 
217.17 	and expansion of the Municipal Athletic Center, including making payments on any 
217.18 	associated bonds.

217.19 	EFFECTIVE DATE. This section is effective the day after the city of St. Cloud and 
217.20 	its chief clerical officer timely comply with Minnesota Statutes, section 645.021.

217.21 	Sec. 23. Laws 1986, chapter 379, section 2, subdivision 1, is amended to read:
217.22 		Subdivision 1.Additional tax authorized. (a) Notwithstanding Minnesota Statutes, 
217.23 	section 477A.016, or any ordinance, city charter, or other provision of law, the city of St. 
217.24 	Cloud may, by ordinance, impose a tax at a rate not to exceed two percent in addition to 
217.25 	the tax authorized under Laws 1979, chapter 197, on the gross receipts from the furnishing 
217.26 	for consideration of lodging at a hotel, motel, rooming house, tourist court, or resort other 
217.27 	than the renting or leasing of it for a continuous period of 30 days or more.
217.28 	(b) Notwithstanding Minnesota Statutes, section 477A.016, the city of St. Cloud may, 
217.29 	if approved by the voters at a general election, increase by ordinance the tax allowed under 
217.30 	paragraph (a) by up to one percent. The election must be held before the governing body 
217.31 	of the city considers the ordinance. The proceeds of the increased tax must be used for 
217.32 	remodeling, improvements, and expansion of the Municipal Athletic Center, including 
217.33 	making payments on any associated bonds.

218.1 	EFFECTIVE DATE. This section is effective the day after the city of St. Cloud and 
218.2 	its chief clerical officer timely comply with Minnesota Statutes, section 645.021.

218.3 	Sec. 24. Laws 2008, chapter 366, article 5, section 26, as amended by Laws 2013, chapter 
218.4 	143, article 9, section 11, is amended to read:
218.5 	Sec. 26. BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR RULE.
 218.6 	(a) The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that 
218.7 	activities must be undertaken within a five-year period from the date of certification of a 
218.8 	tax increment financing district, are increased to a 15 20-year period for the Port Authority 
218.9 	of the City of Bloomington's Tax Increment Financing District No. 1-I, Bloomington Central 
218.10 	Station.
218.11 	(b) Notwithstanding the provisions of Minnesota Statutes, section 469.176, or any other 
218.12 	law to the contrary, the city of Bloomington and its port authority may extend the duration 
218.13 	limits of the district for a period through December 31, 2039.
218.14 	(c) Effective for taxes payable in 2014, tax increment for the district must be computed 
218.15 	using the current local tax rate, notwithstanding the provisions of Minnesota Statutes, section 
218.16 	469.177, subdivision 1a.
218.17 	(d) The requirements of Minnesota Statutes, section 469.1763, subdivision 4, relating 
218.18 	to​ use of increments after the end of the time limit in Minnesota Statutes, section 469.1763, 
218.19 	subdivision 3, do not apply to the Port Authority of the City of Bloomington's Tax Increment 
218.20 	Financing District No. 1-I, Bloomington Central Station.

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

218.23 	Sec. 25. Laws 2011, First Special Session chapter 7, article 4, section 10, subdivision 3, 
218.24 	is amended to read:
218.25 		Subd. 3.Use of revenues. (a) Revenues received from taxes authorized by subdivisions 
218.26 	1 and 2 must be used by the city to pay the cost of collecting the taxes and to pay for the 
218.27 	following projects:
218.28 	(1) $4,500,000 for construction and completion of park improvement projects, including 
218.29 	St. Louis River riverfront improvements; Veteran's Park construction and improvements; 
218.30 	improvements to the Hilltop Park soccer complex and Braun Park baseball complex; capital 
218.31 	equipment and building and grounds improvements at the Pine Valley Park/Pine Valley 
219.1 	Hockey Arena/Cloquet Area Recreation Center; and development of pedestrian trails within 
219.2 	the city;
219.3 	(2) $5,800,00 for extension of utilities and the construction of all improvements associated 
219.4 	with the development of property adjacent to Highway 33 and Interstate Highway 35, 
219.5 	including payment of all debt service on bonds issued for these; and
219.6 	(3) $6,200,000 for engineering and construction of infrastructure improvements, 
219.7 	including, but not limited to roads, bridges, storm sewer, sanitary sewer, and water in areas 
219.8 	identified as part of the city's comprehensive land use plan.
219.9 	(b) Authorized expenses include, but are not limited to, acquiring property and paying 
219.10 	construction expenses related to these improvements, and paying debt service on bonds or 
219.11 	other obligations issued to finance acquisition and construction of these improvements.
219.12 	(c) Notwithstanding the revenue allocations in paragraph (a), clause (3), if the amount 
219.13 	spent for the improvements under paragraph (a), clause (2), are less than the $5,800,000 
219.14 	allowed under that clause, the total amount spent for the purpose listed in paragraph (a), 
219.15 	clause (3), may be increased by the difference between $5,800,000 and the amount actually 
219.16 	spent under paragraph (a), clause (2). However, the total expenditures for projects under 
219.17 	this subdivision may not exceed $16,500,000, excluding any costs related to issuance of 
219.18 	bonds under subdivision 4.

219.19 	EFFECTIVE DATE. This section is effective the day after the governing body of the 
219.20 	city of Cloquet and its chief clerical officer comply with the provisions of Minnesota Statutes, 
219.21 	section 645.021, subdivisions 2 and 3.

219.22 	Sec. 26. Laws 2017, First Special Session chapter 1, article 10, section 4, the effective 
219.23 	date, is amended to read:

219.24 	EFFECTIVE DATE; APPLICATION. This section is effective for applications and 
219.25 	certifications made in 2018 and thereafter, except the repeal of the exclusion of land under 
219.26 	item (iii) is effective retroactively for payments due under Minnesota Statutes, section 
219.27 	290C.08, beginning for payments due to be made in 2014. In order to qualify for retroactive 
219.28 	payments, the following requirements must be met: (1) the owner of land exceeding 60,000 
219.29 	acres that is subject to a single conservation easement funded under Minnesota Statutes, 
219.30 	section 97A.056 or a comparable permanent easement conveyed to a governmental or 
219.31 	nonprofit entity, must submit an application to the commissioner of revenue, in a form and 
219.32 	manner and at a time acceptable to the commissioner, establishing that the affected property 
219.33 	and its use met the requirement of Minnesota Statutes, chapter 290C, as amended by this 
220.1 	section; (2) the owner and each county in which the land is located must certify to the 
220.2 	commissioner that no petitions challenging the market value of the property are pending 
220.3 	under Minnesota Statutes, chapter 278; and (3) the requirements of clauses (1) and (2) must 
220.4 	be satisfied by October 1, 2017. No interest accrues on payment under this section for 
220.5 	periods before November 1, 2017.

220.6 	EFFECTIVE DATE. This section is effective the day following final enactment and 
220.7 	applies retroactively.

220.8 	Sec. 27. TRANSFER 2018 DISTRIBUTION ONLY.
 220.9 	For the 2018 distribution, the fund established under Minnesota Statutes, section 298.28, 
220.10 	subdivision 7, shall receive ten cents per ton of any excess of the balance remaining after 
220.11 	distribution of amounts required under Minnesota Statutes, section 298.28, subdivision 6.

220.12 	EFFECTIVE DATE. This section is effective for the 2018 distribution, and the transfer 
220.13 	must be made within ten days of the August 2018 payment.

220.14 	Sec. 28. CITY OF MINNEAPOLIS; UPPER HARBOR TERMINAL 
220.15 	REDEVELOPMENT PROJECT.
 220.16 		Subdivision 1.Qualifying rules. Notwithstanding the criteria in Minnesota Statutes, 
220.17 	section 469.174, subdivision 10, the governing body of the city of Minneapolis may establish 
220.18 	by resolution one or more redevelopment tax increment financing districts within that portion 
220.19 	of the North Washington Industrial Park Redevelopment Project Area as its boundaries 
220.20 	existed on January 1, 2018, located north of Lowry Avenue. In each resolution, the city 
220.21 	must find that each parcel in the district was part of property that was formerly used as a 
220.22 	municipally owned intermodal barge shipping facility that can no longer be used for such 
220.23 	purpose due to the closure of the Upper St. Anthony Falls Lock under the federal Water 
220.24 	Resources Reform and Development Act of 2014. Except as provided in this section, the 
220.25 	provisions of Minnesota Statutes, sections 469.174 to 469.1794, apply to each district created 
220.26 	under this section.
220.27 		Subd. 2.Use of increments. Minnesota Statutes, section 469.176, subdivision 4j, does 
220.28 	not apply to any district established under this section.
220.29 		Subd. 3.Five-year rule. The five-year period under Minnesota Statutes, section 469.1763, 
220.30 	subdivision 3, is extended to ten years for any district established under this section.
220.31 		Subd. 4.Pooling authority. Notwithstanding Minnesota Statutes, section 469.1763, 
220.32 	subdivision 2, tax increments from any district established under this section may be 
221.1 	expended anywhere within the portion of the project area as described in subdivision 1, on 
221.2 	eligible costs permitted under Minnesota Statutes, sections 469.174 to 469.1794, as amended.

221.3 	EFFECTIVE DATE. This section is effective the day after the governing body of the 
221.4 	city of Minneapolis and its chief clerical officer comply with Minnesota Statutes, section 
221.5 	645.021, subdivisions 2 and 3.

221.6 	Sec. 29. CITY OF CHAMPLIN; TAX INCREMENT FINANCING DISTRICT; 
221.7 	PROJECT REQUIREMENTS.
 221.8 		Subdivision 1.Addition of parcels to district. The governing body of the city of 
221.9 	Champlin may elect to apply the provisions of this section to its Mississippi Crossings tax 
221.10 	increment financing district.
221.11 		Subd. 2.Five-year rule.  The five-year rule under Minnesota Statutes, section 469.1763, 
221.12 	subdivision 3, is extended to a ten-year period for the Mississippi Crossings tax increment 
221.13 	financing district.
221.14 		Subd. 3.Revenues for decertification. Minnesota Statutes, section 469.1763, subdivision 
221.15 	4, does not apply to the Mississippi Crossings tax increment financing district.

221.16 	EFFECTIVE DATE. This section is effective upon compliance with Minnesota Statutes, 
221.17 	section 645.021, subdivisions 2 and 3.

221.18 	Sec. 30. REVENUE DEPARTMENT SERVICE AND RECOVERY SPECIAL 
221.19 	REVENUE FUND.
 221.20 	$3,411,000 of the balance in the Revenue Department account in the special revenue 
221.21 	fund under Minnesota Statutes, section 270C.15, is transferred in fiscal year 2018 to the 
221.22 	general fund.

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

221.24 	Sec. 31. APPROPRIATION.
 221.25 	$5,000 in fiscal year 2019 only is appropriated from the general fund to the commissioner 
221.26 	of revenue for a grant of $2,600 to the city of Mazeppa and a grant of $2,400 to Wabasha 
221.27 	County. The grants, which shall be paid by July 20, 2018, may be used for property tax 
221.28 	abatements and other costs incurred by public and private entities as a result of a fire in the 
221.29 	city of Mazeppa on March 11, 2018. This is a onetime appropriation.

221.30 	EFFECTIVE DATE. This section is effective July 1, 2018.

222.1 	Sec. 32. UNMANNED AIRCRAFT REGISTRATION TAX REFUND; 
222.2 	APPROPRIATION.
 222.3 	(a) The commissioner of transportation shall refund the tax paid for the most recent 
222.4 	registration period on an unmanned aircraft system under Minnesota Statutes, sections 
222.5 	360.531 to 360.67, to a person who:
222.6 	(1) registers and pays the specified fee for the unmanned aircraft system under Minnesota 
222.7 	Statutes, section 360.55, subdivision 9, for the same registration period or an overlapping 
222.8 	registration period; or
222.9 	(2) is exempt from payment of the tax under Minnesota Statutes, sections 360.531 to 
222.10 	360.67, and the fee under Minnesota Statutes, section 360.55, subdivision 9, as provided 
222.11 	under this act.
222.12 	(b) An amount necessary for any refunds under paragraph (a) is appropriated in fiscal 
222.13 	year 2018 from the state airports fund to the commissioner of transportation for the purposes 
222.14 	of providing refunds.

222.15 	EFFECTIVE DATE. This section is effective July 1, 2018.

222.16 	Sec. 33.  REPEALER.
 222.17 	Minnesota Statutes 2016, sections 10A.322, subdivision 4; 13.4967, subdivision 2; and 
222.18 	290.06, subdivision 23, and Minnesota Rules, part 4503.1400, subpart 4, are repealed.

222.19 	EFFECTIVE DATE. This section is effective for contributions made on or after July 
222.20 	1, 2018, and refund claims filed on or after July 1, 2018.

222.21 	ARTICLE 9
222.22 	DEPARTMENT OF REVENUE; PROPERTY TAX; POLICY CHANGES

222.23 	Section 1. Minnesota Statutes 2016, section 162.145, subdivision 3, is amended to read:
222.24 		Subd. 3.Administration. (a) Subject to funds made available by law, the commissioner 
222.25 	shall allocate all funds as provided in subdivision 4 and shall notify, by June 1, certify to
222.26 	the commissioner of revenue the amounts to be paid.
222.27 	(b) Following notification certification from the commissioner of transportation, the 
222.28 	commissioner of revenue shall distribute the specified funds to cities in the same manner 
222.29 	as local government aid under chapter 477A. An appropriation to the commissioner of 
222.30 	transportation under this section is available to the commissioner of revenue for the purposes 
222.31 	specified in this paragraph.
223.1 	(c) Notwithstanding other law to the contrary, in order to receive distributions under 
223.2 	this section, a city must conform to the standards in section 477A.017, subdivision 2. A city 
223.3 	that receives funds under this section must make and preserve records necessary to show 
223.4 	that the funds are spent in compliance with subdivision 4.

223.5 	EFFECTIVE DATE. This section is effective for aids payable in 2018 and thereafter.

223.6 	Sec. 2. Minnesota Statutes 2016, section 270.41, subdivision 3, is amended to read:
223.7 		Subd. 3.Assessor sanctions; refusal to license. (a) Following a recommendation from 
223.8 	the commissioner of revenue, the board may (i) refuse to grant or renew, or may suspend 
223.9 	or revoke, a license of an applicant or licensee, or (ii) censure, warn, or fine any licensed 
223.10 	assessor, or any other person employed by an assessment jurisdiction or contracting with 
223.11 	an assessment jurisdiction for the purpose of valuing or classifying property for property 
223.12 	tax purposes, for any of the following causes or acts:
223.13 	(1) failure to complete required training;
223.14 	(2) inefficiency or neglect of duty;
223.15 	(3) failure to comply with the Code of Conduct and Ethics for Licensed Minnesota 
223.16 	Assessors adopted by the board pursuant to Laws 2005, First Special Session chapter 3, 
223.17 	article 1, section 38;
223.18 	(4) conviction of a crime involving moral turpitude;
223.19 	(5) failure to faithfully and fully perform his or her duties through malfeasance, 
223.20 	misfeasance, or nonfeasance; or
223.21 	(6) any other cause or act that in the board's opinion warrants a refusal to issue a license 
223.22 	or the imposition of a sanction provided under this subdivision.
223.23 	(b) When appropriate for the level of infraction, a written warning must be given to 
223.24 	assessors who have no prior identified infractions. The warning must identify the infraction 
223.25 	and, as appropriate, detail future expectations of performance and behavior. Fines must not 
223.26 	exceed $1,000 for the first occurrence and must not exceed $3,000 for each occurrence 
223.27 	thereafter, and suspensions must not exceed one year for each occurrence, depending in 
223.28 	each case upon the severity of the infraction and the level of negligence or intent. The 
223.29 	commissioner of revenue shall give notice to an applicant or licensee of the commissioner's 
223.30 	recommendation that the board impose sanctions or refuse to grant or renew a license. An 
223.31 	action by the board to impose a sanction fine, to suspend or revoke a license, or to refuse 
223.32 	to grant or renew a license is subject to review in a contested case hearing under chapter 
224.1 	14. A licensee must submit a request for a hearing to the board within 30 days of the notice 
224.2 	date of the commissioner's recommendation for sanctions or for refusal to grant or renew 
224.3 	a license.

224.4 	EFFECTIVE DATE. This section is effective for sanctions or refusals to grant or renew 
224.5 	a license recommended by the commissioner of revenue after June 30, 2018.

224.6 	Sec. 3. Minnesota Statutes 2017 Supplement, section 272.115, subdivision 1, is amended 
224.7 	to read:
224.8 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 6, or 7, 
224.9 	whenever any real estate is sold for a consideration in excess of $1,000 $3,000, whether by 
224.10 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
224.11 	grantee or the legal agent of either shall file a certificate of value with the county auditor 
224.12 	in the county in which the property is located when the deed or other document is presented 
224.13 	for recording. Contract for deeds are subject to recording under section 507.235, subdivision 
224.14 	1. Value shall, in the case of any deed not a gift, be the amount of the full actual consideration 
224.15 	thereof, paid or to be paid, including the amount of any lien or liens assumed. The items 
224.16 	and value of personal property transferred with the real property must be listed and deducted 
224.17 	from the sale price. The certificate of value shall include the classification to which the 
224.18 	property belongs for the purpose of determining the fair market value of the property, and 
224.19 	shall include any proposed change in use of the property known to the person filing the 
224.20 	certificate that could change the classification of the property. The certificate shall include 
224.21 	financing terms and conditions of the sale which are necessary to determine the actual, 
224.22 	present value of the sale price for purposes of the sales ratio study. If the property is being 
224.23 	acquired as part of a like-kind exchange under section 1031 of the Internal Revenue Code 
224.24 	of 1986, as amended through December 31, 2006, that must be indicated on the certificate. 
224.25 	The commissioner of revenue shall promulgate administrative rules specifying the financing 
224.26 	terms and conditions which must be included on the certificate. The certificate of value 
224.27 	must include the Social Security number or the federal employer identification number of 
224.28 	the grantors and grantees. However, a married person who is not an owner of record and 
224.29 	who is signing a conveyance instrument along with the person's spouse solely to release 
224.30 	and convey their marital interest, if any, in the real property being conveyed is not a grantor 
224.31 	for the purpose of the preceding sentence. A statement in the deed that is substantially in 
224.32 	the following form is sufficient to allow the county auditor to accept a certificate for filing 
224.33 	without the Social Security number of the named spouse: "(Name) claims no ownership 
224.34 	interest in the real property being conveyed and is executing this instrument solely to release 
224.35 	and convey a marital interest, if any, in that real property." The identification numbers of 
225.1 	the grantors and grantees are private data on individuals or nonpublic data as defined in 
225.2 	section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the private or 
225.3 	nonpublic data may be disclosed to the commissioner of revenue for purposes of tax 
225.4 	administration. The information required to be shown on the certificate of value is limited 
225.5 	to the information required as of the date of the acknowledgment on the deed or other 
225.6 	document to be recorded.

225.7 	EFFECTIVE DATE. This section is effective for certificates of value filed after 
225.8 	December 31, 2018.

225.9 	Sec. 4. Minnesota Statutes 2016, section 287.21, subdivision 1, is amended to read:
225.10 		Subdivision 1.Determination of tax. (a) A tax is imposed on each deed or instrument 
225.11 	by which any real property in this state is granted, assigned, transferred, or otherwise 
225.12 	conveyed. The tax applies against the net consideration. For purposes of the tax, the 
225.13 	conversion of a corporation to a limited liability company, a limited liability company to a 
225.14 	corporation, a partnership to a limited partnership, a limited partnership to another limited 
225.15 	partnership or other entity, or a similar conversion of one entity to another does not grant, 
225.16 	assign, transfer, or convey real property.
225.17 	(b) The tax is determined in the following manner: (1) when transfers are made by 
225.18 	instruments pursuant to (i) consolidations or mergers, or (ii) designated transfers, the tax is 
225.19 	$1.65; (2) when there is no consideration or when the consideration, exclusive of the value 
225.20 	of any lien or encumbrance remaining thereon at the time of sale, is $500 $3,000 or less, 
225.21 	the tax is $1.65; or (3) when the consideration, exclusive of the value of any lien or 
225.22 	encumbrance remaining at the time of sale, exceeds $500 $3,000, the tax is .0033 of the net 
225.23 	consideration.
225.24 	(c) If, within six months from the date of a designated transfer, an ownership interest in 
225.25 	the grantee entity is transferred by an initial owner to any person or entity with the result 
225.26 	that the designated transfer would not have been a designated transfer if made to the grantee 
225.27 	entity with its subsequent ownership, then a tax is imposed at .0033 of the net consideration 
225.28 	for the designated transfer. If the subsequent transfer of ownership interests was reasonably 
225.29 	expected at the time of the designated transfer, the applicable penalty under section 287.31, 
225.30 	subdivision 1, must be paid. The deed tax imposed under this paragraph is due within 30 
225.31 	days of the subsequent transfer that caused the tax to be imposed under this paragraph. 
225.32 	Involuntary transfers of ownership shall not be considered transfers of ownership under this 
225.33 	paragraph. The commissioner may adopt rules defining the types of transfers to be considered 
225.34 	involuntary.
226.1 	(d) The tax is due at the time a taxable deed or instrument is presented for recording, 
226.2 	except as provided in paragraph (c). The commissioner may require the tax to be documented 
226.3 	in a manner prescribed by the commissioner, and may require that the documentation be 
226.4 	attached to and recorded as part of the deed or instrument. The county recorder or registrar 
226.5 	of titles shall accept the attachment for recording as part of the deed or instrument and may 
226.6 	not require, as a condition of recording a deed or instrument, evidence that a transfer is a 
226.7 	designated transfer in addition to that required by the commissioner. Such an attachment 
226.8 	shall not, however, provide actual or constructive notice of the information contained therein 
226.9 	for purposes of determining any interest in the real property. The commissioner shall 
226.10 	prescribe the manner in which the tax due under paragraph (c) is to be paid and may require 
226.11 	grantees of designated transfers to file with the commissioner subsequent statements verifying 
226.12 	that the tax provided under paragraph (c) does not apply.

226.13 	EFFECTIVE DATE. This section is effective for deeds recorded after December 31, 
226.14 	2018.

226.15 	ARTICLE 10
226.16 	DEPARTMENT OF REVENUE; MISCELLANEOUS; POLICY CHANGES

226.17 	Section 1. Minnesota Statutes 2016, section 270B.08, subdivision 2, is amended to read:
226.18 		Subd. 2.Revocation or cancellation. When a taxpayer's sales tax permit has been 
226.19 	revoked or canceled under section 270C.722 or 297A.84, the commissioner may disclose
226.20 	to any person data identifying the holder of the revoked or canceled permit, stating the basis 
226.21 	for the revocation or cancellation, the date of the revocation or cancellation, and stating 
226.22 	whether the if a revoked or canceled permit has been reinstated, the date upon which the 
226.23 	permit was reinstated.

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

226.25 	Sec. 2. Minnesota Statutes 2016, section 297A.84, is amended to read:
226.26 	297A.84 PERMITS ISSUED AND NOT ISSUED; CANCELLATION.
226.27 		Subdivision 1.Definitions. (a) The following definitions apply for the purposes of this 
226.28 	section.
226.29 	(b) "Applicant" means an individual, corporation, or partnership. Applicant also includes 
226.30 	any officer of a corporation or member of a partnership.
227.1 	(c) "Delinquent sales tax" means tax not paid by the date the tax was due and payable 
227.2 	under section 289A.20, subdivision 4, or an assessment not paid if the applicant has been 
227.3 	issued an order assessing sales and use tax under section 270C.33, subdivision 4.
227.4 		Subd. 2.Permits issued. Except as provided in subdivision 3, the commissioner shall
227.5 	must issue a permit to each applicant who has complied with section 297A.83, and with 
227.6 	section 297A.92 if security is required. A person is considered to have a permit if the person 
227.7 	has a Minnesota tax identification number issued by the commissioner that is currently 
227.8 	active for taxes imposed by this chapter. A permit is valid until canceled or revoked. It is 
227.9 	not assignable and is valid only for the person in whose name it is granted and for the 
227.10 	transaction of business at the places designated on the permit.
227.11 		Subd. 3.Permits not issued. (a) Except as provided in paragraph (b), the commissioner 
227.12 	must not issue a permit to an applicant if the applicant is liable for delinquent sales tax.
227.13 	(b) The commissioner must issue a permit to an applicant if an appeal period of an order 
227.14 	assessing sales tax under section 270C.33, subdivision 5, has not ended. The commissioner 
227.15 	may cancel a permit issued under this paragraph in the manner provided in subdivision 4 
227.16 	if the applicant owes delinquent sales tax after the appeal period has ended.
227.17 		Subd. 4.Nonconforming permits; cancellation; reissue. (a) If the commissioner issues 
227.18 	a permit that does not conform with the requirements of this section or applicable rules, the 
227.19 	commissioner may cancel the permit upon notice to the permit holder. The notice must be 
227.20 	served by first class and certified mail at the permit holder's last known address. The 
227.21 	cancellation is effective immediately.
227.22 	(b) If a permit holder shows that a canceled permit was issued in conformance with the 
227.23 	requirements of this section and applicable rules, the commissioner must reissue the permit.

227.24 	EFFECTIVE DATE. This section is effective for permit applications filed after 
227.25 	December 31, 2018.

227.26 	Sec. 3. Minnesota Statutes 2016, section 297A.85, is amended to read:
227.27 	297A.85 CANCELLATION OF PERMITS.
227.28 	The commissioner may cancel a permit if one of the following conditions occurs:
227.29 	(1) the permit holder has not filed a sales or use tax return for at least one year;
227.30 	(2) the permit holder has not reported any sales or use tax liability on the permit holder's 
227.31 	returns for at least two years;
227.32 	(3) the permit holder requests cancellation of the permit; or
228.1 	(4) the permit is subject to cancellation pursuant to under section 270C.722, subdivision 
228.2 	2, paragraph (a).; or
228.3 	(5) the permit is subject to cancellation under section 289A.84.

228.4 	EFFECTIVE DATE. This section is effective for permit applications filed after 
228.5 	December 31, 2018.

228.6 	ARTICLE 11
228.7 	DEPARTMENT OF REVENUE; PARTNERSHIP TAX; POLICY CHANGES

228.8 	Section 1. Minnesota Statutes 2017 Supplement, section 270C.445, subdivision 6, is 
228.9 	amended to read:
228.10 		Subd. 6.Enforcement; administrative order; penalties; cease and desist. (a) The 
228.11 	commissioner may impose an administrative penalty of not more than $1,000 per violation 
228.12 	of subdivision 3 or 5, or section 270C.4451, provided that a penalty may not be imposed 
228.13 	for any conduct for which a tax preparer penalty is imposed under section 289A.60, 
228.14 	subdivision 13. The commissioner may terminate a tax preparer's authority to transmit 
228.15 	returns electronically to the state, if the commissioner determines the tax preparer engaged 
228.16 	in a pattern and practice of violating this section. Imposition of a penalty under this paragraph 
228.17 	is subject to the contested case procedure under chapter 14. The commissioner shall collect 
228.18 	the penalty in the same manner as the income tax. There is no right to make a claim for 
228.19 	refund under section 289A.50 of the penalty imposed under this paragraph. Penalties imposed 
228.20 	under this paragraph are public data.
228.21 	(b) In addition to the penalty under paragraph (a), if the commissioner determines that 
228.22 	a tax preparer has violated subdivision 3 or 5, or section 270C.4451, the commissioner may 
228.23 	issue an administrative order to the tax preparer requiring the tax preparer to cease and 
228.24 	desist from committing the violation. The administrative order may include an administrative 
228.25 	penalty provided in paragraph (a).
228.26 	(c) If the commissioner issues an administrative order under paragraph (b), the 
228.27 	commissioner must send the order to the tax preparer addressed to the last known address 
228.28 	of the tax preparer.
228.29 	(d) A cease and desist order under paragraph (b) must:
228.30 	(1) describe the act, conduct, or practice committed and include a reference to the law 
228.31 	that the act, conduct, or practice violates; and
229.1 	(2) provide notice that the tax preparer may request a hearing as provided in this 
229.2 	subdivision.
229.3 	(e) Within 30 days after the commissioner issues an administrative order under paragraph 
229.4 	(b), the tax preparer may request a hearing to review the commissioner's action. The request 
229.5 	for hearing must be made in writing and must be served on the commissioner at the address 
229.6 	specified in the order. The hearing request must specifically state the reasons for seeking 
229.7 	review of the order. The date on which a request for hearing is served by mail is the postmark 
229.8 	date on the envelope in which the request for hearing is mailed.
229.9 	(f) If a tax preparer does not timely request a hearing regarding an administrative order 
229.10 	issued under paragraph (b), the order becomes a final order of the commissioner and is not 
229.11 	subject to review by any court or agency.
229.12 	(g) If a tax preparer timely requests a hearing regarding an administrative order issued 
229.13 	under paragraph (b), the hearing must be commenced within ten days after the commissioner 
229.14 	receives the request for a hearing.
229.15 	(h) A hearing timely requested under paragraph (e) is subject to the contested case 
229.16 	procedure under chapter 14, as modified by this subdivision. The administrative law judge 
229.17 	must issue a report containing findings of fact, conclusions of law, and a recommended 
229.18 	order within ten days after the completion of the hearing, the receipt of late-filed exhibits, 
229.19 	or the submission of written arguments, whichever is later.
229.20 	(i) Within five days of the date of the administrative law judge's report issued under 
229.21 	paragraph (h), any party aggrieved by the administrative law judge's report may submit 
229.22 	written exceptions and arguments to the commissioner. Within 15 days after receiving the 
229.23 	administrative law judge's report, the commissioner must issue an order vacating, modifying, 
229.24 	or making final the administrative order.
229.25 	(j) The commissioner and the tax preparer requesting a hearing may by agreement 
229.26 	lengthen any time periods prescribed in paragraphs (g) to (i).
229.27 	(k) An administrative order issued under paragraph (b) is in effect until it is modified 
229.28 	or vacated by the commissioner or an appellate court. The administrative hearing provided 
229.29 	by paragraphs (e) to (i) and any appellate judicial review as provided in chapter 14 constitute 
229.30 	the exclusive remedy for a tax preparer aggrieved by the order.
229.31 	(l) The commissioner may impose an administrative penalty, in addition to the penalty 
229.32 	under paragraph (a), up to $5,000 per violation of a cease and desist order issued under 
229.33 	paragraph (b). Imposition of a penalty under this paragraph is subject to the contested case 
230.1 	procedure under chapter 14. Within 30 days after the commissioner imposes a penalty under 
230.2 	this paragraph, the tax preparer assessed the penalty may request a hearing to review the 
230.3 	penalty order. The request for hearing must be made in writing and must be served on the 
230.4 	commissioner at the address specified in the order. The hearing request must specifically 
230.5 	state the reasons for seeking review of the order. The cease and desist order issued under 
230.6 	paragraph (b) is not subject to review in a proceeding to challenge the penalty order under 
230.7 	this paragraph. The date on which a request for hearing is served by mail is the postmark 
230.8 	date on the envelope in which the request for hearing is mailed. If the tax preparer does not 
230.9 	timely request a hearing, the penalty order becomes a final order of the commissioner and 
230.10 	is not subject to review by any court or agency. A penalty imposed by the commissioner 
230.11 	under this paragraph may be collected and enforced by the commissioner as an income tax 
230.12 	liability. There is no right to make a claim for refund under section 289A.50 of the penalty 
230.13 	imposed under this paragraph. A penalty imposed under this paragraph is public data.
230.14 	(m) If a tax preparer violates a cease and desist order issued under paragraph (b), the 
230.15 	commissioner may terminate the tax preparer's authority to transmit returns electronically 
230.16 	to the state. Termination under this paragraph is public data.
230.17 	(n) A cease and desist order issued under paragraph (b) is public data when it is a final 
230.18 	order.
230.19 	(o) Notwithstanding any other law, the commissioner may impose a penalty or take other 
230.20 	action under this subdivision against a tax preparer, with respect to a return, within the 
230.21 	period to assess tax on that return as provided by section sections289A.38 to 289A.384.
230.22 	(p) Notwithstanding any other law, the imposition of a penalty or any other action against 
230.23 	a tax preparer under this subdivision, other than with respect to a return, must be taken by 
230.24 	the commissioner within five years of the violation of statute.

230.25 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
230.26 	31, 2017, except that for partnerships that make an election under Code of Federal 
230.27 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
230.28 	to the same tax periods to which the election relates.

230.29 	Sec. 2. Minnesota Statutes 2017 Supplement, section 289A.31, subdivision 1, is amended 
230.30 	to read:
230.31 		Subdivision 1.Individual income, fiduciary income, mining company, corporate 
230.32 	franchise, and entertainment taxes. (a) Individual income, fiduciary income, mining 
231.1 	company, and corporate franchise taxes, and interest and penalties, must be paid by the 
231.2 	taxpayer upon whom the tax is imposed, except in the following cases:
231.3 	(1) the tax due from a decedent for that part of the taxable year in which the decedent 
231.4 	died during which the decedent was alive and the taxes, interest, and penalty due for the 
231.5 	prior years must be paid by the decedent's personal representative, if any. If there is no 
231.6 	personal representative, the taxes, interest, and penalty must be paid by the transferees, as 
231.7 	defined in section 270C.58, subdivision 3, to the extent they receive property from the 
231.8 	decedent;
231.9 	(2) the tax due from an infant or other incompetent person must be paid by the person's 
231.10 	guardian or other person authorized or permitted by law to act for the person;
231.11 	(3) the tax due from the estate of a decedent must be paid by the estate's personal 
231.12 	representative;
231.13 	(4) the tax due from a trust, including those within the definition of a corporation, as 
231.14 	defined in section 290.01, subdivision 4, must be paid by a trustee; and
231.15 	(5) the tax due from a taxpayer whose business or property is in charge of a receiver, 
231.16 	trustee in bankruptcy, assignee, or other conservator, must be paid by the person in charge 
231.17 	of the business or property so far as the tax is due to the income from the business or property.
231.18 	(b) Entertainment taxes are the joint and several liability of the entertainer and the 
231.19 	entertainment entity. The payor is liable to the state for the payment of the tax required to 
231.20 	be deducted and withheld under section 290.9201, subdivision 7, and is not liable to the 
231.21 	entertainer for the amount of the payment.
231.22 	(c) The taxes imposed under sections 289A.35, paragraph (b), 289A.383, subdivision 
231.23 	3, and 290.0922 on partnerships are the joint and several liability of the partnership and the 
231.24 	general partners.

231.25 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
231.26 	31, 2017, except that for partnerships that make an election under Code of Federal 
231.27 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
231.28 	to the same tax periods to which the election relates.

231.29 	Sec. 3. Minnesota Statutes 2017 Supplement, section 289A.37, subdivision 2, is amended 
231.30 	to read:
231.31 		Subd. 2.Erroneous refunds. (a) Except as provided in paragraph (b), an erroneous 
231.32 	refund occurs when the commissioner issues a payment to a person that exceeds the amount 
232.1 	the person is entitled to receive under law. An erroneous refund is considered an 
232.2 	underpayment of tax on the date issued.
232.3 	(b) To the extent that the amount paid does not exceed the amount claimed by the 
232.4 	taxpayer, an erroneous refund does not include the following:
232.5 	(1) any amount of a refund or credit paid pursuant to a claim for refund filed by a 
232.6 	taxpayer, including but not limited to refunds of claims made under section 290.06, 
232.7 	subdivision 23; 290.067; 290.0671; 290.0672; 290.0674; 290.0675; 290.0677; 290.068; 
232.8 	290.0681; or 290.0692; or chapter 290A; or
232.9 	(2) any amount paid pursuant to a claim for refund of an overpayment of tax filed by a 
232.10 	taxpayer.
232.11 	(c) The commissioner may make an assessment to recover an erroneous refund at any 
232.12 	time within two years from the issuance of the erroneous refund. If all or part of the erroneous 
232.13 	refund was induced by fraud or misrepresentation of a material fact, the assessment may 
232.14 	be made at any time.
232.15 	(d) Assessments of amounts that are not erroneous refunds under paragraph (b) must be 
232.16 	conducted under section sections289A.38 to 289A.384.

232.17 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
232.18 	31, 2017, except that for partnerships that make an election under Code of Federal 
232.19 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
232.20 	to the same tax periods to which the election relates.

232.21 	Sec. 4. Minnesota Statutes 2016, section 289A.38, subdivision 10, is amended to read:
232.22 		Subd. 10.Incorrect determination of federal adjusted gross income. Notwithstanding 
232.23 	any other provision of this chapter, if a taxpayer whose net income is determined under 
232.24 	section 290.01, subdivision 19, omits from income an amount that will under the Internal 
232.25 	Revenue Code extend the statute of limitations for the assessment of federal income taxes, 
232.26 	or otherwise incorrectly determines the taxpayer's federal adjusted gross income resulting 
232.27 	in adjustments by the Internal Revenue Service, then the period of assessment and 
232.28 	determination of tax will be that under the Internal Revenue Code. When a change is made 
232.29 	to federal income during the extended time provided under this subdivision, the provisions 
232.30 	under subdivisions 7 to 9 sections 289A.381 to 289A.384 regarding additional extensions 
232.31 	apply.

232.32 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
232.33 	31, 2017, except that for partnerships that make an election under Code of Federal 
233.1 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
233.2 	to the same tax periods to which the election relates.

233.3 	Sec. 5. [289A.381] DEFINITIONS; PARTNERSHIPS; FEDERAL ADJUSTMENTS.
233.4 		Subdivision 1.Definitions relating to federal adjustments. Unless otherwise specified, 
233.5 	the definitions in this section apply for the purposes of sections 289A.381 to 289A.385.
233.6 		Subd. 2.Administrative adjustment request. "Administrative adjustment request" 
233.7 	means an administrative adjustment request filed by a partnership under section 6227 of 
233.8 	the Internal Revenue Code.
233.9 		Subd. 3.Audited partnership. "Audited partnership" means a partnership subject to a 
233.10 	federal adjustment resulting from a partnership-level audit.
233.11 		Subd. 4.Corporate partner. "Corporate partner" means a partner that is subject to tax 
233.12 	under section 290.02.
233.13 		Subd. 5.Direct partner. "Direct partner" means a partner that holds an immediate legal 
233.14 	ownership interest in a partnership or pass-through entity.
233.15 		Subd. 6.Exempt partner. "Exempt partner" means a partner that is exempt from taxes 
233.16 	on its net income under section 290.05, subdivision 1.
233.17 		Subd. 7.Federal adjustment. "Federal adjustment" means any change in an amount 
233.18 	calculated under the Internal Revenue Code, whether to income, gross estate, a credit, an 
233.19 	item of preference, or any other item that is used by a taxpayer to compute a tax administered 
233.20 	under this chapter for the reviewed year whether that change results from action by the 
233.21 	Internal Revenue Service or other competent authority, including a partnership-level audit, 
233.22 	or the filing of an amended federal return, federal refund claim, or an administrative 
233.23 	adjustment request by the taxpayer.
233.24 		Subd. 8.Federal adjustments report. "Federal adjustments report" includes a method 
233.25 	or form prescribed by the commissioner for use by a taxpayer to report federal adjustments, 
233.26 	including an amended Minnesota tax return or a uniform multistate report.
233.27 		Subd. 9.Federal partnership representative. "Federal partnership representative" 
233.28 	means the person the partnership designates for the taxable year as the partnership's 
233.29 	representative, or the person the Internal Revenue Service has appointed to act as the 
233.30 	partnership representative, pursuant to section 6223(a) of the Internal Revenue Code.
233.31 		Subd. 10.Final determination date. (a) "Final determination date" means:
234.1 	(1) for a federal adjustment arising from an audit by the Internal Revenue Service or 
234.2 	other competent authority, the first day on which no federal adjustment arising from that 
234.3 	audit remains to be finally determined, whether by agreement, or, if appealed or contested, 
234.4 	by a final decision with respect to which all rights of appeal have been waived or exhausted;
234.5 	(2) for a federal adjustment arising from the filing of an amended federal return, a federal 
234.6 	refund claim, or the filing by a partnership of an administrative adjustment request, the day 
234.7 	which the amended return, refund claim, or administrative adjustment request was filed; or
234.8 	(3) for agreements required to be signed by the Internal Revenue Service and the taxpayer, 
234.9 	the date on which the last party signed the agreement.
234.10 		Subd. 11.Final federal adjustment. "Final federal adjustment" means a federal 
234.11 	adjustment for which the final determination date for that federal adjustment has passed.
234.12 		Subd. 12.Indirect partner. "Indirect partner" means either:
234.13 	(1) a partner in a partnership or pass-through entity that itself holds an immediate legal 
234.14 	ownership interest in another partnership or pass-through entity; or
234.15 	(2) a partner in a partnership or pass-through entity that holds an indirect interest in 
234.16 	another partnership or pass-through entity through another indirect partner.
234.17 		Subd. 13.Partner. "Partner" means a person that holds an interest directly or indirectly 
234.18 	in a partnership or other pass-through entity.
234.19 		Subd. 14.Partnership. The term "partnership" has the meaning provided under section 
234.20 	7701(a)(2) of the Internal Revenue Code.
234.21 		Subd. 15.Partnership-level audit. "Partnership-level audit" means an examination by 
234.22 	the Internal Revenue Service at the partnership level pursuant to subtitle F, chapter 63, 
234.23 	subchapter C, of the Internal Revenue Code, which results in federal adjustments including 
234.24 	reallocation adjustments and adjustments to partnership-related items.
234.25 		Subd. 16.Pass-through entity. "Pass-through entity" means an entity, other than a 
234.26 	partnership, that is not subject to the tax imposed under section 290.02. The term pass-through 
234.27 	entity includes but is not limited to S corporations, estates, and trusts other than grantor 
234.28 	trusts.
234.29 		Subd. 17.Reallocation adjustment. "Reallocation adjustment" means a federal 
234.30 	adjustment, or final federal adjustment, that changes the shares of items of partnership 
234.31 	income, gain, loss, expense, or credit allocated to partners. The term positive reallocation 
234.32 	adjustment means reallocation adjustments that would increase state taxable income for 
235.1 	partners, and the term negative reallocation adjustment means reallocation adjustments that 
235.2 	would decrease state taxable income for partners.
235.3 		Subd. 18.Resident partner. "Resident partner" means an individual partner or individual 
235.4 	indirect partner who is a resident of Minnesota under section 290.01, subdivision 7.
235.5 		Subd. 19.Reviewed year. "Reviewed year" means the taxable year of a partnership that 
235.6 	is subject to a partnership-level audit from which federal adjustments arise.
235.7 		Subd. 20.Tiered partner. "Tiered partner" means any partner that is a partnership or 
235.8 	pass-through entity.
235.9 		Subd. 21.Unrelated business taxable income. "Unrelated business taxable income" 
235.10 	has the same meaning as defined in section 512 of the Internal Revenue Code.

235.11 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
235.12 	31, 2017, except that for partnerships that make an election under Code of Federal 
235.13 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
235.14 	to the same tax periods to which the election relates.

235.15 	Sec. 6. [289A.382] REPORTING FEDERAL ADJUSTMENTS; GENERAL RULE.
235.16 	(a) Within 180 days of a final determination date, a taxpayer must file a federal adjustment 
235.17 	report with the commissioner reporting all final federal adjustments by the Internal Revenue 
235.18 	Service or other competent authority.
235.19 	(b) Within 180 days of a final determination date, a taxpayer must file a federal adjustment 
235.20 	report with the commissioner reporting any federal adjustments reported by the taxpayer 
235.21 	to the Internal Revenue Service, including but not limited to:
235.22 	(1) federal refund claims;
235.23 	(2) a change reported on a timely filed amended federal income tax return; and
235.24 	(3) a change reported on an amended return filed pursuant to section 6225(c) of the 
235.25 	Internal Revenue Code.
235.26 	(c) In the case of a final federal adjustment arising from a partnership-level audit or an 
235.27 	administrative adjustment request filed by a partnership under section 6227 of the Internal 
235.28 	Revenue Code, a taxpayer must report adjustments as provided for under section 289A.383, 
235.29 	and not this section.

235.30 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
235.31 	31, 2017, except that for partnerships that make an election under Code of Federal 
236.1 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
236.2 	to the same tax periods to which the election relates.

236.3 	Sec. 7. [289A.383] REPORTING AND PAYMENT REQUIREMENTS.
236.4 		Subdivision 1.State partnership representative. (a) With respect to an action required 
236.5 	or permitted to be taken by a partnership under this section, or in a proceeding under section 
236.6 	270C.35 or 271.06, the state partnership representative for the reviewed year has the sole 
236.7 	authority to act on behalf of the partnership, and its direct partners and indirect partners are 
236.8 	bound by those actions.
236.9 	(b) The state partnership representative for the reviewed year is the partnership's federal 
236.10 	partnership representative unless the partnership, in a form and manner prescribed by the 
236.11 	commissioner, designates another person as its state partnership representative.
236.12 		Subd. 2.Reporting and payment requirements for partnerships and tiered partners.
 236.13 	(a) Unless an audited partnership makes the election in subdivision 3, then, for all final 
236.14 	federal adjustments the audited partnership must comply with paragraph (b) and each direct 
236.15 	partner of the audited partnership, other than a tiered partner, must comply with paragraph 
236.16 	(c).
236.17 	(b) No later than 90 days after the final determination date, the audited partnership must:
236.18 	(1) file a completed federal adjustment report, including all partner-level information 
236.19 	required under section 289A.12, subdivision 3, with the commissioner;
236.20 	(2) notify each of its direct partners of their distributive share of the adjustments;
236.21 	(3) file an amended composite report for all direct partners who were included in a 
236.22 	composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the 
236.23 	additional amount that would have been due had the federal adjustments been reported 
236.24 	properly as required; and
236.25 	(4) file amended withholding reports for all direct partners who were or should have 
236.26 	been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed 
236.27 	year, and pay the additional amount that would have been due had the federal adjustments 
236.28 	been reported properly as required.
236.29 	(c) No later than 180 days after the final determination date, each direct partner, other 
236.30 	than a tiered partner, that is subject to a tax administered under this chapter, other than the 
236.31 	sales tax, must:
237.1 	(1) file a federal adjustment report reporting their distributive share of the adjustments 
237.2 	reported to them under paragraph (b), clause (2); and
237.3 	(2) pay any additional amount of tax due as if the final federal adjustment had been 
237.4 	properly reported, plus any penalty and interest due under this chapter, and less any credit 
237.5 	for related amounts paid or withheld and remitted on behalf of the direct partner under 
237.6 	paragraph (b), clauses (3) and (4).
237.7 		Subd. 3.Election; partnership or tiered partners pay. (a) An audited partnership may 
237.8 	make an election under this subdivision to pay its assessment at the entity level. If an audited 
237.9 	partnership makes an election to pay its assessment at the entity level it must:
237.10 	(1) no later than 90 days after the final determination date, file a completed federal 
237.11 	adjustment report, including the residency information for all individual direct partners, and 
237.12 	information pertaining to all other partners as prescribed by the commissioner, and notify 
237.13 	the commissioner that it is making the election under this subdivision; and
237.14 	(2) no later than 180 days after the final determination date, pay an amount, determined 
237.15 	as follows, in lieu of taxes on partners:
237.16 	(i) exclude from final federal adjustments and any positive reallocation adjustments the 
237.17 	distributive share of these adjustments made to an exempt partner that is not unrelated 
237.18 	business taxable income;
237.19 	(ii) exclude from final federal adjustments and any positive reallocation adjustments the 
237.20 	distributive share of these adjustments made to a partner that has filed a federal adjustment 
237.21 	report and paid the applicable tax, as required under subdivision 2, for the distributive share 
237.22 	of adjustments reported on a federal return under section 6225(c) of the Internal Revenue 
237.23 	Code;
237.24 	(iii) allocate at the partner level using section 290.17, subdivision 1, all final federal 
237.25 	adjustments and positive reallocation adjustments attributable to resident direct partners for 
237.26 	the reviewed year;
237.27 	(iv) allocate and apportion at the partnership level using sections 290.17 to 290.20 all 
237.28 	remaining final federal adjustments and positive reallocation adjustments for the reviewed 
237.29 	year;
237.30 	(v) determine the total distributive share of the allocated and apportioned final federal 
237.31 	adjustments and positive reallocation adjustments determined in items (iii) and (iv) that are 
237.32 	attributable to:
237.33 	(A) resident direct partners;
238.1 	(B) corporate partners and exempt partners; and
238.2 	(C) the total distributive share amount allocated to all other partners;
238.3 	(vi) for the total distributive share of net final federal adjustments plus positive 
238.4 	reallocation adjustments attributed to corporate partners and exempt partners under item 
238.5 	(v), subitem (B), multiply the total by the highest tax rate in section 290.06, subdivision 1, 
238.6 	for the reviewed year, and calculate interest and penalties as applicable under this chapter;
238.7 	(vii) for the total distributive share of net final federal adjustments plus positive 
238.8 	reallocation adjustments attributable to resident direct partners, and all other partners under 
238.9 	item (v), subitems (A) and (C), multiply the total by the highest tax rate in section 290.06, 
238.10 	subdivision 2c, for the reviewed year, and calculate interest and penalties as applicable 
238.11 	under this chapter; and
238.12 	(viii) add the amount determined in item (vi) to the amount determined in item (vii), 
238.13 	and pay all applicable taxes, penalties, and interest to the commissioner.
238.14 	(b) An audited partnership may not make an election under this subdivision to report:
238.15 	(1) a federal adjustment, including a positive reallocation adjustment, that results in 
238.16 	unitary business income to a corporate partner required to file as a member of a combined 
238.17 	report under section 290.17, subdivision 4; or
238.18 	(2) any final federal adjustments resulting from an administrative adjustment request.
238.19 		Subd. 4.Tiered partners and indirect partners. (a) Each tiered partner and each 
238.20 	indirect partner of an audited partnership that reported final federal adjustments pursuant 
238.21 	to subdivision 2, paragraph (b), clause (1), or this subdivision, must:
238.22 	(1) within 90 days of the report comply with the filing, reporting, and payment 
238.23 	requirements of subdivision 2, paragraph (b); or
238.24 	(2) make the election under subdivision 3 as though it were the audited partnership.
238.25 	(b) Each direct partner in a partnership making a report under paragraph (a) must, within 
238.26 	180 days of the report, comply with the filing, reporting, and payment requirements of 
238.27 	subdivision 2, paragraph (c).
238.28 	(c) Notwithstanding the interim time requirements in this subdivision and subdivisions 
238.29 	2 and 3, all reports and payments required to be made by the tiered and indirect partners 
238.30 	under this section are required to be made within 90 days after the time for the filing and 
238.31 	furnishing of statements to tiered partners and their partners as established by the Internal 
238.32 	Revenue Service under section 6226 of the Internal Revenue Code.
239.1 		Subd. 5.Effects of election by partnership or tiered partner and payment of amount 
239.2 	due. (a) Unless the commissioner determines otherwise, the election under subdivision 3 
239.3 	is irrevocable.
239.4 	(b) If an audited partnership or tiered partner properly reports and pays an amount 
239.5 	determined in subdivision 3, the amount will be treated as paid in lieu of taxes owed by the 
239.6 	partnership's direct partners and indirect partners on the same final federal adjustments. The 
239.7 	direct partners and indirect partners of the partnership who are not resident partners may 
239.8 	not take any deduction or credit for this amount or claim a refund of the amount in this state.
239.9 	(c) Nothing in this subdivision precludes resident partners from claiming a credit against 
239.10 	taxes paid under section 290.06, on any amounts paid by the audited partnership or tiered 
239.11 	partners on the resident partner's behalf to another state or local tax jurisdiction.
239.12 		Subd. 6.Failure of partnership or tiered partner to report or pay. Nothing in this 
239.13 	section prevents the commissioner from assessing partners or indirect partners for taxes 
239.14 	they owe in the event that, for any reason, a partnership or tiered partner fails to timely 
239.15 	make any report or payment required by this section.

239.16 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
239.17 	31, 2017, except that for partnerships that make an election under Code of Federal 
239.18 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
239.19 	to the same tax periods to which the election relates.

239.20 	Sec. 8. [289A.384] ASSESSMENT OF TAX, INTEREST, PENALTIES, AND 
239.21 	ADDITIONAL AMOUNTS.
239.22 		Subdivision 1.Assessment of additional tax, interest, and penalties. The commissioner 
239.23 	may assess additional tax, interest, and penalties following a final federal adjustment:
239.24 	(1) arising from an audit by the Internal Revenue Service, including a partnership-level 
239.25 	audit;
239.26 	(2) reported by the taxpayer on an amended federal tax return; or
239.27 	(3) as part of an administrative adjustment request on or before the dates provided in 
239.28 	this section.
239.29 		Subd. 2.Timely and untimely reported federal adjustments. If a taxpayer files a 
239.30 	federal adjustment report, within or after the periods prescribed in section 289A.382 or 
239.31 	289A.383, the commissioner may assess additional Minnesota amounts related to the federal 
239.32 	adjustments including in-lieu-of amounts, taxes, interest, and penalties at the later of:
240.1 	(1) the expiration of the period of limitations in section 289A.38; or
240.2 	(2) the expiration of the one-year period following the date of the filing with the 
240.3 	commissioner of the federal adjustments report.
240.4 		Subd. 3.Unreported reported federal adjustments. If the taxpayer fails to file a federal 
240.5 	adjustments report, the commissioner may assess additional amounts related to the federal 
240.6 	adjustments including in-lieu-of amounts, taxes, penalties, and interest, at the later of:
240.7 	(1) the expiration of the period of limitations in section 289A.38; or
240.8 	(2) the expiration of the six-year period following the final determination date.

240.9 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
240.10 	31, 2017, except that for partnerships that make an election under Code of Federal 
240.11 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
240.12 	to the same tax periods to which the election relates.

240.13 	Sec. 9. [289A.385] CLAIMS FOR REFUND OR CREDITS OF STATE TAX 
240.14 	ARISING FROM FINAL FEDERAL ADJUSTMENTS MADE BY THE INTERNAL 
240.15 	REVENUE SERVICE.
240.16 	Notwithstanding the general period of limitations on claims for refund in section 289A.40, 
240.17 	taxpayers subject to the reporting requirements of sections 289A.382 and 289A.383 may 
240.18 	file claims for refund related to federal adjustments made by the Internal Revenue Service 
240.19 	on or before the last day for the assessment of tax under section 289A.384.

240.20 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
240.21 	31, 2017, except that for partnerships that make an election under Code of Federal 
240.22 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
240.23 	to the same tax periods to which the election relates.

240.24 	Sec. 10. Minnesota Statutes 2016, section 289A.42, is amended to read:
240.25 	289A.42 CONSENT TO EXTEND STATUTE.
240.26 		Subdivision 1.Extension agreement. If before the expiration of time prescribed in 
240.27 	sections 289A.38 to 289A.384 and 289A.40 for the assessment of tax or the filing of a claim 
240.28 	for refund, both the commissioner and the taxpayer have consented in writing to the 
240.29 	assessment or filing of a claim for refund after that time, the tax may be assessed or the 
240.30 	claim for refund filed at any time before the expiration of the agreed-upon period. The 
240.31 	period may be extended by later agreements in writing before the expiration of the period 
241.1 	previously agreed upon. The taxpayer and the commissioner may also agree to extend the 
241.2 	period for collection of the tax.
241.3 		Subd. 2.Federal extensions. When a taxpayer consents to an extension of time for the 
241.4 	assessment of federal withholding or income taxes, the period in which the commissioner 
241.5 	may recompute the tax is also extended, notwithstanding any period of limitations to the 
241.6 	contrary, as follows:
241.7 	(1) for the periods provided in section 289A.38, subdivisions 8 and 9; 289A.384, 
241.8 	subdivisions 2 and 3.
241.9 	(2) for six months following the expiration of the extended federal period of limitations 
241.10 	when no change is made by the federal authority. If no change is made by the federal 
241.11 	authority, and, but for this subdivision, the commissioner's time period to adjust the tax has 
241.12 	expired, and if the commissioner has completed a field audit of the taxpayer, no additional 
241.13 	changes resulting in additional tax due or a refund may be made. For purposes of this 
241.14 	subdivision, "field audit" has the meaning given it in section 289A.38, subdivision 9.

241.15 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
241.16 	31, 2017, except that for partnerships that make an election under Code of Federal 
241.17 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
241.18 	to the same tax periods to which the election relates.

241.19 	Sec. 11. Minnesota Statutes 2016, section 289A.60, subdivision 24, is amended to read:
241.20 		Subd. 24.Penalty for failure to notify of federal change. If a person fails to report to 
241.21 	the commissioner a change or correction of the person's federal return in the manner and 
241.22 	time prescribed in section 289A.38, subdivision 7 sections 289A.382 and 289A.383, there 
241.23 	must be added to the tax an amount equal to ten percent of the amount of any underpayment 
241.24 	of Minnesota tax attributable to the federal change.

241.25 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
241.26 	31, 2017, except that for partnerships that make an election under Code of Federal 
241.27 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
241.28 	to the same tax periods to which the election relates.

241.29 	Sec. 12. Minnesota Statutes 2017 Supplement, section 290.31, subdivision 1, is amended 
241.30 	to read:
241.31 		Subdivision 1.Partners, not partnership, subject to tax. Except as provided under 
241.32 	section sections289A.35, paragraph (b), and 289A.383, subdivision 3, a partnership as such 
242.1 	shall not be subject to the income tax imposed by this chapter, but is subject to the tax 
242.2 	imposed under section 290.0922. Persons carrying on business as partners shall be liable 
242.3 	for income tax only in their separate or individual capacities.

242.4 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
242.5 	31, 2017, except that for partnerships that make an election under Code of Federal 
242.6 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
242.7 	to the same tax periods to which the election relates.

242.8 	Sec. 13. Minnesota Statutes 2016, section 297F.17, subdivision 6, is amended to read:
242.9 		Subd. 6.Time limit for bad debt refund. Claims for refund must be filed with the 
242.10 	commissioner during the one-year period beginning with the timely filing of the taxpayer's 
242.11 	federal income tax return containing the bad debt deduction that is being claimed. Claimants 
242.12 	under this subdivision are subject to the notice requirements of section 289A.38, subdivision 
242.13 	7 sections 289A.382 and 289A.383.

242.14 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
242.15 	31, 2017, except that for partnerships that make an election under Code of Federal 
242.16 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
242.17 	to the same tax periods to which the election relates.

242.18 	Sec. 14. Minnesota Statutes 2016, section 297G.16, subdivision 7, is amended to read:
242.19 		Subd. 7.Time limit for a bad debt deduction. Claims for refund must be filed with 
242.20 	the commissioner within one year of the filing of the taxpayer's income tax return containing 
242.21 	the bad debt deduction that is being claimed. Claimants under this subdivision are subject 
242.22 	to the notice requirements of section 289A.38, subdivision 7 sections 289A.38 to 289A.384.

242.23 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
242.24 	31, 2017, except that for partnerships that make an election under Code of Federal 
242.25 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
242.26 	to the same tax periods to which the election relates.

242.27 	Sec. 15. Minnesota Statutes 2016, section 469.319, subdivision 4, is amended to read:
242.28 		Subd. 4.Repayment procedures. (a) For the repayment of taxes imposed under chapter 
242.29 	290 or 297A or local taxes collected pursuant to section 297A.99, a business must file an 
242.30 	amended return with the commissioner of revenue and pay any taxes required to be repaid 
242.31 	within 30 days after becoming subject to repayment under this section. The amount required 
243.1 	to be repaid is determined by calculating the tax for the period or periods for which repayment 
243.2 	is required without regard to the exemptions and credits allowed under section 469.315.
243.3 	(b) For the repayment of taxes imposed under chapter 297B, a business must pay any 
243.4 	taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of 
243.5 	revenue, within 30 days after becoming subject to repayment under this section.
243.6 	(c) For the repayment of property taxes, the county auditor shall prepare a tax statement 
243.7 	for the business, applying the applicable tax extension rates for each payable year and 
243.8 	provide a copy to the business and to the taxpayer of record. The business must pay the 
243.9 	taxes to the county treasurer within 30 days after receipt of the tax statement. The business 
243.10 	or the taxpayer of record may appeal the valuation and determination of the property tax to 
243.11 	the Tax Court within 30 days after receipt of the tax statement.
243.12 	(d) The provisions of chapters 270C and 289A relating to the commissioner's authority 
243.13 	to audit, assess, and collect the tax and to hear appeals are applicable to the repayment 
243.14 	required under paragraphs (a) and (b). The commissioner may impose civil penalties as 
243.15 	provided in chapter 289A, and the additional tax and penalties are subject to interest at the 
243.16 	rate provided in section 270C.40. The additional tax shall bear interest from 30 days after 
243.17 	becoming subject to repayment under this section until the date the tax is paid. Any penalty 
243.18 	imposed pursuant to this section shall bear interest from the date provided in section 270C.40, 
243.19 	subdivision 3, to the date of payment of the penalty.
243.20 	(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add the 
243.21 	amount required to be repaid to the property taxes assessed against the property for payment 
243.22 	in the year following the year in which the auditor provided the statement under paragraph 
243.23 	(c).
243.24 	(f) For determining the tax required to be repaid, a reduction of a state or local sales or 
243.25 	use tax is deemed to have been received on the date that the good or service was purchased 
243.26 	or first put to a taxable use. In the case of an income tax or franchise tax, including the credit 
243.27 	payable under section 469.318, a reduction of tax is deemed to have been received for the 
243.28 	two most recent tax years that have ended prior to the date that the business became subject 
243.29 	to repayment under this section. In the case of a property tax, a reduction of tax is deemed 
243.30 	to have been received for the taxes payable in the year that the business became subject to 
243.31 	repayment under this section and for the taxes payable in the prior year.
243.32 	(g) The commissioner may assess the repayment of taxes under paragraph (d) any time 
243.33 	within two years after the business becomes subject to repayment under subdivision 1, or 
243.34 	within any period of limitations for the assessment of tax under section 289A.38 sections 
244.1 	289A.38 to 289A.384, whichever period is later. The county auditor may send the statement 
244.2 	under paragraph (c) any time within three years after the business becomes subject to 
244.3 	repayment under subdivision 1.
244.4 	(h) A business is not entitled to any income tax or franchise tax benefits, including 
244.5 	refundable credits, for any part of the year in which the business becomes subject to 
244.6 	repayment under this section nor for any year thereafter. Property is not exempt from tax 
244.7 	under section 272.02, subdivision 64, for any taxes payable in the year following the year 
244.8 	in which the property became subject to repayment under this section nor for any year 
244.9 	thereafter. A business is not eligible for any sales tax benefits beginning with goods or 
244.10 	services purchased or first put to a taxable use on the day that the business becomes subject 
244.11 	to repayment under this section.

244.12 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
244.13 	31, 2017, except that for partnerships that make an election under Code of Federal 
244.14 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
244.15 	to the same tax periods to which the election relates.

244.16 	Sec. 16.  REPEALER.
 244.17 	Minnesota Statutes 2016, section 289A.38, subdivisions 7, 8, and 9, are repealed.

244.18 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
244.19 	31, 2017, except that for partnerships that make an election under Code of Federal 
244.20 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
244.21 	to the same tax periods to which the election relates.

244.22 	ARTICLE 12
244.23 	DEPARTMENT OF REVENUE; INDIVIDUAL INCOME AND CORPORATE 
244.24 	FRANCHISE TAXES; TECHNICAL CHANGES

244.25 	Section 1. Minnesota Statutes 2016, section 289A.38, subdivision 7, is amended to read:
244.26 		Subd. 7.Federal tax changes. (a) If the amount of income, items of tax preference, 
244.27 	deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for any 
244.28 	period, as reported to the Internal Revenue Service is changed or corrected by the 
244.29 	commissioner of Internal Revenue or other officer of the United States or other competent 
244.30 	authority, or where a renegotiation of a contract or subcontract with the United States results 
244.31 	in a change in income, items of tax preference, deductions, credits, or withholding tax, or, 
244.32 	in the case of estate tax, where there are adjustments to the taxable estate, the taxpayer shall 
244.33 	report the change or correction or renegotiation results in writing to the commissioner. The 
245.1 	report must be submitted within 180 days after the final determination and must be in the 
245.2 	form of either an amended Minnesota estate, withholding tax, corporate franchise tax, or 
245.3 	income tax return conceding the accuracy of the federal determination or a letter detailing 
245.4 	how the federal determination is incorrect or does not change the Minnesota tax. An amended 
245.5 	Minnesota income tax return must be accompanied by an amended property tax refund 
245.6 	return, if necessary. A taxpayer filing an amended federal tax return must also file a copy 
245.7 	of the amended return with the commissioner of revenue within 180 days after filing the 
245.8 	amended return.
245.9 	(b) For the purposes of paragraph (a), a change or correction includes any case where a 
245.10 	taxpayer reaches a closing agreement or compromise with the Internal Revenue Service 
245.11 	under section 7121 or 7122 of the Internal Revenue Code.

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

245.13 	Sec. 2. Minnesota Statutes 2017 Supplement, section 290.0137, is amended to read:
245.14 	290.0137 ACCELERATED RECOGNITION OF CERTAIN INSTALLMENT 
245.15 	SALE GAINS.
245.16 	(a) In the case of a nonresident individual or a person who becomes a nonresident 
245.17 	individual during the tax year, taxable net income shall include the allocable amount realized 
245.18 	upon a sale of the assets of, or any interest in, an S corporation or partnership that operated 
245.19 	in Minnesota during the year of sale, including any income or gain to be recognized in future 
245.20 	years pursuant to an installment sale method of reporting under the Internal Revenue Code.
245.21 	(1) For the purposes of this paragraph, an individual who becomes a nonresident of 
245.22 	Minnesota in any year after an installment sale is required to recognize the full amount of 
245.23 	any income or gain described in this paragraph on the individual's final Minnesota resident 
245.24 	tax return to the extent that such income has not been recognized in a prior year.
245.25 	(2) For the purposes of this section, "realized" has the meaning given in section 1001(b) 
245.26 	of the Internal Revenue Code.
245.27 	(3) For the purposes of this section, "installment sale" means any installment sale under 
245.28 	section 453 of the Internal Revenue Code and any other sale that is reported utilizing a 
245.29 	method of accounting authorized under subchapter E of the Internal Revenue Code that 
245.30 	allows taxpayers to delay reporting or recognizing a realized gain until a future year.
245.31 	(4) For the purposes of this section, "allocable amount" means the full amount to be 
245.32 	apportioned to Minnesota under section 290.191 or 290.20, or the full amount to be assigned 
245.33 	to Minnesota under section 290.17.
246.1 	(b) Notwithstanding paragraph (a), nonresident taxpayers may elect to defer recognizing 
246.2 	unrecognized installment sale gains by making an election under this paragraph. The election 
246.3 	must be filed on a form to be determined or prescribed by the commissioner and must be 
246.4 	filed by the due date of the individual income tax return, including any extension. Electing 
246.5 	taxpayers must make an irrevocable agreement to:
246.6 	(1) file Minnesota tax returns in all subsequent years when gains from the installment 
246.7 	sales are recognized and reported to the Internal Revenue Service;
246.8 	(2) allocate gains to the state of Minnesota as though the gains were realized in the year 
246.9 	of sale under section 290.17, 290.191, or 290.20; and
246.10 	(3) include all relevant federal tax documents reporting the installment sale with 
246.11 	subsequent Minnesota tax returns.
246.12 	(c) Income or gain recognized for Minnesota purposes pursuant to paragraph (a) must 
246.13 	be excluded from taxable net income in any future year that the taxpayer files a Minnesota 
246.14 	tax return to the extent that the income or gain has already been subject to tax pursuant to 
246.15 	paragraph (a).

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

246.17 	Sec. 3. Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
246.18 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
246.19 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
246.20 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
246.21 	their taxable net income the following schedule of rates:
246.22 	(1) On the first $35,480, 5.35 percent;
246.23 	(2) On all over $35,480, but not over $140,960, 7.05 percent;
246.24 	(3) On all over $140,960, but not over $250,000, 7.85 percent;
246.25 	(4) On all over $250,000, 9.85 percent.
246.26 	Married individuals filing separate returns, estates, and trusts must compute their income 
246.27 	tax by applying the above rates to their taxable income, except that the income brackets 
246.28 	will be one-half of the above amounts after the adjustment required in subdivision 2d.
246.29 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
246.30 	computed by applying to taxable net income the following schedule of rates:
246.31 	(1) On the first $24,270, 5.35 percent;
247.1 	(2) On all over $24,270, but not over $79,730, 7.05 percent;
247.2 	(3) On all over $79,730, but not over $150,000, 7.85 percent;
247.3 	(4) On all over $150,000, 9.85 percent.
247.4 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
247.5 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
247.6 	computed by applying to taxable net income the following schedule of rates:
247.7 	(1) On the first $29,880, 5.35 percent;
247.8 	(2) On all over $29,880, but not over $120,070, 7.05 percent;
247.9 	(3) On all over $120,070, but not over $200,000, 7.85 percent;
247.10 	(4) On all over $200,000, 9.85 percent.
247.11 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
247.12 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
247.13 	amount determined by the commissioner must be computed in accordance with tables 
247.14 	prepared and issued by the commissioner of revenue based on income brackets of not more 
247.15 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
247.16 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
247.17 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
247.18 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
247.19 	individual's Minnesota income tax as provided in this subdivision. After the application of 
247.20 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
247.21 	by a fraction in which:
247.22 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
247.23 	defined in section 62 of the Internal Revenue Code and increased by:
247.24 	(i) the additions required under section sections290.0131, subdivisions 2 and 6 to 11,
247.25 	and 290.0137, paragraph (a); and reduced by
247.26 	(ii) the Minnesota assignable portion of the subtraction for United States government 
247.27 	interest under section 290.0132, subdivision 2, and the subtractions under section sections
247.28 	290.0132, subdivisions 9, 10, 14, 15, 17, and 18, and 290.0137, paragraph (c), after applying 
247.29 	the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
247.30 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
247.31 	62 of the Internal Revenue Code, increased by:
248.1 	(i) the amounts specified in section additions required under sections290.0131, 
248.2 	subdivisions 2 and 6 to 11, and 290.0137, paragraph (a); and reduced by
248.3 	(ii) the amounts specified in section subtractions under sections290.0132, subdivisions 
248.4 	2, 9, 10, 14, 15, 17, and 18, and 290.0137, paragraph (c).

248.5 	EFFECTIVE DATE. The amendment to paragraph (a) is effective for taxable years 
248.6 	beginning after December 31, 2017. The amendment to paragraph (e) is effective the day 
248.7 	following final enactment.

248.8 	Sec. 4. Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:
248.9 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
248.10 	December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for 
248.11 	which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage 
248.12 	determined under paragraph (b). For the purpose of making the adjustment as provided in 
248.13 	this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets 
248.14 	as they existed for taxable years beginning after December 31, 2012, and before January 1, 
248.15 	2014. The rate applicable to any rate bracket must not be changed. The dollar amounts 
248.16 	setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate 
248.17 	brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in 
248.18 	$5, it must be rounded up to the nearest $10 amount.
248.19 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
248.20 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
248.21 	1(f)(3)(B) the word "2012" shall be substituted for the word "1992." For 2014, the 
248.22 	commissioner shall then determine the percent change from the 12 months ending on August 
248.23 	31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
248.24 	the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the 
248.25 	year preceding the taxable year. The commissioner shall determine the rate bracket for 
248.26 	married filing separate returns after this adjustment is done. The rate bracket for married 
248.27 	filing separate must be one-half of the rate bracket for married filing joint. The determination 
248.28 	of the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 
248.29 	not be subject to the Administrative Procedure Act contained in chapter 14.
248.30 	No later than December 15 of each year, the commissioner shall announce the specific 
248.31 	percentage that will be used to adjust the tax rate brackets.

248.32 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
248.33 	31, 2017.

249.1 	Sec. 5. Minnesota Statutes 2016, section 290.92, subdivision 28, is amended to read:
249.2 		Subd. 28.Payments to horse racing license holders. Effective with payments made 
249.3 	after April 1, 1988, any holder of a license issued by the Minnesota Racing Commission 
249.4 	who makes a payment for personal or professional services to a holder of a class C license 
249.5 	issued by the commission, except an amount paid as a purse, shall deduct from the payment 
249.6 	and withhold 6.25 percent of the amount as Minnesota withholding tax when the amount 
249.7 	paid to that individual by the same person during the calendar year exceeds $600. For 
249.8 	purposes of the provisions of this section, a payment to any person which is subject to 
249.9 	withholding under this subdivision must be treated as if the payment was a wage paid by 
249.10 	an employer to an employee. Every individual who is to receive a payment which is subject 
249.11 	to withholding under this subdivision shall furnish the license holder with a statement, made 
249.12 	under the penalties of perjury, containing the name, address, and Social Security account 
249.13 	number of the person receiving the payment. No withholding is required if the individual 
249.14 	presents a signed certificate from the individual's employer which states that the individual 
249.15 	is an employee of that employer. A nonresident individual who holds a class C license must 
249.16 	be treated as an athlete for purposes of applying the provisions of subdivision 4a and section 
249.17 	290.17, subdivision 2(1)(b)(ii)(a)(2)(ii).

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

249.19 	Sec. 6. Minnesota Statutes 2017 Supplement, section 462D.03, subdivision 2, is amended 
249.20 	to read:
249.21 		Subd. 2.Designation of qualified beneficiary. (a) The account holder must designate 
249.22 	a first-time home buyer as the qualified beneficiary of the account by April 15 of the year
249.23 	in a form and manner prescribed by the commissioner following the taxable year in which 
249.24 	the account was established. The account holder may be the qualified beneficiary. The 
249.25 	account holder may change the designated qualified beneficiary at any time, but no more 
249.26 	than one qualified beneficiary may be designated for an account at any one time. For purposes 
249.27 	of the one beneficiary restriction, a married couple qualifies as one beneficiary. Changing 
249.28 	the designated qualified beneficiary of an account does not affect computation of the ten-year 
249.29 	period under section 462D.06, subdivision 2.
249.30 	(b) The commissioner shall establish a process for account holders to notify the state 
249.31 	that permits recording of the account, the account holder or holders, any transfers under 
249.32 	section 462D.04, subdivision 2, and the designated qualified beneficiary for each account. 
249.33 	This may be done upon filing the account holder's income tax return or in any other way 
249.34 	the commissioner determines to be appropriate.

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

250.2 	ARTICLE 13
250.3 	DEPARTMENT OF REVENUE; SALES AND USE TAXES; TECHNICAL CHANGES

250.4 	Section 1. Minnesota Statutes 2016, section 297A.68, subdivision 17, is amended to read:
250.5 		Subd. 17.Ships used in interstate commerce; other vessels. Repair, replacement, and 
250.6 	rebuilding parts and materials, and lubricants, for the following are exempt:
250.7 	(1) ships or vessels used or to be used principally in interstate or foreign commerce are 
250.8 	exempt.; and
250.9 	(2) vessels with a gross registered tonnage of at least 3,000 tons are exempt.

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

250.11 	Sec. 2. Minnesota Statutes 2016, section 297A.68, subdivision 44, is amended to read:
250.12 		Subd. 44.Greater Minnesota business expansions. (a) Purchases and use of tangible 
250.13 	personal property or taxable services by a qualified business, as defined in section 116J.8738,
250.14 	are exempt if:
250.15 	(1) the commissioner of employment and economic development certifies to the 
250.16 	commissioner of revenue, in a format approved by the commissioner of revenue, that the 
250.17 	qualified business meets the requirements under section 116J.8738;
250.18 	(2) the business subsidy agreement provides that the exemption under this subdivision 
250.19 	applies;
250.20 	(2) (3) the property or services are primarily used or consumed at the facility in greater 
250.21 	Minnesota identified in the business subsidy agreement; and
250.22 	(3) (4) the purchase was made and delivery received during the duration of the 
250.23 	certification of the business as a qualified business under section 116J.8738 business subsidy 
250.24 	agreement.
250.25 	(b) Purchase and use of construction materials and supplies used or consumed in, and 
250.26 	equipment incorporated into, the construction of improvements to real property in greater 
250.27 	Minnesota are exempt if the improvements after completion of construction are to be used 
250.28 	in the conduct of the trade or business of the qualified business, as defined in section 
250.29 	116J.8738 and the commissioner of employment and economic development certifies to 
250.30 	the commissioner of revenue, in a format approved by the commissioner of revenue, that 
251.1 	the qualified business meets the requirements under section 116J.8738. This exemption 
251.2 	applies regardless of whether the purchases are made by the business or a contractor.
251.3 	(c) The exemptions under this subdivision apply to a local sales and use tax.
251.4 	(d) The tax on purchases imposed under this subdivision must be imposed and collected 
251.5 	as if the rate under section 297A.62 applied, and then refunded in the manner provided in 
251.6 	section 297A.75. The total amount refunded for a facility over the certification period is 
251.7 	limited to the amount listed in the business subsidy agreement. No more than $7,000,000 
251.8 	may be refunded in a fiscal year for all purchases under this subdivision. Refunds must be 
251.9 	allocated on a first-come, first-served basis. If more than $7,000,000 of eligible claims are 
251.10 	made in a fiscal year, claims by qualified businesses carry over to the next fiscal year, and 
251.11 	the commissioner of revenue must first allocate refunds to qualified businesses eligible for 
251.12 	a refund in the preceding fiscal year. Any portion of the balance of funds allocated for 
251.13 	refunds under this paragraph does not cancel and shall be carried forward to and available 
251.14 	for refunds in subsequent fiscal years. Notwithstanding section 297A.75, subdivision 4, for 
251.15 	an eligible refund claim that carries over to a subsequent fiscal year, the interest on the 
251.16 	amount carried over must be paid on the refund no sooner than from 90 days after July 1 
251.17 	of the fiscal year in which funds are available for the eligible claim.

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

251.19 	Sec. 3. Minnesota Statutes 2016, section 297A.71, subdivision 45, is amended to read:
251.20 		Subd. 45.Biopharmaceutical manufacturing facility. (a) Materials and supplies used 
251.21 	or consumed in, capital equipment incorporated into, and privately owned infrastructure in 
251.22 	support of the construction, improvement, or expansion of a biopharmaceutical manufacturing 
251.23 	facility in the state are exempt if the commissioner of employment and economic 
251.24 	development certifies to the commissioner of revenue that the following criteria are met:
251.25 	(1) the facility is used for the manufacturing of biologics;
251.26 	(2) the total capital investment made at the facility exceeds $50,000,000; and
251.27 	(3) the facility creates and maintains at least 190 full-time equivalent positions at the 
251.28 	facility. These positions must be new jobs in Minnesota and not the result of relocating jobs 
251.29 	that currently exist in Minnesota.
251.30 	(b) The tax must be imposed and collected as if the rate under section 297A.62 applied, 
251.31 	and refunded in the manner provided in section 297A.75.
252.1 	(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing facility 
252.2 	must:
252.3 	(1) initially apply to the Department commissioner of employment and economic 
252.4 	development for certification no later than one year from the final completion date of 
252.5 	construction, improvement, or expansion of the facility; and
252.6 	(2) for each year that the owner of the biopharmaceutical manufacturing facility applies 
252.7 	for a refund, the owner commissioner must have received written certification from the 
252.8 	Department commissioner of employment and economic development that the facility has 
252.9 	met the criteria of paragraph (a).
252.10 	(d) The refund is to be paid annually at a rate of 25 percent of the total allowable refund 
252.11 	payable to date, with the commissioner making annual payments of the remaining refund 
252.12 	until all of the refund has been paid.
252.13 	(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are 
252.14 	interchangeable and mean medical drugs or medicinal preparations produced using 
252.15 	technology that uses biological systems, living organisms, or derivatives of living organisms 
252.16 	to make or modify products or processes for specific use. The medical drugs or medicinal 
252.17 	preparations include but are not limited to proteins, antibodies, nucleic acids, and vaccines.

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

252.19 	Sec. 4. Minnesota Statutes 2016, section 297A.77, is amended by adding a subdivision to 
252.20 	read:
252.21 		Subd. 5.Records must be kept. Every person liable for any tax imposed by this chapter, 
252.22 	or for the collection thereof, shall keep such records, render such statements, make such 
252.23 	returns, and comply with such rules, as the commissioner may from time to time prescribe.

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

252.25 	ARTICLE 14
252.26 	DEPARTMENT OF REVENUE; TOBACCO TAXES; TECHNICAL CHANGES

252.27 	Section 1. Minnesota Statutes 2016, section 297F.01, subdivision 19, is amended to read:
252.28 		Subd. 19.Tobacco products. (a) "Tobacco products" means any product containing, 
252.29 	made, or derived from tobacco that is intended for human consumption, whether chewed, 
252.30 	smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or 
252.31 	any component, part, or accessory of a tobacco product, including, but not limited to, cigars; 
253.1 	cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking 
253.2 	tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing 
253.3 	tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds 
253.4 	and forms of tobacco; but does not include cigarettes as defined in this section. Tobacco 
253.5 	products includes vapor products. Tobacco products excludes any tobacco product that has 
253.6 	been approved by the United States Food and Drug Administration for sale as a tobacco 
253.7 	cessation product, as a tobacco dependence product, or for other medical purposes, and is 
253.8 	being marketed and sold solely for such an approved purpose.
253.9 	(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4, tobacco 
253.10 	products includes a premium cigar, as defined in subdivision 13a.

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

253.12 	Sec. 2. Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to 
253.13 	read:
253.14 		Subd. 22b.Vapor products. (a) "Vapor products" means any cartridge, bottle, or other 
253.15 	package that contains nicotine made or derived from tobacco, that is in a solution that is 
253.16 	consumed, or meant to be consumed, through the use of a heating element, power source, 
253.17 	electronic circuit, or other electronic, chemical, or mechanical means that produces vapor 
253.18 	from the nicotine. This paragraph expires December 31, 2018.
253.19 	(b) Beginning January 1, 2019, "vapor products" means any cartridge, bottle, or other 
253.20 	package that contains nicotine, including nicotine produced from sources other than tobacco, 
253.21 	that is in a solution that is consumed, or meant to be consumed, through the use of a heating 
253.22 	element, power source, electronic circuit, or other electronic, chemical, or mechanical means 
253.23 	that produces vapor from the nicotine.
253.24 	(c) Vapor products includes any electronic cigarette, electronic cigar, electronic cigarillo, 
253.25 	electronic pipe, or similar product or device, and any batteries, heating elements, or other 
253.26 	components, parts, or accessories sold with and meant to be used in the consumption of the 
253.27 	nicotine solution.

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

253.29 	Sec. 3. Minnesota Statutes 2016, section 297F.01, subdivision 23, is amended to read:
253.30 		Subd. 23.Wholesale sales price. "Wholesale sales price" means the price at which a 
253.31 	distributor purchases a tobacco product. Wholesale sales price includes the applicable federal 
253.32 	excise tax, freight charges, or packaging costs, regardless of whether they were included in 
254.1 	the purchase price. Wholesale sales price of a vapor product does not include the cost of a 
254.2 	product, device, component, part, or accessory described in subdivision 22b that is sold 
254.3 	with a nicotine solution if the distributor sells the cartridge of nicotine solution separately 
254.4 	and can isolate the cost of the product, device, component, part, or accessory.

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

254.6 	ARTICLE 15
254.7 	DEPARTMENT OF REVENUE; PROPERTY TAXES; TECHNICAL CHANGES

254.8 	Section 1. Minnesota Statutes 2016, section 270C.85, subdivision 2, is amended to read:
254.9 		Subd. 2.Powers and duties. The commissioner shall have and exercise the following 
254.10 	powers and duties in administering the property tax laws.:
254.11 	(a) (1) confer with, advise, and give the necessary instructions and directions to local 
254.12 	assessors and local boards of review throughout the state as to their duties under the laws 
254.13 	of the state.;
254.14 	(b) (2) direct proceedings, actions, and prosecutions to be instituted to enforce the laws 
254.15 	relating to the liability and punishment of public officers and officers and agents of 
254.16 	corporations for failure or negligence to comply with the provisions of the property tax 
254.17 	laws, and cause complaints to be made against local assessors, members of boards of 
254.18 	equalization, members of boards of review, or any other assessing or taxing officer, to the 
254.19 	proper authority, for their removal from office for misconduct or negligence of duty.;
254.20 	(c) (3) require county attorneys to assist in the commencement of prosecutions in actions 
254.21 	or proceedings for removal, forfeiture, and punishment, for violation of the property tax 
254.22 	laws in their respective districts or counties.;
254.23 	(d) (4) require town, city, county, and other public officers to report and certify 
254.24 	information, at the parcel level or in the aggregate, as to the assessment and taxation of real 
254.25 	and personal property, and such other information as may be needful in the work of the 
254.26 	commissioner, in such form as the commissioner may prescribe. The commissioner shall 
254.27 	prescribe the content, format, manner, and time of filing of all required reports and 
254.28 	certifications;
254.29 	(e) (5) transmit to the governor, on or before the third Monday in December of each 
254.30 	even-numbered year, and to each member of the legislature, on or before November 15 of 
254.31 	each even-numbered year, the report of the department for the preceding years, showing all 
255.1 	the taxable property subject to the property tax laws and the value of the same, in tabulated 
255.2 	form.;
255.3 	(f) (6) inquire into the methods of assessment and taxation and ascertain whether the 
255.4 	assessors faithfully discharge their duties.; and
255.5 	(g) (7) assist local assessors in determining the estimated market value of industrial 
255.6 	special-use property. For purposes of this paragraph clause, "industrial special-use property" 
255.7 	means property that:
255.8 	(1)(i) is designed and equipped for a particular type of industry;
255.9 	(2)(ii) is not easily adapted to some other use due to the unique nature of the facilities;
255.10 	(3)(iii) has facilities totaling at least 75,000 square feet in size; and
255.11 	(4)(iv) has a total estimated market value of $10,000,000 or greater based on the 
255.12 	assessor's preliminary determination.

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

255.14 	Sec. 2. Minnesota Statutes 2017 Supplement, section 270C.89, subdivision 1, is amended 
255.15 	to read:
255.16 		Subdivision 1.Initial report. Each county assessor shall file by April 1 with the 
255.17 	commissioner a copy of the abstract preliminary assessment information that the 
255.18 	commissioner may require under section 270C.85, subdivision 2, clause (4), that will be 
255.19 	acted upon by the local and county boards of review. The abstract must list the real and 
255.20 	personal property in the county itemized by assessment districts. The assessor of each county 
255.21 	in the state shall file with the commissioner, within ten working days following final action 
255.22 	of the local board of review or equalization and within five days following final action of 
255.23 	the county board of equalization, any changes made by the local or county board. The 
255.24 	information must be filed in the manner prescribed by the commissioner.

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

255.26 	Sec. 3. Minnesota Statutes 2016, section 270C.89, subdivision 2, is amended to read:
255.27 		Subd. 2.Final report. The final abstract of assessments assessment information after 
255.28 	adjustments by the State Board of Equalization and inclusion of any omitted property shall 
255.29 	be submitted reported to the commissioner on or before September 1 of each calendar year
255.30 	under section 270C.85, subdivision 2, clause (4). The final abstract must separately report 
255.31 	the captured tax capacity of tax increment financing districts under section 469.177, 
256.1 	subdivision 2, the areawide net tax capacity contribution values determined under sections 
256.2 	276A.05, subdivision 1, and 473F.07, subdivision 1, and the value subject to the power line 
256.3 	credit under section 273.42.

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

256.5 	Sec. 4. Minnesota Statutes 2016, section 270C.91, is amended to read:
256.6 	270C.91 RECORD OF PROCEEDINGS CHANGING NET TAX CAPACITY; 
256.7 	DUTIES OF COUNTY AUDITOR.
256.8 	A record of all proceedings of the commissioner affecting any change in the net tax 
256.9 	capacity of any property, as revised by the State Board of Equalization, shall be kept by the 
256.10 	commissioner and a copy thereof, duly certified, shall be mailed each year to the auditor of 
256.11 	each county wherein such property is situated, on or before June 30 or 30 days after 
256.12 	submission of the abstract required by section 270C.89, whichever is later. This record shall 
256.13 	specify the amounts or amount, or both, added to or deducted from the net tax capacity of 
256.14 	the real property of each of the several towns and cities, and of the real property not in towns 
256.15 	or cities, also the percent or amount of both, added to or deducted from the several classes 
256.16 	of personal property in each of the towns and cities, and also the amount added to or deducted 
256.17 	from the assessment of any person. The county auditor shall add to or deduct from such 
256.18 	tract or lot, or portion thereof, of any real property in the county the required percent or 
256.19 	amount, or both, on the net tax capacity thereof as it stood after equalized by the county 
256.20 	board, adding in each case a fractional sum of 50 cents or more, and deducting in each case 
256.21 	any fractional sum of less than 50 cents, so that no net tax capacity of any separate tract or 
256.22 	lot shall contain any fraction of a dollar; and add to, or deduct from, the several classes of 
256.23 	personal property in the county the required percent or amount, or both, on the net tax 
256.24 	capacity thereof as it stood after equalized by the county board, adding or deducting in 
256.25 	manner aforesaid any fractional sum so that no net tax capacity of any separate class of 
256.26 	personal property shall contain a fraction of a dollar, and add to or deduct from assessment 
256.27 	of any person, as they stood after equalization by the county board, the required amounts 
256.28 	to agree with the assessments as returned by the commissioner.

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

256.30 	Sec. 5. Minnesota Statutes 2016, section 273.061, subdivision 9, is amended to read:
256.31 		Subd. 9.Additional general duties. Additional duties of the county assessor shall be
256.32 	are as follows:
257.1 	(1) to make all assessments, based upon the appraised values reported by the local 
257.2 	assessors or assistants and the county assessor's own knowledge of the value of the property 
257.3 	assessed;
257.4 	(2) to personally view and determine the value of any property which that because of 
257.5 	its type or character may be difficult for the local assessor to appraise;
257.6 	(3) to make all changes ordered by the local boards of review, relative to the net tax 
257.7 	capacity of the property of any individual, firm or corporation after notice has been given 
257.8 	and hearings held as provided by law;
257.9 	(4) to enter all assessments in the assessment books, furnished by the county auditor, 
257.10 	with each book and the tabular statements for each book in correct balance;
257.11 	(5) to prepare all assessment cards, charts, maps and any other forms prescribed by the 
257.12 	commissioner of revenue;
257.13 	(6) to attend the meeting of the county board of equalization; to investigate and report 
257.14 	on any assessment ordered by said board; to enter all changes made by said board in the 
257.15 	assessment books and prepare the abstract of assessments for the commissioner of revenue
257.16 	information reported to the commissioner under section 270C.85, subdivision 2, clause (4); 
257.17 	to enter all changes made by the State Board of Equalization in the assessment books; to 
257.18 	deduct all exemptions authorized by law from each assessment and certify to the county 
257.19 	auditor the taxable value of each parcel of land, as described and listed in the assessment 
257.20 	books by the county auditor, and the taxable value of the personal property of each person, 
257.21 	firm, or corporation assessed;
257.22 	(7) to investigate and make recommendations relative to all applications for the abatement 
257.23 	of taxes or applications for the reduction of the net tax capacity of any property; and
257.24 	(8) to perform all other duties relating to the assessment of property for the purpose of 
257.25 	taxation which may be required by the commissioner of revenue.

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

257.27 	Sec. 6. Minnesota Statutes 2017 Supplement, section 273.0755, is amended to read:
257.28 	273.0755 TRAINING AND EDUCATION OF PROPERTY TAX PERSONNEL.
257.29 	(a) Beginning with the four-year period starting on July 1, 2000, every person licensed 
257.30 	by the state Board of Assessors at the Accredited Minnesota Assessor level or higher, shall 
257.31 	successfully complete a weeklong Minnesota laws course sponsored by the Department of 
258.1 	Revenue at least once in every four-year period. An assessor need not attend the course if 
258.2 	they successfully pass the test for the course.
258.3 	(b) The commissioner of revenue may require that each county, and each city for which 
258.4 	the city assessor performs the duties of county assessor, have (i) (1) a person on the assessor's 
258.5 	staff who is certified by the Department of Revenue in sales ratio calculations, (ii) (2) an 
258.6 	officer or employee who is certified by the Department of Revenue in tax calculations, and 
258.7 	(iii) (3) an officer or employee who is certified by the Department of Revenue in the proper 
258.8 	preparation of abstracts of assessment. The commissioner of revenue may require that each 
258.9 	county have an officer or employee who is certified by the Department of Revenue in the 
258.10 	proper preparation of abstracts of tax lists information reported to the commissioner under 
258.11 	section 270C.85, subdivision 2, clause (4). Certifications under this paragraph expire after 
258.12 	four years.
258.13 	(c) Beginning with the four-year educational licensing period starting on July 1, 2004, 
258.14 	every Minnesota assessor licensed by the State Board of Assessors must attend and participate 
258.15 	in a seminar that focuses on ethics, professional conduct and the need for standardized 
258.16 	assessment practices developed and presented by the commissioner of revenue. This 
258.17 	requirement must be met at least once in every subsequent four-year period. This requirement 
258.18 	applies to all assessors licensed for one year or more in the four-year period.
258.19 	(d) When the commissioner of revenue determines that an individual or board that 
258.20 	performs functions related to property tax administration has performed those functions in 
258.21 	a manner that is not uniform or equitable, the commissioner may require that the individual 
258.22 	or members of the board complete supplemental training. The commissioner may not require 
258.23 	that an individual complete more than 32 hours of supplemental training pursuant to this 
258.24 	paragraph. If the individual is required to complete supplemental training due to that 
258.25 	individual's membership on a local or county board of appeal and equalization, the 
258.26 	commissioner may not require that the individual complete more than two hours of 
258.27 	supplemental training.

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

258.29 	Sec. 7. Minnesota Statutes 2016, section 273.113, subdivision 3, is amended to read:
258.30 		Subd. 3.Reimbursement for lost revenue. The county auditor shall certify to the 
258.31 	commissioner of revenue, as part of the abstracts of tax lists required to be filed with the 
258.32 	commissioner under section 275.29 270C.85, subdivision 2, clause (4), the amount of tax 
258.33 	lost to the county from the property tax credit under subdivision 2. Any prior year adjustments 
258.34 	must also be certified in the abstracts of tax lists. The commissioner of revenue shall review 
259.1 	the certifications to determine their accuracy. The commissioner may make the changes in 
259.2 	the certification that are considered necessary or return a certification to the county auditor 
259.3 	for corrections. The commissioner shall reimburse each taxing district, other than school 
259.4 	districts, for the taxes lost. The payments must be made at the time provided in section 
259.5 	473H.10 for payment to taxing jurisdictions in the same proportion that the ad valorem tax 
259.6 	is distributed. Reimbursements to school districts must be made as provided in section 
259.7 	273.1392. The amount necessary to make the reimbursements under this section is annually 
259.8 	appropriated from the general fund to the commissioner of revenue.

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

259.10 	Sec. 8. Minnesota Statutes 2016, section 273.119, subdivision 2, is amended to read:
259.11 		Subd. 2.Reimbursement for lost revenue. The county may transfer money from the 
259.12 	county conservation account created in section 40A.152 to the county revenue fund to 
259.13 	reimburse the fund for the cost of the property tax credit. The county auditor shall certify 
259.14 	to the commissioner of revenue, as part of the abstracts of tax lists required to be filed with 
259.15 	the commissioner under section 275.29 270C.85, subdivision 2, clause (4), the amount of 
259.16 	tax lost to the county from the property tax credit under subdivision 1 and the extent that 
259.17 	the tax lost exceeds funds available in the county conservation account. Any prior year 
259.18 	adjustments must also be certified in the abstracts of tax lists. The commissioner of revenue 
259.19 	shall review the certifications to determine their accuracy. The commissioner may make 
259.20 	the changes in the certification that are considered necessary or return a certification to the 
259.21 	county auditor for corrections. The commissioner shall reimburse each taxing district, other 
259.22 	than school districts, from the Minnesota conservation fund under section 40A.151 for the 
259.23 	taxes lost in excess of the county account. The payments must be made at the time provided 
259.24 	in section 473H.10, subdivision 3, for payment to taxing jurisdictions in the same proportion 
259.25 	that the ad valorem tax is distributed.

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

259.27 	Sec. 9. Minnesota Statutes 2016, section 273.1231, subdivision 3, is amended to read:
259.28 		Subd. 3.Disaster or emergency area.  (a) "Disaster or emergency area" means a 
259.29 	geographic area for which:
259.30 	(1)(i) the president of the United States, the secretary of agriculture, or the administrator 
259.31 	of the Small Business Administration has determined that a disaster exists pursuant to federal 
259.32 	law, or
260.1 	(ii) a local emergency has been declared pursuant to section 12.29; and
260.2 	(2) an application by the local unit of government requesting property tax relief under 
260.3 	this section has been received by the governor and approved by the executive council.
260.4 	(b) The executive council must not approve an application unless:
260.5 	(1) a completed disaster survey is included; and
260.6 	(2) within the boundaries of the applicant, (i) the average damage for the buildings that 
260.7 	are damaged is at least $5,000, and (ii) either at least 25 taxable buildings were damaged, 
260.8 	or the total dollar amount of damage to all taxable buildings equals or exceeds one percent 
260.9 	of the total taxable market value of buildings for the applicant as reported to the commissioner 
260.10 	of revenue under section 270C.89, subdivision 2 270C.85, subdivision 2, clause (4), for the 
260.11 	assessment in the year prior to the year of the damage.

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

260.13 	Sec. 10. Minnesota Statutes 2016, section 273.136, subdivision 2, is amended to read:
260.14 		Subd. 2.Reduction amounts submitted to county. The commissioner of revenue shall 
260.15 	determine, not later than April 1 of each year, the amount of reduction resulting from section 
260.16 	273.135 in each county containing a tax relief area as defined by section 273.134, paragraph 
260.17 	(b), basing determinations on a review of abstracts of tax lists submitted by the county 
260.18 	auditors pursuant to section 275.29 information reported to the commissioner under section 
260.19 	270C.85, subdivision 2, clause (4). The commissioner may make changes in the abstracts 
260.20 	of tax lists as deemed necessary. The commissioner of revenue, after such review, shall 
260.21 	submit to the St. Louis County auditor, on or before April 15, the amount of the first half 
260.22 	payment payable hereunder and on or before September 15 the amount of the second half 
260.23 	payment.

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

260.25 	Sec. 11. Minnesota Statutes 2017 Supplement, section 273.1384, subdivision 2, is amended 
260.26 	to read:
260.27 		Subd. 2.Agricultural homestead market value credit. Property classified as agricultural 
260.28 	homestead under section 273.13, subdivision 23, paragraph (a), is eligible for an agricultural 
260.29 	credit. The credit is computed using the property's agricultural credit market value, defined 
260.30 	for this purpose as the property's market value excluding the market value of the house, 
260.31 	garage, and immediately surrounding one acre of land. The credit is equal to 0.3 percent of 
260.32 	the first $115,000 of the property's agricultural credit market value plus 0.1 percent of the 
261.1 	property's agricultural credit market value in excess of $115,000, subject to a maximum 
261.2 	credit of $490 for a full agricultural homestead. In the case of property that is classified as 
261.3 	part homestead and part nonhomestead solely because not all the owners occupy or farm 
261.4 	the property, not all the owners have qualifying relatives occupying or farming the property, 
261.5 	or solely because not all the spouses of owners occupy the property, the credit is computed 
261.6 	on the amount of agricultural credit market value corresponding to the percentage of 
261.7 	homestead, and the maximum credit equals $490 multiplied by the percentage of homestead. 
261.8 	The percentage of homestead is equal to 100 divided by the number of owners of the property, 
261.9 	or, in the case of a trust, the number of grantors of the trust that owns the property.

261.10 	EFFECTIVE DATE. This section is effective for taxes payable in 2019 and thereafter.

261.11 	Sec. 12. Minnesota Statutes 2016, section 273.1384, subdivision 3, is amended to read:
261.12 		Subd. 3.Credit reimbursements. The county auditor shall determine the tax reductions 
261.13 	allowed under subdivision 2 within the county for each taxes payable year and shall certify 
261.14 	that amount to the commissioner of revenue as a part of the abstracts of tax lists submitted 
261.15 	by the county auditors under section 275.29 under section 270C.85, subdivision 2, clause 
261.16 	(4). Any prior year adjustments shall also be certified on the abstracts of tax lists. The 
261.17 	commissioner shall review the certifications for accuracy, and may make such changes as 
261.18 	are deemed necessary, or return the certification to the county auditor for correction. The 
261.19 	credit under this section must be used to proportionately reduce the net tax capacity-based 
261.20 	property tax payable to each local taxing jurisdiction as provided in section 273.1393.

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

261.22 	Sec. 13. Minnesota Statutes 2017 Supplement, section 273.1387, subdivision 3, is amended 
261.23 	to read:
261.24 		Subd. 3.Credit reimbursements. The county auditor shall determine the tax reductions 
261.25 	allowed under this section within the county for each taxes payable year and shall certify 
261.26 	that amount to the commissioner of revenue as a part of the abstracts of tax lists submitted 
261.27 	under section 275.29 under section 270C.85, subdivision 2, clause (4). Any prior year 
261.28 	adjustments shall also be certified on the abstracts of tax lists. The commissioner shall 
261.29 	review the certifications for accuracy, and may make such changes as are deemed necessary, 
261.30 	or return the certification to the county auditor for correction. The credit under this section 
261.31 	must be used to reduce the school district net tax capacity-based property tax as provided 
261.32 	in section 273.1393.

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

262.1 	Sec. 14. Minnesota Statutes 2016, section 273.18, is amended to read:
262.2 	273.18 LISTING, VALUATION, AND ASSESSMENT OF EXEMPT PROPERTY 
262.3 	BY COUNTY AUDITORS.
262.4 	(a) In every sixth year after the year 2010, the county auditor shall enter the description 
262.5 	of each tract of real property exempt by law from taxation, with the name of the owner, and 
262.6 	the assessor shall value and assess the same in the same manner that other real property is 
262.7 	valued and assessed, and shall designate in each case the purpose for which the property is 
262.8 	used.
262.9 	(b) For purposes of the apportionment of fire state aid under section 69.021, subdivision 
262.10 	7, The county auditor shall include on the abstract of assessment of exempt real property 
262.11 	filed under this section in the exempt property information that the commissioner may 
262.12 	require under section 270C.85, subdivision 2, clause (4), the total number of acres of all 
262.13 	natural resources lands for which in lieu payments are made under sections 477A.11 to 
262.14 	477A.14. The assessor shall estimate its market value, provided that if the assessor is not 
262.15 	able to estimate the market value of the land on a per parcel basis, the assessor shall furnish 
262.16 	the commissioner of revenue with an estimate of the average value per acre of this land 
262.17 	within the county.

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

262.19 	Sec. 15. Minnesota Statutes 2016, section 274.14, is amended to read:
262.20 	274.14 LENGTH OF SESSION; RECORD.
262.21 	The board must meet after the second Friday in June on at least one meeting day and 
262.22 	may meet for up to ten consecutive meeting days. The actual meeting dates must be contained 
262.23 	on the valuation notices mailed to each property owner in the county as provided in section 
262.24 	273.121. For this purpose, "meeting days" is defined as any day of the week excluding 
262.25 	Sunday. At the board's discretion, "meeting days" may include Saturday. No action taken 
262.26 	by the county board of review after June 30 is valid, except for corrections permitted in 
262.27 	sections 273.01 and 274.01. The county auditor shall keep an accurate record of the 
262.28 	proceedings and orders of the board. The record must be published like other proceedings 
262.29 	of county commissioners. A copy of the published record must be sent to the commissioner 
262.30 	of revenue, with the abstract of assessment required by section 274.16 within five days 
262.31 	following final action of the county board of equalization.
262.32 	For counties that conduct either regular board of review meetings or open book meetings, 
262.33 	at least one of the meeting days must include a meeting that does not end before 7:00 p.m. 
263.1 	For counties that require taxpayer appointments for the board of review, appointments must 
263.2 	include some available times that extend until at least 7:00 p.m. The county may have a 
263.3 	Saturday meeting in lieu of, or in addition to, the extended meeting times under this 
263.4 	paragraph.

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

263.6 	Sec. 16. Minnesota Statutes 2016, section 274.16, is amended to read:
263.7 	274.16 CORRECTED LISTS, ABSTRACTS.
263.8 	The county assessor or, in Ramsey County, the official designated by the board of county 
263.9 	commissioners shall calculate the changes of the assessment lists determined by the county 
263.10 	board of equalization, and make corrections accordingly, in the real or personal lists, or 
263.11 	both, and shall make duplicate abstracts duplicates of them. One must be filed in the assessor's 
263.12 	office, and one must be forwarded to the commissioner of revenue as provided in section 
263.13 	270C.89.

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

263.15 	Sec. 17. Minnesota Statutes 2017 Supplement, section 275.025, subdivision 1, is amended 
263.16 	to read:
263.17 		Subdivision 1.Levy amount. The state general levy is levied against 
263.18 	commercial-industrial property and seasonal residential recreational property, as defined 
263.19 	in this section. The state general levy for commercial-industrial property is $784,590,000 
263.20 	for taxes payable in 2018 and thereafter. The state general levy for seasonal-recreational 
263.21 	property is $44,190,000 for taxes payable in 2018 and thereafter. The tax under this section 
263.22 	is not treated as a local tax rate under section 469.177 and is not the levy of a governmental 
263.23 	unit under chapters 276A and 473F.
263.24 	The commissioner shall increase or decrease the preliminary or final rate for a year as 
263.25 	necessary to account for errors and tax base changes that affected a preliminary or final rate 
263.26 	for either of the two preceding years. Adjustments are allowed to the extent that the necessary 
263.27 	information is available to the commissioner at the time the rates for a year must be certified, 
263.28 	and for the following reasons:
263.29 	(1) an erroneous report of taxable value by a local official;
263.30 	(2) an erroneous calculation by the commissioner; and
264.1 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
264.2 	residential recreational property reported on the abstracts of tax lists submitted under section 
264.3 	275.29 that was not reported on the abstracts of assessment submitted under section 270C.89
264.4 	to the commissioner under section 270C.85, subdivision 2, clause (4), for the same year.
264.5 	The commissioner may, but need not, make adjustments if the total difference in the tax 
264.6 	levied for the year would be less than $100,000.

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

264.8 	Sec. 18. Minnesota Statutes 2016, section 290B.09, subdivision 1, is amended to read:
264.9 		Subdivision 1.Determination; payment. The county auditor shall determine the total 
264.10 	current year's deferred amount of property tax under this chapter in the county, and submit
264.11 	report those amounts as part of the abstracts of tax lists submitted by the county auditors 
264.12 	under section 275.29 to the commissioner under section 270C.85, subdivision 2, clause (4). 
264.13 	The commissioner may make changes in the abstracts of tax lists as deemed necessary. The 
264.14 	commissioner of revenue, after such review, shall pay the deferred amount of property tax 
264.15 	to each county treasurer on or before August 31.
264.16 	The county treasurer shall distribute as part of the October settlement the funds received 
264.17 	as if they had been collected as a part of the property tax.

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

264.19 	Sec. 19. Minnesota Statutes 2016, section 469.177, subdivision 1, is amended to read:
264.20 		Subdivision 1.Original net tax capacity. (a) Upon or after adoption of a tax increment 
264.21 	financing plan, the auditor of any county in which the district is situated shall, upon request 
264.22 	of the authority, certify the original net tax capacity of the tax increment financing district 
264.23 	and that portion of the district overlying any subdistrict as described in the tax increment 
264.24 	financing plan and shall certify in each year thereafter the amount by which the original net 
264.25 	tax capacity has increased or decreased as a result of a change in tax exempt status of 
264.26 	property within the district and any subdistrict, reduction or enlargement of the district or 
264.27 	changes pursuant to subdivision 4. The auditor shall certify the amount within 30 days after 
264.28 	receipt of the request and sufficient information to identify the parcels included in the district. 
264.29 	The certification relates to the taxes payable year as provided in subdivision 6.
264.30 	(b) If the classification under section 273.13 of property located in a district changes to 
264.31 	a classification that has a different assessment ratio, the original net tax capacity of that 
265.1 	property must be redetermined at the time when its use is changed as if the property had 
265.2 	originally been classified in the same class in which it is classified after its use is changed.
265.3 	(c) The amount to be added to the original net tax capacity of the district as a result of 
265.4 	previously tax exempt real property within the district becoming taxable equals the net tax 
265.5 	capacity of the real property as most recently assessed pursuant to section 273.18 information 
265.6 	reported to the commissioner under section 270C.85, subdivision 2, clause (4), or, if that 
265.7 	assessment was made more than one year prior to the date of title transfer rendering the 
265.8 	property taxable, the net tax capacity assessed by the assessor at the time of the transfer. If 
265.9 	improvements are made to tax exempt property after the municipality approves the district 
265.10 	and before the parcel becomes taxable, the assessor shall, at the request of the authority, 
265.11 	separately assess the estimated market value of the improvements. If the property becomes 
265.12 	taxable, the county auditor shall add to original net tax capacity, the net tax capacity of the 
265.13 	parcel, excluding the separately assessed improvements. If substantial taxable improvements 
265.14 	were made to a parcel after certification of the district and if the property later becomes tax 
265.15 	exempt, in whole or part, as a result of the authority acquiring the property through 
265.16 	foreclosure or exercise of remedies under a lease or other revenue agreement or as a result 
265.17 	of tax forfeiture, the amount to be added to the original net tax capacity of the district as a 
265.18 	result of the property again becoming taxable is the amount of the parcel's value that was 
265.19 	included in original net tax capacity when the parcel was first certified. The amount to be 
265.20 	added to the original net tax capacity of the district as a result of enlargements equals the 
265.21 	net tax capacity of the added real property as most recently certified by the commissioner 
265.22 	of revenue as of the date of modification of the tax increment financing plan pursuant to 
265.23 	section 469.175, subdivision 4.
265.24 	(d) If the net tax capacity of a property increases because the property no longer qualifies 
265.25 	under the Minnesota Agricultural Property Tax Law, section 273.111; the Minnesota Open 
265.26 	Space Property Tax Law, section 273.112; or the Metropolitan Agricultural Preserves Act, 
265.27 	chapter 473H, the Rural Preserve Property Tax Program under section 273.114, or because 
265.28 	platted, unimproved property is improved or market value is increased after approval of the 
265.29 	plat under section 273.11, subdivision 14a or 14b, the increase in net tax capacity must be 
265.30 	added to the original net tax capacity. If the net tax capacity of a property increases because 
265.31 	the property no longer qualifies for the homestead market value exclusion under section 
265.32 	273.13, subdivision 35, the increase in net tax capacity must be added to original net tax 
265.33 	capacity if the original construction of the affected home was completed before the date the 
265.34 	assessor certified the original net tax capacity of the district.
266.1 	(e) The amount to be subtracted from the original net tax capacity of the district as a 
266.2 	result of previously taxable real property within the district becoming tax exempt or 
266.3 	qualifying in whole or part for an exclusion from taxable market value, or a reduction in 
266.4 	the geographic area of the district, shall be the amount of original net tax capacity initially 
266.5 	attributed to the property becoming tax exempt, being excluded from taxable market value, 
266.6 	or being removed from the district. If the net tax capacity of property located within the tax 
266.7 	increment financing district is reduced by reason of a court-ordered abatement, stipulation 
266.8 	agreement, voluntary abatement made by the assessor or auditor or by order of the 
266.9 	commissioner of revenue, the reduction shall be applied to the original net tax capacity of 
266.10 	the district when the property upon which the abatement is made has not been improved 
266.11 	since the date of certification of the district and to the captured net tax capacity of the district 
266.12 	in each year thereafter when the abatement relates to improvements made after the date of 
266.13 	certification. The county auditor may specify reasonable form and content of the request 
266.14 	for certification of the authority and any modification thereof pursuant to section 469.175, 
266.15 	subdivision 4.
266.16 	(f) If a parcel of property contained a substandard building or improvements described 
266.17 	in section 469.174, subdivision 10, paragraph (e), that were demolished or removed and if 
266.18 	the authority elects to treat the parcel as occupied by a substandard building under section 
266.19 	469.174, subdivision 10, paragraph (b), or by improvements under section 469.174, 
266.20 	subdivision 10, paragraph (e), the auditor shall certify the original net tax capacity of the 
266.21 	parcel using the greater of (1) the current net tax capacity of the parcel, or (2) the estimated 
266.22 	market value of the parcel for the year in which the building or other improvements were 
266.23 	demolished or removed, but applying the classification rates for the current year.
266.24 	(g) For a redevelopment district qualifying under section 469.174, subdivision 10, 
266.25 	paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of 
266.26 	the land as the original tax capacity for any parcel in the district that contains a building 
266.27 	that suffered substantial damage as a result of the disaster or emergency.

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

266.29 	Sec. 20.  REPEALER.
 266.30 	Minnesota Statutes 2016, section 275.29, is repealed.

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

267.1 	ARTICLE 16
267.2 	DEPARTMENT OF REVENUE; MISCELLANEOUS; TECHNICAL CHANGES

267.3 	Section 1. Minnesota Statutes 2016, section 272.02, subdivision 27, is amended to read:
267.4 		Subd. 27.Superior National Forest; recreational property for use by disabled
267.5 	veterans with a disability. Real and personal property is exempt if it is located in the 
267.6 	Superior National Forest, and owned or leased and operated by a nonprofit organization 
267.7 	that is exempt from federal income taxation under section 501(c)(3) of the Internal Revenue 
267.8 	Code and primarily used to provide recreational opportunities for disabled veterans with a 
267.9 	disability and their families.

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

267.11 	Sec. 2. Minnesota Statutes 2016, section 272.02, subdivision 81, is amended to read:
267.12 		Subd. 81.Certain recreational property for disabled veterans with a disability. Real 
267.13 	and personal property is exempt if it is located in a county in the metropolitan area with a 
267.14 	population of less than 500,000 according to the 2000 federal census, and owned or leased 
267.15 	and operated by a nonprofit organization, and primarily used to provide recreational 
267.16 	opportunities for disabled veterans with a disability and their families.

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

267.18 	Sec. 3. Minnesota Statutes 2016, section 273.032, is amended to read:
267.19 	273.032 MARKET VALUE DEFINITION.
267.20 	(a) Unless otherwise provided, for the purpose of determining any property tax levy 
267.21 	limitation based on market value or any limit on net debt, the issuance of bonds, certificates 
267.22 	of indebtedness, or capital notes based on market value, any qualification to receive state 
267.23 	aid based on market value, or any state aid amount based on market value, the terms "market 
267.24 	value," "estimated market value," and "market valuation," whether equalized or unequalized, 
267.25 	mean the estimated market value of taxable property within the local unit of government 
267.26 	before any of the following or similar adjustments for:
267.27 	(1) the market value exclusions under:
267.28 	(i) section 273.11, subdivisions 14a and 14c (vacant platted land);
267.29 	(ii) section 273.11, subdivision 16 (certain improvements to homestead property);
267.30 	(iii) section 273.11, subdivisions 19 and 20 (certain improvements to business properties);
268.1 	(iv) section 273.11, subdivision 21 (homestead property damaged by mold);
268.2 	(v) section 273.13, subdivision 34 (homestead of a disabled veteran with a disability or 
268.3 	family caregiver); or
268.4 	(vi) section 273.13, subdivision 35 (homestead market value exclusion); or
268.5 	(2) the deferment of value under:
268.6 	(i) the Minnesota Agricultural Property Tax Law, section 273.111;
268.7 	(ii) the Aggregate Resource Preservation Law, section 273.1115;
268.8 	(iii) the Minnesota Open Space Property Tax Law, section 273.112;
268.9 	(iv) the rural preserves property tax program, section 273.114; or
268.10 	(v) the Metropolitan Agricultural Preserves Act, section 473H.10; or
268.11 	(3) the adjustments to tax capacity for:
268.12 	(i) tax increment financing under sections 469.174 to 469.1794;
268.13 	(ii) fiscal disparities under chapter 276A or 473F; or
268.14 	(iii) powerline credit under section 273.425.
268.15 	(b) Estimated market value under paragraph (a) also includes the market value of 
268.16 	tax-exempt property if the applicable law specifically provides that the limitation, 
268.17 	qualification, or aid calculation includes tax-exempt property.
268.18 	(c) Unless otherwise provided, "market value," "estimated market value," and "market 
268.19 	valuation" for purposes of property tax levy limitations and calculation of state aid, refer 
268.20 	to the estimated market value for the previous assessment year and for purposes of limits 
268.21 	on net debt, the issuance of bonds, certificates of indebtedness, or capital notes refer to the 
268.22 	estimated market value as last finally equalized.
268.23 	(d) For purposes of a provision of a home rule charter or of any special law that is not 
268.24 	codified in the statutes and that imposes a levy limitation based on market value or any limit 
268.25 	on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market 
268.26 	value, the terms "market value," "taxable market value," and "market valuation," whether 
268.27 	equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

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

269.1 	Sec. 4. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 22, is amended 
269.2 	to read:
269.3 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) and 
269.4 	(c), real estate which is residential and used for homestead purposes is class 1a. In the case 
269.5 	of a duplex or triplex in which one of the units is used for homestead purposes, the entire 
269.6 	property is deemed to be used for homestead purposes. The market value of class 1a property 
269.7 	must be determined based upon the value of the house, garage, and land.
269.8 	The first $500,000 of market value of class 1a property has a net classification rate of 
269.9 	one percent of its market value; and the market value of class 1a property that exceeds 
269.10 	$500,000 has a classification rate of 1.25 percent of its market value.
269.11 	(b) Class 1b property includes homestead real estate or homestead manufactured homes 
269.12 	used for the purposes of a homestead by:
269.13 	(1) any person who is blind as defined in section 256D.35, or the blind person who is 
269.14 	blind and the blind person's spouse of the person who is blind;
269.15 	(2) any person who is permanently and totally disabled or by the disabled person with 
269.16 	a disability and the disabled person's spouse of the person with a disability; or
269.17 	(3) the surviving spouse of a veteran who was permanently and totally disabled veteran
269.18 	homesteading a property classified under this paragraph for taxes payable in 2008.
269.19 	Property is classified and assessed under clause (2) only if the government agency or 
269.20 	income-providing source certifies, upon the request of the homestead occupant, that the 
269.21 	homestead occupant satisfies the disability requirements of this paragraph, and that the 
269.22 	property is not eligible for the valuation exclusion under subdivision 34.
269.23 	Property is classified and assessed under paragraph (b) only if the commissioner of 
269.24 	revenue or the county assessor certifies that the homestead occupant satisfies the requirements 
269.25 	of this paragraph.
269.26 	Permanently and totally disabled for the purpose of this subdivision means a condition 
269.27 	which is permanent in nature and totally incapacitates the person from working at an 
269.28 	occupation which brings the person an income. The first $50,000 market value of class 1b 
269.29 	property has a net classification rate of .45 percent of its market value. The remaining market 
269.30 	value of class 1b property is classified as class 1a or class 2a property, whichever is 
269.31 	appropriate.
269.32 	(c) Class 1c property is commercial use real and personal property that abuts public 
269.33 	water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by 
270.1 	the Department of Natural Resources, and is devoted to temporary and seasonal residential 
270.2 	occupancy for recreational purposes but not devoted to commercial purposes for more than 
270.3 	250 days in the year preceding the year of assessment, and that includes a portion used as 
270.4 	a homestead by the owner, which includes a dwelling occupied as a homestead by a 
270.5 	shareholder of a corporation that owns the resort, a partner in a partnership that owns the 
270.6 	resort, or a member of a limited liability company that owns the resort even if the title to 
270.7 	the homestead is held by the corporation, partnership, or limited liability company. For 
270.8 	purposes of this paragraph, property is devoted to a commercial purpose on a specific day 
270.9 	if any portion of the property, excluding the portion used exclusively as a homestead, is 
270.10 	used for residential occupancy and a fee is charged for residential occupancy. Class 1c 
270.11 	property must contain three or more rental units. A "rental unit" is defined as a cabin, 
270.12 	condominium, townhouse, sleeping room, or individual camping site equipped with water 
270.13 	and electrical hookups for recreational vehicles. Class 1c property must provide recreational 
270.14 	activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill 
270.15 	or cross-country ski equipment; provide marina services, launch services, or guide services; 
270.16 	or sell bait and fishing tackle. Any unit in which the right to use the property is transferred 
270.17 	to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies 
270.18 	for class 1c even though it may remain available for rent. A camping pad offered for rent 
270.19 	by a property that otherwise qualifies for class 1c is also class 1c, regardless of the term of 
270.20 	the rental agreement, as long as the use of the camping pad does not exceed 250 days. If 
270.21 	the same owner owns two separate parcels that are located in the same township, and one 
270.22 	of those properties is classified as a class 1c property and the other would be eligible to be 
270.23 	classified as a class 1c property if it was used as the homestead of the owner, both properties 
270.24 	will be assessed as a single class 1c property; for purposes of this sentence, properties are 
270.25 	deemed to be owned by the same owner if each of them is owned by a limited liability 
270.26 	company, and both limited liability companies have the same membership. The portion of 
270.27 	the property used as a homestead is class 1a property under paragraph (a). The remainder 
270.28 	of the property is classified as follows: the first $600,000 of market value is tier I, the next 
270.29 	$1,700,000 of market value is tier II, and any remaining market value is tier III. The 
270.30 	classification rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 
270.31 	percent. Owners of real and personal property devoted to temporary and seasonal residential 
270.32 	occupancy for recreation purposes in which all or a portion of the property was devoted to 
270.33 	commercial purposes for not more than 250 days in the year preceding the year of assessment 
270.34 	desiring classification as class 1c, must submit a declaration to the assessor designating the 
270.35 	cabins or units occupied for 250 days or less in the year preceding the year of assessment 
270.36 	by January 15 of the assessment year. Those cabins or units and a proportionate share of 
271.1 	the land on which they are located must be designated as class 1c as otherwise provided. 
271.2 	The remainder of the cabins or units and a proportionate share of the land on which they 
271.3 	are located must be designated as class 3a commercial. The owner of property desiring 
271.4 	designation as class 1c property must provide guest registers or other records demonstrating 
271.5 	that the units for which class 1c designation is sought were not occupied for more than 250 
271.6 	days in the year preceding the assessment if so requested. The portion of a property operated 
271.7 	as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) 
271.8 	other nonresidential facility operated on a commercial basis not directly related to temporary 
271.9 	and seasonal residential occupancy for recreation purposes does not qualify for class 1c.
271.10 	(d) Class 1d property includes structures that meet all of the following criteria:
271.11 	(1) the structure is located on property that is classified as agricultural property under 
271.12 	section 273.13, subdivision 23;
271.13 	(2) the structure is occupied exclusively by seasonal farm workers during the time when 
271.14 	they work on that farm, and the occupants are not charged rent for the privilege of occupying 
271.15 	the property, provided that use of the structure for storage of farm equipment and produce 
271.16 	does not disqualify the property from classification under this paragraph;
271.17 	(3) the structure meets all applicable health and safety requirements for the appropriate 
271.18 	season; and
271.19 	(4) the structure is not salable as residential property because it does not comply with 
271.20 	local ordinances relating to location in relation to streets or roads.
271.21 	The market value of class 1d property has the same classification rates as class 1a property 
271.22 	under paragraph (a).

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

271.24 	Sec. 5. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 34, is amended 
271.25 	to read:
271.26 		Subd. 34.Homestead of disabled veteran with a disability or family caregiver. (a) 
271.27 	All or a portion of the market value of property owned by a veteran and serving as the 
271.28 	veteran's homestead under this section is excluded in determining the property's taxable 
271.29 	market value if the veteran has a service-connected disability of 70 percent or more as 
271.30 	certified by the United States Department of Veterans Affairs. To qualify for exclusion 
271.31 	under this subdivision, the veteran must have been honorably discharged from the United 
271.32 	States armed forces, as indicated by United States Government Form DD214 or other official 
271.33 	military discharge papers.
272.1 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded, 
272.2 	except as provided in clause (2); and
272.3 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
272.4 	excluded.
272.5 	(c) If a disabled veteran with a disability qualifying for a valuation exclusion under 
272.6 	paragraph (b), clause (2), predeceases the veteran's spouse, and if upon the death of the 
272.7 	veteran the spouse holds the legal or beneficial title to the homestead and permanently 
272.8 	resides there, the exclusion shall carry over to the benefit of the veteran's spouse for the 
272.9 	current taxes payable year and for eight additional taxes payable years or until such time 
272.10 	as the spouse remarries, or sells, transfers, or otherwise disposes of the property, whichever 
272.11 	comes first. Qualification under this paragraph requires an application under paragraph (h), 
272.12 	and a spouse must notify the assessor if there is a change in the spouse's marital status, 
272.13 	ownership of the property, or use of the property as a permanent residence.
272.14 	(d) If the spouse of a member of any branch or unit of the United States armed forces 
272.15 	who dies due to a service-connected cause while serving honorably in active service, as 
272.16 	indicated on United States Government Form DD1300 or DD2064, holds the legal or 
272.17 	beneficial title to a homestead and permanently resides there, the spouse is entitled to the 
272.18 	benefit described in paragraph (b), clause (2), for eight taxes payable years, or until such 
272.19 	time as the spouse remarries or sells, transfers, or otherwise disposes of the property, 
272.20 	whichever comes first.
272.21 	(e) If a veteran meets the disability criteria of paragraph (a) but does not own property 
272.22 	classified as homestead in the state of Minnesota, then the homestead of the veteran's primary 
272.23 	family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify 
272.24 	for under paragraph (b).
272.25 	(f) In the case of an agricultural homestead, only the portion of the property consisting 
272.26 	of the house and garage and immediately surrounding one acre of land qualifies for the 
272.27 	valuation exclusion under this subdivision.
272.28 	(g) A property qualifying for a valuation exclusion under this subdivision is not eligible 
272.29 	for the market value exclusion under subdivision 35, or classification under subdivision 22, 
272.30 	paragraph (b).
272.31 	(h) To qualify for a valuation exclusion under this subdivision a property owner must 
272.32 	apply to the assessor by July 1 of the first assessment year for which the exclusion is sought. 
272.33 	For an application received after July 1, the exclusion shall become effective for the following 
272.34 	assessment year. Except as provided in paragraph (c), the owner of a property that has been 
273.1 	accepted for a valuation exclusion must notify the assessor if there is a change in ownership 
273.2 	of the property or in the use of the property as a homestead.
273.3 	(i) A first-time application by a qualifying spouse for the market value exclusion under 
273.4 	paragraph (d) must be made any time within two years of the death of the service member.
273.5 	(j) For purposes of this subdivision:
273.6 	(1) "active service" has the meaning given in section 190.05;
273.7 	(2) "own" means that the person's name is present as an owner on the property deed;
273.8 	(3) "primary family caregiver" means a person who is approved by the secretary of the 
273.9 	United States Department of Veterans Affairs for assistance as the primary provider of 
273.10 	personal care services for an eligible veteran under the Program of Comprehensive Assistance 
273.11 	for Family Caregivers, codified as United States Code, title 38, section 1720G; and
273.12 	(4) "veteran" has the meaning given the term in section 197.447.
273.13 	(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion 
273.14 	under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit 
273.15 	under paragraph (b), clause (2), for eight taxes payable years or until the spouse remarries 
273.16 	or sells, transfers, or otherwise disposes of the property if:
273.17 	(1) the spouse files a first-time application within two years of the death of the service 
273.18 	member or by June 1, 2019, whichever is later;
273.19 	(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the 
273.20 	homestead and permanently resides there;
273.21 	(3) the veteran met the honorable discharge requirements of paragraph (a); and
273.22 	(4) the United States Department of Veterans Affairs certifies that:
273.23 	(i) the veteran met the total (100 percent) and permanent disability requirement under 
273.24 	paragraph (b), clause (2); or
273.25 	(ii) the spouse has been awarded dependency and indemnity compensation.
273.26 	(l) The purpose of this provision of law providing a level of homestead property tax 
273.27 	relief for gravely disabled veterans with a disability, their primary family caregivers, and 
273.28 	their surviving spouses is to help ease the burdens of war for those among our state's citizens 
273.29 	who bear those burdens most heavily.
273.30 	(m) By July 1, the county veterans service officer must certify the disability rating and 
273.31 	permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.

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

274.2 	Sec. 6. Minnesota Statutes 2016, section 289A.08, subdivision 6, is amended to read:
274.3 		Subd. 6.Returns of married persons. A husband and wife Individuals who are married 
274.4 	to each other must file a joint Minnesota income tax return if they filed a joint federal income 
274.5 	tax return. If the husband and wife spouses have elected to file separate federal income tax 
274.6 	returns, they must file separate Minnesota income tax returns. This election to file a joint 
274.7 	or separate return must be changed if they change their election for federal purposes. In the 
274.8 	event taxpayers desire to change their election, the change must be done in the manner and 
274.9 	on the form prescribed by the commissioner.
274.10 	The determination of whether an individual is married shall be made under the provisions 
274.11 	of section 7703 of the Internal Revenue Code.

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

274.13 	Sec. 7. Minnesota Statutes 2016, section 289A.25, subdivision 1, is amended to read:
274.14 		Subdivision 1.Requirements to pay. An individual, trust, S corporation, or partnership 
274.15 	must, when prescribed in subdivision 3, paragraph (b), make payments of estimated tax. 
274.16 	For individuals, the term "estimated tax" means the amount the taxpayer estimates is the 
274.17 	sum of the taxes imposed by chapter 290 for the taxable year. For trusts, S corporations, 
274.18 	and partnerships, the term estimated tax means the amount the taxpayer estimates is the 
274.19 	sum of the taxes for the taxable year imposed by chapter 290 and the composite income tax 
274.20 	imposed by section 289A.08, subdivision 7. If the individual is an infant or incompetent 
274.21 	person, the payments must be made by the individual's guardian. If joint payments on 
274.22 	estimated tax are made but a joint return is not made for the taxable year, the estimated tax 
274.23 	for that year may be treated as the estimated tax of either the husband or the wife spouse or 
274.24 	may be divided between them.

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

274.26 	Sec. 8. Minnesota Statutes 2016, section 289A.31, subdivision 2, is amended to read:
274.27 		Subd. 2.Joint income tax returns. (a) If a joint income tax return is made by a husband 
274.28 	and wife spouses, the liability for the tax is joint and several. A spouse who qualifies for 
274.29 	relief from a liability attributable to an underpayment under section 6015(b) of the Internal 
274.30 	Revenue Code is relieved of the state income tax liability on the underpayment.
275.1 	(b) In the case of individuals who were a husband and wife married as determined in 
275.2 	section 7703 of the Internal Revenue Code prior to the dissolution of their marriage or their 
275.3 	legal separation, or prior to the death of one of the individuals, for tax liabilities reported 
275.4 	on a joint or combined return, the liability of each person is limited to the proportion of the 
275.5 	tax due on the return that equals that person's proportion of the total tax due if the husband 
275.6 	and wife each spouse filed separate returns for the taxable year. This provision is effective 
275.7 	only when the commissioner receives written notice of the marriage dissolution, legal 
275.8 	separation, or death of a spouse from the husband or wife surviving spouse. No refund may 
275.9 	be claimed by an ex-spouse, legally separated or widowed spouse for any taxes paid more 
275.10 	than 60 days before receipt by the commissioner of the written notice.
275.11 	(c) A request for calculation of separate liability pursuant to paragraph (b) for taxes 
275.12 	reported on a return must be made within six years after the due date of the return. For 
275.13 	calculation of separate liability for taxes assessed by the commissioner under section 289A.35
275.14 	or 289A.37, the request must be made within six years after the date of assessment. The 
275.15 	commissioner is not required to calculate separate liability if the remaining unpaid liability 
275.16 	for which recalculation is requested is $100 or less.

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

275.18 	Sec. 9. Minnesota Statutes 2016, section 289A.37, subdivision 6, is amended to read:
275.19 		Subd. 6.Order of assessment if joint income tax return. If a joint income tax return 
275.20 	is filed by a husband and wife spouses, an order of assessment may be a single joint notice. 
275.21 	If the commissioner has been notified by either spouse that that spouse's address has changed 
275.22 	and if that spouse requests it, then, instead of the single joint notice mailed to the last known 
275.23 	address of the husband and wife spouses, a duplicate or original of the joint notice must be 
275.24 	sent to the requesting spouse at the address designated by the requesting spouse. The other 
275.25 	joint notice must be mailed to the other spouse at that spouse's last known address. An 
275.26 	assessment is not invalid for failure to send it to a spouse if the spouse actually receives the 
275.27 	notice in the same period as if it had been mailed to that spouse at the correct address or if 
275.28 	the spouse has failed to provide an address to the commissioner other than the last known 
275.29 	address.

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

275.31 	Sec. 10. Minnesota Statutes 2016, section 290.0802, subdivision 2, is amended to read:
275.32 		Subd. 2.Subtraction. (a) A qualified individual is allowed a subtraction from federal 
275.33 	taxable income of the individual's subtraction base amount. The excess of the subtraction 
276.1 	base amount over the taxable net income computed without regard to the subtraction for 
276.2 	the elderly or disabled a person with a disability under section 290.0132, subdivision 5, 
276.3 	may be used to reduce the amount of a lump sum distribution subject to tax under section 
276.4 	290.032.
276.5 	(b)(1) The initial subtraction base amount equals
276.6 	(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,
276.7 	(ii) $9,600 for a single taxpayer, and
276.8 	(iii) $6,000 for a married taxpayer filing a separate federal return.
276.9 	(2) The qualified individual's initial subtraction base amount, then, must be reduced by 
276.10 	the sum of nontaxable retirement and disability benefits and one-half of the amount of 
276.11 	adjusted gross income in excess of the following thresholds:
276.12 	(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified 
276.13 	individuals,
276.14 	(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one 
276.15 	spouse is a qualified individual, and
276.16 	(iii) $9,000 for a married taxpayer filing a separate federal return.
276.17 	(3) In the case of a qualified individual who is under the age of 65, the maximum amount 
276.18 	of the subtraction base may not exceed the taxpayer's disability income.
276.19 	(4) The resulting amount is the subtraction base amount.

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

276.21 	Sec. 11. Minnesota Statutes 2016, section 290.0802, subdivision 3, is amended to read:
276.22 		Subd. 3.Restrictions; married couples. Except in the case of a husband and wife
276.23 	spouses who live apart at all times during the taxable year, if the taxpayer is married at the 
276.24 	close of the taxable year, the subtraction under subdivision 2 is allowable only if the taxpayers 
276.25 	file joint federal and state income tax returns for the taxable year.

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

276.27 	Sec. 12. Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended 
276.28 	to read:
276.29 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
276.30 	terms have the meanings given.
277.1 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
277.2 	year:
277.3 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
277.4 	55(b)(2) of the Internal Revenue Code;
277.5 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
277.6 	taxable income, but excluding:
277.7 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
277.8 	(ii) the medical expense deduction;
277.9 	(iii) the casualty, theft, and disaster loss deduction; and
277.10 	(iv) the impairment-related work expenses of a disabled person with a disability;
277.11 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
277.12 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
277.13 	to the extent not included in federal alternative minimum taxable income, the excess of the 
277.14 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
277.15 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
277.16 	without regard to the depletion deduction for the taxable year);
277.17 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
277.18 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
277.19 	Code determined without regard to subparagraph (E);
277.20 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
277.21 	of interest income as provided by section 290.0131, subdivision 2; and
277.22 	(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;
277.23 	less the sum of the amounts determined under the following:
277.24 	(i) interest income as defined in section 290.0132, subdivision 2;
277.25 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
277.26 	3, to the extent included in federal alternative minimum taxable income;
277.27 	(iii) the amount of investment interest paid or accrued within the taxable year on 
277.28 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
277.29 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
277.30 	in computing federal adjusted gross income;
278.1 	(iv) amounts subtracted from federal taxable income as provided by section 290.0132, 
278.2 	subdivisions 7, 9 to 15, 17, 21, 24, and 26; and
278.3 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
278.4 	paragraph (c).
278.5 	In the case of an estate or trust, alternative minimum taxable income must be computed 
278.6 	as provided in section 59(c) of the Internal Revenue Code.
278.7 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
278.8 	the Internal Revenue Code.
278.9 	(c) "Net minimum tax" means the minimum tax imposed by this section.
278.10 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
278.11 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
278.12 	under this chapter.
278.13 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
278.14 	after subtracting the exemption amount determined under subdivision 3.

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

278.16 	Sec. 13. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 3, is amended 
278.17 	to read:
278.18 		Subd. 3.Income. (a) "Income" means the sum of the following:
278.19 	(1) federal adjusted gross income as defined in the Internal Revenue Code; and
278.20 	(2) the sum of the following amounts to the extent not included in clause (1):
278.21 	(i) all nontaxable income;
278.22 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
278.23 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
278.24 	carryover allowed under section 469(b) of the Internal Revenue Code;
278.25 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
278.26 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
278.27 	Code;
278.28 	(iv) cash public assistance and relief;
278.29 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
278.30 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
279.1 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
279.2 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
279.3 	gross income in the years when the payments were made;
279.4 	(vi) interest received from the federal or a state government or any instrumentality or 
279.5 	political subdivision thereof;
279.6 	(vii) workers' compensation;
279.7 	(viii) nontaxable strike benefits;
279.8 	(ix) the gross amounts of payments received in the nature of disability income or sick 
279.9 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
279.10 	or otherwise;
279.11 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
279.12 	1986, as amended through December 31, 1995;
279.13 	(xi) contributions made by the claimant to an individual retirement account, including 
279.14 	a qualified voluntary employee contribution; simplified employee pension plan; 
279.15 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
279.16 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
279.17 	Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for 
279.18 	the claimant and spouse;
279.19 	(xii) to the extent not included in federal adjusted gross income, distributions received 
279.20 	by the claimant or spouse from a traditional or Roth style retirement account or plan;
279.21 	(xiii) nontaxable scholarship or fellowship grants;
279.22 	(xiv) the amount of deduction allowed under section 199 of the Internal Revenue Code;
279.23 	(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue 
279.24 	Code;
279.25 	(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue 
279.26 	Code; and
279.27 	(xvii) the amount deducted for certain expenses of elementary and secondary school 
279.28 	teachers under section 62(a)(2)(D) of the Internal Revenue Code.
279.29 	In the case of an individual who files an income tax return on a fiscal year basis, the 
279.30 	term "federal adjusted gross income" shall mean federal adjusted gross income reflected in 
279.31 	the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced 
280.1 	by the amount of a net operating loss carryback or carryforward or a capital loss carryback 
280.2 	or carryforward allowed for the year.
280.3 	(b) "Income" does not include:
280.4 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
280.5 	(2) amounts of any pension or annuity which was exclusively funded by the claimant 
280.6 	or spouse and which funding payments were not excluded from federal adjusted gross 
280.7 	income in the years when the payments were made;
280.8 	(3) to the extent included in federal adjusted gross income, amounts contributed by the 
280.9 	claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed 
280.10 	the retirement base amount reduced by the amount of contributions excluded from federal 
280.11 	adjusted gross income, but not less than zero;
280.12 	(4) surplus food or other relief in kind supplied by a governmental agency;
280.13 	(5) relief granted under this chapter;
280.14 	(6) child support payments received under a temporary or final decree of dissolution or 
280.15 	legal separation; or
280.16 	(7) restitution payments received by eligible individuals and excludable interest as 
280.17 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
280.18 	Public Law 107-16.
280.19 	(c) The sum of the following amounts may be subtracted from income:
280.20 	(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
280.21 	(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
280.22 	(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
280.23 	(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
280.24 	(5) for the claimant's fifth dependent, the exemption amount; and
280.25 	(6) if the claimant or claimant's spouse was disabled had a disability or attained the age 
280.26 	of 65 on or before December 31 of the year for which the taxes were levied or rent paid, 
280.27 	the exemption amount.
280.28 	(d) For purposes of this subdivision, the "exemption amount" means the exemption 
280.29 	amount under section 151(d) of the Internal Revenue Code for the taxable year for which 
280.30 	the income is reported; "retirement base amount" means the deductible amount for the 
280.31 	taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue 
281.1 	Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue 
281.2 	Code, without regard to whether the claimant or spouse claimed a deduction; and "traditional 
281.3 	or Roth style retirement account or plan" means retirement plans under sections 401, 403, 
281.4 	408, 408A, and 457 of the Internal Revenue Code.

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

281.6 	Sec. 14. Minnesota Statutes 2016, section 290A.03, subdivision 4, is amended to read:
281.7 		Subd. 4.Household. "Household" means a claimant and an individual related to the 
281.8 	claimant as husband or wife the claimant's spouse who are domiciled in the same homestead.

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

281.10 	Sec. 15. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 8, is amended 
281.11 	to read:
281.12 		Subd. 8.Claimant. (a) "Claimant" means a person, other than a dependent, as defined 
281.13 	under sections 151 and 152 of the Internal Revenue Code disregarding section 152(b)(3) 
281.14 	of the Internal Revenue Code, who filed a claim authorized by this chapter and who was a 
281.15 	resident of this state as provided in chapter 290 during the calendar year for which the claim 
281.16 	for relief was filed.
281.17 	(b) In the case of a claim relating to rent constituting property taxes, the claimant shall 
281.18 	have resided in a rented or leased unit on which ad valorem taxes or payments made in lieu 
281.19 	of ad valorem taxes, including payments of special assessments imposed in lieu of ad valorem 
281.20 	taxes, are payable at some time during the calendar year covered by the claim.
281.21 	(c) "Claimant" shall not include a resident of a nursing home, intermediate care facility, 
281.22 	long-term residential facility, or a facility that accepts housing support payments whose 
281.23 	rent constituting property taxes is paid pursuant to the Supplemental Security Income 
281.24 	program under title XVI of the Social Security Act, the Minnesota supplemental aid program 
281.25 	under sections 256D.35 to 256D.54, the medical assistance program pursuant to title XIX 
281.26 	of the Social Security Act, or the housing support program under chapter 256I.
281.27 	If only a portion of the rent constituting property taxes is paid by these programs, the 
281.28 	resident shall be a claimant for purposes of this chapter, but the refund calculated pursuant 
281.29 	to section 290A.04 shall be multiplied by a fraction, the numerator of which is income as 
281.30 	defined in subdivision 3, paragraphs (a) and (b), reduced by the total amount of income 
281.31 	from the above sources other than vendor payments under the medical assistance program 
281.32 	and the denominator of which is income as defined in subdivision 3, paragraphs (a) and (b), 
282.1 	plus vendor payments under the medical assistance program, to determine the allowable 
282.2 	refund pursuant to this chapter.
282.3 	(d) Notwithstanding paragraph (c), if the claimant was a resident of the nursing home, 
282.4 	intermediate care facility, long-term residential facility, or facility for which the rent was 
282.5 	paid for the claimant by the housing support program for only a portion of the calendar year 
282.6 	covered by the claim, the claimant may compute rent constituting property taxes by 
282.7 	disregarding the rent constituting property taxes from the nursing home or facility and use 
282.8 	only that amount of rent constituting property taxes or property taxes payable relating to 
282.9 	that portion of the year when the claimant was not in the facility. The claimant's household 
282.10 	income is the income for the entire calendar year covered by the claim.
282.11 	(e) In the case of a claim for rent constituting property taxes of a part-year Minnesota 
282.12 	resident, the income and rental reflected in this computation shall be for the period of 
282.13 	Minnesota residency only. Any rental expenses paid which may be reflected in arriving at 
282.14 	federal adjusted gross income cannot be utilized for this computation. When two individuals 
282.15 	of a household are able to meet the qualifications for a claimant, they may determine among 
282.16 	them as to who the claimant shall be. If they are unable to agree, the matter shall be referred 
282.17 	to the commissioner of revenue whose decision shall be final. If a homestead property owner 
282.18 	was a part-year Minnesota resident, the income reflected in the computation made pursuant 
282.19 	to section 290A.04 shall be for the entire calendar year, including income not assignable to 
282.20 	Minnesota.
282.21 	(f) If a homestead is occupied by two or more renters, who are not husband and wife
282.22 	married to each other, the rent shall be deemed to be paid equally by each, and separate 
282.23 	claims shall be filed by each. The income of each shall be each renter's household income 
282.24 	for purposes of computing the amount of credit to be allowed.

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

282.26 	Sec. 16. Minnesota Statutes 2016, section 290A.05, is amended to read:
282.27 	290A.05 COMBINED HOUSEHOLD INCOME.
282.28 	If a person occupies a homestead with another person or persons not related to the person 
282.29 	as husband and wife the person's spouse, excluding dependents, roomers or boarders on 
282.30 	contract, and has property tax payable with respect to the homestead, the household income 
282.31 	of the claimant or claimants for the purpose of computing the refund allowed by section 
282.32 	290A.04 shall include the total income received by the other persons residing in the 
282.33 	homestead. For purposes of this section, "dependent" includes a parent of the claimant or 
283.1 	spouse who lives in the claimant's homestead and does not have an ownership interest in 
283.2 	the homestead. If a person occupies a homestead with another person or persons not related
283.3 	to the person as husband and wife the person's spouse or as dependents, the property tax 
283.4 	payable or rent constituting property tax shall be reduced as follows.
283.5 	If the other person or persons are residing at the homestead under rental or lease 
283.6 	agreement, the amount of property tax payable or rent constituting property tax shall be that 
283.7 	portion not covered by the rental agreement.

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

283.9 	Sec. 17. Minnesota Statutes 2016, section 290A.08, is amended to read:
283.10 	290A.08 ONE CLAIMANT PER HOUSEHOLD.
283.11 	Only one claimant per household per year is entitled to relief under this chapter. Payment 
283.12 	of the claim for relief may be made payable to the husband and wife spouses as one claimant. 
283.13 	The commissioner, upon written request, may issue separate checks, to the husband and 
283.14 	wife spouses for one-half of the relief provided the original check has not been issued or 
283.15 	has been returned. Individuals related as husband and wife spouses who were married during 
283.16 	the year may elect to file a joint claim which shall include each spouse's income, rent 
283.17 	constituting property taxes, and property taxes payable. Husbands and wives Spouses who 
283.18 	were married for the entire year and were domiciled in the same household for the entire 
283.19 	year must file a joint claim. The maximum dollar amount allowable for a joint claim shall 
283.20 	not exceed the amount that one person could receive.

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

283.22 	Sec. 18. Minnesota Statutes 2016, section 290A.09, is amended to read:
283.23 	290A.09 PROOF OF CLAIM.
283.24 	Every claimant shall supply to the commissioner of revenue, in support of the claim, 
283.25 	proof of eligibility under this chapter, including but not limited to amount of rent paid or 
283.26 	property taxes accrued, name and address of owner or managing agent of property rented, 
283.27 	changes in homestead, household membership, household income, size and nature of property 
283.28 	claimed as a homestead.
283.29 	Disabled Persons with a disability filing claims shall submit proof of disability in the 
283.30 	form and manner as the commissioner may prescribe. The department may require 
283.31 	examination and certification by the claimant's physician or by a physician designated by 
283.32 	the commissioner. The cost of any examination shall be borne by the claimant, unless the 
284.1 	examination proves the disability, in which case the cost of the examination shall be borne 
284.2 	by the commissioner.
284.3 	A determination of disability of a claimant by the Social Security Administration under 
284.4 	Title II or Title XVI of the Social Security Act shall constitute presumptive proof of disability.

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

284.6 	Sec. 19. Minnesota Statutes 2016, section 297A.61, subdivision 18, is amended to read:
284.7 		Subd. 18.Disabled Person with a disability. "Disabled Person with a disability" means 
284.8 	an individual who has a permanent and total disability as defined in section 273.13, 
284.9 	subdivision 22.

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

284.11 	Sec. 20. Minnesota Statutes 2017 Supplement, section 297A.67, subdivision 6, is amended 
284.12 	to read:
284.13 		Subd. 6.Other exempt meals. (a) Prepared food, candy, and soft drinks purchased for 
284.14 	and served exclusively to individuals who are 60 years of age or over and their spouses or 
284.15 	to disabled persons with a disability and their spouses by governmental agencies, nonprofit 
284.16 	organizations, or churches, or pursuant to any program funded in whole or in part through 
284.17 	United States Code, title 42, sections 3001 through 3045, wherever delivered, prepared, or 
284.18 	served, are exempt. Taxable food sold through vending machines is not exempt.
284.19 	(b) Prepared food, candy, and soft drinks purchased for and served exclusively to children 
284.20 	who are less than 14 years of age or disabled children with a disability who are less than 
284.21 	16 years of age and who are attending a child care or early childhood education program, 
284.22 	are exempt if they are:
284.23 	(1) purchased by a nonprofit child care facility that is exempt under section 297A.70, 
284.24 	subdivision 4, and that primarily serves families with income of 250 percent or less of 
284.25 	federal poverty guidelines; and
284.26 	(2) prepared at the site of the child care facility.

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

285.1 	Sec. 21. Minnesota Statutes 2016, section 297A.67, subdivision 12, is amended to read:
285.2 		Subd. 12.Parts and accessories used to make a motor vehicle disabled accessible
285.3 	to a person with a disability. Parts, accessories, and labor charges that are used solely to 
285.4 	modify a motor vehicle to make it disabled accessible to persons with a disability are exempt.

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

285.6 	Sec. 22. Minnesota Statutes 2016, section 297A.70, subdivision 3, is amended to read:
285.7 		Subd. 3.Sales of certain goods and services to government. (a) The following sales 
285.8 	to or use by the specified governments and political subdivisions of the state are exempt:
285.9 	(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and fire 
285.10 	apparatus to a political subdivision;
285.11 	(2) machinery and equipment, except for motor vehicles, used directly for mixed 
285.12 	municipal solid waste management services at a solid waste disposal facility as defined in 
285.13 	section 115A.03, subdivision 10;
285.14 	(3) chore and homemaking services to a political subdivision of the state to be provided 
285.15 	to elderly individuals or disabled individuals persons with a disability;
285.16 	(4) telephone services to the Office of MN.IT Services that are used to provide 
285.17 	telecommunications services through the MN.IT services revolving fund;
285.18 	(5) firefighter personal protective equipment as defined in paragraph (b), if purchased 
285.19 	or authorized by and for the use of an organized fire department, fire protection district, or 
285.20 	fire company regularly charged with the responsibility of providing fire protection to the 
285.21 	state or a political subdivision;
285.22 	(6) bullet-resistant body armor that provides the wearer with ballistic and trauma 
285.23 	protection, if purchased by a law enforcement agency of the state or a political subdivision 
285.24 	of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
285.25 	(7) motor vehicles purchased or leased by political subdivisions of the state if the vehicles 
285.26 	are exempt from registration under section 168.012, subdivision 1, paragraph (b), exempt 
285.27 	from taxation under section 473.448, or exempt from the motor vehicle sales tax under 
285.28 	section 297B.03, clause (12);
285.29 	(8) equipment designed to process, dewater, and recycle biosolids for wastewater 
285.30 	treatment facilities of political subdivisions, and materials incidental to installation of that 
285.31 	equipment;
286.1 	(9) the removal of trees, bushes, or shrubs for the construction and maintenance of roads, 
286.2 	trails, or firebreaks when purchased by an agency of the state or a political subdivision of 
286.3 	the state;
286.4 	(10) purchases by the Metropolitan Council or the Department of Transportation of 
286.5 	vehicles and repair parts to equip operations provided for in section 174.90, including, but 
286.6 	not limited to, the Northstar Corridor Rail project; and
286.7 	(11) purchases of water used directly in providing public safety services by an organized 
286.8 	fire department, fire protection district, or fire company regularly charged with the 
286.9 	responsibility of providing fire protection to the state or a political subdivision.
286.10 	(b) For purposes of this subdivision, "firefighters personal protective equipment" means 
286.11 	helmets, including face shields, chin straps, and neck liners; bunker coats and pants, including 
286.12 	pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; protective coveralls; 
286.13 	goggles; self-contained breathing apparatus; canister filter masks; personal alert safety 
286.14 	systems; spanner belts; optical or thermal imaging search devices; and all safety equipment 
286.15 	required by the Occupational Safety and Health Administration.
286.16 	(c) For purchases of items listed in paragraph (a), clause (10), the tax must be imposed 
286.17 	and collected as if the rate under section 297A.62, subdivision 1, applied and then refunded 
286.18 	in the manner provided in section 297A.75.

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

286.20 	Sec. 23. Minnesota Statutes 2017 Supplement, section 297A.70, subdivision 4, is amended 
286.21 	to read:
286.22 		Subd. 4.Sales to nonprofit groups. (a) All sales, except those listed in paragraph (b), 
286.23 	to the following "nonprofit organizations" are exempt:
286.24 	(1) a corporation, society, association, foundation, or institution organized and operated 
286.25 	exclusively for charitable, religious, or educational purposes if the item purchased is used 
286.26 	in the performance of charitable, religious, or educational functions;
286.27 	(2) any senior citizen group or association of groups that:
286.28 	(i) in general limits membership to persons who are either age 55 or older, or physically 
286.29 	disabled persons with a physical disability;
286.30 	(ii) is organized and operated exclusively for pleasure, recreation, and other nonprofit 
286.31 	purposes, not including housing, no part of the net earnings of which inures to the benefit 
286.32 	of any private shareholders; and
287.1 	(iii) is an exempt organization under section 501(c) of the Internal Revenue Code; and
287.2 	(3) an organization that qualifies for an exemption for memberships under subdivision 
287.3 	12 if the item is purchased and used in the performance of the organization's mission.
287.4 	For purposes of this subdivision, charitable purpose includes the maintenance of a cemetery 
287.5 	owned by a religious organization.
287.6 	(b) This exemption does not apply to the following sales:
287.7 	(1) building, construction, or reconstruction materials purchased by a contractor or a 
287.8 	subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 
287.9 	maximum price covering both labor and materials for use in the construction, alteration, or 
287.10 	repair of a building or facility;
287.11 	(2) construction materials purchased by tax-exempt entities or their contractors to be 
287.12 	used in constructing buildings or facilities that will not be used principally by the tax-exempt 
287.13 	entities;
287.14 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), 
287.15 	and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, 
287.16 	subdivision 2, except wine purchased by an established religious organization for sacramental 
287.17 	purposes or as allowed under subdivision 9a; and
287.18 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as 
287.19 	provided in paragraph (c).
287.20 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01, 
287.21 	subdivision 11, only if the vehicle is:
287.22 	(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
287.23 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
287.24 	for carrying more than nine persons including the driver; and
287.25 	(2) intended to be used primarily to transport tangible personal property or individuals, 
287.26 	other than employees, to whom the organization provides service in performing its charitable, 
287.27 	religious, or educational purpose.
287.28 	(d) A limited liability company also qualifies for exemption under this subdivision if 
287.29 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
287.30 	purchased qualify for the exemption.

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

288.1 	Sec. 24. Minnesota Statutes 2016, section 297A.70, subdivision 16, is amended to read:
288.2 		Subd. 16.Camp fees. Fees to camps or other recreation facilities are exempt for:
288.3 	(1) services primarily for children, adults accompanying children, or persons with 
288.4 	disabilities a disability; or
288.5 	(2) educational or religious activities;
288.6 	and if the camp or facilities are owned and operated by an exempt organization under section 
288.7 	501(c)(3) of the Internal Revenue Code.

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

288.9 	Sec. 25. Minnesota Statutes 2016, section 297A.71, subdivision 22, is amended to read:
288.10 		Subd. 22.Materials used to make residential property disabled accessible to persons 
288.11 	with a disability. Building materials and equipment sold to, or stored, used, or consumed 
288.12 	by, a nonprofit organization are exempt if:
288.13 	(1) the materials and equipment are used or incorporated into modifying an existing 
288.14 	residential structure to make it disabled accessible to persons with a disability; and
288.15 	(2) the materials and equipment used in the modification would qualify for an exemption 
288.16 	under either subdivision 11 or 12 if made by the current owner of the residence.
288.17 	For purposes of this subdivision, "nonprofit organization" means any nonprofit 
288.18 	corporation, society, association, foundation, or institution organized and operated exclusively 
288.19 	for charitable, religious, educational, or civic purposes; or a veterans' group exempt from 
288.20 	federal taxation under section 501(c), clause (19), of the Internal Revenue Code.

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

288.22 	Sec. 26. Minnesota Statutes 2017 Supplement, section 297A.75, subdivision 1, is amended 
288.23 	to read:
288.24 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the following 
288.25 	exempt items must be imposed and collected as if the sale were taxable and the rate under 
288.26 	section 297A.62, subdivision 1, applied. The exempt items include:
288.27 	(1) building materials for an agricultural processing facility exempt under section 
288.28 	297A.71, subdivision 13;
288.29 	(2) building materials for mineral production facilities exempt under section 297A.71, 
288.30 	subdivision 14;
289.1 	(3) building materials for correctional facilities under section 297A.71, subdivision 3;
289.2 	(4) building materials used in a residence for disabled veterans with a disability exempt 
289.3 	under section 297A.71, subdivision 11;
289.4 	(5) elevators and building materials exempt under section 297A.71, subdivision 12;
289.5 	(6) materials and supplies for qualified low-income housing under section 297A.71, 
289.6 	subdivision 23;
289.7 	(7) materials, supplies, and equipment for municipal electric utility facilities under 
289.8 	section 297A.71, subdivision 35;
289.9 	(8) equipment and materials used for the generation, transmission, and distribution of 
289.10 	electrical energy and an aerial camera package exempt under section 297A.68, subdivision 
289.11 	37;
289.12 	(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph 
289.13 	(a), clause (10);
289.14 	(10) materials, supplies, and equipment for construction or improvement of projects and 
289.15 	facilities under section 297A.71, subdivision 40;
289.16 	(11) materials, supplies, and equipment for construction, improvement, or expansion 
289.17 	of:
289.18 	(i) an aerospace defense manufacturing facility exempt under Minnesota Statutes 2014, 
289.19 	section 297A.71, subdivision 42;
289.20 	(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 
289.21 	45;
289.22 	(iii) a research and development facility exempt under Minnesota Statutes 2014, section 
289.23 	297A.71, subdivision 46; and
289.24 	(iv) an industrial measurement manufacturing and controls facility exempt under 
289.25 	Minnesota Statutes 2014, section 297A.71, subdivision 47;
289.26 	(12) enterprise information technology equipment and computer software for use in a 
289.27 	qualified data center exempt under section 297A.68, subdivision 42;
289.28 	(13) materials, supplies, and equipment for qualifying capital projects under section 
289.29 	297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
289.30 	(14) items purchased for use in providing critical access dental services exempt under 
289.31 	section 297A.70, subdivision 7, paragraph (c);
290.1 	(15) items and services purchased under a business subsidy agreement for use or 
290.2 	consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 
290.3 	44;
290.4 	(16) building materials, equipment, and supplies for constructing or replacing real 
290.5 	property exempt under section 297A.71, subdivision 49; and
290.6 	(17) building materials, equipment, and supplies for constructing or replacing real 
290.7 	property exempt under section 297A.71, subdivision 50, paragraph (b).

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

290.9 	Sec. 27. Minnesota Statutes 2016, section 297B.01, subdivision 14, is amended to read:
290.10 		Subd. 14.Purchase price.  (a) "Purchase price" means the total consideration valued 
290.11 	in money for a sale, whether paid in money or otherwise. The purchase price excludes the 
290.12 	amount of a manufacturer's rebate paid or payable to the purchaser. If a motor vehicle is 
290.13 	taken in trade as a credit or as part payment on a motor vehicle taxable under this chapter, 
290.14 	the credit or trade-in value allowed by the person selling the motor vehicle shall be deducted 
290.15 	from the total selling price to establish the purchase price of the vehicle being sold and the 
290.16 	trade-in allowance allowed by the seller shall constitute the purchase price of the motor 
290.17 	vehicle accepted as a trade-in. The purchase price in those instances where the motor vehicle 
290.18 	is acquired by gift or by any other transfer for a nominal or no monetary consideration shall 
290.19 	also include the average value of similar motor vehicles, established by standards and guides 
290.20 	as determined by the motor vehicle registrar. The purchase price in those instances where 
290.21 	a motor vehicle is manufactured by a person who registers it under the laws of this state 
290.22 	shall mean the manufactured cost of such motor vehicle and manufactured cost shall mean 
290.23 	the amount expended for materials, labor, and other properly allocable costs of manufacture, 
290.24 	except that in the absence of actual expenditures for the manufacture of a part or all of the 
290.25 	motor vehicle, manufactured costs shall mean the reasonable value of the completed motor 
290.26 	vehicle.
290.27 	(b) The term "purchase price" shall not include the portion of the value of a motor vehicle 
290.28 	due solely to modifications necessary to make the motor vehicle disability accessible to 
290.29 	persons with a disability.
290.30 	(c) The term "purchase price" shall not include the transfer of a motor vehicle by way 
290.31 	of gift between a husband and wife spouses or parent and child, or to a nonprofit organization 
290.32 	as provided under subdivision 16, paragraph (c), clause (6), nor shall it include the transfer 
290.33 	of a motor vehicle by a guardian to a ward when there is no monetary consideration and the 
291.1 	title to such vehicle was registered in the name of the guardian, as guardian, only because 
291.2 	the ward was a minor.
291.3 	(d) The term "purchase price" shall not include the transfer of a motor vehicle as a gift 
291.4 	between a foster parent and foster child. For purposes of this subdivision, a foster relationship 
291.5 	exists, regardless of the age of the child, if (1) a foster parent's home is or was licensed as 
291.6 	a foster family home under Minnesota Rules, parts 2960.3000 to 2960.3340, and (2) the 
291.7 	county verifies that the child was a state ward or in permanent foster care.
291.8 	(e) There shall not be included in "purchase price" the amount of any tax imposed by 
291.9 	the United States upon or with respect to retail sales whether imposed upon the retailer or 
291.10 	the consumer.

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

291.12 	Sec. 28. Minnesota Statutes 2017 Supplement, section 297B.01, subdivision 16, is amended 
291.13 	to read:
291.14 		Subd. 16.Sale, sells, selling, purchase, purchased, or acquired. (a) "Sale," "sells," 
291.15 	"selling," "purchase," "purchased," or "acquired" means any transfer of title of any motor 
291.16 	vehicle, whether absolutely or conditionally, for a consideration in money or by exchange 
291.17 	or barter for any purpose other than resale in the regular course of business.
291.18 	(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others or 
291.19 	by holding it in an effort to so lease it, and which is put to no other use by the owner other 
291.20 	than resale after such lease or effort to lease, shall be considered property purchased for 
291.21 	resale.
291.22 	(c) The terms also shall include any transfer of title or ownership of a motor vehicle by 
291.23 	other means, for or without consideration, except that these terms shall not include:
291.24 	(1) the acquisition of a motor vehicle by inheritance from or by bequest of, or 
291.25 	transfer-on-death of title by, a decedent who owned it;
291.26 	(2) the transfer of a motor vehicle which was previously licensed in the names of two 
291.27 	or more joint tenants and subsequently transferred without monetary consideration to one 
291.28 	or more of the joint tenants;
291.29 	(3) the transfer of a motor vehicle by way of gift from a limited used vehicle dealer 
291.30 	licensed under section 168.27, subdivision 4a, to an individual, when the transfer is with 
291.31 	no monetary or other consideration or expectation of consideration and the parties to the 
291.32 	transfer submit an affidavit to that effect at the time the title transfer is recorded;
292.1 	(4) the transfer of a motor vehicle by gift between:
292.2 	(i) spouses;
292.3 	(ii) parents and a child; or
292.4 	(iii) grandparents and a grandchild;
292.5 	(5) the voluntary or involuntary transfer of a motor vehicle between a husband and wife
292.6 	spouses in a divorce proceeding; or
292.7 	(6) the transfer of a motor vehicle by way of a gift to an organization that is exempt from 
292.8 	federal income taxation under section 501(c)(3) of the Internal Revenue Code when the 
292.9 	motor vehicle will be used exclusively for religious, charitable, or educational purposes.

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

292.11 	Sec. 29. Laws 2017, First Special Session chapter 1, article 8, section 3, the effective date, 
292.12 	is amended to read:

292.13 	EFFECTIVE DATE. This section is effective for (1) petitions and appeals filed after 
292.14 	June 30, 2017, for which notices of entry of order are mailed before July 1, 2018, and (2) 
292.15 	notices of entry of order mailed after June 30, 2018.

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

APPENDIX 

Repealed Minnesota Statutes: H4385-2 

10A.322 SPENDING LIMIT AGREEMENTS.Subd. 4.Refund receipt forms; penalty. 
(a) The board must make available to a political party on request and to any candidate for whom an agreement under this section is effective, a supply of official refund receipt forms that state in boldface type that: 

(1) a contributor who is given a receipt form is eligible to claim a refund as provided in section 290.06, subdivision 23; and 

(2) if the contribution is to a candidate, that the candidate has signed an agreement to limit campaign expenditures as provided in this section. 

The forms must provide duplicate copies of the receipt to be attached to the contributor's claim. 

(b) The willful issuance of an official refund receipt form or a facsimile of one to any of the candidate's contributors by a candidate or treasurer of a candidate who did not sign an agreement under this section is subject to a civil penalty of up to $3,000 imposed by the board. 

(c) The willful issuance of an official refund receipt form or a facsimile to an individual not eligible to claim a refund under section 290.06, subdivision 23, is subject to a civil penalty of up to $3,000 imposed by the board. 

(d) A violation of paragraph (b) or (c) is a misdemeanor. 

13.4967 OTHER TAX DATA CODED ELSEWHERE.Subd. 2.Political contribution refund. 
Certain political contribution refund data in the Revenue Department are classified under section 290.06, subdivision 23. 

273.1315 CERTIFICATION OF CLASS 1B PROPERTY.Subdivision 1.Class 1b homestead declaration before 2009. 
Any property owner seeking classification and assessment of the owner's homestead as class 1b property pursuant to section 273.13, subdivision 22, paragraph (b), on or before October 1, 2008, shall file with the commissioner of revenue a 1b homestead declaration, on a form prescribed by the commissioner. The declaration shall contain the following information: 

(1) the information necessary to verify that on or before June 30 of the filing year, the property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision 22, paragraph (b), for 1b classification; and 

(2) any additional information prescribed by the commissioner. 

The declaration must be filed on or before October 1 to be effective for property taxes payable during the succeeding calendar year. The declaration and any supplementary information received from the property owner pursuant to this subdivision shall be subject to chapter 270B. If approved by the commissioner, the declaration remains in effect until the property no longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify the commissioner within 30 days that the property no longer qualifies under that paragraph because of a sale, change in occupancy, or change in the status or condition of an occupant shall result in the penalty provided in section 273.124, subdivision 13b, computed on the basis of the class 1b benefits for the property, and the property shall lose its current class 1b classification. 

The commissioner shall provide to the assessor on or before November 1 a listing of the parcels of property qualifying for 1b classification. 

Subd. 2.Class 1b homestead declaration 2009 and thereafter. 
(a) Any property owner seeking classification and assessment of the owner's homestead as class 1b property pursuant to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file with the county assessor a class 1b homestead declaration, on a form prescribed by the commissioner of revenue. The declaration must contain the following information: 

(1) the information necessary to verify that, on or before June 30 of the filing year, the property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision 22, paragraph (b), for class 1b classification; and 

(2) any additional information prescribed by the commissioner. 

(b) The declaration must be filed on or before October 1 to be effective for property taxes payable during the succeeding calendar year. The Social Security numbers and income and medical information received from the property owner pursuant to this subdivision are private data on individuals as defined in section 13.02. If approved by the assessor, the declaration remains in effect until the property no longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify the assessor within 30 days that the property no longer qualifies under that paragraph because of a sale, change in occupancy, or change in the status or condition of an occupant shall result in the penalty provided in section 273.124, subdivision 13b, computed on the basis of the class 1b benefits for the property, and the property shall lose its current class 1b classification. 

275.29 ABSTRACTS TO COMMISSIONER OF REVENUE.
Not later than March 31, in each year, the county auditor shall make and transmit to the commissioner of revenue, in such form as may be prescribed by the commissioner of revenue, complete abstracts of the tax lists of the county, showing the number of acres of land assessed; its value, including the structures thereon; the value of town and city lots, including structures; the total value of all taxable personal property in the several assessment districts; the aggregate amount of all taxable property in the county, and the total amount of taxes levied therein for state, county, town, and all other purposes for that year. 

289A.38 LIMITATIONS ON TIME FOR ASSESSMENT OF TAX.Subd. 7.Federal tax changes. 
If the amount of income, items of tax preference, deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for any period, as reported to the Internal Revenue Service is changed or corrected by the commissioner of Internal Revenue or other officer of the United States or other competent authority, or where a renegotiation of a contract or subcontract with the United States results in a change in income, items of tax preference, deductions, credits, or withholding tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the taxpayer shall report the change or correction or renegotiation results in writing to the commissioner. The report must be submitted within 180 days after the final determination and must be in the form of either an amended Minnesota estate, withholding tax, corporate franchise tax, or income tax return conceding the accuracy of the federal determination or a letter detailing how the federal determination is incorrect or does not change the Minnesota tax. An amended Minnesota income tax return must be accompanied by an amended property tax refund return, if necessary. A taxpayer filing an amended federal tax return must also file a copy of the amended return with the commissioner of revenue within 180 days after filing the amended return. 

Subd. 8.Failure to report change or correction of federal return. 
If a taxpayer fails to make a report as required by subdivision 7, the commissioner may recompute the tax, including a refund, based on information available to the commissioner. The tax may be recomputed within six years after the report should have been filed, notwithstanding any period of limitations to the contrary. 

Subd. 9.Report made of change or correction of federal return. 
If a taxpayer is required to make a report under subdivision 7, and does report the change or files a copy of the amended return, the commissioner may recompute and reassess the tax due, including a refund (1) within one year after the report or amended return is filed with the commissioner, notwithstanding any period of limitations to the contrary, or (2) within any other applicable period stated in this section, whichever period is longer. The period provided for the carryback of any amount of loss or credit is also extended as provided in this subdivision, notwithstanding any law to the contrary. If the commissioner has completed a field audit of the taxpayer, and, but for this subdivision, the commissioner's time period to adjust the tax has expired, the additional tax due or refund is limited to only those changes that are required to be made to the return which relate to the changes made on the federal return. This subdivision does not apply to sales and use tax. 

For purposes of this subdivision and section 289A.42, subdivision 2, a "field audit" is the physical presence of examiners in the taxpayer's or taxpayer's representative's office conducting an examination of the taxpayer with the intention of issuing an assessment or notice of change in tax or which results in the issuing of an assessment or notice of change in tax. The examination may include inspecting a taxpayer's place of business, tangible personal property, equipment, computer systems and facilities, pertinent books, records, papers, vouchers, computer printouts, accounts, and documents. 

290.01 DEFINITIONS.Subd. 29a.State itemized deduction. 
"State itemized deduction" means federal itemized deductions, as defined in section 63(d) of the Internal Revenue Code, disregarding any limitation under section 68 of the Internal Revenue Code, and reduced by the amount of the addition required under section 290.0131, subdivision 13. 

290.0131 INDIVIDUALS; ADDITIONS TO FEDERAL TAXABLE INCOME.Subd. 7.Fines, fees, and penalties. 
The amount of expenses disallowed under section 290.10, subdivision 2, is an addition. 

Subd. 11.Income attributable to domestic production activities. 
The amount of the deduction allowable under section 199 of the Internal Revenue Code is an addition. 

Subd. 12.Disallowed itemized deductions. 
(a) The amount of disallowed itemized deductions is an addition. The amount of disallowed itemized deductions, plus the addition required under subdivision 3, may not be more than the amount by which the itemized deductions, as allowed under section 63(d) of the Internal Revenue Code, exceeds the amount of the standard deduction as defined in section 63(c) of the Internal Revenue Code. 

(b) The amount of disallowed itemized deductions is equal to the lesser of: 

(1) three percent of the excess of the taxpayer's federal adjusted gross income over the applicable amount; or 

(2) 80 percent of the amount of the itemized deductions otherwise allowable to the taxpayer under the Internal Revenue Code for the taxable year. 

(c) "Applicable amount" means $100,000, or $50,000 for a married individual filing a separate return. Each dollar amount is increased by an amount equal to: 

(1) that dollar amount, multiplied by 

(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code for the calendar year in which the taxable year begins, by substituting "calendar year 1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3). 

(d) "Itemized deductions" excludes: 

(1) the deduction for medical expenses under section 213 of the Internal Revenue Code; 

(2) any deduction for investment interest as defined in section 163(d) of the Internal Revenue Code; and 

(3) the deduction under section 165(a) of the Internal Revenue Code for casualty or theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue Code or for losses described in section 165(d) of the Internal Revenue Code. 

Subd. 13.Disallowed personal exemption amount. 
(a) The amount of disallowed personal exemptions for taxpayers with federal adjusted gross income over the threshold amount is an addition. 

(b) The disallowed personal exemption amount is equal to the number of personal exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, and by the applicable percentage. 

(c) For a married individual filing a separate return, "applicable percentage" means two percentage points for each $1,250, or fraction of that amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds the threshold amount. For all other filers, applicable percentage means two percentage points for each $2,500, or fraction of that amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds the threshold amount. The applicable percentage must not exceed 100 percent. 

(d) "Threshold amount" means: 

(1) $150,000 for a joint return or a surviving spouse; 

(2) $125,000 for a head of a household; 

(3) $100,000 for an individual who is not married and who is not a surviving spouse or head of a household; and 

(4) $75,000 for a married individual filing a separate return. 

(e) The thresholds must be increased by an amount equal to: 

(1) the threshold dollar amount, multiplied by 

(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code for the calendar year in which the taxable year begins, by substituting "calendar year 1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3). 

290.0132 INDIVIDUALS; SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.Subd. 8.Subnational foreign taxes. 
(a) For individuals who are allowed a federal foreign tax credit for taxes that do not qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover of subnational foreign taxes for the taxable year is a subtraction, but not to exceed the total subnational foreign taxes reported in claiming the foreign tax credit. 

(b) For purposes of this subdivision, "federal foreign tax credit" means the credit allowed under section 27 of the Internal Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed under section 904(c) of the Internal Revenue Code minus national level foreign taxes to the extent they exceed the federal foreign tax credit. 

Subd. 19.Disallowed itemized deductions. 
The amount of the limitation on itemized deductions under section 68(b) of the Internal Revenue Code is a subtraction. 

Subd. 20.Disallowed personal exemption. 
The amount of the phaseout of personal exemptions under section 151(d) of the Internal Revenue Code is a subtraction. 

290.0133 CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE INCOME.Subd. 13.Income attributable to domestic production activities. 
The amount of the deduction allowable under section 199 of the Internal Revenue Code is an addition. 

Subd. 14.Fines, fees, and penalties. 
The amount of expenses disallowed under section 290.10, subdivision 2, is an addition. 

290.06 RATES OF TAX; CREDITS.Subd. 23.Refund of contributions to political parties and candidates. 
(a) A taxpayer may claim a refund equal to the amount of the taxpayer's contributions made in the calendar year to candidates and to a political party. The maximum refund for an individual must not exceed $50 and for a married couple, filing jointly, must not exceed $100. A refund of a contribution is allowed only if the taxpayer files a form required by the commissioner and attaches to the form a copy of an official refund receipt form issued by the candidate or party and signed by the candidate, the treasurer of the candidate's principal campaign committee, or the chair or treasurer of the party unit, after the contribution was received. The receipt forms must be numbered, and the data on the receipt that are not public must be made available to the campaign finance and public disclosure board upon its request. A claim must be filed with the commissioner no sooner than January 1 of the calendar year in which the contribution was made and no later than April 15 of the calendar year following the calendar year in which the contribution was made. A taxpayer may file only one claim per calendar year. Amounts paid by the commissioner after June 15 of the calendar year following the calendar year in which the contribution was made must include interest at the rate specified in section 270C.405. 

(b) No refund is allowed under this subdivision for a contribution to a candidate unless the candidate: 

(1) has signed an agreement to limit campaign expenditures as provided in section 10A.322; 

(2) is seeking an office for which voluntary spending limits are specified in section 10A.25; and 

(3) has designated a principal campaign committee. 

This subdivision does not limit the campaign expenditures of a candidate who does not sign an agreement but accepts a contribution for which the contributor improperly claims a refund. 

(c) For purposes of this subdivision, "political party" means a major political party as defined in section 200.02, subdivision 7, or a minor political party qualifying for inclusion on the income tax or property tax refund form under section 10A.31, subdivision 3a. 

A "major party" or "minor party" includes the aggregate of that party's organization within each house of the legislature, the state party organization, and the party organization within congressional districts, counties, legislative districts, municipalities, and precincts. 

"Candidate" means a candidate as defined in section 10A.01, subdivision 10, except a candidate for judicial office. 

"Contribution" means a gift of money. 

(d) The commissioner shall make copies of the form available to the public and candidates upon request. 

(e) The following data collected or maintained by the commissioner under this subdivision are private: the identities of individuals claiming a refund, the identities of candidates to whom those individuals have made contributions, and the amount of each contribution. 

(f) The commissioner shall report to the campaign finance and public disclosure board by each August 1 a summary showing the total number and aggregate amount of political contribution refunds made on behalf of each candidate and each political party. These data are public. 

(g) The amount necessary to pay claims for the refund provided in this section is appropriated from the general fund to the commissioner of revenue. 

(h) For a taxpayer who files a claim for refund via the Internet or other electronic means, the commissioner may accept the number on the official receipt as documentation that a contribution was made rather than the actual receipt as required by paragraph (a). 

290.0921 CORPORATE ALTERNATIVE MINIMUM TAX AFTER 1989.Subdivision 1.Tax imposed. 
In addition to the taxes computed under this chapter without regard to this section, the franchise tax imposed on corporations includes a tax equal to the excess, if any, for the taxable year of: 

(1) 5.8 percent of Minnesota alternative minimum taxable income; over 

(2) the tax imposed under section 290.06, subdivision 1, without regard to this section. 

Subd. 2.Definitions. 
(a) For purposes of this section, the following terms have the meanings given them. 

(b) "Alternative minimum taxable net income" is alternative minimum taxable income, 

(1) less the exemption amount, and 

(2) apportioned or allocated to Minnesota under section 290.17, 290.191, or 290.20. 

(c) The "exemption amount" is $40,000, reduced, but not below zero, by 25 percent of the excess of alternative minimum taxable income over $150,000. 

(d) "Minnesota alternative minimum taxable income" is alternative minimum taxable net income, less the deductions for alternative tax net operating loss under subdivision 4; and dividends received under subdivision 6. The sum of the deductions under this paragraph may not exceed 90 percent of alternative minimum taxable net income. This limitation does not apply to: 

(1) a deduction for dividends paid to or received from a corporation which is subject to tax under section 290.36 and which is a member of an affiliated group of corporations as defined by the Internal Revenue Code; or 

(2) a deduction for dividends received from a property and casualty insurer as defined under section 60A.60, subdivision 8, which is a member of an affiliated group of corporations as defined by the Internal Revenue Code and either: (i) the dividend is eliminated in consolidation under Treasury Regulation 1.1502-14(a), as amended through December 31, 1989; or (ii) the dividend is deducted under an election under section 243(b) of the Internal Revenue Code. 

Subd. 3a.Exemptions. 
The following entities are exempt from the tax imposed by this section: 

(1) cooperatives taxable under subchapter T of the Internal Revenue Code or organized under chapter 308 or a similar law of another state; 

(2) corporations subject to tax under section 297I.05, subdivisions 1 to 5; 

(3) real estate investment trusts; 

(4) regulated investment companies or a fund thereof; 

(5) entities having a valid election in effect under section 860D(b) of the Internal Revenue Code; and 

(6) small corporations exempt from the federal alternative minimum tax under section 55(e) of the Internal Revenue Code. 

Subd. 4.Alternative tax net operating loss. 
(a) An alternative tax net operating loss deduction is allowed from alternative minimum taxable net income equal to the net operating loss deduction allowable for the taxable year under section 290.095 with the following modifications: 

(1) The amount of the net operating loss deduction must not exceed 90 percent of alternative minimum taxable net income. 

(2) In determining the amount of the net operating loss deduction (i) the net operating loss under section 290.095 must be adjusted as provided in paragraph (b), and (ii) for taxable years beginning after December 31, 1989, section 290.095, subdivision 3, must be applied by substituting "90 percent of alternative minimum taxable net income" for "taxable net income." 

(b) The following adjustments must be made to the alternative tax net operating loss deduction under paragraph (a): 

(1) For a loss year beginning after December 31, 1989, the net operating loss for each year under section 290.095 must be (i) determined with the adjustments provided in sections 56 and 58 of the Internal Revenue Code, as modified by subdivision 3 and (ii) reduced by the items of tax preference for the year determined under section 57 of the Internal Revenue Code, as modified by subdivision 3. 

(2) For a loss year beginning before January 1, 1990, the amount of the net operating loss that may be carried over to taxable years beginning after December 31, 1989, equals the amount which may be carried from the loss year to the first taxable year of the taxpayer beginning after December 31, 1989. 

Subd. 6.Dividends received. 
(a) A deduction is allowed from alternative minimum taxable net income equal to the deduction for dividends received under section 290.21, subdivision 4, for purposes of calculating taxable income under section 290.01, subdivision 29. 

(b) The amount of the deduction must not exceed 90 percent of alternative minimum taxable net income. 

This limitation does not apply to: 

(1) dividends paid to or received from a corporation which is subject to tax under section 290.36 and which is a member of an affiliated group of corporations as defined by the Internal Revenue Code; or 

(2) dividends received from a property and casualty insurer as defined under section 60A.60, subdivision 8, which is a member of an affiliated group of corporations as defined by the Internal Revenue Code and either: (i) the dividend is eliminated in consolidation under Treasury Regulation 1.1502-14(a), as amended through December 31, 1989; or (ii) the dividend is deducted under an election under section 243(b) of the Internal Revenue Code. 

290.10 NONDEDUCTIBLE ITEMS.Subd. 2.Fines, fees, and penalties. 
(a) Except as provided in this subdivision, no deduction from taxable income for a trade or business expense under section 162(a) of the Internal Revenue Code shall be allowed for any amount paid or incurred, whether by suit, agreement, or otherwise, to, or at the direction of, a government or entity described in paragraph (d) in relation to the violation of any law or the investigation or inquiry by such government or entity into the potential violation of any law. 

(b) Exception for amounts constituting restitution or paid to come into compliance with the law. Paragraph (a) does not apply to any amount which: 

(1) the taxpayer establishes: 

(i) constitutes restitution, including remediation of property for damage or harm caused by or which may be caused by the violation of any law or the potential violation of any law; or 

(ii) is paid to come into compliance with any law which was violated or involved in the investigation or inquiry; and 

(2) is identified as restitution or as an amount paid to come into compliance with the law, as the case may be, in the court order or settlement agreement. 

This paragraph does not apply to any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation. 

(c) Paragraph (a) does not apply to any amount paid or incurred by order of a court in a suit in which no government or entity described in paragraph (d) is a party. 

(d) An entity is described in this paragraph if it is: 

(1) a nongovernmental entity which exercises self-regulatory powers, including imposing sanctions, in connection with a qualified board or exchange, as defined in section 1256(g)(7) of the Internal Revenue Code, or; 

(2) to the extent provided in federal regulations, a nongovernmental entity which exercises self-regulatory powers, including imposing sanctions, as part of performing an essential governmental function. 

(e) Paragraph (a) does not apply to any amount paid or incurred as taxes due. 

327C.01 DEFINITIONS.Subd. 13.Class I manufactured home park. 
A "class I manufactured home park" means a park that complies with the provisions of section 327C.16. 

327C.16 CLASS I MANUFACTURED HOME PARK.Subdivision 1.Qualifications. 
(a) To qualify as a class I manufactured home park, as defined in section 327C.01, subdivision 13, a park owner, or on-site attendant as an employee of the manufactured home park, must satisfy 12 hours of qualifying education courses every three years, as prescribed in this subdivision. Park owners or on-site attendants may begin accumulating qualifying hours to qualify as a class I manufactured home park beginning in 2017. 

(b) The qualifying education courses required for classification under this subdivision must be continuing education courses approved by the Department of Labor and Industry or the Department of Commerce for: 

(1) continuing education in real estate; or 

(2) continuing education for residential contractors and manufactured home installers. 

(c) The qualifying education courses must include: 

(1) two hours on fair housing, approved for real estate licensure or residential contractor licensure; 

(2) one hour on the Americans with Disabilities Act, approved for real estate licensure or residential contractor licensure; 

(3) four hours on legal compliance related to any of the following: landlord/tenant, licensing requirements, or home financing under chapters 58, 327, 327B, 327C, and 504B, and Minnesota Rules, chapter 1350 or 4630; 

(4) three hours of general education approved for real estate, residential contractors, or manufactured home installers; and 

(5) two hours of HUD-specific manufactured home installer courses as required under section 327B.041. 

(d) If the qualifying owner or employee attendant is no longer the person meeting the requirements under this subdivision, but did qualify during the current assessment year, then the manufactured home park shall still qualify for the class rate provided for class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause (5), item (iii). 

Subd. 2.Proof of compliance. 
(a) A park owner that has met the requirements of subdivision 1 shall provide an affidavit to the park owner's county assessor certifying that the park owner, corporate officer, or on-site attendant has complied with subdivision 1 and that the park meets the definition of a class I manufactured home park as defined in this section, and is entitled to the property tax classification rate for class I manufactured home parks in section 273.13, subdivision 25. The park owner shall retain the original course completion certificates issued by the course sponsor under this section for three years and, upon written request for verification, provide these to the county assessor within 30 days. 

(b) A park owner must provide the county assessor written notice of any change in compliance status of the manufactured home park no later than December 15 of the assessment year. 

477A.085 DEBT SERVICE AID; CITY OF MINNEAPOLIS.
On or before November 1, 2016, and the first day of each November thereafter, the commissioner shall pay to the city of Minneapolis an amount equal to 40 percent of the city's otherwise required levy to pay its general obligation library referendum bonds for the following calendar year. The levy excludes any amount to pay bonds, other than refunding bonds, issued after May 1, 2013. An amount sufficient to pay the aid under this section is appropriated from the general fund to the commissioner of revenue. 

4503.1400PUBLIC SUBSIDY AGREEMENTS.   Subp. 4.Effect on right to participate in political contribution refund program.  
The right to issue receipts under the political contribution refund program established in Minnesota Statutes, section 290.06, subdivision 23, arises only when the public subsidy agreement is actually signed.