Legislative Session number- 88

Bill Name: SF0552

1E Relating to taxation

ARTICLE 1 - AIDS AND CREDITS

Appropriating money
to the commissioner of revenue for police and fire pension aid; modifying the
method of calculating local government aid (LGA); modifying the calculation of
the pre-1940 housing percentage for East Grand Forks and city revenue need;
defining percent of housing built between 1940 and 1970, jobs per capita and
peak population decline; providing a sparsity adjustment formula for certain
cities; modifying eligibility for certain town aid payments; modifying the city
formula aid and city aid distribution requirements; providing certain certified
aid adjustments; setting the city aid and town aid appropriation and increasing
the county program appropriation; modifies payments in lieu of taxes (PILT) for
natural resource land; repealing certain provisions relating to LGA aid formula
and obsolete aid adjustments

ARTICLE 2 - PROPERTY TAX

Modifying authority
of the board of water and soil resources (BWSR) and certain local water
management entity evaluation and report requirements, local government levy
authority for water planning and management and conservation and watershed
districts, county conservation fee money disposition, erosion and water
management cost sharing, and soil loss ordinances; clarifying manufactured homes
as motor vehicle dealer inventory under certain conditions; modifying accredited
assessor requirements; expanding personal property tax exemptions for pollution
control; allowing an exemption for certain property owned by an Indian tribe;
providing an exemption for certain personal property of electric generation
facilities; requiring a statement of exemption for claimed pollution control
property; clarifying conservation property tax valuation; modifying agricultural
homestead criteria and land and buildings classification and modifying trust
property homestead determination; providing a maximum for class 4d property tax;
increasing the disparity reduction credit; setting the state general levy amount
on commercial industrial property and eliminating the exemption for electric
generation attached machinery from the state general levy; modifying provisions
for payment of delinquent taxes; modifying definition of income for the property
tax refund, decreasing the threshold percentage for the property tax refund for
renters; increasing the maximum refund for renters; modifying certain provisions
under the sustainable forest incentive act (SFIA) relating to qualification,
eligibility requirements, length of covenant, and calculation of incentive
payment; extending the deadline for special service districts and housing
improvement districts; modifying the special assessments procedure for state
property; appropriating money to the commissioner of revenue for special
assessments grants and Moose Lake reimbursement for payments for connection of
state facilities to a sewer line; adding funds for the Bloomington areawide
portion of the levy for fiscal disparities for property taxes in 2014-2023;
modifying the levy authority of the Cook-Orr hospital district; authorizing
Carlton county to levy a tax for certain cemetery purposes; extending the levy
authority for the Northwest Minnesota multicounty housing and redevelopment
authority; allowing an extension of the agricultural homestead classification
for certain farmers in Marshall county; reimbursing taxing jurisdictions in
Hennepin county for property tax abatements granted for 2011 tornado damages
notwithstanding time restrictions and appropriating money; providing a property
tax exemption for the St. Paul ball park and the Target Center; allowing
Minneapolis to contract for Target Center construction projects under the
construction manager at risk; providing a moratorium on changes in assessment
practice; requiring the commissioner of revenue to study the impact of
alternative interpretations and application for taxation of real and personal
property used in business and production activities; allowing reenrollment in
the sustainable forest incentive program; requiring counties and certain cities
to submit property tax savings reports; establishing a metropolitan council
disparities working group; repealing an apportionment and levy of state general
tax provision

ARTICLE 3 - EDUCATION AND LEVIES

Modifying the definition of
general education revenue for charter schools; providing eligibility for
achievement and integration revenue; expanding the general education revenue
formula; modifying district equity index; creating education advancement
revenue; expanding the general education revenue definition to include education
advancement revenue; providing a formula for education advance aid; modifying
the general education levy calculation for certain districts; modifying the
general education aid definition; modifying referendum revenue formulas for
2015; specifying certain duties of the commissioner of education relating to
computing the reduction to a school district referendum allowance; prohibiting
an increase to operating referendum in fiscal year 2015; adjusting the current
year aid payment percentage; appropriating money to the commissioner for general
education aid

ARTICLE 4 - SPECIAL TAXES

Providing for collection of 911
fees from prepaid wireless telecommunications services and prepaid wireless E911
series; authorizing the commissioner of revenues to participate in audits
performed by the multistate tax commission; authorizing Hennepin and Ramsey
counties to impose an additional mortgage registry and deed tax, extending the
authority to 2023; imposing a tax on gross receipts of wholesale sales on sports
memorabilia to purchasers in the state; modifying aviation excise taxes;
imposing a gross receipts tax on paper pull-tabs; exempting certain bingo halls
from combined net receipts tax; modifying certain tobacco provisions, defining
terms, providing annual tax rate adjustment, increasing the tobacco products tax
rate, imposing additional tobacco products taxes; exempting 501(c)(3)
organizations from registering with the gambling control board for certain
raffle prizes; modifying the aircraft registration tax rate; defining certain
prepaid wireless telecommunications terms, providing for fee imposition,
collection, remittance, administration, and reporting; imposing a tobacco floor
stocks tax; requiring the recomputation of cigarette tax refunds and the
refunding of sales and excise taxes and fees paid by Indians and Indian tribes
due to health impact fees imposed from 2005-2009; requiring an aviation tax
report; appropriating money to the commissioner of public safety for allied
radio matrix for emergency response (ARMER) program grants to certain counties;
requiring a tobacco tax collection report; repealing participation in the
multistate tax compact and repealing the health care access fund and health
impact fee

ARTICLE 5 - INDIVIDUAL INCOME AND CORPORATE FRANCHISE
TAXES

Providing tax incentives for certain expansions of greater Minnesota
businesses, defining terms, specifying qualification requirements for the small
business investment credit, increasing the credit allocation, requiring
promotion of the investment credit in greater Minnesota, providing for
revocation of credits and applying certain repayment provisions, requiring
report, sunset provision; establishing the greater Minnesota internship program,
eliminating the deduction for foreign operation income (FOC) income; providing
for a subtraction of income taxes for certain railroad track maintenance
expenditures; reducing the corporate tax rate; increasing the income thresholds
for tax brackets to reflect inflation adjustment for 2013, increasing the rate
on the third tier income tax bracket, and conforming provisions; establishing a
refundable business tax credit for employers participating in the greater
Minnesota internship program; increasing the tax credit for current and past
military service; modifying eligibility for an income tax credit for past
military service; increasing the research and development credit for S
corporations; modifying the historic structure rehabilitation income and
corporate franchise tax credit and appropriating money, sunset provision;
authorizing a tax credit to greater Minnesota qualified business meeting
business expansion requirements; adding a clothing sales tax credit to the
individual income tax and specifying limitations; reducing the corporate
alternative minimum tax (AMT) rate and conforming provisions; removing the
subtraction for foreign royalty income and conforming provisions; modifying the
threshold and tax amounts for the corporate minimum fee and providing for
inflation adjustments; excluding real estate investment trust (REIT) dividends
from the dividend deduction provision; expanding the definition of qualified
brewer producing fermented malt beverages to qualify for the small brewer tax
credit; clarifying the effective date for the historic structure rehabilitation
credit; providing a clothing sales tax credit adjustment for tax year
2013

ARTICLE 6 - ESTATE TAXES

Modifying and clarifying estate tax
exclusions for qualified small business property and qualified farm
property

ARTICLE 7 - SALES AND USE TAXES; LOCAL SALES TAX

Requiring
foreign vendors selling good and services to the state to register with the
commissioner of revenue; expanding and clarifying the definition of sale and
purchase, including additional products and services subject to the general
sales and use tax; reducing the general sales tax rate and the constitutional
rate for legacy funds; increasing the sales tax on rental vehicles; maintaining
the state lottery gross receipts sales tax amount; expanding the definition of a
retailer maintaining a place a business in this state by adding rebuttable
presumptions for purposes of establishing sales tax nexus and defining retailer
and solicitor, severability clause; imposing a nexus tax for certain internet
sales and allowing multiple points of use certificates; modifying sales tax
exemptions for drugs and medical devices, exempting purchases in items for
Medicare and Medicaid; including tangible personal property in materials
consumed in industrial production, modifying the capital equipment exemption,
clarifying publication materials exemptions, modifying qualified data centers
purchases, providing a sales tax exemption for greater Minnesota business
expansions purchases and use of tangible personal property; expanding the sales
tax exemption for sales and purchases to local government units; establishing
sales tax exemptions for sales to religious orders, veterans groups and sales to
and for nonprofit organizations; extending the sales tax exemption for hospitals
and outpatient surgical centers to critical access dental care providers;
providing a sales tax exemption for certain nursing homes and board care homes,
biopharmaceutical manufacturing facilities, research and development facilities,
industrial measurement manufacturing and controls facilities, retail, hotel,
amusement, and office construction projects; authorizing refunds for qualifying
purchases under newly authorized sales tax exemptions; modifying motor vehicles
sales tax revenue requirements; clarifying the tax based for locally collected
taxes; modifying allowed expenditures regarding imposition of local sales taxes;
modifying the St. Paul local taxes tax, the St. Cloud area cities local sales
tax, and the Clearwater local sales tax; requiring Duluth to reduce the general
local sales tax rate; revisors instruction; repealing the direct satellite
service definition, affiliated entities jurisdiction to require collection and
remittance of tax by retailer, super bowl admission, court reporter document
copies, telecommunications, cable and direct satellite machinery and equipment
business exemptions

ARTICLE 8 - LOCAL DEVELOPMENT

Modifying certain tax
increment financing (TIF) provisions, expanding the definition of authority,
defining soil deficiency district, authorizing the designation of a mining
reclamation project area and specifying municipality approval requirements,
modifying limitations, setting the duration limit for a soil deficiency
district, extending authority for economic development districts, specifying
conditions and eliminating qualified border retail facilities, extending the
temporary tax increment financing authority to stimulate construction and
specifying conditions, providing restrictions for soil deficiency district tax
increments use, extending the four-year rule for certain TIF districts,
extending the five-year rule to ten years for districts certified after June 30,
2003 and conforming use of revenues for decertification; clarifying original tax
rate to exclude the school rate attributable to the general education levy;
authorizing Hopkins to extend the duration of a certain redevelopment TIF
district; providing for special rules for certain TIF district parcels deemed
occupied in Oakdale; authorizing Minneapolis to establish a value capture
district for construction of the streetcar line; authorizing the Dakota county
community development agency to establish a redevelopment TIF district;
clarifying the status of a TIF district in St. Cloud; extending the duration of
a TIF district in Ely and in Glencoe; providing expanded tax increment financing
powers relating to certain existing districts in Bloomington; authorizing the
use of TIF for developments consisting
of building and ancillary facilities in
Apple Valley; authorizing Maplewood to create redevelopment TIF districts
subject to special rules

ARTICLE 9 - DESTINATION MEDICAL CENTER

Providing
local taxing authority to the city of Rochester and Olmsted counties;
establishing a destination medical center authority and board to develop and
finance public infrastructure for the destination medical center project;
defining terms, specifying board membership requirements; specifying
organization, structure, characteristics and jurisdiction, authority,
jurisdiction, depository regulations and liability; specifying regulations for
tax levies, city or county appropriations, and other fiscal matters; providing a
sales tax exemption for construction materials and public infrastructure in the
destination medical center authority development plan; authorizing Olmsted
county to impose a transportation tax for financing transportation
infrastructure and to impose a wheelage tax for transportation projects;
requiring the authority to prepare and adopt a development plan, specifying
requirements for city review, plan modifications, consulting authority,
auditing, reporting, and contract construction requirements; specifying certain
powers and duties of the authority relating to projects and costs, revenue
pooling, property acquisition and exemption from taxes, applicable city
requirements, sale of property, contracts and purchasing, and borrowing in
anticipation of bonds; allowing the issuance of revenue bonds and specifying
form and sale requirements; authorizing the city of Rochester to impose a tax on
receipts for admission to entertainment and recreation facilities; authorizing
certain general sales tax authority and specifying certain special abatement and
special tax increment financing (TIF) rules; authorizing state infrastructure
aid, specifying certification of Mayo expenditures and local contribution
requirements, general state infrastructure aid and state transit aid conditions,
defining certain terms applicable to the state aid; allowing Rochester to impose
an additional sales tax percentage, specifying use of revenues, and specifying
certain termination requirements; authorizing the imposition of an additional
lodging tax; making conforming changes

ARTICLE 10 - MINERALS
TAX

Correcting a taconite production tax error; redirecting a portion of the
occupation tax deposited in the general fund for an annual appropriation to the
mining environmental and regulatory account; requiring companies to match any
funds received by the taconite economic development fund; . increasing the
taconite production tax rate; increasing distribution of taconite production tax
to school districts; reducing the distribution of the taconite production tax
used to fund the taconite homestead credit; establishing a special fund for
receiving a portion of the taconite production tax and allocating certain
amounts to local projects; authorizing the commissioner of the Iron Range
resources and rehabilitation to issue revenue bonds for making grants to school
districts located in the taconite relief area or taconite assistance area, to be
used to pay for building projects or to reduce debt service on completed
building projects; requiring the commissioner of revenue, in coordination with
the commissioner of the Iron Range resources and rehabilitation board, to study
the Iron Range fiscal disparities program

ARTICLE 11 - PUBLIC
FINANCE

Authorizing investments in certain school district securities;
expanding certain local public entity guaranteed investment contract agreement
options; expanding the county capital improvement definition for projects
eligible for financing with county capital improvement bonds and modifying the
bond issuance election requirement application reverse referendum authority:
allowing the Dakota county community development agency to have all powers of a
city in connection with housing improvement areas in Dakota county; eliminating
certain restrictions on metropolitan airports commission (MAC) investment;
removing a requirement that any unused carryover of bond allocations be deducted
from that entitlement allocation for the next year; removing the one-year
carryforward limit on allocations for student loan bonds; removing the one-year
carryforward limit on mortgage bonds awarded to the Minnesota housing finance
agency (HFA); allowing expenditures incurred to be financed with bonds even
though they were incurred before approval of the plan, if such expenditures are
included in the capital improvement plan; modifying the reverse referendum
authority for city capital improvement plan bonds: modifying the reverse
referendum authority for street construction bonds and allowing expenditures
that were incurred by a municipality before approval of a street construction
plan, if such expenditures are included in the reconstruction plan; extending
the city of St. Paul?s capital improvement bonding program to 2024;
appropriating money from the general fund in fiscal year 2015 for completion of
repairs and renovation of the Capitol building; authorizing the commissioner of
administration to enter into a lease-purchase agreement for a term of up to 25
years for predesign, design and construction of offices and hearing rooms within
the Capitol area for legislative and other functions; clarifying the
carryforward bonding authority for 2011; allowing independent school district #
435, Wauben-Omega-White Earth, to expand classroom space at its Omega elementary
site using a certain grant awarded to the district by the department of human
services

ARTICLE 12 - MARKET VALUE DEFINITIONS

Changing the definition of
market value to estimated market value for political subdivisions for tax and
debt determination; requiring modification of the adjusted net tax capacity;
defining estimated market value and taxable market value; modifying the
definition of market value; modifying manufactured home park cooperative
homestead treatment; making technical and clarifying changes; repealing limited
market value, the definition of valuation under Iron Range fiscal disparities
and metropolitan area fiscal disparities, and the definition of equalized market
values in local government aid

ARTICLE 13 - DEPARTMENT POLICY AND TECHNICAL:
INCOME AND FRANCHISE TAXES; ESTATE TAXES

Making certain department policy,
technical, and clarifying changes to certain estate tax and income and franchise
tax provisions; specifying certain recapture tax return, informational return,
and return and payment due date requirements; modifying reporting requirements
of regulated investment companies paying municipal bond interest; clarifying the
estimated tax payments for C corporations and exempt entities provision;
correcting certain obsolete references; clarifying the unity of ownership
business principle; modifying requirements for the withholding of payments to
out-of-state contractors

ARTICLE 14 - DEPARTMENT POLICY AND TECHNICAL: SALES
AND USE TAXES; SPECIAL TAXES

Making certain department policy, technical, and
clarifying changes to certain sales and use tax and special tax provisions
relating to deed tax real property partitions, the obsolete accelerated monthly
sales tax payments remittance schedule for vendors, brewer credits calendar year
reference, and the retaliatory insurance tax

ARTICLE 15 - DEPARTMENT POLICY
AND TECHNICAL: MINERALS TAXES; PROPERTY TAX

Making certain department policy,
technical, and clarifying changes to certain minerals tax and property tax
provisions; modifying certain provisions relating to homestead application
mailings, class 4bb residential classification, air flight property tax
collection, assessor appraisal duties, air flight property tax authority,
exemption property tax usage, net proceeds tax property tax exemption,
definition of person for property tax; market value definitions, rural preserve
property tax program ownership changes, agricultural homesteads for intensive
livestock and poultry confinement, homestead applications update, administrative
appeals for railroads and utilities, rural area definition, notice of delinquent
property tax, senior citizens property tax deferral program authority,
nonferrous occupation tax definition of hydrometallurgical processes, and net
proceeds tax distribution conformance; repealing an obsolete provision relating
to qualifying residential property lead paint hazards

ARTICLE 16 - DEPARTMENT
POLICY AND TECHNICAL: MISCELLANEOUS

Making certain department policy,
technical, and clarifying changes to certain miscellaneous tax provisions;
modifying certain provisions relating to lost or destroyed warrant duplicate
indemnity and uniform interest on penalties accrues
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