Legislative Session number- 85

Bill Name: SF2869

2E Relating to taxation

ARTICLE 1 - AIDS TO LOCAL GOVERNMENTS

Modifying the
distribution of local government aid (LGA); specifying a city
revenue need
minimum; modifying the city aid base and increasing the aid base for certain
cities; defining small city aid base, city jobs base, out of home placement aid
and town aids; modifying county tax base equalization aid and transition aid,
city formula aid, city aid distribution, county aids; providing a 2009 aid
adjustment; increasing the cities appropriation limit; providing an inflation
adjustment for municipal (city) aid and county need aid distributions; providing
a distribution of payments in lieu of tax for land included in state parks
located on Lake Vermilion; authorizing first class metropolitan cities in
receipt of certain excessive aid to expend excess on debt obligations related to
public facilities or neighborhood revitalization; requiring a legislative study
of local government aids and requiring a report by a certain date

ARTICLE 2 -
PROPERTY TAXES

Modifying the school district referendum market value tax base;
extending school districts levy authority for retired employee health benefits
under condition of effective sunset clause; authorizing utilities to recover the
cost of higher property taxes due to class rate changes through a rate
adjustment; exempting noncommercial seasonal recreational or noncommercial
seasonal recreation residential lands county, city and town leased lands from
property taxation; extending the personal property electric generation
facilities construction commencement and biomass electric generation facility
construction commencement deadlines for property tax exemption status; exempting
state trust lands from the personal property definition; modifying the
agricultural property tax law; establishing an aggregate resource preservation
property tax program for the valuation and classification of property containing
certain unmined commercial aggregate deposit; modifying the requirements for
open space property tax treatment; adding soccer as an acceptable use; providing
a tax credit for property in bovine tuberculosis management zones; extending
homestead classification to certain property used for nonhomestead purposes;
modifying class 2b property homestead classification eligibility; modifying
class 3 personal property part of electric generation systems; increasing the
property tax class rates on certain utility property; modifying the class 4b,
4bb and 4c property classifications and adding certain restaurants to the 4c
classification; including bovine tuberculosis eradication credit in the net
property tax computation; subjecting to taxation federal and state government
fee lands leased or rented for noncommercial seasonal recreational use or
noncommercial seasonal recreational residential use; modifying the state general
levy and removing seasonal residential recreation property from the levy;
requiring county auditors to use the previous year final levy upon taxing
authority proposed certification failure by due date; authorizing sanctions for
property tax petitioners contesting the valuation of income producing property;
providing for payment of property tax refunds to counties for delinquent
property taxes; authorizing counties to levy taxes on property located within
unorganized territories for the purposes of funding fire protection and first
responder services; permitting a town board to vote to refund any surplus or
service charge upon the removal of a subordinate service district; changing the
transit taxing district definition; modifying airport tax levy authority;
regulating assessment of properties of purely public charities; classifying the
Comfort Lake Forest Lake watershed district as a watershed management
organization in Chisago and Washington counties for the management of surface
water; providing for St. Louis county debt services for sanitary district bonds;
requiring the commissioner of revenue to study agricultural property valuation
and report to the legislature by a certain date; repealing the property tax
exemption for electric power plant personal property, taconite and steel mill,
the seasonal residential recreational tax capacity, seasonal residential
recreational property due dates and penalties and additions to the transit
taxing district

ARTICLE 3 - SENIOR CITIZENS PROPERTY TAX CAP

Relating to
property taxation; establishing a maximum homestead property tax (cap) program,
defining terms, specifying participation qualifications, including age, income
and length of residence qualifiers, providing an application procedure,
providing for excess income certification procedures by commissioner of revenue;
providing for tax calculation, tax rate and levy by county auditor; providing
for termination of program participation

ARTICLE 4 - INDIVIDUAL INCOME AND
CORPORATE FRANCHISE TAXES

Changing the foreign operating corporation definition
for taxation purposes; providing an income tax subtraction for the amount of
national service education awards received from the national service trust for
service in an approved AmeriCorps national service program; under corporate
federal taxable income provisions changing certain pollution control facilities
amortization deductions, foreign operating corporations deemed dividends and
adding unitary groups; modifying requirements for sales receipts for services
determination managed by a corporation or trust for a fund of a corporation for
regulated investment companies under the apportionment formula for corporate
franchise tax purposes; providing for transactions without economic substance;
modifying the wage definition; providing a transition for pollution control
facilities amortization

ARTICLE 5 - SALES AND USE TAXES

Exempting emergency
response vehicles and repair parts from the motor vehicle sales tax; exempting
the purchase or lease of propane fueled motor vehicles by school districts and
purchases for materials and supplies used in construction of the Northstar
commuter rail and Central corridor light rail transit projects from the sales
tax, specifying a Northstar commuter rail total refund limit; exempting student
transport school district purchased propane fueled motor vehicles from the motor
vehicle sales tax; authorizing the city of Mankato to extend the sales and use
tax and expanding the use of revenues to include the performing arts theatre and
the southern Minnesota women's hockey exposition center and authorizing
imposition of a food and beverage tax and an entertainment tax; allowing the
city of Two Harbors tax revenue use for water system improvements; authorizing
the city of Proctor to use additional sales and use tax to be used pay for
public utilities, sidewalks, bikeways, trails and parks and recreation
improvements and increasing the bonding authority of the city for the projects;
authorizing the city of Clearwater by ordinance and with voter approval to
impose a sales and use tax and a sales tax on motor vehicles and to issue state
bonds to pay for costs of acquisition, construction, improvement and development
of regional parks, bicycle trails, park land, pedestrian walkways, open space
and land and buildings for a community and recreation center, tax termination;
authorizing the city of Cloquet by ordinance and with voter approval to impose a
sales and use tax and a sales tax on motor vehicles and to issue bonds to
finance the construction and completion of certain park improvement projects,
the extension of utilities and other improvements and for construction of a city
industrial park, tax termination; authorizing Cook county by election to impose
by ordinance a sales and use tax for a community center and recreation area,
Grand Marais pool and Grand Marais public library construction and improvements;
authorizing the city of Ely by ordinance and with voter approval to impose a
sales and use tax and to issue bonds for certain improvements, tax termination;
authorizing the city of Mankato impose a food and beverage tax and an
entertainment tax, specifying use of proceeds and providing for collection,
administration and enforcement and repealing certain previous limitations on use
of tax revenues; exempting materials, supplies and equipment used in the
construction of the Minnetonka water treatment facility from the sales tax;
authorizing the city of North Mankato by ordinance and with voter approval to
impose a sales and use tax and to issue bonds to pay all or part of the capital
costs of the city share of the marked trunk highway #14 and county state aid
highway #41 interchange project, development of regional parks and hiking and
biking trails, expansion of the North Mankato Taylor library, redevelopment of
the central business district and lake improvement projects, tax termination;
authorizing the city of Winona upon voter approval to impose a sales and use tax
to pay for construction of a street connection from the city of Winona to
highways #61 and 43; authorizing the issuance of bonds, tax termination;
repealing previously enacted city of Mankato sales and excise taxes, bonding,
reverse referendum, tax expiration and collection and administration
provisions

ARTICLE 6 - JUNE ACCELERATED TAX PAYMENTS

Modifying the percentage
of the estimated June tax liability required to be paid before June 30

ARTICLE
7 - SPECIAL TAXES

Creating the surplus lines association of Minnesota as a
nonprofit association, classifying data as public, requiring licensees to submit
documents to the surplus lines association; modifying provisions relating to
petroleum product distribution by rail car; extending the authority of Ramsey
and Hennepin counties to impose a mortgage registry and deed tax for the
environmental response fund and modifying fund authorized uses; authorizing St.
Louis county to impose a deed and mortgage tax, requiring proceeds to be
deposited in the environmental response fund, creating an environmental response
fund for acquisition of polluted or contaminated lands and the paying of certain
costs, requiring the county to seek matching funds and authorizing the county to
issue bonds and resell land at fair market value; authorizing Dakota county to
impose a deed and mortgage tax, requiring proceeds to be deposited in the
environmental response fund, creating an environmental response fund for
acquisition of polluted or contaminated lands and the paying of certain costs,
requiring the county to seek matching funds and authorizing the county to issue
bonds and resell land at fair market value, sunset provision; authorizing Anoka
county to impose a deed and mortgage tax, creating the Anoka county
environmental response fund, specifying uses for the fund and providing for
matching funds, bonding and land sales, sunset provision

ARTICLE 8 - MINERALS;
AGGREGATE

Authorizing the iron range resources and rehabilitation board (IRRRB)
to sell forest trust lands under trust benefit conditions; modifying the
taconite economic development fund distribution formula; restricting the
taconite and iron sulphides tax exemption to state mined ore; exempting school
mineral tax distributions from the education funding general aid taconite
deduction requirement; reducing the taconite economic development fund
distribution payment, retiring fund distributions and payments as of a certain
year, increasing the tax allocation to the IRRRB for the iron range higher
education account; requiring a certain producer grant amount to be paid to ISD
#2142, St. Louis county, for a facilities study; defining aggregate material
importers to consist of excavated materials purchases, increasing the county
aggregate production tax, requiring counties to impose on importers a certain
aggregate production tax, prohibiting local government units in receipt of
revenues from imposing additional aggregate production host community fees,
allowing county auditors a certain annual administrative fee retention on total
aggregate material production tax collection, modifying tax credit distribution,
modifying a public works and local economic development fund distribution for
central iron range sanitary sewer district construction effective date;
providing for electric generating plants in taconite tax relief areas taconite
facility qualification status treatment

ARTICLE 9 - LOCAL DEVELOPMENT

Allowing
a regional emerging investment fund credit and a seed capital investment credit;
amending certain business subsidy provisions; providing for an historic
preservation tax credit and designating a renaissance zone for the former state
regional treatment center in the city of Fergus Falls; modifying an Anoka county
bonding provision governing county library bonding amounts; providing a job
opportunity building zone (JOBZ) qualified business designation termination;
authorizing the metropolitan council to issue certificates of indebtedness,
bonds or other obligations for additional financing of metropolitan area transit
and paratransit capital expenditures; requiring the Hennepin county auditor to
calculate and certify the amount of an areawide levy generated by phase II of
the mall of America project, requiring city of Bloomington distribution and
requiring the city to use the money to finance a parking facility for phase II
of the mall of America project; modifying the use of tax increments for
activities not identified in the housing replacement plan; modifying the use of
tax increments for activities not identified in the housing replacement plan for
the cities of Minneapolis and Crystal; increasing the size of the homeless
assistance tax increment district of the city of Minneapolis; changing the city
of Fridley tax increment financing (TIF) district special rules and specifying a
sunset for new districts approval and establishment; changing the city of New
Brighton TIF district authorized expenditures outside the district and extending
district duration; authorizing the city of Austin to use TIF increments for city
housing and redevelopment authority reimbursement for soils and debris disposal
expenditures; exempting from the sales tax the Bloomington mall of America
building materials and supplies used for improvements within the TIF district in
the city of Bloomington, extending the duration of the TIF district, authorizing
city of Bloomington to eliminate certain sections of the TIF district and expand
the boundaries to include certain other areas, requiring public hearing on
district modification, specifying mall of America construction requirements,
specifying wage, affordable access, labor peace agreement requirements;
authorizing and providing for a local taxing authority for the city of
Bloomington; authorizing the Dakota county community development authority to
designate additional property to be acquired for a TIF project; providing a
limit on abatements for the city of Dayton and Hassan township; authorizing a
time extension for activity for certain city of Duluth TIF districts;
authorizing the housing and redevelopment authority for the city of Oakdale to
create a redevelopment TIF district with extended duration limits

ARTICLE 10 -
DEPARTMENT INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Specifying a tax
return filing date for unitary group corporate members; modifying a foreign
operation corporation definition qualification; making technical corrections;
allowing payor tax withholding for federal backup withholding

ARTICLE 11 -
DEPARTMENT SALES AND USE TAXES

Declaring purchaser sales and use taxes
liability relief under conditions of incorrect payment due to erroneous state
information and specifying liability for tax payment; updating references;
including the commonwealth of Puerto Rico in the definition of state; exempting
durable certain medical equipment repair and replacement parts from the sales
tax and clarifying the drug exemption; defining database files

ARTICLE 12 -
SPECIAL TAXES AND FEES

Requiring the commissioner of the pollution control
agency to inform the commissioner of revenue of the amount necessary to operate
the electronic waste account and allowing non refunded amounts to remain in the
account; imposing a tax liability for the tobacco health impact fee; updating
references; making technical corrections; exempting wholesale drug distributors
from the health care provider definition; modifying the use tax on legend drugs;
exempting denatured ethanol purchased by licensed distributors from the gasoline
tax and exempting special and alternative fuels purchased by licensed
distributors delivered to a terminal for use in blending; declaring as
contraband cigarettes and cigarette packaging in non compliance with fire safety
requirements; removing (insurance) gross premiums less return premiums received
by nonprofit health service plan corporations from tax imposition

ARTICLE 13 -
DEPARTMENT PROPERTY TAXES AND AIDS

Classifying assessor and housing low income
property certification and eligibility income data as private data on
individuals; updating references; exempting manufactured homes assessment from
tax conversion; defining utility property under tax relief for destroyed
property to be property appraised and classified by the commissioner of revenue,
requiring the commissioner of revenue to reassess damaged property for which an
application to the commissioner is made, allowing the commissioner of revenue to
grant utilities an abatement of net taxes, clarifying when applications are to
be made; classifying state or federal tax returns or tax return information for
property tax homestead classification claims as private data on individuals;
making technical corrections; modifying the class 1b property definition;
allowing local boards with transferred powers to counties to continue local
assessor employment; making conforming amendments; classifying household
information on property tax deferral applications as private data on
individuals; repealing under local government aid (LGA) provisions certain
billed costs to the commissioner of revenue and the subsequent
deductions

ARTICLE 14 - JOB OPPORTUNITY BUILDING ZONES

Modifying conditions
for job opportunity building zones (JOBZ) tax benefits repayment by businesses
no longer operating in a zone, defining certain terms; modifying waiver of
repayment authority; providing treatment for breach of agreements by businesses
continuing operations in the zone; providing a prohibition against amendments to
business subsidy agreements and requiring annual certification of continuing
eligibility for JOBZ benefits

ARTICLE 15 - DEPARTMENT MISCELLANEOUS

Allowing
Minnesota State Colleges and Universities (MnSCU) and local government units to
collect debt under the commissioner of revenue debt qualification plan,
expanding the definition of referring agency, clarifying the roles of
participating agencies, requiring debtor notification of department revenue
recapture use, clarifying collection prohibition during appeal

ARTICLE 16 -
MISCELLANEOUS

Exempting mortgages on property in federally declared disaster
areas from mortgage registry tax, including refinancing mortgages in the
exemption; requiring the commissioner of revenue to continue to maintain certain
tax related data comparing household incomes with home market values and
property tax burdens, requiring data to be furnished to the legislature and
appropriating money to the commissioner of revenue
(rt)