Legislative Session number- 85

Bill Name: HF3201

HF 3201

FOURTH ENGROSSMENT

Omnibus technical tax bill; Tax policy and
administration provisions modified relating to income, franchise, property,
sales, and other taxes.

ARTICLE 1 -- AIDS TO LOCAL GOVERNMENT

Section 1: City
aid base language is modified.

Section 2: City formula aid language is
modified.

Section 3: City aid distribution language is modified.

Section 4:
Mahnomen County; County, City, School District, Property Tax Reimbursement, Aid
Appropriation language is modified.

Section 5: Mahnomen County; City, County
and School District Tax Base Adjustments language is modified.

Section 6:
Utility property; tax base adjustments for calculation of school districts and
levies language is modified.

Section 7: Utility property; tax base adjustments
for calculation of county, city, and town aids language is modified.

ARTICLE 2
-- PROPERTY TAXES

Section 1: Allocation language is modified.

Section 2:
Methodology language is modified.

Section 3: Modular homes used as models by
dealers language is modified.

Section 4: Apprenticeship training facilities
subdivision added.

Section 5: Monosloped roofs for feedlots and manure storage
areas subdivision added.

Section 6: Requirement language is modified.

Section
7: Agricultural homesteads; special provisions language is amended.

Section 8:
Annual registration of certain relative homesteads language is added.

Section
9: Manufactured homes; sectional structures language is amended.

Section 10:
Requirement language is modified.

Section 11: Class 1 property language is
modified.

Section 12: Class 2 property language is modified.

Section 13: Class
4 property language is modified. Charitable and nonprofit organizations
property tax exemption provided.

Section 14: Homestead of disabled veteran
language is added.

Section 15: Certification of Class 1b property - homestead
declaration before 2009 and thereafter language is provided.

Section 16:
Seasonal residential recreational tax capacity language is modified.

Section
17: Joint public hearing; nonmetropolitan county, cities, and school districts
language is added.

Section 18: Special taxing districts; definitions are
modified.

Section 19: Contents of tax statements language is amended.

Section
20: Dismissal of petition; exclusion of certain evidence language is
modified.

Section 21: Class 3a property language is amended.

Section 22:
Delinquent taxes may be paid in inverse order statute is amended.

Section 23:
Calculation of incentive payment statute is amended.

Section 24: Definition of
municipality statute is amended.

Section 25: General powers of authority
statute is amended.

Section 26: Creation of an airport authority; dissolution.

Subdivision 1. Member details and definitions are provided.
Subdivision 2.
Process to establish authority is provided.
Subdivision 3. Airport authority
commission guidelines are provided.
Subdivision 4. Appointment of commissioners
process is provided.
Subdivision 5. Compensation, meetings, and officers details
are provided.
Subdivision 6. Process to increase size of authority is
provided.
Subdivision 7. Process to decrease size of authority is provided.

Subdivision 8. Process to dissolve authority is provided.

Section 27: Tax levy
may be certified by an airport authority - process is provided.

Section 28:
Hardship assessment deferral for seniors, disabled, or military persons.


Section 29: Minneapolis, City of; street maintenance and lighting language is
modified.

Section 30: Tax, payment of expenses language is modified.

Section
31: Tax levy language is modified.

Section 32: Lakeview cemetery association
language provided.
Subdivision 1. Authorization to establish the
association.
Subdivision 2. Additions and withdrawal of membership to the
association.
Subdivision 3. Operation, tax levy language is provided.

Section
33: Repealer - past statutes are repealed.

ARTICLE 3 -- INCOME TAXES

Section
1: Returns by persons, corporations, cooperatives, governmental entities, or
school districts language is amended.

Section 2: Additions to federal taxable
income language is amended.

Section 3: Subtractions from federal taxable income
language is amended.

Section 4: Corporations; additions to federal taxable
income language is amended.

Section 5: Credit allowed - language
modified.

Section 6: Nondeductible items language is modified.
Subdivision 1.
Expenses, interest, and taxes language is modified.
Subdivision 2. Fines, fees,
and penalties language is added.

Section 7: Income not derived from conduct of
a trade or business - language modified.

Section 8: Payments to persons who are
not employees - language added.

Section 9: Audit and report to legislature -
The commissioner must conduct a random sample audit of withholdings and returns
associated with those withholdings. The commissioner must report on the findings
of the audit to the committees of the Senate and House of Representatives with
jurisdiction over taxes no later than February 1, 2011.

ARTICLE 4 -- FEDERAL
UPDATE

Section 1: Internal Revenue Code language is amended through February
13, 2008.

Section 2: Net income language is modified.

Section 3: Additions to
federal taxable income language is modified.

Section 4: Corporations; additions
to federal taxable income language is modified.

Section 5: Internal Revenue
Code is amended through February 13, 2008.

Section 6: Schedules of rates for
individuals, estates, and trusts language is modified.

Section 7: Definitions
language is modified.

Section 8: Internal Revenue Code is amended through
February 13, 2008.

Section 9: Scope language is modified.

ARTICLE 5 -- SALES
AND USE TAX

Section 1: Manufactured and modular housing language is
added.

Section 2: City of Duluth, authoriziation for additional sales tax
language is provided.

Section 3: City of Bemidji language is
modified.
Subdivision 1. Sales and use tax authorized
Subdivision 2. Use of
revenues
Subdivision 3. Bonds
Subdivision 4. Termination of tax

ARTICLE 6 --
JUNE ACCELERATED TAX PAYMENTS

Section 1: Sales and use tax is amended.

Section
2: Accelerated payment of June sales tax liability; penalty for underpayment
language is modified.

Section 3: Accelerated tax payment; cigarette or tobacco
products distributor language modified.

Section 4: Accelerated tax payment;
penalty language is provided.

ARTICLE 7 -- SPECIAL TAXES

Section 1:
Determination of property includable in the Minnesota gross estate of a decedent
language provided.

Section 2: All-terrain vehicle language amended.

Section
3: Inventory; judicial determination; appeal; disposition of seized property
language is amended.

Section 4: Premiums paid to certain foreign insurance
companies language added.

Section 5: Temporary petrofund fee exemption for
Minnesota commercial airlines language provided.

ARTICLE 8 -- MINERALS

Section
1: Commercial-industrial property language is modified.

Section 2: Increase in
net tax capacity language is modified.

Section 3: Forest trust - forest lands
in the taconite assistance area may be purchased with specifically authorized
funds and held in trust for the benefit of the citizens as the Iron Ranger
Miners' Memorial Forest.

Section 4: Iron Range Higher Education Committee
membership language is amended.

Section 5: Imposed; calculation - details
regarding the tax on concentrate, taconite, iron sulphides, and the mining and
quarrying of these minerals.

Section 6: Taxes additional to occupation tax; in
lieu of other taxes language is modified.

Section 7: School districts -
proceeds from various mining companies are distributed to applicable school
districts, language is modified.

Section 8: Counties - rate of tax per ton is
modified.

Section 9: Iron Range higher education account language is
added.

Section 10: Distribution of taconite municipal aid account language is
modified.

Section 11: Use of money - money in the Douglas J. Johnson economic
protection trust fund, language is modified.

Section 12: Expenditure of funds
language is modified.

Section 13: Grant and loan fund - language is added
regarding a grant to the city of Virginia for connecting sewer and water lines
to the St. Louis County maintenance garage and extending the lines to
interconnect with the city of Gilbert's sewer and water lines.

Section 14:
Public works and local economic development fund language is modified.

Section
15: Definitions including "aggregate metal", "person", "operator", "extraction
site", "importer", "county", and "borrow" are modified.

Section 16: Report and
remittance language is modified regarding the proceeds of the tax on aggregate
material.

Section 17: Proceeds of taxes language is modified to include
"aggregate materials".

Section 18: Iron Range resources and rehabilitation
board; appropriation; retire bonds language is provided.

ARTICLE 9 -- ECONOMIC
DEVELOPMENT

Section 1: Additional border city allocations, 2008 language is
provided.

Section 2: Redevelopment district language is modified.

Section 3:
Renewal and renovation district language is modified.

Section 4: Tax increment
financing plan language is modified.

Section 5: Municipality approval language
is modified.

Section 6: Duration of tax increment financing districts language
is modified.

Section 7: Excess increments language is modified.

Section 8:
Prohibited facilities language is modified.

Section 9: Parcels not includable
in districts language is modified.

Section 10: Requirement imposed language is
modified.

Section 11: Expenditures outside district language is
modified.

Section 12: Original net tax capacity language is modified.

Section
13: Interfund loans language is modified.

Section 14: Preconditions to
establish district language is modified.

Section 15: Establishment language is
modified.

Section 16: Eligible activities language is modified.

Section 17:
Housing account language is modified.

Section 18: Authority - housing
replacement projects in the city of Crystal, language is modified.

Section 19:
Creation of projects - language is modified regarding the number of parcels in
the city of Minneapolis to be included in housing replacement
districts.

Section 20: Grants to qualifying businesses language is
modified.

Section 21: Burnsville; Northwest quadrant tax increment
financing
Subdivision 1. Definitions include "city", "project area", and "soil
deficiency district".
Subdivision 2. Special rules - if the city elects, upon
the adoption of the tax increment finance plan for the district, the rules in
this section apply to various types of districts.

Section 22: City of Eyota;
tax increment financing district
Subdivision 1. Authorization - the city of
Eyota is deemed to be a small city
Subdivision 2. Local approval - this section
is effective for the city of Eyota upon approval of Eyota's governing
body

Section 23: City of Fridley; tax increment financing district; special
rules language is modified.

Section 24: City of New Brighton; tax increment
financing; expenditures outside district language is modified.

Section 25:
Repealer language is modified and effective date is provided.

ARTICLE 10 --
PUBLIC FINANCE

Section 1: Amount language is modified.

Section 2: Purchase of
certain equipment language is modified.

Section 3: Market value language is
modified.

Section 4: Time of notice language is modified.

Section 5:
Definitions
Subdivision 1. Subordinate service district definition is
modified.
Subdivision 2. Special services definition is added.

Section 6:
Creation language is modified.
Subdivision 1. Petition language is
provided.
Subdivision 2. Public hearing language is modified.
Subdivision 3.
Approval and disapproval language is modified.

Section 7: Financing language is
modified.
Subdivision 1. Budget language regarding the town board is
provided.
Subdivision 2. Bonds language is modified.
Subdivision 3. Covenants to
secure obligations language is modified.

Section 8: Petition for removal of
district and procedure language is provided.
Subdivision 1. Petition details are
provided.
Subdivision 2. Bonds language is added.

Section 9: Capital notes
language is modified.

Section 10: Limitations on amount language is
modified.

Section 11: Financing language is modified.
Subdivision 1. Budget
language is modified.
Subdivision 2. Bonds language is added.
Subdivision 3.
Covenants to secure obligations language is added.
Subdivision 4. Continuance in
the event of withdrawal language is added.

Section 12: Equipment acquisition;
capitol notes language is modified.

Section 13: Creation - The Hennepin County
Housing and Redevelopment language is modified.

Section 14: Limitation language
is modified.

Section 15: Cities may issue capitol notes for capital equipment
language is modified.

Section 16: Financing purchase of certain equipment
language is modified.

Section 17: City definition is modified.

Section 18:
Trust for postemployment benefits
Subdivision 1. Authorization and
establishment language provided.
Subdivision 2. Purpose of the trust language is
provided.
Subdivision 3. Trust administrator guidelines are
provided.
Subdivision 4. Account maintenance language is provided.
Subdivision
5. Investment language is provided.
Subdivision 6. Limit on deposit language is
provided.
Subdivision 7. Withdrawal of funds and termination of account language
is provided.
Subdivision 8: Status of irrevocable trust language is
provided.

Section 19: Obligations language is modified.

Section 20:
Anticipation of grants language is added.

Section 21: Net debt language is
modified.

Section 22: Certain purposes language is modified.

Section 23: Grant
anticipation financing of transportation or transit projects language is
modified.
Subdivision 1. Definitions added include "political subdivision", and
"issuing political subdivision".
Subdivision 2. Authorization language is
provided.
Subdivision 3. Issuance of obligations language is
provided.
Subdivision 4. Use of proceeds language is provided.

Section 24:
Generally - except as otherwise provided no municipality, except a school
district or a city of the first class, shall incur or be subject to a net debt
of three percent of the market value of taxable property in the
municipality.

Section 25: Approval by electors and exceptions language is
provided.

Section 26: Street reconstruction language is modified.

Section 27:
Validation language is provided.

Section 28: Town of Crane Lake, Certificates
of Indebtedness language is provided.

Section 29: City of Winsted, bonding
authority language is provided.

ARTICLE 11 -- DEPARTMENT INCOME AND FRANCHISE
TAXES

Section 1: Debt language is modified.

Section 2: Information included in
income tax return language is modified.

Section 3: Withholding statement to
employee or payee and to commissioner language is modified.

Section 4:
Regulated investment companies reporting exempt-interest dividends language is
modified.

Section 5: Individual income, fiduciary income, corporate franchise,
and entertainment taxes; partnership and S corporation returns, information
returns, and mining company returns language is modified.

Section 6: Federal
tax changes language is modified.

Section 7: Penalties; failure to file
informational return and incorrect identification number language is
modified.

Section 8: Penalties relating to property tax refunds language is
modified.

Section 9: Reportable transaction understatement language is
modified.

Section 10: Preparer identification number language is
provided.

Section 11: Subtractions from federal taxable income language is
modified.

Section 12: Corporations; modifications decreasing federal taxable
income language is modified.

Section 13: Bovine testing credit language is
provided.

Section 14: Inflation adjustment language is modified.

Section 15:
Inflation adjustment language is modified.

Section 16: Exemption amount
language is modified.

Section 17: Alternative minimum taxable income language
is modified.

Section 18: "Deposit" definition is provided.

Section 19:
"Dependent" definition is provided.

ARTICLE 12 -- DEPARTMENT SALES AND USE
TAX

Section 1: Bad debt loss language is modified.

Section 2: Border city zone
refunds language is provided.

Section 3: Penalty for failure to properly
complete sales and use tax return language is modified.

Section 4: Penalty for
failure to report liquor sales language is provided.

Section 5: Sale and
purchase language is modified.

Section 6: Retail sale language is
modified.

Section 7: Sales price language is modified.

Section 8: Tangible
personal property language is modified.

Section 9: Telecommunications services
language is modified.

Section 10: Bundled transaction language is
provided.

Section 11: Ancillary services language is provided.

Section 12:
Conference bridging service language is provided.

Section 13: Detailed
telecommunications billing service language is provided.

Section 14: Directory
assistance definition is provided.

Section 15: Vertical service language is
provided.

Section 16: Voice mail service language is provided.

Section 17:
Ring tone definition is provided.

Section 18: Fur clothing language is
provided.

Section 19: Use of tangible personal property or taxable services
language is modified.

Section 20: Presumption of tax; burden of proof language
is modified.

Section 21: Defined telecommunications services sourcing language
is modified.

Section 22: Postpaid calling service language is
modified.

Section 23: Prepaid calling service language is modified.

Section
24: Prepaid wireless calling service language is provided.

Section 25:
Ancillary service language is provided.

Section 26: Drugs and medical devices
language is modified.

Section 27: Clothing language is modified.

Section 28:
Baby products language is modified.

Section 29: Advertising materials language
is modified.

Section 30: Packing materials language is modified.

Section 31:
Telecommunications, cable television, and direct satellite equipment language is
modified.

Section 32: Materials consumed in agricultural production language is
modified.

Section 33: Hospitals and outpatient surgical centers language is
modified.

Section 34: Private communication service for State Lottery language
is provided.

Section 35: Exemption Certificates - Content and form of
exemption certification and purchaser requirement language is modified.

Section
36: Liquor reporting requirements and penalty language is provided.

Section 37:
Payment of tax language is modified.

Section 38: Ordinary course of business
language is modified.

Section 39: Sales tax exemption; equipment; construction
materials language is modified.

Section 40: Fur tax payments language is
provided.

Section 41: Repealer language is provided.

ARTICLE 13 -- DEPARTMENT
PROPERTY TAXES

Section 1: Flight property language is modified.

Section 2:
Assessment of flight property language is modified.

Section 3: Report by
airline company language is modified.

Section 4: Airflight property tax lien
language is modified.

Section 5: Penalties
Subdivision 1. Penalty for late
filing language is provided.
Subdivision 2. Penalty for repeated instances of
late filing language is provided.
Subdivision 3. Penalty for frivolous report
language is provided.
Subdivision 4. Penalty for fraudulent report language is
provided.
Subdivision 5. Penalties added to tax language is provided.

Section
6: Examinations, investigations and subpoenas language is provided.

Section 7:
Tax capacity language is modified.

Section 8: Appeal language is
modified.

Section 9: Creation, purpose, and powers of the Board of Assessors
language is modified.

Section 10: Definition of "board" is provided.

Section
11: Members of the Board of Assessors details are provided.

Section 12:
License; refusal or revocation language is modified.

Section 13: Prohibited
activity language is modified.

Section 14: Charges for courses, examinations or
materials language is modified.

Section 15: Disposition of fees language is
modified.

Section 16: Training courses regulations language is
modified.

Section 17: Rules are provided.

Section 18: Licensure of qualified
persons language is modified.

Section 19: Employment of licensed assessors
language is modified.

Section 20: Commissioner may require social security or
identifying numbers on forms language is modified.

Section 21: Authority
language is modified.

Section 22: Job opportunity building zone property
language is modified.

Section 23: Requirement language is modified.

Section
24: Cities and townships; employment of licensed assessor language is
provided.

Section 25: County or local assessing district to assume cost of
training language is provided.

Section 26: Requirements language is modified.


Section 27: Conservation property tax valuation language is modified.

Section
28: Valuation of real property, notice language is modified.

Section 29:
Homestead application language is modified.

Section 30: Disparity reduction
credit language is modified.

Section 31: Listing and assessment by commissioner
language is modified.

Section 32: Listing and assessment by commissioner
language is modified.

Section 33: Report required language is
modified.

Section 34: Recommended and ordered values language is provided.


Section 35: Ordinary board; meetings, deadlines, grievances language is
modified.

Section 36: Members, meetings, and rules for equalizing assignments
language is modified.

Section 37: County Boards; appeals and equalization
course and meeting requirements language is provided.
Subdivision 1. Handbook
for county boards
Subdivision 2. Appeals and equalization course
Subdivision 3.
Proof of compliance; transfer of duties

Section 38: Notice of proposed property
taxes language is modified.

Section 39: Public advertisement language is
modified.

Section 40: Special taxing districts; organization date;
certification of levy or special assessments language is modified.

Section 41:
Electronic tax statements language is provided.

Section 42: Partial payments
language is modified.

Section 43: Due dates and penalties language is modified.


Section 44: Qualifying homestead definition is provided.

Section 45: Claimant
definition is provided.

Section 46: Applications language is modified.

Section
47: Annual certification language is modified.

Section 48: Penalties for
removal language is modified.

Section 49: Appeals language is
provided.
Subdivision 1. Claimant right to reconsideration
Subdivision 2.
Appeal by claimant
Subdivision 3. Notice date
Subdivision 4. Time and content
for administrative appeal
Subdivision 5. Extensions
Subdivision 6. Determination
of appeal
Subdivision 7. Agreement determining issues under appeal
Subdivision
8. Appeal to Tax Court
Subdivision 9: Exemption from Administrative Procedure
Act

Section 50: Repealer language is provided.

ARTICLE 14 -- DEPARTMENT
SPECIAL TAXES

Section 1: Deficit assessments language is modified.

Section 2:
Premium tax language is modified.

Section 3: Exemptions language is
modified.

Section 4: Tax-forfeited land language is modified.

Section 5: Use
tax and prescription drugs language is modified.

Section 6: Tax collection
language is modified.

Section 7: Pharmacy refund language is modified.

Section
8: Tobacco products use tax language is modified.

Section 9: Consumer use tax,
use tax return, and cigarette consumer language is modified.

Section 10:
Insurance policies surcharge language is modified.

Section 11: Exemptions
language is modified.

Section 12: Joint Underwriting Association offset
language is modified.

Section 13: Definition of tax language is
modified.

ARTICLE 15 -- DEPARTMENT MISCELLANEOUS

Section 1: Duties language is
modified.

Section 2: Agency participation language is modified.

Section 3:
Computation language is modified

Section 4: Adjustment of rate language is
modified.

Section 5: Refunds not subject to attachment or garnishment language
is provided.

Section 6: Required and excluded tax preparers language is
modified.

Section 7: Liability imposed language is modified.

Section 8: Period
of limitations language is modified.

Section 9: State reimbursement language
is modified.

ARTICLE 16 -- MISCELLANEOUS

Section 1: Local impact notes
language is modified.

Section 2: Miscellaneous exceptions language is
modified.

Section 3: Compilation of local impact notes language is
modified.

Section 4: Certain political subdivisions, report language is
modified.

Section 5: Local revenue language is modified.

Section 6: Claimant
agency language is modified.

Section 7: Priority of claims language is
modified.

Section 8: Tax may be imposed; Otter Tail County language is
modified.

Section 9: Repealer language provided.

SNA 3/10/08