1.1 	A bill for an act
1.2 	relating to taxation; making modifications to individual income, corporate franchise, 
1.3 	property, sales and use, estate, mineral and tobacco taxes, and other tax provisions; 
1.4 	providing for certain conformity and nonconformity to federal provisions; 
1.5 	modifying the property tax refund; modifying the homestead credit refund; 
1.6 	extending the small business investment credit; specifying the application of 
1.7 	tobacco taxes to vapor products; modifying classification provisions; making minor 
1.8 	policy, technical, and clarifying changes to individual income and corporate 
1.9 	franchise taxes, sales and use taxes, tobacco taxes, property taxes, and other 
1.10 	miscellaneous tax provisions; authorizing fire protection special taxing districts; 
1.11 	providing exemptions from the state general levy; modifying watershed project 
1.12 	levies; modifying wind energy production tax; modifying veteran with a disability 
1.13 	market value exclusion; authorizing early termination from metropolitan agricultural 
1.14 	preserve program; requiring study; increasing the estate tax exclusion amount; 
1.15 	providing for adjustment of certain tax rates; clarifying application of tax to captive 
1.16 	insurance companies; modifying the stillbirth credit; authorizing local taxes; 
1.17 	modifying certain local lodging tax authority; establishing certain sales tax 
1.18 	exemptions; prohibiting imposition of certain excise taxes or fees; modifying 
1.19 	certain MNsure funding and authority provisions; modifying certain estate property 
1.20 	ownership requirements;amending Minnesota Statutes 2016, sections 16A.152, 
1.21 	by adding a subdivision; 62V.05, subdivisions 2, 5, 10; 62V.08; 103D.905, 
1.22 	subdivision 9; 103E.611, subdivision 2; 116J.8737, subdivisions 5, 12; 138.053; 
1.23 	162.145, subdivision 3; 197.603, subdivision 2; 270.41, subdivision 3; 270B.08, 
1.24 	subdivision 2; 270C.85, subdivision 2; 270C.89, subdivision 2; 270C.91; 272.02, 
1.25 	subdivisions 27, 81, by adding a subdivision; 273.032; 273.061, subdivision 9; 
1.26 	273.113, subdivision 3; 273.119, subdivision 2; 273.1231, subdivision 3; 273.124, 
1.27 	subdivision 3a; 273.1245, subdivision 2; 273.136, subdivision 2; 273.1384, 
1.28 	subdivision 3; 273.18; 274.14; 274.16; 275.066; 287.21, subdivision 1; 289A.08, 
1.29 	subdivisions 1, 6, 7; 289A.25, subdivision 1; 289A.31, subdivision 2; 289A.37, 
1.30 	subdivision 6; 289A.38, subdivisions 7, 10; 289A.42; 289A.60, subdivision 24; 
1.31 	290.01, subdivisions 22, 29a, by adding subdivisions; 290.0131, subdivisions 1, 
1.32 	3, 12, 13, by adding subdivisions; 290.0132, subdivisions 1, 7, 20, by adding 
1.33 	subdivisions; 290.0133, by adding a subdivision; 290.0134, by adding subdivisions; 
1.34 	290.06, subdivisions 2c, 2d; 290.067, subdivision 2a; 290.0671, subdivision 7; 
1.35 	290.0672, subdivision 2; 290.0681, subdivisions 3, 4; 290.0685, subdivision 1; 
1.36 	290.0802, subdivisions 2, 3; 290.091, subdivision 3; 290.0921, subdivision 3; 
1.37 	290.0922, subdivision 1; 290.095, subdivision 4; 290.21, subdivision 4; 290.34, 
1.38 	by adding a subdivision; 290.92, subdivisions 1, 28; 290A.03, subdivisions 4, 12; 
1.39 	290A.04, subdivisions 2, 2a, 4; 290A.05; 290A.08; 290A.09; 290B.09, subdivision 
2.1 	1; 291.03, subdivisions 8, 10; 297A.61, subdivision 18; 297A.67, subdivision 12; 
2.2 	297A.68, subdivisions 17, 25, 44; 297A.70, subdivisions 3, 16; 297A.71, 
2.3 	subdivisions 22, 45, by adding subdivisions; 297A.77, by adding a subdivision; 
2.4 	297A.84; 297A.85; 297B.01, subdivision 14; 297B.03; 297F.01, subdivisions 19, 
2.5 	23, by adding a subdivision; 297F.17, subdivision 6; 297G.16, subdivision 7; 
2.6 	297I.20, by adding a subdivision; 298.28, subdivision 9a; 469.177, subdivision 1; 
2.7 	469.316, subdivision 1; 469.319, subdivision 4; 471.831, subdivision 1; 473H.08, 
2.8 	subdivisions 1, 4, by adding a subdivision; 474A.02, subdivision 22b; 475.521, 
2.9 	subdivision 1; 477A.016; Minnesota Statutes 2017 Supplement, sections 270A.03, 
2.10 	subdivision 5; 270C.445, subdivision 6; 270C.89, subdivision 1; 272.029, 
2.11 	subdivision 2; 272.115, subdivision 1; 273.0755; 273.13, subdivisions 22, 25, 34; 
2.12 	273.1384, subdivision 2; 273.1387, subdivision 3; 275.025, subdivisions 1, 2; 
2.13 	289A.02, subdivision 7; 289A.10, subdivision 1; 289A.12, subdivision 14; 289A.31, 
2.14 	subdivision 1; 289A.35; 289A.37, subdivision 2; 290.01, subdivisions 4a, 19, 31; 
2.15 	290.0131, subdivision 10; 290.0132, subdivisions 21, 26; 290.0133, subdivision 
2.16 	12; 290.0137; 290.05, subdivision 1; 290.067, subdivisions 1, 2b; 290.0671, 
2.17 	subdivision 1; 290.0672, subdivision 1; 290.0681, subdivisions 1, 2; 290.0684, 
2.18 	subdivision 2; 290.091, subdivision 2; 290.17, subdivisions 2, 4; 290.31, subdivision 
2.19 	1; 290A.03, subdivisions 3, 8, 13, 15; 291.005, subdivision 1; 291.016, subdivision 
2.20 	3; 291.03, subdivisions 1, 9, 11; 297A.61, subdivision 3; 297A.67, subdivision 6; 
2.21 	297A.70, subdivision 4; 297A.75, subdivision 1; 297B.01, subdivision 16; 298.17; 
2.22 	298.227; 298.28, subdivision 7a; 462D.03, subdivision 2; 462D.06, subdivisions 
2.23 	1, 2; Laws 1986, chapter 396, section 5, as amended; Laws 1986, chapter 462, 
2.24 	section 31, as amended; Laws 2008, chapter 366, article 5, section 33, as amended; 
2.25 	Laws 2009, chapter 88, article 2, section 46, subdivisions 1, as amended, 2, 3, as 
2.26 	amended, 4, 5; Laws 2015, chapter 71, article 12, section 8; Laws 2017, First 
2.27 	Special Session chapter 1, article 4, section 31; article 8, section 3; article 10, 
2.28 	section 4; proposing coding for new law in Minnesota Statutes, chapters 216C; 
2.29 	289A; 290; 462A; proposing coding for new law as Minnesota Statutes, chapter 
2.30 	299O; repealing Minnesota Statutes 2016, sections 275.29; 289A.10, subdivision 
2.31 	1a; 289A.12, subdivision 18; 289A.18, subdivision 3a; 289A.20, subdivision 3a; 
2.32 	289A.38, subdivisions 7, 8, 9; 290.0131, subdivisions 7, 11; 290.0133, subdivisions 
2.33 	13, 14; 290.10, subdivision 2; 291.03, subdivisions 8, 10; Minnesota Statutes 2017 
2.34 	Supplement, section 291.03, subdivisions 9, 11.
2.35 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.36 	ARTICLE 1
2.37 	FEDERAL TAX CONFORMITY

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

3.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
3.32 	31, 2017.

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

4.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
4.7 	31, 2017.

4.8 	Sec. 3. Minnesota Statutes 2016, section 289A.08, subdivision 1, is amended to read:
4.9 		Subdivision 1.Generally; individuals. (a) A taxpayer must file a return for each taxable 
4.10 	year the taxpayer is required to file a return under section 6012 of the Internal Revenue 
4.11 	Code or meets the requirements under paragraph (d) to file a return, except that:
4.12 	(1) an individual who is not a Minnesota resident for any part of the year is not required 
4.13 	to file a Minnesota income tax return if the individual's gross income derived from Minnesota 
4.14 	sources as determined under sections 290.081, paragraph (a), and 290.17, is less than the 
4.15 	filing requirements for a single individual who is a full year resident of Minnesota; and
4.16 	(2) an individual who is a Minnesota resident is not required to file a Minnesota income 
4.17 	tax return if the individual's gross income derived from Minnesota sources as determined 
4.18 	under section 290.17, less the subtractions allowed under section 290.0132, subdivisions 
4.19 	12 and 15, is less than the filing requirements for a single individual who is a full-year 
4.20 	resident of Minnesota.
4.21 	(b) The decedent's final income tax return, and other income tax returns for prior years 
4.22 	where the decedent had gross income in excess of the minimum amount at which an 
4.23 	individual is required to file and did not file, must be filed by the decedent's personal 
4.24 	representative, if any. If there is no personal representative, the return or returns must be 
4.25 	filed by the transferees, as defined in section 270C.58, subdivision 3, who receive property 
4.26 	of the decedent.
4.27 	(c) The term "gross income," as it is used in this section, has the same meaning given it 
4.28 	in section 290.01, subdivision 20.
4.29 	(d) The commissioner of revenue shall annually determine the gross income levels at 
4.30 	which individuals are required to file a return for each taxable year based on the amounts 
4.31 	that may be deducted under section 290.0803 and the personal and dependent exemptions 
4.32 	under section 290.0138.

5.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
5.2 	31, 2017.

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

6.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
6.20 	31, 2017.

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

7.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
7.14 	31, 2017.

7.15 	Sec. 6. Minnesota Statutes 2017 Supplement, section 289A.35, is amended to read:
7.16 	289A.35 ASSESSMENTS ON RETURNS.
7.17 	(a) The commissioner may audit and adjust the taxpayer's computation of federal adjusted 
7.18 	gross income, federal taxable income, items of federal tax preferences, or federal credit 
7.19 	amounts to make them conform with the provisions of chapter 290 or section 298.01. If a 
7.20 	return has been filed, the commissioner shall enter the liability reported on the return and 
7.21 	may make any audit or investigation that is considered necessary.
7.22 	(b) Upon petition by a taxpayer, and when the commissioner determines that it is in the 
7.23 	best interest of the state, the commissioner may allow S corporations and partnerships to 
7.24 	receive orders of assessment issued under section 270C.33, subdivision 4, on behalf of their 
7.25 	owners, and to pay liabilities shown on such orders. In such cases, the owners' liability must 
7.26 	be calculated using the method provided in section 289A.08, subdivision 7, paragraph (b).
7.27 	(c) A taxpayer may petition the commissioner for the use of the method described in 
7.28 	paragraph (b) after the taxpayer is notified that an audit has been initiated and before an 
7.29 	order of assessment has been issued.
7.30 	(d) A determination of the commissioner under paragraph (b) to grant or deny the petition 
7.31 	of a taxpayer cannot be appealed to the Tax Court or any other court.
8.1 	(e) The commissioner may audit and adjust the taxpayer's computation of tax under 
8.2 	chapter 291. In the case of a return filed pursuant to section 289A.10, the commissioner 
8.3 	shall notify the estate no later than nine months after the filing date, as provided by section 
8.4 	289A.38, subdivision 2, whether the return is under examination or the return has been 
8.5 	processed as filed.

8.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.7 	31, 2017.

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

8.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.13 	31, 2017.

8.14 	Sec. 8. Minnesota Statutes 2017 Supplement, section 290.01, subdivision 19, is amended 
8.15 	to read:
8.16 		Subd. 19.Net income. (a) For a corporation taxable under section 290.02, and an estate 
8.17 	or a trust taxable under section 290.03, the term "net income" means the federal taxable 
8.18 	income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through 
8.19 	the date named in this subdivision, incorporating the federal effective dates of changes to 
8.20 	the Internal Revenue Code and any elections made by the taxpayer in accordance with the 
8.21 	Internal Revenue Code in determining federal taxable income for federal income tax 
8.22 	purposes, and with the modifications provided in sections 290.0131 to 290.0136.
8.23 	(b) For an individual, the term "net income" means federal adjusted gross income with 
8.24 	the modifications provided in sections 290.0131 and 290.0132.
8.25 	(c) In the case of a regulated investment company or a fund thereof, as defined in section 
8.26 	851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 
8.27 	company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 
8.28 	except that:
8.29 	(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 
8.30 	Revenue Code does not apply;
8.31 	(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue 
8.32 	Code must be applied by allowing a deduction for capital gain dividends and exempt-interest 
9.1 	dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; 
9.2 	and
9.3 	(3) the deduction for dividends paid must also be applied in the amount of any 
9.4 	undistributed capital gains which the regulated investment company elects to have treated 
9.5 	as provided in section 852(b)(3)(D) of the Internal Revenue Code.
9.6 	(d) The net income of a real estate investment trust as defined and limited by section 
9.7 	856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 
9.8 	taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
9.9 	(e) The net income of a designated settlement fund as defined in section 468B(d) of the 
9.10 	Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal 
9.11 	Revenue Code.
9.12 	(f) The Internal Revenue Code of 1986, as amended through December 16, 2016 March 
9.13 	31, 2018, shall be in effect for taxable years beginning after December 31, 1996.
9.14 	(g) Except as otherwise provided, references to the Internal Revenue Code in this 
9.15 	subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of 
9.16 	determining net income for the applicable year.

9.17 	EFFECTIVE DATE. This section is effective the day following final enactment, except 
9.18 	the changes incorporated by federal changes are effective retroactively at the same time as 
9.19 	the changes were effective for federal purposes and the changes amending the new paragraph 
9.20 	(a) and adding paragraph (b) are effective for taxable years beginning after December 31, 
9.21 	2017.

9.22 	Sec. 9. Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to 
9.23 	read:
9.24 		Subd. 21a.Adjusted gross income; federal adjusted gross income. The terms "adjusted 
9.25 	gross income" and "federal adjusted gross income" mean adjusted gross income, as defined 
9.26 	in section 62 of the Internal Revenue Code, as amended through the date named in 
9.27 	subdivision 19, incorporating the federal effective date of changes to the Internal Revenue 
9.28 	Code and any elections made by the taxpayer under the Internal Revenue Code in determining 
9.29 	federal adjusted gross income for federal income tax purposes.

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

10.1 	Sec. 10. Minnesota Statutes 2016, section 290.01, subdivision 22, is amended to read:
10.2 		Subd. 22.Taxable net income. For tax years beginning after December 31, 1986 2017, 
10.3 	the term "taxable net income" means:
10.4 	(1) for resident individuals the same as, net income less the deductions allowed under 
10.5 	section 290.0803;
10.6 	(2) for individuals who were not residents of Minnesota for less than the entire year, the 
10.7 	same as net income less the deductions allowed under section 290.0803, except that the tax 
10.8 	is imposed only on the Minnesota apportioned share of that income as determined pursuant 
10.9 	to section 290.06, subdivision 2c, paragraph (e);
10.10 	(3) for all other taxpayers, the part of net income that is allocable to Minnesota by 
10.11 	assignment or apportionment under one or more of sections 290.17, 290.191, 290.20, and 
10.12 	290.36, except that for nonresident individuals net income is reduced by the amount of the 
10.13 	standard deduction allowable under section 290.0803, subdivision 2, before allocation of 
10.14 	net income to Minnesota.

10.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
10.16 	31, 2017.

10.17 	Sec. 11. Minnesota Statutes 2016, section 290.01, subdivision 29a, is amended to read:
10.18 		Subd. 29a.State itemized deduction. "State itemized deduction" means federal itemized 
10.19 	deductions, as defined in section 63(d) of the Internal Revenue Code, disregarding any 
10.20 	limitation under section 68 of the Internal Revenue Code, and reduced by the amount of 
10.21 	the addition required under section 290.0131, subdivision 13 changes to itemized deductions 
10.22 	made by Public Law 115-97 other than the changes made by section 11028, and disregarding 
10.23 	the federal itemized deduction of income or sales taxes under section 164 of the Internal 
10.24 	Revenue Code.
10.25 	For taxable years beginning after December 31, 2017, the amount that would have been 
10.26 	allowable as interest under section 163(h)(3)(E) of the Internal Revenue Code, disregarding 
10.27 	subparagraph 163(h)(3)(E)(iv), is allowed as a state itemized deduction.

10.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
10.29 	31, 2017.

11.1 	Sec. 12. Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to 
11.2 	read:
11.3 		Subd. 29b.State standard deduction. "State standard deduction" means the federal 
11.4 	standard deduction computed under section 63(c) and (f) of the Internal Revenue Code, as 
11.5 	amended through December 16, 2016, except that for purposes of adjusting the amounts 
11.6 	under this subdivision, the provisions of section 1(f) of the Internal Revenue Code, as 
11.7 	amended through March 31, 2018, apply.

11.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
11.9 	31, 2017.

11.10 	Sec. 13. Minnesota Statutes 2017 Supplement, section 290.01, subdivision 31, is amended 
11.11 	to read:
11.12 		Subd. 31.Internal Revenue Code. Unless specifically defined otherwise, "Internal 
11.13 	Revenue Code" means the Internal Revenue Code of 1986, as amended through December 
11.14 	16, 2016 March 31, 2018. Internal Revenue Code also includes any uncodified provision 
11.15 	in federal law that relates to provisions of the Internal Revenue Code that are incorporated 
11.16 	into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1, 
11.17 	subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as 
11.18 	amended through March 18, 2010.

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

11.23 	Sec. 14. Minnesota Statutes 2016, section 290.0131, subdivision 1, is amended to read:
11.24 		Subdivision 1.Definition; scope. (a) For the purposes of this section, "addition" means 
11.25 	an amount that must be added to federal taxable adjusted gross income, or for estates and 
11.26 	trusts, federal taxable income, in computing net income for the taxable year to which the 
11.27 	amounts relate.
11.28 	(b) The additions in this section apply to individuals, estates, and trusts.
11.29 	(c) Unless specifically indicated or unless the context clearly indicates otherwise, only 
11.30 	amounts that were deducted or excluded in computing federal taxable adjusted gross income, 
11.31 	or for estates and trusts, federal taxable income, are an addition under this section.

12.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
12.2 	31, 2017.

12.3 	Sec. 15. Minnesota Statutes 2016, section 290.0131, subdivision 3, is amended to read:
12.4 		Subd. 3.Income, sales and use, motor vehicle sales, or excise taxes paid. (a) For trusts 
12.5 	and estates, the amount of income, sales and use, motor vehicle sales, or excise taxes paid 
12.6 	or accrued within the taxable year under this chapter and the amount of taxes based on net 
12.7 	income, sales and use, motor vehicle sales, or excise taxes paid to any other state or to any 
12.8 	province or territory of Canada is an addition to the extent deducted under section 63(d) of 
12.9 	the Internal Revenue Code.
12.10 	(b) The addition under paragraph (a) may not be more than the amount by which the 
12.11 	state itemized deduction exceeds the amount of the standard deduction as defined in section 
12.12 	63(c) of the Internal Revenue Code. For the purpose of this subdivision, income, sales and 
12.13 	use, motor vehicle sales, or excise taxes are the last itemized deductions disallowed under 
12.14 	subdivision 12.

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

12.17 	Sec. 16. Minnesota Statutes 2017 Supplement, section 290.0131, subdivision 10, is amended 
12.18 	to read:
12.19 		Subd. 10.Section 179 expensing. Effective for property placed in service in taxable 
12.20 	years beginning before January 1, 2019, 80 percent of the amount by which the deduction 
12.21 	allowed under the dollar limits of section 179 of the Internal Revenue Code exceeds the 
12.22 	deduction allowable by section 179 of the Internal Revenue Code, as amended through 
12.23 	December 31, 2003, is an addition.

12.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
12.25 	31, 2018.

12.26 	Sec. 17. Minnesota Statutes 2016, section 290.0131, subdivision 12, is amended to read:
12.27 		Subd. 12.Disallowed itemized deductions. (a) The amount of disallowed itemized 
12.28 	deductions is an addition. The amount of disallowed itemized deductions, plus the addition 
12.29 	required under subdivision 3, may not be more than the amount by which the state itemized 
12.30 	deductions, as allowed under section 63(d) of the Internal Revenue Code, exceeds the amount 
12.31 	of the state standard deduction as defined in section 63(c) of the Internal Revenue Code.
13.1 	(b) The amount of disallowed itemized deductions is equal to the lesser of:
13.2 	(1) three percent of the excess of the taxpayer's federal adjusted gross income over the 
13.3 	applicable amount; or
13.4 	(2) 80 percent of the amount of the state itemized deductions otherwise allowable to the 
13.5 	taxpayer under the Internal Revenue Code for the taxable year.
13.6 	(c) "Applicable amount" means $100,000, or $50,000 for a married individual filing a 
13.7 	separate return. Each dollar amount is increased by an amount equal to:
13.8 	(1) that dollar amount, multiplied by
13.9 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
13.10 	Code for the calendar year in which the taxable year begins, by substituting "calendar year 
13.11 	1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3) "1990" for "2016" in 
13.12 	section 1(f)(3)(B)(ii) of the Internal Revenue Code.
13.13 	(d) "Itemized deductions" excludes:
13.14 	(1) the deduction for medical expenses under section 213 of the Internal Revenue Code;
13.15 	(2) any deduction for investment interest as defined in section 163(d) of the Internal 
13.16 	Revenue Code; and
13.17 	(3) the deduction under section 165(a) of the Internal Revenue Code for casualty or theft 
13.18 	losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue Code or 
13.19 	for losses described in section 165(d) of the Internal Revenue Code.

13.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
13.21 	31, 2017.

13.22 	Sec. 18. Minnesota Statutes 2016, section 290.0131, subdivision 13, is amended to read:
13.23 		Subd. 13.Disallowed personal exemption amount. (a) The amount of disallowed 
13.24 	personal exemptions for taxpayers with federal adjusted gross income over the threshold 
13.25 	amount is an addition.
13.26 	(b) The disallowed personal exemption amount is equal to the number of personal 
13.27 	exemptions and dependent exemption subtraction allowed under section 151(b) and (c) of 
13.28 	the Internal Revenue Code 290.0132, subdivision 20, multiplied by the dollar amount for 
13.29 	personal exemptions under section 151(d)(1) and (2) of the Internal Revenue Code, as 
13.30 	adjusted for inflation by section 151(d)(4) of the Internal Revenue Code, and by the
13.31 	applicable percentage.
14.1 	(c) For a married individual filing a separate return, "applicable percentage" means two 
14.2 	percentage points for each $1,250, or fraction of that amount, by which the taxpayer's federal 
14.3 	adjusted gross income for the taxable year exceeds the threshold amount. For all other filers, 
14.4 	applicable percentage means two percentage points for each $2,500, or fraction of that 
14.5 	amount, by which the taxpayer's federal adjusted gross income for the taxable year exceeds 
14.6 	the threshold amount. The applicable percentage must not exceed 100 percent.
14.7 	(d) "Threshold amount" means:
14.8 	(1) $150,000 for a joint return or a surviving spouse;
14.9 	(2) $125,000 for a head of a household;
14.10 	(3) $100,000 for an individual who is not married and who is not a surviving spouse or 
14.11 	head of a household; and
14.12 	(4) $75,000 for a married individual filing a separate return.
14.13 	(e) The thresholds must be increased by an amount equal to:
14.14 	(1) the threshold dollar amount, multiplied by
14.15 	(2) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue 
14.16 	Code for the calendar year in which the taxable year begins, by substituting "calendar year 
14.17 	1990" for "calendar year 1992" in subparagraph (B) of section 1(f)(3) "1990" for "2016" in 
14.18 	section 1(f)(3)(B)(ii) of the Internal Revenue Code.

14.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
14.20 	31, 2017.

14.21 	Sec. 19. Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision 
14.22 	to read:
14.23 		Subd. 15.Qualified business income addition. For a trust or estate, the amount deducted 
14.24 	under section 199A of the Internal Revenue Code in computing the federal taxable income 
14.25 	of the trust or estate is an addition.

14.26 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
14.27 	31, 2017.

15.1 	Sec. 20. Minnesota Statutes 2016, section 290.0131, is amended by adding a subdivision 
15.2 	to read:
15.3 		Subd. 16.Foreign-derived intangible income. The amount of foreign-derived intangible 
15.4 	income deducted under section 250 of the Internal Revenue Code for the taxable year is an 
15.5 	addition.

15.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.7 	31, 2017.

15.8 	Sec. 21. Minnesota Statutes 2016, section 290.0132, subdivision 1, is amended to read:
15.9 		Subdivision 1.Definition; scope. (a) For the purposes of this section, "subtraction" 
15.10 	means an amount that shall is allowed to be subtracted from federal taxable adjusted gross
15.11 	income, or for estates and trusts, federal taxable income, in computing net income for the 
15.12 	taxable year to which the amounts relate.
15.13 	(b) The subtractions in this section apply to individuals, estates, and trusts.
15.14 	(c) Unless specifically indicated or unless the context clearly indicates otherwise, no 
15.15 	amount deducted, subtracted, or otherwise excluded in computing federal taxable adjusted 
15.16 	gross income, or for estates and trusts, federal taxable income, is a subtraction under this 
15.17 	section.

15.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.19 	31, 2017.

15.20 	Sec. 22. Minnesota Statutes 2016, section 290.0132, subdivision 7, is amended to read:
15.21 		Subd. 7.Charitable contributions for taxpayers who do not itemize. To the extent 
15.22 	not deducted or not deductible under section 408(d)(8)(E) of the Internal Revenue Code in 
15.23 	determining federal taxable income by For an individual who does not itemize deductions 
15.24 	for federal income tax purposes under section 290.0803 for the taxable year, an amount 
15.25 	equal to 50 percent of the excess of charitable contributions over $500 allowable as a state 
15.26 	itemized deduction for the taxable year under section 170(a) of the Internal Revenue Code
15.27 	is a subtraction. The subtraction under this subdivision must not include a distribution that 
15.28 	is excluded from federal adjusted gross income and that is not deductible under section 
15.29 	408(d)(8)(E) of the Internal Revenue Code.

15.30 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
15.31 	31, 2017.

16.1 	Sec. 23. Minnesota Statutes 2016, section 290.0132, subdivision 20, is amended to read:
16.2 		Subd. 20.Disallowed Personal and dependent exemption. The amount of the phaseout 
16.3 	of personal exemptions under section 151(d) of the Internal Revenue Code is a subtraction.
16.4 	The amount of personal and dependent exemptions calculated under section 290.0138 is a 
16.5 	subtraction.

16.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.7 	31, 2017.

16.8 	Sec. 24. Minnesota Statutes 2017 Supplement, section 290.0132, subdivision 21, is amended 
16.9 	to read:
16.10 		Subd. 21.Military service pension; retirement pay.  To the extent included in federal 
16.11 	taxable adjusted gross income, compensation received from a pension or other retirement 
16.12 	pay from the federal government for service in the military, as computed under United 
16.13 	States Code, title 10, sections 1401 to 1414, 1447 to 1455, and 12733, is a subtraction. The 
16.14 	subtraction is limited to individuals who do not claim the credit under section 290.0677.

16.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
16.16 	31, 2017.

16.17 	Sec. 25. Minnesota Statutes 2017 Supplement, section 290.0132, subdivision 26, is amended 
16.18 	to read:
16.19 		Subd. 26.Social Security benefits. (a) A portion of Social Security benefits is allowed 
16.20 	as a subtraction. The subtraction equals the lesser of Social Security benefits or a maximum 
16.21 	subtraction subject to the limits under paragraphs (b), (c), and (d).
16.22 	(b) For married taxpayers filing a joint return and surviving spouses, the maximum 
16.23 	subtraction equals $4,500 $4,590. The maximum subtraction is reduced by 20 percent of 
16.24 	provisional income over $77,000 $78,530. In no case is the subtraction less than zero.
16.25 	(c) For single or head-of-household taxpayers, the maximum subtraction equals $3,500
16.26 	$3,570. The maximum subtraction is reduced by 20 percent of provisional income over 
16.27 	$60,200 $61,400. In no case is the subtraction less than zero.
16.28 	(d) For married taxpayers filing separate returns, the maximum subtraction equals $2,250
16.29 	one-half the maximum subtraction for joint returns under paragraph (b). The maximum 
16.30 	subtraction is reduced by 20 percent of provisional income over $38,500 one-half the 
16.31 	maximum subtraction for joint returns under paragraph (b). In no case is the subtraction 
16.32 	less than zero.
17.1 	(e) For purposes of this subdivision, "provisional income" means modified adjusted 
17.2 	gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of 
17.3 	the Social Security benefits received during the taxable year, and "Social Security benefits" 
17.4 	has the meaning given in section 86(d)(1) of the Internal Revenue Code.
17.5 	(f) The commissioner shall adjust the maximum subtraction and threshold amounts in 
17.6 	paragraphs (b) to (d) by the percentage determined pursuant to the provisions of section 
17.7 	1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B) of the Internal Revenue 
17.8 	Code the word "2016" "2017" shall be substituted for the word "1992." For 2018, the 
17.9 	commissioner shall then determine the percentage change from the 12 months ending on 
17.10 	August 31, 2016, to the 12 months ending on August 31, 2017, and in each subsequent year, 
17.11 	from the 12 months ending on August 31, 2016, to the 12 months ending on August 31 of 
17.12 	the year preceding the taxable year. "2016." The determination of the commissioner pursuant 
17.13 	to this subdivision must not be considered a rule and is not subject to the Administrative 
17.14 	Procedure Act contained in chapter 14, including section 14.386. The maximum subtraction 
17.15 	and threshold amounts as adjusted must be rounded to the nearest $10 amount. If the amount 
17.16 	ends in $5, the amount is rounded up to the nearest $10 amount.

17.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.18 	31, 2017.

17.19 	Sec. 26. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
17.20 	to read:
17.21 		Subd. 27.Moving expenses. Expenses that qualify as a deduction under section 217(a) 
17.22 	through (f) of the Internal Revenue Code, disregarding paragraph (k), and only to the extent 
17.23 	the expenses are not deducted in computing federal taxable income is a subtraction.

17.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.25 	31, 2017.

17.26 	Sec. 27. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
17.27 	to read:
17.28 		Subd. 28.Global intangible low-taxed income. The taxpayer's global intangible 
17.29 	low-taxed income included under section 951A of the Internal Revenue Code for the taxable 
17.30 	year is a subtraction.

17.31 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.32 	31, 2017.

18.1 	Sec. 28. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
18.2 	to read:
18.3 		Subd. 29.Deferred foreign income. The amount of deferred foreign income recognized 
18.4 	because of section 965 of the Internal Revenue Code, and before any deduction under section 
18.5 	965(c) of the Internal Revenue Code, is a subtraction.

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

18.8 	Sec. 29. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
18.9 	to read:
18.10 		Subd. 30.Standard or itemized deduction. The amount allowed under section 290.0803 
18.11 	is a subtraction.

18.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
18.13 	31, 2017.

18.14 	Sec. 30. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
18.15 	to read:
18.16 		Subd. 31.Tuition subtraction. The amount that would have been allowable under 
18.17 	section 222 of the Internal Revenue Code, disregarding paragraph (e) and only to the extent 
18.18 	the amount is not deducted in computing federal adjusted gross income is a subtraction.

18.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
18.20 	31, 2018.

18.21 	Sec. 31. Minnesota Statutes 2017 Supplement, section 290.0133, subdivision 12, is amended 
18.22 	to read:
18.23 		Subd. 12.Section 179 expensing. Effective for property placed in service in taxable 
18.24 	years beginning before January 1, 2019, 80 percent of the amount by which the deduction 
18.25 	allowed under the dollar limits of section 179 of the Internal Revenue Code exceeds the 
18.26 	deduction allowable by section 179 of the Internal Revenue Code, as amended through 
18.27 	December 31, 2003, is an addition.

18.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
18.29 	31, 2018.

19.1 	Sec. 32. Minnesota Statutes 2016, section 290.0133, is amended by adding a subdivision 
19.2 	to read:
19.3 		Subd. 15.Foreign-derived intangible income. The amount of foreign-derived intangible 
19.4 	income deducted under section 250 of the Internal Revenue Code for the taxable year is an 
19.5 	addition.

19.6 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
19.7 	31, 2017.

19.8 	Sec. 33. Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision 
19.9 	to read:
19.10 		Subd. 17.Global intangible low-taxed income. The taxpayer's global intangible 
19.11 	low-taxed income included under section 951A of the Internal Revenue Code for the taxable 
19.12 	year is a subtraction.

19.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
19.14 	31, 2017.

19.15 	Sec. 34. Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision 
19.16 	to read:
19.17 		Subd. 18.Deferred foreign income. The amount of deferred foreign income recognized 
19.18 	because of section 965 of the Internal Revenue Code, and before any deduction under section 
19.19 	965(c) of the Internal Revenue Code, is a subtraction.

19.20 	Sec. 35. [290.0138] PERSONAL AND DEPENDENT EXEMPTIONS.
19.21 		Subdivision 1.Personal and dependent exemptions. (a) A taxpayer is allowed (1) a 
19.22 	personal exemption in the amount of $4,150, and in the case of a married couple filing a 
19.23 	joint return an additional personal exemption of $4,150; plus (2) a dependent exemption of 
19.24 	$4,150 multiplied by the number of dependents of the taxpayer, as defined under sections 
19.25 	151 and 152 of the Internal Revenue Code.
19.26 	(b) The personal and dependent exemptions are not allowed to an individual who is 
19.27 	eligible to be claimed as a dependent, as defined in sections 151 or 152 of the Internal 
19.28 	Revenue Code, by another taxpayer.
19.29 		Subd. 2.Cost-of-living adjustment. For taxable years beginning after December 31, 
19.30 	2018, the commissioner shall annually adjust the amounts in subdivision 1 by the percentage 
19.31 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code as 
20.1 	amended through March 31, 2018, except that in section 1(f)(3)(B), the word "2017" shall 
20.2 	be substituted for the word "1992." The exemption amount as adjusted for inflation must 
20.3 	be rounded to the nearest $50. If the amount is not a multiple of $50, the commissioner shall 
20.4 	round down to the next lowest multiple of $50. The determination of the commissioner 
20.5 	under this subdivision is not a rule under the Administrative Procedure Act.

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

20.8 	Sec. 36. Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
20.9 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
20.10 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
20.11 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
20.12 	their taxable net income the following schedule of rates:
20.13 	(1) On the first $35,480 $37,850, 5.35 5.1 percent;
20.14 	(2) On all over $35,480 $37,850, but not over $140,960 $150,380, 7.05 percent;
20.15 	(3) On all over $140,960 $150,380, but not over $250,000 $266,700, 7.85 percent;
20.16 	(4) On all over $250,000 $266,700, 9.85 percent.
20.17 	Married individuals filing separate returns, estates, and trusts must compute their income 
20.18 	tax by applying the above rates to their taxable income, except that the income brackets 
20.19 	will be one-half of the above amounts.
20.20 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
20.21 	computed by applying to taxable net income the following schedule of rates:
20.22 	(1) On the first $24,270 $25,890, 5.35 5.1 percent;
20.23 	(2) On all over $24,270 $25,890, but not over $79,730 $85,060, 7.05 percent;
20.24 	(3) On all over $79,730 $85,060, but not over $150,000 $160,020, 7.85 percent;
20.25 	(4) On all over $150,000 $160,020, 9.85 percent.
20.26 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
20.27 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
20.28 	computed by applying to taxable net income the following schedule of rates:
20.29 	(1) On the first $29,880 $31,880, 5.35 5.1 percent;
20.30 	(2) On all over $29,880 $31,880, but not over $120,070 $128,090, 7.05 percent;
21.1 	(3) On all over $120,070 $128,090, but not over $200,000 $213,360, 7.85 percent;
21.2 	(4) On all over $200,000 $213,360, 9.85 percent.
21.3 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
21.4 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
21.5 	amount determined by the commissioner must be computed in accordance with tables 
21.6 	prepared and issued by the commissioner of revenue based on income brackets of not more 
21.7 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
21.8 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
21.9 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
21.10 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
21.11 	individual's Minnesota income tax as provided in this subdivision. After the application of 
21.12 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
21.13 	by a fraction in which:
21.14 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
21.15 	defined in section 62 of the Internal Revenue Code and increased by the additions required 
21.16 	under section 290.0131, subdivisions 2 and 6 to 11 10, and reduced by the Minnesota 
21.17 	assignable portion of the subtraction for United States government interest under section 
21.18 	290.0132, subdivision 2, and the subtractions under section 290.0132, subdivisions 9, 10, 
21.19 	14, 15, 17, and 18, and 27 to 29, after applying the allocation and assignability provisions 
21.20 	of section 290.081, clause (a), or 290.17; and
21.21 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
21.22 	62 of the Internal Revenue Code, increased by the amounts specified in section 290.0131, 
21.23 	subdivisions 2 and 6 to 11 10, and reduced by the amounts specified in section 290.0132, 
21.24 	subdivisions 2, 9, 10, 14, 15, 17, and 18, and 27 to 29.

21.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
21.26 	31, 2017.

21.27 	Sec. 37. Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:
21.28 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
21.29 	December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for 
21.30 	which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage 
21.31 	determined under paragraph (b). For the purpose of making the adjustment as provided in 
21.32 	this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets 
21.33 	as they existed for taxable years beginning after December 31, 2012, and before January 1, 
22.1 	2014. The rate applicable to any rate bracket must not be changed. The dollar amounts 
22.2 	setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate 
22.3 	brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in 
22.4 	$5, it must be rounded up to the nearest $10 amount.
22.5 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
22.6 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
22.7 	1(f)(3)(B) the word "2012" "2017" shall be substituted for the word "1992." For 2014, the 
22.8 	commissioner shall then determine the percent change from the 12 months ending on August 
22.9 	31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
22.10 	the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the 
22.11 	year preceding the taxable year. "2016." The determination of the commissioner pursuant 
22.12 	to this subdivision shall not be considered a "rule" and shall not be subject to the 
22.13 	Administrative Procedure Act contained in chapter 14.
22.14 	No later than December 15 of each year, the commissioner shall announce the specific 
22.15 	percentage that will be used to adjust the tax rate brackets.

22.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
22.17 	31, 2017.

22.18 	Sec. 38. Minnesota Statutes 2017 Supplement, section 290.067, subdivision 1, is amended 
22.19 	to read:
22.20 		Subdivision 1.Amount of credit. (a) A taxpayer may take as a credit against the tax 
22.21 	due from the taxpayer and a spouse, if any, under this chapter an amount equal to the 
22.22 	dependent care credit for which the taxpayer is eligible pursuant to the provisions of section 
22.23 	21 of the Internal Revenue Code except that in determining whether the child qualified as 
22.24 	a dependent, income received as a Minnesota family investment program grant or allowance 
22.25 	to or on behalf of the child must not be taken into account in determining whether the child 
22.26 	received more than half of the child's support from the taxpayer, and the provisions of 
22.27 	section 32(b)(1)(D) of the Internal Revenue Code do not apply.
22.28 	(b) If a child who has not attained the age of six years at the close of the taxable year is 
22.29 	cared for at a licensed family day care home operated by the child's parent, the taxpayer is 
22.30 	deemed to have paid employment-related expenses. If the child is 16 months old or younger 
22.31 	at the close of the taxable year, the amount of expenses deemed to have been paid equals 
22.32 	the maximum limit for one qualified individual under section 21(c) and (d) of the Internal 
22.33 	Revenue Code. If the child is older than 16 months of age but has not attained the age of 
22.34 	six years at the close of the taxable year, the amount of expenses deemed to have been paid 
23.1 	equals the amount the licensee would charge for the care of a child of the same age for the 
23.2 	same number of hours of care.
23.3 	(c) If a married couple:
23.4 	(1) has a child who has not attained the age of one year at the close of the taxable year;
23.5 	(2) files a joint tax return for the taxable year; and
23.6 	(3) does not participate in a dependent care assistance program as defined in section 129 
23.7 	of the Internal Revenue Code, in lieu of the actual employment related expenses paid for 
23.8 	that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i) 
23.9 	the combined earned income of the couple or (ii) the amount of the maximum limit for one 
23.10 	qualified individual under section 21(c) and (d) of the Internal Revenue Code will be deemed 
23.11 	to be the employment related expense paid for that child. The earned income limitation of 
23.12 	section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These 
23.13 	deemed amounts apply regardless of whether any employment-related expenses have been 
23.14 	paid.
23.15 	(d) If the taxpayer is not required and does not file a federal individual income tax return 
23.16 	for the tax year, no credit is allowed for any amount paid to any person unless:
23.17 	(1) the name, address, and taxpayer identification number of the person are included on 
23.18 	the return claiming the credit; or
23.19 	(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue 
23.20 	Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name 
23.21 	and address of the person are included on the return claiming the credit.
23.22 	In the case of a failure to provide the information required under the preceding sentence, 
23.23 	the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence 
23.24 	in attempting to provide the information required.
23.25 	(e) In the case of a nonresident, part-year resident, or a person who has earned income 
23.26 	not subject to tax under this chapter including earned income excluded pursuant to section 
23.27 	290.0132, subdivision 10, the credit determined under section 21 of the Internal Revenue 
23.28 	Code must be allocated based on the ratio by which the earned income of the claimant and 
23.29 	the claimant's spouse from Minnesota sources bears to the total earned income of the claimant 
23.30 	and the claimant's spouse.
23.31 	(f) For residents of Minnesota, the subtractions for military pay under section 290.0132, 
23.32 	subdivisions 11 and 12, are not considered "earned income not subject to tax under this 
23.33 	chapter."
24.1 	(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the 
24.2 	Internal Revenue Code is not considered "earned income not subject to tax under this 
24.3 	chapter."
24.4 	(h) For taxpayers with federal adjusted gross income in excess of $50,000 $50,990, the 
24.5 	credit is equal to the lesser of the credit otherwise calculated under this subdivision, or the 
24.6 	amount equal to $600 minus five percent of federal adjusted gross income in excess of 
24.7 	$50,000 $50,990 for taxpayers with one qualified individual, or $1,200 minus five percent 
24.8 	of federal adjusted gross income in excess of $50,000 $50,990 for taxpayers with two or 
24.9 	more qualified individuals, but in no case is the credit less than zero.

24.10 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
24.11 	31, 2017.

24.12 	Sec. 39. Minnesota Statutes 2016, section 290.067, subdivision 2a, is amended to read:
24.13 		Subd. 2a.Income. (a) For purposes of this section, "income" means the sum of the 
24.14 	following:
24.15 	(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; 
24.16 	and
24.17 	(2) the sum of the following amounts to the extent not included in clause (1):
24.18 	(i) all nontaxable income;
24.19 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
24.20 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
24.21 	carryover allowed under section 469(b) of the Internal Revenue Code;
24.22 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
24.23 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
24.24 	Code;
24.25 	(iv) cash public assistance and relief;
24.26 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
24.27 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
24.28 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
24.29 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
24.30 	gross income in the years when the payments were made;
24.31 	(vi) interest received from the federal or a state government or any instrumentality or 
24.32 	political subdivision thereof;
25.1 	(vii) workers' compensation;
25.2 	(viii) nontaxable strike benefits;
25.3 	(ix) the gross amounts of payments received in the nature of disability income or sick 
25.4 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
25.5 	or otherwise;
25.6 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
25.7 	1986, as amended through December 31, 1995;
25.8 	(xi) contributions made by the claimant to an individual retirement account, including 
25.9 	a qualified voluntary employee contribution; simplified employee pension plan; 
25.10 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
25.11 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
25.12 	Revenue Code;
25.13 	(xii) nontaxable scholarship or fellowship grants;
25.14 	(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
25.15 	(xiv)(xiii) the amount of deduction allowed under section 220 or 223 of the Internal 
25.16 	Revenue Code;
25.17 	(xv) (xiv) the amount deducted for tuition expenses under section 222 of the Internal 
25.18 	Revenue Code; and
25.19 	(xvi) (xv) the amount deducted for certain expenses of elementary and secondary school 
25.20 	teachers under section 62(a)(2)(D) of the Internal Revenue Code.; and
25.21 	(xvi) alimony received to the extent not included in the recipient's income.
25.22 	In the case of an individual who files an income tax return on a fiscal year basis, the 
25.23 	term "federal adjusted gross income" means federal adjusted gross income reflected in the 
25.24 	fiscal year ending in the next calendar year. Federal adjusted gross income may not be 
25.25 	reduced by the amount of a net operating loss carryback or carryforward or a capital loss 
25.26 	carryback or carryforward allowed for the year.
25.27 	(b) "Income" does not include:
25.28 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
25.29 	(2) amounts of any pension or annuity that were exclusively funded by the claimant or 
25.30 	spouse if the funding payments were not excluded from federal adjusted gross income in 
25.31 	the years when the payments were made;
26.1 	(3) surplus food or other relief in kind supplied by a governmental agency;
26.2 	(4) relief granted under chapter 290A;
26.3 	(5) child support payments received under a temporary or final decree of dissolution or 
26.4 	legal separation; and
26.5 	(6) restitution payments received by eligible individuals and excludable interest as 
26.6 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
26.7 	Public Law 107-16.

26.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
26.9 	31, 2017.

26.10 	Sec. 40. Minnesota Statutes 2017 Supplement, section 290.067, subdivision 2b, is amended 
26.11 	to read:
26.12 		Subd. 2b.Inflation adjustment. The commissioner shall adjust the dollar amount of 
26.13 	the income threshold at which the maximum credit begins to be reduced under subdivision 
26.14 	1 by the percentage determined pursuant to the provisions of section 1(f) of the Internal 
26.15 	Revenue Code, except that in section 1(f)(3)(B) the word "2016" "2017" shall be substituted 
26.16 	for the word "1992." For 2018, the commissioner shall then determine the percent change 
26.17 	from the 12 months ending on August 31, 2016, to the 12 months ending on August 31, 
26.18 	2017, and in each subsequent year, from the 12 months ending on August 31, 2016, to the 
26.19 	12 months ending on August 31 of the year preceding the taxable year. "2016." The 
26.20 	determination of the commissioner pursuant to this subdivision must not be considered a 
26.21 	"rule" and is not subject to the Administrative Procedure Act contained in chapter 14. The 
26.22 	threshold amount as adjusted must be rounded to the nearest $10 amount. If the amount 
26.23 	ends in $5, the amount is rounded up to the nearest $10 amount.

26.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
26.25 	31, 2017.

26.26 	Sec. 41. Minnesota Statutes 2017 Supplement, section 290.0671, subdivision 1, is amended 
26.27 	to read:
26.28 		Subdivision 1.Credit allowed. (a) An individual who is a resident of Minnesota is 
26.29 	allowed a credit against the tax imposed by this chapter equal to a percentage of earned 
26.30 	income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the 
26.31 	Internal Revenue Code, except that a taxpayer with no qualifying children who has attained 
27.1 	the age of 21, but not attained age 65 before the close of the taxable year and is otherwise 
27.2 	eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit.
27.3 	(b) For individuals with no qualifying children, the credit equals 2.10 percent of the first 
27.4 	$6,180 $6,480 of earned income. The credit is reduced by 2.01 percent of earned income 
27.5 	or adjusted gross income, whichever is greater, in excess of $8,130 $8,530, but in no case 
27.6 	is the credit less than zero.
27.7 	(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first 
27.8 	$11,120 $11,670 of earned income. The credit is reduced by 6.02 percent of earned income 
27.9 	or adjusted gross income, whichever is greater, in excess of $21,190 $22,340, but in no case 
27.10 	is the credit less than zero.
27.11 	(d) For individuals with two or more qualifying children, the credit equals 11 percent 
27.12 	of the first $18,240$19,130 of earned income. The credit is reduced by 10.82 percent of 
27.13 	earned income or adjusted gross income, whichever is greater, in excess of $25,130 $26,360, 
27.14 	but in no case is the credit less than zero.
27.15 	(e) For a part-year resident, the credit must be allocated based on the percentage calculated 
27.16 	under section 290.06, subdivision 2c, paragraph (e).
27.17 	(f) For a person who was a resident for the entire tax year and has earned income not 
27.18 	subject to tax under this chapter, including income excluded under section 290.0132, 
27.19 	subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross 
27.20 	income reduced by the earned income not subject to tax under this chapter over federal 
27.21 	adjusted gross income. For purposes of this paragraph, the following clauses are not 
27.22 	considered "earned income not subject to tax under this chapter":
27.23 	(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
27.24 	(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
27.25 	(3) income derived from an Indian reservation by an enrolled member of the reservation 
27.26 	while living on the reservation.
27.27 	(g) For tax years beginning after December 31, 2013 2018, the $8,130 $8,530 in paragraph 
27.28 	(b), the $21,190 $22,230 in paragraph (c), and the $25,130 $26,360 in paragraph (d), after 
27.29 	being adjusted for inflation under subdivision 7, are each increased by $5,000$5,700 for 
27.30 	married taxpayers filing joint returns. For tax years beginning after December 31, 2013
27.31 	2018, the commissioner shall annually adjust the $5,000 $5,700 by the percentage determined 
27.32 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
27.33 	1(f)(3)(B), the word "2008" "2017" shall be substituted for the word "1992." For 2014, the 
28.1 	commissioner shall then determine the percent change from the 12 months ending on August 
28.2 	31, 2008, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
28.3 	the 12 months ending on August 31, 2008, to the 12 months ending on August 31 of the 
28.4 	year preceding the taxable year. "2016." The earned income thresholds as adjusted for 
28.5 	inflation must be rounded to the nearest $10. If the amount ends in $5, the amount is rounded 
28.6 	up to the nearest $10. The determination of the commissioner under this subdivision is not 
28.7 	a rule under the Administrative Procedure Act.
28.8 	(h) The commissioner shall construct tables showing the amount of the credit at various 
28.9 	income levels and make them available to taxpayers. The tables shall follow the schedule 
28.10 	contained in this subdivision, except that the commissioner may graduate the transition 
28.11 	between income brackets.

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

28.14 	Sec. 42. Minnesota Statutes 2016, section 290.0671, subdivision 7, is amended to read:
28.15 		Subd. 7.Inflation adjustment. The earned income amounts used to calculate the credit 
28.16 	and the income thresholds at which the maximum credit begins to be reduced in subdivision 
28.17 	1 must be adjusted for inflation. The commissioner shall adjust by the percentage determined 
28.18 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
28.19 	1(f)(3)(B) the word "2013" "2017" shall be substituted for the word "1992." For 2015, the 
28.20 	commissioner shall then determine the percent change from the 12 months ending on August 
28.21 	31, 2013, to the 12 months ending on August 31, 2014, and in each subsequent year, from 
28.22 	the 12 months ending on August 31, 2013, to the 12 months ending on August 31 of the 
28.23 	year preceding the taxable year. "2016." The earned income thresholds as adjusted for 
28.24 	inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount 
28.25 	is rounded up to the nearest $10 amount. The determination of the commissioner under this 
28.26 	subdivision is not a rule under the Administrative Procedure Act.

28.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
28.28 	31, 2017.

28.29 	Sec. 43. Minnesota Statutes 2017 Supplement, section 290.0672, subdivision 1, is amended 
28.30 	to read:
28.31 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
28.32 	the meanings given.
29.1 	(b) "Long-term care insurance" means a policy that:
29.2 	(1) qualifies for a deduction under section 213 of the Internal Revenue Code, disregarding 
29.3 	the adjusted gross income test; or meets the requirements given in section 62A.46; or provides 
29.4 	similar coverage issued under the laws of another jurisdiction; and
29.5 	(2) has a lifetime long-term care benefit limit of not less than $100,000; and
29.6 	(3) has been offered in compliance with the inflation protection requirements of section 
29.7 	62S.23.
29.8 	(c) "Qualified beneficiary" means the taxpayer or the taxpayer's spouse.
29.9 	(d) "Premiums deducted in determining federal taxable net income" means the lesser of 
29.10 	(1) long-term care insurance premiums that qualify as deductions under section 213 of the 
29.11 	Internal Revenue Code; and (2) the total amount deductible for medical care expenses under 
29.12 	section 213 of the Internal Revenue Code.

29.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
29.14 	31, 2017.

29.15 	Sec. 44. Minnesota Statutes 2016, section 290.0672, subdivision 2, is amended to read:
29.16 		Subd. 2.Credit. A taxpayer is allowed a credit against the tax imposed by this chapter 
29.17 	for long-term care insurance policy premiums paid during the tax year. The credit for each 
29.18 	policy equals 25 percent of premiums paid to the extent not deducted in determining federal
29.19 	taxable net income. A taxpayer may claim a credit for only one policy for each qualified 
29.20 	beneficiary. A maximum of $100 applies to each qualified beneficiary. The maximum total 
29.21 	credit allowed per year is $200 for married couples filing joint returns and $100 for all other 
29.22 	filers. For a nonresident or part-year resident, the credit determined under this section must 
29.23 	be allocated based on the percentage calculated under section 290.06, subdivision 2c, 
29.24 	paragraph (e).

29.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
29.26 	31, 2017.

29.27 	Sec. 45. Minnesota Statutes 2017 Supplement, section 290.0681, subdivision 1, is amended 
29.28 	to read:
29.29 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
29.30 	the meanings given.
30.1 	(b) "Account" means the historic credit administration account in the special revenue 
30.2 	fund.
30.3 	(c) "Office" means the State Historic Preservation Office of the Department of 
30.4 	Administration.
30.5 	(d) "Project" means rehabilitation of a certified historic structure, as defined in section 
30.6 	47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is allowed a 
30.7 	federal credit.
30.8 	(e) "Federal credit" means the credit allowed under section 47(a)(2) 47(a) of the Internal 
30.9 	Revenue Code, except that the amount allowed is deemed to be allocated in the taxable year 
30.10 	that the project is placed in service.
30.11 	(f) "Placed in service" has the meaning used in section 47 of the Internal Revenue Code.
30.12 	(g) "Qualified rehabilitation expenditures" has the meaning given in section 47 of the 
30.13 	Internal Revenue Code.

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

30.16 	Sec. 46. Minnesota Statutes 2017 Supplement, section 290.0681, subdivision 2, is amended 
30.17 	to read:
30.18 		Subd. 2.Credit or grant allowed; certified historic structure. (a) A credit is allowed 
30.19 	against the tax imposed under this chapter equal to not more than 100 percent of the credit 
30.20 	allowed under section 47(a)(2) 47(a) of the Internal Revenue Code for a project. The credit 
30.21 	is payable in an amount equal to one-fifth of the total credit amount allowed in the five 
30.22 	taxable years beginning with the year the project is placed in service. To qualify for the 
30.23 	credit:
30.24 	(1) the project must receive Part 3 certification and be placed in service during the taxable 
30.25 	year; and
30.26 	(2) the taxpayer must be allowed the federal credit and be issued a credit certificate for 
30.27 	the taxable year as provided in subdivision 4.
30.28 	(b) The commissioner of administration may pay a grant in lieu of the credit. The grant 
30.29 	equals 90 percent of the credit that would be allowed for the project. The grant is payable 
30.30 	in an amount equal to one-fifth of 90 percent of the credit that would be allowed for the 
30.31 	project in the five taxable years beginning with the year the project is placed in service.
31.1 	(c) In lieu of the credit under paragraph (a), an insurance company may claim a credit 
31.2 	against the insurance premiums tax imposed under chapter 297I.

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

31.5 	Sec. 47. Minnesota Statutes 2016, section 290.0681, subdivision 3, is amended to read:
31.6 		Subd. 3.Applications; allocations. (a) To qualify for a credit or grant under this section, 
31.7 	the developer of a project must apply to the office before the rehabilitation begins. The 
31.8 	application must contain the information and be in the form prescribed by the office. The 
31.9 	office may collect a fee for application of up to 0.5 percent of qualified rehabilitation 
31.10 	expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to 
31.11 	offset costs associated with personnel and administrative expenses related to administering 
31.12 	the credit and preparing the economic impact report in subdivision 9. Application fees are 
31.13 	deposited in the account. The application must indicate if the application is for a credit or 
31.14 	a grant in lieu of the credit or a combination of the two and designate the taxpayer qualifying 
31.15 	for the credit or the recipient of the grant.
31.16 	(b) Upon approving an application for credit, the office shall issue allocation certificates 
31.17 	that:
31.18 	(1) verify eligibility for the credit or grant;
31.19 	(2) state the amount of credit or grant anticipated with the project, with the credit amount 
31.20 	equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated 
31.21 	in the application;
31.22 	(3) state that the credit or grant allowed may increase or decrease if the federal credit 
31.23 	the project receives at the time it is placed in service is different than the amount anticipated 
31.24 	at the time the allocation certificate is issued; and
31.25 	(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or 
31.26 	grant recipient is entitled to receive one-fifth of the total amount of either the credit or the 
31.27 	grant at the time the project is placed in service, provided that date is within three calendar 
31.28 	years following the issuance of the allocation certificate.
31.29 	(c) The office, in consultation with the commissioner, shall determine if the project is 
31.30 	eligible for a credit or a grant under this section and must notify the developer in writing 
31.31 	of its determination. Eligibility for the credit is subject to review and audit by the 
31.32 	commissioner.
32.1 	(d) The federal credit recapture and repayment requirements under section 50 of the 
32.2 	Internal Revenue Code do not apply to the credit allowed under this section.
32.3 	(e) Any decision of the office under paragraph (c) may be challenged as a contested case 
32.4 	under chapter 14. The contested case proceeding must be initiated within 45 days of the 
32.5 	date of written notification by the office.

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

32.8 	Sec. 48. Minnesota Statutes 2016, section 290.0681, subdivision 4, is amended to read:
32.9 		Subd. 4.Credit certificates; grants. (a)(1) The developer of a project for which the 
32.10 	office has issued an allocation certificate must notify the office when the project is placed 
32.11 	in service. Upon verifying that the project has been placed in service, and was allowed a 
32.12 	federal credit, the office must issue a credit certificate to the taxpayer designated in the 
32.13 	application or must issue a grant to the recipient designated in the application. The credit 
32.14 	certificate must state the amount of the credit.
32.15 	(2) The credit amount equals the federal credit allowed for the project.
32.16 	(3) The grant amount equals 90 percent of the federal credit allowed for the project.
32.17 	(b) The recipient of a credit certificate may assign the certificate to another taxpayer
32.18 	before the first one-fifth payment is claimed, which is then allowed the credit under this 
32.19 	section or section 297I.20, subdivision 3. An assignment is not valid unless the assignee 
32.20 	notifies the commissioner within 30 days of the date that the assignment is made. The 
32.21 	commissioner shall prescribe the forms necessary for notifying the commissioner of the 
32.22 	assignment of a credit certificate and for claiming a credit by assignment.
32.23 	(c) Credits passed through to partners, members, shareholders, or owners pursuant to 
32.24 	subdivision 5 are not an assignment of a credit certificate under this subdivision.
32.25 	(d) A grant agreement between the office and the recipient of a grant may allow the 
32.26 	grant to be issued to another individual or entity.

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

33.1 	Sec. 49. Minnesota Statutes 2017 Supplement, section 290.0684, subdivision 2, is amended 
33.2 	to read:
33.3 		Subd. 2.Credit allowed. (a) An individual who is a resident of Minnesota is allowed a 
33.4 	credit against the tax imposed by this chapter. The credit is not allowed to an individual 
33.5 	who is eligible to be claimed as a dependent, as defined in sections 151 and 152 of the 
33.6 	Internal Revenue Code. The credit may not exceed the liability for tax under this chapter.
33.7 	(b) The amount of the credit allowed equals 50 percent of contributions for the taxable 
33.8 	year. The maximum credit is $500, subject to the phaseout in paragraphs (c) and (d). In no 
33.9 	case is the credit less than zero.
33.10 	(c) For individual filers, the maximum credit is reduced by two percent of adjusted gross 
33.11 	income in excess of $75,000 $76,490.
33.12 	(d) For married couples filing a joint return, the maximum credit is phased out as follows:
33.13 	(1) for married couples with adjusted gross income in excess of $75,000 $76,490, but 
33.14 	not more than $100,000 $101,990, the maximum credit is reduced by one percent of adjusted 
33.15 	gross income in excess of $75,000 $76,490;
33.16 	(2) for married couples with adjusted gross income in excess of $100,000 $101,990, but 
33.17 	not more than $135,000 $137,680, the maximum credit is $250; and
33.18 	(3) for married couples with adjusted gross income in excess of $135,000 $137,680, the 
33.19 	maximum credit is $250, reduced by one percent of adjusted gross income in excess of 
33.20 	$135,000 $137,680.
33.21 	(e) The income thresholds in paragraphs (c) and (d) used to calculate the maximum 
33.22 	credit must be adjusted for inflation. The commissioner shall adjust the income thresholds 
33.23 	by the percentage determined under the provisions of section 1(f) of the Internal Revenue 
33.24 	Code, except that in section 1(f)(3)(B) the word "2016" "2017" is substituted for the word 
33.25 	"1992." For 2018, the commissioner shall then determine the percent change from the 12 
33.26 	months ending on August 31, 2016, to the 12 months ending on August 31, 2017, and in 
33.27 	each subsequent year, from the 12 months ending on August 31, 2016, to the 12 months 
33.28 	ending on August 31 of the year preceding the taxable year. "2016." The income thresholds 
33.29 	as adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends in 
33.30 	$5, the amount is rounded up to the nearest $10 amount. The determination of the 
33.31 	commissioner under this subdivision is not subject to chapter 14, including section 14.386.

33.32 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
33.33 	31, 2017.

34.1 	Sec. 50. Minnesota Statutes 2016, section 290.0802, subdivision 2, is amended to read:
34.2 		Subd. 2.Subtraction. (a) A qualified individual is allowed a subtraction from federal 
34.3 	taxable adjusted gross income of the individual's subtraction base amount. The excess of 
34.4 	the subtraction base amount over the taxable net income computed without regard to the 
34.5 	subtraction for the elderly or disabled under section 290.0132, subdivision 5, may be used 
34.6 	to reduce the amount of a lump sum distribution subject to tax under section 290.032.
34.7 	(b)(1) The initial subtraction base amount equals
34.8 	(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,
34.9 	(ii) $9,600 for a single taxpayer, and
34.10 	(iii) $6,000 for a married taxpayer filing a separate federal return.
34.11 	(2) The qualified individual's initial subtraction base amount, then, must be reduced by 
34.12 	the sum of nontaxable retirement and disability benefits and one-half of the amount of 
34.13 	adjusted gross income in excess of the following thresholds:
34.14 	(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified 
34.15 	individuals,
34.16 	(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one 
34.17 	spouse is a qualified individual, and
34.18 	(iii) $9,000 for a married taxpayer filing a separate federal return.
34.19 	(3) In the case of a qualified individual who is under the age of 65, the maximum amount 
34.20 	of the subtraction base may not exceed the taxpayer's disability income.
34.21 	(4) The resulting amount is the subtraction base amount.

34.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
34.23 	31, 2017.

34.24 	Sec. 51. [290.0803] STANDARD OR ITEMIZED DEDUCTION.
34.25 		Subdivision 1.Election. An individual may elect to claim a state standard deduction in 
34.26 	lieu of state itemized deductions. However, in the case of a married individual filing a 
34.27 	separate return, if one spouse elects to claim state itemized deductions, the other spouse is 
34.28 	not allowed a state standard deduction.
34.29 		Subd. 2.Subtraction. Based on the election under subdivision 1, individuals are allowed 
34.30 	to subtract from federal adjusted gross income the state standard deduction or the state 
34.31 	itemized deduction.

35.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
35.2 	31, 2017.

35.3 	Sec. 52. Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended 
35.4 	to read:
35.5 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
35.6 	terms have the meanings given.
35.7 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
35.8 	year:
35.9 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
35.10 	55(b)(2) of the Internal Revenue Code;
35.11 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
35.12 	taxable income, but excluding:
35.13 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
35.14 	and
35.15 	(ii) the medical expense deduction;
35.16 	(iii) the casualty, theft, and disaster loss deduction; and
35.17 	(iv) the impairment-related work expenses of a disabled person;
35.18 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
35.19 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
35.20 	to the extent not included in federal alternative minimum taxable income, the excess of the 
35.21 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
35.22 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
35.23 	without regard to the depletion deduction for the taxable year);
35.24 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
35.25 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
35.26 	Code determined without regard to subparagraph (E);
35.27 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
35.28 	of interest income as provided by section 290.0131, subdivision 2; and
35.29 	(6) the amount of addition required by section 290.0131, subdivisions 9to 11, 10, and 
35.30 	16;
35.31 	(7) the deduction allowed under section 199A of the Internal Revenue Code;
36.1 	less the sum of the amounts determined under the following:
36.2 	(i) interest income as defined in section 290.0132, subdivision 2;
36.3 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
36.4 	3, to the extent included in federal alternative minimum taxable income;
36.5 	(iii) the amount of investment interest paid or accrued within the taxable year on 
36.6 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
36.7 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
36.8 	in computing federal adjusted gross income;
36.9 	(iv) amounts subtracted from federal taxable adjusted gross income as provided by 
36.10 	section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29; and
36.11 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
36.12 	paragraph (c); and
36.13 	(vi) the amount which would have been an allowable deduction under section 165(h) of 
36.14 	the Internal Revenue Code, as amended through December 16, 2016, and which was taken 
36.15 	as a Minnesota itemized deduction under section 290.01, subdivision 29.
36.16 	In the case of an estate or trust, alternative minimum taxable income must be computed 
36.17 	as provided in section 59(c) of the Internal Revenue Code, except that alternative minimum 
36.18 	taxable income must be increased by the amount of the addition under section 290.0131, 
36.19 	subdivision 15.
36.20 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
36.21 	the Internal Revenue Code.
36.22 	(c) "Net minimum tax" means the minimum tax imposed by this section.
36.23 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
36.24 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
36.25 	under this chapter.
36.26 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
36.27 	after subtracting the exemption amount determined under subdivision 3.

36.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
36.29 	31, 2017.

37.1 	Sec. 53. Minnesota Statutes 2016, section 290.091, subdivision 3, is amended to read:
37.2 		Subd. 3.Exemption amount. (a) For purposes of computing the alternative minimum 
37.3 	tax, the exemption amount is, for taxable years beginning after December 31, 2005, $60,000
37.4 	$75,760 for married couples filing joint returns, $30,000 $37,880 for married individuals 
37.5 	filing separate returns, estates, and trusts, and $45,000 $56,820 for unmarried individuals.
37.6 	(b) The exemption amount determined under this subdivision is subject to the phase out 
37.7 	under section 55(d)(3) 55(d)(2) of the Internal Revenue Code, except that alternative 
37.8 	minimum taxable income as determined under this section must be substituted in the 
37.9 	computation of the phase out.
37.10 	(c) For taxable years beginning after December 31, 2006 2018, the exemption amount 
37.11 	under paragraph (a) must be adjusted for inflation. The commissioner shall adjust the 
37.12 	exemption amount by the percentage determined pursuant to the provisions of section 1(f) 
37.13 	of the Internal Revenue Code, except that in section 1(f)(3)(B) the word "2005" "2017"
37.14 	shall be substituted for the word "1992." For 2007, the commissioner shall then determine 
37.15 	the percent change from the 12 months ending on August 31, 2005, to the 12 months ending 
37.16 	on August 31, 2006, and in each subsequent year, from the 12 months ending on August 
37.17 	31, 2005, to the 12 months ending on August 31 of the year preceding the taxable year.
37.18 	"2016." The exemption amount as adjusted must be rounded to the nearest $10. If the amount 
37.19 	ends in $5, it must be rounded up to the nearest $10 amount. The determination of the 
37.20 	commissioner under this subdivision is not a rule under the Administrative Procedure Act.

37.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
37.22 	31, 2017.

37.23 	Sec. 54. Minnesota Statutes 2016, section 290.0922, subdivision 1, is amended to read:
37.24 		Subdivision 1.Imposition. (a) In addition to the tax imposed by this chapter without 
37.25 	regard to this section, the franchise tax imposed on a corporation required to file under 
37.26 	section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation under 
37.27 	section 290.9725 for the taxable year includes a tax equal to the following amounts:

37.28
37.29	If the sum of the corporation's Minnesota 
property, payrolls, and sales or receipts is:
		the tax equals:
	
37.3137.30
			less than
		$
	930,000
990,000
		$
	0
		
37.3337.32
		$
	930,000
990,000
	to
	$
	1,869,999
1,989,999
		$
	190
200
		
37.3537.34
		$
	1,870,000
1,990,000
	to
	$
	9,339,999
9,959,999
		$
	560
600
		
38.238.1
		$
	9,340,000
9,960,000
	to
	$
	18,679,999
19,929,999
		$
	1,870
1,990
		
38.438.3
		$
	18,680,000
19,930,000
	to
	$
	37,359,999
39,859,999
		$
	3,740
3,990
		
38.638.5
		$
	37,360,000
39,860,000
	or
	more
			$
	9,340
9,960
		
38.7 	(b) A tax is imposed for each taxable year on a corporation required to file a return under 
38.8 	section 289A.12, subdivision 3, that is treated as an "S" corporation under section 290.9725
38.9 	and on a partnership required to file a return under section 289A.12, subdivision 3, other 
38.10 	than a partnership that derives over 80 percent of its income from farming. The tax imposed 
38.11 	under this paragraph is due on or before the due date of the return for the taxpayer due under 
38.12 	section 289A.18, subdivision 1. The commissioner shall prescribe the return to be used for 
38.13 	payment of this tax. The tax under this paragraph is equal to the following amounts:

38.14
38.15
38.16
38.17	If the sum of the S corporation's 
or partnership's Minnesota 
property, payrolls, and sales or 
receipts is:
			the tax equals:
	
38.1938.18
			less than
		$
	930,000
990,000
		$
	0
		
38.2138.20
		$
	930,000
990,000
	to
	$
	1,869,999
1,989,999
		$
	190
200
		
38.2338.22
		$
	1,870,000
1,990,000
	to
	$
	9,339,999
9,959,999
		$
	560
600
		
38.2538.24
		$
	9,340,000
9,960,000
	to
	$
	18,679,999
19,929,999
		$
	1,870
1,990
		
38.2738.26
		$
	18,680,000
19,930,000
	to
	$
	37,359,999
39,859,999
		$
	3,740
3,990
		
38.2938.28
		$
	37,360,000
39,860,000
	or
	more
			$
	9,340
9,960
		
38.30 	(c) The commissioner shall adjust the dollar amounts of both the tax and the property, 
38.31 	payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage 
38.32 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except 
38.33 	that in section 1(f)(3)(B) the word "2012" "2017" must be substituted for the word "1992." 
38.34 	For 2014, the commissioner shall determine the percentage change from the 12 months 
38.35 	ending on August 31, 2012, to the 12 months ending on August 31, 2013, and in each 
38.36 	subsequent year, from the 12 months ending on August 31, 2012, to the 12 months ending 
38.37 	on August 31 of the year preceding the taxable year. "2016." The determination of the 
38.38 	commissioner pursuant to this subdivision is not a "rule" subject to the Administrative 
38.39 	Procedure Act contained in chapter 14. The tax amounts as adjusted must be rounded to the 
38.40 	nearest $10 amount and the threshold amounts must be adjusted to the nearest $10,000 
39.1 	amount. For tax amounts that end in $5, the amount is rounded up to the nearest $10 amount 
39.2 	and for the threshold amounts that end in $5,000, the amount is rounded up to the nearest 
39.3 	$10,000.

39.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
39.5 	31, 2017.

39.6 	Sec. 55. Minnesota Statutes 2016, section 290.095, subdivision 4, is amended to read:
39.7 		Subd. 4.Computation and modifications. The following modifications shall be made 
39.8 	in computing a net operating loss in any taxable year and also in computing the taxable net 
39.9 	income for any taxable year before a net operating loss deduction shall be allowed:
39.10 	(a) No deduction shall be allowed for or with respect to losses connected with income 
39.11 	producing activities if the income therefrom would not be required to be either assignable 
39.12 	to this state or included in computing the taxpayer's taxable net income.
39.13 	(b) A net operating loss deduction shall not be allowed.
39.14 	(c) The amount deductible on account of losses from sales or exchanges of capital assets 
39.15 	shall not exceed the amount includable on account of gains from sales or exchanges of 
39.16 	capital assets.
39.17 	(d) Renegotiation of profits for a prior taxable year under the renegotiation laws of the 
39.18 	United States of America, including renegotiation of the profits with a subcontractor, shall 
39.19 	not enter into the computation.
39.20 	(e) Federal income and excess profits taxes shall not be allowed as a deduction.
39.21 	(f) The 80-percent limitation under section 172(a)(2) of the Internal Revenue Code does 
39.22 	not apply to the computations for corporate taxpayers under this section.

39.23 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
39.24 	31, 2017.

39.25 	Sec. 56. Minnesota Statutes 2017 Supplement, section 290.17, subdivision 2, is amended 
39.26 	to read:
39.27 		Subd. 2.Income not derived from conduct of a trade or business. The income of a 
39.28 	taxpayer subject to the allocation rules that is not derived from the conduct of a trade or 
39.29 	business must be assigned in accordance with paragraphs (a) to (f):
39.30 	(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in section 
39.31 	3401(a) and, (f), and (i) of the Internal Revenue Code is assigned to this state if, and to the 
40.1 	extent that, the work of the employee is performed within it; all other income from such 
40.2 	sources is treated as income from sources without this state.
40.3 	Severance pay shall be considered income from labor or personal or professional services.
40.4 	(2) In the case of an individual who is a nonresident of Minnesota and who is an athlete 
40.5 	or entertainer, income from compensation for labor or personal services performed within 
40.6 	this state shall be determined in the following manner:
40.7 	(i) the amount of income to be assigned to Minnesota for an individual who is a 
40.8 	nonresident salaried athletic team employee shall be determined by using a fraction in which 
40.9 	the denominator contains the total number of days in which the individual is under a duty 
40.10 	to perform for the employer, and the numerator is the total number of those days spent in 
40.11 	Minnesota. For purposes of this paragraph, off-season training activities, unless conducted 
40.12 	at the team's facilities as part of a team imposed program, are not included in the total number 
40.13 	of duty days. Bonuses earned as a result of play during the regular season or for participation 
40.14 	in championship, play-off, or all-star games must be allocated under the formula. Signing 
40.15 	bonuses are not subject to allocation under the formula if they are not conditional on playing 
40.16 	any games for the team, are payable separately from any other compensation, and are 
40.17 	nonrefundable; and
40.18 	(ii) the amount of income to be assigned to Minnesota for an individual who is a 
40.19 	nonresident, and who is an athlete or entertainer not listed in item (i), for that person's athletic 
40.20 	or entertainment performance in Minnesota shall be determined by assigning to this state 
40.21 	all income from performances or athletic contests in this state.
40.22 	(3) For purposes of this section, amounts received by a nonresident as "retirement income" 
40.23 	as defined in section (b)(1) of the State Income Taxation of Pension Income Act, Public 
40.24 	Law 104-95, are not considered income derived from carrying on a trade or business or 
40.25 	from wages or other compensation for work an employee performed in Minnesota, and are 
40.26 	not taxable under this chapter.
40.27 	(b) Income or gains from tangible property located in this state that is not employed in 
40.28 	the business of the recipient of the income or gains must be assigned to this state.
40.29 	(c) Income or gains from intangible personal property not employed in the business of 
40.30 	the recipient of the income or gains must be assigned to this state if the recipient of the 
40.31 	income or gains is a resident of this state or is a resident trust or estate.
40.32 	Gain on the sale of a partnership interest is allocable to this state in the ratio of the 
40.33 	original cost of partnership tangible property in this state to the original cost of partnership 
41.1 	tangible property everywhere, determined at the time of the sale. If more than 50 percent 
41.2 	of the value of the partnership's assets consists of intangibles, gain or loss from the sale of 
41.3 	the partnership interest is allocated to this state in accordance with the sales factor of the 
41.4 	partnership for its first full tax period immediately preceding the tax period of the partnership 
41.5 	during which the partnership interest was sold.
41.6 	Gain on the sale of an interest in a single member limited liability company that is 
41.7 	disregarded for federal income tax purposes is allocable to this state as if the single member 
41.8 	limited liability company did not exist and the assets of the limited liability company are 
41.9 	personally owned by the sole member.
41.10 	Gain on the sale of goodwill or income from a covenant not to compete that is connected 
41.11 	with a business operating all or partially in Minnesota is allocated to this state to the extent 
41.12 	that the income from the business in the year preceding the year of sale was allocable to 
41.13 	Minnesota under subdivision 3.
41.14 	When an employer pays an employee for a covenant not to compete, the income allocated 
41.15 	to this state is in the ratio of the employee's service in Minnesota in the calendar year 
41.16 	preceding leaving the employment of the employer over the total services performed by the 
41.17 	employee for the employer in that year.
41.18 	(d) Income from winnings on a bet made by an individual while in Minnesota is assigned 
41.19 	to this state. In this paragraph, "bet" has the meaning given in section 609.75, subdivision 
41.20 	2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).
41.21 	(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the 
41.22 	taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
41.23 	(f) For the purposes of this section, working as an employee shall not be considered to 
41.24 	be conducting a trade or business.

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

41.26 	Sec. 57. Minnesota Statutes 2016, section 290.21, subdivision 4, is amended to read:
41.27 		Subd. 4.Dividends received from another corporation. (a)(1) Eighty percent of 
41.28 	dividends received by a corporation during the taxable year from another corporation, in 
41.29 	which the recipient owns 20 percent or more of the stock, by vote and value, not including 
41.30 	stock described in section 1504(a)(4) of the Internal Revenue Code when the corporate 
41.31 	stock with respect to which dividends are paid does not constitute the stock in trade of the 
41.32 	taxpayer or would not be included in the inventory of the taxpayer, or does not constitute 
41.33 	property held by the taxpayer primarily for sale to customers in the ordinary course of the 
42.1 	taxpayer's trade or business, or when the trade or business of the taxpayer does not consist 
42.2 	principally of the holding of the stocks and the collection of the income and gains therefrom; 
42.3 	and
42.4 	(2)(i) the remaining 20 percent of dividends if the dividends received are the stock in 
42.5 	an affiliated company transferred in an overall plan of reorganization and the dividend is 
42.6 	eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as amended 
42.7 	through December 31, 1989;
42.8 	(ii) the remaining 20 percent of dividends if the dividends are received from a corporation 
42.9 	which is subject to tax under section 290.36 and which is a member of an affiliated group 
42.10 	of corporations as defined by the Internal Revenue Code and the dividend is eliminated in 
42.11 	consolidation under Treasury Department Regulation 1.1502-14(a), as amended through 
42.12 	December 31, 1989, or is deducted under an election under section 243(b) of the Internal 
42.13 	Revenue Code; or
42.14 	(iii) the remaining 20 percent of the dividends if the dividends are received from a 
42.15 	property and casualty insurer as defined under section 60A.60, subdivision 8, which is a 
42.16 	member of an affiliated group of corporations as defined by the Internal Revenue Code and 
42.17 	either: (A) the dividend is eliminated in consolidation under Treasury Regulation 
42.18 	1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted 
42.19 	under an election under section 243(b) of the Internal Revenue Code.
42.20 	(b) Seventy percent of dividends received by a corporation during the taxable year from 
42.21 	another corporation in which the recipient owns less than 20 percent of the stock, by vote 
42.22 	or value, not including stock described in section 1504(a)(4) of the Internal Revenue Code 
42.23 	when the corporate stock with respect to which dividends are paid does not constitute the 
42.24 	stock in trade of the taxpayer, or does not constitute property held by the taxpayer primarily 
42.25 	for sale to customers in the ordinary course of the taxpayer's trade or business, or when the 
42.26 	trade or business of the taxpayer does not consist principally of the holding of the stocks 
42.27 	and the collection of income and gain therefrom.
42.28 	(c) The dividend deduction provided in this subdivision shall be allowed only with 
42.29 	respect to dividends that are included in a corporation's Minnesota taxable net income for 
42.30 	the taxable year.
42.31 	The dividend deduction provided in this subdivision does not apply to a dividend from 
42.32 	a corporation which, for the taxable year of the corporation in which the distribution is made 
42.33 	or for the next preceding taxable year of the corporation, is a corporation exempt from tax 
42.34 	under section 501 of the Internal Revenue Code.
43.1 	The dividend deduction provided in this subdivision does not apply to a dividend received 
43.2 	from a real estate investment trust as defined in section 856 of the Internal Revenue Code.
43.3 	The dividend deduction provided in this subdivision applies to the amount of regulated 
43.4 	investment company dividends only to the extent determined under section 854(b) of the 
43.5 	Internal Revenue Code.
43.6 	The dividend deduction provided in this subdivision shall not be allowed with respect 
43.7 	to any dividend for which a deduction is not allowed under the provisions of section 246(c)
43.8 	or 246A of the Internal Revenue Code.
43.9 	(d) If dividends received by a corporation that does not have nexus with Minnesota under 
43.10 	the provisions of Public Law 86-272 are included as income on the return of an affiliated 
43.11 	corporation permitted or required to file a combined report under section 290.17, subdivision 
43.12 	4, or 290.34, subdivision 2, then for purposes of this subdivision the determination as to 
43.13 	whether the trade or business of the corporation consists principally of the holding of stocks 
43.14 	and the collection of income and gains therefrom shall be made with reference to the trade 
43.15 	or business of the affiliated corporation having a nexus with Minnesota.
43.16 	(e) The deduction provided by this subdivision does not apply if the dividends are paid 
43.17 	by a FSC as defined in section 922 of the Internal Revenue Code.
43.18 	(f) If one or more of the members of the unitary group whose income is included on the 
43.19 	combined report received a dividend, the deduction under this subdivision for each member 
43.20 	of the unitary business required to file a return under this chapter is the product of: (1) 100 
43.21 	percent of the dividends received by members of the group; (2) the percentage allowed 
43.22 	pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business income 
43.23 	apportionable to this state for the taxable year under section 290.191 or 290.20.

43.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
43.25 	31, 2017.

43.26 	Sec. 58. Minnesota Statutes 2016, section 290.34, is amended by adding a subdivision to 
43.27 	read:
43.28 		Subd. 5.Insurance companies; interest expense limitation. To be consistent with the 
43.29 	federal treatment of the interest expense limitation under section 163(j) of the Internal 
43.30 	Revenue Code for an affiliated group that includes an insurance company taxable under 
43.31 	chapter 297I and exempt from taxation under section 290.05, subdivision 1, clause (c), the 
43.32 	rules under this subdivision apply. In that case, the interest expense limitation under section 
43.33 	163(j) must be computed for the corporation subject to tax under this chapter using the 
44.1 	adjusted taxable income of the insurance companies that are part of the affiliated group and 
44.2 	taxed under chapter 297I.

44.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
44.4 	31, 2017.

44.5 	Sec. 59. Minnesota Statutes 2016, section 290.92, subdivision 1, is amended to read:
44.6 		Subdivision 1.Definitions. (1) Wages. For purposes of this section, the term "wages" 
44.7 	means the same as that term is defined in section 3401(a) and, (f), and (i) of the Internal 
44.8 	Revenue Code.
44.9 	(2) Payroll period. For purposes of this section the term "payroll period" means a period 
44.10 	for which a payment of wages is ordinarily made to the employee by the employee's 
44.11 	employer, and the term "miscellaneous payroll period" means a payroll period other than a 
44.12 	daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual payroll 
44.13 	period.
44.14 	(3) Employee. For purposes of this section the term "employee" means any resident 
44.15 	individual performing services for an employer, either within or without, or both within and 
44.16 	without the state of Minnesota, and every nonresident individual performing services within 
44.17 	the state of Minnesota, the performance of which services constitute, establish, and determine 
44.18 	the relationship between the parties as that of employer and employee. As used in the 
44.19 	preceding sentence, the term "employee" includes an officer of a corporation, and an officer, 
44.20 	employee, or elected official of the United States, a state, or any political subdivision thereof, 
44.21 	or the District of Columbia, or any agency or instrumentality of any one or more of the 
44.22 	foregoing.
44.23 	(4) Employer. For purposes of this section the term "employer" means any person, 
44.24 	including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies, 
44.25 	and corporations transacting business in or deriving any income from sources within the 
44.26 	state of Minnesota for whom an individual performs or performed any service, of whatever 
44.27 	nature, as the employee of such person, except that if the person for whom the individual 
44.28 	performs or performed the services does not have control of the payment of the wages for 
44.29 	such services, the term "employer," except for purposes of paragraph (1), means the person 
44.30 	having control of the payment of such wages. As used in the preceding sentence, the term 
44.31 	"employer" includes any corporation, individual, estate, trust, or organization which is 
44.32 	exempt from taxation under section 290.05 and further includes, but is not limited to, officers 
44.33 	of corporations who have control, either individually or jointly with another or others, of 
44.34 	the payment of the wages.
45.1 	(5) Number of withholding exemptions claimed. For purposes of this section, the term 
45.2 	"number of withholding exemptions claimed" means the number of withholding exemptions 
45.3 	claimed in a withholding exemption certificate in effect under subdivision 5, except that if 
45.4 	no such certificate is in effect, the number of withholding exemptions claimed shall be 
45.5 	considered to be zero.

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

45.7 	Sec. 60. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 3, is amended 
45.8 	to read:
45.9 		Subd. 3.Income. (a) "Income" means the sum of the following:
45.10 	(1) federal adjusted gross income as defined in the Internal Revenue Code; and
45.11 	(2) the sum of the following amounts to the extent not included in clause (1):
45.12 	(i) all nontaxable income;
45.13 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
45.14 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
45.15 	carryover allowed under section 469(b) of the Internal Revenue Code;
45.16 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
45.17 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
45.18 	Code;
45.19 	(iv) cash public assistance and relief;
45.20 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
45.21 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
45.22 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
45.23 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
45.24 	gross income in the years when the payments were made;
45.25 	(vi) interest received from the federal or a state government or any instrumentality or 
45.26 	political subdivision thereof;
45.27 	(vii) workers' compensation;
45.28 	(viii) nontaxable strike benefits;
45.29 	(ix) the gross amounts of payments received in the nature of disability income or sick 
45.30 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
45.31 	or otherwise;
46.1 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
46.2 	1986, as amended through December 31, 1995;
46.3 	(xi) contributions made by the claimant to an individual retirement account, including 
46.4 	a qualified voluntary employee contribution; simplified employee pension plan; 
46.5 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
46.6 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
46.7 	Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for 
46.8 	the claimant and spouse;
46.9 	(xii) to the extent not included in federal adjusted gross income, distributions received 
46.10 	by the claimant or spouse from a traditional or Roth style retirement account or plan;
46.11 	(xiii) nontaxable scholarship or fellowship grants;
46.12 	(xiv) the amount of deduction allowed under section 199 of the Internal Revenue Code
46.13 	alimony received to the extent not included in the recipient's income;
46.14 	(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue 
46.15 	Code;
46.16 	(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue 
46.17 	Code; and
46.18 	(xvii) the amount deducted for certain expenses of elementary and secondary school 
46.19 	teachers under section 62(a)(2)(D) of the Internal Revenue Code;
46.20 	(xviii) the amount excluded from federal adjusted gross income for qualified moving 
46.21 	expense reimbursements under section 132(a)(6) of the Internal Revenue Code, as amended 
46.22 	through December 16, 2016; and
46.23 	(xix) the amount deducted from federal adjusted gross income for moving expenses 
46.24 	under section 217 of the Internal Revenue Code, as amended through December 16, 2016.
46.25 	In the case of an individual who files an income tax return on a fiscal year basis, the 
46.26 	term "federal adjusted gross income" shall mean federal adjusted gross income reflected in 
46.27 	the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced 
46.28 	by the amount of a net operating loss carryback or carryforward or a capital loss carryback 
46.29 	or carryforward allowed for the year.
46.30 	(b) "Income" does not include:
46.31 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
47.1 	(2) amounts of any pension or annuity which was exclusively funded by the claimant 
47.2 	or spouse and which funding payments were not excluded from federal adjusted gross 
47.3 	income in the years when the payments were made;
47.4 	(3) to the extent included in federal adjusted gross income, amounts contributed by the 
47.5 	claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed 
47.6 	the retirement base amount reduced by the amount of contributions excluded from federal 
47.7 	adjusted gross income, but not less than zero;
47.8 	(4) surplus food or other relief in kind supplied by a governmental agency;
47.9 	(5) relief granted under this chapter;
47.10 	(6) child support payments received under a temporary or final decree of dissolution or 
47.11 	legal separation; or
47.12 	(7) restitution payments received by eligible individuals and excludable interest as 
47.13 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
47.14 	Public Law 107-16.
47.15 	(c) The sum of the following amounts may be subtracted from income:
47.16 	(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
47.17 	(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
47.18 	(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
47.19 	(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
47.20 	(5) for the claimant's fifth dependent, the exemption amount; and
47.21 	(6) if the claimant or claimant's spouse was disabled or attained the age of 65 on or 
47.22 	before December 31 of the year for which the taxes were levied or rent paid, the exemption 
47.23 	amount.
47.24 	(d)(1) For purposes of this subdivision, the "exemption amount" means the exemption 
47.25 	amount under section 151(d) of the Internal Revenue Code for the taxable year for which 
47.26 	the income is reported; "retirement base amount" means the deductible amount for the 
47.27 	taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue 
47.28 	Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue 
47.29 	Code, without regard to whether the claimant or spouse claimed a deduction; and "traditional 
47.30 	or Roth style retirement account or plan" means retirement plans under sections 401, 403, 
47.31 	408, 408A, and 457 of the Internal Revenue Code.: $4,150. For taxable years beginning 
47.32 	after December 31, 2018, the commissioner shall annually adjust the $4,150 by the percentage 
48.1 	determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, as 
48.2 	amended through March 31, 2018. The exemption amount as adjusted for inflation must be 
48.3 	rounded to the nearest $50. If the amount is not a multiple of $50, the commissioner shall 
48.4 	round down to the next lowest multiple of $50. The determination of the commissioner 
48.5 	under this subdivision is not a rule under the Administrative Procedure Act, including section 
48.6 	14.386; and
48.7 	(2) "retirement base amount" means the deductible amount for the taxable year for the 
48.8 	claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for 
48.9 	inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard 
48.10 	to whether the claimant or spouse claimed a deduction, and "traditional or Roth-style 
48.11 	retirement account or plan" means retirement plans under sections 401, 403, 408, 408A, 
48.12 	and 457 of the Internal Revenue Code.

48.13 	EFFECTIVE DATE. This section is effective for property tax refunds based on property 
48.14 	taxes payable after December 31, 2018, and rent constituting property taxes payable after 
48.15 	December 31, 2017.

48.16 	Sec. 61. Minnesota Statutes 2016, section 290A.03, subdivision 12, is amended to read:
48.17 		Subd. 12.Gross rent. (a) "Gross rent" means rental paid for the right of occupancy, at 
48.18 	arm's length, of a homestead, exclusive of charges for any medical services furnished by 
48.19 	the landlord as a part of the rental agreement, whether expressly set out in the rental 
48.20 	agreement or not.
48.21 	(b) The gross rent of a resident of a nursing home or intermediate care facility is $350
48.22 	$490 per month. The gross rent of a resident of an adult foster care home is $550 $760 per 
48.23 	month. Beginning for rent paid in 2002 2019, the commissioner shall annually adjust for 
48.24 	inflation the gross rent amounts stated in this paragraph. The adjustment must be made in 
48.25 	accordance with section 1(f) of the Internal Revenue Code, except that for purposes of this 
48.26 	paragraph the percentage increase shall be determined from the year ending on June 30, 
48.27 	2001 2017, to the year ending on June 30 of the year in which the rent is paid. The 
48.28 	commissioner shall round the gross rents to the nearest $10 amount. If the amount ends in 
48.29 	$5, the commissioner shall round it up to the next $10 amount. The determination of the 
48.30 	commissioner under this paragraph is not a rule under the Administrative Procedure Act.
48.31 	(c) If the landlord and tenant have not dealt with each other at arm's length and the 
48.32 	commissioner determines that the gross rent charged was excessive, the commissioner may 
48.33 	adjust the gross rent to a reasonable amount for purposes of this chapter.
49.1 	(d) Any amount paid by a claimant residing in property assessed pursuant to section 
49.2 	273.124, subdivision 3, 4, 5, or 6 for occupancy in that property shall be excluded from 
49.3 	gross rent for purposes of this chapter. However, property taxes imputed to the homestead 
49.4 	of the claimant or the dwelling unit occupied by the claimant that qualifies for homestead 
49.5 	treatment pursuant to section 273.124, subdivision 3, 4, 5, or 6 shall be included within the 
49.6 	term "property taxes payable" as defined in subdivision 13, notwithstanding the fact that 
49.7 	ownership is not in the name of the claimant.

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

49.10 	Sec. 62. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 15, is amended 
49.11 	to read:
49.12 		Subd. 15.Internal Revenue Code.  "Internal Revenue Code" means the Internal Revenue 
49.13 	Code of 1986, as amended through December 16, 2016 March 31, 2018.

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

49.16 	Sec. 63. Minnesota Statutes 2016, section 290A.04, subdivision 2, is amended to read:
49.17 		Subd. 2.Homeowners; homestead credit refund. A claimant whose property taxes 
49.18 	payable are in excess of the percentage of the household income stated below shall pay an 
49.19 	amount equal to the percent of income shown for the appropriate household income level 
49.20 	along with the percent to be paid by the claimant of the remaining amount of property taxes 
49.21 	payable. The state refund equals the amount of property taxes payable that remain, up to 
49.22 	the state refund amount shown below.

49.2549.24
49.23
	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund
	
49.2749.26
	$0 to 1,619 1,729
	1.0 percent
	15 percent
	$
	2,580
2,760
	
49.28
49.29	1,620 1,730 to 3,229
3,449
	1.1 percent
	15 percent
	$
	2,580
2,760
	
49.30
49.31	3,230 3,450 to 4,889
5,229
	1.2 percent
	15 percent
	$
	2,580
2,760
	
49.32
49.33	4,890 5,230 to 6,519
6,969
	1.3 percent
	20 percent
	$
	2,580
2,760
	
49.34
49.35	6,520 6,970 to 8,129
8,689
	1.4 percent
	20 percent
	$
	2,580
2,760
	
50.1
50.2	8,130 8,690 to 11,389
12,169
	1.5 percent
	20 percent
	$
	2,580
2,760
	
50.3
50.4	11,390 12,170 to 13,009
13,899
	1.6 percent
	20 percent
	$
	2,580
2,760
	
50.5
50.6	13,010 13,900 to 14,649
15,659
	1.7 percent
	20 percent
	$
	2,580
2,760
	
50.7
50.8	14,650 15,660 to 16,269
17,389
	1.8 percent
	20 percent
	$
	2,580
2,760
	
50.950.10
	16,270 17,390 to 17,879
19,109
	1.9 percent
	25 percent
	$
	2,580
2,760
	
50.11
50.12	17,880 19,110 to 22,779
24,349
	2.0 percent
	25 percent
	$
	2,580
2,760
	
50.13
50.14	22,780 24,350 to 24,399
26,079
	2.0 percent
	30 percent
	$
	2,580
2,760
	
50.15
50.16	24,400 26,080 to 27,659
29,559
	2.0 percent
	30 percent
	$
	2,580
2,760
	
50.17
50.18	27,660 29,560 to 39,029
41,709
	2.0 percent
	35 percent
	$
	2,580
2,760
	
50.19
50.20	39,030 41,710 to 56,919
60,829
	2.0 percent
	35 percent
	$
	2,090
2,230
	
50.21
50.22	56,920 60,830 to 65,049
69,519
	2.0 percent
	40 percent
	$
	1,830
1,960
	
50.23
50.24	65,050 69,520 to 73,189
78,219
	2.1 percent
	40 percent
	$
	1,510
1,610
	
50.25
50.26	73,190 78,220 to 81,319
86,909
	2.2 percent
	40 percent
	$
	1,350
1,440
	
50.27
50.28	81,320 86,910 to 89,449
95,599
	2.3 percent
	40 percent
	$
	1,180
1,260
	
50.29
50.30	89,450 95,600 to 94,339
100,819
	2.4 percent
	45 percent
	$
	1,000
1,070
	
50.31
50.32	94,340 100,820 to 
97,609 104,319
	2.5 percent
	45 percent
	$
	830
890
	
50.33
50.34	97,610 104,320 to 
101,559 108,539
	2.5 percent
	50 percent
	$
	680
730
	
50.35
50.36	101,560 108,540 to 
105,499 112,749
	2.5 percent
	50 percent
	$
	500
530
	
50.37 	The payment made to a claimant shall be the amount of the state refund calculated under 
50.38 	this subdivision. No payment is allowed if the claimant's household income is $105,500
50.39 	$112,750 or more.

50.40 	Sec. 64. Minnesota Statutes 2016, section 290A.04, subdivision 2a, is amended to read:
50.41 		Subd. 2a.Renters. A claimant whose rent constituting property taxes exceeds the 
50.42 	percentage of the household income stated below must pay an amount equal to the percent 
51.1 	of income shown for the appropriate household income level along with the percent to be 
51.2 	paid by the claimant of the remaining amount of rent constituting property taxes. The state 
51.3 	refund equals the amount of rent constituting property taxes that remain, up to the maximum 
51.4 	state refund amount shown below.

51.751.6
51.5
	Household Income
	Percent of Income
	Percent Paid by
Claimant
	Maximum 
State
Refund
	
51.951.8
	$0 to 4,909 5,249
	1.0 percent
	5 percent
	$
	2,000
2,140
	
51.10
51.11	4,910 5,250 to 6,529
6,979
	1.0 percent
	10 percent
	$
	2,000
2,140
	
51.12
51.13	6,530 6,980 to 8,159
8,719
	1.1 percent
	10 percent
	$
	1,950
2,080
	
51.14
51.15	8,160 8,720 to 11,439
12,229
	1.2 percent
	10 percent
	$
	1,900
2,030
	
51.16
51.17	11,440 12,230 to 14,709
15,719
	1.3 percent
	15 percent
	$
	1,850
1,980
	
51.18
51.19	14,710 15,720 to 16,339
17,459
	1.4 percent
	15 percent
	$
	1,800
1,920
	
51.20
51.21	16,340 17,460 to 17,959
19,189
	1.4 percent
	20 percent
	$
	1,750
1,870
	
51.22
51.23	17,960 19,190 to 21,239
22,699
	1.5 percent
	20 percent
	$
	1,700
1,820
	
51.24
51.25	21,240 22,700 to 22,869
24,439
	1.6 percent
	20 percent
	$
	1,650
1,760
	
51.26
51.27	22,870 24,440 to 24,499
26,179
	1.7 percent
	25 percent
	$
	1,650
1,760
	
51.28
51.29	24,500 26,180 to 27,779
29,689
	1.8 percent
	25 percent
	$
	1,650
1,760
	
51.30
51.31	27,780 29,690 to 29,399
31,419
	1.9 percent
	30 percent
	$
	1,650
1,760
	
51.32
51.33	29,400 31,420 to 34,299
36,659
	2.0 percent
	30 percent
	$
	1,650
1,760
	
51.34
51.35	34,300 36,660 to 39,199
41,889
	2.0 percent
	35 percent
	$
	1,650
1,760
	
51.36
51.37	39,200 41,890 to 45,739
48,879
	2.0 percent
	40 percent
	$
	1,650
1,760
	
51.38
51.39	45,740 48,880 to 47,369
50,629
	2.0 percent
	45 percent
	$
	1,500
1,600
	
51.40
51.41	47,370 50,630 to 49,009
52,379
	2.0 percent
	45 percent
	$
	1,350
1,440
	
51.42
51.43	49,010 52,380 to 50,649
54,129
	2.0 percent
	45 percent
	$
	1,150
1,230
	
51.44
51.45	50,650 54,130 to 52,269
55,859
	2.0 percent
	50 percent
	$
	1,000
1,070
	
52.1
52.2	52,270 55,860 to 53,909
57,619
	2.0 percent
	50 percent
	$
	900
960
	
52.3
52.4	53,910 57,620 to 55,539
59,359
	2.0 percent
	50 percent
	$
	500
530
	
52.5
52.6	55,540 59,360 to 57,169
61,099
	2.0 percent
	50 percent
	$
	200
210
	
52.7 	The payment made to a claimant is the amount of the state refund calculated under this 
52.8 	subdivision. No payment is allowed if the claimant's household income is $57,170 $61,100
52.9 	or more.

52.10 	Sec. 65. Minnesota Statutes 2016, section 290A.04, subdivision 4, is amended to read:
52.11 		Subd. 4.Inflation adjustment. (a) Beginning for property tax refunds payable in calendar 
52.12 	year 2002, the commissioner shall annually adjust the dollar amounts of the income thresholds 
52.13 	and the maximum refunds under subdivisions 2 and 2a for inflation. The commissioner 
52.14 	shall make the inflation adjustments in accordance with section 1(f) of the Internal Revenue 
52.15 	Code, except that for purposes of this subdivision the percentage increase shall be determined 
52.16 	as provided in this 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 2018, to the year ending on June 30 of the year preceding that in 
52.20 	which 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 2018, to the year ending on June 30 of the year preceding that 
52.24 	in 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.
52.31 	(e) The commissioner shall annually announce the adjusted refund schedule at the same 
52.32 	time provided under section 290.06. The determination of the commissioner under this 
52.33 	subdivision is not a rule under the Administrative Procedure Act.

53.1 	Sec. 66. Minnesota Statutes 2017 Supplement, section 291.005, subdivision 1, is amended 
53.2 	to read:
53.3 		Subdivision 1.Scope. Unless the context otherwise clearly requires, the following terms 
53.4 	used in this chapter shall have the following meanings:
53.5 	(1) "Commissioner" means the commissioner of revenue or any person to whom the 
53.6 	commissioner has delegated functions under this chapter.
53.7 	(2) "Federal gross estate" means the gross estate of a decedent as required to be valued 
53.8 	and otherwise determined for federal estate tax purposes under the Internal Revenue Code, 
53.9 	increased by the value of any property in which the decedent had a qualifying income interest 
53.10 	for life and for which an election was made under section 291.03, subdivision 1d, for 
53.11 	Minnesota estate tax purposes, but was not made for federal estate tax purposes.
53.12 	(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, 
53.13 	as amended through December 16, 2016 March 31, 2018.
53.14 	(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) 
53.15 	excluding therefrom any property included in the estate which has its situs outside Minnesota, 
53.16 	and (b) including any property omitted from the federal gross estate which is includable in 
53.17 	the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.
53.18 	(5) "Nonresident decedent" means an individual whose domicile at the time of death 
53.19 	was not in Minnesota.
53.20 	(6) "Personal representative" means the executor, administrator or other person appointed 
53.21 	by the court to administer and dispose of the property of the decedent. If there is no executor, 
53.22 	administrator or other person appointed, qualified, and acting within this state, then any 
53.23 	person in actual or constructive possession of any property having a situs in this state which 
53.24 	is included in the federal gross estate of the decedent shall be deemed to be a personal 
53.25 	representative to the extent of the property and the Minnesota estate tax due with respect 
53.26 	to the property.
53.27 	(7) "Resident decedent" means an individual whose domicile at the time of death was 
53.28 	in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply 
53.29 	to determinations of domicile under this chapter.
53.30 	(8) "Situs of property" means, with respect to:
53.31 	(i) real property, the state or country in which it is located;
54.1 	(ii) tangible personal property, the state or country in which it was normally kept or 
54.2 	located at the time of the decedent's death or for a gift of tangible personal property within 
54.3 	three years of death, the state or country in which it was normally kept or located when the 
54.4 	gift was executed;
54.5 	(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue 
54.6 	Code, owned by a nonresident decedent and that is normally kept or located in this state 
54.7 	because it is on loan to an organization, qualifying as exempt from taxation under section 
54.8 	501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is 
54.9 	deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
54.10 	(iv) intangible personal property, the state or country in which the decedent was domiciled 
54.11 	at death or for a gift of intangible personal property within three years of death, the state or 
54.12 	country in which the decedent was domiciled when the gift was executed.
54.13 	For a nonresident decedent with an ownership interest in a pass-through entity with 
54.14 	assets that include real or tangible personal property, situs of the real or tangible personal 
54.15 	property, including qualified works of art, is determined as if the pass-through entity does 
54.16 	not exist and the real or tangible personal property is personally owned by the decedent. If 
54.17 	the pass-through entity is owned by a person or persons in addition to the decedent, ownership 
54.18 	of the property is attributed to the decedent in proportion to the decedent's capital ownership 
54.19 	share of the pass-through entity.
54.20 	(9) "Pass-through entity" includes the following:
54.21 	(i) an entity electing S corporation status under section 1362 of the Internal Revenue 
54.22 	Code;
54.23 	(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
54.24 	(iii) a single-member limited liability company or similar entity, regardless of whether 
54.25 	it is taxed as an association or is disregarded for federal income tax purposes under Code 
54.26 	of Federal Regulations, title 26, section 301.7701-3; or
54.27 	(iv) a trust to the extent the property is includible in the decedent's federal gross estate; 
54.28 	but excludes
54.29 	(v) an entity whose ownership interest securities are traded on an exchange regulated 
54.30 	by the Securities and Exchange Commission as a national securities exchange under section 
54.31 	6 of the Securities Exchange Act, United States Code, title 15, section 78f.

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

55.1 	Sec. 67. Minnesota Statutes 2016, section 297A.68, subdivision 25, is amended to read:
55.2 		Subd. 25.Sale of property used in a trade or business. (a) The sale of tangible personal 
55.3 	property primarily used in a trade or business is exempt if the sale is not made in the normal 
55.4 	course of business of selling that kind of property and if one of the following conditions is 
55.5 	satisfied:
55.6 	(1) the sale occurs in a transaction subject to or described in section 118, 331, 332, 336, 
55.7 	337, 338, 351, 355, 368, 721, 731, 1031, or 1033 of the Internal Revenue Code, as amended 
55.8 	through December 16, 2016;
55.9 	(2) the sale is between members of a controlled group as defined in section 1563(a) of 
55.10 	the Internal Revenue Code;
55.11 	(3) the sale is a sale of farm machinery;
55.12 	(4) the sale is a farm auction sale;
55.13 	(5) the sale is a sale of substantially all of the assets of a trade or business; or
55.14 	(6) the total amount of gross receipts from the sale of trade or business property made 
55.15 	during the calendar month of the sale and the preceding 11 calendar months does not exceed 
55.16 	$1,000.
55.17 	The use, storage, distribution, or consumption of tangible personal property acquired as 
55.18 	a result of a sale exempt under this subdivision is also exempt.
55.19 	(b) For purposes of this subdivision, the following terms have the meanings given.
55.20 	(1) A "farm auction" is a public auction conducted by a licensed auctioneer if substantially 
55.21 	all of the property sold consists of property used in the trade or business of farming and 
55.22 	property not used primarily in a trade or business.
55.23 	(2) "Trade or business" includes the assets of a separate division, branch, or identifiable 
55.24 	segment of a trade or business if, before the sale, the income and expenses attributable to 
55.25 	the separate division, branch, or identifiable segment could be separately ascertained from 
55.26 	the books of account or record (the lease or rental of an identifiable segment does not qualify 
55.27 	for the exemption).
55.28 	(3) A "sale of substantially all of the assets of a trade or business" must occur as a single 
55.29 	transaction or a series of related transactions within the 12-month period beginning on the 
55.30 	date of the first sale of assets intended to qualify for the exemption provided in paragraph 
55.31 	(a), clause (5).

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

56.3 	Sec. 68. Minnesota Statutes 2016, section 297B.03, is amended to read:
56.4 	297B.03 EXEMPTIONS.
56.5 	There is specifically exempted from the provisions of this chapter and from computation 
56.6 	of the amount of tax imposed by it the following:
56.7 	(1) purchase or use, including use under a lease purchase agreement or installment sales 
56.8 	contract made pursuant to section 465.71, of any motor vehicle by the United States and its 
56.9 	agencies and instrumentalities and by any person described in and subject to the conditions 
56.10 	provided in section 297A.67, subdivision 11;
56.11 	(2) purchase or use of any motor vehicle by any person who was a resident of another 
56.12 	state or country at the time of the purchase and who subsequently becomes a resident of 
56.13 	Minnesota, provided the purchase occurred more than 60 days prior to the date such person 
56.14 	began residing in the state of Minnesota and the motor vehicle was registered in the person's 
56.15 	name in the other state or country;
56.16 	(3) purchase or use of any motor vehicle by any person making a valid election to be 
56.17 	taxed under the provisions of section 297A.90;
56.18 	(4) purchase or use of any motor vehicle previously registered in the state of Minnesota 
56.19 	when such transfer constitutes a transfer within the meaning of section 118, 331, 332, 336, 
56.20 	337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal Revenue Code, 
56.21 	as amended through December 16, 2016;
56.22 	(5) purchase or use of any vehicle owned by a resident of another state and leased to a 
56.23 	Minnesota-based private or for-hire carrier for regular use in the transportation of persons 
56.24 	or property in interstate commerce provided the vehicle is titled in the state of the owner or 
56.25 	secured party, and that state does not impose a sales tax or sales tax on motor vehicles used 
56.26 	in interstate commerce;
56.27 	(6) purchase or use of a motor vehicle by a private nonprofit or public educational 
56.28 	institution for use as an instructional aid in automotive training programs operated by the 
56.29 	institution. "Automotive training programs" includes motor vehicle body and mechanical 
56.30 	repair courses but does not include driver education programs;
57.1 	(7) purchase of a motor vehicle by an ambulance service licensed under section 144E.10
57.2 	when that vehicle is equipped and specifically intended for emergency response or for 
57.3 	providing ambulance service;
57.4 	(8) purchase of a motor vehicle by or for a public library, as defined in section 134.001, 
57.5 	subdivision 2, as a bookmobile or library delivery vehicle;
57.6 	(9) purchase of a ready-mixed concrete truck;
57.7 	(10) purchase or use of a motor vehicle by a town for use exclusively for road 
57.8 	maintenance, including snowplows and dump trucks, but not including automobiles, vans, 
57.9 	or pickup trucks;
57.10 	(11) purchase or use of a motor vehicle by a corporation, society, association, foundation, 
57.11 	or institution organized and operated exclusively for charitable, religious, or educational 
57.12 	purposes, except a public school, university, or library, but only if the vehicle is:
57.13 	(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
57.14 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
57.15 	for carrying more than nine persons including the driver; and
57.16 	(ii) intended to be used primarily to transport tangible personal property or individuals, 
57.17 	other than employees, to whom the organization provides service in performing its charitable, 
57.18 	religious, or educational purpose;
57.19 	(12) purchase of a motor vehicle for use by a transit provider exclusively to provide 
57.20 	transit service is exempt if the transit provider is either (i) receiving financial assistance or 
57.21 	reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 
57.22 	473.388, or 473.405;
57.23 	(13) purchase or use of a motor vehicle by a qualified business, as defined in section 
57.24 	469.310, located in a job opportunity building zone, if the motor vehicle is principally 
57.25 	garaged in the job opportunity building zone and is primarily used as part of or in direct 
57.26 	support of the person's operations carried on in the job opportunity building zone. The 
57.27 	exemption under this clause applies to sales, if the purchase was made and delivery received 
57.28 	during the duration of the job opportunity building zone. The exemption under this clause 
57.29 	also applies to any local sales and use tax;
57.30 	(14) purchase of a leased vehicle by the lessee who was a participant in a lease-to-own 
57.31 	program from a charitable organization that is:
57.32 	(i) described in section 501(c)(3) of the Internal Revenue Code; and
58.1 	(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4; and
58.2 	(15) purchase of a motor vehicle used exclusively as a mobile medical unit for the 
58.3 	provision of medical or dental services by a federally qualified health center, as defined 
58.4 	under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget 
58.5 	Reconciliation Act of 1990.

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

58.8 	Sec. 69. Minnesota Statutes 2017 Supplement, section 462D.06, subdivision 1, is amended 
58.9 	to read:
58.10 		Subdivision 1.Subtraction. (a) As provided in section 290.0132, subdivision 25, an 
58.11 	account holder is allowed a subtraction from the federal taxable adjusted gross income equal 
58.12 	to interest or dividends earned on the first-time home buyer savings account during the 
58.13 	taxable year.
58.14 	(b) The subtraction under paragraph (a) is allowed each year for the taxable years 
58.15 	including and following the taxable year in which the account was established. No person 
58.16 	other than the account holder is allowed a subtraction under this section.

58.17 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
58.18 	31, 2017.

58.19 	Sec. 70. Minnesota Statutes 2017 Supplement, section 462D.06, subdivision 2, is amended 
58.20 	to read:
58.21 		Subd. 2.Addition. (a) As provided in section 290.0131, subdivision 14, an account 
58.22 	holder must add to federal taxable adjusted gross income the following amounts:
58.23 	(1) the amount in excess of the total contributions for all taxable years that is withdrawn 
58.24 	and used for other than eligible costs, or for a transfer permitted under section 462D.04, 
58.25 	subdivision 2; and
58.26 	(2) the amount remaining in the first-time home buyer savings account at the close of 
58.27 	the tenth taxable year that exceeds the total contributions to the account for all taxable years.
58.28 	(b) For an account that received a transfer under section 462D.04, subdivision 2, the 
58.29 	ten-year period under paragraph (a), clause (2), ends at the close of the earliest taxable year 
58.30 	that applies to either account under that clause.

59.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
59.2 	31, 2017.

59.3 	Sec. 71. Minnesota Statutes 2016, section 469.316, subdivision 1, is amended to read:
59.4 		Subdivision 1.Application. An individual, estate, or trust operating a trade or business 
59.5 	in a job opportunity building zone, and an individual, estate, or trust making a qualifying 
59.6 	investment in a qualified business operating in a job opportunity building zone qualifies for 
59.7 	the exemptions from taxes imposed under chapter 290, as provided in this section. The 
59.8 	exemptions provided under this section apply only to the extent that the income otherwise 
59.9 	would be taxable under chapter 290. Subtractions under this section from federal adjusted 
59.10 	gross income, federal taxable income, alternative minimum taxable income, or any other 
59.11 	base subject to tax are limited to the amount that otherwise would be included in the tax 
59.12 	base absent the exemption under this section. This section applies only to taxable years 
59.13 	beginning during the duration of the job opportunity building zone.

59.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
59.15 	31, 2017.

59.16 	Sec. 72.  REPEALER.
 59.17 	Minnesota Statutes 2016, sections 290.0131, subdivisions 7 and 11; 290.0133, 
59.18 	subdivisions 13 and 14; and 290.10, subdivision 2, are repealed.

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

59.21 	ARTICLE 2
59.22 	INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

59.23 	Section 1. Minnesota Statutes 2016, section 16A.152, is amended by adding a subdivision 
59.24 	to read:
59.25 		Subd. 2a.Tax rates adjustment. (a) The commissioner of revenue must make reductions 
59.26 	to the individual income tax rates and the corporate franchise tax rate in section 290.06, 
59.27 	subdivisions 1 and 2c, and the alternative minimum tax rates in sections 290.091 and 
59.28 	290.0921, by one-tenth of one percentage point if, on the basis of a November forecast of 
59.29 	general fund revenues and expenditures, the commissioner of management and budget 
59.30 	determines that the following conditions have been met:
59.31 	(1) the provisions of subdivision 2, paragraph (a), clauses (1) to (4), are satisfied; and
60.1 	(2) for a forecast occurring in an even-numbered year, revenues exceed expenditures, 
60.2 	excluding any carryforward amounts, at the close of the next biennium and the subsequent 
60.3 	biennium by an amount greater than the revenue reduction resulting from the corresponding 
60.4 	rate cuts defined in this paragraph, as estimated by the commissioner of revenue; or
60.5 	(3) for a forecast occurring in an odd-numbered year, revenues exceed expenditures, 
60.6 	excluding any carryforward amounts, at the close of the current biennium and the subsequent 
60.7 	biennium by an amount greater than the revenue reduction resulting from the corresponding 
60.8 	rate cuts defined in this paragraph, as estimated by the commissioner of revenue.
60.9 	(b) Rate reductions under this subdivision resulting from a November forecast in an 
60.10 	even-numbered year are effective for all taxable years beginning with the taxable year that 
60.11 	begins one year after January 1 of the year immediately following the forecast year.
60.12 	(c) Rate reductions under this subdivision resulting from a November forecast in an 
60.13 	odd-numbered year are effective for all taxable years beginning with the taxable year that 
60.14 	begins on January 1 of the year immediately following the forecast year.
60.15 	(d) Reductions enacted under this subdivision shall not exceed one percentage point for 
60.16 	each rate.
60.17 	(e) Rate reductions under this subdivision shall occur before calculating any transfers 
60.18 	to the budget reserve account under subdivision 1b, paragraph (b).
60.19 	(f) The commissioner of revenue shall publish the new tax rates in the State Register as 
60.20 	soon as is practicable. After the commissioner of revenue publishes the new tax rates in the 
60.21 	State Register, the revisor of statutes must update the tax rates in sections 290.06, 
60.22 	subdivisions 1 and 2c, 290.091, and 290.0921, in the next edition of Minnesota Statutes.

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

60.24 	Sec. 2. Minnesota Statutes 2016, section 116J.8737, subdivision 5, is amended to read:
60.25 		Subd. 5.Credit allowed. (a)(1) A qualified investor or qualified fund is eligible for a 
60.26 	credit equal to 25 percent of the qualified investment in a qualified small business. 
60.27 	Investments made by a pass-through entity qualify for a credit only if the entity is a qualified 
60.28 	fund. The commissioner must not allocate more than $15,000,000 $5,000,000 in credits to 
60.29 	qualified investors or qualified funds for taxable years beginning after December 31, 2013
60.30 	2017, and before January 1, 2017, and must not allocate more than $10,000,000 in credits 
60.31 	to qualified investors or qualified funds for taxable years beginning after December 31, 
60.32 	2016, and before January 1, 2018 2019; and
61.1 	(2) for taxable years beginning after December 31, 2014, and before January 1, 2018, 
61.2 	50 percent must be allocated to credits for qualifying investments in qualified greater 
61.3 	Minnesota businesses and minority- or women-owned qualified small businesses in 
61.4 	Minnesota. Any portion of a taxable year's credits that is reserved for qualifying investments 
61.5 	in greater Minnesota businesses and minority- or women-owned qualified small businesses 
61.6 	in Minnesota that is not allocated by September 30 of the taxable year is available for 
61.7 	allocation to other credit applications beginning on October 1. Any portion of a taxable 
61.8 	year's credits that is not allocated by the commissioner does not cancel and may be carried 
61.9 	forward to subsequent taxable years until all credits have been allocated.
61.10 	(b) The commissioner may not allocate more than a total maximum amount in credits 
61.11 	for a taxable year to a qualified investor for the investor's cumulative qualified investments 
61.12 	as an individual qualified investor and as an investor in a qualified fund; for married couples 
61.13 	filing joint returns the maximum is $250,000, and for all other filers the maximum is 
61.14 	$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits 
61.15 	over all taxable years for qualified investments in any one qualified small business.
61.16 	(c) The commissioner may not allocate a credit to a qualified investor either as an 
61.17 	individual qualified investor or as an investor in a qualified fund if, at the time the investment 
61.18 	is proposed:
61.19 	(1) the investor is an officer or principal of the qualified small business; or
61.20 	(2) the investor, either individually or in combination with one or more members of the 
61.21 	investor's family, owns, controls, or holds the power to vote 20 percent or more of the 
61.22 	outstanding securities of the qualified small business.
61.23 	A member of the family of an individual disqualified by this paragraph is not eligible for a 
61.24 	credit under this section. For a married couple filing a joint return, the limitations in this 
61.25 	paragraph apply collectively to the investor and spouse. For purposes of determining the 
61.26 	ownership interest of an investor under this paragraph, the rules under section 267(c) and 
61.27 	267(e) of the Internal Revenue Code apply.
61.28 	(d) Applications for tax credits for 2010 must be made available on the department's 
61.29 	Web site by September 1, 2010, and the department must begin accepting applications by 
61.30 	September 1, 2010. Applications for subsequent years must be made available by November 
61.31 	1 of the preceding year.
61.32 	(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. 
61.33 	Tax credits must be allocated to qualified investors or qualified funds in the order that the 
61.34 	tax credit request applications are filed with the department. The commissioner must approve 
62.1 	or reject tax credit request applications within 15 days of receiving the application. The 
62.2 	investment specified in the application must be made within 60 days of the allocation of 
62.3 	the credits. If the investment is not made within 60 days, the credit allocation is canceled 
62.4 	and available for reallocation. A qualified investor or qualified fund that fails to invest as 
62.5 	specified in the application, within 60 days of allocation of the credits, must notify the 
62.6 	commissioner of the failure to invest within five business days of the expiration of the 
62.7 	60-day investment period.
62.8 	(f) All tax credit request applications filed with the department on the same day must 
62.9 	be treated as having been filed contemporaneously. If two or more qualified investors or 
62.10 	qualified funds file tax credit request applications on the same day, and the aggregate amount 
62.11 	of credit allocation claims exceeds the aggregate limit of credits under this section or the 
62.12 	lesser amount of credits that remain unallocated on that day, then the credits must be allocated 
62.13 	among the qualified investors or qualified funds who filed on that day on a pro rata basis 
62.14 	with respect to the amounts claimed. The pro rata allocation for any one qualified investor 
62.15 	or qualified fund is the product obtained by multiplying a fraction, the numerator of which 
62.16 	is the amount of the credit allocation claim filed on behalf of a qualified investor and the 
62.17 	denominator of which is the total of all credit allocation claims filed on behalf of all 
62.18 	applicants on that day, by the amount of credits that remain unallocated on that day for the 
62.19 	taxable year.
62.20 	(g) A qualified investor or qualified fund, or a qualified small business acting on their 
62.21 	behalf, must notify the commissioner when an investment for which credits were allocated 
62.22 	has been made, and the taxable year in which the investment was made. A qualified fund 
62.23 	must also provide the commissioner with a statement indicating the amount invested by 
62.24 	each investor in the qualified fund based on each investor's share of the assets of the qualified 
62.25 	fund at the time of the qualified investment. After receiving notification that the investment 
62.26 	was made, the commissioner must issue credit certificates for the taxable year in which the 
62.27 	investment was made to the qualified investor or, for an investment made by a qualified 
62.28 	fund, to each qualified investor who is an investor in the fund. The certificate must state 
62.29 	that the credit is subject to revocation if the qualified investor or qualified fund does not 
62.30 	hold the investment in the qualified small business for at least three years, consisting of the 
62.31 	calendar year in which the investment was made and the two following years. The three-year 
62.32 	holding period does not apply if:
62.33 	(1) the investment by the qualified investor or qualified fund becomes worthless before 
62.34 	the end of the three-year period;
63.1 	(2) 80 percent or more of the assets of the qualified small business is sold before the end 
63.2 	of the three-year period;
63.3 	(3) the qualified small business is sold before the end of the three-year period;
63.4 	(4) the qualified small business's common stock begins trading on a public exchange 
63.5 	before the end of the three-year period; or
63.6 	(5) the qualified investor dies before the end of the three-year period.
63.7 	(h) The commissioner must notify the commissioner of revenue of credit certificates 
63.8 	issued under this section.

63.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
63.10 	31, 2017.

63.11 	Sec. 3. Minnesota Statutes 2016, section 116J.8737, subdivision 12, is amended to read:
63.12 		Subd. 12.Sunset. This section expires for taxable years beginning after December 31, 
63.13 	2017 2018, except that reporting requirements under subdivision 6 and revocation of credits 
63.14 	under subdivision 7 remain in effect through 2019 2020 for qualified investors and qualified 
63.15 	funds, and through 2021 2022 for qualified small businesses, reporting requirements under 
63.16 	subdivision 9 remain in effect through 2022 2023, and the appropriation in subdivision 11 
63.17 	remains in effect through 2021 2022.

63.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
63.19 	31, 2017.

63.20 	Sec. 4. [216C.418] COMBINED HEAT AND POWER AND EXPANDER 
63.21 	GENERATOR DEVELOPMENT PLAN.
63.22 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
63.23 	the meanings given them, unless the context clearly indicates otherwise.
63.24 	(b) "Eligible combined heat and power system" means a system that:
63.25 	(1) uses the same energy source for the simultaneous or sequential generation of electrical 
63.26 	power, mechanical shaft power, or both, in combination with the generation of steam or 
63.27 	other forms of useful thermal energy, including for industrial process applications, which 
63.28 	produces at least 20 percent of its total useful energy in the form of thermal energy which 
63.29 	is not used to produce electrical or mechanical power, or combination thereof, and at least 
63.30 	20 percent of its total useful energy in the form of electrical or mechanical power, or 
63.31 	combination thereof, with a system energy efficiency percentage of at least 60 percent;
64.1 	(2) has a nameplate output of no less than one megawatt and no more than 15 megawatts;
64.2 	(3) is located in Minnesota; and
64.3 	(4) is placed in service after January 1, 2019, and before January 1, 2026.
64.4 	(c) "Eligible expander generator system" means a system that:
64.5 	(1) uses a gaseous flow, pressure drop, or both, for generation of electrical power, 
64.6 	mechanical shaft power, or both, or other forms of useful thermal energy, including for 
64.7 	industrial process applications, with a system efficiency of at least 60 percent;
64.8 	(2) has a nameplate output of no less than 250 kilowatts and no more than 15 megawatts;
64.9 	(3) is located in Minnesota; and
64.10 	(4) is placed in service after January 1, 2019, and before January 1, 2026.
64.11 		Subd. 2.Application for and issuance of certifications. (a) The commissioner shall 
64.12 	develop an application form and process for certifying eligible combined heat and power 
64.13 	systems and eligible expander generator systems projects that qualify for a credit against 
64.14 	individual income and corporate franchise tax under chapter 290. The commissioner shall 
64.15 	make the forms available no later than October 1, 2019. The commissioner may require that 
64.16 	applicants provide any information that the commissioner deems appropriate or useful in 
64.17 	certifying credits under this section. The application must specify the taxable year in which 
64.18 	the taxpayer expects to place the system in service. At a minimum, the application must 
64.19 	also require applicants to provide sufficient information for the commissioner to verify that:
64.20 	(1) the proposed systems meet the requirements of this section;
64.21 	(2) the amount of the credit that the project is expected to qualify for based on the 
64.22 	projected cost of the proposed systems;
64.23 	(3) construction of the systems is expected to begin no later than one year after the 
64.24 	commissioner issues a certification, including a commitment by the applicant to do so if 
64.25 	the commissioner issues a certification and documentation attesting to the feasibility of the 
64.26 	applicant satisfying that commitment; and
64.27 	(4) the systems are expected to be placed in service by the taxable year specified in the 
64.28 	application.
64.29 	(b) Taxpayers seeking to qualify for a credit must apply to the commissioner for 
64.30 	certification of the proposed system and must obtain the certification before beginning 
64.31 	construction.
65.1 		Subd. 3.Certification. A taxpayer with a qualifying project proposal under this section 
65.2 	must certify to the commissioner the placed-in-service date, total installed cost, and nameplate 
65.3 	output of the eligible combined heat and power system or eligible expander generator system. 
65.4 	In addition, a copy of the certification must be provided to the commissioner of commerce.
65.5 		Subd. 4.Report to the legislature. The Department of Commerce shall report to the 
65.6 	chairs and ranking minority members of the senate and house of representatives committees 
65.7 	having jurisdiction over taxes by January 15, 2019, on the efficiency of combined heat and 
65.8 	power and expander generator processing plants including how a tax credit would benefit 
65.9 	the development of lower-cost and small-carbon-footprint energy in the state of Minnesota.

65.10 	Sec. 5. Minnesota Statutes 2017 Supplement, section 289A.10, subdivision 1, is amended 
65.11 	to read:
65.12 		Subdivision 1.Return required. In the case of a decedent who has an interest in property 
65.13 	with a situs in Minnesota, the personal representative must submit a Minnesota estate tax 
65.14 	return to the commissioner, on a form prescribed by the commissioner, if:
65.15 	(1) a federal estate tax return is required to be filed; or
65.16 	(2) the sum of the federal gross estate and federal adjusted taxable gifts, as defined in 
65.17 	section 2001(b) of the Internal Revenue Code, made within three years of the date of the 
65.18 	decedent's death exceeds $1,200,000 for estates of decedents dying in 2014; $1,400,000 for 
65.19 	estates of decedents dying in 2015; $1,600,000 for estates of decedents dying in 2016; 
65.20 	$2,100,000 for estates of decedents dying in 2017; $2,400,000 for estates of decedents dying 
65.21 	in 2018; $2,700,000and $5,000,000 for estates of decedents dying in 2019; and $3,000,000 
65.22 	for estates of decedents dying in 2020 and thereafter.
65.23 	The return must contain a computation of the Minnesota estate tax due. The return must 
65.24 	be signed by the personal representative.

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

65.27 	Sec. 6. Minnesota Statutes 2017 Supplement, section 290.01, subdivision 4a, is amended 
65.28 	to read:
65.29 		Subd. 4a.Financial institution. (a) "Financial institution" means:
65.30 	(1) any corporation or other business entity registered (i) under state law as a bank 
65.31 	holding company; (ii) under the federal Bank Holding Company Act of 1956, as amended; 
66.1 	or (iii) as a savings and loan holding company under the federal National Housing Act, as 
66.2 	amended;
66.3 	(2) a national bank organized and existing as a national bank association pursuant to the 
66.4 	provisions of United States Code, title 12, chapter 2;
66.5 	(3) a savings association or federal savings bank as defined in United States Code, title 
66.6 	12, section 1813(b)(1);
66.7 	(4) any bank or thrift institution incorporated or organized under the laws of any state;
66.8 	(5) any corporation organized under United States Code, title 12, sections 611 to 631;
66.9 	(6) any agency or branch of a foreign depository as defined under United States Code, 
66.10 	title 12, section 3101;
66.11 	(7) any corporation or other business entity that is more than 50 percent owned, directly 
66.12 	or indirectly, by any person or business entity described in clauses (1) to (6), other than an 
66.13 	insurance company taxable under chapter 297I;
66.14 	(8) a corporation or other business entity that derives more than 50 percent of its total 
66.15 	gross income for financial accounting purposes from finance leases. For the purposes of 
66.16 	this clause, "gross income" means the average from the current tax year and immediately 
66.17 	preceding two years and excludes gross income from incidental or occasional transactions. 
66.18 	For purposes of this clause, "finance lease" means any lease transaction that is the functional 
66.19 	equivalent of an extension of credit and that transfers substantially all the benefits and risks 
66.20 	incident to the ownership of property, including any direct financing lease or leverage lease 
66.21 	that meets the criteria of Financial Accounting Standards Board Statement No. 13, accounting 
66.22 	for leases, or any other lease that is accounted for as financing by a lessor under generally 
66.23 	accepted accounting principles; or
66.24 	(9) any other person or business entity, other than an insurance company taxable under 
66.25 	chapter 297I, that derives more than 50 percent of its gross income from activities that an 
66.26 	entity described in clauses (2) to (6) or (8) is authorized to transact. For the purposes of this 
66.27 	clause, gross income does not include income from nonrecurring, extraordinary items.
66.28 	(b) The commissioner is authorized to exclude any person from the application of 
66.29 	paragraph (a), clause (9), if the person proves by clear and convincing evidence that the 
66.30 	person's income-producing activity is not in substantial competition with any person described 
66.31 	in paragraph (a), clauses (2) to (6) or (8).

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

67.1 	Sec. 7. Minnesota Statutes 2016, section 290.01, is amended by adding a subdivision to 
67.2 	read:
67.3 		Subd. 5c.Disqualified captive insurance company. (a) "Disqualified captive insurance 
67.4 	company" means an insurance company that:
67.5 	(1)(i) is licensed as a captive insurance company under the laws of any state or foreign 
67.6 	country; or
67.7 	(ii) derives 80 percent or more of its total premiums for the taxable year from entities 
67.8 	that are members of the unitary business, as that term is used in section 290.17; and
67.9 	(2)(i) receives less than 50 percent of its gross receipts for the taxable year from 
67.10 	premiums; or
67.11 	(ii) pays less than 0.25 percent of its total premiums for the taxable year in tax under 
67.12 	chapter 297I or a comparable tax of another state or country.
67.13 	(b) For purposes of this subdivision, "premiums" means amounts paid for arrangements 
67.14 	that constitute insurance for federal income tax purposes, but excludes return premiums, 
67.15 	premiums for reinsurance assumed from other insurance companies, and any other premiums 
67.16 	that are or would be exempt from taxation under section 297I.05 as a result of their type or 
67.17 	character, if the insurance was for business in Minnesota.

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

67.20 	Sec. 8. Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision 
67.21 	to read:
67.22 		Subd. 32.Disallowed section 280E expenses; medical cannabis manufacturers. The 
67.23 	amount of expenses of a medical cannabis manufacturer, as defined under section 152.22, 
67.24 	subdivision 7, related to the business of medical cannabis under sections 152.21 to 152.37, 
67.25 	and not allowed for federal income tax purposes under section 280E of the Internal Revenue 
67.26 	Code is a subtraction.

67.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
67.28 	31, 2017.

68.1 	Sec. 9. Minnesota Statutes 2016, section 290.0134, is amended by adding a subdivision 
68.2 	to read:
68.3 		Subd. 19.Disallowed section 280E expenses; medical cannabis manufacturers. The 
68.4 	amount of expenses of a medical cannabis manufacturer, as defined under section 152.22, 
68.5 	subdivision 7, related to the business of medical cannabis under sections 152.21 to 152.37, 
68.6 	and not allowed for federal income tax purposes under section 280E of the Internal Revenue 
68.7 	Code is a subtraction.

68.8 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
68.9 	31, 2017.

68.10 	Sec. 10. Minnesota Statutes 2017 Supplement, section 290.05, subdivision 1, is amended 
68.11 	to read:
68.12 		Subdivision 1.Exempt entities. The following corporations, individuals, estates, trusts, 
68.13 	and organizations shall be exempted from taxation under this chapter, provided that every 
68.14 	such person or corporation claiming exemption under this chapter, in whole or in part, must 
68.15 	establish to the satisfaction of the commissioner the taxable status of any income or activity:
68.16 	(a) corporations, individuals, estates, and trusts engaged in the business of mining or 
68.17 	producing iron ore and mining, producing, or refining other ores, metals, and minerals, the 
68.18 	mining, production, or refining of which is subject to the occupation tax imposed by section 
68.19 	298.01; but if any such corporation, individual, estate, or trust engages in any other business 
68.20 	or activity or has income from any property not used in such business it shall be subject to 
68.21 	this tax computed on the net income from such property or such other business or activity. 
68.22 	Royalty shall not be considered as income from the business of mining or producing iron 
68.23 	ore within the meaning of this section;
68.24 	(b) the United States of America, the state of Minnesota or any political subdivision of 
68.25 	either agencies or instrumentalities, whether engaged in the discharge of governmental or 
68.26 	proprietary functions; and
68.27 	(c) any insurance company, as defined in section 290.17, subdivision 4, paragraph (j), 
68.28 	but including any insurance company licensed and domiciled in another state that grants, 
68.29 	on a reciprocal basis, exemption from retaliatory taxes other than a disqualified captive 
68.30 	insurance company.

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

69.1 	Sec. 11. [290.0683] MINNESOTA HOUSING TAX CREDIT PROGRAM; 
69.2 	DEFINITIONS.
69.3 	(a) For purposes of this section, the following terms have the meanings given.
69.4 	(b) "Agency" means the Minnesota Housing Finance Agency.
69.5 	(c) "Minnesota housing tax credit contribution fund" means the fund established in 
69.6 	section 462A.40.
69.7 	(d) "Qualified project" means a project that qualifies for a grant or loan under section 
69.8 	462A.40, subdivision 2.
69.9 	(e) "Taxpayer" means a taxpayer as defined in section 290.01, subdivision 6, or a taxpayer 
69.10 	as defined in section 297I.01, subdivision 16.

69.11 	Sec. 12. Minnesota Statutes 2016, section 290.0685, subdivision 1, is amended to read:
69.12 		Subdivision 1.Credit allowed. (a) An eligible individual is allowed a credit against the 
69.13 	tax imposed by this chapter equal to $2,000 for each birth for which a certificate of birth 
69.14 	resulting in stillbirth has been issued under section 144.2151 or in the case of a resident 
69.15 	described in paragraph (c), clauses (2) and (3), that was in another state when a birth resulting 
69.16 	in stillbirth occurred, if a certificate would have been issued under section 144.2151. The 
69.17 	credit under this section is allowed only in the taxable year in which the stillbirth occurred 
69.18 	and if the child would have been a dependent of the taxpayer as defined in section 152 of 
69.19 	the Internal Revenue Code.
69.20 	(b) For a nonresident or part-year resident, the credit must be allocated based on the 
69.21 	percentage calculated under section 290.06, subdivision 2c, paragraph (e).
69.22 	(c) For purposes of this section, "eligible individual" means:
69.23 	(1) the individual who gave birth resulting in stillbirth and who is also listed as a parent 
69.24 	on the certificate of birth resulting in stillbirth;
69.25 	(2) in the case of a resident that was transported to another state for medical care that 
69.26 	resulted in a birth resulting in stillbirth, the individual who gave birth to the child; or
69.27 	(3) in the case of a resident of Minnesota who is a member of the armed forces of the 
69.28 	United States or United Nations, stationed outside the state in compliance with military 
69.29 	orders, the individual who gave birth resulting in stillbirth, or if that individual is a 
69.30 	nonresident of Minnesota, the spouse.

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

70.3 	Sec. 13. Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended 
70.4 	to read:
70.5 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
70.6 	terms have the meanings given.
70.7 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
70.8 	year:
70.9 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
70.10 	55(b)(2) of the Internal Revenue Code;
70.11 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
70.12 	taxable income, but excluding:
70.13 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
70.14 	(ii) the medical expense deduction;
70.15 	(iii) the casualty, theft, and disaster loss deduction; and
70.16 	(iv) the impairment-related work expenses of a disabled person;
70.17 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
70.18 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
70.19 	to the extent not included in federal alternative minimum taxable income, the excess of the 
70.20 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
70.21 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
70.22 	without regard to the depletion deduction for the taxable year);
70.23 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
70.24 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
70.25 	Code determined without regard to subparagraph (E);
70.26 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
70.27 	of interest income as provided by section 290.0131, subdivision 2; and
70.28 	(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;
70.29 	less the sum of the amounts determined under the following:
70.30 	(i) interest income as defined in section 290.0132, subdivision 2;
71.1 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
71.2 	3, to the extent included in federal alternative minimum taxable income;
71.3 	(iii) the amount of investment interest paid or accrued within the taxable year on 
71.4 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
71.5 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
71.6 	in computing federal adjusted gross income;
71.7 	(iv) amounts subtracted from federal taxable income as provided by section 290.0132, 
71.8 	subdivisions 7, 9 to 15, 17, 21, 24, and 26, and 27; and
71.9 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
71.10 	paragraph (c).
71.11 	In the case of an estate or trust, alternative minimum taxable income must be computed 
71.12 	as provided in section 59(c) of the Internal Revenue Code.
71.13 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
71.14 	the Internal Revenue Code.
71.15 	(c) "Net minimum tax" means the minimum tax imposed by this section.
71.16 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
71.17 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
71.18 	under this chapter.
71.19 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
71.20 	after subtracting the exemption amount determined under subdivision 3.

71.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
71.22 	31, 2017.

71.23 	Sec. 14. Minnesota Statutes 2016, section 290.0921, subdivision 3, is amended to read:
71.24 		Subd. 3.Alternative minimum taxable income. "Alternative minimum taxable income" 
71.25 	is Minnesota net income as defined in section 290.01, subdivision 19, and includes the 
71.26 	adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), (f), and (h) of 
71.27 	the Internal Revenue Code. If a corporation files a separate company Minnesota tax return, 
71.28 	the minimum tax must be computed on a separate company basis. If a corporation is part 
71.29 	of a tax group filing a unitary return, the minimum tax must be computed on a unitary basis. 
71.30 	The following adjustments must be made.
71.31 	(1) The portion of the depreciation deduction allowed for federal income tax purposes 
71.32 	under section 168(k) of the Internal Revenue Code that is required as an addition under 
72.1 	section 290.0133, subdivision 11, is disallowed in determining alternative minimum taxable 
72.2 	income.
72.3 	(2) The subtraction for depreciation allowed under section 290.0134, subdivision 13, is 
72.4 	allowed as a depreciation deduction in determining alternative minimum taxable income.
72.5 	(3) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) 
72.6 	of the Internal Revenue Code does not apply.
72.7 	(4) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal 
72.8 	Revenue Code does not apply.
72.9 	(5) The tax preference for depletion under section 57(a)(1) of the Internal Revenue Code 
72.10 	does not apply.
72.11 	(6) The tax preference for tax exempt interest under section 57(a)(5) of the Internal 
72.12 	Revenue Code does not apply.
72.13 	(7) The tax preference for charitable contributions of appreciated property under section 
72.14 	57(a)(6) of the Internal Revenue Code does not apply.
72.15 	(8) For purposes of calculating the adjustment for adjusted current earnings in section 
72.16 	56(g) of the Internal Revenue Code, the term "alternative minimum taxable income" as it 
72.17 	is used in section 56(g) of the Internal Revenue Code, means alternative minimum taxable 
72.18 	income as defined in this subdivision, determined without regard to the adjustment for 
72.19 	adjusted current earnings in section 56(g) of the Internal Revenue Code.
72.20 	(9) For purposes of determining the amount of adjusted current earnings under section 
72.21 	56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 56(g)(4) 
72.22 	of the Internal Revenue Code with respect to (i) the amount of foreign dividend gross-up 
72.23 	subtracted as provided in section 290.0134, subdivision 2, or (ii) the amount of refunds of 
72.24 	income, excise, or franchise taxes subtracted as provided in section 290.0134, subdivision 
72.25 	8.
72.26 	(10) Alternative minimum taxable income excludes the income from operating in a job 
72.27 	opportunity building zone as provided under section 469.317.
72.28 	(11) The subtraction for disallowed section 280E expenses of medical cannabis 
72.29 	manufacturers allowed under section 290.0134, subdivision 17, is allowed as a deduction 
72.30 	in determining alternative minimum taxable income.
72.31 	Items of tax preference must not be reduced below zero as a result of the modifications 
72.32 	in this subdivision.

73.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
73.2 	31, 2017.

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

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

75.27 	Sec. 16. Minnesota Statutes 2017 Supplement, section 291.016, subdivision 3, is amended 
75.28 	to read:
75.29 		Subd. 3.Subtraction. (a) For estates of decedents dying after December 31, 2016 2017, 
75.30 	a subtraction is allowed in computing the Minnesota taxable estate, equal to the sum of:
75.31 	(1) the exclusion amount for the year of death under paragraph (b); and
75.32 	(2) the lesser of:
76.1 	(i) the value of qualified small business property under section 291.03, subdivision 9, 
76.2 	and the value of qualified farm property under section 291.03, subdivision 10; or
76.3 	(ii) $5,000,000 minus the exclusion amount for the year of death under paragraph (b).
76.4 	(b) The following exclusion amounts apply for the year of death:
76.5 	(1) $2,100,000 for decedents dying in 2017;
76.6 	(2) $2,400,000 for decedents dying in 2018; and
76.7 	(3) $2,700,000 (2) $5,000,000 for decedents dying in 2019; and
76.8 	(4) $3,000,000 for decedents dying in 2020 and thereafter.
76.9 	(c) The subtraction under this subdivision must not reduce the Minnesota taxable estate 
76.10 	to less than zero.

76.11 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
76.12 	December 31, 2018.

76.13 	Sec. 17. Minnesota Statutes 2017 Supplement, section 291.03, subdivision 1, is amended 
76.14 	to read:
76.15 		Subdivision 1.Tax amount. The tax imposed must be computed by applying to the 
76.16 	Minnesota taxable estate the following schedule of rates and then the resulting amount 
76.17 	multiplied by a fraction, not greater than one, the numerator of which is the value of the 
76.18 	Minnesota gross estate plus the value of gifts under section 291.016, subdivision 2, clause 
76.19 	(3), with a Minnesota situs, and the denominator of which is the federal gross estate plus 
76.20 	the value of gifts under section 291.016, subdivision 2, clause (3):
76.21 	(a) For estates of decedents dying in 2017:

76.22	Amount of Minnesota Taxable Estate
	Rate of Tax
	
76.23	Not over $5,100,000
	12 percent
	
76.2476.25	Over $5,100,000 but not over $7,100,000
	$612,000 plus 12.8 percent of the excess over 
$5,100,000
	
76.2676.27	Over $7,100,000 but not over $8,100,000
	$868,000 plus 13.6 percent of the excess over 
$7,100,000
	
76.2876.29	Over $8,100,000 but not over $9,100,000
	$1,004,000 plus 14.4 percent of the excess 
over $8,100,000
	
76.3076.31	Over $9,100,000 but not over $10,100,000
	$1,148,000 plus 15.2 percent of the excess 
over $9,100,000
	
76.3276.33	Over $10,100,000
	$1,300,000 plus 16 percent of the excess over 
$10,100,000
	
76.34 	(b) For estates of decedents dying in 2018 and thereafter:

76.35	Amount of Minnesota Taxable Estate
	Rate of Tax
	
77.1	Not over $7,100,000
	13 percent
	
77.277.3	Over $7,100,000 but not over $8,100,000
	$923,000 plus 13.6 percent of the excess over 
$7,100,000
	
77.477.5	Over $8,100,000 but not over $9,100,000
	$1,059,000 plus 14.4 percent of the excess 
over $8,100,000
	
77.677.7	Over $9,100,000 but not over $10,100,000
	$1,203,000 plus 15.2 percent of the excess 
over $9,100,000
	
77.877.9	Over $10,100,000
	$1,355,000 plus 16 percent of the excess over 
$10,100,000

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

77.12 	Sec. 18. Minnesota Statutes 2016, section 291.03, subdivision 8, is amended to read:
77.13 		Subd. 8.Definitions. (a) For purposes of this section, the following terms have the 
77.14 	meanings given in this subdivision.
77.15 	(b) "Family member" means a family member as defined in section 2032A(e)(2) of the 
77.16 	Internal Revenue Code, or a trust whose present beneficiaries are all family members as 
77.17 	defined in section 2032A(e)(2) of the Internal Revenue Code.
77.18 	(c) "Qualified heir" means a family member who acquired qualified property upon the 
77.19 	death of the decedent and satisfies the requirement under subdivision 9, clause (7) (8), or 
77.20 	subdivision 10, clause (5), for the property.
77.21 	(d) "Qualified property" means qualified small business property under subdivision 9 
77.22 	and qualified farm property under subdivision 10.

77.23 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
77.24 	dying after December 31, 2016.

77.25 	Sec. 19. Minnesota Statutes 2017 Supplement, section 291.03, subdivision 9, is amended 
77.26 	to read:
77.27 		Subd. 9.Qualified small business property. Property satisfying all of the following 
77.28 	requirements is qualified small business property:
77.29 	(1) The value of the property was included in the federal adjusted taxable estate.
77.30 	(2) The property consists of the assets of a trade or business or shares of stock or other 
77.31 	ownership interests in a corporation or other entity engaged in a trade or business. Shares 
77.32 	of stock in a corporation or an ownership interest in another type of entity do not qualify 
77.33 	under this subdivision if the shares or ownership interests are traded on a public stock 
77.34 	exchange at any time during the three-year period ending on the decedent's date of death. 
78.1 	For purposes of this subdivision, an ownership interest includes the interest the decedent is 
78.2 	deemed to own under sectionssection 2036, 2037, and 2038, 2040, or 2044 of the Internal 
78.3 	Revenue Code.
78.4 	(3) During the taxable year that ended before the decedent's death, the trade or business 
78.5 	must not have been a passive activity within the meaning of section 469(c) of the Internal 
78.6 	Revenue Code, and the decedent or the decedent's spouse must have materially participated 
78.7 	in the trade or business within the meaning of section 469(h) of the Internal Revenue Code, 
78.8 	excluding section 469(h)(3) of the Internal Revenue Code and any other provision provided 
78.9 	by United States Treasury Department regulation that substitutes material participation in 
78.10 	prior taxable years for material participation in the taxable year that ended before the 
78.11 	decedent's death.
78.12 	(4) The gross annual sales of the trade or business were $10,000,000 or less for the last 
78.13 	taxable year that ended before the date of the death of the decedent.
78.14 	(5) the property does not include:
78.15 	(i) cash;
78.16 	(ii) cash equivalents;
78.17 	(iii) publicly traded securities; or
78.18 	(iv) any assets not used in the operation of the trade or business.
78.19 	(6) For property consisting of shares of stock or other ownership interests in an entity, 
78.20 	the value of items described in clause (5) must be excluded in the valuation of the decedent's 
78.21 	interest in the entity.
78.22 	(7) The decedent or the decedent's spouse continuously owned the property, or an 
78.23 	undivided or joint interest in the property, including property the decedent or the decedent's 
78.24 	spouse is deemed to own under sections section 2036, 2037, and 2038, 2040, or 2044 of 
78.25 	the Internal Revenue Code, or under subdivision 1d, for the three-year period ending on the 
78.26 	date of death of the decedent. In the case of a sole proprietor, if the property replaced similar 
78.27 	property within the three-year period, the replacement property will be treated as having 
78.28 	been owned for the three-year period ending on the date of death of the decedent. For the 
78.29 	purposes of the three-year holding period under this clause, any ownership by the decedent's 
78.30 	spouse, whether the spouse predeceases or survives the decedent, is attributed to the decedent.
78.31 	(8) For three years following the date of death of the decedent, the trade or business is 
78.32 	not a passive activity within the meaning of section 469(c) of the Internal Revenue Code, 
78.33 	and a family member materially participates in the operation of the trade or business within 
79.1 	the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3) 
79.2 	of the Internal Revenue Code and any other provision provided by United States Treasury 
79.3 	Department regulation that substitutes material participation in prior taxable years for 
79.4 	material participation in the three years following the date of death of the decedent.
79.5 	(9) The estate and the qualified heir elect to treat the property as qualified small business 
79.6 	property and agree, in the form prescribed by the commissioner, to pay the recapture tax 
79.7 	under subdivision 11, if applicable.

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

79.10 	Sec. 20. Minnesota Statutes 2016, section 291.03, subdivision 10, is amended to read:
79.11 		Subd. 10.Qualified farm property. Property satisfying all of the following requirements 
79.12 	is qualified farm property:
79.13 	(1) The value of the property was included in the federal adjusted taxable estate.
79.14 	(2) The property consists of agricultural land and is owned by a person or entity that is 
79.15 	either not subject to or is in compliance with section 500.24.
79.16 	(3) For property taxes payable in the taxable year of the decedent's death, the property 
79.17 	is classified as class 2a property under section 273.13, subdivision 23, and is classified as 
79.18 	agricultural homestead, agricultural relative homestead, or special agricultural homestead 
79.19 	under section 273.124.
79.20 	(4) The decedent or the decedent's spouse continuously owned the property, or an 
79.21 	undivided or joint interest in the property, including property the decedent or the decedent's 
79.22 	spouse is deemed to own under sections section 2036, 2037, and 2038, 2040, or 2044 of 
79.23 	the Internal Revenue Code, or under subdivision 1d, for the three-year period ending on the 
79.24 	date of death of the decedent either by ownership of the agricultural land or pursuant to 
79.25 	holding an interest in an entity that is not subject to or is in compliance with section 500.24.
79.26 	For the purposes of the three-year holding period under this clause, any ownership by the 
79.27 	decedent's spouse, whether the spouse predeceases or survives the decedent, is attributed 
79.28 	to the decedent.
79.29 	(5) The property is classified for property tax purposes as class 2a property under section 
79.30 	273.13, subdivision 23, for three years following the date of death of the decedent.
80.1 	(6) The estate and the qualified heir elect to treat the property as qualified farm property 
80.2 	and agree, in a form prescribed by the commissioner, to pay the recapture tax under 
80.3 	subdivision 11, if applicable.

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

80.6 	Sec. 21. Minnesota Statutes 2017 Supplement, section 291.03, subdivision 11, is amended 
80.7 	to read:
80.8 		Subd. 11.Recapture tax. (a) If, within three years after the decedent's death and before 
80.9 	the death of the qualified heir, the qualified heir disposes of any interest in the qualified 
80.10 	property, other than by a disposition to a family member, or a family member ceases to 
80.11 	satisfy the requirement under subdivision 9, clause (7) (8); or 10, clause (5), an additional 
80.12 	estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir 
80.13 	replaces qualified small business property excluded under subdivision 9 with similar property, 
80.14 	then the qualified heir will not be treated as having disposed of an interest in the qualified 
80.15 	property.
80.16 	(b) The amount of the additional tax equals the amount of the exclusion claimed by the 
80.17 	estate under subdivision 8, paragraph (d), multiplied by 16 percent.
80.18 	(c) The additional tax under this subdivision is due on the day which is six months after 
80.19 	the date of the disposition or cessation in paragraph (a).
80.20 	(d) The tax under this subdivision does not apply to the acquisition of title or possession 
80.21 	of the qualified property by a federal, state, or local government unit, or any other entity 
80.22 	with the power of eminent domain for a public purpose, as defined in section 117.025, 
80.23 	subdivision 11, within the three-year holding period.
80.24 	(e) This subdivision shall not apply as a result of any of the following:
80.25 	(1) a portion of qualified farm property consisting of less than one-fifth of the acreage 
80.26 	of the property is reclassified as class 2b property under section 273.13, subdivision 23, and 
80.27 	the qualified heir has not substantially altered the reclassified property during the three-year 
80.28 	holding period; or
80.29 	(2) a portion of qualified farm property classified as 2a property at the death of the 
80.30 	decedent pursuant to section 273.13, subdivision 23, paragraph (a), consisting of a residence, 
80.31 	garage, and immediately surrounding one acre of land is reclassified as 4bb property during 
80.32 	the three-year holding period, and the qualified heir has not substantially altered the property.

81.1 	EFFECTIVE DATE. This section is effective retroactively for estates of decedents 
81.2 	dying after December 31, 2016.

81.3 	Sec. 22. Minnesota Statutes 2016, section 297I.20, is amended by adding a subdivision 
81.4 	to read:
81.5 		Subd. 4.Minnesota housing tax credit. An insurance company may claim a credit 
81.6 	against the premiums tax imposed under this chapter equal to the amount indicated on the 
81.7 	credit certificate statement issued to the company if a Minnesota housing tax credit is 
81.8 	established. If the amount of the credit exceeds the liability for tax under this chapter, the 
81.9 	excess is a credit carryover to each of the ten succeeding taxable years. The entire amount 
81.10 	of the excess unused credit for the taxable year must be carried first to the earliest of the 
81.11 	taxable years to which the credit may be carried and then to each successive year to which 
81.12 	the credit may be carried. This credit does not affect the calculation of police and fire aid 
81.13 	under section 69.021.

81.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
81.15 	31, 2018.

81.16 	Sec. 23. [462A.40] MINNESOTA HOUSING TAX CREDIT CONTRIBUTION 
81.17 	FUND.
81.18 		Subdivision 1.Fund created. If a Minnesota housing tax credit is established, the 
81.19 	Minnesota housing tax credit contribution fund is created to be a revolving fund at the 
81.20 	agency and administered by the commissioner. Amounts contributed to the fund are 
81.21 	appropriated to the commissioner. The commissioner may use the amounts appropriated to 
81.22 	direct disbursements from the fund as loans or grants to eligible recipients.
81.23 		Subd. 2.Use of funds; grant and loan program. (a) The commissioner may award 
81.24 	grants and loans to be used for multifamily and single family developments for persons and 
81.25 	families of low and moderate income. Allowable use of the funds include: gap financing, 
81.26 	as defined in section 462A.33, subdivision 1, new construction, acquisition, rehabilitation, 
81.27 	demolition or removal of existing structures, construction financing, permanent financing, 
81.28 	interest rate reduction, and refinancing.
81.29 	(b) The commissioner may give preference for grants and loans to comparable proposals 
81.30 	that include regulatory changes or waivers that result in identifiable cost avoidance or cost 
81.31 	reductions, including but not limited to increased density, flexibility in site development 
81.32 	standards, or zoning code requirements.
82.1 	(c) To the extent practicable, grants and loans shall be made so that an approximately 
82.2 	equal number of housing units are financed in the metropolitan area, as defined in section 
82.3 	473.121, subdivision 2, and in greater Minnesota.
82.4 	(d) The commissioner shall set aside 35 percent of the financing under this section for 
82.5 	single-family homes and 20 percent for cities with a population under 10,000. A project 
82.6 	that meets both set asides may count toward both requirements. If by June 1 each year the 
82.7 	commissioner does not receive requests to use all of the financing set aside under this 
82.8 	paragraph, the commissioner may use any remaining financing for other projects eligible 
82.9 	under this section.
82.10 		Subd. 3.Eligible recipients. (a) The commissioner may award grants or loans to a city, 
82.11 	a federally recognized American Indian tribe or subdivision located in Minnesota, a tribal 
82.12 	housing corporation, a private developer, a nonprofit organization, a housing and 
82.13 	redevelopment authority under sections 469.001 to 469.047, a public housing authority or 
82.14 	agency authorized by law to exercise any of the powers granted by sections 469.001 to 
82.15 	469.047, or the owner of the housing, excluding individuals who own the housing and are 
82.16 	using it as their domicile.
82.17 	(b) Eligible recipients must use the funds to serve households that meet the income limits 
82.18 	as provided in section 462A.33, subdivision 5.
82.19 	(c) For the purpose of this subdivision, "city" has the meaning given it in section 462A.03, 
82.20 	subdivision 21.
82.21 		Subd. 4.Recapture. A loan or grant awarded under this section is subject to repayment 
82.22 	or recapture under the guidelines adopted by the commissioner. Any loan or grant that is 
82.23 	repaid or recaptured must be redeposited in the fund.
82.24 		Subd. 5.Report. The commissioner shall report by January 15, 2020, to the chairs and 
82.25 	ranking minority members of the legislative policy and finance committees with jurisdiction 
82.26 	over housing on whether a tax credit would increase development and availability of 
82.27 	affordable housing  to persons and families of low and moderate incomes in Minnesota.

82.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
82.29 	31, 2018.

82.30 	Sec. 24.  REPEALER.
 82.31 	(a) Minnesota Statutes 2016, sections 289A.10, subdivision 1a; 289A.12, subdivision 
82.32 	18; 289A.18, subdivision 3a; 289A.20, subdivision 3a; and 291.03, subdivisions 8 and 10,
82.33 	are repealed.
83.1 	(b) Minnesota Statutes 2017 Supplement, section 291.03, subdivisions 9 and 11, are 
83.2 	repealed.

83.3 	EFFECTIVE DATE. This section is effective for estates of decedents dying after 
83.4 	December 31, 2018.

83.5 	ARTICLE 3
83.6 	SALES, USE, AND EXCISE TAXES

83.7 	Section 1. Minnesota Statutes 2017 Supplement, section 297A.61, subdivision 3, is 
83.8 	amended to read:
83.9 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited to, 
83.10 	each of the transactions listed in this subdivision. In applying the provisions of this chapter, 
83.11 	the terms "tangible personal property" and "retail sale" include the taxable services listed 
83.12 	in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision of these taxable 
83.13 	services, unless specifically provided otherwise. Services performed by an employee for 
83.14 	an employer are not taxable. Services performed by a partnership or association for another 
83.15 	partnership or association are not taxable if one of the entities owns or controls more than 
83.16 	80 percent of the voting power of the equity interest in the other entity. Services performed 
83.17 	between members of an affiliated group of corporations are not taxable. For purposes of 
83.18 	the preceding sentence, "affiliated group of corporations" means those entities that would 
83.19 	be classified as members of an affiliated group as defined under United States Code, title 
83.20 	26, section 1504, disregarding the exclusions in section 1504(b).
83.21 	(b) Sale and purchase include:
83.22 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
83.23 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
83.24 	(2) the leasing of or the granting of a license to use or consume, for a consideration in 
83.25 	money or by exchange or barter, tangible personal property, other than a manufactured 
83.26 	home used for residential purposes for a continuous period of 30 days or more.
83.27 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
83.28 	tangible personal property for a consideration for consumers who furnish either directly or 
83.29 	indirectly the materials used in the production, fabrication, printing, or processing.
83.30 	(d) Sale and purchase include the preparing for a consideration of food. Notwithstanding 
83.31 	section 297A.67, subdivision 2, taxable food includes, but is not limited to, the following:
83.32 	(1) prepared food sold by the retailer;
84.1 	(2) soft drinks;
84.2 	(3) candy; and
84.3 	(4) dietary supplements.
84.4 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, gas, 
84.5 	water, or steam for use or consumption within this state.
84.6 	(f) A sale and a purchase includes the transfer for a consideration of prewritten computer 
84.7 	software whether delivered electronically, by load and leave, or otherwise.
84.8 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
84.9 	services:
84.10 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
84.11 	events, and the making available of amusement devices, tanning facilities, reducing salons, 
84.12 	steam baths, health clubs, and spas or athletic facilities, but not release fees or other charges 
84.13 	for pen-raised game or poultry by a game farm or hunting preserve;
84.14 	(2) lodging and related services by a hotel, rooming house, resort, campground, motel, 
84.15 	or trailer camp, including furnishing the guest of the facility with access to telecommunication 
84.16 	services, and the granting of any similar license to use real property in a specific facility, 
84.17 	other than the renting or leasing of it for a continuous period of 30 days or more under an 
84.18 	enforceable written agreement that may not be terminated without prior notice and including 
84.19 	accommodations intermediary services provided in connection with other services provided 
84.20 	under this clause;
84.21 	(3) nonresidential parking services, whether on a contractual, hourly, or other periodic 
84.22 	basis, except for parking at a meter;
84.23 	(4) the granting of membership in a club, association, or other organization if:
84.24 	(i) the club, association, or other organization makes available for the use of its members 
84.25 	sports and athletic facilities, without regard to whether a separate charge is assessed for use 
84.26 	of the facilities; and
84.27 	(ii) use of the sports and athletic facility is not made available to the general public on 
84.28 	the same basis as it is made available to members.
84.29 	Granting of membership means both onetime initiation fees and periodic membership dues, 
84.30 	but does not include release fees or other charges for pen-raised game or poultry by a game 
84.31 	farm or hunting preserve. Sports and athletic facilities include golf courses; tennis, 
85.1 	racquetball, handball, and squash courts; basketball and volleyball facilities; running tracks; 
85.2 	exercise equipment; swimming pools; and other similar athletic or sports facilities;
85.3 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
85.4 	material used in road construction; and delivery of concrete block by a third party if the 
85.5 	delivery would be subject to the sales tax if provided by the seller of the concrete block. 
85.6 	For purposes of this clause, "road construction" means construction of:
85.7 	(i) public roads;
85.8 	(ii) cartways; and
85.9 	(iii) private roads in townships located outside of the seven-county metropolitan area 
85.10 	up to the point of the emergency response location sign; and
85.11 	(6) services as provided in this clause:
85.12 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
85.13 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
85.14 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
85.15 	include services provided by coin operated facilities operated by the customer;
85.16 	(ii) motor vehicle washing, waxing, and cleaning services, including services provided 
85.17 	by coin operated facilities operated by the customer, and rustproofing, undercoating, and 
85.18 	towing of motor vehicles;
85.19 	(iii) building and residential cleaning, maintenance, and disinfecting services and pest 
85.20 	control and exterminating services;
85.21 	(iv) detective, security, burglar, fire alarm, and armored car services; but not including 
85.22 	services performed within the jurisdiction they serve by off-duty licensed peace officers as 
85.23 	defined in section 626.84, subdivision 1, or services provided by a nonprofit organization 
85.24 	or any organization at the direction of a county for monitoring and electronic surveillance 
85.25 	of persons placed on in-home detention pursuant to court order or under the direction of the 
85.26 	Minnesota Department of Corrections;
85.27 	(v) pet grooming services;
85.28 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
85.29 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor plant 
85.30 	care; tree, bush, shrub, and stump removal, except when performed as part of a land clearing 
85.31 	contract as defined in section 297A.68, subdivision 40; and tree trimming for public utility 
86.1 	lines. Services performed under a construction contract for the installation of shrubbery, 
86.2 	plants, sod, trees, bushes, and similar items are not taxable;
86.3 	(vii) massages, except when provided by a licensed health care facility or professional 
86.4 	or upon written referral from a licensed health care facility or professional for treatment of 
86.5 	illness, injury, or disease; and
86.6 	(viii) the furnishing of lodging, board, and care services for animals in kennels and other 
86.7 	similar arrangements, but excluding veterinary and horse boarding services.
86.8 	(h) A sale and a purchase includes the furnishing for a consideration of tangible personal 
86.9 	property or taxable services by the United States or any of its agencies or instrumentalities, 
86.10 	or the state of Minnesota, its agencies, instrumentalities, or political subdivisions.
86.11 	(i) A sale and a purchase includes the furnishing for a consideration of 
86.12 	telecommunications services, ancillary services associated with telecommunication services, 
86.13 	and pay television services. Telecommunication services include, but are not limited to, the 
86.14 	following services, as defined in section 297A.669: air-to-ground radiotelephone service, 
86.15 	mobile telecommunication service, postpaid calling service, prepaid calling service, prepaid 
86.16 	wireless calling service, and private communication services. The services in this paragraph 
86.17 	are taxed to the extent allowed under federal law.
86.18 	(j) A sale and a purchase includes the furnishing for a consideration of installation if the 
86.19 	installation charges would be subject to the sales tax if the installation were provided by 
86.20 	the seller of the item being installed.
86.21 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer to a 
86.22 	customer when (1) the vehicle is rented by the customer for a consideration, or (2) the motor 
86.23 	vehicle dealer is reimbursed pursuant to a service contract as defined in section 59B.02, 
86.24 	subdivision 11.
86.25 	(l) A sale and a purchase includes furnishing for a consideration of specified digital 
86.26 	products or other digital products or granting the right for a consideration to use specified 
86.27 	digital products or other digital products on a temporary or permanent basis and regardless 
86.28 	of whether the purchaser is required to make continued payments for such right. Wherever 
86.29 	the term "tangible personal property" is used in this chapter, other than in subdivisions 10 
86.30 	and 38, the provisions also apply to specified digital products, or other digital products, 
86.31 	unless specifically provided otherwise or the context indicates otherwise.
86.32 	(m) The sale of the privilege of admission under section 297A.61, subdivision 3, 
86.33 	paragraph (g), clause (1), to a place of amusement, recreational area, or athletic event 
87.1 	includes all charges included in the privilege of admission's sales price, without deduction 
87.2 	for amenities that may be provided, unless the amenities are separately stated and the 
87.3 	purchaser of the privilege of admission is entitled to add or decline the amenities, and the 
87.4 	amenities are not otherwise taxable.

87.5 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
87.6 	30, 2018.

87.7 	Sec. 2. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision to 
87.8 	read:
87.9 		Subd. 51.Minnetonka police and fire public safety facilities. Materials and supplies 
87.10 	used in, and equipment incorporated into, (1) the construction of a new fire station on the 
87.11 	campus of the Minnetonka city hall, and (2) the remodeling and expansion of an existing 
87.12 	police and fire station in Minnetonka to accommodate its use as a police station are exempt.

87.13 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
87.14 	30, 2018, and before January 1, 2021.

87.15 	Sec. 3. Minnesota Statutes 2016, section 297A.71, is amended by adding a subdivision to 
87.16 	read:
87.17 		Subd. 52.Inver Grove Heights fire station. Materials and supplies used in and 
87.18 	equipment incorporated into the construction of a new fire station, which includes firefighting 
87.19 	and public safety training facilities, in the city of Inver Grove Heights is exempt.

87.20 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
87.21 	30, 2018, and before January 1, 2021.

87.22 	Sec. 4. Minnesota Statutes 2016, section 477A.016, is amended to read:
87.23 	477A.016 NEW TAXES PROHIBITED.
87.24 	(a) No county, city, town or other taxing authority shall increase a present tax or impose 
87.25 	a new tax on sales or income.
87.26 	(b) No county, city, town, or other taxing authority shall increase a present excise tax 
87.27 	or fee or impose a new excise tax or fee on either:
87.28 	(1) the manufacture, distribution, wholesale, or retail sale of food, based on volume of 
87.29 	product sold, product sales value, or the type of product manufactured, distributed, or sold; 
87.30 	or
88.1 	(2) any container used for transporting, protecting, or consuming food.
88.2 	(c) For purposes of this section:
88.3 	(1) "food" has the meaning given in section 34A.01, subdivision 4; and
88.4 	(2) "container" means a bottle, cup, can, bag, or other packaging that is made from 
88.5 	plastic, aluminum, glass, cardboard, or other material.
88.6 	(d) This section does not apply to reasonable license fees lawfully imposed by a county, 
88.7 	city, town, or other licensing authority in the exercise of its regulatory authority to license 
88.8 	a trade, profession, or business.

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

88.10 	Sec. 5. Laws 1986, chapter 396, section 5, as amended by Laws 2001, First Special Session 
88.11 	chapter 5, article 12, section 87, and Laws 2012, chapter 299, article 3, section 3, is amended 
88.12 	to read:
88.13 	Sec. 5. LIQUOR, LODGING, AND RESTAURANT TAXES.
 88.14 	The city may, by resolution, levy in addition to taxes authorized by other law:
88.15 	(1) a sales tax of not more than three percent on the gross receipts on retail on-sales of 
88.16 	intoxicating liquor and fermented malt beverages when sold at licensed on-sale liquor 
88.17 	establishments located within the downtown taxing area, provided that this tax may not be 
88.18 	imposed if sales of intoxicating liquor and fermented malt beverages are exempt from 
88.19 	taxation under chapter 297A;
88.20 	(2) a sales tax of not more than three percent on the gross receipts from the furnishing 
88.21 	for consideration of lodging for a period of less than 30 days at a hotel, motel, rooming 
88.22 	house, tourist court, or trailer camp located within the city by a hotel or motel which has 
88.23 	more than 50 rooms available for lodging; the tax imposed under this clause shall be at a 
88.24 	rate that, when added to the sum of the rate of the sales tax imposed under Minnesota 
88.25 	Statutes, chapter 297A, the rate of the sales tax imposed under section 4, and the rate of any 
88.26 	other taxes on lodging in the city of Minneapolis, equals 1313.875 percent; and
88.27 	(3) a sales tax of not more than three percent on the gross receipts on all sales of food 
88.28 	primarily for consumption on or off the premises by restaurants and places of refreshment 
88.29 	as defined by resolution of the city that occur within the downtown taxing area.
88.30 	The taxes authorized by this section must not be terminated before January 1, 2047. The 
88.31 	taxes shall be imposed and may be adjusted periodically by the city council such that the 
88.32 	rates imposed produce revenue sufficient, together with the tax imposed under section 4, 
89.1 	to finance the purposes described in Minnesota Statutes, section 297A.994, and section 4, 
89.2 	subdivisions 3 and 4. These taxes shall be applied, first, as provided in Minnesota Statutes, 
89.3 	section 297A.994, subdivision 3, clauses (1) to (3), and then, solely to pay, secure, maintain, 
89.4 	and fund the payment of any principal of, premium on, and interest on any bonds or any 
89.5 	other purposes in section 4, subdivision 3 or 4. The commissioner of revenue may enter 
89.6 	into appropriate agreements with the city to provide for the collection of these taxes by the 
89.7 	state on behalf of the city. These taxes shall be subject to the same interest, penalties, and 
89.8 	enforcement provisions as the taxes imposed under Minnesota Statutes, chapter 297A.

89.9 	EFFECTIVE DATE. This section is effective for sales and purchases made after 
89.10 	September 30, 2018.

89.11 	Sec. 6. Laws 1986, chapter 462, section 31, as amended by Laws 1991, chapter 291, article 
89.12 	8, section 24, and Laws 2011, chapter 112, article 4, section 6, is amended to read:
89.13 	Sec. 31. AUTHORITY FOR TAXATION.
 89.14 	Notwithstanding Minnesota Statutes, section 477A.016, or any other law, and 
89.15 	supplemental to the tax imposed by Laws 1982, chapter 523, article 25, section 1, the city 
89.16 	of St. Paul may impose, by ordinance, a tax, at a rate not greater than three four percent, on 
89.17 	the gross receipts from the furnishing for consideration of lodging and related services at a 
89.18 	hotel, rooming house, tourist court, motel, or resort, other than the renting or leasing of 
89.19 	space for a continuous period of 30 days or more. The tax does not apply to the furnishing 
89.20 	of lodging and related services by a business having less than 50 lodging rooms. The tax 
89.21 	shall be collected by and its proceeds paid to the city. Ninety-five percent of the revenues 
89.22 	generated by this tax shall be used to fund a convention bureau to market and promote the 
89.23 	city as a tourist or convention center.

89.24 	EFFECTIVE DATE. This section is effective the first day of the calendar quarter 
89.25 	beginning at least 30 days after the governing body of the city of St. Paul and its chief 
89.26 	clerical officer timely complete their compliance with Minnesota Statutes, section 645.021, 
89.27 	subdivisions 2 and 3.

89.28 	Sec. 7. CITY OF EXCELSIOR; TAXES AUTHORIZED.
 89.29 		Subdivision 1.Sales and use tax authorization. Notwithstanding Minnesota Statutes, 
89.30 	section 297A.99, subdivisions 1 and 2, or 477A.016, or any other law, ordinance, or city 
89.31 	charter, the city of Excelsior may impose, by ordinance, a sales and use tax of up to one-half 
89.32 	of one percent for the purposes specified in subdivision 2, subject to voter approval in a 
89.33 	general election held before January 1, 2019. Except as otherwise provided in this section, 
90.1 	the provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration, 
90.2 	collection, and enforcement of the tax authorized under this subdivision.
90.3 		Subd. 2.Use of sales and use tax revenues. The revenues derived from the tax authorized 
90.4 	under subdivision 1 must be used by the city of Excelsior to pay the costs of collecting and 
90.5 	administering the tax and to finance the capital and administrative costs of improvements 
90.6 	to the commons as indicated in the November 2016 findings of the commons master planning 
90.7 	work group. Authorized expenses include, but are not limited to, improvements for 
90.8 	walkability and accessibility, enhancement of beach area and facilities, prevention and 
90.9 	management of shoreline erosion, redesign of the port and bandshell, improvement of 
90.10 	playground equipment, and securing and paying debt service on bonds issued under 
90.11 	subdivision 3 or other obligations issued to the improvements listed in this subdivision in 
90.12 	the city of Excelsior.
90.13 		Subd. 3.Bonding authority. (a) The city of Excelsior may issue bonds under Minnesota 
90.14 	Statutes, chapter 475, to finance all or a portion of the costs of the projects authorized in 
90.15 	subdivision 2. The aggregate principal amount of bonds issued under this subdivision may 
90.16 	not exceed $7,000,000, plus an amount to be applied to the payment of the costs of issuing 
90.17 	the bonds. The bonds may be paid from or secured by any funds available to the city of 
90.18 	Excelsior, including the tax authorized under subdivision 1. The issuance of bonds under 
90.19 	this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61.
90.20 	(b) The bonds are not included in computing any debt limitation applicable to the city 
90.21 	of Excelsior, and any levy of taxes under Minnesota Statutes, section 475.61, to pay principal 
90.22 	and interest on the bonds is not subject to any levy limitation. A separate election to approve 
90.23 	the bonds under Minnesota Statutes, section 475.58, is not required.
90.24 		Subd. 4.Termination of taxes. The tax imposed under subdivision 1 expires at the later 
90.25 	of: (1) 25 years after the tax is first imposed; or (2) when the city council determines that 
90.26 	$7,000,000 has been received from the tax to pay for the cost of the projects authorized 
90.27 	under subdivision 2, plus an amount sufficient to pay the costs related to issuance of the 
90.28 	bonds authorized under subdivision 3, including interest on the bonds. Any funds remaining 
90.29 	after payment of all such costs and retirement or redemption of the bonds shall be placed 
90.30 	in the general fund of the city. The tax imposed under subdivision 1 may expire at an earlier 
90.31 	time if the city so determines by ordinance.

90.32 	EFFECTIVE DATE. This section is effective the day after compliance by the governing 
90.33 	body of the city of Excelsior with Minnesota Statutes, section 645.021, subdivisions 2 and 
90.34 	3.

91.1 	ARTICLE 4
91.2 	PROPERTY TAX

91.3 	Section 1. Minnesota Statutes 2016, section 103D.905, subdivision 9, is amended to read:
91.4 		Subd. 9.Project tax levy. In addition to other tax levies provided in this section or in 
91.5 	any other law, a watershed district may levy a tax:
91.6 	(1) to pay the costs of projects undertaken by the watershed district which that are to be
91.7 	funded, in whole or in part, with the proceeds ofmoney appropriated by law for grants or 
91.8 	construction or implementation loans under sections 103F.701 to 103F.755 to the district;
91.9 	(2) to pay the principal of, or premium or administrative surcharge, if any, and interest 
91.10 	on, the bonds and notes issued by the watershed district pursuant to section 103F.725; or
91.11 	(3) to repay the construction or implementation loans under sections 103F.701 to 
91.12 	103F.755.
91.13 	Taxes levied with respect to payment of bonds and notes shall comply with section 
91.14 	475.61.

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

91.16 	Sec. 2. Minnesota Statutes 2016, section 138.053, is amended to read:
91.17 	138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR TOWNS.
91.18 	The governing body of any home rule charter or statutory city or town may annually 
91.19 	appropriate from its general fund an amount not to exceed 0.02418 percent of estimated 
91.20 	market value, derived from ad valorem taxes on property or other revenues, to be paid to 
91.21 	the historical society of its respective city, town, or county to be used for the promotion of 
91.22 	historical work and to aid in defraying the expenses of carrying on the historical work in 
91.23 	the county. No city or town may appropriate any funds for the benefit of any historical 
91.24 	society unless the society is affiliated with and approved by the Minnesota Historical Society.

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

91.26 	Sec. 3. Minnesota Statutes 2016, section 197.603, subdivision 2, is amended to read:
91.27 		Subd. 2.Records; data privacy. Pursuant to chapter 13 the county veterans service 
91.28 	officer is the responsible authority with respect to all records in the officer's custody. The 
91.29 	data on clients' applications for assistance is private data on individuals, as defined in section 
91.30 	13.02, subdivision 12. The county veterans service officer may disclose to the county assessor 
92.1 	private data necessary to determine a client's eligibility for the disabled veteran's homestead 
92.2 	market value exclusion under section 273.13, subdivision 34.

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

92.4 	Sec. 4. Minnesota Statutes 2016, section 272.02, is amended by adding a subdivision to 
92.5 	read:
92.6 		Subd. 102.Certain property owned by an Indian tribe. (a) Property is exempt that:
92.7 	(1) is located in a city of the first class with a population of more than 380,000 as of the 
92.8 	2010 federal census;
92.9 	(2) was on January 1, 2016, and is for the current assessment, owned by a federally 
92.10 	recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota; 
92.11 	and
92.12 	(3) is used exclusively as a pharmacy.
92.13 	(b) Property that qualifies for the exemption under this subdivision is limited to parcels 
92.14 	and structures that do not exceed, in the aggregate, 4,000 square feet. Property acquired for 
92.15 	single-family housing, market-rate apartments, agriculture, or forestry does not qualify for 
92.16 	this exemption. The exemption created by this subdivision expires with taxes payable in 
92.17 	2028.

92.18 	EFFECTIVE DATE. This section is effective beginning with taxes payable in 2019 
92.19 	and thereafter.

92.20 	Sec. 5. Minnesota Statutes 2017 Supplement, section 272.029, subdivision 2, is amended 
92.21 	to read:
92.22 		Subd. 2.Definitions. (a) For the purposes of this section:
92.23 	(1) "wind energy conversion system" has the meaning given in section 216C.06, 
92.24 	subdivision 19, and also includes a substation that is used and owned by one or more wind 
92.25 	energy conversion facilities;
92.26 	(2) "large scale wind energy conversion system" means a wind energy conversion system 
92.27 	of more than 12 megawatts, as measured by the nameplate capacity of the system or as 
92.28 	combined with other systems as provided in paragraph (b);
92.29 	(3) "medium scale wind energy conversion system" means a wind energy conversion 
92.30 	system of over two and not more than 12 megawatts, as measured by the nameplate capacity 
92.31 	of the system or as combined with other systems as provided in paragraph (b); and
93.1 	(4) "small scale wind energy conversion system" means a wind energy conversion system 
93.2 	of two megawatts and under, as measured by the nameplate capacity of the system or as 
93.3 	combined with other systems as provided in paragraph (b).
93.4 	(b) For systems installed and contracted for after January 1, 2002, the total size of a 
93.5 	wind energy conversion system under this subdivision shall be determined according to this 
93.6 	paragraph. Unless the systems are interconnected with different distribution systems, the 
93.7 	nameplate capacity of one wind energy conversion system shall be combined with the 
93.8 	nameplate capacity of any other wind energy conversion system that is:
93.9 	(1) located within five miles of the wind energy conversion system;
93.10 	(2) constructed within the same 12-month period as the wind energy conversion system; 
93.11 	and
93.12 	(3) under common ownership.
93.13 	In the case of a dispute, the commissioner of commerce shall determine the total size of 
93.14 	the system, and shall draw all reasonable inferences in favor of combining the systems.
93.15 	(c) In making a determination under paragraph (b), the commissioner of commerce may 
93.16 	determine that two wind energy conversion systems are under common ownership when 
93.17 	the underlying ownership structure contains similar the same persons or entities, even if the 
93.18 	ownership shares differ between the two systems. Wind energy conversion systems are not 
93.19 	under common ownership solely because the same person or entity provided equity financing 
93.20 	for the systems. Wind energy conversion systems that were determined by the commissioner 
93.21 	of commerce to be eligible for a renewable energy production incentive under section 
93.22 	216C.41 are not under common ownership unless a change in the qualifying owner was 
93.23 	made to an owner of another wind energy conversion system subsequent to the determination 
93.24 	by the commissioner of commerce.

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

93.26 	Sec. 6. Minnesota Statutes 2016, section 273.124, subdivision 3a, is amended to read:
93.27 		Subd. 3a.Manufactured home park cooperative. (a) When a manufactured home park 
93.28 	is owned by a corporation or association organized under chapter 308A or 308B, and each 
93.29 	person who owns a share or shares in the corporation or association is entitled to occupy a 
93.30 	lot within the park, the corporation or association may claim homestead treatment for the 
93.31 	park. Each lot must be designated by legal description or number, and each lot is limited to 
93.32 	not more than one-half acre of land.
94.1 	(b) The manufactured home park shall be entitled to homestead treatment if all of the 
94.2 	following criteria are met:
94.3 	(1) the occupant or the cooperative corporation or association is paying the ad valorem 
94.4 	property taxes and any special assessments levied against the land and structure either 
94.5 	directly, or indirectly through dues to the corporation or association; and
94.6 	(2) the corporation or association organized under chapter 308A or 308B is wholly 
94.7 	owned by persons having a right to occupy a lot owned by the corporation or association.
94.8 	(c) A charitable corporation, organized under the laws of Minnesota with no outstanding 
94.9 	stock, and granted a ruling by the Internal Revenue Service for 501(c)(3) tax-exempt status, 
94.10 	qualifies for homestead treatment with respect to a manufactured home park if its members 
94.11 	hold residential participation warrants entitling them to occupy a lot in the manufactured 
94.12 	home park.
94.13 	(d) "Homestead treatment" under this subdivision means the classification rate provided 
94.14 	for class 4c property classified under section 273.13, subdivision 25, paragraph (d), clause 
94.15 	(5), item (ii)., and the homestead market value exclusion under section 273.13, subdivision 
94.16 	35, does not apply and the property taxes assessed against the park shall not be included in 
94.17 	the determination of taxes payable for rent paid under section 290A.03.

94.18 	EFFECTIVE DATE. This section is effective beginning with claims for taxes payable 
94.19 	in 2019.

94.20 	Sec. 7. Minnesota Statutes 2016, section 273.1245, subdivision 2, is amended to read:
94.21 		Subd. 2.Disclosure. The assessor shall disclose the data described in subdivision 1 to 
94.22 	the commissioner of revenue as provided by law. The assessor shall also disclose all or 
94.23 	portions of the data described in subdivision 1 to:
94.24 	(1) the county treasurer solely for the purpose of proceeding under the Revenue Recapture 
94.25 	Act to recover personal property taxes owing; and
94.26 	(2) the county veterans service officer for the purpose of determining a person's eligibility 
94.27 	for the disabled veteran's homestead market value exclusion under section 273.13, subdivision 
94.28 	34.

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

95.1 	Sec. 8. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 25, is amended 
95.2 	to read:
95.3 		Subd. 25.Class 4. (a) Class 4a is residential real estate containing four or more units 
95.4 	and used or held for use by the owner or by the tenants or lessees of the owner as a residence 
95.5 	for rental periods of 30 days or more, excluding property qualifying for class 4d. Class 4a 
95.6 	also includes hospitals licensed under sections 144.50 to 144.56, other than hospitals exempt 
95.7 	under section 272.02, and contiguous property used for hospital purposes, without regard 
95.8 	to whether the property has been platted or subdivided. The market value of class 4a property 
95.9 	has a classification rate of 1.25 percent.
95.10 	(b) Class 4b includes:
95.11 	(1) residential real estate containing less than four units that does not qualify as class 
95.12 	4bb, other than seasonal residential recreational property;
95.13 	(2) manufactured homes not classified under any other provision;
95.14 	(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead farm 
95.15 	classified under subdivision 23, paragraph (b) containing two or three units; and
95.16 	(4) unimproved property that is classified residential as determined under subdivision 
95.17 	33.
95.18 	The market value of class 4b property has a classification rate of 1.25 percent.
95.19 	(c) Class 4bb includes:
95.20 	(1) nonhomestead residential real estate containing one unit, other than seasonal 
95.21 	residential recreational property;
95.22 	(2) a single family dwelling, garage, and surrounding one acre of property on a 
95.23 	nonhomestead farm classified under subdivision 23, paragraph (b); and
95.24 	(3) a condominium-type storage unit having an individual property identification number 
95.25 	that is not used for a commercial purpose.
95.26 	Class 4bb property has the same classification rates as class 1a property under subdivision 
95.27 	22.
95.28 	Property that has been classified as seasonal residential recreational property at any time 
95.29 	during which it has been owned by the current owner or spouse of the current owner does 
95.30 	not qualify for class 4bb.
95.31 	(d) Class 4c property includes:
96.1 	(1) except as provided in subdivision 22, paragraph (c), real and personal property 
96.2 	devoted to commercial temporary and seasonal residential occupancy for recreation purposes, 
96.3 	for not more than 250 days in the year preceding the year of assessment. For purposes of 
96.4 	this clause, property is devoted to a commercial purpose on a specific day if any portion of 
96.5 	the property is used for residential occupancy, and a fee is charged for residential occupancy. 
96.6 	Class 4c property under this clause must contain three or more rental units. A "rental unit" 
96.7 	is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site 
96.8 	equipped with water and electrical hookups for recreational vehicles. A camping pad offered 
96.9 	for rent by a property that otherwise qualifies for class 4c under this clause is also class 4c 
96.10 	under this clause regardless of the term of the rental agreement, as long as the use of the 
96.11 	camping pad does not exceed 250 days. In order for a property to be classified under this 
96.12 	clause, either: (i) the business located on the property must provide recreational activities, 
96.13 	at least 40 percent of the annual gross lodging receipts related to the property must be from 
96.14 	business conducted during 90 consecutive days, and either (A) at least 60 percent of all paid 
96.15 	bookings by lodging guests during the year must be for periods of at least two consecutive 
96.16 	nights; or (B) at least 20 percent of the annual gross receipts must be from charges for 
96.17 	providing recreational activities, or; (ii) the business must contain 20 or fewer rental units, 
96.18 	and must be located in a township or a city with a population of 2,500 or less located outside 
96.19 	the metropolitan area, as defined under section 473.121, subdivision 2, that contains a portion 
96.20 	of a state trail administered by the Department of Natural Resources; or (iii) the facility 
96.21 	must consist of no more than five sleeping rooms and must provide an area or areas to 
96.22 	prepare meals and to conduct indoor craft or hobby activities. For purposes of item (i)(A), 
96.23 	a paid booking of five or more nights shall be counted as two bookings. Class 4c property 
96.24 	also includes commercial use real property used exclusively for recreational purposes in 
96.25 	conjunction with other class 4c property classified under this clause and devoted to temporary 
96.26 	and seasonal residential occupancy for recreational purposes, up to a total of two acres, 
96.27 	provided the property is not devoted to commercial recreational use for more than 250 days 
96.28 	in the year preceding the year of assessment and is located within two miles of the class 4c 
96.29 	property with which it is used. In order for a property to qualify for classification under this 
96.30 	clause, the owner must submit a declaration to the assessor designating the cabins or units 
96.31 	occupied for 250 days or less in the year preceding the year of assessment by January 15 
96.32 	of the assessment year. Those cabins or units and a proportionate share of the land on which 
96.33 	they are located must be designated class 4c under this clause as otherwise provided. The 
96.34 	remainder of the cabins or units and a proportionate share of the land on which they are 
96.35 	located will be designated as class 3a. The owner of property desiring designation as class 
96.36 	4c property under this clause must provide guest registers or other records demonstrating 
97.1 	that the units for which class 4c designation is sought were not occupied for more than 250 
97.2 	days in the year preceding the assessment if so requested. The portion of a property operated 
97.3 	as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) 
97.4 	other nonresidential facility operated on a commercial basis not directly related to temporary 
97.5 	and seasonal residential occupancy for recreation purposes does not qualify for class 4c. 
97.6 	For the purposes of this paragraph, "recreational activities" means renting ice fishing houses, 
97.7 	boats and motors, snowmobiles, downhill or cross-country ski equipment; providing marina 
97.8 	services, launch services, or guide services; or selling bait and fishing tackle;
97.9 	(2) qualified property used as a golf course if:
97.10 	(i) it is open to the public on a daily fee basis. It may charge membership fees or dues, 
97.11 	but a membership fee may not be required in order to use the property for golfing, and its 
97.12 	green fees for golfing must be comparable to green fees typically charged by municipal 
97.13 	courses; and
97.14 	(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
97.15 	A structure used as a clubhouse, restaurant, or place of refreshment in conjunction with 
97.16 	the golf course is classified as class 3a property;
97.17 	(3) real property up to a maximum of three acres of land owned and used by a nonprofit 
97.18 	community service oriented organization and not used for residential purposes on either a 
97.19 	temporary or permanent basis, provided that:
97.20 	(i) the property is not used for a revenue-producing activity for more than six days in 
97.21 	the calendar year preceding the year of assessment; or
97.22 	(ii) the organization makes annual charitable contributions and donations at least equal 
97.23 	to the property's previous year's property taxes and the property is allowed to be used for 
97.24 	public and community meetings or events for no charge, as appropriate to the size of the 
97.25 	facility.
97.26 	For purposes of this clause:
97.27 	(A) "charitable contributions and donations" has the same meaning as lawful gambling 
97.28 	purposes under section 349.12, subdivision 25, excluding those purposes relating to the 
97.29 	payment of taxes, assessments, fees, auditing costs, and utility payments;
97.30 	(B) "property taxes" excludes the state general tax;
97.31 	(C) a "nonprofit community service oriented organization" means any corporation, 
97.32 	society, association, foundation, or institution organized and operated exclusively for 
98.1 	charitable, religious, fraternal, civic, or educational purposes, and which is exempt from 
98.2 	federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal 
98.3 	Revenue Code; and
98.4 	(D) "revenue-producing activities" shall include but not be limited to property or that 
98.5 	portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt 
98.6 	liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling 
98.7 	alley, a retail store, gambling conducted by organizations licensed under chapter 349, an 
98.8 	insurance business, or office or other space leased or rented to a lessee who conducts a 
98.9 	for-profit enterprise on the premises.
98.10 	Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The 
98.11 	use of the property for social events open exclusively to members and their guests for periods 
98.12 	of less than 24 hours, when an admission is not charged nor any revenues are received by 
98.13 	the organization shall not be considered a revenue-producing activity.
98.14 	The organization shall maintain records of its charitable contributions and donations 
98.15 	and of public meetings and events held on the property and make them available upon 
98.16 	request any time to the assessor to ensure eligibility. An organization meeting the requirement 
98.17 	under item (ii) must file an application by May 1 with the assessor for eligibility for the 
98.18 	current year's assessment. The commissioner shall prescribe a uniform application form 
98.19 	and instructions;
98.20 	(4) postsecondary student housing of not more than one acre of land that is owned by a 
98.21 	nonprofit corporation organized under chapter 317A and is used exclusively by a student 
98.22 	cooperative, sorority, or fraternity for on-campus housing or housing located within two 
98.23 	miles of the border of a college campus;
98.24 	(5)(i) manufactured home parks as defined in section 327.14, subdivision 3, excluding 
98.25 	manufactured home parks described in items (ii) and (iii), (ii) manufactured home parks as 
98.26 	defined in section 327.14, subdivision 3, that are described in section 273.124, subdivision 
98.27 	3a, and (iii) class I manufactured home parks as defined in section 327C.01, subdivision 
98.28 	13;
98.29 	(6) real property that is actively and exclusively devoted to indoor fitness, health, social, 
98.30 	recreational, and related uses, is owned and operated by a not-for-profit corporation, and is 
98.31 	located within the metropolitan area as defined in section 473.121, subdivision 2;
98.32 	(7) a leased or privately owned noncommercial aircraft storage hangar not exempt under 
98.33 	section 272.01, subdivision 2, and the land on which it is located, provided that:
99.1 	(i) the land is on an airport owned or operated by a city, town, county, Metropolitan 
99.2 	Airports Commission, or group thereof; and
99.3 	(ii) the land lease, or any ordinance or signed agreement restricting the use of the leased 
99.4 	premise, prohibits commercial activity performed at the hangar.
99.5 	If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must be 
99.6 	filed by the new owner with the assessor of the county where the property is located within 
99.7 	60 days of the sale;
99.8 	(8) a privately owned noncommercial aircraft storage hangar not exempt under section 
99.9 	272.01, subdivision 2, and the land on which it is located, provided that:
99.10 	(i) the land abuts a public airport; and
99.11 	(ii) the owner of the aircraft storage hangar provides the assessor with a signed agreement 
99.12 	restricting the use of the premises, prohibiting commercial use or activity performed at the 
99.13 	hangar; and
99.14 	(9) residential real estate, a portion of which is used by the owner for homestead purposes, 
99.15 	and that is also a place of lodging, if all of the following criteria are met:
99.16 	(i) rooms are provided for rent to transient guests that generally stay for periods of 14 
99.17 	or fewer days;
99.18 	(ii) meals are provided to persons who rent rooms, the cost of which is incorporated in 
99.19 	the basic room rate;
99.20 	(iii) meals are not provided to the general public except for special events on fewer than 
99.21 	seven days in the calendar year preceding the year of the assessment; and
99.22 	(iv) the owner is the operator of the property.
99.23 	The market value subject to the 4c classification under this clause is limited to five rental 
99.24 	units. Any rental units on the property in excess of five, must be valued and assessed as 
99.25 	class 3a. The portion of the property used for purposes of a homestead by the owner must 
99.26 	be classified as class 1a property under subdivision 22;
99.27 	(10) real property up to a maximum of three acres and operated as a restaurant as defined 
99.28 	under section 157.15, subdivision 12, provided it: (i) is located on a lake as defined under 
99.29 	section 103G.005, subdivision 15, paragraph (a), clause (3); and (ii) is either devoted to 
99.30 	commercial purposes for not more than 250 consecutive days, or receives at least 60 percent 
99.31 	of its annual gross receipts from business conducted during four consecutive months. Gross 
99.32 	receipts from the sale of alcoholic beverages must be included in determining the property's 
100.1 	qualification under item (ii). The property's primary business must be as a restaurant and 
100.2 	not as a bar. Gross receipts from gift shop sales located on the premises must be excluded. 
100.3 	Owners of real property desiring 4c classification under this clause must submit an annual 
100.4 	declaration to the assessor by February 1 of the current assessment year, based on the 
100.5 	property's relevant information for the preceding assessment year;
100.6 	(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used as 
100.7 	a marina, as defined in section 86A.20, subdivision 5, which is made accessible to the public 
100.8 	and devoted to recreational use for marina services. The marina owner must annually provide 
100.9 	evidence to the assessor that it provides services, including lake or river access to the public 
100.10 	by means of an access ramp or other facility that is either located on the property of the 
100.11 	marina or at a publicly owned site that abuts the property of the marina. No more than 800 
100.12 	feet of lakeshore may be included in this classification. Buildings used in conjunction with 
100.13 	a marina for marina services, including but not limited to buildings used to provide food 
100.14 	and beverage services, fuel, boat repairs, or the sale of bait or fishing tackle, are classified 
100.15 	as class 3a property; and
100.16 	(12) real and personal property devoted to noncommercial temporary and seasonal 
100.17 	residential occupancy for recreation purposes.
100.18 	Class 4c property has a classification rate of 1.5 percent of market value, except that (i) 
100.19 	each parcel of noncommercial seasonal residential recreational property under clause (12) 
100.20 	has the same classification rates as class 4bb property, (ii) manufactured home parks assessed 
100.21 	under clause (5), item (i), have the same classification rate as class 4b property, the market 
100.22 	value of manufactured home parks assessed under clause (5), item (ii), have a classification 
100.23 	rate of 0.75 percent if more than 50 percent of the lots in the park are occupied by 
100.24 	shareholders in the cooperative corporation or association and a classification rate of one 
100.25 	percent if 50 percent or less of the lots are so occupied, and class I manufactured home 
100.26 	parks as defined in section 327C.01, subdivision 13, have a classification rate of 1.0 percent, 
100.27 	(iii) commercial-use seasonal residential recreational property and marina recreational land 
100.28 	as described in clause (11), has a classification rate of one percent for the first $500,000 of 
100.29 	market value, and 1.25 percent for the remaining market value, (iv) the market value of 
100.30 	property described in clause (4) has a classification rate of one percent, (v) the market value 
100.31 	of property described in clauses (2), (6), and (10) has a classification rate of 1.25 percent, 
100.32 	(vi) that portion of the market value of property in clause (9) qualifying for class 4c property 
100.33 	has a classification rate of 1.25 percent, and (vii) property qualifying for classification under 
100.34 	clause (3) that is owned or operated by a congressionally chartered veterans organization 
100.35 	has a classification rate of one percent. The commissioner of veterans affairs must provide 
101.1 	a list of congressionally chartered veterans organizations to the commissioner of revenue 
101.2 	by June 30, 2017, and by January 1, 2018, and each year thereafter.
101.3 	(e) Class 4d property is qualifying low-income rental housing certified to the assessor 
101.4 	by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion of 
101.5 	the units in the building qualify as low-income rental housing units as certified under section 
101.6 	273.128, subdivision 3, only the proportion of qualifying units to the total number of units 
101.7 	in the building qualify for class 4d. The remaining portion of the building shall be classified 
101.8 	by the assessor based upon its use. Class 4d also includes the same proportion of land as 
101.9 	the qualifying low-income rental housing units are to the total units in the building. For all 
101.10 	properties qualifying as class 4d, the market value determined by the assessor must be based 
101.11 	on the normal approach to value using normal unrestricted rents.
101.12 	(f) The first tier of market value of class 4d property has a classification rate of 0.75 
101.13 	percent. The remaining value of class 4d property has a classification rate of 0.25 percent. 
101.14 	For the purposes of this paragraph, the "first tier of market value of class 4d property" means 
101.15 	the market value of each housing unit up to the first tier limit. For the purposes of this 
101.16 	paragraph, all class 4d property value must be assigned to individual housing units. The 
101.17 	first tier limit is $100,000 for assessment year 2014. For subsequent years, the limit is 
101.18 	adjusted each year by the average statewide change in estimated market value of property 
101.19 	classified as class 4a and 4d under this section for the previous assessment year, excluding 
101.20 	valuation change due to new construction, rounded to the nearest $1,000, provided, however, 
101.21 	that the limit may never be less than $100,000. Beginning with assessment year 2015, the 
101.22 	commissioner of revenue must certify the limit for each assessment year by November 1 
101.23 	of the previous year.

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

101.25 	Sec. 9. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 34, is amended 
101.26 	to read:
101.27 		Subd. 34.Homestead of disabled veteran or family caregiver. (a) All or a portion of 
101.28 	the market value of property owned by a veteran and serving as the veteran's homestead 
101.29 	under this section is excluded in determining the property's taxable market value if the 
101.30 	veteran has a service-connected disability of 70 percent or more as certified by the United 
101.31 	States Department of Veterans Affairs. To qualify for exclusion under this subdivision, the 
101.32 	veteran must have been honorably discharged from the United States armed forces, as 
101.33 	indicated by United States Government Form DD214 or other official military discharge 
101.34 	papers.
102.1 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded, 
102.2 	except as provided in clause (2); and
102.3 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
102.4 	excluded.
102.5 	(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b), clause 
102.6 	(2), predeceases the veteran's spouse, and if upon the death of the veteran the spouse holds 
102.7 	the legal or beneficial title to the homestead and permanently resides there, the exclusion 
102.8 	shall carry over to the benefit of the veteran's spouse for the current taxes payable year and 
102.9 	for eight additional taxes payable years or until such time as the spouse remarries, or sells, 
102.10 	transfers, or otherwise disposes of the property, whichever comes first, except as otherwise 
102.11 	provided in paragraph (n). Qualification under this paragraph requires an application under 
102.12 	paragraph (h), and a spouse must notify the assessor if there is a change in the spouse's 
102.13 	marital status, ownership of the property, or use of the property as a permanent residence.
102.14 	(d) If the spouse of a member of any branch or unit of the United States armed forces 
102.15 	who dies due to a service-connected cause while serving honorably in active service, as 
102.16 	indicated on United States Government Form DD1300 or DD2064, holds the legal or 
102.17 	beneficial title to a homestead and permanently resides there, the spouse is entitled to the 
102.18 	benefit described in paragraph (b), clause (2), for eight taxes payable years, or until such 
102.19 	time as the spouse remarries or sells, transfers, or otherwise disposes of the property, 
102.20 	whichever comes first, except as otherwise provided in paragraph (n).
102.21 	(e) If a veteran meets the disability criteria of paragraph (a) but does not own property 
102.22 	classified as homestead in the state of Minnesota, then the homestead of the veteran's primary 
102.23 	family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify 
102.24 	for under paragraph (b).
102.25 	(f) In the case of an agricultural homestead, only the portion of the property consisting 
102.26 	of the house and garage and immediately surrounding one acre of land qualifies for the 
102.27 	valuation exclusion under this subdivision.
102.28 	(g) A property qualifying for a valuation exclusion under this subdivision is not eligible 
102.29 	for the market value exclusion under subdivision 35, or classification under subdivision 22, 
102.30 	paragraph (b).
102.31 	(h) To qualify for a valuation exclusion under this subdivision a property owner must 
102.32 	apply to the assessor by July 1 December 15 of the first assessment year for which the 
102.33 	exclusion is sought. For an application received after July 1 December 15, the exclusion 
102.34 	shall become effective for the following assessment year. Except as provided in paragraph 
103.1 	(c), the owner of a property that has been accepted for a valuation exclusion must notify 
103.2 	the assessor if there is a change in ownership of the property or in the use of the property 
103.3 	as a homestead. When a property qualifying for a market value exclusion under this 
103.4 	subdivision is sold or transferred, the exclusion must be removed for taxes payable in the 
103.5 	following year, provided that the new owner may file a claim for an exclusion if eligible.
103.6 	(i) A first-time application by a qualifying spouse for the market value exclusion under 
103.7 	paragraph (d) must be made any time within two years of the death of the service member.
103.8 	(j) For purposes of this subdivision:
103.9 	(1) "active service" has the meaning given in section 190.05;
103.10 	(2) "own" means that the person's name is present as an owner on the property deed;
103.11 	(3) "primary family caregiver" means a person who is approved by the secretary of the 
103.12 	United States Department of Veterans Affairs for assistance as the primary provider of 
103.13 	personal care services for an eligible veteran under the Program of Comprehensive Assistance 
103.14 	for Family Caregivers, codified as United States Code, title 38, section 1720G; and
103.15 	(4) "veteran" has the meaning given the term in section 197.447.
103.16 	(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion 
103.17 	under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit 
103.18 	under paragraph (b), clause (2), for eight taxes payable years or until the spouse remarries 
103.19 	or sells, transfers, or otherwise disposes of the property, except as otherwise provided in 
103.20 	paragraph (n), if:
103.21 	(1) the spouse files a first-time application within two years of the death of the service 
103.22 	member or by June 1, 2019, whichever is later;
103.23 	(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the 
103.24 	homestead and permanently resides there;
103.25 	(3) the veteran met the honorable discharge requirements of paragraph (a); and
103.26 	(4) the United States Department of Veterans Affairs certifies that:
103.27 	(i) the veteran met the total (100 percent) and permanent disability requirement under 
103.28 	paragraph (b), clause (2); or
103.29 	(ii) the spouse has been awarded dependency and indemnity compensation.
103.30 	(l) The purpose of this provision of law providing a level of homestead property tax 
103.31 	relief for gravely disabled veterans, their primary family caregivers, and their surviving 
104.1 	spouses is to help ease the burdens of war for those among our state's citizens who bear 
104.2 	those burdens most heavily.
104.3 	(m) By July 1, the county veterans service officer must certify the disability rating and 
104.4 	permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.
104.5 	(n) A spouse who received the benefit in paragraph (c), (d), or (k) but no longer holds 
104.6 	the legal or beneficial title to the property may continue to receive the exclusion for a 
104.7 	property other than the property for which the exclusion was initially granted until the spouse 
104.8 	remarries or sells, transfers, or otherwise disposes of the property, provided that:
104.9 	(1) the spouse applies under paragraph (h) for the continuation of the exclusion allowed 
104.10 	under this paragraph;
104.11 	(2) the spouse holds the legal or beneficial title to the property for which the continuation 
104.12 	of the exclusion is sought under this paragraph and permanently resides there;
104.13 	(3) the estimated market value of the property for which the exclusion is sought under 
104.14 	this paragraph is less than or equal to the estimated market value of the property that first 
104.15 	received the exclusion, based on the value of each property on the date of the sale of the 
104.16 	property that first received the exclusion; and
104.17 	(4) the spouse has not previously received the benefit under this paragraph for a property 
104.18 	other than the property for which the exclusion is sought.
104.19 	The exclusion for a spouse under this paragraph and paragraph (c), (d), or (k) may not 
104.20 	exceed a total of eight taxes payable years.

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

104.23 	Sec. 10. Minnesota Statutes 2017 Supplement, section 275.025, subdivision 1, is amended 
104.24 	to read:
104.25 		Subdivision 1.Levy amount. (a) The state general levy is levied against 
104.26 	commercial-industrial property and seasonal residential recreational property, as defined 
104.27 	in this section. The state general levy for commercial-industrial property is $784,590,000 
104.28 	for taxes payable in 2018 and thereafter. The state general levy for seasonal-recreational 
104.29 	property is $44,190,000 for taxes payable in 2018 and thereafter. The tax under this section 
104.30 	is not treated as a local tax rate under section 469.177 and is not the levy of a governmental 
104.31 	unit under chapters 276A and 473F.
105.1 	(b) The commissioner shall increase or decrease the preliminary or final rate for a year 
105.2 	as necessary to account for errors and tax base changes that affected a preliminary or final 
105.3 	rate for either of the two preceding years. Adjustments are allowed to the extent that the 
105.4 	necessary information is available to the commissioner at the time the rates for a year must 
105.5 	be certified, and for the following reasons:
105.6 	(1) an erroneous report of taxable value by a local official;
105.7 	(2) an erroneous calculation by the commissioner; and
105.8 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
105.9 	residential recreational property reported on the abstracts of tax lists submitted under section 
105.10 	275.29 that was not reported on the abstracts of assessment submitted under section 270C.89 
105.11 	for the same year.
105.12 	The commissioner may, but need not, make adjustments if the total difference in the tax 
105.13 	levied for the year would be less than $100,000.
105.14 	(c) Each year, the commissioner must reduce the state commercial-industrial levy under 
105.15 	paragraph (a) by the amount of state general tax that would be paid by property defined in 
105.16 	subdivision 2, paragraph (c), if it were not exempt.

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

105.18 	Sec. 11. Minnesota Statutes 2017 Supplement, section 275.025, subdivision 2, is amended 
105.19 	to read:
105.20 		Subd. 2.Commercial-industrial tax capacity. (a) For the purposes of this section, 
105.21 	"commercial-industrial tax capacity" means the tax capacity of all taxable property classified 
105.22 	as class 3 or class 5(1) under section 273.13, excluding:
105.23 	(1) the tax capacity attributable to the first $100,000 of market value of each parcel of 
105.24 	commercial-industrial property as defined under section 273.13, subdivision 24, clauses (1) 
105.25 	and (2);
105.26 	(2) electric generation attached machinery under class 3; and
105.27 	(3) property described in section 473.625; and
105.28 	(4) property described in paragraph (c).
105.29 	(b) County commercial-industrial tax capacity amounts are not adjusted for the captured 
105.30 	net tax capacity of a tax increment financing district under section 469.177, subdivision 2, 
105.31 	the net tax capacity of transmission lines deducted from a local government's total net tax 
106.1 	capacity under section 273.425, or fiscal disparities contribution and distribution net tax 
106.2 	capacities under chapter 276A or 473F. For purposes of this subdivision, the procedures 
106.3 	for determining eligibility for tier 1 under section 273.13, subdivision 24, clauses (1) and 
106.4 	(2), shall apply in determining the portion of a property eligible to be considered within the 
106.5 	first $100,000 of market value.
106.6 	(c) Personal property that is part of an intrastate natural gas transportation or distribution 
106.7 	pipeline system is exempt from the tax imposed under this section if:
106.8 	(1) construction of the pipeline system began after January 1, 2018; and
106.9 	(2) the property is located in an area:
106.10 	(i) outside the seven-county metropolitan area, as defined in section 473.121, subdivision 
106.11 	3; and
106.12 	(ii) in which households or businesses lacked access to natural gas distribution systems 
106.13 	as of January 1, 2018.
106.14 	The exemption under this paragraph applies for a period not to exceed 12 years, provided 
106.15 	that once a property no longer qualifies, it may not subsequently qualify for the exemption 
106.16 	under this paragraph.

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

106.18 	Sec. 12. Minnesota Statutes 2016, section 275.066, is amended to read:
106.19 	275.066 SPECIAL TAXING DISTRICTS; DEFINITION.
106.20 	For the purposes of property taxation and property tax state aids, the term "special taxing 
106.21 	districts" includes the following entities:
106.22 	(1) watershed districts under chapter 103D;
106.23 	(2) sanitary districts under sections 442A.01 to 442A.29;
106.24 	(3) regional sanitary sewer districts under sections 115.61 to 115.67;
106.25 	(4) regional public library districts under section 134.201;
106.26 	(5) park districts under chapter 398;
106.27 	(6) regional railroad authorities under chapter 398A;
106.28 	(7) hospital districts under sections 447.31 to 447.38;
106.29 	(8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15;
107.1 	(9) Duluth Transit Authority under sections 458A.21 to 458A.37;
107.2 	(10) regional development commissions under sections 462.381 to 462.398;
107.3 	(11) housing and redevelopment authorities under sections 469.001 to 469.047;
107.4 	(12) port authorities under sections 469.048 to 469.068;
107.5 	(13) economic development authorities under sections 469.090 to 469.1081;
107.6 	(14) Metropolitan Council under sections 473.123 to 473.549;
107.7 	(15) Metropolitan Airports Commission under sections 473.601 to 473.679;
107.8 	(16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716;
107.9 	(17) Morrison County Rural Development Financing Authority under Laws 1982, chapter 
107.10 	437, section 1;
107.11 	(18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 6;
107.12 	(19) East Lake County Medical Clinic District under Laws 1989, chapter 211, sections 
107.13 	1 to 6;
107.14 	(20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article 5, 
107.15 	section 39;
107.16 	(21) Middle Mississippi River Watershed Management Organization under sections 
107.17 	103B.211 and 103B.241;
107.18 	(22) emergency medical services special taxing districts under section 144F.01;
107.19 	(23) a county levying under the authority of section 103B.241, 103B.245, or 103B.251;
107.20 	(24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home 
107.21 	under Laws 2003, First Special Session chapter 21, article 4, section 12;
107.22 	(25) an airport authority created under section 360.0426; and
107.23 	(26) fire protection special taxing districts under section 299O.01; and
107.24 	(27) any other political subdivision of the state of Minnesota, excluding counties, school 
107.25 	districts, cities, and towns, that has the power to adopt and certify a property tax levy to the 
107.26 	county auditor, as determined by the commissioner of revenue.

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

108.1 	Sec. 13. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 13, is amended 
108.2 	to read:
108.3 		Subd. 13.Property taxes payable. "Property taxes payable" means the property tax 
108.4 	exclusive of special assessments, penalties, and interest payable on a claimant's homestead 
108.5 	after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2, 
108.6 	and any other state paid property tax credits in any calendar year, and after any refund 
108.7 	claimed and allowable under section 290A.04, subdivision 2h, that is first payable in the 
108.8 	year that the property tax is payable. In the case of a claimant who makes ground lease 
108.9 	payments, "property taxes payable" includes the amount of the payments directly attributable 
108.10 	to the property taxes assessed against the parcel on which the house is located. Regardless 
108.11 	of the limitations in section 280A(c)(5) of the Internal Revenue Code, "property taxes 
108.12 	payable" must be apportioned or reduced for the use of a portion of the claimant's homestead 
108.13 	for a business purpose if the claimant deducts any business depreciation expenses for the 
108.14 	use of a portion of the homestead or deducts expenses under section 280A of the Internal 
108.15 	Revenue Code for a business operated in the claimant's homestead. For homesteads which 
108.16 	are manufactured homes as defined in section 273.125, subdivision 8, and for homesteads 
108.17 	which are including manufactured homes located in a manufactured home community owned 
108.18 	by a cooperative organized under chapter 308A or 308B, and park trailers taxed as 
108.19 	manufactured homes under section 168.012, subdivision 9, "property taxes payable" shall 
108.20 	also include 17 percent of the gross rent paid in the preceding year for the site on which the 
108.21 	homestead is located. When a homestead is owned by two or more persons as joint tenants 
108.22 	or tenants in common, such tenants shall determine between them which tenant may claim 
108.23 	the property taxes payable on the homestead. If they are unable to agree, the matter shall 
108.24 	be referred to the commissioner of revenue whose decision shall be final. Property taxes 
108.25 	are considered payable in the year prescribed by law for payment of the taxes.
108.26 	In the case of a claim relating to "property taxes payable," the claimant must have owned 
108.27 	and occupied the homestead on January 2 of the year in which the tax is payable and (i) the 
108.28 	property must have been classified as homestead property pursuant to section 273.124, on 
108.29 	or before December 15 of the assessment year to which the "property taxes payable" relate; 
108.30 	or (ii) the claimant must provide documentation from the local assessor that application for 
108.31 	homestead classification has been made on or before December 15 of the year in which the 
108.32 	"property taxes payable" were payable and that the assessor has approved the application.

108.33 	EFFECTIVE DATE. This section is effective beginning with claims for taxes payable 
108.34 	in 2019.

109.1 	Sec. 14. [299O.01] FIRE PROTECTION SPECIAL TAXING DISTRICTS.
109.2 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
109.3 	the meanings given unless the context clearly requires otherwise.
109.4 	(b) "City" means a statutory or home rule charter city.
109.5 	(c) "Governing body" means for a city, its city council; for a county, its county board; 
109.6 	and for a town, the board of supervisors.
109.7 	(d) "Political subdivision" means a county, a city, or a township organized to provide 
109.8 	town government.
109.9 		Subd. 2.Authority to establish. (a) Two or more political subdivisions may establish, 
109.10 	by resolution of their governing bodies, a special taxing district to provide fire protection 
109.11 	or emergency medical services or both in the area of the district, comprising the jurisdiction 
109.12 	of each of the political subdivisions forming the district. For a county that participates in 
109.13 	establishing a district, the county's jurisdiction comprises the unorganized territory of the 
109.14 	county that it designates in its resolution for inclusion in the district. The area of the special 
109.15 	taxing district does not need to be contiguous or its boundaries continuous.
109.16 	(b) Before establishing a district under this section, the participating political subdivisions 
109.17 	must enter an agreement that specifies how any liabilities, other than debt issued under 
109.18 	subdivision 6, and assets of the district will be distributed if the district is dissolved. The 
109.19 	agreement may also include other terms, including a method for apportioning the levy of 
109.20 	the district among participating political subdivisions under subdivision 4, paragraph (b), 
109.21 	as the political subdivisions determine appropriate. The agreement must be adopted no later 
109.22 	than upon passage of the resolution establishing the district under paragraph (a), but may 
109.23 	be later amended by agreement of each of the political subdivisions participating in the 
109.24 	district.
109.25 		Subd. 3.Board. The special taxing district established under this section is governed 
109.26 	by a board made up initially of representatives of each participating political subdivision 
109.27 	in the proportions set out in the establishing resolution, subject to change as provided in the 
109.28 	district's charter, if any, or in the district's bylaws. Each participating political subdivision's 
109.29 	representative must be an elected member of the governing body of the political subdivision 
109.30 	and serves at the pleasure of that participant's governing body.
109.31 		Subd. 4.Property tax levy. (a) The board may levy a tax on the taxable real and personal 
109.32 	property in the district. The tax levy may not exceed 0.096 percent of  the estimated market 
109.33 	value of the district, or $1,100,000, whichever is less. The proceeds of the levy must be 
110.1 	used as provided in subdivision 5. The board shall certify the levy at the times provided 
110.2 	under section 275.07. The board shall provide the county with whatever information is 
110.3 	necessary to identify the property that is located within the district. If the boundaries include 
110.4 	a part of a parcel, the entire parcel is included in the district. The county auditors must 
110.5 	spread, collect, and distribute the proceeds of the tax at the same time and in the same 
110.6 	manner as provided by law for all other property taxes.
110.7 	(b) As an alternative to paragraph (a), the board may apportion its levy among the political 
110.8 	subdivisions that are members of the district under a formula or method, such as population, 
110.9 	number of service calls, cost of providing service, the market value of improvements, or 
110.10 	other measure or measures, that was approved by the governing body of each of the political 
110.11 	subdivisions that is a member of the district. The amount of the levy allocated to each 
110.12 	political subdivision must be added to that political subdivision's levy and spread at the 
110.13 	same time and in the same manner as provided by law for other taxes. The proceeds of the 
110.14 	levy must be collected and remitted to the district and used as provided in subdivision 5.
110.15 		Subd. 5.Use of levy proceeds. The proceeds of property taxes levied under this section 
110.16 	must be used to provide fire protection or emergency medical services to residents of the 
110.17 	district and property located in the district, as well as to pay debt issued under subdivision 
110.18 	6. Services may be provided by employees of the district or by contracting for services 
110.19 	provided by other governmental or private entities.
110.20 		Subd. 6.Debt. (a) The district may incur debt under chapter 475 when the board 
110.21 	determines doing so is necessary to accomplish its duties.
110.22 	(b) In addition, the board of the district may issue certificates of indebtedness or capital 
110.23 	notes under section 412.301 to purchase capital equipment. In applying section 412.301, 
110.24 	paragraph (e), to the district the following rules apply:
110.25 	(1) the taxable property of the entire district must be used to calculate the percent of 
110.26 	estimated market value; and
110.27 	(2) "the number of voters at the last municipal election" means the sum of the number 
110.28 	of voters at the last municipal election for each of the cities that is a member of the district 
110.29 	plus the number of registered voters in each town that is a participating member of the 
110.30 	district.
110.31 		Subd. 7.Powers. (a) In addition to authority expressly granted in this section, a special 
110.32 	taxing district may exercise any power that may be exercised by any of its participating 
110.33 	political subdivisions and that is necessary or reasonable to support the services set out in 
110.34 	subdivision 5. The district may only levy the taxes authorized in subdivision 4. These powers 
111.1 	include, without limitation, the authority to participate in state programs and to enforce or 
111.2 	carry out state laws related to fire protection or emergency medical services, including 
111.3 	programs providing state aid, reimbursement or funding of employee benefits, authorizing 
111.4 	local enforcement of state standards, and similar authority. These include but are not limited 
111.5 	to fire protection related programs and political subdivision powers or responsibilities under 
111.6 	chapters 299A and 424A; sections 6.495, 69.011, and 353.64; and any administrative rules 
111.7 	related to the fire code.
111.8 	(b) To the extent that the district's authority under this subdivision overlaps with or may 
111.9 	conflict with the authority of the participating political subdivision, the agreement under 
111.10 	subdivision 2, paragraph (b), must provide for allocation of those powers or responsibilities 
111.11 	between the participating political subdivisions and the district and may provide for resolution 
111.12 	of conflicts in the exercise of those powers.
111.13 		Subd. 8.Additions and withdrawals. (a) Additional eligible political subdivisions may 
111.14 	be added to a special taxing district under this section as provided by the board of the district 
111.15 	and agreed to in a resolution of the governing body of the political subdivision proposed to 
111.16 	be added.
111.17 	(b) A political subdivision may withdraw from a special taxing district under this section 
111.18 	by resolution of its governing body. The political subdivision must notify the board of the 
111.19 	special taxing district of the withdrawal by providing a copy of the resolution at least two 
111.20 	years in advance of the proposed withdrawal. The taxable property of the withdrawing 
111.21 	member is subject to the property tax levy under subdivision 4 for the two taxes payable 
111.22 	years following the notice of the withdrawal, unless the board and the withdrawing member 
111.23 	agree otherwise by a resolution adopted by each of their governing bodies. If a political 
111.24 	subdivision withdraws from a district for which debt was issued under subdivision 6 when 
111.25 	the political subdivision was a participating member of the district and which is outstanding 
111.26 	when the political subdivision withdraws from the district, the taxable property of the 
111.27 	withdrawing political subdivision remains subject to the special taxing district debt levy 
111.28 	until that outstanding debt has been paid or defeased. If the district's property levy to repay 
111.29 	the debt was apportioned among the political subdivisions under an alternative formula or 
111.30 	method under subdivision 4, paragraph (b), the withdrawing political subdivision is subject 
111.31 	to the same percentage of the debt levy as applied in the taxes payable year immediately 
111.32 	before its withdrawal from the district.
111.33 	(c) Notwithstanding subdivision 2, a special taxing district comprised of two political 
111.34 	subdivisions continues to exist even if one of the political subdivisions withdraws.
112.1 		Subd. 9.Dissolution. The special taxing district may be dissolved by resolution approved 
112.2 	by majority vote of the board. If the special taxing district is dissolved, the assets and 
112.3 	liabilities may be assigned to a successor entity, if any, or otherwise disposed of for public 
112.4 	purposes as provided in the agreement adopted under subdivision 2, paragraph (b), or 
112.5 	otherwise agreed to by the participating political subdivisions. A district may not be dissolved 
112.6 	until all debt issued under subdivision 6 has been paid or defeased.

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

112.8 	Sec. 15. Minnesota Statutes 2016, section 473H.08, subdivision 1, is amended to read:
112.9 		Subdivision 1.Till expiration started. Agricultural preserves shall continue until either 
112.10 	the landowner or, the authority, or a state agency or governmental unit initiates expiration 
112.11 	as provided in this section.

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

112.15 	Sec. 16. Minnesota Statutes 2016, section 473H.08, is amended by adding a subdivision 
112.16 	to read:
112.17 		Subd. 3a.Expiration for park and trail purposes. (a) An agricultural preserve expires 
112.18 	immediately when a state agency or other governmental unit purchases the property or 
112.19 	obtains an easement over the property for the purpose of creating or expanding a public 
112.20 	trail or public park. This subdivision applies only to the portion of the agricultural preserve 
112.21 	acquired for trail or park purposes, and any portion of the property not acquired for trail or 
112.22 	park purposes shall remain an agricultural preserve.
112.23 	(b) The acquiring state agency or governmental unit shall give notice of the expiration 
112.24 	under paragraph (a) to the authority. The notice must specify the portion of the property 
112.25 	being removed from the agricultural preserve and the date on which that portion expires.

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

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

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

113.10 	Sec. 18. Laws 2008, chapter 366, article 5, section 33, the effective date, as amended by 
113.11 	Laws 2013, chapter 143, article 4, section 35, is amended to read:

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

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

113.15 	Sec. 19. Laws 2009, chapter 88, article 2, section 46, subdivision 1, as amended by Laws 
113.16 	2013, chapter 143, article 4, section 36, is amended to read:
113.17 		Subdivision 1.Agreement. The city of Cloquet and Perch Lake Township, by resolution 
113.18 	of each of their governing bodies, may establish the Cloquet Area Fire and Ambulance 
113.19 	Special Taxing District for the purpose of providing fire or ambulance services, or both, 
113.20 	throughout the district. In this section, "municipality" means home rule charter and statutory 
113.21 	cities, towns, and Indian tribes. The district may exercise all the powers relating to fire and 
113.22 	ambulance services of the municipalities that receive fire or ambulance services, or both, 
113.23 	from the district. Upon application, any other municipality may join the district with the 
113.24 	agreement of the municipalities that comprise the district at the time of its application to 
113.25 	join.

113.26 	EFFECTIVE DATE. This section is effective upon compliance by the Cloquet Area 
113.27 	Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021, 
113.28 	subdivision 3.

113.29 	Sec. 20. Laws 2009, chapter 88, article 2, section 46, subdivision 2, is amended to read:
113.30 		Subd. 2.Board. The Cloquet Area Fire and Ambulance Special Taxing District Board 
113.31 	is governed by a board made up initially of one or more elected officials of the governing 
113.32 	body of each participating municipality in the proportions set out in the establishing 
114.1 	resolution, subject to change as provided in the district's charter, if any, or in the district's 
114.2 	bylaws. Each municipality's representatives serve at the pleasure of that municipality's 
114.3 	governing body.

114.4 	EFFECTIVE DATE. This section is effective upon compliance by the  Cloquet Area 
114.5 	Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021, 
114.6 	subdivision 3.

114.7 	Sec. 21. Laws 2009, chapter 88, article 2, section 46, subdivision 3, as amended by Laws 
114.8 	2013, chapter 143, article 4, section 37, is amended to read:
114.9 		Subd. 3.Tax. The district board may impose a property tax on taxable property as 
114.10 	provided in this subdivision to pay the costs of providing fire or ambulance services, or 
114.11 	both, throughout the district as well as to pay debt issued under subdivision 4. The board 
114.12 	shall annually determine the total amount of the levy that is attributable to the cost of 
114.13 	providing fire services and the cost of providing ambulance services within the primary 
114.14 	service area. For those municipalities that only receive ambulance services, the costs for 
114.15 	the provision of ambulance services shall be levied against taxable property within those 
114.16 	municipalities at a rate necessary not to exceed 0.019 percent of the estimated market value. 
114.17 	For those municipalities that receive both fire and ambulance services, the tax shall be 
114.18 	imposed at a rate that does not exceed 0.2835 percent of estimated market value.
114.19 	When a member municipality opts to receive fire service from the district or an additional 
114.20 	municipality becomes a member of the district, the cost of providing fire services to that 
114.21 	community shall be determined by the board and added to the maximum levy amount.
114.22 	Each county auditor of a county that contains a municipality subject to the tax under 
114.23 	this section must collect the tax and pay it to the Fire and Ambulance Special Taxing District. 
114.24 	The district may also impose other fees or charges as allowed by law for the provision of 
114.25 	fire and ambulance services.

114.26 	EFFECTIVE DATE. This section is effective upon compliance by the  Cloquet Area 
114.27 	Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021, 
114.28 	subdivision 3.

114.29 	Sec. 22. Laws 2009, chapter 88, article 2, section 46, subdivision 4, is amended to read:
114.30 		Subd. 4.Public indebtedness. The district may incur debt in the manner provided for 
114.31 	a municipality by Minnesota Statutes, chapter 475, when necessary to accomplish its duties., 
114.32 	as defined in Minnesota Statutes, sections 475.51, subdivision 2, and 475.521, subdivision 
115.1 	1, paragraph (c), under Minnesota Statutes, chapter 475, and may issue certificates of 
115.2 	indebtedness or capital notes in the manner provided for a city under Minnesota Statutes, 
115.3 	section 412.301, when necessary to accomplish its duties. The debt service for debt, the 
115.4 	proceeds of which financed capital costs for ambulance service, shall be levied against 
115.5 	taxable property within those municipalities in the primary service area. The debt service 
115.6 	for debt, the proceeds of which financed capital costs for fire service, shall be levied against 
115.7 	taxable property within those municipalities receiving fire services.

115.8 	EFFECTIVE DATE. This section is effective upon compliance by the  Cloquet Area 
115.9 	Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021, 
115.10 	subdivision 3.

115.11 	Sec. 23. Laws 2009, chapter 88, article 2, section 46, subdivision 5, is amended to read:
115.12 		Subd. 5.Withdrawal. Notice of intent to withdraw from participation in the district 
115.13 	may be given only in the month of January, with a minimum of twelve months notice of 
115.14 	intent to withdraw. Withdrawal becomes effective for taxes levied pursuant to subdivision 
115.15 	3 in the year when the notice is given. A property tax levied by the district on taxable 
115.16 	property located in a withdrawing municipality to make debt service payments for obligations 
115.17 	issued by the district pursuant to subdivision 4 shall remain in effect until the obligations 
115.18 	outstanding on the date of withdrawal are satisfied, including any property tax levied in 
115.19 	connection with a refunding of such obligations. The district and its members may develop 
115.20 	and agree upon other continuing obligations after withdrawal of a municipality.

115.21 	EFFECTIVE DATE. This section is effective upon compliance by the  Cloquet Area 
115.22 	Fire and Ambulance Special Taxing District Board with Minnesota Statutes, section 645.021, 
115.23 	subdivision 3.

115.24 	Sec. 24. Laws 2017, First Special Session chapter 1, article 10, section 4, the effective 
115.25 	date, is amended to read:

115.26 	EFFECTIVE DATE; APPLICATION. This section is effective for applications and 
115.27 	certifications made in 2018 and thereafter, except the repeal of the exclusion of land under 
115.28 	item (iii) is effective retroactively for payments due under Minnesota Statutes, section 
115.29 	290C.08, beginning for payments due to be made in 2014. In order to qualify for retroactive 
115.30 	payments, the following requirements must be met: (1) the owner of land exceeding 60,000 
115.31 	acres that is subject to a single conservation easement funded under Minnesota Statutes, 
115.32 	section 97A.056 or a comparable permanent easement conveyed to a governmental or 
115.33 	nonprofit entity, must submit an application to the commissioner of revenue, in a form and 
116.1 	manner and at a time acceptable to the commissioner, establishing that the affected property 
116.2 	and its use met the requirement of Minnesota Statutes, chapter 290C, as amended by this 
116.3 	section; (2) the owner and each county in which the land is located must certify to the 
116.4 	commissioner that no petitions challenging the market value of the property are pending 
116.5 	under Minnesota Statutes, chapter 278; and (3) the requirements of clauses (1) and (2) must 
116.6 	be satisfied by October 1, 2017. No interest accrues on payment under this section for 
116.7 	periods before November 1, 2017.

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

116.9 	Sec. 25. STUDY OF VALUATION METHOD OF PIPELINE AND PUBLIC 
116.10 	UTILITY OPERATING PROPERTY.
 116.11 	(a) The commissioner of revenue shall study and prepare a report on the current methods 
116.12 	used to value the operating property of pipelines and public utilities, as defined in Minnesota 
116.13 	Statutes, section 216B.02, subdivision 4, in the state of Minnesota.
116.14 	(b) The report must:
116.15 	(1) describe, in detail, prior and current methods used to value pipeline and public utility 
116.16 	operating property in Minnesota;
116.17 	(2) evaluate whether the current methods used produce an accurate estimate of market 
116.18 	value;
116.19 	(3) compile and explain, in detail, the number of state-assessed pipeline and public utility 
116.20 	valuations that have been appealed in the last 20 years, and the extent to which the market 
116.21 	value was increased or reduced, by agreement, settlement, or judgment, and list and provide 
116.22 	detail on the taxing jurisdictions that have been issued a refund order in the last 20 years as 
116.23 	a result of agreement, settlement, or judgment, including the year and amount paid;
116.24 	(4) report the costs incurred by all taxing jurisdictions relating to the appeals and litigation 
116.25 	to settle any disputes in the last 20 years;
116.26 	(5) evaluate the extent to which host political subdivisions and communities are 
116.27 	adequately compensated under the existing Minnesota property tax system for the external 
116.28 	costs imposed by pipeline and public utility systems;
116.29 	(6) describe, analyze, and compare the methods used to value pipeline and public utility 
116.30 	operating property in other states, not limited to border states; and
116.31 	(7) make recommendations and prepare legislation on improvements or alternative 
116.32 	valuation methods for pipeline and public utility operating property.
117.1 	(c) The commissioner shall report the findings of the study to the committees of the 
117.2 	house of representatives and senate having jurisdiction over taxes by February 15, 2019, 
117.3 	and file the report as required by Minnesota Statutes, section 3.195.

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

117.5 	ARTICLE 5
117.6 	PUBLIC FINANCE

117.7 	Section 1. Minnesota Statutes 2016, section 103E.611, subdivision 2, is amended to read:
117.8 		Subd. 2.Interest. (a) Interest is an additional drainage lien on all property until paid. 
117.9 	The interest rate on the drainage lien principal from the date the drainage lien statement is 
117.10 	recorded must be set by the board but may not exceed the rate determined by the state court 
117.11 	administrator for judgments under section 549.09, or six percent, whichever is greater.
117.12 	(b) Before the tax lists for the year are given to the county treasurer, the auditor shall 
117.13 	compute the interest on the unpaid balance of the drainage lien at the rate set by the board. 
117.14 	The amount of interest must be computed on the entire unpaid principal from the date the 
117.15 	drainage lien was recorded to August 15 of the next calendar year, and afterwards from 
117.16 	August 15 to August 15 of each year.
117.17 	(c) Interest is due and payable after November 1 of each year the drainage lien principal 
117.18 	or interest is due and unpaid.

117.19 	Sec. 2. Minnesota Statutes 2016, section 471.831, subdivision 1, is amended to read:
117.20 		Subdivision 1.Any relief under bankruptcy code. A municipality, as defined in 
117.21 	subdivision 2, may file a petition and seek any relief available to it under United States 
117.22 	Code, title 11, as amended through December 31, 1996.

117.23 	Sec. 3. Minnesota Statutes 2016, section 474A.02, subdivision 22b, is amended to read:
117.24 		Subd. 22b.Public facilities project. "Public facilities project" means any publicly owned 
117.25 	facility, or a facility owned by a nonprofit organization that is used for district heating or 
117.26 	cooling, whether publicly or privately owned, that is eligible to be financed with the proceeds 
117.27 	of public facilities bonds as defined under section 474A.02, subdivision 23a.

117.28 	Sec. 4. Minnesota Statutes 2016, section 475.521, subdivision 1, is amended to read:
117.29 		Subdivision 1.Definitions. For purposes of this section, the following terms have the 
117.30 	meanings given.
118.1 	(a) "Bonds" mean an obligation defined under section 475.51.
118.2 	(b) "Capital improvement" means acquisition or betterment of public lands, buildings 
118.3 	or other improvements for the purpose of a city hall, town hall, library, public safety facility, 
118.4 	and public works facility. An improvement must have an expected useful life of five years 
118.5 	or more to qualify. Capital improvement does not include light rail transit or any activity 
118.6 	related to it, or a park, road, bridge, administrative building other than a city or town hall, 
118.7 	or land for any of those facilities. For purposes of this section, "capital improvement" 
118.8 	includes expenditures for purposes described in this paragraph that have been incurred by 
118.9 	a municipality before approval of a capital improvement plan, if such expenditures are 
118.10 	included in a capital improvement plan approved on or before the date of the public hearing 
118.11 	under subdivision 2 regarding issuance of bonds for such expenditures.
118.12 	(c) "Municipality" means a home rule charter or statutory city or a town described in 
118.13 	section 368.01, subdivision 1 or 1a.

118.14 	ARTICLE 6
118.15 	MISCELLANEOUS

118.16 	Section 1. Minnesota Statutes 2016, section 62V.05, subdivision 2, is amended to read:
118.17 		Subd. 2.Operations funding. (a) Prior to January 1, 2015, MNsure shall retain or collect 
118.18 	up to 1.5 percent of total premiums for individual and small group market health plans and 
118.19 	dental plans sold through MNsure to fund the cash reserves of MNsure, but the amount 
118.20 	collected shall not exceed a dollar amount equal to 25 percent of the funds collected under 
118.21 	section 62E.11, subdivision 6, for calendar year 2012.
118.22 	(b) Beginning January 1, 2015, MNsure shall retain or collect up to 3.5 percent of total 
118.23 	premiums for individual and small group market health plans and dental plans sold through 
118.24 	MNsure to fund the operations of MNsure, but the amount collected shall not exceed a 
118.25 	dollar amount equal to 50 percent of the funds collected under section 62E.11, subdivision 
118.26 	6, for calendar year 2012.
118.27 	(c) (a) Beginning January 1, 2016, through December 31, 2018, MNsure shall retain or 
118.28 	collect up to 3.5 percent of total premiums for individual and small group market health 
118.29 	plans and dental plans sold through MNsure to fund the operations of MNsure, but the 
118.30 	amount collected may never exceed a dollar amount greater than 100 percent of the funds 
118.31 	collected under section 62E.11, subdivision 6, for calendar year 2012.
118.32 	(d) For fiscal years 2014 and 2015, the commissioner of management and budget is 
118.33 	authorized to provide cash flow assistance of up to $20,000,000 from the special revenue 
119.1 	fund or the statutory general fund under section 16A.671, subdivision 3, paragraph (a), to 
119.2 	MNsure. Any funds provided under this paragraph shall be repaid, with interest, by June 
119.3 	30, 2015.
119.4 	(b) Beginning January 1, 2019, MNsure shall retain or collect up to two percent of total 
119.5 	premiums for individual and small group health plans and dental plans sold through MNsure 
119.6 	to fund the operations of MNsure, but the amount collected may never exceed a dollar 
119.7 	amount greater than 25 percent of the funds collected under section 62E.11, subdivision 6, 
119.8 	for calendar year 2012.
119.9 	(e) (c) Funding for the operations of MNsure shall cover any compensation provided to 
119.10 	navigators participating in the navigator program.
119.11 	(d) Interagency agreements between MNsure and the Department of Human Services, 
119.12 	and the Public Assistance Cost Allocation Plan for the Department of Human Services shall 
119.13 	not be modified to reflect any changes to the percentage of premiums that MNsure is allowed 
119.14 	to retain or collect under this section, and no additional funding shall be transferred from 
119.15 	the Department of Human Services to MNsure as a result of any changes to the percentage 
119.16 	of premiums that MNsure is allowed to retain or collect under this section.

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

119.18 	Sec. 2. Minnesota Statutes 2016, section 62V.05, subdivision 5, is amended to read:
119.19 		Subd. 5.Health carrier and health plan requirements; participation. (a) Beginning 
119.20 	January 1, 2015, the board may establish certification requirements for health carriers and 
119.21 	health plans to be offered through MNsure that satisfy federal requirements under section 
119.22 	1311(c)(1) of the Affordable Care Act, Public Law 111-148 United States Code, title 42, 
119.23 	section 18031(c)(1).
119.24 	(b) Paragraph (a) does not apply if by June 1, 2013, the legislature enacts regulatory 
119.25 	requirements that:
119.26 	(1) apply uniformly to all health carriers and health plans in the individual market;
119.27 	(2) apply uniformly to all health carriers and health plans in the small group market; and
119.28 	(3) satisfy minimum federal certification requirements under section 1311(c)(1) of the 
119.29 	Affordable Care Act, Public Law 111-148 United States Code, title 42, section 18031(c)(1).
119.30 	(c) In accordance with section 1311(e) of the Affordable Care Act, Public Law 111-148
119.31 	United States Code, title 42, section 18031(e), the board shall establish policies and 
119.32 	procedures for certification and selection of health plans to be offered as qualified health 
120.1 	plans through MNsure. The board shall certify and select a health plan as a qualified health 
120.2 	plan to be offered through MNsure, if:
120.3 	(1) the health plan meets the minimum certification requirements established in paragraph 
120.4 	(a) or the market regulatory requirements in paragraph (b);
120.5 	(2) the board determines that making the health plan available through MNsure is in the 
120.6 	interest of qualified individuals and qualified employers;
120.7 	(3) the health carrier applying to offer the health plan through MNsure also applies to 
120.8 	offer health plans at each actuarial value level and service area that the health carrier currently 
120.9 	offers in the individual and small group markets; and
120.10 	(4) the health carrier does not apply to offer health plans in the individual and small 
120.11 	group markets through MNsure under a separate license of a parent organization or holding 
120.12 	company under section 60D.15, that is different from what the health carrier offers in the 
120.13 	individual and small group markets outside MNsure.
120.14 	(d) In determining the interests of qualified individuals and employers under paragraph 
120.15 	(c), clause (2), the board may not exclude a health plan for any reason specified under section 
120.16 	1311(e)(1)(B) of the Affordable Care Act, Public Law 111-148 United States Code, title 
120.17 	42, section 18031(e)(1)(B). The board may consider:
120.18 	(1) affordability;
120.19 	(2) quality and value of health plans;
120.20 	(3) promotion of prevention and wellness;
120.21 	(4) promotion of initiatives to reduce health disparities;
120.22 	(5) market stability and adverse selection;
120.23 	(6) meaningful choices and access;
120.24 	(7) alignment and coordination with state agency and private sector purchasing strategies 
120.25 	and payment reform efforts; and
120.26 	(8) other criteria that the board determines appropriate.
120.27 	(e) A health plan that meets the minimum certification requirements under paragraph 
120.28 	(c) and United States Code, title 42, section 18031(c)(1), and any regulations and guidance 
120.29 	issued under that section, is deemed to be in the interest of qualified individuals and qualified 
120.30 	employers. The board shall not establish certification requirements for health carriers and 
120.31 	health plans for participation in MNsure that are in addition to the certification requirements 
121.1 	under paragraph (c) and United States Code, title 42, section 18031(c)(1), and any regulations 
121.2 	and guidance issued under that section. The board shall not determine the cost of, cost-sharing 
121.3 	elements of, or benefits provided in health plans sold through MNsure.
121.4 	(e) (f) For qualified health plans offered through MNsure on or after January 1, 2015, 
121.5 	the board shall establish policies and procedures under paragraphs (c) and (d) for selection 
121.6 	of health plans to be offered as qualified health plans through MNsure by February 1 of 
121.7 	each year, beginning February 1, 2014. The board shall consistently and uniformly apply 
121.8 	all policies and procedures and any requirements, standards, or criteria to all health carriers 
121.9 	and health plans. For any policies, procedures, requirements, standards, or criteria that are 
121.10 	defined as rules under section 14.02, subdivision 4, the board may use the process described 
121.11 	in subdivision 9.
121.12 	(f) For 2014, the board shall not have the power to select health carriers and health plans 
121.13 	for participation in MNsure. The board shall permit all health plans that meet the certification 
121.14 	requirements under section 1311(c)(1) of the Affordable Care Act, Public Law 111-148, to 
121.15 	be offered through MNsure.
121.16 	(g) Under this subdivision, the board shall have the power to verify that health carriers 
121.17 	and health plans are properly certified to be eligible for participation in MNsure.
121.18 	(h) The board has the authority to decertify health carriers and health plans that fail to 
121.19 	maintain compliance with section 1311(c)(1) of the Affordable Care Act, Public Law 111-148
121.20 	United States Code, title 42, section 18031(c)(1).
121.21 	(i) For qualified health plans offered through MNsure beginning January 1, 2015, health 
121.22 	carriers must use the most current addendum for Indian health care providers approved by 
121.23 	the Centers for Medicare and Medicaid Services and the tribes as part of their contracts with 
121.24 	Indian health care providers. MNsure shall comply with all future changes in federal law 
121.25 	with regard to health coverage for the tribes.

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

121.27 	Sec. 3. Minnesota Statutes 2016, section 62V.05, subdivision 10, is amended to read:
121.28 		Subd. 10.Limitations; risk-bearing. (a) The board shall not bear insurance risk or enter 
121.29 	into any agreement with health care providers to pay claims.
121.30 	(b) Nothing in this subdivision shall prevent MNsure from providing insurance for its 
121.31 	employees.
122.1 	(c) The commissioner of human services shall not bear insurance risk or enter into any 
122.2 	agreement with providers to pay claims for any health coverage administered by the 
122.3 	commissioner that is made available for purchase through the MNsure Web site as an 
122.4 	alternative to purchasing a qualifying health plan through MNsure or an individual health 
122.5 	plan offered outside of MNsure.
122.6 	(d) Nothing in this subdivision shall prohibit:
122.7 	(1) the commissioner of human services from administering the medical assistance 
122.8 	program under chapter 256B and the MinnesotaCare program under chapter 256L, as long 
122.9 	as health coverage under these programs is not purchased by the individual through the 
122.10 	MNsure Web site; and
122.11 	(2) employees of the Department of Human Services from obtaining insurance from the 
122.12 	state employee group insurance program.

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

122.14 	Sec. 4. Minnesota Statutes 2016, section 62V.08, is amended to read:
122.15 	62V.08 REPORTS.
122.16 	(a) MNsure shall submit a report to the legislature by January 15, 2015, and each January 
122.17 	15 thereafter, on: (1) the performance of MNsure operations; (2) meeting MNsure 
122.18 	responsibilities; (3) an accounting of MNsure budget activities; (4) practices and procedures 
122.19 	that have been implemented to ensure compliance with data practices laws, and a description 
122.20 	of any violations of data practices laws or procedures; and (5) the effectiveness of the 
122.21 	outreach and implementation activities of MNsure in reducing the rate of uninsurance.
122.22 	(b) MNsure must publish its administrative and operational costs on a Web site to educate 
122.23 	consumers on those costs. The information published must include: (1) the amount of 
122.24 	premiums and federal premium subsidies collected; (2) the amount and source of revenue 
122.25 	received under section 62V.05, subdivision 1, paragraph (b), clause (3); (3) the amount and 
122.26 	source of any other fees collected for purposes of supporting operations; and (4) any misuse 
122.27 	of funds as identified in accordance with section 3.975. The Web site must be updated at 
122.28 	least annually.
122.29 	(c) As part of the report required to be submitted to the legislature in paragraph (a) and 
122.30 	the information required to be published in paragraph (b), MNsure shall include the total 
122.31 	amount spent on business continuity planning, data privacy protection, and cyber security 
122.32 	provisions.

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

123.2 	Sec. 5. Minnesota Statutes 2017 Supplement, section 298.17, is amended to read:
123.3 	298.17 OCCUPATION TAXES TO BE APPORTIONED; REFUND.
123.4 	(a) All occupation taxes paid by persons, copartnerships, companies, joint stock 
123.5 	companies, corporations, and associations, however or for whatever purpose organized, 
123.6 	engaged in the business of mining or producing iron ore or other ores, when collected shall 
123.7 	be apportioned and distributed in accordance with the Constitution of the state of Minnesota, 
123.8 	article X, section 3, in the manner following: 90 percent shall be deposited in the state 
123.9 	treasury and credited to the general fund of which four-ninths shall be used for the support 
123.10 	of elementary and secondary schools; and ten percent of the proceeds of the tax imposed 
123.11 	by this section shall be deposited in the state treasury and credited to the general fund for 
123.12 	the general support of the university.
123.13 	(b) Of the money apportioned to the general fund by this section, the following allocations 
123.14 	must be made:
123.15 	(1) there is annually appropriated and credited to the mining environmental and regulatory 
123.16 	account in the special revenue fund an amount equal to that which would have been generated 
123.17 	by a 2-1/2 cent tax imposed by section 298.24 on each taxable ton produced in the preceding 
123.18 	calendar year. Money in the mining environmental and regulatory account is appropriated 
123.19 	annually to the commissioner of natural resources to fund agency staff to work on 
123.20 	environmental issues and provide regulatory services for ferrous and nonferrous mining 
123.21 	operations in this state. Payment to the mining environmental and regulatory account shall 
123.22 	be made by July 1 annually. The commissioner of natural resources shall execute an 
123.23 	interagency agreement with the Pollution Control Agency to assist with the provision of 
123.24 	environmental regulatory services such as monitoring and permitting required for ferrous 
123.25 	and nonferrous mining operations;
123.26 	(2) there is annually appropriated and credited to the Iron Range resources and 
123.27 	rehabilitation account in the special revenue fund an amount equal to that which would have 
123.28 	been generated by a 1.5 cent tax imposed by section 298.24 on each taxable ton produced 
123.29 	in the preceding calendar year, to be expended for the purposes of section 298.22. The 
123.30 	money appropriated shall be used (i) to provide environmental development grants to local 
123.31 	governments located within any county in region 3 as defined in governor's executive order 
123.32 	number 60, issued on June 12, 1970, that does not contain a municipality qualifying pursuant 
123.33 	to section 273.134, paragraph (b), or (ii) to provide economic development loans or grants 
123.34 	to businesses located within any such county, provided that the county board or an advisory 
124.1 	group appointed by the county board to provide recommendations on economic development 
124.2 	shall make recommendations to the commissioner of Iron Range resources and rehabilitation 
124.3 	regarding the loans. Of the money allocated to Koochiching County, one-third must be paid 
124.4 	to the Koochiching County Economic Development Commission. Payment to the Iron 
124.5 	Range resources and rehabilitation account shall be made by May 15 annually; and
124.6 	(3) there is annually appropriated and credited to the Iron Range resources and 
124.7 	rehabilitation account in the special revenue fund for transfer to the Iron Range school 
124.8 	consolidation and cooperatively operated school account under section 298.28, subdivision 
124.9 	7a, an amount equal to that which would have been generated by a six cent tax imposed by 
124.10 	section 298.24 on each taxable ton produced in the preceding calendar year. Payment to the 
124.11 	Iron Range resources and rehabilitation account shall be made by May 15 annually.
124.12 	(c) The money appropriated pursuant to paragraph (b), clause (2), shall be used (i) to 
124.13 	provide environmental development grants to local governments located within any county 
124.14 	in region 3 as defined in governor's executive order number 60, issued on June 12, 1970, 
124.15 	which does not contain a municipality qualifying pursuant to section 273.134, paragraph 
124.16 	(b), or (ii) to provide economic development loans or grants to businesses located within 
124.17 	any such county, provided that the county board or an advisory group appointed by the 
124.18 	county board to provide recommendations on economic development shall make 
124.19 	recommendations to the commissioner of Iron Range resources and rehabilitation regarding 
124.20 	the loans. Payment to the Iron Range resources and rehabilitation account shall be made by 
124.21 	May 15 annually After the allocations are made under paragraph (b), any amount remaining 
124.22 	in the general fund, of the money apportioned to the general fund under this section in the 
124.23 	current year, shall be refunded by the commissioner of revenue as provided. By May 15 
124.24 	annually, the commissioner shall issue a refund to each producer equal to the amount of tax 
124.25 	paid by that producer in the current year under section 298.01, as compared to the total 
124.26 	amount of tax paid in the current year under section 298.01 by all producers, provided that 
124.27 	a producer shall not be eligible for a refund under this section in an amount greater than the 
124.28 	amount of tax paid by that producer in the current year. The total amount of refunds issued 
124.29 	under this paragraph in any year shall not exceed $5,000,000.
124.30 	(d) Of the money allocated to Koochiching County, one-third must be paid to the 
124.31 	Koochiching County Economic Development Commission.

124.32 	EFFECTIVE DATE. This section is effective beginning with distributions made in 
124.33 	2019 and thereafter.

125.1 	Sec. 6. Minnesota Statutes 2017 Supplement, section 298.227, is amended to read:
125.2 	298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
125.3 	An amount equal to that distributed pursuant to each taconite producer's taxable 
125.4 	production and qualifying sales under section 298.28, subdivision 9a, shall be held by the 
125.5 	commissioner of Iron Range resources and rehabilitation in a separate taconite economic 
125.6 	development fund for each taconite and direct reduced ore producer. Money from the fund 
125.7 	for each producer shall be released by the commissioner after review by a joint committee 
125.8 	consisting of an equal number of representatives of the salaried employees and the 
125.9 	nonsalaried production and maintenance employees of that producer. The District 11 director 
125.10 	of the United States Steelworkers of America, on advice of each local employee president, 
125.11 	shall select the employee members. In nonorganized operations, the employee committee 
125.12 	shall be elected by the nonsalaried production and maintenance employees. The review 
125.13 	must be completed no later than six months after the producer presents a proposal for 
125.14 	expenditure of the funds to the committee. The funds held pursuant to this section may be 
125.15 	released only for workforce development and associated public facility improvement, 
125.16 	concurrent reclamation, or for acquisition of plant and stationary mining equipment and,
125.17 	facilities for the producer, or for research and development in Minnesota on new mining, 
125.18 	or taconite, iron, or steel production technology, but only if the producer provides a matching 
125.19 	expenditure equal to the amount of the distribution to be used for the same purpose beginning 
125.20 	with distributions in 2014. Effective for proposals for expenditures of money from the fund 
125.21 	beginning May 26, 2007, the commissioner may not release the funds before the next 
125.22 	scheduled meeting of the board. If a proposed expenditure is not approved by the 
125.23 	commissioner, after consultation with the advisory board, the funds must be deposited in 
125.24 	the taconite environmental protection fund under sections 298.222 to 298.225. If a taconite 
125.25 	production facility is sold after operations at the facility had ceased, any money remaining 
125.26 	in the fund for the former producer may be released to the purchaser of the facility on the 
125.27 	terms otherwise applicable to the former producer under this section. If a producer fails to 
125.28 	provide matching funds for a proposed expenditure within six months after the commissioner 
125.29 	approves release of the funds, the funds are available for release to another producer in 
125.30 	proportion to the distribution provided and under the conditions of this section may be 
125.31 	released by the commissioner for deposit in the taconite area environmental protection fund 
125.32 	created in section 298.223. Any portion of the fund which is not released by the commissioner 
125.33 	within one year of its deposit in the fund shall be divided betweendistributed to the taconite 
125.34 	environmental protection fund created in section 298.223 and the Douglas J. Johnson 
125.35 	economic protection trust fund created in section 298.292 for placement in their respective 
126.1 	special accounts. Two-thirds of the unreleased funds shall be distributed to the taconite 
126.2 	environmental protection fund and one-third to the Douglas J. Johnson economic protection 
126.3 	trust fund.

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

126.5 	Sec. 7. Minnesota Statutes 2017 Supplement, section 298.28, subdivision 7a, is amended 
126.6 	to read:
126.7 		Subd. 7a.Iron Range school consolidation and cooperatively operated school account.
 126.8 	(a) The following amounts must be allocated to the commissioner of Iron Range resources 
126.9 	and rehabilitation to be deposited in the Iron Range school consolidation and cooperatively 
126.10 	operated school account that is hereby created:
126.11 	(1)(i) for distributions in 2015 through 2023, ten cents per taxable ton of the tax imposed 
126.12 	under section 298.24; and
126.13 	(ii) for distributions beginning in 2024, five cents per taxable ton of the tax imposed 
126.14 	under section 298.24;
126.15 	(2) the amount as determined under section 298.17, paragraph (b), clause (3);
126.16 	(3)(i) for distributions in 2015, an amount equal to two-thirds of the increased tax 
126.17 	proceeds attributable to the increase in the implicit price deflator as provided in section 
126.18 	298.24, subdivision 1, with the remaining one-third to be distributed to the Douglas J. 
126.19 	Johnson economic protection trust fund;
126.20 	(ii) for distributions in 2016, an amount equal to two-thirds of the sum of the increased 
126.21 	tax proceeds attributable to the increase in the implicit price deflator as provided in section 
126.22 	298.24, subdivision 1, for distribution years 2015 and 2016, with the remaining one-third 
126.23 	to be distributed to the Douglas J. Johnson economic protection trust fund; and
126.24 	(iii) for distributions in 2017 and thereafter, an amount equal to two-thirds of the sum 
126.25 	of the increased tax proceeds attributable to the increase in the implicit price deflator as 
126.26 	provided in section 298.24, subdivision 1, for distribution years 2015, 2016, and 2017, with 
126.27 	the remaining one-third to be distributed to the Douglas J. Johnson economic protection 
126.28 	trust fund; and
126.29 	(4) any other amount as provided by law.
126.30 	(b) Expenditures from this account may be approved as ongoing annual expenditures 
126.31 	and shall be made only to provide disbursements to assist school districts with the payment 
126.32 	of bonds that were issued for qualified school projects, or for any other school disbursement 
127.1 	as approved by the commissioner of Iron Range resources and rehabilitation after consultation 
127.2 	with the Iron Range Resources and Rehabilitation Board. For purposes of this section, 
127.3 	"qualified school projects" means school projects within the taconite assistance area as 
127.4 	defined in section 273.1341, that were (1) approved, by referendum, after April 3, 2006; 
127.5 	and (2) approved by the commissioner of education pursuant to section 123B.71.
127.6 	(c) Beginning in fiscal year 2019, the disbursement to school districts for payments for 
127.7 	bonds issued under section 123A.482, subdivision 9, must be increased each year to offset 
127.8 	any reduction in debt service equalization aid that the school district qualifies for in that 
127.9 	year, under section 123B.53, subdivision 6, compared with the amount the school district 
127.10 	qualified for in fiscal year 2018.
127.11 	(d) No expenditure under this section shall be made unless approved by the commissioner 
127.12 	of Iron Range resources and rehabilitation after consultation with the Iron Range Resources 
127.13 	and Rehabilitation Board.

127.14 	EFFECTIVE DATE. This section is effective for distributions beginning in 2018 and 
127.15 	thereafter.

127.16 	Sec. 8. Minnesota Statutes 2016, section 298.28, subdivision 9a, is amended to read:
127.17 		Subd. 9a.Taconite economic development fund. (a) 25.1 cents per ton for distributions 
127.18 	in 2002 and thereafter must be paid to the taconite economic development fund. No 
127.19 	distribution shall be made under this paragraph in 2004 or any subsequent year in which 
127.20 	total industry production falls below 30 million tons. Distribution shall only be made to a 
127.21 	Minnesota taconite pellet producer's fund under section 298.227 if the producer timely pays 
127.22 	its tax under section 298.24 by the dates provided under section 298.27, or pursuant to the 
127.23 	due dates provided by an administrative agreement with the commissioner.
127.24 	(b) An amount equal to 50 percent of the tax under section 298.24 for concentrate sold 
127.25 	in the form of pellet chips and fines not exceeding 5/16 inch in size and not including crushed 
127.26 	pellets shall be paid to the taconite economic development fund. The amount paid shall not 
127.27 	exceed $700,000 annually for all companies Minnesota taconite pellet producers. If the 
127.28 	initial amount to be paid to the fund exceeds this amount, each company'sMinnesota taconite 
127.29 	pellet producer's payment shall be prorated so the total does not exceed $700,000.

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

128.1 	Sec. 9. Laws 2015, chapter 71, article 12, section 8, is amended to read:
128.2 	Sec. 8. EXPANDED ACCESS TO QUALIFIED HEALTH PLANS AND 
128.3 	SUBSIDIES.
 128.4 	The commissioner of commerce, in consultation with the Board of Directors of MNsure 
128.5 	and the MNsure Legislative Oversight Committee, shall develop a proposal to allow 
128.6 	individuals to purchase qualified health plans outside of MNsure directly from health plan 
128.7 	companies and to allow eligible individuals to receive advanced premium tax credits and 
128.8 	cost-sharing reductions when purchasing these health plans. The commissioner shall seek 
128.9 	all federal waivers and approvals necessary to implement this proposal and shall submit the 
128.10 	necessary federal waivers and approvals to the federal government no later than October 1, 
128.11 	2018. The commissioner shall submit a draft proposal to the MNsure board and the MNsure 
128.12 	Legislative Oversight Committee at least 30 days before submitting a final proposal to the 
128.13 	federal government no later than September 1, 2018, and shall notify the board and legislative 
128.14 	oversight committee of any federal decision or action related to the proposal.

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

128.16 	Sec. 10. Laws 2017, First Special Session chapter 1, article 4, section 31, is amended to 
128.17 	read:
128.18 	Sec. 31. APPROPRIATION; FIRE REMEDIATION GRANTS.
 128.19 	$1,392,258 is appropriated in fiscal year 2018 from the general fund to the commissioner 
128.20 	of public safety for grants to remediate the effects of fires in the city of Melrose on September 
128.21 	8, 2016. The commissioner must allocate the grants as follows:
128.22 	(1) $1,296,458 to the city of Melrose; and
128.23 	(2) $95,800 to Stearns County.
128.24 	A grant recipient must use the money appropriated under this section for remediation 
128.25 	costs, including disaster recovery, infrastructure, reimbursement for emergency personnel 
128.26 	costs, reimbursement for equipment costs, and reimbursements for property tax abatements, 
128.27 	incurred by public or private entities as a result of the fires. This is a onetime appropriation 
128.28 	and is available until June 30, 2018 2021.

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

129.1 	Sec. 11. RATES FOR INDIVIDUAL MARKET HEALTH AND DENTAL PLANS 
129.2 	FOR 2019.
 129.3 	(a) Health carriers must take into account the reduction in the premium withhold 
129.4 	percentage under Minnesota Statutes, section 62V.05, subdivision 2, applicable beginning 
129.5 	in calendar year 2019 for individual market health plans and dental plans sold through 
129.6 	MNsure when setting rates for individual market health plans and dental plans for calendar 
129.7 	year 2019.
129.8 	(b) For purposes of this section, "dental plan," "health carrier," "health plan," and 
129.9 	"individual market" have the meanings given in Minnesota Statutes, section 62V.02.

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

129.11 	Sec. 12. TRANSFER 2018 DISTRIBUTION ONLY.
 129.12 	For the 2018 distribution, the fund established under Minnesota Statutes, section 298.28, 
129.13 	subdivision 7, shall receive ten cents per ton of any excess of the balance remaining after 
129.14 	distribution of amounts required under Minnesota Statutes, section 298.28, subdivision 6.

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

129.17 	ARTICLE 7
129.18 	DEPARTMENT OF REVENUE; PROPERTY TAX; POLICY CHANGES

129.19 	Section 1. Minnesota Statutes 2016, section 162.145, subdivision 3, is amended to read:
129.20 		Subd. 3.Administration. (a) Subject to funds made available by law, the commissioner 
129.21 	shall allocate all funds as provided in subdivision 4 and shall notify, by June 1, certify to
129.22 	the commissioner of revenue the amounts to be paid.
129.23 	(b) Following notification certification from the commissioner of transportation, the 
129.24 	commissioner of revenue shall distribute the specified funds to cities in the same manner 
129.25 	as local government aid under chapter 477A. An appropriation to the commissioner of 
129.26 	transportation under this section is available to the commissioner of revenue for the purposes 
129.27 	specified in this paragraph.
129.28 	(c) Notwithstanding other law to the contrary, in order to receive distributions under 
129.29 	this section, a city must conform to the standards in section 477A.017, subdivision 2. A city 
129.30 	that receives funds under this section must make and preserve records necessary to show 
129.31 	that the funds are spent in compliance with subdivision 4.

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

130.2 	Sec. 2. Minnesota Statutes 2016, section 270.41, subdivision 3, is amended to read:
130.3 		Subd. 3.Assessor sanctions; refusal to license. (a) Following a recommendation from 
130.4 	the commissioner of revenue, the board may (i) refuse to grant or renew, or may suspend 
130.5 	or revoke, a license of an applicant or licensee, or (ii) censure, warn, or fine any licensed 
130.6 	assessor, or any other person employed by an assessment jurisdiction or contracting with 
130.7 	an assessment jurisdiction for the purpose of valuing or classifying property for property 
130.8 	tax purposes, for any of the following causes or acts:
130.9 	(1) failure to complete required training;
130.10 	(2) inefficiency or neglect of duty;
130.11 	(3) failure to comply with the Code of Conduct and Ethics for Licensed Minnesota 
130.12 	Assessors adopted by the board pursuant to Laws 2005, First Special Session chapter 3, 
130.13 	article 1, section 38;
130.14 	(4) conviction of a crime involving moral turpitude;
130.15 	(5) failure to faithfully and fully perform his or her duties through malfeasance, 
130.16 	misfeasance, or nonfeasance; or
130.17 	(6) any other cause or act that in the board's opinion warrants a refusal to issue a license 
130.18 	or the imposition of a sanction provided under this subdivision.
130.19 	(b) When appropriate for the level of infraction, a written warning must be given to 
130.20 	assessors who have no prior identified infractions. The warning must identify the infraction 
130.21 	and, as appropriate, detail future expectations of performance and behavior. Fines must not 
130.22 	exceed $1,000 for the first occurrence and must not exceed $3,000 for each occurrence 
130.23 	thereafter, and suspensions must not exceed one year for each occurrence, depending in 
130.24 	each case upon the severity of the infraction and the level of negligence or intent. The 
130.25 	commissioner of revenue shall give notice to an applicant or licensee of the commissioner's 
130.26 	recommendation that the board impose sanctions or refuse to grant or renew a license. An 
130.27 	action by the board to impose a sanction fine, to suspend or revoke a license, or to refuse 
130.28 	to grant or renew a license is subject to review in a contested case hearing under chapter 
130.29 	14. A licensee must submit a request for a hearing to the board within 30 days of the notice 
130.30 	date of the commissioner's recommendation for sanctions or for refusal to grant or renew 
130.31 	a license.

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

131.3 	Sec. 3. Minnesota Statutes 2017 Supplement, section 272.115, subdivision 1, is amended 
131.4 	to read:
131.5 		Subdivision 1.Requirement. Except as otherwise provided in subdivision 5, 6, or 7, 
131.6 	whenever any real estate is sold for a consideration in excess of $1,000 $3,000, whether by 
131.7 	warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor, 
131.8 	grantee or the legal agent of either shall file a certificate of value with the county auditor 
131.9 	in the county in which the property is located when the deed or other document is presented 
131.10 	for recording. Contract for deeds are subject to recording under section 507.235, subdivision 
131.11 	1. Value shall, in the case of any deed not a gift, be the amount of the full actual consideration 
131.12 	thereof, paid or to be paid, including the amount of any lien or liens assumed. The items 
131.13 	and value of personal property transferred with the real property must be listed and deducted 
131.14 	from the sale price. The certificate of value shall include the classification to which the 
131.15 	property belongs for the purpose of determining the fair market value of the property, and 
131.16 	shall include any proposed change in use of the property known to the person filing the 
131.17 	certificate that could change the classification of the property. The certificate shall include 
131.18 	financing terms and conditions of the sale which are necessary to determine the actual, 
131.19 	present value of the sale price for purposes of the sales ratio study. If the property is being 
131.20 	acquired as part of a like-kind exchange under section 1031 of the Internal Revenue Code 
131.21 	of 1986, as amended through December 31, 2006, that must be indicated on the certificate. 
131.22 	The commissioner of revenue shall promulgate administrative rules specifying the financing 
131.23 	terms and conditions which must be included on the certificate. The certificate of value 
131.24 	must include the Social Security number or the federal employer identification number of 
131.25 	the grantors and grantees. However, a married person who is not an owner of record and 
131.26 	who is signing a conveyance instrument along with the person's spouse solely to release 
131.27 	and convey their marital interest, if any, in the real property being conveyed is not a grantor 
131.28 	for the purpose of the preceding sentence. A statement in the deed that is substantially in 
131.29 	the following form is sufficient to allow the county auditor to accept a certificate for filing 
131.30 	without the Social Security number of the named spouse: "(Name) claims no ownership 
131.31 	interest in the real property being conveyed and is executing this instrument solely to release 
131.32 	and convey a marital interest, if any, in that real property." The identification numbers of 
131.33 	the grantors and grantees are private data on individuals or nonpublic data as defined in 
131.34 	section 13.02, subdivisions 9 and 12, but, notwithstanding that section, the private or 
131.35 	nonpublic data may be disclosed to the commissioner of revenue for purposes of tax 
132.1 	administration. The information required to be shown on the certificate of value is limited 
132.2 	to the information required as of the date of the acknowledgment on the deed or other 
132.3 	document to be recorded.

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

132.6 	Sec. 4. Minnesota Statutes 2016, section 287.21, subdivision 1, is amended to read:
132.7 		Subdivision 1.Determination of tax. (a) A tax is imposed on each deed or instrument 
132.8 	by which any real property in this state is granted, assigned, transferred, or otherwise 
132.9 	conveyed. The tax applies against the net consideration. For purposes of the tax, the 
132.10 	conversion of a corporation to a limited liability company, a limited liability company to a 
132.11 	corporation, a partnership to a limited partnership, a limited partnership to another limited 
132.12 	partnership or other entity, or a similar conversion of one entity to another does not grant, 
132.13 	assign, transfer, or convey real property.
132.14 	(b) The tax is determined in the following manner: (1) when transfers are made by 
132.15 	instruments pursuant to (i) consolidations or mergers, or (ii) designated transfers, the tax is 
132.16 	$1.65; (2) when there is no consideration or when the consideration, exclusive of the value 
132.17 	of any lien or encumbrance remaining thereon at the time of sale, is $500 $3,000 or less, 
132.18 	the tax is $1.65; or (3) when the consideration, exclusive of the value of any lien or 
132.19 	encumbrance remaining at the time of sale, exceeds $500 $3,000, the tax is .0033 of the net 
132.20 	consideration.
132.21 	(c) If, within six months from the date of a designated transfer, an ownership interest in 
132.22 	the grantee entity is transferred by an initial owner to any person or entity with the result 
132.23 	that the designated transfer would not have been a designated transfer if made to the grantee 
132.24 	entity with its subsequent ownership, then a tax is imposed at .0033 of the net consideration 
132.25 	for the designated transfer. If the subsequent transfer of ownership interests was reasonably 
132.26 	expected at the time of the designated transfer, the applicable penalty under section 287.31, 
132.27 	subdivision 1, must be paid. The deed tax imposed under this paragraph is due within 30 
132.28 	days of the subsequent transfer that caused the tax to be imposed under this paragraph. 
132.29 	Involuntary transfers of ownership shall not be considered transfers of ownership under this 
132.30 	paragraph. The commissioner may adopt rules defining the types of transfers to be considered 
132.31 	involuntary.
132.32 	(d) The tax is due at the time a taxable deed or instrument is presented for recording, 
132.33 	except as provided in paragraph (c). The commissioner may require the tax to be documented 
132.34 	in a manner prescribed by the commissioner, and may require that the documentation be 
133.1 	attached to and recorded as part of the deed or instrument. The county recorder or registrar 
133.2 	of titles shall accept the attachment for recording as part of the deed or instrument and may 
133.3 	not require, as a condition of recording a deed or instrument, evidence that a transfer is a 
133.4 	designated transfer in addition to that required by the commissioner. Such an attachment 
133.5 	shall not, however, provide actual or constructive notice of the information contained therein 
133.6 	for purposes of determining any interest in the real property. The commissioner shall 
133.7 	prescribe the manner in which the tax due under paragraph (c) is to be paid and may require 
133.8 	grantees of designated transfers to file with the commissioner subsequent statements verifying 
133.9 	that the tax provided under paragraph (c) does not apply.

133.10 	EFFECTIVE DATE. This section is effective for deeds recorded after December 31, 
133.11 	2018.

133.12 	ARTICLE 8
133.13 	DEPARTMENT OF REVENUE; MISCELLANEOUS; POLICY CHANGES

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

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

133.22 	Sec. 2. Minnesota Statutes 2016, section 297A.84, is amended to read:
133.23 	297A.84 PERMITS ISSUED AND NOT ISSUED; CANCELLATION.
133.24 		Subdivision 1.Definitions. (a) The following definitions apply for the purposes of this 
133.25 	section.
133.26 	(b) "Applicant" means an individual, corporation, or partnership. Applicant also includes 
133.27 	any officer of a corporation or member of a partnership.
133.28 	(c) "Delinquent sales tax" means tax not paid by the date the tax was due and payable 
133.29 	under section 289A.20, subdivision 4, or an assessment not paid if the applicant has been 
133.30 	issued an order assessing sales and use tax under section 270C.33, subdivision 4.
134.1 		Subd. 2.Permits issued. Except as provided in subdivision 3, the commissioner shall
134.2 	must issue a permit to each applicant who has complied with section 297A.83, and with 
134.3 	section 297A.92 if security is required. A person is considered to have a permit if the person 
134.4 	has a Minnesota tax identification number issued by the commissioner that is currently 
134.5 	active for taxes imposed by this chapter. A permit is valid until canceled or revoked. It is 
134.6 	not assignable and is valid only for the person in whose name it is granted and for the 
134.7 	transaction of business at the places designated on the permit.
134.8 		Subd. 3.Permits not issued. (a) Except as provided in paragraph (b), the commissioner 
134.9 	must not issue a permit to an applicant if the applicant is liable for delinquent sales tax.
134.10 	(b) The commissioner must issue a permit to an applicant if an appeal period of an order 
134.11 	assessing sales tax under section 270C.33, subdivision 5, has not ended. The commissioner 
134.12 	may cancel a permit issued under this paragraph in the manner provided in subdivision 4 
134.13 	if the applicant owes delinquent sales tax after the appeal period has ended.
134.14 		Subd. 4.Nonconforming permits; cancellation; reissue. (a) If the commissioner issues 
134.15 	a permit that does not conform with the requirements of this section or applicable rules, the 
134.16 	commissioner may cancel the permit upon notice to the permit holder. The notice must be 
134.17 	served by first class and certified mail at the permit holder's last known address. The 
134.18 	cancellation is effective immediately.
134.19 	(b) If a permit holder shows that a canceled permit was issued in conformance with the 
134.20 	requirements of this section and applicable rules, the commissioner must reissue the permit.

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

134.23 	Sec. 3. Minnesota Statutes 2016, section 297A.85, is amended to read:
134.24 	297A.85 CANCELLATION OF PERMITS.
134.25 	The commissioner may cancel a permit if one of the following conditions occurs:
134.26 	(1) the permit holder has not filed a sales or use tax return for at least one year;
134.27 	(2) the permit holder has not reported any sales or use tax liability on the permit holder's 
134.28 	returns for at least two years;
134.29 	(3) the permit holder requests cancellation of the permit; or
134.30 	(4) the permit is subject to cancellation pursuant to under section 270C.722, subdivision 
134.31 	2, paragraph (a).; or
135.1 	(5) the permit is subject to cancellation under section 297A.84.

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

135.4 	ARTICLE 9
135.5 	DEPARTMENT OF REVENUE; PARTNERSHIP TAX; POLICY CHANGES

135.6 	Section 1. Minnesota Statutes 2017 Supplement, section 270C.445, subdivision 6, is 
135.7 	amended to read:
135.8 		Subd. 6.Enforcement; administrative order; penalties; cease and desist. (a) The 
135.9 	commissioner may impose an administrative penalty of not more than $1,000 per violation 
135.10 	of subdivision 3 or 5, or section 270C.4451, provided that a penalty may not be imposed 
135.11 	for any conduct for which a tax preparer penalty is imposed under section 289A.60, 
135.12 	subdivision 13. The commissioner may terminate a tax preparer's authority to transmit 
135.13 	returns electronically to the state, if the commissioner determines the tax preparer engaged 
135.14 	in a pattern and practice of violating this section. Imposition of a penalty under this paragraph 
135.15 	is subject to the contested case procedure under chapter 14. The commissioner shall collect 
135.16 	the penalty in the same manner as the income tax. There is no right to make a claim for 
135.17 	refund under section 289A.50 of the penalty imposed under this paragraph. Penalties imposed 
135.18 	under this paragraph are public data.
135.19 	(b) In addition to the penalty under paragraph (a), if the commissioner determines that 
135.20 	a tax preparer has violated subdivision 3 or 5, or section 270C.4451, the commissioner may 
135.21 	issue an administrative order to the tax preparer requiring the tax preparer to cease and 
135.22 	desist from committing the violation. The administrative order may include an administrative 
135.23 	penalty provided in paragraph (a).
135.24 	(c) If the commissioner issues an administrative order under paragraph (b), the 
135.25 	commissioner must send the order to the tax preparer addressed to the last known address 
135.26 	of the tax preparer.
135.27 	(d) A cease and desist order under paragraph (b) must:
135.28 	(1) describe the act, conduct, or practice committed and include a reference to the law 
135.29 	that the act, conduct, or practice violates; and
135.30 	(2) provide notice that the tax preparer may request a hearing as provided in this 
135.31 	subdivision.
136.1 	(e) Within 30 days after the commissioner issues an administrative order under paragraph 
136.2 	(b), the tax preparer may request a hearing to review the commissioner's action. The request 
136.3 	for hearing must be made in writing and must be served on the commissioner at the address 
136.4 	specified in the order. The hearing request must specifically state the reasons for seeking 
136.5 	review of the order. The date on which a request for hearing is served by mail is the postmark 
136.6 	date on the envelope in which the request for hearing is mailed.
136.7 	(f) If a tax preparer does not timely request a hearing regarding an administrative order 
136.8 	issued under paragraph (b), the order becomes a final order of the commissioner and is not 
136.9 	subject to review by any court or agency.
136.10 	(g) If a tax preparer timely requests a hearing regarding an administrative order issued 
136.11 	under paragraph (b), the hearing must be commenced within ten days after the commissioner 
136.12 	receives the request for a hearing.
136.13 	(h) A hearing timely requested under paragraph (e) is subject to the contested case 
136.14 	procedure under chapter 14, as modified by this subdivision. The administrative law judge 
136.15 	must issue a report containing findings of fact, conclusions of law, and a recommended 
136.16 	order within ten days after the completion of the hearing, the receipt of late-filed exhibits, 
136.17 	or the submission of written arguments, whichever is later.
136.18 	(i) Within five days of the date of the administrative law judge's report issued under 
136.19 	paragraph (h), any party aggrieved by the administrative law judge's report may submit 
136.20 	written exceptions and arguments to the commissioner. Within 15 days after receiving the 
136.21 	administrative law judge's report, the commissioner must issue an order vacating, modifying, 
136.22 	or making final the administrative order.
136.23 	(j) The commissioner and the tax preparer requesting a hearing may by agreement 
136.24 	lengthen any time periods prescribed in paragraphs (g) to (i).
136.25 	(k) An administrative order issued under paragraph (b) is in effect until it is modified 
136.26 	or vacated by the commissioner or an appellate court. The administrative hearing provided 
136.27 	by paragraphs (e) to (i) and any appellate judicial review as provided in chapter 14 constitute 
136.28 	the exclusive remedy for a tax preparer aggrieved by the order.
136.29 	(l) The commissioner may impose an administrative penalty, in addition to the penalty 
136.30 	under paragraph (a), up to $5,000 per violation of a cease and desist order issued under 
136.31 	paragraph (b). Imposition of a penalty under this paragraph is subject to the contested case 
136.32 	procedure under chapter 14. Within 30 days after the commissioner imposes a penalty under 
136.33 	this paragraph, the tax preparer assessed the penalty may request a hearing to review the 
136.34 	penalty order. The request for hearing must be made in writing and must be served on the 
137.1 	commissioner at the address specified in the order. The hearing request must specifically 
137.2 	state the reasons for seeking review of the order. The cease and desist order issued under 
137.3 	paragraph (b) is not subject to review in a proceeding to challenge the penalty order under 
137.4 	this paragraph. The date on which a request for hearing is served by mail is the postmark 
137.5 	date on the envelope in which the request for hearing is mailed. If the tax preparer does not 
137.6 	timely request a hearing, the penalty order becomes a final order of the commissioner and 
137.7 	is not subject to review by any court or agency. A penalty imposed by the commissioner 
137.8 	under this paragraph may be collected and enforced by the commissioner as an income tax 
137.9 	liability. There is no right to make a claim for refund under section 289A.50 of the penalty 
137.10 	imposed under this paragraph. A penalty imposed under this paragraph is public data.
137.11 	(m) If a tax preparer violates a cease and desist order issued under paragraph (b), the 
137.12 	commissioner may terminate the tax preparer's authority to transmit returns electronically 
137.13 	to the state. Termination under this paragraph is public data.
137.14 	(n) A cease and desist order issued under paragraph (b) is public data when it is a final 
137.15 	order.
137.16 	(o) Notwithstanding any other law, the commissioner may impose a penalty or take other 
137.17 	action under this subdivision against a tax preparer, with respect to a return, within the 
137.18 	period to assess tax on that return as provided by section sections289A.38 to 289A.384.
137.19 	(p) Notwithstanding any other law, the imposition of a penalty or any other action against 
137.20 	a tax preparer under this subdivision, other than with respect to a return, must be taken by 
137.21 	the commissioner within five years of the violation of statute.

137.22 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
137.23 	31, 2017, except that for partnerships that make an election under Code of Federal 
137.24 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
137.25 	to the same tax periods to which the election relates.

137.26 	Sec. 2. Minnesota Statutes 2017 Supplement, section 289A.31, subdivision 1, is amended 
137.27 	to read:
137.28 		Subdivision 1.Individual income, fiduciary income, mining company, corporate 
137.29 	franchise, and entertainment taxes. (a) Individual income, fiduciary income, mining 
137.30 	company, and corporate franchise taxes, and interest and penalties, must be paid by the 
137.31 	taxpayer upon whom the tax is imposed, except in the following cases:
137.32 	(1) the tax due from a decedent for that part of the taxable year in which the decedent 
137.33 	died during which the decedent was alive and the taxes, interest, and penalty due for the 
138.1 	prior years must be paid by the decedent's personal representative, if any. If there is no 
138.2 	personal representative, the taxes, interest, and penalty must be paid by the transferees, as 
138.3 	defined in section 270C.58, subdivision 3, to the extent they receive property from the 
138.4 	decedent;
138.5 	(2) the tax due from an infant or other incompetent person must be paid by the person's 
138.6 	guardian or other person authorized or permitted by law to act for the person;
138.7 	(3) the tax due from the estate of a decedent must be paid by the estate's personal 
138.8 	representative;
138.9 	(4) the tax due from a trust, including those within the definition of a corporation, as 
138.10 	defined in section 290.01, subdivision 4, must be paid by a trustee; and
138.11 	(5) the tax due from a taxpayer whose business or property is in charge of a receiver, 
138.12 	trustee in bankruptcy, assignee, or other conservator, must be paid by the person in charge 
138.13 	of the business or property so far as the tax is due to the income from the business or property.
138.14 	(b) Entertainment taxes are the joint and several liability of the entertainer and the 
138.15 	entertainment entity. The payor is liable to the state for the payment of the tax required to 
138.16 	be deducted and withheld under section 290.9201, subdivision 7, and is not liable to the 
138.17 	entertainer for the amount of the payment.
138.18 	(c) The taxes imposed under sections 289A.35, paragraph (b), 289A.383, subdivision 
138.19 	3, and 290.0922 on partnerships are the joint and several liability of the partnership and the 
138.20 	general partners.

138.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
138.22 	31, 2017, except that for partnerships that make an election under Code of Federal 
138.23 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
138.24 	to the same tax periods to which the election relates.

138.25 	Sec. 3. Minnesota Statutes 2017 Supplement, section 289A.37, subdivision 2, is amended 
138.26 	to read:
138.27 		Subd. 2.Erroneous refunds. (a) Except as provided in paragraph (b), an erroneous 
138.28 	refund occurs when the commissioner issues a payment to a person that exceeds the amount 
138.29 	the person is entitled to receive under law. An erroneous refund is considered an 
138.30 	underpayment of tax on the date issued.
138.31 	(b) To the extent that the amount paid does not exceed the amount claimed by the 
138.32 	taxpayer, an erroneous refund does not include the following:
139.1 	(1) any amount of a refund or credit paid pursuant to a claim for refund filed by a 
139.2 	taxpayer, including but not limited to refunds of claims made under section 290.06, 
139.3 	subdivision 23; 290.067; 290.0671; 290.0672; 290.0674; 290.0675; 290.0677; 290.068; 
139.4 	290.0681; or 290.0692; or chapter 290A; or
139.5 	(2) any amount paid pursuant to a claim for refund of an overpayment of tax filed by a 
139.6 	taxpayer.
139.7 	(c) The commissioner may make an assessment to recover an erroneous refund at any 
139.8 	time within two years from the issuance of the erroneous refund. If all or part of the erroneous 
139.9 	refund was induced by fraud or misrepresentation of a material fact, the assessment may 
139.10 	be made at any time.
139.11 	(d) Assessments of amounts that are not erroneous refunds under paragraph (b) must be 
139.12 	conducted under section sections289A.38 to 289A.384.

139.13 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
139.14 	31, 2017, except that for partnerships that make an election under Code of Federal 
139.15 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
139.16 	to the same tax periods to which the election relates.

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

139.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
139.29 	31, 2017, except that for partnerships that make an election under Code of Federal 
139.30 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
139.31 	to the same tax periods to which the election relates.

140.1 	Sec. 5. [289A.381] DEFINITIONS; PARTNERSHIPS; FEDERAL ADJUSTMENTS.
140.2 		Subdivision 1.Definitions relating to federal adjustments. Unless otherwise specified, 
140.3 	the definitions in this section apply for the purposes of sections 289A.381 to 289A.385.
140.4 		Subd. 2.Administrative adjustment request. "Administrative adjustment request" 
140.5 	means an administrative adjustment request filed by a partnership under section 6227 of 
140.6 	the Internal Revenue Code.
140.7 		Subd. 3.Audited partnership. "Audited partnership" means a partnership subject to a 
140.8 	federal adjustment resulting from a partnership-level audit.
140.9 		Subd. 4.Corporate partner. "Corporate partner" means a partner that is subject to tax 
140.10 	under section 290.02.
140.11 		Subd. 5.Direct partner. "Direct partner" means a partner that holds an immediate legal 
140.12 	ownership interest in a partnership or pass-through entity.
140.13 		Subd. 6.Exempt partner. "Exempt partner" means a partner that is exempt from taxes 
140.14 	on its net income under section 290.05, subdivision 1.
140.15 		Subd. 7.Federal adjustment. "Federal adjustment" means any change in an amount 
140.16 	calculated under the Internal Revenue Code, whether to income, gross estate, a credit, an 
140.17 	item of preference, or any other item that is used by a taxpayer to compute a tax administered 
140.18 	under this chapter for the reviewed year whether that change results from action by the 
140.19 	Internal Revenue Service or other competent authority, including a partnership-level audit, 
140.20 	or the filing of an amended federal return, federal refund claim, or an administrative 
140.21 	adjustment request by the taxpayer.
140.22 		Subd. 8.Federal adjustments report. "Federal adjustments report" includes a method 
140.23 	or form prescribed by the commissioner for use by a taxpayer to report federal adjustments, 
140.24 	including an amended Minnesota tax return or a uniform multistate report.
140.25 		Subd. 9.Federal partnership representative. "Federal partnership representative" 
140.26 	means the person the partnership designates for the taxable year as the partnership's 
140.27 	representative, or the person the Internal Revenue Service has appointed to act as the 
140.28 	partnership representative, pursuant to section 6223(a) of the Internal Revenue Code.
140.29 		Subd. 10.Final determination date. (a) "Final determination date" means:
140.30 	(1) for a federal adjustment arising from an audit by the Internal Revenue Service or 
140.31 	other competent authority, the first day on which no federal adjustment arising from that 
141.1 	audit remains to be finally determined, whether by agreement, or, if appealed or contested, 
141.2 	by a final decision with respect to which all rights of appeal have been waived or exhausted;
141.3 	(2) for a federal adjustment arising from the filing of an amended federal return, a federal 
141.4 	refund claim, or the filing by a partnership of an administrative adjustment request, the day 
141.5 	which the amended return, refund claim, or administrative adjustment request was filed; or
141.6 	(3) for agreements required to be signed by the Internal Revenue Service and the taxpayer, 
141.7 	the date on which the last party signed the agreement.
141.8 		Subd. 11.Final federal adjustment. "Final federal adjustment" means a federal 
141.9 	adjustment for which the final determination date for that federal adjustment has passed.
141.10 		Subd. 12.Indirect partner. "Indirect partner" means either:
141.11 	(1) a partner in a partnership or pass-through entity that itself holds an immediate legal 
141.12 	ownership interest in another partnership or pass-through entity; or
141.13 	(2) a partner in a partnership or pass-through entity that holds an indirect interest in 
141.14 	another partnership or pass-through entity through another indirect partner.
141.15 		Subd. 13.Partner. "Partner" means a person that holds an interest directly or indirectly 
141.16 	in a partnership or other pass-through entity.
141.17 		Subd. 14.Partnership. The term "partnership" has the meaning provided under section 
141.18 	7701(a)(2) of the Internal Revenue Code.
141.19 		Subd. 15.Partnership-level audit. "Partnership-level audit" means an examination by 
141.20 	the Internal Revenue Service at the partnership level pursuant to subtitle F, chapter 63, 
141.21 	subchapter C, of the Internal Revenue Code, which results in federal adjustments including 
141.22 	reallocation adjustments and adjustments to partnership-related items.
141.23 		Subd. 16.Pass-through entity. "Pass-through entity" means an entity, other than a 
141.24 	partnership, that is not subject to the tax imposed under section 290.02. The term pass-through 
141.25 	entity includes but is not limited to S corporations, estates, and trusts other than grantor 
141.26 	trusts.
141.27 		Subd. 17.Reallocation adjustment. "Reallocation adjustment" means a federal 
141.28 	adjustment, or final federal adjustment, that changes the shares of items of partnership 
141.29 	income, gain, loss, expense, or credit allocated to partners. The term positive reallocation 
141.30 	adjustment means reallocation adjustments that would increase state taxable income for 
141.31 	partners, and the term negative reallocation adjustment means reallocation adjustments that 
141.32 	would decrease state taxable income for partners.
142.1 		Subd. 18.Resident partner. "Resident partner" means an individual partner or individual 
142.2 	indirect partner who is a resident of Minnesota under section 290.01, subdivision 7.
142.3 		Subd. 19.Reviewed year. "Reviewed year" means the taxable year of a partnership that 
142.4 	is subject to a partnership-level audit from which federal adjustments arise.
142.5 		Subd. 20.Tiered partner. "Tiered partner" means any partner that is a partnership or 
142.6 	pass-through entity.
142.7 		Subd. 21.Unrelated business taxable income. "Unrelated business taxable income" 
142.8 	has the same meaning as defined in section 512 of the Internal Revenue Code.

142.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
142.10 	31, 2017, except that for partnerships that make an election under Code of Federal 
142.11 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
142.12 	to the same tax periods to which the election relates.

142.13 	Sec. 6. [289A.382] REPORTING FEDERAL ADJUSTMENTS; GENERAL RULE.
142.14 	(a) Within 180 days of a final determination date, a taxpayer must file a federal adjustment 
142.15 	report with the commissioner reporting all final federal adjustments by the Internal Revenue 
142.16 	Service or other competent authority.
142.17 	(b) Within 180 days of a final determination date, a taxpayer must file a federal adjustment 
142.18 	report with the commissioner reporting any federal adjustments reported by the taxpayer 
142.19 	to the Internal Revenue Service, including but not limited to:
142.20 	(1) federal refund claims;
142.21 	(2) a change reported on a timely filed amended federal income tax return; and
142.22 	(3) a change reported on an amended return filed pursuant to section 6225(c) of the 
142.23 	Internal Revenue Code.
142.24 	(c) In the case of a final federal adjustment arising from a partnership-level audit or an 
142.25 	administrative adjustment request filed by a partnership under section 6227 of the Internal 
142.26 	Revenue Code, a taxpayer must report adjustments as provided under section 289A.383, 
142.27 	and not this section.

142.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
142.29 	31, 2017, except that for partnerships that make an election under Code of Federal 
142.30 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
142.31 	to the same tax periods to which the election relates.

143.1 	Sec. 7. [289A.383] REPORTING AND PAYMENT REQUIREMENTS.
143.2 		Subdivision 1.State partnership representative. (a) With respect to an action required 
143.3 	or permitted to be taken by a partnership under this section, or in a proceeding under section 
143.4 	270C.35 or 271.06, the state partnership representative for the reviewed year has the sole 
143.5 	authority to act on behalf of the partnership, and its direct partners and indirect partners are 
143.6 	bound by those actions.
143.7 	(b) The state partnership representative for the reviewed year is the partnership's federal 
143.8 	partnership representative unless the partnership, in a form and manner prescribed by the 
143.9 	commissioner, designates another person as its state partnership representative.
143.10 		Subd. 2.Reporting and payment requirements for partnerships and tiered partners.
 143.11 	(a) Unless an audited partnership makes the election in subdivision 3, then, for all final 
143.12 	federal adjustments the audited partnership must comply with paragraph (b) and each direct 
143.13 	partner of the audited partnership, other than a tiered partner, must comply with paragraph 
143.14 	(c).
143.15 	(b) No later than 90 days after the final determination date, the audited partnership must:
143.16 	(1) file a completed federal adjustment report, including all partner-level information 
143.17 	required under section 289A.12, subdivision 3, with the commissioner;
143.18 	(2) notify each of its direct partners of their distributive share of the adjustments;
143.19 	(3) file an amended composite report for all direct partners who were included in a 
143.20 	composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the 
143.21 	additional amount that would have been due had the federal adjustments been reported 
143.22 	properly as required; and
143.23 	(4) file amended withholding reports for all direct partners who were or should have 
143.24 	been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed 
143.25 	year, and pay the additional amount that would have been due had the federal adjustments 
143.26 	been reported properly as required.
143.27 	(c) No later than 180 days after the final determination date, each direct partner, other 
143.28 	than a tiered partner, who is subject to a tax administered under this chapter, other than the 
143.29 	sales tax, must:
143.30 	(1) file a federal adjustment report reporting their distributive share of the adjustments 
143.31 	reported to them under paragraph (b), clause (2); and
144.1 	(2) pay any additional amount of tax due as if the final federal adjustment had been 
144.2 	properly reported, plus any penalty and interest due under this chapter, and less any credit 
144.3 	for related amounts paid or withheld and remitted on behalf of the direct partner under 
144.4 	paragraph (b), clauses (3) and (4).
144.5 		Subd. 3.Election; partnership or tiered partners pay. (a) An audited partnership may 
144.6 	make an election under this subdivision to pay its assessment at the entity level. If an audited 
144.7 	partnership makes an election to pay its assessment at the entity level it must:
144.8 	(1) no later than 90 days after the final determination date, file a completed federal 
144.9 	adjustment report, including the residency information for all individual partners, both direct 
144.10 	and indirect, and information pertaining to all other partners as prescribed by the 
144.11 	commissioner, and notify the commissioner that it is making the election under this 
144.12 	subdivision; and
144.13 	(2) no later than 180 days after the final determination date, pay an amount, determined 
144.14 	as follows, in lieu of taxes on partners:
144.15 	(i) exclude from final federal adjustments and any positive reallocation adjustments the 
144.16 	distributive share of these adjustments made to an exempt partner that is not unrelated 
144.17 	business taxable income;
144.18 	(ii) exclude from final federal adjustments and any positive reallocation adjustments the 
144.19 	distributive share of these adjustments made to a partner that has filed a federal adjustment 
144.20 	report and paid the applicable tax, as required under subdivision 2, for the distributive share 
144.21 	of adjustments reported on a federal return under section 6225(c) of the Internal Revenue 
144.22 	Code;
144.23 	(iii) allocate at the partner level using section 290.17, subdivision 1, all final federal 
144.24 	adjustments and positive reallocation adjustments attributable to resident partners, both 
144.25 	direct and indirect, for the reviewed year;
144.26 	(iv) allocate and apportion at the partnership level using sections 290.17 to 290.20 all 
144.27 	remaining final federal adjustments and positive reallocation adjustments for the reviewed 
144.28 	year;
144.29 	(v) determine the total distributive share of the allocated and apportioned final federal 
144.30 	adjustments and positive reallocation adjustments determined in items (iii) and (iv) that are 
144.31 	attributable to:
144.32 	(A) resident partners;
144.33 	(B) corporate partners and exempt partners; and
145.1 	(C) the total distributive share amount allocated to all other partners;
145.2 	(vi) for the total distributive share of net final federal adjustments plus positive 
145.3 	reallocation adjustments attributed to corporate partners and exempt partners under item 
145.4 	(v), subitem (B), multiply the total by the highest tax rate in section 290.06, subdivision 1, 
145.5 	for the reviewed year, and calculate interest and penalties as applicable under this chapter;
145.6 	(vii) for the total distributive share of net final federal adjustments plus positive 
145.7 	reallocation adjustments attributable to resident partners, and all other partners under item 
145.8 	(v), subitems (A) and (C), multiply the total by the highest tax rate in section 290.06, 
145.9 	subdivision 2c, for the reviewed year, and calculate interest and penalties as applicable 
145.10 	under this chapter; and
145.11 	(viii) add the amount determined in item (vi) to the amount determined in item (vii), 
145.12 	and pay all applicable taxes, penalties, and interest to the commissioner.
145.13 	(b) An audited partnership may not make an election under this subdivision to report:
145.14 	(1) a federal adjustment, including a positive reallocation adjustment, that results in 
145.15 	unitary business income to a corporate partner required to file as a member of a combined 
145.16 	report under section 290.17, subdivision 4; or
145.17 	(2) any final federal adjustments resulting from an administrative adjustment request.
145.18 		Subd. 4.Tiered partners and indirect partners. (a) Each tiered partner and each 
145.19 	indirect partner of an audited partnership that reported final federal adjustments pursuant 
145.20 	to subdivision 2, paragraph (b), clause (1), or this subdivision, must:
145.21 	(1) within 90 days of the report comply with the filing, reporting, and payment 
145.22 	requirements of subdivision 2, paragraph (b); or
145.23 	(2) make the election under subdivision 3 as though it were the audited partnership.
145.24 	(b) Each direct partner in a partnership making a report under paragraph (a) must, within 
145.25 	180 days of the report, comply with the filing, reporting, and payment requirements of 
145.26 	subdivision 2, paragraph (c).
145.27 	(c) Notwithstanding the interim time requirements in this subdivision and subdivisions 
145.28 	2 and 3, all reports and payments required to be made by the tiered and indirect partners 
145.29 	under this section are required to be made within 90 days after the time for the filing and 
145.30 	furnishing of statements to tiered partners and their partners as established by the Internal 
145.31 	Revenue Service under section 6226 of the Internal Revenue Code.
146.1 		Subd. 5.Effects of election by partnership or tiered partner and payment of amount 
146.2 	due. (a) Unless the commissioner determines otherwise, the election under subdivision 3 
146.3 	is irrevocable.
146.4 	(b) If an audited partnership or tiered partner properly reports and pays an amount 
146.5 	determined in subdivision 3, the amount will be treated as paid in lieu of taxes owed by the 
146.6 	partnership's direct partners on the same final federal adjustments. The direct partners and 
146.7 	indirect partners of the partnership who are not resident partners may not take any deduction 
146.8 	or credit for this amount or claim a refund of the amount in this state.
146.9 	(c) Nothing in this subdivision precludes resident partners from claiming a credit against 
146.10 	taxes paid under section 290.06, on any amounts paid by the audited partnership or tiered 
146.11 	partners on the resident partner's behalf to another state or local tax jurisdiction.
146.12 		Subd. 6.Failure of partnership or tiered partner to report or pay. Nothing in this 
146.13 	section prevents the commissioner from assessing partners or indirect partners for taxes 
146.14 	they owe in the event that, for any reason, a partnership or tiered partner fails to timely 
146.15 	make any report or payment required by this section.

146.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
146.17 	31, 2017, except that for partnerships that make an election under Code of Federal 
146.18 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
146.19 	to the same tax periods to which the election relates.

146.20 	Sec. 8. [289A.384] ASSESSMENT OF TAX, INTEREST, PENALTIES, AND 
146.21 	ADDITIONAL AMOUNTS.
146.22 		Subdivision 1.Assessment of additional tax, interest, and penalties. The commissioner 
146.23 	may assess additional tax, interest, and penalties following a final federal adjustment:
146.24 	(1) arising from an audit by the Internal Revenue Service, including a partnership-level 
146.25 	audit;
146.26 	(2) reported by the taxpayer on an amended federal tax return; or
146.27 	(3) as part of an administrative adjustment request on or before the dates provided in 
146.28 	this section.
146.29 		Subd. 2.Timely and untimely reported federal adjustments. If a taxpayer files a 
146.30 	federal adjustment report, within or after the periods prescribed in section 289A.382 or 
146.31 	289A.383, the commissioner may assess additional Minnesota amounts related to the federal 
146.32 	adjustments including in-lieu-of amounts, taxes, interest, and penalties at the later of:
147.1 	(1) the expiration of the period of limitations in section 289A.38; or
147.2 	(2) the expiration of the one-year period following the date of the filing with the 
147.3 	commissioner of the federal adjustments report.
147.4 		Subd. 3.Unreported reported federal adjustments. If the taxpayer fails to file a federal 
147.5 	adjustments report, the commissioner may assess additional amounts related to the federal 
147.6 	adjustments including in-lieu-of amounts, taxes, penalties, and interest, at the later of:
147.7 	(1) the expiration of the period of limitations in section 289A.38; or
147.8 	(2) the expiration of the six-year period following the final determination date.

147.9 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
147.10 	31, 2017, except that for partnerships that make an election under Code of Federal 
147.11 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
147.12 	to the same tax periods to which the election relates.

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

147.20 	EFFECTIVE DATE. This section is effective for tax years beginning after December 
147.21 	31, 2017, except that for partnerships that make an election under Code of Federal 
147.22 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
147.23 	to the same tax periods to which the election relates.

147.24 	Sec. 10. Minnesota Statutes 2016, section 289A.42, is amended to read:
147.25 	289A.42 CONSENT TO EXTEND STATUTE.
147.26 		Subdivision 1.Extension agreement. If before the expiration of time prescribed in 
147.27 	sections 289A.38 to 289A.384 and 289A.40 for the assessment of tax or the filing of a claim 
147.28 	for refund, both the commissioner and the taxpayer have consented in writing to the 
147.29 	assessment or filing of a claim for refund after that time, the tax may be assessed or the 
147.30 	claim for refund filed at any time before the expiration of the agreed-upon period. The 
147.31 	period may be extended by later agreements in writing before the expiration of the period 
148.1 	previously agreed upon. The taxpayer and the commissioner may also agree to extend the 
148.2 	period for collection of the tax.
148.3 		Subd. 2.Federal extensions. When a taxpayer consents to an extension of time for the 
148.4 	assessment of federal withholding or income taxes, the period in which the commissioner 
148.5 	may recompute the tax is also extended, notwithstanding any period of limitations to the 
148.6 	contrary, as follows:
148.7 	(1) for the periods provided in section 289A.38, subdivisions 8 and 9; 289A.384, 
148.8 	subdivisions 2 and 3.
148.9 	(2) for six months following the expiration of the extended federal period of limitations 
148.10 	when no change is made by the federal authority. If no change is made by the federal 
148.11 	authority, and, but for this subdivision, the commissioner's time period to adjust the tax has 
148.12 	expired, and if the commissioner has completed a field audit of the taxpayer, no additional 
148.13 	changes resulting in additional tax due or a refund may be made. For purposes of this 
148.14 	subdivision, "field audit" has the meaning given it in section 289A.38, subdivision 9.

148.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
148.16 	31, 2017, except that for partnerships that make an election under Code of Federal 
148.17 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
148.18 	to the same tax periods to which the election relates.

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

148.25 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
148.26 	31, 2017, except that for partnerships that make an election under Code of Federal 
148.27 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
148.28 	to the same tax periods to which the election relates.

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

149.4 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
149.5 	31, 2017, except that for partnerships that make an election under Code of Federal 
149.6 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
149.7 	to the same tax periods to which the election relates.

149.8 	Sec. 13. Minnesota Statutes 2016, section 297F.17, subdivision 6, is amended to read:
149.9 		Subd. 6.Time limit for bad debt refund. Claims for refund must be filed with the 
149.10 	commissioner during the one-year period beginning with the timely filing of the taxpayer's 
149.11 	federal income tax return containing the bad debt deduction that is being claimed. Claimants 
149.12 	under this subdivision are subject to the notice requirements of section 289A.38, subdivision 
149.13 	7 sections 289A.382 and 289A.383.

149.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
149.15 	31, 2017, except that for partnerships that make an election under Code of Federal 
149.16 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
149.17 	to the same tax periods to which the election relates.

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

149.23 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
149.24 	31, 2017, except that for partnerships that make an election under Code of Federal 
149.25 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
149.26 	to the same tax periods to which the election relates.

149.27 	Sec. 15. Minnesota Statutes 2016, section 469.319, subdivision 4, is amended to read:
149.28 		Subd. 4.Repayment procedures. (a) For the repayment of taxes imposed under chapter 
149.29 	290 or 297A or local taxes collected pursuant to section 297A.99, a business must file an 
149.30 	amended return with the commissioner of revenue and pay any taxes required to be repaid 
149.31 	within 30 days after becoming subject to repayment under this section. The amount required 
150.1 	to be repaid is determined by calculating the tax for the period or periods for which repayment 
150.2 	is required without regard to the exemptions and credits allowed under section 469.315.
150.3 	(b) For the repayment of taxes imposed under chapter 297B, a business must pay any 
150.4 	taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of 
150.5 	revenue, within 30 days after becoming subject to repayment under this section.
150.6 	(c) For the repayment of property taxes, the county auditor shall prepare a tax statement 
150.7 	for the business, applying the applicable tax extension rates for each payable year and 
150.8 	provide a copy to the business and to the taxpayer of record. The business must pay the 
150.9 	taxes to the county treasurer within 30 days after receipt of the tax statement. The business 
150.10 	or the taxpayer of record may appeal the valuation and determination of the property tax to 
150.11 	the Tax Court within 30 days after receipt of the tax statement.
150.12 	(d) The provisions of chapters 270C and 289A relating to the commissioner's authority 
150.13 	to audit, assess, and collect the tax and to hear appeals are applicable to the repayment 
150.14 	required under paragraphs (a) and (b). The commissioner may impose civil penalties as 
150.15 	provided in chapter 289A, and the additional tax and penalties are subject to interest at the 
150.16 	rate provided in section 270C.40. The additional tax shall bear interest from 30 days after 
150.17 	becoming subject to repayment under this section until the date the tax is paid. Any penalty 
150.18 	imposed pursuant to this section shall bear interest from the date provided in section 270C.40, 
150.19 	subdivision 3, to the date of payment of the penalty.
150.20 	(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add the 
150.21 	amount required to be repaid to the property taxes assessed against the property for payment 
150.22 	in the year following the year in which the auditor provided the statement under paragraph 
150.23 	(c).
150.24 	(f) For determining the tax required to be repaid, a reduction of a state or local sales or 
150.25 	use tax is deemed to have been received on the date that the good or service was purchased 
150.26 	or first put to a taxable use. In the case of an income tax or franchise tax, including the credit 
150.27 	payable under section 469.318, a reduction of tax is deemed to have been received for the 
150.28 	two most recent tax years that have ended prior to the date that the business became subject 
150.29 	to repayment under this section. In the case of a property tax, a reduction of tax is deemed 
150.30 	to have been received for the taxes payable in the year that the business became subject to 
150.31 	repayment under this section and for the taxes payable in the prior year.
150.32 	(g) The commissioner may assess the repayment of taxes under paragraph (d) any time 
150.33 	within two years after the business becomes subject to repayment under subdivision 1, or 
150.34 	within any period of limitations for the assessment of tax under section 289A.38 sections 
151.1 	289A.38 to 289A.384, whichever period is later. The county auditor may send the statement 
151.2 	under paragraph (c) any time within three years after the business becomes subject to 
151.3 	repayment under subdivision 1.
151.4 	(h) A business is not entitled to any income tax or franchise tax benefits, including 
151.5 	refundable credits, for any part of the year in which the business becomes subject to 
151.6 	repayment under this section nor for any year thereafter. Property is not exempt from tax 
151.7 	under section 272.02, subdivision 64, for any taxes payable in the year following the year 
151.8 	in which the property became subject to repayment under this section nor for any year 
151.9 	thereafter. A business is not eligible for any sales tax benefits beginning with goods or 
151.10 	services purchased or first put to a taxable use on the day that the business becomes subject 
151.11 	to repayment under this section.

151.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
151.13 	31, 2017, except that for partnerships that make an election under Code of Federal 
151.14 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
151.15 	to the same tax periods to which the election relates.

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

151.18 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
151.19 	31, 2017, except that for partnerships that make an election under Code of Federal 
151.20 	Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies 
151.21 	to the same tax periods to which the election relates.

151.22 	ARTICLE 10
151.23 	DEPARTMENT OF REVENUE; INDIVIDUAL INCOME AND CORPORATE 
151.24 	FRANCHISE TAXES; TECHNICAL CHANGES

151.25 	Section 1. Minnesota Statutes 2016, section 289A.38, subdivision 7, is amended to read:
151.26 		Subd. 7.Federal tax changes. (a) If the amount of income, items of tax preference, 
151.27 	deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for any 
151.28 	period, as reported to the Internal Revenue Service is changed or corrected by the 
151.29 	commissioner of Internal Revenue or other officer of the United States or other competent 
151.30 	authority, or where a renegotiation of a contract or subcontract with the United States results 
151.31 	in a change in income, items of tax preference, deductions, credits, or withholding tax, or, 
151.32 	in the case of estate tax, where there are adjustments to the taxable estate, the taxpayer shall 
151.33 	report the change or correction or renegotiation results in writing to the commissioner. The 
152.1 	report must be submitted within 180 days after the final determination and must be in the 
152.2 	form of either an amended Minnesota estate, withholding tax, corporate franchise tax, or 
152.3 	income tax return conceding the accuracy of the federal determination or a letter detailing 
152.4 	how the federal determination is incorrect or does not change the Minnesota tax. An amended 
152.5 	Minnesota income tax return must be accompanied by an amended property tax refund 
152.6 	return, if necessary. A taxpayer filing an amended federal tax return must also file a copy 
152.7 	of the amended return with the commissioner of revenue within 180 days after filing the 
152.8 	amended return.
152.9 	(b) For the purposes of paragraph (a), a change or correction includes any case where a 
152.10 	taxpayer reaches a closing agreement or a compromise with the Internal Revenue Service 
152.11 	under section 7121 or 7122 of the Internal Revenue Code.

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

152.13 	Sec. 2. Minnesota Statutes 2017 Supplement, section 290.0137, is amended to read:
152.14 	290.0137 ACCELERATED RECOGNITION OF CERTAIN INSTALLMENT 
152.15 	SALE GAINS.
152.16 	(a) In the case of a nonresident individual or a person who becomes a nonresident 
152.17 	individual during the tax year, taxable net income shall include the allocable amount realized 
152.18 	upon a sale of the assets of, or any interest in, an S corporation or partnership that operated 
152.19 	in Minnesota during the year of sale, including any income or gain to be recognized in future 
152.20 	years pursuant to an installment sale method of reporting under the Internal Revenue Code.
152.21 	(1) For the purposes of this paragraph, an individual who becomes a nonresident of 
152.22 	Minnesota in any year after an installment sale is required to recognize the full amount of 
152.23 	any income or gain described in this paragraph on the individual's final Minnesota resident 
152.24 	tax return to the extent that such income has not been recognized in a prior year.
152.25 	(2) For the purposes of this section, "realized" has the meaning given in section 1001(b) 
152.26 	of the Internal Revenue Code.
152.27 	(3) For the purposes of this section, "installment sale" means any installment sale under 
152.28 	section 453 of the Internal Revenue Code and any other sale that is reported utilizing a 
152.29 	method of accounting authorized under subchapter E of the Internal Revenue Code that 
152.30 	allows taxpayers to delay reporting or recognizing a realized gain until a future year.
152.31 	(4) For the purposes of this section, "allocable amount" means the full amount to be 
152.32 	apportioned to Minnesota under section 290.191 or 290.20, or the full amount to be assigned 
152.33 	to Minnesota under section 290.17.
153.1 	(b) Notwithstanding paragraph (a), nonresident taxpayers may elect to defer recognizing 
153.2 	unrecognized installment sale gains by making an election under this paragraph. The election 
153.3 	must be filed on a form to be determined or prescribed by the commissioner and must be 
153.4 	filed by the due date of the individual income tax return, including any extension. Electing 
153.5 	taxpayers must make an irrevocable agreement to:
153.6 	(1) file Minnesota tax returns in all subsequent years when gains from the installment 
153.7 	sales are recognized and reported to the Internal Revenue Service;
153.8 	(2) allocate gains to the state of Minnesota as though the gains were realized in the year 
153.9 	of sale under section 290.17, 290.191, or 290.20; and
153.10 	(3) include all relevant federal tax documents reporting the installment sale with 
153.11 	subsequent Minnesota tax returns.
153.12 	(c) Income or gain recognized for Minnesota purposes pursuant to paragraph (a) must 
153.13 	be excluded from taxable net income in any future year that the taxpayer files a Minnesota 
153.14 	tax return to the extent that the income or gain has already been subject to tax pursuant to 
153.15 	paragraph (a).

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

153.17 	Sec. 3. Minnesota Statutes 2016, section 290.06, subdivision 2c, is amended to read:
153.18 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
153.19 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
153.20 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
153.21 	their taxable net income the following schedule of rates:
153.22 	(1) On the first $35,480, 5.35 percent;
153.23 	(2) On all over $35,480, but not over $140,960, 7.05 percent;
153.24 	(3) On all over $140,960, but not over $250,000, 7.85 percent;
153.25 	(4) On all over $250,000, 9.85 percent.
153.26 	Married individuals filing separate returns, estates, and trusts must compute their income 
153.27 	tax by applying the above rates to their taxable income, except that the income brackets 
153.28 	will be one-half of the above amounts after the adjustment required in subdivision 2d.
153.29 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
153.30 	computed by applying to taxable net income the following schedule of rates:
153.31 	(1) On the first $24,270, 5.35 percent;
154.1 	(2) On all over $24,270, but not over $79,730, 7.05 percent;
154.2 	(3) On all over $79,730, but not over $150,000, 7.85 percent;
154.3 	(4) On all over $150,000, 9.85 percent.
154.4 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
154.5 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
154.6 	computed by applying to taxable net income the following schedule of rates:
154.7 	(1) On the first $29,880, 5.35 percent;
154.8 	(2) On all over $29,880, but not over $120,070, 7.05 percent;
154.9 	(3) On all over $120,070, but not over $200,000, 7.85 percent;
154.10 	(4) On all over $200,000, 9.85 percent.
154.11 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
154.12 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
154.13 	amount determined by the commissioner must be computed in accordance with tables 
154.14 	prepared and issued by the commissioner of revenue based on income brackets of not more 
154.15 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
154.16 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
154.17 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
154.18 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
154.19 	individual's Minnesota income tax as provided in this subdivision. After the application of 
154.20 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
154.21 	by a fraction in which:
154.22 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
154.23 	defined in section 62 of the Internal Revenue Code and increased by:
154.24 	(i) the additions required under section sections290.0131, subdivisions 2 and 6 to 11,
154.25 	and 290.0137, paragraph (a); and reduced by
154.26 	(ii) the Minnesota assignable portion of the subtraction for United States government 
154.27 	interest under section 290.0132, subdivision 2, and the subtractions under section sections
154.28 	290.0132, subdivisions 9, 10, 14, 15, 17, and 18, and 290.0137, paragraph (c), after applying 
154.29 	the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and
154.30 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
154.31 	62 of the Internal Revenue Code, increased by:
155.1 	(i) the amounts specified in section additions required under sections290.0131, 
155.2 	subdivisions 2 and 6 to 11, and 290.0137, paragraph (a); and reduced by
155.3 	(ii) the amounts specified in section subtractions under sections290.0132, subdivisions 
155.4 	2, 9, 10, 14, 15, 17, and 18, and 290.0137, paragraph (c).

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

155.8 	Sec. 4. Minnesota Statutes 2016, section 290.06, subdivision 2d, is amended to read:
155.9 		Subd. 2d.Inflation adjustment of brackets. (a) For taxable years beginning after 
155.10 	December 31, 2013, the minimum and maximum dollar amounts for each rate bracket for 
155.11 	which a tax is imposed in subdivision 2c shall be adjusted for inflation by the percentage 
155.12 	determined under paragraph (b). For the purpose of making the adjustment as provided in 
155.13 	this subdivision all of the rate brackets provided in subdivision 2c shall be the rate brackets 
155.14 	as they existed for taxable years beginning after December 31, 2012, and before January 1, 
155.15 	2014. The rate applicable to any rate bracket must not be changed. The dollar amounts 
155.16 	setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate 
155.17 	brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in 
155.18 	$5, it must be rounded up to the nearest $10 amount.
155.19 	(b) The commissioner shall adjust the rate brackets and by the percentage determined 
155.20 	pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in section 
155.21 	1(f)(3)(B) the word "2012" shall be substituted for the word "1992." For 2014, the 
155.22 	commissioner shall then determine the percent change from the 12 months ending on August 
155.23 	31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent year, from 
155.24 	the 12 months ending on August 31, 2012, to the 12 months ending on August 31 of the 
155.25 	year preceding the taxable year. The commissioner shall determine the rate bracket for 
155.26 	married filing separate returns after this adjustment is done. The rate bracket for married 
155.27 	filing separate must be one-half of the rate bracket for married filing joint. The determination 
155.28 	of the commissioner pursuant to this subdivision shall not be considered a "rule" and shall 
155.29 	not be subject to the Administrative Procedure Act contained in chapter 14.
155.30 	No later than December 15 of each year, the commissioner shall announce the specific 
155.31 	percentage that will be used to adjust the tax rate brackets.

155.32 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
155.33 	31, 2017.

156.1 	Sec. 5. Minnesota Statutes 2016, section 290.92, subdivision 28, is amended to read:
156.2 		Subd. 28.Payments to horse racing license holders. Effective with payments made 
156.3 	after April 1, 1988, any holder of a license issued by the Minnesota Racing Commission 
156.4 	who makes a payment for personal or professional services to a holder of a class C license 
156.5 	issued by the commission, except an amount paid as a purse, shall deduct from the payment 
156.6 	and withhold 6.25 percent of the amount as Minnesota withholding tax when the amount 
156.7 	paid to that individual by the same person during the calendar year exceeds $600. For 
156.8 	purposes of the provisions of this section, a payment to any person which is subject to 
156.9 	withholding under this subdivision must be treated as if the payment was a wage paid by 
156.10 	an employer to an employee. Every individual who is to receive a payment which is subject 
156.11 	to withholding under this subdivision shall furnish the license holder with a statement, made 
156.12 	under the penalties of perjury, containing the name, address, and Social Security account 
156.13 	number of the person receiving the payment. No withholding is required if the individual 
156.14 	presents a signed certificate from the individual's employer which states that the individual 
156.15 	is an employee of that employer. A nonresident individual who holds a class C license must 
156.16 	be treated as an athlete for purposes of applying the provisions of subdivision 4a and section 
156.17 	290.17, subdivision 2(1)(b)(ii)(a)(2)(ii).

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

156.19 	Sec. 6. Minnesota Statutes 2017 Supplement, section 462D.03, subdivision 2, is amended 
156.20 	to read:
156.21 		Subd. 2.Designation of qualified beneficiary. (a) The account holder must designate 
156.22 	a first-time home buyer as the qualified beneficiary of the account by April 15 of the year
156.23 	in a form and manner prescribed by the commissioner following the taxable year in which 
156.24 	the account was established. The account holder may be the qualified beneficiary. The 
156.25 	account holder may change the designated qualified beneficiary at any time, but no more 
156.26 	than one qualified beneficiary may be designated for an account at any one time. For purposes 
156.27 	of the one beneficiary restriction, a married couple qualifies as one beneficiary. Changing 
156.28 	the designated qualified beneficiary of an account does not affect computation of the ten-year 
156.29 	period under section 462D.06, subdivision 2.
156.30 	(b) The commissioner shall establish a process for account holders to notify the state 
156.31 	that permits recording of the account, the account holder or holders, any transfers under 
156.32 	section 462D.04, subdivision 2, and the designated qualified beneficiary for each account. 
156.33 	This may be done upon filing the account holder's income tax return or in any other way 
156.34 	the commissioner determines to be appropriate.

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

157.2 	ARTICLE 11
157.3 	DEPARTMENT OF REVENUE; SALES AND USE TAXES; TECHNICAL CHANGES

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

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

157.11 	Sec. 2. Minnesota Statutes 2016, section 297A.68, subdivision 44, is amended to read:
157.12 		Subd. 44.Greater Minnesota business expansions. (a) Purchases and use of tangible 
157.13 	personal property or taxable services by a qualified business, as defined in section 116J.8738,
157.14 	are exempt if:
157.15 	(1) the commissioner of employment and economic development certifies to the 
157.16 	commissioner of revenue, in a format approved by the commissioner of revenue, that the 
157.17 	qualified business meets the requirements under section 116J.8738;
157.18 	(2) the business subsidy agreement provides that the exemption under this subdivision 
157.19 	applies;
157.20 	(2) (3) the property or services are primarily used or consumed at the facility in greater 
157.21 	Minnesota identified in the business subsidy agreement; and
157.22 	(3) (4) the purchase was made and delivery received during the duration of the 
157.23 	certification of the business as a qualified business under section 116J.8738 business subsidy 
157.24 	agreement.
157.25 	(b) Purchase and use of construction materials and supplies used or consumed in, and 
157.26 	equipment incorporated into, the construction of improvements to real property in greater 
157.27 	Minnesota are exempt if the improvements after completion of construction are to be used 
157.28 	in the conduct of the trade or business of the qualified business, as defined in section 
157.29 	116J.8738 and the commissioner of employment and economic development certifies to 
157.30 	the commissioner of revenue, in a format approved by the commissioner of revenue, that 
158.1 	the qualified business meets the requirements under section 116J.8738. This exemption 
158.2 	applies regardless of whether the purchases are made by the business or a contractor.
158.3 	(c) The exemptions under this subdivision apply to a local sales and use tax.
158.4 	(d) The tax on purchases imposed under this subdivision must be imposed and collected 
158.5 	as if the rate under section 297A.62 applied, and then refunded in the manner provided in 
158.6 	section 297A.75. The total amount refunded for a facility over the certification period is 
158.7 	limited to the amount listed in the business subsidy agreement. No more than $7,000,000 
158.8 	may be refunded in a fiscal year for all purchases under this subdivision. Refunds must be 
158.9 	allocated on a first-come, first-served basis. If more than $7,000,000 of eligible claims are 
158.10 	made in a fiscal year, claims by qualified businesses carry over to the next fiscal year, and 
158.11 	the commissioner of revenue must first allocate refunds to qualified businesses eligible for 
158.12 	a refund in the preceding fiscal year. Any portion of the balance of funds allocated for 
158.13 	refunds under this paragraph does not cancel and shall be carried forward to and available 
158.14 	for refunds in subsequent fiscal years. Notwithstanding section 297A.75, subdivision 4, for 
158.15 	an eligible refund claim that carries over to a subsequent fiscal year, the interest on the 
158.16 	amount carried over must be paid on the refund no sooner than from 90 days after July 1 
158.17 	of the fiscal year in which funds are available for the eligible claim.

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

158.19 	Sec. 3. Minnesota Statutes 2016, section 297A.71, subdivision 45, is amended to read:
158.20 		Subd. 45.Biopharmaceutical manufacturing facility. (a) Materials and supplies used 
158.21 	or consumed in, capital equipment incorporated into, and privately owned infrastructure in 
158.22 	support of the construction, improvement, or expansion of a biopharmaceutical manufacturing 
158.23 	facility in the state are exempt if the commissioner of employment and economic 
158.24 	development certifies to the commissioner of revenue that the following criteria are met:
158.25 	(1) the facility is used for the manufacturing of biologics;
158.26 	(2) the total capital investment made at the facility exceeds $50,000,000; and
158.27 	(3) the facility creates and maintains at least 190 full-time equivalent positions at the 
158.28 	facility. These positions must be new jobs in Minnesota and not the result of relocating jobs 
158.29 	that currently exist in Minnesota.
158.30 	(b) The tax must be imposed and collected as if the rate under section 297A.62 applied, 
158.31 	and refunded in the manner provided in section 297A.75.
159.1 	(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing facility 
159.2 	must:
159.3 	(1) initially apply to the Department commissioner of employment and economic 
159.4 	development for certification no later than one year from the final completion date of 
159.5 	construction, improvement, or expansion of the facility; and
159.6 	(2) for each year that the owner of the biopharmaceutical manufacturing facility applies 
159.7 	for a refund, the owner commissioner must have received written certification from the 
159.8 	Department commissioner of employment and economic development that the facility has 
159.9 	met the criteria of paragraph (a).
159.10 	(d) The refund is to be paid annually at a rate of 25 percent of the total allowable refund 
159.11 	payable to date, with the commissioner making annual payments of the remaining refund 
159.12 	until all of the refund has been paid.
159.13 	(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are 
159.14 	interchangeable and mean medical drugs or medicinal preparations produced using 
159.15 	technology that uses biological systems, living organisms, or derivatives of living organisms 
159.16 	to make or modify products or processes for specific use. The medical drugs or medicinal 
159.17 	preparations include but are not limited to proteins, antibodies, nucleic acids, and vaccines.

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

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

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

159.25 	ARTICLE 12
159.26 	DEPARTMENT OF REVENUE; TOBACCO TAXES; TECHNICAL CHANGES

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

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

160.12 	Sec. 2. Minnesota Statutes 2016, section 297F.01, is amended by adding a subdivision to 
160.13 	read:
160.14 		Subd. 22b.Vapor products. (a) "Vapor products" means any cartridge, bottle, or other 
160.15 	package that contains nicotine made or derived from tobacco, that is in a solution that is 
160.16 	consumed, or meant to be consumed, through the use of a heating element, power source, 
160.17 	electronic circuit, or other electronic, chemical, or mechanical means that produces vapor 
160.18 	from the nicotine. This paragraph expires December 31, 2018.
160.19 	(b) Beginning January 1, 2019, "vapor products" means any cartridge, bottle, or other 
160.20 	package that contains nicotine, including nicotine produced from sources other than tobacco, 
160.21 	that is in a solution that is consumed, or meant to be consumed, through the use of a heating 
160.22 	element, power source, electronic circuit, or other electronic, chemical, or mechanical means 
160.23 	that produces vapor from the nicotine.
160.24 	(c) Vapor products includes any electronic cigarette, electronic cigar, electronic cigarillo, 
160.25 	electronic pipe, or similar product or device, and any batteries, heating elements, or other 
160.26 	components, parts, or accessories sold with and meant to be used in the consumption of the 
160.27 	nicotine solution.

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

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

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

161.6 	ARTICLE 13
161.7 	DEPARTMENT OF REVENUE; PROPERTY TAXES; TECHNICAL CHANGES

161.8 	Section 1. Minnesota Statutes 2016, section 270C.85, subdivision 2, is amended to read:
161.9 		Subd. 2.Powers and duties. The commissioner shall have and exercise the following 
161.10 	powers and duties in administering the property tax laws.:
161.11 	(a) (1) confer with, advise, and give the necessary instructions and directions to local 
161.12 	assessors and local boards of review throughout the state as to their duties under the laws 
161.13 	of the state.;
161.14 	(b) (2) direct proceedings, actions, and prosecutions to be instituted to enforce the laws 
161.15 	relating to the liability and punishment of public officers and officers and agents of 
161.16 	corporations for failure or negligence to comply with the provisions of the property tax 
161.17 	laws, and cause complaints to be made against local assessors, members of boards of 
161.18 	equalization, members of boards of review, or any other assessing or taxing officer, to the 
161.19 	proper authority, for their removal from office for misconduct or negligence of duty.;
161.20 	(c) (3) require county attorneys to assist in the commencement of prosecutions in actions 
161.21 	or proceedings for removal, forfeiture, and punishment, for violation of the property tax 
161.22 	laws in their respective districts or counties.;
161.23 	(d) (4) require town, city, county, and other public officers to report and certify 
161.24 	information, at the parcel level or in the aggregate, as to the assessment and taxation of real 
161.25 	and personal property, and such other information as may be needful in the work of the 
161.26 	commissioner, in such form as the commissioner may prescribe. The commissioner shall 
161.27 	prescribe the content, format, manner, and time of filing of all required reports and 
161.28 	certifications;
161.29 	(e) (5) transmit to the governor, on or before the third Monday in December of each 
161.30 	even-numbered year, and to each member of the legislature, on or before November 15 of 
161.31 	each even-numbered year, the report of the department for the preceding years, showing all 
162.1 	the taxable property subject to the property tax laws and the value of the same, in tabulated 
162.2 	form.;
162.3 	(f) (6) inquire into the methods of assessment and taxation and ascertain whether the 
162.4 	assessors faithfully discharge their duties.; and
162.5 	(g) (7) assist local assessors in determining the estimated market value of industrial 
162.6 	special-use property. For purposes of this paragraph clause, "industrial special-use property" 
162.7 	means property that:
162.8 	(1)(i) is designed and equipped for a particular type of industry;
162.9 	(2)(ii) is not easily adapted to some other use due to the unique nature of the facilities;
162.10 	(3)(iii) has facilities totaling at least 75,000 square feet in size; and
162.11 	(4)(iv) has a total estimated market value of $10,000,000 or greater based on the 
162.12 	assessor's preliminary determination.

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

162.14 	Sec. 2. Minnesota Statutes 2017 Supplement, section 270C.89, subdivision 1, is amended 
162.15 	to read:
162.16 		Subdivision 1.Initial report. Each county assessor shall file by April 1 with the 
162.17 	commissioner a copy of the abstract preliminary assessment information that the 
162.18 	commissioner may require under section 270C.85, subdivision 2, clause (4), that will be 
162.19 	acted upon by the local and county boards of review. The abstract must list the real and 
162.20 	personal property in the county itemized by assessment districts. The assessor of each county 
162.21 	in the state shall file with the commissioner, within ten working days following final action 
162.22 	of the local board of review or equalization and within five days following final action of 
162.23 	the county board of equalization, any changes made by the local or county board. The 
162.24 	information must be filed in the manner prescribed by the commissioner.

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

162.26 	Sec. 3. Minnesota Statutes 2016, section 270C.89, subdivision 2, is amended to read:
162.27 		Subd. 2.Final report. The final abstract of assessments assessment information after 
162.28 	adjustments by the State Board of Equalization and inclusion of any omitted property shall 
162.29 	be submitted reported to the commissioner on or before September 1 of each calendar year
162.30 	under section 270C.85, subdivision 2, clause (4). The final abstract must separately report 
162.31 	the captured tax capacity of tax increment financing districts under section 469.177, 
163.1 	subdivision 2, the areawide net tax capacity contribution values determined under sections 
163.2 	276A.05, subdivision 1, and 473F.07, subdivision 1, and the value subject to the power line 
163.3 	credit under section 273.42.

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

163.5 	Sec. 4. Minnesota Statutes 2016, section 270C.91, is amended to read:
163.6 	270C.91 RECORD OF PROCEEDINGS CHANGING NET TAX CAPACITY; 
163.7 	DUTIES OF COUNTY AUDITOR.
163.8 	A record of all proceedings of the commissioner affecting any change in the net tax 
163.9 	capacity of any property, as revised by the State Board of Equalization, shall be kept by the 
163.10 	commissioner and a copy thereof, duly certified, shall be mailed each year to the auditor of 
163.11 	each county wherein such property is situated, on or before June 30 or 30 days after 
163.12 	submission of the abstract required by section 270C.89, whichever is later. This record shall 
163.13 	specify the amounts or amount, or both, added to or deducted from the net tax capacity of 
163.14 	the real property of each of the several towns and cities, and of the real property not in towns 
163.15 	or cities, also the percent or amount of both, added to or deducted from the several classes 
163.16 	of personal property in each of the towns and cities, and also the amount added to or deducted 
163.17 	from the assessment of any person. The county auditor shall add to or deduct from such 
163.18 	tract or lot, or portion thereof, of any real property in the county the required percent or 
163.19 	amount, or both, on the net tax capacity thereof as it stood after equalized by the county 
163.20 	board, adding in each case a fractional sum of 50 cents or more, and deducting in each case 
163.21 	any fractional sum of less than 50 cents, so that no net tax capacity of any separate tract or 
163.22 	lot shall contain any fraction of a dollar; and add to, or deduct from, the several classes of 
163.23 	personal property in the county the required percent or amount, or both, on the net tax 
163.24 	capacity thereof as it stood after equalized by the county board, adding or deducting in 
163.25 	manner aforesaid any fractional sum so that no net tax capacity of any separate class of 
163.26 	personal property shall contain a fraction of a dollar, and add to or deduct from assessment 
163.27 	of any person, as they stood after equalization by the county board, the required amounts 
163.28 	to agree with the assessments as returned by the commissioner.

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

163.30 	Sec. 5. Minnesota Statutes 2016, section 273.061, subdivision 9, is amended to read:
163.31 		Subd. 9.Additional general duties. Additional duties of the county assessor shall be
163.32 	are as follows:
164.1 	(1) to make all assessments, based upon the appraised values reported by the local 
164.2 	assessors or assistants and the county assessor's own knowledge of the value of the property 
164.3 	assessed;
164.4 	(2) to personally view and determine the value of any property which that because of 
164.5 	its type or character may be difficult for the local assessor to appraise;
164.6 	(3) to make all changes ordered by the local boards of review, relative to the net tax 
164.7 	capacity of the property of any individual, firm or corporation after notice has been given 
164.8 	and hearings held as provided by law;
164.9 	(4) to enter all assessments in the assessment books, furnished by the county auditor, 
164.10 	with each book and the tabular statements for each book in correct balance;
164.11 	(5) to prepare all assessment cards, charts, maps and any other forms prescribed by the 
164.12 	commissioner of revenue;
164.13 	(6) to attend the meeting of the county board of equalization; to investigate and report 
164.14 	on any assessment ordered by said board; to enter all changes made by said board in the 
164.15 	assessment books and prepare the abstract of assessments for the commissioner of revenue
164.16 	information reported to the commissioner under section 270C.85, subdivision 2, clause (4); 
164.17 	to enter all changes made by the State Board of Equalization in the assessment books; to 
164.18 	deduct all exemptions authorized by law from each assessment and certify to the county 
164.19 	auditor the taxable value of each parcel of land, as described and listed in the assessment 
164.20 	books by the county auditor, and the taxable value of the personal property of each person, 
164.21 	firm, or corporation assessed;
164.22 	(7) to investigate and make recommendations relative to all applications for the abatement 
164.23 	of taxes or applications for the reduction of the net tax capacity of any property; and
164.24 	(8) to perform all other duties relating to the assessment of property for the purpose of 
164.25 	taxation which may be required by the commissioner of revenue.

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

164.27 	Sec. 6. Minnesota Statutes 2017 Supplement, section 273.0755, is amended to read:
164.28 	273.0755 TRAINING AND EDUCATION OF PROPERTY TAX PERSONNEL.
164.29 	(a) Beginning with the four-year period starting on July 1, 2000, every person licensed 
164.30 	by the state Board of Assessors at the Accredited Minnesota Assessor level or higher, shall 
164.31 	successfully complete a weeklong Minnesota laws course sponsored by the Department of 
165.1 	Revenue at least once in every four-year period. An assessor need not attend the course if 
165.2 	they successfully pass the test for the course.
165.3 	(b) The commissioner of revenue may require that each county, and each city for which 
165.4 	the city assessor performs the duties of county assessor, have (i) (1) a person on the assessor's 
165.5 	staff who is certified by the Department of Revenue in sales ratio calculations, (ii) (2) an 
165.6 	officer or employee who is certified by the Department of Revenue in tax calculations, and 
165.7 	(iii) (3) an officer or employee who is certified by the Department of Revenue in the proper 
165.8 	preparation of abstracts of assessment. The commissioner of revenue may require that each 
165.9 	county have an officer or employee who is certified by the Department of Revenue in the 
165.10 	proper preparation of abstracts of tax lists information reported to the commissioner under 
165.11 	section 270C.85, subdivision 2, clause (4). Certifications under this paragraph expire after 
165.12 	four years.
165.13 	(c) Beginning with the four-year educational licensing period starting on July 1, 2004, 
165.14 	every Minnesota assessor licensed by the State Board of Assessors must attend and participate 
165.15 	in a seminar that focuses on ethics, professional conduct and the need for standardized 
165.16 	assessment practices developed and presented by the commissioner of revenue. This 
165.17 	requirement must be met at least once in every subsequent four-year period. This requirement 
165.18 	applies to all assessors licensed for one year or more in the four-year period.
165.19 	(d) When the commissioner of revenue determines that an individual or board that 
165.20 	performs functions related to property tax administration has performed those functions in 
165.21 	a manner that is not uniform or equitable, the commissioner may require that the individual 
165.22 	or members of the board complete supplemental training. The commissioner may not require 
165.23 	that an individual complete more than 32 hours of supplemental training pursuant to this 
165.24 	paragraph. If the individual is required to complete supplemental training due to that 
165.25 	individual's membership on a local or county board of appeal and equalization, the 
165.26 	commissioner may not require that the individual complete more than two hours of 
165.27 	supplemental training.

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

165.29 	Sec. 7. Minnesota Statutes 2016, section 273.113, subdivision 3, is amended to read:
165.30 		Subd. 3.Reimbursement for lost revenue. The county auditor shall certify to the 
165.31 	commissioner of revenue, as part of the abstracts of tax lists required to be filed with the 
165.32 	commissioner under section 275.29 270C.85, subdivision 2, clause (4), the amount of tax 
165.33 	lost to the county from the property tax credit under subdivision 2. Any prior year adjustments 
165.34 	must also be certified in the abstracts of tax lists. The commissioner of revenue shall review 
166.1 	the certifications to determine their accuracy. The commissioner may make the changes in 
166.2 	the certification that are considered necessary or return a certification to the county auditor 
166.3 	for corrections. The commissioner shall reimburse each taxing district, other than school 
166.4 	districts, for the taxes lost. The payments must be made at the time provided in section 
166.5 	473H.10 for payment to taxing jurisdictions in the same proportion that the ad valorem tax 
166.6 	is distributed. Reimbursements to school districts must be made as provided in section 
166.7 	273.1392. The amount necessary to make the reimbursements under this section is annually 
166.8 	appropriated from the general fund to the commissioner of revenue.

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

166.10 	Sec. 8. Minnesota Statutes 2016, section 273.119, subdivision 2, is amended to read:
166.11 		Subd. 2.Reimbursement for lost revenue. The county may transfer money from the 
166.12 	county conservation account created in section 40A.152 to the county revenue fund to 
166.13 	reimburse the fund for the cost of the property tax credit. The county auditor shall certify 
166.14 	to the commissioner of revenue, as part of the abstracts of tax lists required to be filed with 
166.15 	the commissioner under section 275.29 270C.85, subdivision 2, clause (4), the amount of 
166.16 	tax lost to the county from the property tax credit under subdivision 1 and the extent that 
166.17 	the tax lost exceeds funds available in the county conservation account. Any prior year 
166.18 	adjustments must also be certified in the abstracts of tax lists. The commissioner of revenue 
166.19 	shall review the certifications to determine their accuracy. The commissioner may make 
166.20 	the changes in the certification that are considered necessary or return a certification to the 
166.21 	county auditor for corrections. The commissioner shall reimburse each taxing district, other 
166.22 	than school districts, from the Minnesota conservation fund under section 40A.151 for the 
166.23 	taxes lost in excess of the county account. The payments must be made at the time provided 
166.24 	in section 473H.10, subdivision 3, for payment to taxing jurisdictions in the same proportion 
166.25 	that the ad valorem tax is distributed.

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

166.27 	Sec. 9. Minnesota Statutes 2016, section 273.1231, subdivision 3, is amended to read:
166.28 		Subd. 3.Disaster or emergency area.  (a) "Disaster or emergency area" means a 
166.29 	geographic area for which:
166.30 	(1)(i) the president of the United States, the secretary of agriculture, or the administrator 
166.31 	of the Small Business Administration has determined that a disaster exists pursuant to federal 
166.32 	law, or
167.1 	(ii) a local emergency has been declared pursuant to section 12.29; and
167.2 	(2) an application by the local unit of government requesting property tax relief under 
167.3 	this section has been received by the governor and approved by the executive council.
167.4 	(b) The executive council must not approve an application unless:
167.5 	(1) a completed disaster survey is included; and
167.6 	(2) within the boundaries of the applicant, (i) the average damage for the buildings that 
167.7 	are damaged is at least $5,000, and (ii) either at least 25 taxable buildings were damaged, 
167.8 	or the total dollar amount of damage to all taxable buildings equals or exceeds one percent 
167.9 	of the total taxable market value of buildings for the applicant as reported to the commissioner 
167.10 	of revenue under section 270C.89, subdivision 2 270C.85, subdivision 2, clause (4), for the 
167.11 	assessment in the year prior to the year of the damage.

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

167.13 	Sec. 10. Minnesota Statutes 2016, section 273.136, subdivision 2, is amended to read:
167.14 		Subd. 2.Reduction amounts submitted to county. The commissioner of revenue shall 
167.15 	determine, not later than April 1 of each year, the amount of reduction resulting from section 
167.16 	273.135 in each county containing a tax relief area as defined by section 273.134, paragraph 
167.17 	(b), basing determinations on a review of abstracts of tax lists submitted by the county 
167.18 	auditors pursuant to section 275.29 information reported to the commissioner under section 
167.19 	270C.85, subdivision 2, clause (4). The commissioner may make changes in the abstracts 
167.20 	of tax lists as deemed necessary. The commissioner of revenue, after such review, shall 
167.21 	submit to the St. Louis County auditor, on or before April 15, the amount of the first half 
167.22 	payment payable hereunder and on or before September 15 the amount of the second half 
167.23 	payment.

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

167.25 	Sec. 11. Minnesota Statutes 2017 Supplement, section 273.1384, subdivision 2, is amended 
167.26 	to read:
167.27 		Subd. 2.Agricultural homestead market value credit. Property classified as agricultural 
167.28 	homestead under section 273.13, subdivision 23, paragraph (a), is eligible for an agricultural 
167.29 	credit. The credit is computed using the property's agricultural credit market value, defined 
167.30 	for this purpose as the property's market value excluding the market value of the house, 
167.31 	garage, and immediately surrounding one acre of land. The credit is equal to 0.3 percent of 
167.32 	the first $115,000 of the property's agricultural credit market value plus 0.1 percent of the 
168.1 	property's agricultural credit market value in excess of $115,000, subject to a maximum 
168.2 	credit of $490 for a full agricultural homestead. In the case of property that is classified as 
168.3 	part homestead and part nonhomestead solely because not all the owners occupy or farm 
168.4 	the property, not all the owners have qualifying relatives occupying or farming the property, 
168.5 	or solely because not all the spouses of owners occupy the property, the credit is computed 
168.6 	on the amount of agricultural credit market value corresponding to the percentage of 
168.7 	homestead, and the maximum credit equals $490 multiplied by the percentage of homestead. 
168.8 	The percentage of homestead is equal to 100 divided by the number of owners of the property, 
168.9 	or, in the case of a trust, the number of grantors of the trust that owns the property.

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

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

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

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

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

169.1 	Sec. 14. Minnesota Statutes 2016, section 273.18, is amended to read:
169.2 	273.18 LISTING, VALUATION, AND ASSESSMENT OF EXEMPT PROPERTY 
169.3 	BY COUNTY AUDITORS.
169.4 	(a) In every sixth year after the year 2010, the county auditor shall enter the description 
169.5 	of each tract of real property exempt by law from taxation, with the name of the owner, and 
169.6 	the assessor shall value and assess the same in the same manner that other real property is 
169.7 	valued and assessed, and shall designate in each case the purpose for which the property is 
169.8 	used.
169.9 	(b) For purposes of the apportionment of fire state aid under section 69.021, subdivision 
169.10 	7, The county auditor shall include on the abstract of assessment of exempt real property 
169.11 	filed under this section in the exempt property information that the commissioner may 
169.12 	require under section 270C.85, subdivision 2, clause (4), the total number of acres of all 
169.13 	natural resources lands for which in lieu payments are made under sections 477A.11 to 
169.14 	477A.14. The assessor shall estimate its market value, provided that if the assessor is not 
169.15 	able to estimate the market value of the land on a per parcel basis, the assessor shall furnish 
169.16 	the commissioner of revenue with an estimate of the average value per acre of this land 
169.17 	within the county.

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

169.19 	Sec. 15. Minnesota Statutes 2016, section 274.14, is amended to read:
169.20 	274.14 LENGTH OF SESSION; RECORD.
169.21 	The board must meet after the second Friday in June on at least one meeting day and 
169.22 	may meet for up to ten consecutive meeting days. The actual meeting dates must be contained 
169.23 	on the valuation notices mailed to each property owner in the county as provided in section 
169.24 	273.121. For this purpose, "meeting days" is defined as any day of the week excluding 
169.25 	Sunday. At the board's discretion, "meeting days" may include Saturday. No action taken 
169.26 	by the county board of review after June 30 is valid, except for corrections permitted in 
169.27 	sections 273.01 and 274.01. The county auditor shall keep an accurate record of the 
169.28 	proceedings and orders of the board. The record must be published like other proceedings 
169.29 	of county commissioners. A copy of the published record must be sent to the commissioner 
169.30 	of revenue, with the abstract of assessment required by section 274.16 within five days 
169.31 	following final action of the county board of equalization.
169.32 	For counties that conduct either regular board of review meetings or open book meetings, 
169.33 	at least one of the meeting days must include a meeting that does not end before 7:00 p.m. 
170.1 	For counties that require taxpayer appointments for the board of review, appointments must 
170.2 	include some available times that extend until at least 7:00 p.m. The county may have a 
170.3 	Saturday meeting in lieu of, or in addition to, the extended meeting times under this 
170.4 	paragraph.

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

170.6 	Sec. 16. Minnesota Statutes 2016, section 274.16, is amended to read:
170.7 	274.16 CORRECTED LISTS, ABSTRACTS.
170.8 	The county assessor or, in Ramsey County, the official designated by the board of county 
170.9 	commissioners shall calculate the changes of the assessment lists determined by the county 
170.10 	board of equalization, and make corrections accordingly, in the real or personal lists, or 
170.11 	both, and shall make duplicate abstracts duplicates of them. One must be filed in the assessor's 
170.12 	office, and one must be forwarded to the commissioner of revenue as provided in section 
170.13 	270C.89.

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

170.15 	Sec. 17. Minnesota Statutes 2017 Supplement, section 275.025, subdivision 1, is amended 
170.16 	to read:
170.17 		Subdivision 1.Levy amount. The state general levy is levied against 
170.18 	commercial-industrial property and seasonal residential recreational property, as defined 
170.19 	in this section. The state general levy for commercial-industrial property is $784,590,000 
170.20 	for taxes payable in 2018 and thereafter. The state general levy for seasonal-recreational 
170.21 	property is $44,190,000 for taxes payable in 2018 and thereafter. The tax under this section 
170.22 	is not treated as a local tax rate under section 469.177 and is not the levy of a governmental 
170.23 	unit under chapters 276A and 473F.
170.24 	The commissioner shall increase or decrease the preliminary or final rate for a year as 
170.25 	necessary to account for errors and tax base changes that affected a preliminary or final rate 
170.26 	for either of the two preceding years. Adjustments are allowed to the extent that the necessary 
170.27 	information is available to the commissioner at the time the rates for a year must be certified, 
170.28 	and for the following reasons:
170.29 	(1) an erroneous report of taxable value by a local official;
170.30 	(2) an erroneous calculation by the commissioner; and
171.1 	(3) an increase or decrease in taxable value for commercial-industrial or seasonal 
171.2 	residential recreational property reported on the abstracts of tax lists submitted under section 
171.3 	275.29 that was not reported on the abstracts of assessment submitted under section 270C.89
171.4 	to the commissioner under section 270C.85, subdivision 2, clause (4), for the same year.
171.5 	The commissioner may, but need not, make adjustments if the total difference in the tax 
171.6 	levied for the year would be less than $100,000.

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

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

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

171.19 	Sec. 19. Minnesota Statutes 2016, section 469.177, subdivision 1, is amended to read:
171.20 		Subdivision 1.Original net tax capacity. (a) Upon or after adoption of a tax increment 
171.21 	financing plan, the auditor of any county in which the district is situated shall, upon request 
171.22 	of the authority, certify the original net tax capacity of the tax increment financing district 
171.23 	and that portion of the district overlying any subdistrict as described in the tax increment 
171.24 	financing plan and shall certify in each year thereafter the amount by which the original net 
171.25 	tax capacity has increased or decreased as a result of a change in tax exempt status of 
171.26 	property within the district and any subdistrict, reduction or enlargement of the district or 
171.27 	changes pursuant to subdivision 4. The auditor shall certify the amount within 30 days after 
171.28 	receipt of the request and sufficient information to identify the parcels included in the district. 
171.29 	The certification relates to the taxes payable year as provided in subdivision 6.
171.30 	(b) If the classification under section 273.13 of property located in a district changes to 
171.31 	a classification that has a different assessment ratio, the original net tax capacity of that 
172.1 	property must be redetermined at the time when its use is changed as if the property had 
172.2 	originally been classified in the same class in which it is classified after its use is changed.
172.3 	(c) The amount to be added to the original net tax capacity of the district as a result of 
172.4 	previously tax exempt real property within the district becoming taxable equals the net tax 
172.5 	capacity of the real property as most recently assessed pursuant to section 273.18 information 
172.6 	reported to the commissioner under section 270C.85, subdivision 2, clause (4), or, if that 
172.7 	assessment was made more than one year prior to the date of title transfer rendering the 
172.8 	property taxable, the net tax capacity assessed by the assessor at the time of the transfer. If 
172.9 	improvements are made to tax exempt property after the municipality approves the district 
172.10 	and before the parcel becomes taxable, the assessor shall, at the request of the authority, 
172.11 	separately assess the estimated market value of the improvements. If the property becomes 
172.12 	taxable, the county auditor shall add to original net tax capacity, the net tax capacity of the 
172.13 	parcel, excluding the separately assessed improvements. If substantial taxable improvements 
172.14 	were made to a parcel after certification of the district and if the property later becomes tax 
172.15 	exempt, in whole or part, as a result of the authority acquiring the property through 
172.16 	foreclosure or exercise of remedies under a lease or other revenue agreement or as a result 
172.17 	of tax forfeiture, the amount to be added to the original net tax capacity of the district as a 
172.18 	result of the property again becoming taxable is the amount of the parcel's value that was 
172.19 	included in original net tax capacity when the parcel was first certified. The amount to be 
172.20 	added to the original net tax capacity of the district as a result of enlargements equals the 
172.21 	net tax capacity of the added real property as most recently certified by the commissioner 
172.22 	of revenue as of the date of modification of the tax increment financing plan pursuant to 
172.23 	section 469.175, subdivision 4.
172.24 	(d) If the net tax capacity of a property increases because the property no longer qualifies 
172.25 	under the Minnesota Agricultural Property Tax Law, section 273.111; the Minnesota Open 
172.26 	Space Property Tax Law, section 273.112; or the Metropolitan Agricultural Preserves Act, 
172.27 	chapter 473H, the Rural Preserve Property Tax Program under section 273.114, or because 
172.28 	platted, unimproved property is improved or market value is increased after approval of the 
172.29 	plat under section 273.11, subdivision 14a or 14b, the increase in net tax capacity must be 
172.30 	added to the original net tax capacity. If the net tax capacity of a property increases because 
172.31 	the property no longer qualifies for the homestead market value exclusion under section 
172.32 	273.13, subdivision 35, the increase in net tax capacity must be added to original net tax 
172.33 	capacity if the original construction of the affected home was completed before the date the 
172.34 	assessor certified the original net tax capacity of the district.
173.1 	(e) The amount to be subtracted from the original net tax capacity of the district as a 
173.2 	result of previously taxable real property within the district becoming tax exempt or 
173.3 	qualifying in whole or part for an exclusion from taxable market value, or a reduction in 
173.4 	the geographic area of the district, shall be the amount of original net tax capacity initially 
173.5 	attributed to the property becoming tax exempt, being excluded from taxable market value, 
173.6 	or being removed from the district. If the net tax capacity of property located within the tax 
173.7 	increment financing district is reduced by reason of a court-ordered abatement, stipulation 
173.8 	agreement, voluntary abatement made by the assessor or auditor or by order of the 
173.9 	commissioner of revenue, the reduction shall be applied to the original net tax capacity of 
173.10 	the district when the property upon which the abatement is made has not been improved 
173.11 	since the date of certification of the district and to the captured net tax capacity of the district 
173.12 	in each year thereafter when the abatement relates to improvements made after the date of 
173.13 	certification. The county auditor may specify reasonable form and content of the request 
173.14 	for certification of the authority and any modification thereof pursuant to section 469.175, 
173.15 	subdivision 4.
173.16 	(f) If a parcel of property contained a substandard building or improvements described 
173.17 	in section 469.174, subdivision 10, paragraph (e), that were demolished or removed and if 
173.18 	the authority elects to treat the parcel as occupied by a substandard building under section 
173.19 	469.174, subdivision 10, paragraph (b), or by improvements under section 469.174, 
173.20 	subdivision 10, paragraph (e), the auditor shall certify the original net tax capacity of the 
173.21 	parcel using the greater of (1) the current net tax capacity of the parcel, or (2) the estimated 
173.22 	market value of the parcel for the year in which the building or other improvements were 
173.23 	demolished or removed, but applying the classification rates for the current year.
173.24 	(g) For a redevelopment district qualifying under section 469.174, subdivision 10, 
173.25 	paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of 
173.26 	the land as the original tax capacity for any parcel in the district that contains a building 
173.27 	that suffered substantial damage as a result of the disaster or emergency.

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

173.29 	Sec. 20.  REPEALER.
 173.30 	Minnesota Statutes 2016, section 275.29, is repealed.

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

174.1 	ARTICLE 14
174.2 	DEPARTMENT OF REVENUE; MISCELLANEOUS; TECHNICAL CHANGES

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

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

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

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

174.18 	Sec. 3. Minnesota Statutes 2016, section 273.032, is amended to read:
174.19 	273.032 MARKET VALUE DEFINITION.
174.20 	(a) Unless otherwise provided, for the purpose of determining any property tax levy 
174.21 	limitation based on market value or any limit on net debt, the issuance of bonds, certificates 
174.22 	of indebtedness, or capital notes based on market value, any qualification to receive state 
174.23 	aid based on market value, or any state aid amount based on market value, the terms "market 
174.24 	value," "estimated market value," and "market valuation," whether equalized or unequalized, 
174.25 	mean the estimated market value of taxable property within the local unit of government 
174.26 	before any of the following or similar adjustments for:
174.27 	(1) the market value exclusions under:
174.28 	(i) section 273.11, subdivisions 14a and 14c (vacant platted land);
174.29 	(ii) section 273.11, subdivision 16 (certain improvements to homestead property);
174.30 	(iii) section 273.11, subdivisions 19 and 20 (certain improvements to business properties);
175.1 	(iv) section 273.11, subdivision 21 (homestead property damaged by mold);
175.2 	(v) section 273.13, subdivision 34 (homestead of a disabled veteran with a disability or 
175.3 	family caregiver); or
175.4 	(vi) section 273.13, subdivision 35 (homestead market value exclusion); or
175.5 	(2) the deferment of value under:
175.6 	(i) the Minnesota Agricultural Property Tax Law, section 273.111;
175.7 	(ii) the Aggregate Resource Preservation Law, section 273.1115;
175.8 	(iii) the Minnesota Open Space Property Tax Law, section 273.112;
175.9 	(iv) the rural preserves property tax program, section 273.114; or
175.10 	(v) the Metropolitan Agricultural Preserves Act, section 473H.10; or
175.11 	(3) the adjustments to tax capacity for:
175.12 	(i) tax increment financing under sections 469.174 to 469.1794;
175.13 	(ii) fiscal disparities under chapter 276A or 473F; or
175.14 	(iii) powerline credit under section 273.425.
175.15 	(b) Estimated market value under paragraph (a) also includes the market value of 
175.16 	tax-exempt property if the applicable law specifically provides that the limitation, 
175.17 	qualification, or aid calculation includes tax-exempt property.
175.18 	(c) Unless otherwise provided, "market value," "estimated market value," and "market 
175.19 	valuation" for purposes of property tax levy limitations and calculation of state aid, refer 
175.20 	to the estimated market value for the previous assessment year and for purposes of limits 
175.21 	on net debt, the issuance of bonds, certificates of indebtedness, or capital notes refer to the 
175.22 	estimated market value as last finally equalized.
175.23 	(d) For purposes of a provision of a home rule charter or of any special law that is not 
175.24 	codified in the statutes and that imposes a levy limitation based on market value or any limit 
175.25 	on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market 
175.26 	value, the terms "market value," "taxable market value," and "market valuation," whether 
175.27 	equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

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

176.1 	Sec. 4. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 22, is amended 
176.2 	to read:
176.3 		Subd. 22.Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) and 
176.4 	(c), real estate which is residential and used for homestead purposes is class 1a. In the case 
176.5 	of a duplex or triplex in which one of the units is used for homestead purposes, the entire 
176.6 	property is deemed to be used for homestead purposes. The market value of class 1a property 
176.7 	must be determined based upon the value of the house, garage, and land.
176.8 	The first $500,000 of market value of class 1a property has a net classification rate of 
176.9 	one percent of its market value; and the market value of class 1a property that exceeds 
176.10 	$500,000 has a classification rate of 1.25 percent of its market value.
176.11 	(b) Class 1b property includes homestead real estate or homestead manufactured homes 
176.12 	used for the purposes of a homestead by:
176.13 	(1) any person who is blind as defined in section 256D.35, or the blind person who is 
176.14 	blind and the blind person's spouse of the person who is blind;
176.15 	(2) any person who is permanently and totally disabled or by the disabled person with 
176.16 	a disability and the disabled person's spouse of the person with a disability; or
176.17 	(3) the surviving spouse of a veteran who was permanently and totally disabled veteran
176.18 	homesteading a property classified under this paragraph for taxes payable in 2008.
176.19 	Property is classified and assessed under clause (2) only if the government agency or 
176.20 	income-providing source certifies, upon the request of the homestead occupant, that the 
176.21 	homestead occupant satisfies the disability requirements of this paragraph, and that the 
176.22 	property is not eligible for the valuation exclusion under subdivision 34.
176.23 	Property is classified and assessed under paragraph (b) only if the commissioner of 
176.24 	revenue or the county assessor certifies that the homestead occupant satisfies the requirements 
176.25 	of this paragraph.
176.26 	Permanently and totally disabled for the purpose of this subdivision means a condition 
176.27 	which is permanent in nature and totally incapacitates the person from working at an 
176.28 	occupation which brings the person an income. The first $50,000 market value of class 1b 
176.29 	property has a net classification rate of .45 percent of its market value. The remaining market 
176.30 	value of class 1b property is classified as class 1a or class 2a property, whichever is 
176.31 	appropriate.
176.32 	(c) Class 1c property is commercial use real and personal property that abuts public 
176.33 	water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by 
177.1 	the Department of Natural Resources, and is devoted to temporary and seasonal residential 
177.2 	occupancy for recreational purposes but not devoted to commercial purposes for more than 
177.3 	250 days in the year preceding the year of assessment, and that includes a portion used as 
177.4 	a homestead by the owner, which includes a dwelling occupied as a homestead by a 
177.5 	shareholder of a corporation that owns the resort, a partner in a partnership that owns the 
177.6 	resort, or a member of a limited liability company that owns the resort even if the title to 
177.7 	the homestead is held by the corporation, partnership, or limited liability company. For 
177.8 	purposes of this paragraph, property is devoted to a commercial purpose on a specific day 
177.9 	if any portion of the property, excluding the portion used exclusively as a homestead, is 
177.10 	used for residential occupancy and a fee is charged for residential occupancy. Class 1c 
177.11 	property must contain three or more rental units. A "rental unit" is defined as a cabin, 
177.12 	condominium, townhouse, sleeping room, or individual camping site equipped with water 
177.13 	and electrical hookups for recreational vehicles. Class 1c property must provide recreational 
177.14 	activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill 
177.15 	or cross-country ski equipment; provide marina services, launch services, or guide services; 
177.16 	or sell bait and fishing tackle. Any unit in which the right to use the property is transferred 
177.17 	to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies 
177.18 	for class 1c even though it may remain available for rent. A camping pad offered for rent 
177.19 	by a property that otherwise qualifies for class 1c is also class 1c, regardless of the term of 
177.20 	the rental agreement, as long as the use of the camping pad does not exceed 250 days. If 
177.21 	the same owner owns two separate parcels that are located in the same township, and one 
177.22 	of those properties is classified as a class 1c property and the other would be eligible to be 
177.23 	classified as a class 1c property if it was used as the homestead of the owner, both properties 
177.24 	will be assessed as a single class 1c property; for purposes of this sentence, properties are 
177.25 	deemed to be owned by the same owner if each of them is owned by a limited liability 
177.26 	company, and both limited liability companies have the same membership. The portion of 
177.27 	the property used as a homestead is class 1a property under paragraph (a). The remainder 
177.28 	of the property is classified as follows: the first $600,000 of market value is tier I, the next 
177.29 	$1,700,000 of market value is tier II, and any remaining market value is tier III. The 
177.30 	classification rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 
177.31 	percent. Owners of real and personal property devoted to temporary and seasonal residential 
177.32 	occupancy for recreation purposes in which all or a portion of the property was devoted to 
177.33 	commercial purposes for not more than 250 days in the year preceding the year of assessment 
177.34 	desiring classification as class 1c, must submit a declaration to the assessor designating the 
177.35 	cabins or units occupied for 250 days or less in the year preceding the year of assessment 
177.36 	by January 15 of the assessment year. Those cabins or units and a proportionate share of 
178.1 	the land on which they are located must be designated as class 1c as otherwise provided. 
178.2 	The remainder of the cabins or units and a proportionate share of the land on which they 
178.3 	are located must be designated as class 3a commercial. The owner of property desiring 
178.4 	designation as class 1c property must provide guest registers or other records demonstrating 
178.5 	that the units for which class 1c designation is sought were not occupied for more than 250 
178.6 	days in the year preceding the assessment if so requested. The portion of a property operated 
178.7 	as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) 
178.8 	other nonresidential facility operated on a commercial basis not directly related to temporary 
178.9 	and seasonal residential occupancy for recreation purposes does not qualify for class 1c.
178.10 	(d) Class 1d property includes structures that meet all of the following criteria:
178.11 	(1) the structure is located on property that is classified as agricultural property under 
178.12 	section 273.13, subdivision 23;
178.13 	(2) the structure is occupied exclusively by seasonal farm workers during the time when 
178.14 	they work on that farm, and the occupants are not charged rent for the privilege of occupying 
178.15 	the property, provided that use of the structure for storage of farm equipment and produce 
178.16 	does not disqualify the property from classification under this paragraph;
178.17 	(3) the structure meets all applicable health and safety requirements for the appropriate 
178.18 	season; and
178.19 	(4) the structure is not salable as residential property because it does not comply with 
178.20 	local ordinances relating to location in relation to streets or roads.
178.21 	The market value of class 1d property has the same classification rates as class 1a property 
178.22 	under paragraph (a).

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

178.24 	Sec. 5. Minnesota Statutes 2017 Supplement, section 273.13, subdivision 34, is amended 
178.25 	to read:
178.26 		Subd. 34.Homestead of disabled veteran with a disability or family caregiver. (a) 
178.27 	All or a portion of the market value of property owned by a veteran and serving as the 
178.28 	veteran's homestead under this section is excluded in determining the property's taxable 
178.29 	market value if the veteran has a service-connected disability of 70 percent or more as 
178.30 	certified by the United States Department of Veterans Affairs. To qualify for exclusion 
178.31 	under this subdivision, the veteran must have been honorably discharged from the United 
178.32 	States armed forces, as indicated by United States Government Form DD214 or other official 
178.33 	military discharge papers.
179.1 	(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is excluded, 
179.2 	except as provided in clause (2); and
179.3 	(2) for a total (100 percent) and permanent disability, $300,000 of market value is 
179.4 	excluded.
179.5 	(c) If a disabled veteran with a disability qualifying for a valuation exclusion under 
179.6 	paragraph (b), clause (2), predeceases the veteran's spouse, and if upon the death of the 
179.7 	veteran the spouse holds the legal or beneficial title to the homestead and permanently 
179.8 	resides there, the exclusion shall carry over to the benefit of the veteran's spouse for the 
179.9 	current taxes payable year and for eight additional taxes payable years or until such time 
179.10 	as the spouse remarries, or sells, transfers, or otherwise disposes of the property, whichever 
179.11 	comes first. Qualification under this paragraph requires an application under paragraph (h), 
179.12 	and a spouse must notify the assessor if there is a change in the spouse's marital status, 
179.13 	ownership of the property, or use of the property as a permanent residence.
179.14 	(d) If the spouse of a member of any branch or unit of the United States armed forces 
179.15 	who dies due to a service-connected cause while serving honorably in active service, as 
179.16 	indicated on United States Government Form DD1300 or DD2064, holds the legal or 
179.17 	beneficial title to a homestead and permanently resides there, the spouse is entitled to the 
179.18 	benefit described in paragraph (b), clause (2), for eight taxes payable years, or until such 
179.19 	time as the spouse remarries or sells, transfers, or otherwise disposes of the property, 
179.20 	whichever comes first.
179.21 	(e) If a veteran meets the disability criteria of paragraph (a) but does not own property 
179.22 	classified as homestead in the state of Minnesota, then the homestead of the veteran's primary 
179.23 	family caregiver, if any, is eligible for the exclusion that the veteran would otherwise qualify 
179.24 	for under paragraph (b).
179.25 	(f) In the case of an agricultural homestead, only the portion of the property consisting 
179.26 	of the house and garage and immediately surrounding one acre of land qualifies for the 
179.27 	valuation exclusion under this subdivision.
179.28 	(g) A property qualifying for a valuation exclusion under this subdivision is not eligible 
179.29 	for the market value exclusion under subdivision 35, or classification under subdivision 22, 
179.30 	paragraph (b).
179.31 	(h) To qualify for a valuation exclusion under this subdivision a property owner must 
179.32 	apply to the assessor by July 1 of the first assessment year for which the exclusion is sought. 
179.33 	For an application received after July 1, the exclusion shall become effective for the following 
179.34 	assessment year. Except as provided in paragraph (c), the owner of a property that has been 
180.1 	accepted for a valuation exclusion must notify the assessor if there is a change in ownership 
180.2 	of the property or in the use of the property as a homestead.
180.3 	(i) A first-time application by a qualifying spouse for the market value exclusion under 
180.4 	paragraph (d) must be made any time within two years of the death of the service member.
180.5 	(j) For purposes of this subdivision:
180.6 	(1) "active service" has the meaning given in section 190.05;
180.7 	(2) "own" means that the person's name is present as an owner on the property deed;
180.8 	(3) "primary family caregiver" means a person who is approved by the secretary of the 
180.9 	United States Department of Veterans Affairs for assistance as the primary provider of 
180.10 	personal care services for an eligible veteran under the Program of Comprehensive Assistance 
180.11 	for Family Caregivers, codified as United States Code, title 38, section 1720G; and
180.12 	(4) "veteran" has the meaning given the term in section 197.447.
180.13 	(k) If a veteran dying after December 31, 2011, did not apply for or receive the exclusion 
180.14 	under paragraph (b), clause (2), before dying, the veteran's spouse is entitled to the benefit 
180.15 	under paragraph (b), clause (2), for eight taxes payable years or until the spouse remarries 
180.16 	or sells, transfers, or otherwise disposes of the property if:
180.17 	(1) the spouse files a first-time application within two years of the death of the service 
180.18 	member or by June 1, 2019, whichever is later;
180.19 	(2) upon the death of the veteran, the spouse holds the legal or beneficial title to the 
180.20 	homestead and permanently resides there;
180.21 	(3) the veteran met the honorable discharge requirements of paragraph (a); and
180.22 	(4) the United States Department of Veterans Affairs certifies that:
180.23 	(i) the veteran met the total (100 percent) and permanent disability requirement under 
180.24 	paragraph (b), clause (2); or
180.25 	(ii) the spouse has been awarded dependency and indemnity compensation.
180.26 	(l) The purpose of this provision of law providing a level of homestead property tax 
180.27 	relief for gravely disabled veterans with a disability, their primary family caregivers, and 
180.28 	their surviving spouses is to help ease the burdens of war for those among our state's citizens 
180.29 	who bear those burdens most heavily.
180.30 	(m) By July 1, the county veterans service officer must certify the disability rating and 
180.31 	permanent address of each veteran receiving the benefit under paragraph (b) to the assessor.

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

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

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

181.13 	Sec. 7. Minnesota Statutes 2016, section 289A.25, subdivision 1, is amended to read:
181.14 		Subdivision 1.Requirements to pay. An individual, trust, S corporation, or partnership 
181.15 	must, when prescribed in subdivision 3, paragraph (b), make payments of estimated tax. 
181.16 	For individuals, the term "estimated tax" means the amount the taxpayer estimates is the 
181.17 	sum of the taxes imposed by chapter 290 for the taxable year. For trusts, S corporations, 
181.18 	and partnerships, the term estimated tax means the amount the taxpayer estimates is the 
181.19 	sum of the taxes for the taxable year imposed by chapter 290 and the composite income tax 
181.20 	imposed by section 289A.08, subdivision 7. If the individual is an infant or incompetent 
181.21 	person, the payments must be made by the individual's guardian. If joint payments on 
181.22 	estimated tax are made but a joint return is not made for the taxable year, the estimated tax 
181.23 	for that year may be treated as the estimated tax of either the husband or the wife spouse or 
181.24 	may be divided between them.

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

181.26 	Sec. 8. Minnesota Statutes 2016, section 289A.31, subdivision 2, is amended to read:
181.27 		Subd. 2.Joint income tax returns. (a) If a joint income tax return is made by a husband 
181.28 	and wife spouses, the liability for the tax is joint and several. A spouse who qualifies for 
181.29 	relief from a liability attributable to an underpayment under section 6015(b) of the Internal 
181.30 	Revenue Code is relieved of the state income tax liability on the underpayment.
182.1 	(b) In the case of individuals who were a husband and wife married as determined in 
182.2 	section 7703 of the Internal Revenue Code prior to the dissolution of their marriage or their 
182.3 	legal separation, or prior to the death of one of the individuals, for tax liabilities reported 
182.4 	on a joint or combined return, the liability of each person is limited to the proportion of the 
182.5 	tax due on the return that equals that person's proportion of the total tax due if the husband 
182.6 	and wife each spouse filed separate returns for the taxable year. This provision is effective 
182.7 	only when the commissioner receives written notice of the marriage dissolution, legal 
182.8 	separation, or death of a spouse from the husband or wife surviving spouse. No refund may 
182.9 	be claimed by an ex-spouse, legally separated or widowed spouse for any taxes paid more 
182.10 	than 60 days before receipt by the commissioner of the written notice.
182.11 	(c) A request for calculation of separate liability pursuant to paragraph (b) for taxes 
182.12 	reported on a return must be made within six years after the due date of the return. For 
182.13 	calculation of separate liability for taxes assessed by the commissioner under section 289A.35
182.14 	or 289A.37, the request must be made within six years after the date of assessment. The 
182.15 	commissioner is not required to calculate separate liability if the remaining unpaid liability 
182.16 	for which recalculation is requested is $100 or less.

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

182.18 	Sec. 9. Minnesota Statutes 2016, section 289A.37, subdivision 6, is amended to read:
182.19 		Subd. 6.Order of assessment if joint income tax return. If a joint income tax return 
182.20 	is filed by a husband and wife spouses, an order of assessment may be a single joint notice. 
182.21 	If the commissioner has been notified by either spouse that that spouse's address has changed 
182.22 	and if that spouse requests it, then, instead of the single joint notice mailed to the last known 
182.23 	address of the husband and wife spouses, a duplicate or original of the joint notice must be 
182.24 	sent to the requesting spouse at the address designated by the requesting spouse. The other 
182.25 	joint notice must be mailed to the other spouse at that spouse's last known address. An 
182.26 	assessment is not invalid for failure to send it to a spouse if the spouse actually receives the 
182.27 	notice in the same period as if it had been mailed to that spouse at the correct address or if 
182.28 	the spouse has failed to provide an address to the commissioner other than the last known 
182.29 	address.

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

182.31 	Sec. 10. Minnesota Statutes 2016, section 290.0802, subdivision 2, is amended to read:
182.32 		Subd. 2.Subtraction. (a) A qualified individual is allowed a subtraction from federal 
182.33 	taxable income of the individual's subtraction base amount. The excess of the subtraction 
183.1 	base amount over the taxable net income computed without regard to the subtraction for 
183.2 	the elderly or disabled a person with a disability under section 290.0132, subdivision 5, 
183.3 	may be used to reduce the amount of a lump sum distribution subject to tax under section 
183.4 	290.032.
183.5 	(b)(1) The initial subtraction base amount equals
183.6 	(i) $12,000 for a married taxpayer filing a joint return if a spouse is a qualified individual,
183.7 	(ii) $9,600 for a single taxpayer, and
183.8 	(iii) $6,000 for a married taxpayer filing a separate federal return.
183.9 	(2) The qualified individual's initial subtraction base amount, then, must be reduced by 
183.10 	the sum of nontaxable retirement and disability benefits and one-half of the amount of 
183.11 	adjusted gross income in excess of the following thresholds:
183.12 	(i) $18,000 for a married taxpayer filing a joint return if both spouses are qualified 
183.13 	individuals,
183.14 	(ii) $14,500 for a single taxpayer or for a married couple filing a joint return if only one 
183.15 	spouse is a qualified individual, and
183.16 	(iii) $9,000 for a married taxpayer filing a separate federal return.
183.17 	(3) In the case of a qualified individual who is under the age of 65, the maximum amount 
183.18 	of the subtraction base may not exceed the taxpayer's disability income.
183.19 	(4) The resulting amount is the subtraction base amount.

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

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

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

183.27 	Sec. 12. Minnesota Statutes 2017 Supplement, section 290.091, subdivision 2, is amended 
183.28 	to read:
183.29 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
183.30 	terms have the meanings given.
184.1 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
184.2 	year:
184.3 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
184.4 	55(b)(2) of the Internal Revenue Code;
184.5 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
184.6 	taxable income, but excluding:
184.7 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
184.8 	(ii) the medical expense deduction;
184.9 	(iii) the casualty, theft, and disaster loss deduction; and
184.10 	(iv) the impairment-related work expenses of a disabled person with a disability;
184.11 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
184.12 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
184.13 	to the extent not included in federal alternative minimum taxable income, the excess of the 
184.14 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
184.15 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
184.16 	without regard to the depletion deduction for the taxable year);
184.17 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
184.18 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
184.19 	Code determined without regard to subparagraph (E);
184.20 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
184.21 	of interest income as provided by section 290.0131, subdivision 2; and
184.22 	(6) the amount of addition required by section 290.0131, subdivisions 9 to 11;
184.23 	less the sum of the amounts determined under the following:
184.24 	(i) interest income as defined in section 290.0132, subdivision 2;
184.25 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
184.26 	3, to the extent included in federal alternative minimum taxable income;
184.27 	(iii) the amount of investment interest paid or accrued within the taxable year on 
184.28 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
184.29 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
184.30 	in computing federal adjusted gross income;
185.1 	(iv) amounts subtracted from federal taxable income as provided by section 290.0132, 
185.2 	subdivisions 7, 9 to 15, 17, 21, 24, and 26; and
185.3 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
185.4 	paragraph (c).
185.5 	In the case of an estate or trust, alternative minimum taxable income must be computed 
185.6 	as provided in section 59(c) of the Internal Revenue Code.
185.7 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
185.8 	the Internal Revenue Code.
185.9 	(c) "Net minimum tax" means the minimum tax imposed by this section.
185.10 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
185.11 	to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed 
185.12 	under this chapter.
185.13 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
185.14 	after subtracting the exemption amount determined under subdivision 3.

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

185.16 	Sec. 13. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 3, is amended 
185.17 	to read:
185.18 		Subd. 3.Income. (a) "Income" means the sum of the following:
185.19 	(1) federal adjusted gross income as defined in the Internal Revenue Code; and
185.20 	(2) the sum of the following amounts to the extent not included in clause (1):
185.21 	(i) all nontaxable income;
185.22 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
185.23 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
185.24 	carryover allowed under section 469(b) of the Internal Revenue Code;
185.25 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
185.26 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
185.27 	Code;
185.28 	(iv) cash public assistance and relief;
185.29 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
185.30 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
186.1 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
186.2 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
186.3 	gross income in the years when the payments were made;
186.4 	(vi) interest received from the federal or a state government or any instrumentality or 
186.5 	political subdivision thereof;
186.6 	(vii) workers' compensation;
186.7 	(viii) nontaxable strike benefits;
186.8 	(ix) the gross amounts of payments received in the nature of disability income or sick 
186.9 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
186.10 	or otherwise;
186.11 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
186.12 	1986, as amended through December 31, 1995;
186.13 	(xi) contributions made by the claimant to an individual retirement account, including 
186.14 	a qualified voluntary employee contribution; simplified employee pension plan; 
186.15 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
186.16 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
186.17 	Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for 
186.18 	the claimant and spouse;
186.19 	(xii) to the extent not included in federal adjusted gross income, distributions received 
186.20 	by the claimant or spouse from a traditional or Roth style retirement account or plan;
186.21 	(xiii) nontaxable scholarship or fellowship grants;
186.22 	(xiv) the amount of deduction allowed under section 199 of the Internal Revenue Code;
186.23 	(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue 
186.24 	Code;
186.25 	(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue 
186.26 	Code; and
186.27 	(xvii) the amount deducted for certain expenses of elementary and secondary school 
186.28 	teachers under section 62(a)(2)(D) of the Internal Revenue Code.
186.29 	In the case of an individual who files an income tax return on a fiscal year basis, the 
186.30 	term "federal adjusted gross income" shall mean federal adjusted gross income reflected in 
186.31 	the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced 
187.1 	by the amount of a net operating loss carryback or carryforward or a capital loss carryback 
187.2 	or carryforward allowed for the year.
187.3 	(b) "Income" does not include:
187.4 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
187.5 	(2) amounts of any pension or annuity which was exclusively funded by the claimant 
187.6 	or spouse and which funding payments were not excluded from federal adjusted gross 
187.7 	income in the years when the payments were made;
187.8 	(3) to the extent included in federal adjusted gross income, amounts contributed by the 
187.9 	claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed 
187.10 	the retirement base amount reduced by the amount of contributions excluded from federal 
187.11 	adjusted gross income, but not less than zero;
187.12 	(4) surplus food or other relief in kind supplied by a governmental agency;
187.13 	(5) relief granted under this chapter;
187.14 	(6) child support payments received under a temporary or final decree of dissolution or 
187.15 	legal separation; or
187.16 	(7) restitution payments received by eligible individuals and excludable interest as 
187.17 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
187.18 	Public Law 107-16.
187.19 	(c) The sum of the following amounts may be subtracted from income:
187.20 	(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
187.21 	(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
187.22 	(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
187.23 	(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
187.24 	(5) for the claimant's fifth dependent, the exemption amount; and
187.25 	(6) if the claimant or claimant's spouse was disabled had a disability or attained the age 
187.26 	of 65 on or before December 31 of the year for which the taxes were levied or rent paid, 
187.27 	the exemption amount.
187.28 	(d) For purposes of this subdivision, the "exemption amount" means the exemption 
187.29 	amount under section 151(d) of the Internal Revenue Code for the taxable year for which 
187.30 	the income is reported; "retirement base amount" means the deductible amount for the 
187.31 	taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue 
188.1 	Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue 
188.2 	Code, without regard to whether the claimant or spouse claimed a deduction; and "traditional 
188.3 	or Roth style retirement account or plan" means retirement plans under sections 401, 403, 
188.4 	408, 408A, and 457 of the Internal Revenue Code.

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

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

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

188.10 	Sec. 15. Minnesota Statutes 2017 Supplement, section 290A.03, subdivision 8, is amended 
188.11 	to read:
188.12 		Subd. 8.Claimant. (a) "Claimant" means a person, other than a dependent, as defined 
188.13 	under sections 151 and 152 of the Internal Revenue Code disregarding section 152(b)(3) 
188.14 	of the Internal Revenue Code, who filed a claim authorized by this chapter and who was a 
188.15 	resident of this state as provided in chapter 290 during the calendar year for which the claim 
188.16 	for relief was filed.
188.17 	(b) In the case of a claim relating to rent constituting property taxes, the claimant shall 
188.18 	have resided in a rented or leased unit on which ad valorem taxes or payments made in lieu 
188.19 	of ad valorem taxes, including payments of special assessments imposed in lieu of ad valorem 
188.20 	taxes, are payable at some time during the calendar year covered by the claim.
188.21 	(c) "Claimant" shall not include a resident of a nursing home, intermediate care facility, 
188.22 	long-term residential facility, or a facility that accepts housing support payments whose 
188.23 	rent constituting property taxes is paid pursuant to the Supplemental Security Income 
188.24 	program under title XVI of the Social Security Act, the Minnesota supplemental aid program 
188.25 	under sections 256D.35 to 256D.54, the medical assistance program pursuant to title XIX 
188.26 	of the Social Security Act, or the housing support program under chapter 256I.
188.27 	If only a portion of the rent constituting property taxes is paid by these programs, the 
188.28 	resident shall be a claimant for purposes of this chapter, but the refund calculated pursuant 
188.29 	to section 290A.04 shall be multiplied by a fraction, the numerator of which is income as 
188.30 	defined in subdivision 3, paragraphs (a) and (b), reduced by the total amount of income 
188.31 	from the above sources other than vendor payments under the medical assistance program 
188.32 	and the denominator of which is income as defined in subdivision 3, paragraphs (a) and (b), 
189.1 	plus vendor payments under the medical assistance program, to determine the allowable 
189.2 	refund pursuant to this chapter.
189.3 	(d) Notwithstanding paragraph (c), if the claimant was a resident of the nursing home, 
189.4 	intermediate care facility, long-term residential facility, or facility for which the rent was 
189.5 	paid for the claimant by the housing support program for only a portion of the calendar year 
189.6 	covered by the claim, the claimant may compute rent constituting property taxes by 
189.7 	disregarding the rent constituting property taxes from the nursing home or facility and use 
189.8 	only that amount of rent constituting property taxes or property taxes payable relating to 
189.9 	that portion of the year when the claimant was not in the facility. The claimant's household 
189.10 	income is the income for the entire calendar year covered by the claim.
189.11 	(e) In the case of a claim for rent constituting property taxes of a part-year Minnesota 
189.12 	resident, the income and rental reflected in this computation shall be for the period of 
189.13 	Minnesota residency only. Any rental expenses paid which may be reflected in arriving at 
189.14 	federal adjusted gross income cannot be utilized for this computation. When two individuals 
189.15 	of a household are able to meet the qualifications for a claimant, they may determine among 
189.16 	them as to who the claimant shall be. If they are unable to agree, the matter shall be referred 
189.17 	to the commissioner of revenue whose decision shall be final. If a homestead property owner 
189.18 	was a part-year Minnesota resident, the income reflected in the computation made pursuant 
189.19 	to section 290A.04 shall be for the entire calendar year, including income not assignable to 
189.20 	Minnesota.
189.21 	(f) If a homestead is occupied by two or more renters, who are not husband and wife
189.22 	married to each other, the rent shall be deemed to be paid equally by each, and separate 
189.23 	claims shall be filed by each. The income of each shall be each renter's household income 
189.24 	for purposes of computing the amount of credit to be allowed.

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

189.26 	Sec. 16. Minnesota Statutes 2016, section 290A.05, is amended to read:
189.27 	290A.05 COMBINED HOUSEHOLD INCOME.
189.28 	If a person occupies a homestead with another person or persons not related to the person 
189.29 	as husband and wife the person's spouse, excluding dependents, roomers or boarders on 
189.30 	contract, and has property tax payable with respect to the homestead, the household income 
189.31 	of the claimant or claimants for the purpose of computing the refund allowed by section 
189.32 	290A.04 shall include the total income received by the other persons residing in the 
189.33 	homestead. For purposes of this section, "dependent" includes a parent of the claimant or 
190.1 	spouse who lives in the claimant's homestead and does not have an ownership interest in 
190.2 	the homestead. If a person occupies a homestead with another person or persons not related
190.3 	to the person as husband and wife the person's spouse or as dependents, the property tax 
190.4 	payable or rent constituting property tax shall be reduced as follows.
190.5 	If the other person or persons are residing at the homestead under rental or lease 
190.6 	agreement, the amount of property tax payable or rent constituting property tax shall be that 
190.7 	portion not covered by the rental agreement.

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

190.9 	Sec. 17. Minnesota Statutes 2016, section 290A.08, is amended to read:
190.10 	290A.08 ONE CLAIMANT PER HOUSEHOLD.
190.11 	Only one claimant per household per year is entitled to relief under this chapter. Payment 
190.12 	of the claim for relief may be made payable to the husband and wife spouses as one claimant. 
190.13 	The commissioner, upon written request, may issue separate checks, to the husband and 
190.14 	wife spouses for one-half of the relief provided the original check has not been issued or 
190.15 	has been returned. Individuals related as husband and wife spouses who were married during 
190.16 	the year may elect to file a joint claim which shall include each spouse's income, rent 
190.17 	constituting property taxes, and property taxes payable. Husbands and wives Spouses who 
190.18 	were married for the entire year and were domiciled in the same household for the entire 
190.19 	year must file a joint claim. The maximum dollar amount allowable for a joint claim shall 
190.20 	not exceed the amount that one person could receive.

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

190.22 	Sec. 18. Minnesota Statutes 2016, section 290A.09, is amended to read:
190.23 	290A.09 PROOF OF CLAIM.
190.24 	Every claimant shall supply to the commissioner of revenue, in support of the claim, 
190.25 	proof of eligibility under this chapter, including but not limited to amount of rent paid or 
190.26 	property taxes accrued, name and address of owner or managing agent of property rented, 
190.27 	changes in homestead, household membership, household income, size and nature of property 
190.28 	claimed as a homestead.
190.29 	Disabled Persons with a disability filing claims shall submit proof of disability in the 
190.30 	form and manner as the commissioner may prescribe. The department may require 
190.31 	examination and certification by the claimant's physician or by a physician designated by 
190.32 	the commissioner. The cost of any examination shall be borne by the claimant, unless the 
191.1 	examination proves the disability, in which case the cost of the examination shall be borne 
191.2 	by the commissioner.
191.3 	A determination of disability of a claimant by the Social Security Administration under 
191.4 	Title II or Title XVI of the Social Security Act shall constitute presumptive proof of disability.

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

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

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

191.11 	Sec. 20. Minnesota Statutes 2017 Supplement, section 297A.67, subdivision 6, is amended 
191.12 	to read:
191.13 		Subd. 6.Other exempt meals. (a) Prepared food, candy, and soft drinks purchased for 
191.14 	and served exclusively to individuals who are 60 years of age or over and their spouses or 
191.15 	to disabled persons with a disability and their spouses by governmental agencies, nonprofit 
191.16 	organizations, or churches, or pursuant to any program funded in whole or in part through 
191.17 	United States Code, title 42, sections 3001 through 3045, wherever delivered, prepared, or 
191.18 	served, are exempt. Taxable food sold through vending machines is not exempt.
191.19 	(b) Prepared food, candy, and soft drinks purchased for and served exclusively to children 
191.20 	who are less than 14 years of age or disabled children with a disability who are less than 
191.21 	16 years of age and who are attending a child care or early childhood education program, 
191.22 	are exempt if they are:
191.23 	(1) purchased by a nonprofit child care facility that is exempt under section 297A.70, 
191.24 	subdivision 4, and that primarily serves families with income of 250 percent or less of 
191.25 	federal poverty guidelines; and
191.26 	(2) prepared at the site of the child care facility.

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

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

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

192.6 	Sec. 22. Minnesota Statutes 2016, section 297A.70, subdivision 3, is amended to read:
192.7 		Subd. 3.Sales of certain goods and services to government. (a) The following sales 
192.8 	to or use by the specified governments and political subdivisions of the state are exempt:
192.9 	(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and fire 
192.10 	apparatus to a political subdivision;
192.11 	(2) machinery and equipment, except for motor vehicles, used directly for mixed 
192.12 	municipal solid waste management services at a solid waste disposal facility as defined in 
192.13 	section 115A.03, subdivision 10;
192.14 	(3) chore and homemaking services to a political subdivision of the state to be provided 
192.15 	to elderly individuals or disabled individuals persons with a disability;
192.16 	(4) telephone services to the Office of MN.IT Services that are used to provide 
192.17 	telecommunications services through the MN.IT services revolving fund;
192.18 	(5) firefighter personal protective equipment as defined in paragraph (b), if purchased 
192.19 	or authorized by and for the use of an organized fire department, fire protection district, or 
192.20 	fire company regularly charged with the responsibility of providing fire protection to the 
192.21 	state or a political subdivision;
192.22 	(6) bullet-resistant body armor that provides the wearer with ballistic and trauma 
192.23 	protection, if purchased by a law enforcement agency of the state or a political subdivision 
192.24 	of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;
192.25 	(7) motor vehicles purchased or leased by political subdivisions of the state if the vehicles 
192.26 	are exempt from registration under section 168.012, subdivision 1, paragraph (b), exempt 
192.27 	from taxation under section 473.448, or exempt from the motor vehicle sales tax under 
192.28 	section 297B.03, clause (12);
192.29 	(8) equipment designed to process, dewater, and recycle biosolids for wastewater 
192.30 	treatment facilities of political subdivisions, and materials incidental to installation of that 
192.31 	equipment;
193.1 	(9) the removal of trees, bushes, or shrubs for the construction and maintenance of roads, 
193.2 	trails, or firebreaks when purchased by an agency of the state or a political subdivision of 
193.3 	the state;
193.4 	(10) purchases by the Metropolitan Council or the Department of Transportation of 
193.5 	vehicles and repair parts to equip operations provided for in section 174.90, including, but 
193.6 	not limited to, the Northstar Corridor Rail project; and
193.7 	(11) purchases of water used directly in providing public safety services by an organized 
193.8 	fire department, fire protection district, or fire company regularly charged with the 
193.9 	responsibility of providing fire protection to the state or a political subdivision.
193.10 	(b) For purposes of this subdivision, "firefighters personal protective equipment" means 
193.11 	helmets, including face shields, chin straps, and neck liners; bunker coats and pants, including 
193.12 	pant suspenders; boots; gloves; head covers or hoods; wildfire jackets; protective coveralls; 
193.13 	goggles; self-contained breathing apparatus; canister filter masks; personal alert safety 
193.14 	systems; spanner belts; optical or thermal imaging search devices; and all safety equipment 
193.15 	required by the Occupational Safety and Health Administration.
193.16 	(c) For purchases of items listed in paragraph (a), clause (10), the tax must be imposed 
193.17 	and collected as if the rate under section 297A.62, subdivision 1, applied and then refunded 
193.18 	in the manner provided in section 297A.75.

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

193.20 	Sec. 23. Minnesota Statutes 2017 Supplement, section 297A.70, subdivision 4, is amended 
193.21 	to read:
193.22 		Subd. 4.Sales to nonprofit groups. (a) All sales, except those listed in paragraph (b), 
193.23 	to the following "nonprofit organizations" are exempt:
193.24 	(1) a corporation, society, association, foundation, or institution organized and operated 
193.25 	exclusively for charitable, religious, or educational purposes if the item purchased is used 
193.26 	in the performance of charitable, religious, or educational functions;
193.27 	(2) any senior citizen group or association of groups that:
193.28 	(i) in general limits membership to persons who are either age 55 or older, or physically 
193.29 	disabled persons with a physical disability;
193.30 	(ii) is organized and operated exclusively for pleasure, recreation, and other nonprofit 
193.31 	purposes, not including housing, no part of the net earnings of which inures to the benefit 
193.32 	of any private shareholders; and
194.1 	(iii) is an exempt organization under section 501(c) of the Internal Revenue Code; and
194.2 	(3) an organization that qualifies for an exemption for memberships under subdivision 
194.3 	12 if the item is purchased and used in the performance of the organization's mission.
194.4 	For purposes of this subdivision, charitable purpose includes the maintenance of a cemetery 
194.5 	owned by a religious organization.
194.6 	(b) This exemption does not apply to the following sales:
194.7 	(1) building, construction, or reconstruction materials purchased by a contractor or a 
194.8 	subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 
194.9 	maximum price covering both labor and materials for use in the construction, alteration, or 
194.10 	repair of a building or facility;
194.11 	(2) construction materials purchased by tax-exempt entities or their contractors to be 
194.12 	used in constructing buildings or facilities that will not be used principally by the tax-exempt 
194.13 	entities;
194.14 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), 
194.15 	and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, 
194.16 	subdivision 2, except wine purchased by an established religious organization for sacramental 
194.17 	purposes or as allowed under subdivision 9a; and
194.18 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as 
194.19 	provided in paragraph (c).
194.20 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01, 
194.21 	subdivision 11, only if the vehicle is:
194.22 	(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
194.23 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
194.24 	for carrying more than nine persons including the driver; and
194.25 	(2) intended to be used primarily to transport tangible personal property or individuals, 
194.26 	other than employees, to whom the organization provides service in performing its charitable, 
194.27 	religious, or educational purpose.
194.28 	(d) A limited liability company also qualifies for exemption under this subdivision if 
194.29 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
194.30 	purchased qualify for the exemption.

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

195.1 	Sec. 24. Minnesota Statutes 2016, section 297A.70, subdivision 16, is amended to read:
195.2 		Subd. 16.Camp fees. Fees to camps or other recreation facilities are exempt for:
195.3 	(1) services primarily for children, adults accompanying children, or persons with 
195.4 	disabilities a disability; or
195.5 	(2) educational or religious activities;
195.6 	and if the camp or facilities are owned and operated by an exempt organization under section 
195.7 	501(c)(3) of the Internal Revenue Code.

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

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

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

195.22 	Sec. 26. Minnesota Statutes 2017 Supplement, section 297A.75, subdivision 1, is amended 
195.23 	to read:
195.24 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the following 
195.25 	exempt items must be imposed and collected as if the sale were taxable and the rate under 
195.26 	section 297A.62, subdivision 1, applied. The exempt items include:
195.27 	(1) building materials for an agricultural processing facility exempt under section 
195.28 	297A.71, subdivision 13;
195.29 	(2) building materials for mineral production facilities exempt under section 297A.71, 
195.30 	subdivision 14;
196.1 	(3) building materials for correctional facilities under section 297A.71, subdivision 3;
196.2 	(4) building materials used in a residence for disabled veterans with a disability exempt 
196.3 	under section 297A.71, subdivision 11;
196.4 	(5) elevators and building materials exempt under section 297A.71, subdivision 12;
196.5 	(6) materials and supplies for qualified low-income housing under section 297A.71, 
196.6 	subdivision 23;
196.7 	(7) materials, supplies, and equipment for municipal electric utility facilities under 
196.8 	section 297A.71, subdivision 35;
196.9 	(8) equipment and materials used for the generation, transmission, and distribution of 
196.10 	electrical energy and an aerial camera package exempt under section 297A.68, subdivision 
196.11 	37;
196.12 	(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph 
196.13 	(a), clause (10);
196.14 	(10) materials, supplies, and equipment for construction or improvement of projects and 
196.15 	facilities under section 297A.71, subdivision 40;
196.16 	(11) materials, supplies, and equipment for construction, improvement, or expansion 
196.17 	of:
196.18 	(i) an aerospace defense manufacturing facility exempt under Minnesota Statutes 2014, 
196.19 	section 297A.71, subdivision 42;
196.20 	(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 
196.21 	45;
196.22 	(iii) a research and development facility exempt under Minnesota Statutes 2014, section 
196.23 	297A.71, subdivision 46; and
196.24 	(iv) an industrial measurement manufacturing and controls facility exempt under 
196.25 	Minnesota Statutes 2014, section 297A.71, subdivision 47;
196.26 	(12) enterprise information technology equipment and computer software for use in a 
196.27 	qualified data center exempt under section 297A.68, subdivision 42;
196.28 	(13) materials, supplies, and equipment for qualifying capital projects under section 
196.29 	297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
196.30 	(14) items purchased for use in providing critical access dental services exempt under 
196.31 	section 297A.70, subdivision 7, paragraph (c);
197.1 	(15) items and services purchased under a business subsidy agreement for use or 
197.2 	consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 
197.3 	44;
197.4 	(16) building materials, equipment, and supplies for constructing or replacing real 
197.5 	property exempt under section 297A.71, subdivision 49; and
197.6 	(17) building materials, equipment, and supplies for constructing or replacing real 
197.7 	property exempt under section 297A.71, subdivision 50, paragraph (b).

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

197.9 	Sec. 27. Minnesota Statutes 2016, section 297B.01, subdivision 14, is amended to read:
197.10 		Subd. 14.Purchase price.  (a) "Purchase price" means the total consideration valued 
197.11 	in money for a sale, whether paid in money or otherwise. The purchase price excludes the 
197.12 	amount of a manufacturer's rebate paid or payable to the purchaser. If a motor vehicle is 
197.13 	taken in trade as a credit or as part payment on a motor vehicle taxable under this chapter, 
197.14 	the credit or trade-in value allowed by the person selling the motor vehicle shall be deducted 
197.15 	from the total selling price to establish the purchase price of the vehicle being sold and the 
197.16 	trade-in allowance allowed by the seller shall constitute the purchase price of the motor 
197.17 	vehicle accepted as a trade-in. The purchase price in those instances where the motor vehicle 
197.18 	is acquired by gift or by any other transfer for a nominal or no monetary consideration shall 
197.19 	also include the average value of similar motor vehicles, established by standards and guides 
197.20 	as determined by the motor vehicle registrar. The purchase price in those instances where 
197.21 	a motor vehicle is manufactured by a person who registers it under the laws of this state 
197.22 	shall mean the manufactured cost of such motor vehicle and manufactured cost shall mean 
197.23 	the amount expended for materials, labor, and other properly allocable costs of manufacture, 
197.24 	except that in the absence of actual expenditures for the manufacture of a part or all of the 
197.25 	motor vehicle, manufactured costs shall mean the reasonable value of the completed motor 
197.26 	vehicle.
197.27 	(b) The term "purchase price" shall not include the portion of the value of a motor vehicle 
197.28 	due solely to modifications necessary to make the motor vehicle disability accessible to 
197.29 	persons with a disability.
197.30 	(c) The term "purchase price" shall not include the transfer of a motor vehicle by way 
197.31 	of gift between a husband and wife spouses or parent and child, or to a nonprofit organization 
197.32 	as provided under subdivision 16, paragraph (c), clause (6), nor shall it include the transfer 
197.33 	of a motor vehicle by a guardian to a ward when there is no monetary consideration and the 
198.1 	title to such vehicle was registered in the name of the guardian, as guardian, only because 
198.2 	the ward was a minor.
198.3 	(d) The term "purchase price" shall not include the transfer of a motor vehicle as a gift 
198.4 	between a foster parent and foster child. For purposes of this subdivision, a foster relationship 
198.5 	exists, regardless of the age of the child, if (1) a foster parent's home is or was licensed as 
198.6 	a foster family home under Minnesota Rules, parts 2960.3000 to 2960.3340, and (2) the 
198.7 	county verifies that the child was a state ward or in permanent foster care.
198.8 	(e) There shall not be included in "purchase price" the amount of any tax imposed by 
198.9 	the United States upon or with respect to retail sales whether imposed upon the retailer or 
198.10 	the consumer.

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

198.12 	Sec. 28. Minnesota Statutes 2017 Supplement, section 297B.01, subdivision 16, is amended 
198.13 	to read:
198.14 		Subd. 16.Sale, sells, selling, purchase, purchased, or acquired. (a) "Sale," "sells," 
198.15 	"selling," "purchase," "purchased," or "acquired" means any transfer of title of any motor 
198.16 	vehicle, whether absolutely or conditionally, for a consideration in money or by exchange 
198.17 	or barter for any purpose other than resale in the regular course of business.
198.18 	(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others or 
198.19 	by holding it in an effort to so lease it, and which is put to no other use by the owner other 
198.20 	than resale after such lease or effort to lease, shall be considered property purchased for 
198.21 	resale.
198.22 	(c) The terms also shall include any transfer of title or ownership of a motor vehicle by 
198.23 	other means, for or without consideration, except that these terms shall not include:
198.24 	(1) the acquisition of a motor vehicle by inheritance from or by bequest of, or 
198.25 	transfer-on-death of title by, a decedent who owned it;
198.26 	(2) the transfer of a motor vehicle which was previously licensed in the names of two 
198.27 	or more joint tenants and subsequently transferred without monetary consideration to one 
198.28 	or more of the joint tenants;
198.29 	(3) the transfer of a motor vehicle by way of gift from a limited used vehicle dealer 
198.30 	licensed under section 168.27, subdivision 4a, to an individual, when the transfer is with 
198.31 	no monetary or other consideration or expectation of consideration and the parties to the 
198.32 	transfer submit an affidavit to that effect at the time the title transfer is recorded;
199.1 	(4) the transfer of a motor vehicle by gift between:
199.2 	(i) spouses;
199.3 	(ii) parents and a child; or
199.4 	(iii) grandparents and a grandchild;
199.5 	(5) the voluntary or involuntary transfer of a motor vehicle between a husband and wife
199.6 	spouses in a divorce proceeding; or
199.7 	(6) the transfer of a motor vehicle by way of a gift to an organization that is exempt from 
199.8 	federal income taxation under section 501(c)(3) of the Internal Revenue Code when the 
199.9 	motor vehicle will be used exclusively for religious, charitable, or educational purposes.

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

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

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

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

APPENDIX 

Repealed Minnesota Statutes: UEH4385-2 

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.10 FILING REQUIREMENTS FOR ESTATE TAX RETURNS.Subd. 1a.Recapture tax return required. 
If a disposition or cessation as provided by section 291.03, subdivision 11, paragraph (a), has occurred, the qualified heir, as defined under section 291.03, subdivision 8, paragraph (c), or personal representative of the decedent's estate must submit a recapture tax return to the commissioner. 

289A.12 FILING REQUIREMENTS FOR INFORMATION RETURNS AND REPORTS.Subd. 18.Returns by qualified heirs. 
A qualified heir, as defined in section 291.03, subdivision 8, paragraph (c), must file two returns with the commissioner attesting that no disposition or cessation as provided by section 291.03, subdivision 11, paragraph (a), occurred. The first return must be filed no earlier than 24 months and no later than 26 months after the decedent's death. The second return must be filed no earlier than 36 months and no later than 39 months after the decedent's death. 

289A.18 DUE DATES FOR FILING OF RETURNS.Subd. 3a.Recapture tax return. 
A recapture tax return must be filed with the commissioner within six months after the date of the disposition or cessation as provided by section 291.03, subdivision 11, paragraph (a). 

289A.20 DUE DATES FOR MAKING PAYMENTS OF TAX.Subd. 3a.Recapture tax. 
The additional estate tax imposed by section 291.03, subdivision 11, paragraph (b), is due and payable on or before the expiration of the date provided by section 291.03, subdivision 11, paragraph (c). 

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. 

290.0131 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. 

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. 

290.10 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. 

291.03 RATES.Subd. 8.Definitions. 
(a) For purposes of this section, the following terms have the meanings given in this subdivision. 

(b) "Family member" means a family member as defined in section 2032A(e)(2) of the Internal Revenue Code, or a trust whose present beneficiaries are all family members as defined in section 2032A(e)(2) of the Internal Revenue Code. 

(c) "Qualified heir" means a family member who acquired qualified property upon the death of the decedent and satisfies the requirement under subdivision 9, clause (7), or subdivision 10, clause (5), for the property. 

(d) "Qualified property" means qualified small business property under subdivision 9 and qualified farm property under subdivision 10. 

Subd. 9.Qualified small business property. 
Property satisfying all of the following requirements is qualified small business property: 

(1) The value of the property was included in the federal adjusted taxable estate. 

(2) The property consists of the assets of a trade or business or shares of stock or other ownership interests in a corporation or other entity engaged in a trade or business. Shares of stock in a corporation or an ownership interest in another type of entity do not qualify under this subdivision if the shares or ownership interests are traded on a public stock exchange at any time during the three-year period ending on the decedent's date of death. For purposes of this subdivision, an ownership interest includes the interest the decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code. 

(3) During the taxable year that ended before the decedent's death, the trade or business must not have been a passive activity within the meaning of section 469(c) of the Internal Revenue Code, and the decedent or the decedent's spouse must have materially participated in the trade or business within the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other provision provided by United States Treasury Department regulation that substitutes material participation in prior taxable years for material participation in the taxable year that ended before the decedent's death. 

(4) The gross annual sales of the trade or business were $10,000,000 or less for the last taxable year that ended before the date of the death of the decedent. 

(5) The property does not include: 

(i) cash; 

(ii) cash equivalents; 

(iii) publicly traded securities; or 

(iv) any assets not used in the operation of the trade or business. 

(6) For property consisting of shares of stock or other ownership interests in an entity, the value of items described in clause (5) must be excluded in the valuation of the decedent's interest in the entity. 

(7) The decedent continuously owned the property, including property the decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for the three-year period ending on the date of death of the decedent. In the case of a sole proprietor, if the property replaced similar property within the three-year period, the replacement property will be treated as having been owned for the three-year period ending on the date of death of the decedent. 

(8) For three years following the date of death of the decedent, the trade or business is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code, and a family member materially participates in the operation of the trade or business within the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other provision provided by United States Treasury Department regulation that substitutes material participation in prior taxable years for material participation in the three years following the date of death of the decedent. 

(9) The estate and the qualified heir elect to treat the property as qualified small business property and agree, in the form prescribed by the commissioner, to pay the recapture tax under subdivision 11, if applicable. 

Subd. 10.Qualified farm property. 
Property satisfying all of the following requirements is qualified farm property: 

(1) The value of the property was included in the federal adjusted taxable estate. 

(2) The property consists of agricultural land and is owned by a person or entity that is either not subject to or is in compliance with section 500.24. 

(3) For property taxes payable in the taxable year of the decedent's death, the property is classified as class 2a property under section 273.13, subdivision 23, and is classified as agricultural homestead, agricultural relative homestead, or special agricultural homestead under section 273.124. 

(4) The decedent continuously owned the property, including property the decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for the three-year period ending on the date of death of the decedent either by ownership of the agricultural land or pursuant to holding an interest in an entity that is not subject to or is in compliance with section 500.24. 

(5) The property is classified for property tax purposes as class 2a property under section 273.13, subdivision 23, for three years following the date of death of the decedent. 

(6) The estate and the qualified heir elect to treat the property as qualified farm property and agree, in a form prescribed by the commissioner, to pay the recapture tax under subdivision 11, if applicable. 

Subd. 11.Recapture tax. 
(a) If, within three years after the decedent's death and before the death of the qualified heir, the qualified heir disposes of any interest in the qualified property, other than by a disposition to a family member, or a family member ceases to satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir replaces qualified small business property excluded under subdivision 9 with similar property, then the qualified heir will not be treated as having disposed of an interest in the qualified property. 

(b) The amount of the additional tax equals the amount of the exclusion claimed by the estate under subdivision 8, paragraph (d), multiplied by 16 percent. 

(c) The additional tax under this subdivision is due on the day which is six months after the date of the disposition or cessation in paragraph (a). 

(d) The tax under this subdivision does not apply to the acquisition of title or possession of the qualified property by a federal, state, or local government unit, or any other entity with the power of eminent domain for a public purpose, as defined in section 117.025, subdivision 11, within the three-year holding period. 

(e) This subdivision shall not apply as a result of any of the following: 

(1) a portion of qualified farm property consisting of less than one-fifth of the acreage of the property is reclassified as class 2b property under section 273.13, subdivision 23, and the qualified heir has not substantially altered the reclassified property during the three-year holding period; or 

(2) a portion of qualified farm property classified as 2a property at the death of the decedent pursuant to section 273.13, subdivision 23, paragraph (a), consisting of a residence, garage, and immediately surrounding one acre of land is reclassified as 4bb property during the three-year holding period, and the qualified heir has not substantially altered the property.