Legislative Session number- 85

Bill Name: SF2935

Relating to taxation

ARTICLE 1 - AIDS TO LOCAL GOVERNMENTS

Increasing the
city aid base for the city of Mahnomen; modifying the city aid formula;
modifying city aid distribution calculations; modifying Mahnomen county, city
and school district property tax reimbursements, tax base adjustments and tax
base adjustments for calculation of school district aids and levies; requiring
the commissioner of revenue to compute the adjusted net tax capacity and
referendum market value for tax base adjustments for the calculation of school
district and county, city and town aids and levies for utility property

ARTICLE
2 - PROPERTY TAXES

Allowing towns incorporating into cities to continue to
receive payment in lieu of tax allocations for public hunting areas; requiring
the assessment/sales ratio study to take into account the changes in the use of
the property; authorizing utilities to recover the cost of higher property taxes
due to class rate changes through a rate adjustment; exempting modular homes
used as models by dealers from the property tax; exempting property used to
operate state or federally approved apprenticeship training facilities from the
property tax; exempting monosloped roofs for feedlots and manure storage areas
from the property tax; requiring the certificate of real estate value to include
any proposed changes in the use of the property; requiring annual registration
of certain relative households; increasing the value threshold for taxability of
certain structures; extending the application of 4d property classification for
low income rental property; increasing the market value included in tier I
homestead resorts; modifying class 1c provisions; increasing the property tax
class rates on certain utility property; modifying class 4c property
classification provisions; expanding residential real estate property
classification to certain nonprofit community service oriented organizations;
providing for a valuation exclusion for homesteads of certain disabled military
veterans; providing for administration and declaration of class 1b homestead
property, specifying filing requirements; allowing counties to hold a joint
truth in taxation hearing with the governing bodies of the taxing authorities
within the county; adding airport authorities to the list of special taxing
districts; modifying proposed property tax notice content requirements;
itemizing specific information required for petitioner contests of the valuation
of income producing property; increasing the maximum value for delinquent taxes
on a commercial property to be compressed into a confession of judgment;
permitting payment of a partial year of delinquent taxes to be paid in inverse
order; increasing the minimum sustainable forest incentive payment; authorizing
a city, county, town or an Indian nation to create an airport authority;
granting airport authorities the power of municipalities; specifying the process
for establishing an authority; vesting the powers of an airport authority in the
airport authority commissioners, providing for appointment of commissioners;
providing for compensation, meetings and officers; providing for the processes
to increase and decrease the size of the authority and to dissolve the
authority; authorizing an airport authority to annually certify a tax levy;
authorizing deferment of special assessments for certain members of the armed
forces; modifying provisions relating to funding for the construction, operation
and maintenance of streets and street lighting within the city of Minneapolis;
modifying the levy authority for the Cook Orr hospital district; modifying the
levy authority of the Cook county hospital district; authorizing the cities of
Coleraine, Bovey, Taconite, Marble and Calumet and the towns of Iron Range,
Lawrence, Greenway and Trout Lake to establish the Lakeview cemetery
association; repealing provisions relating to the city of Minneapolis and the
Lakeview cemetery association

ARTICLE 3 - INDIVIDUAL INCOME TAXES

Requiring
expanded tax information reporting to the commissioner of revenue under certain
conditions; 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; modifying the income tax credit
for military service for deceased individuals; prohibiting businesses from
deducting fines, penalties and fess paid to or at the discretion of a
governmental unit; modifying provisions relating to compensation received while
a nonresident; requiring withholding on certain contractor payments; requiring
the commissioner of revenue to conduct a random sample of withholdings and
returns and report to the legislature by a certain date

ARTICLE 4 - FEDERAL
UPDATE

Conforming to various federal tax changes for individual income,
corporate franchise, estate tax and property tax refunds

ARTICLE 5 - SALES AND
USE TAXES

Modifying sourcing rules for modular and manufactured homes;
prohibiting political subdivisions from advertising, promoting, expending funds
or holding a referendum to support imposition of a local option sales tax;
authorizing the city of Duluth to increase the rate of tax on the sales of food
and beverages; authorizing the use of proceeds of the tax for a new arena at the
Duluth entertainment and convention center (DECC); authorizing Cook county to
extend the local sales tax upon voter approval at a special election held prior
to a certain date, requiring use of sales tax for county community center and
recreation area and Grand Marais pool and public library construction and
improvements, specifying a new taxing authority expiration and expenditure
limitation; authorizing county bond issuance without election, specifying bond
limit and debt limitation and tax levy computation exclusion for bonds;
authorizing and providing for the city of Proctor to impose by ordinance an
additional sales and use tax to be used for construction of and improvements to
city streets, public utilities, sidewalks, bikeways, trails and parks and
recreation and increasing the bonding authority of the city for the projects;
authorizing the city of Bemidji to extend the imposition of a sales and use tax
authority to finance certain authorized projects and to pay costs for the
construction of a regional event center; modifying the bond issuance and
termination of tax provisions; requiring approval by the city voters;
authorizing and providing for the city of Clearwater to by ordinance and with
voter approval 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; providing for termination of the taxes; authorizing and providing for
the city of North Mankato to by ordinance and with voter approval 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; providing for termination of
the taxes; authorizing and providing for 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; providing for termination of the taxes

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

Authorizing the
commissioner of revenue to determine the value of property subject to the estate
tax independently of the value for federal purposes; modifying the amount of
gasoline usage attributable to all terrain vehicle operation; modifying certain
duties of the commissioner of revenue relating to the disposition of cigarette
packages or tobacco products after judgment of forfeiture; exempting from the
insurance premiums tax certain life insurance premiums paid by state employees
group insurance program (SEGIP) members; extending the expiration date for the
authority of Hennepin and Ramsey counties to impose mortgage registry and deed
taxes; extending the Ramsey county
deed and mortgage tax; 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; 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; authorizing the county to issue bonds and resell
land at fair market value;
authorizing Anoka county to impose a deed and
mortgage tax, sunset provision; creating the Anoka county environmental response
fund, specifying uses for the fund; providing for matching funds, bonding and
land sales; requiring the commissioner of transportation (DOT) to provide
certain assistance; extending the temporary petrofund fee exemption for
Minnesota commercial airlines

ARTICLE 8 - ECONOMIC DEVELOPMENT

Providing for
additional border city enterprise and development zone allocations by the
commissioner of employment and economic development (DEED) to western border
cities for certain tax reductions; making certain technical and minor policy
modifications to tax increment financing (TIF) provisions; modifying TIF plans
to allow the authority to specify the first year it elects to receive the
increment; expanding the permitted uses for TIF districts in bioscience zones;
extending the duration limit for certain job opportunity building zones (JOBZ)
under certain conditions; requiring and providing for JOBZ notification and
approval of relocation conditions; authorizing the state auditor to request from
the commissioner of revenue tax return information of JOBZ recipient taxpayers;
authorizing the city of Brooklyn Center to expand the permitted use of a
redevelopment tax increment financing (TIF) district to include environmental
remediation and housing construction; providing for authority of the successor
to the Minneapolis community development agency relating to housing replacement
projects; increasing the number of city parcel designations for housing
replacement districts; designating a certain amount of money from a prior
appropriation to the commissioner of employment and economic development (DEED)
to be used by the commissioner for a study to determine the economic viability
of business plans for international economic development zones; authorizing the
city of Burnsville to create a certain TIF district subject to certain special
rules and limits; deeming Eyota as a small city for TIF purposes upon local
approval; authorizing and providing for the city of Fridley to create a TIF
district subject to certain special rules; authorizing the city of New Brighton
to expend increments generated from a certain tax increment financing district
to facilitate certain activities outside the district; repealing the definition
of qualified housing district and the distribution of certain Burnsville tax
increments

ARTICLE 9 - PUBLIC FINANCE

Providing terms and conditions relating
to the issuance of obligations and the financing of public improvements and
services; modifying certain collateral amount requirements for the deposit of
local public funds; extending the time for repayment of certain school district
certificates or notes for equipment purchases; extending the time for certain
publications of a public notice; modifying the definition of subordinate service
district and defining special services for towns; modifying certain requirements
for the establishment of a subordinate service districts by town boards and
specifying certain duties of town boards, authorizing the issuance of bonds and
certain covenants to secure obligations for subordinate service districts;
modifying county subordinate service districts provisions, authorizing the
issuance of bonds and certain covenants to secure obligations for subordinate
service districts; extending the time for repayment of Hennepin county equipment
acquisition capital notes, modifying the definition of equipment; clarifying the
authority of the Hennepin county housing and redevelopment authority within a
municipality; eliminating the expiration date for a home rule charter city and
city councils to issue capital notes for software; modifying the definition of
city for municipal gas distribution purposes; authorizing political subdivisions
with an actuarial liability to pay postemployment benefits to create a trust to
pay benefits; providing for a trust administrator; specifying account
maintenance and investment provisions; providing for a limit on deposit,
withdrawal of funds and termination of account and the status of the irrevocable
fund; authorizing counties and cities to borrow and issue bonds in anticipation
of receiving federal transportation grants; increasing the net debt limit of a
municipality; modifying certain conditions for street reconstruction financing
obligations; providing for postemployment trust validation; authorizing the town
of Crane Lake in St. Louis county to issue certificates of indebtedness for
property acquisition related to land exchange with the United States forest
service, requiring a tax levy to pay the principal and interest; authorizing the
city of Winsted to issue bonds to finance the acquisition and betterment of a
facility consisting of a city hall, community center and police station for park
improvements including trails and an amphitheater, related public improvements
and landscaping for the improvements

ARTICLE 10 - DEPARTMENT INCOME AND
FRANCHISE TAXES

Modifying the determination of debt under the revenue recapture
act; requiring birth dates to be included in income tax returns; modifying
withholding statement requirements by electronic means provisions; clarifying
regulated investment companies requirement to file reports with the commissioner
of revenue; prescribing penalties for partnership of S corporation filing with
an incorrect tax identification number; clarifying penalties for excessive
property tax refunds; requiring tax preparers identification numbers; clarifying
a work opportunity credit provision; modifying the bovine testing credit;
modifying the inflation adjustment for the dependent care credit and working
family credit; modifying the inflation adjustment for the alternative minimum
tax on preference items; modifying the definition of dependent for property tax
refund purposes; modifying the determination of estate tax; providing for
pollution control facilities amortization transition

ARTICLE 11 - DEPARTMENT
SALES AND USE TAXES

Modifying provisions relating to bad debt loss; providing
for the computation of interest for border city zone refunds; clarifying
provisions relating to the penalty for failure to properly complete sales and
use tax returns; prescribing a penalty for failure to report liquor sales;
including the furnishing of telecommunication services by a hotel, rooming
house, resort, campground or trailer camp under the definition of sale;
including pest control services in the definition of sale; including ring tones
in the definition of sale and clarifying the definition of telecommunication
services to include air to ground radio telephone services, mobile
telecommunication service, postpaid calling service, prepaid wireless calling
service and private communication services; providing for bundled transactions
as a retail sale, exception; clarifying the definition of delivery charges
relating to sales price; providing for sales price to include consideration
received by the seller from third parties under certain conditions; eliminating
prepaid calling cards from the definition of tangible personal property;
clarifying the definition of telecommunication services; defining bundled
transaction, ancillary services, conference bridging service, detailed
telecommunications billing service, directory assistance,
vertical service,
voice mail service, ring tone and fur clothing for sales tax
purposes; exempting
kidney dialysis equipment from the sales tax; clarifying the imposition of tax
on the use of personal tangible property for bundled transactions; clarifying
procedures for seller burden of proof liability for nontaxable retail sales;
clarifying the definition of prepaid calling service; defining prepaid wireless
calling service; providing for the sale on ancillary service to be sourced to
the customer place of primary use; including breast pumps in the definition of
baby products for sales tax exemption purposes; clarifying the business sales
tax exemption for advertising and packing materials and telecommunications,
cable television and direct satellite equipment; modifying exemption
requirements for materials consumed in agricultural production; authorizing an
entity containing both a hospital and nonprofit unit to claim sales tax
exemption under certain conditions; exempting private communication service for
the state lottery from the sales tax; modifying provisions relating to tax
exempt certificates; requiring liquor sellers to file an annual informational
report annually by a certain date; clarifying the definition of sales price for
interstate motor carriers as retailers; clarifying the sales tax on motor
vehicle exemption on vehicles purchased by dealers or lessors; requiring
furriers to file annual tax returns; repealing provisions relating to special
fur clothing tax, prepaid telephone cars, multiple points of use and property
brought into the state by nonresidents

ARTICLE 12 - DEPARTMENT PROPERTY
TAXES

Modifying provisions relating to the airline flight property tax;
modifying the
definition of flight property to include computers and software;
modifying the assessment of flight property; modifying airline company report
requirements; clarifying airflight property tax lien provisions; imposing a
penalty for failure of airline company to file annual report by the required
date; granting additional powers to the commissioner of revenue; modifying the
determination of tax capacity for flight property; modifying appeal procedures;
modifying provisions relating to the state board of assessors, modifying fees
and rule provisions; authorizing the commissioner of revenue to abate airline
company report filing penalties under certain conditions; requiring a business
to notify the county assessor in writing of eligibility for JOBZ property tax
exemption; modifying certificate of value filing requirements for married
persons not an owner of record; permitting cities and townships a certain period
of time from the date of incorporation to employ a licensed assessor; requiring
county or local assessing districts to assume the cost of training assessors;
modifying certain agricultural homestead property tax provisions; modifying
certain property tax classification provisions; modifying disparity reduction
credit provisions; modifying certain provisions relating to express, stage and
transportation companies and companies supplying electric power; modifying
certain provisions relating to the board of appeal and equalization; requiring
the commissioner of revenue to develop a handbook by a certain date detailing
procedures, responsibilities and requirements for county board of appeal
and
equalization; authorizing notice of proposed property taxes to be sent
in
electronic form or by electronic mail (e-mail) upon written request of the
taxpayer; requiring the commissioner of revenue to annually prescribe the
specific form and format of the advertisement for proposed property tax notice
requirements; modifying certain special taxing districts provisions; authorizing
counties to send tax statements by electronic means upon written request of the
real property owner; modifying procedures for partial payments of delinquent
taxes; modifying qualifying homesteads under the senior citizens property tax
deferral program; modifying certain provisions under the sustainable resource
management incentive program, providing for appeals; repealing certain
provisions relating to examinations and investigations and the board of
assessors

ARTICLE 13 - DEPARTMENT SPECIAL TAXES

Modifying joint underwriting
associations deficit assessments; clarifying a premium tax provision under
reciprocals or interinsurance contract exchange provisions; clarifying a
provision relating to mortgage registry and deed tax exemptions; setting the
deed tax for a conveyance of tax-forfeited lands to a governmental subdivision
for authorized public uses or for redevelopment purposes; clarifying certain
gross revenue and gross receipts taxes provisions relating to pharmacies;
reducing the threshold for nonapplicability of tobacco products use tax to
individuals; requiring and providing for consumer use tax on cigarettes under
certain conditions; modifying the exemption provisions for the surcharge on fire
safety premiums; modifying the joint underwriting association offset provision,
clarifying the estimated tax provision for insurance taxes

ARTICLE 14 -
DEPARTMENT MISCELLANEOUS

Requiring referring agencies to refer debts
electronically to the commissioner of revenue for collection; modifying
computation of debt; prohibiting tax refunds or other payments payable by the
commissioner of revenue to a taxpayer from being assignable, subject to
execution, levy, attachment, garnishment, lien foreclosure or other legal
process except as provided by law; expanding the requirement for the
commissioner to publish lists of convicted tax preparers to include tax
preparers assessed penalties exceeding a certain amount; providing for a notice
of lien filed with the office of secretary of state to be transcribed to any
county for a certain period of time; modifying provisions relating to the state
reimbursement for volunteer firefighters retirement supplemental benefit
payments

ARTICLE 15 - MISCELLANEOUS

Modifying commissioner of finance impact
notes provisions; modifying
carryforward provisions; authorizing the
commissioner of revenue to disclose to the commissioner of finance returns or
return information necessary in order to prepare a revenue forecast; requiring
expenditure estimates to include an allowance for inflation; eliminating a
reporting requirement for the commissioner of revenue relating to local
government units exceeding established revenue targets; regulating and
increasing the state budget reserve; modifying priorities for additional
revenues in general fund forecasts and transferring a certain amount to the
budget reserve account; creating a tax volatility reduction account; removing
the rebate for registration filing fees above the statutory cap; modifying the
definition of claimant agency under the revenue recapture act to include cities
for collections purposes; prioritizing claims brought by hospital or ambulance
service; requiring the commissioner of revenue to maintain a toll free telephone
access service for taxpayer assistance for calls within the state; requiring the
commissioner of revenue to complete the process of making grants to nonprofit
organizations to provide taxpayers assistance services by a certain date;
establishing a runway safety and airport zoning advisory task force to study and
make recommendations regarding best practices for safety implications of airport
zoning at the Minneapolis-St. Paul international airport and other airports
operated by the metropolitan airports commission (MAC), specifying membership;
requiring a report to the legislature by a certain date; providing for expenses;
sunset provision; appropriating money to the legislative coordinating commission
(LCC) for administrative expenses and
other costs; requiring the commissioner of
revenue to maintain certain data for the legislature; requiring the commissioner
of finance to designate any positive general fund balance and an unrestricted
balance; appropriating money to the commissioner of revenue for the fiscal
disparities study, 1099 reporting requirements, sales tax report, data update
and to the commissioner of employment and economic development (DEED) for a
grant to the city of Austin to assist in the payment of costs related to the
construction of a bioscience research facility; appropriating money to the
commissioner of employment and economic development (DEED) for a grant to the
city of St. Paul to pay, redeem or defease the debt service costs incurred for
the River Centre campus; repealing certain rebate requirements
(ra)