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Minnesota Legislature

Office of the Revisor of Statutes

HF 1

as introduced - 89th Legislature (2015 - 2016) Posted on 01/12/2015 03:25pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to economic development; jobs creation; modifying permitting efficiency
goals; rulemaking reform; allowing a subtraction for certain active business
income of pass-through entities; increasing the rate of and providing for limited
refundability of the research credit; adopting the Minnesota New Markets
Jobs Act; providing capital for business growth in economically distressed
communities; workforce housing; providing for a workforce housing grant
program; providing for additions to taxable income; providing a credit for
contributions to land trusts; promoting the creation of land trusts; providing
a credit for new STEM and long-term care employees; depositing revenue
from certain agency penalties in the general fund instead of dedicated funds;
eliminating statutory appropriations of penalty revenue to agencies; creating
a small business compliance assistance grant program; imposing penalties;
appropriating money;amending Minnesota Statutes 2014, sections 3.842,
subdivision 4a; 14.02, by adding a subdivision; 14.05, subdivision 1, by adding a
subdivision; 14.116; 14.131; 14.19; 14.388, subdivision 2; 14.389, subdivision 2;
16A.1285, by adding a subdivision; 17.102, subdivisions 4, 4a; 17A.11; 18B.05;
18C.131; 18D.323; 18G.10, subdivision 2; 18H.17; 18J.09; 21.115; 21.92; 25.39,
subdivision 4; 27.041, subdivision 3; 32.21, subdivision 4; 34.07; 62J.536,
subdivision 2b; 84.027, subdivision 14a; 116.03, subdivision 2b; 116J.66;
169.685, subdivisions 5, 7; 169.871, subdivision 5; 169.999, subdivision 5;
174.30, subdivision 8; 174.315, subdivision 3; 221.036, subdivision 14; 221.84,
subdivision 3; 239.785, subdivision 6; 290.01, subdivisions 19a, 19b, 19c;
290.068, subdivisions 1, 3, 6a; 290.091, subdivision 2; 297F.21, subdivision 3;
297G.20, subdivision 4; 341.321; proposing coding for new law in Minnesota
Statutes, chapters 116J; 290; proposing coding for new law as Minnesota
Statutes, chapter 116X; repealing Minnesota Statutes 2014, section 14.127.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

ENVIRONMENTAL PERMITTING EFFICIENCY

Section 1.

Minnesota Statutes 2014, section 84.027, subdivision 14a, is amended to read:


Subd. 14a.

Permitting efficiency.

(a) It is the goal of the state that environmental
and resource management permits be issued or denied within deleted text begin90deleted text endnew text begin 45new text end days for Tier 1
permits or 150 days for Tier 2 permits following submission of a permit application.
The commissioner of natural resources shall establish management systems designed
to achieve the goal.

(b) The commissioner shall prepare an annual permitting efficiency report that
includes statistics on meeting the goal in paragraph (a) and the criteria for Tier 1 and Tier
2 by permit categories. The report is due August 1 each year. For permit applications
that have not met the goal, the report must state the reasons for not meeting the goal. In
stating the reasons for not meeting the goal, the commissioner shall separately identify
delays caused by the responsiveness of the proposer, lack of staff, scientific or technical
disagreements, or the level of public engagement. The report must specify the number
of days from initial submission of the application to the day of determination that the
application is complete. The report must aggregate the data for the year and assess
whether program or system changes are necessary to achieve the goal. The report must
be posted on the department's Web site and submitted to the governor and the chairs and
ranking minority members of the house of representatives and senate committees having
jurisdiction over natural resources policy and finance.

(c) The commissioner shall allow electronic submission of environmental review
and permit documents to the department.

(d) Beginning July 1, 2011, within 30 business days of application for a permit
subject to paragraph (a), the commissioner of natural resources shall notify the
project proposer, in writing, whether the application is complete or incomplete. If the
commissioner determines that an application is incomplete, the notice to the applicant must
enumerate all deficiencies, citing specific provisions of the applicable rules and statutes,
and advise the applicant on how the deficiencies can be remedied. If the commissioner
determines that the application is complete, the notice must confirm the application's Tier
1 or Tier 2 permit status. This paragraph does not apply to an application for a permit that
is subject to a grant or loan agreement under chapter 446A.

Sec. 2.

Minnesota Statutes 2014, section 116.03, subdivision 2b, is amended to read:


Subd. 2b.

Permitting efficiency.

(a) It is the goal of the state that environmental
and resource management permits be issued or denied within deleted text begin90deleted text endnew text begin 45new text end days for Tier 1
permits or 150 days for Tier 2 permits following submission of a permit application.
The commissioner of the Pollution Control Agency shall establish management systems
designed to achieve the goal. For the purposes of this section, "Tier 1 permits" are permits
that do not require individualized actions or public comment periods, and "Tier 2 permits"
are permits that require individualized actions or public comment periods.

(b) The commissioner shall prepare an annual permitting efficiency report that
includes statistics on meeting the goal in paragraph (a) and the criteria for Tier 1 and Tier
2 by permit categories. The report is due August 1 each year. For permit applications
that have not met the goal, the report must state the reasons for not meeting the goal. In
stating the reasons for not meeting the goal, the commissioner shall separately identify
delays caused by the responsiveness of the proposer, lack of staff, scientific or technical
disagreements, or the level of public engagement. The report must specify the number
of days from initial submission of the application to the day of determination that the
application is complete. The report must aggregate the data for the year and assess
whether program or system changes are necessary to achieve the goal. The report must
be posted on the agency's Web site and submitted to the governor and the chairs and
ranking minority members of the house of representatives and senate committees having
jurisdiction over environment policy and finance.

(c) The commissioner shall allow electronic submission of environmental review
and permit documents to the agency.

(d) Beginning July 1, 2011, within 30 business days of application for a permit
subject to paragraph (a), the commissioner of the Pollution Control Agency shall notify
the project proposer, in writing, whether the application is complete or incomplete. If the
commissioner determines that an application is incomplete, the notice to the applicant must
enumerate all deficiencies, citing specific provisions of the applicable rules and statutes,
and advise the applicant on how the deficiencies can be remedied. If the commissioner
determines that the application is complete, the notice must confirm the application's Tier
1 or Tier 2 permit status. This paragraph does not apply to an application for a permit that
is subject to a grant or loan agreement under chapter 446A.

(e) For purposes of this subdivision, "permit professional" means an individual not
employed by the Pollution Control Agency who:

(1) has a professional license issued by the state of Minnesota in the subject area
of the permit;

(2) has at least ten years of experience in the subject area of the permit; and

(3) abides by the duty of candor applicable to employees of the Pollution Control
Agency under agency rules and complies with all applicable requirements under chapter
326.

(f) Upon the agency's request, an applicant relying on a permit professional must
participate in a meeting with the agency before submitting an application:

(1) at least two weeks prior to the preapplication meeting, the applicant must submit
at least the following:

(i) project description, including, but not limited to, scope of work, primary
emissions points, discharge outfalls, and water intake points;

(ii) location of the project, including county, municipality, and location on the site;

(iii) business schedule for project completion; and

(iv) other information requested by the agency at least four weeks prior to the
scheduled meeting; and

(2) during the preapplication meeting, the agency shall provide for the applicant at
least the following:

(i) an overview of the permit review program;

(ii) a determination of which specific application or applications will be necessary
to complete the project;

(iii) a statement notifying the applicant if the specific permit being sought requires a
mandatory public hearing or comment period;

(iv) a review of the timetable established in the permit review program for the
specific permit being sought; and

(v) a determination of what information must be included in the application,
including a description of any required modeling or testing.

(g) The applicant may select a permit professional to undertake the preparation
of the permit application and draft permit.

(h) If a preapplication meeting was held, the agency shall, within seven business
days of receipt of an application, notify the applicant and submitting permit professional
that the application is complete or is denied, specifying the deficiencies of the application.

(i) Upon receipt of notice that the application is complete, the permit professional
shall submit to the agency a timetable for submitting a draft permit. The permit
professional shall submit a draft permit on or before the date provided in the timetable.
Within 60 days after the close of the public comment period, the commissioner shall notify
the applicant whether the permit can be issued.

(j) Nothing in this section shall be construed to modify:

(1) any requirement of law that is necessary to retain federal delegation to or
assumption by the state; or

(2) the authority to implement a federal law or program.

(k) The permit application and draft permit shall identify or include as an appendix
all studies and other sources of information used to substantiate the analysis contained in
the permit application and draft permit. The commissioner shall request additional studies,
if needed, and the project proposer shall submit all additional studies and information
necessary for the commissioner to perform the commissioner's responsibility to review,
modify, and determine the completeness of the application and approve the draft permit.

ARTICLE 2

RULEMAKING REFORM

Section 1.

Minnesota Statutes 2014, section 3.842, subdivision 4a, is amended to read:


Subd. 4a.

Objections to rulesnew text begin or proposed rulesnew text end.

(a) deleted text beginFor purposes of this
subdivision, "committee" means the house of representatives policy committee or senate
policy committee with primary jurisdiction over state governmental operations.
deleted text end The
commission deleted text beginor a committeedeleted text end may object to a rulenew text begin or proposed rulenew text end as provided in this
subdivisiondeleted text begin. If the commission or a committee objects to all or some portion of a rule
because the commission or committee considers it to be
deleted text endnew text begin on the grounds that the rule or
proposed rule: (1) is
new text end beyond the procedural or substantive authority delegated to the
agencydeleted text begin, including a proposed rule submitted under section 14.15, subdivision 4, or 14.26,
subdivision 3
, paragraph (c)
deleted text endnew text begin; or (2) is inconsistent with the enabling statute; is unnecessary
or redundant; has a substantial economic impact as defined in section 14.02, subdivision
5; is not based on sound, reasonably available scientific, technical, economic, or other
information; is not cost effective; is unduly burdensome; or is more restrictive than the
standard, limitation, or requirement imposed by federal law or rule pertaining to the same
subject matter. If the commission objects to all or some portion of a rule or proposed rule
new text end,
the commission deleted text beginor committee maydeleted text endnew text begin shallnew text end file that objection in the Office of the Secretary
of State. The filed objection must contain a concise statement of the commission's deleted text beginor
committee's
deleted text end reasons for its action. deleted text beginAn objection to a proposed rule submitted by the
commission or a committee under section 14.15, subdivision 4, or 14.26, subdivision 3,
paragraph (c), may not be filed before the rule is adopted
deleted text endnew text begin For a proposed rule, the objection
must be filed within 30 days of receipt of the notice under section 14.116, 14.388, or 14.389
new text end.

(b) The secretary of state shall affix to each objection a certification of the date and
time of its filing and as soon after the objection is filed as practicable shallnew text begin electronicallynew text end
transmit a deleted text begincertifieddeleted text end copy of it to the agency issuing the rule in question and to the revisor
of statutes. The secretary of state shall also maintain a permanent register open to public
inspection of all objections by the commission deleted text beginor committeedeleted text end.

(c) The commission deleted text beginor committeedeleted text end shall publish and index an objection filed under
this section in the next issue of the State Register. The revisor of statutes shall indicate
the existence of the objection adjacent to the rule in question when that rule is published
in Minnesota Rules.

(d) Within 14 days after the filing of an objection by the commission deleted text beginor committeedeleted text end to
a rulenew text begin or proposed rulenew text end, the issuing agency shall respond in writing to the objecting entity.
After receipt of the response, the commission deleted text beginor committeedeleted text end may withdraw or modify its
objection.new text begin After the filing of an objection that is not subsequently withdrawn, the agency
may not adopt the rule until the legislature adjourns sine die. If the commission files an
objection that is not subsequently withdrawn, the commission must, as soon as practical,
make a recommendation on a bill that approves the proposed rule, prohibits adoption of
the proposed rule, or amends or repeals the law governing a previously adopted rule
for which an objection was filed.
new text end

(e) After the filing of an objection by the commission deleted text beginor committeedeleted text end that is not
subsequently withdrawn, the burden is upon the agency in any proceeding for judicial
review or for enforcement of the rule to establishnew text begin by clear and convincing evidencenew text end that
the whole or portion of the rule objected to is validnew text begin and demonstrates that the objection
raised under paragraph (a) is not justified, based on the criteria for objecting to a rule
under paragraph (a)
new text end.

(f) The failure of the commission deleted text beginor a committeedeleted text end to object to a rule is not an implied
legislative authorization of its validity.

(g) In accordance with sections 14.44 and 14.45, the commission deleted text beginor a committeedeleted text end
may petition for a declaratory judgment to determine the validity of a rule objected to
by the commission deleted text beginor committeedeleted text end. The action must be started within two years after an
objection is filed in the Office of the Secretary of State.

(h) The commission deleted text beginor a committeedeleted text end may intervene in litigation arising from agency
action. For purposes of this paragraph, agency action means the whole or part of a rule, or
the failure to issue a rule.

Sec. 2.

Minnesota Statutes 2014, section 14.02, is amended by adding a subdivision to
read:


new text begin Subd. 5. new text end

new text begin Substantial economic impact. new text end

new text begin A rule has a "substantial economic impact"
if the rule would result in, or likely result in:
new text end

new text begin (1) an adverse effect or impact on the private-sector economy of the state of
Minnesota of $1,000,000 or more in a single year;
new text end

new text begin (2) a significant increase in costs or prices for consumers, individual private-sector
industries, state agencies, local governments, individuals, or private-sector enterprises
within certain geographic regions inside the state of Minnesota;
new text end

new text begin (3) significant adverse impacts on the competitiveness of private-sector
Minnesota-based enterprises, or on private-sector employment, investment, productivity,
or innovation within the state of Minnesota; or
new text end

new text begin (4) compliance costs, in the first year after the rule takes effect, of more than $25,000
for any one business that has less than 50 full-time employees, or for any one statutory or
home rule charter city that has less than ten full-time employees.
new text end

Sec. 3.

Minnesota Statutes 2014, section 14.05, subdivision 1, is amended to read:


Subdivision 1.

Authority to adopt original rules restricted.

new text begin(a) new text endEach agency shall
adopt, amend, suspend, or repeal its rulesnew text begin: (1)new text end in accordance with the procedures specified
in sections 14.001 to 14.69deleted text begin, anddeleted text endnew text begin; (2)new text end only pursuant to authority new text begin expressly new text enddelegated by new text begin
state or federal
new text endlawnew text begin; (3) only as necessary to serve the public interest;new text end andnew text begin (4) new text end in full
compliance with its duties and obligations.

new text begin (b)new text end If a law authorizing rules is repealed, the rules adopted pursuant to that law are
automatically repealed on the effective date of the law's repeal unless there is another
law authorizing the rules.

new text begin (c)new text end Except as provided in section 14.06, sections 14.001 to 14.69 shall not be
authority for an agency to adopt, amend, suspend, or repeal rules.

Sec. 4.

Minnesota Statutes 2014, section 14.05, is amended by adding a subdivision to
read:


new text begin Subd. 1a. new text end

new text begin Limitation regarding certain policies, guidelines, and other
nonbinding interpretive statements.
new text end

new text begin An agency shall not seek to implement or enforce
against any person a policy, guideline, or other nonbinding interpretive statement that
meets the definition of a rule under this chapter if the policy, guideline, or other nonbinding
interpretive statement has not been adopted as a rule in accordance with this chapter.
new text end

Sec. 5.

Minnesota Statutes 2014, section 14.116, is amended to read:


14.116 NOTICE TO LEGISLATURE.

(a) By January 15 each year, each agency must submit its rulemaking docket
maintained under section 14.366, and the official rulemaking record required under section
14.365 for any rule adopted during the preceding calendar year, to the chairs and ranking
minority members of the legislative policy and budget committees with jurisdiction over
the subject matter of the proposed rulenew text begin and to the Legislative Coordinating Commissionnew text end.

(b) When an agency mails notice of intent to adopt rules under section 14.14 or
14.22, the agency must send a copy of the same notice and a copy of the statement of need
and reasonableness to the chairs and ranking minority party members of the legislative
policy and budget committees with jurisdiction over the subject matter of the proposed
rules and to the Legislative Coordinating Commission.

(c) In addition, if the mailing of the notice is within two years of the effective date
of the law granting the agency authority to adopt the proposed rules, the agency shall
make reasonable efforts to send a copy of the notice and the statement to all sitting
legislators who were chief house of representatives and senate authors of the bill granting
the rulemaking authority. If the bill was amended to include this rulemaking authority,
the agency shall make reasonable efforts to send the notice and the statement to the chief
house of representatives and senate authors of the amendment granting rulemaking
authority, rather than to the chief authors of the bill.

Sec. 6.

Minnesota Statutes 2014, section 14.131, is amended to read:


14.131 STATEMENT OF NEED AND REASONABLENESS.

By the date of the section 14.14, subdivision 1a, notice, the agency must
prepare, review, and make available for public review a statement of the need for and
reasonableness of the rule. The statement of need and reasonableness must be prepared
under rules adopted by the chief administrative law judge and must include the following
to the extent the agency, through reasonable effort, can ascertain this information:

(1) a description of the classes of persons who probably will be affected by the
proposed rule, including classes that will bear the costs of the proposed rule and classes
that will benefit from the proposed rule;

(2) the probable costs to the agency and to any other agency of the implementation
and enforcement of the proposed rule and any anticipated effect on state revenues;

(3) a determination of whether there are less costly methods or less intrusive
methods for achieving the purpose of the proposed rule;

(4) a description of any alternative methods for achieving the purpose of the
proposed rule that were seriously considered by the agency and the reasons why they
were rejected in favor of the proposed rule;

(5) the probable costs of complying with the proposed rule, including the portion
of the total costs that will be borne by identifiable categories of affected parties, such as
separate classes of governmental units, businesses, or individuals;

(6) the probable costs or consequences of not adopting the proposed rule, including
those costs or consequences borne by identifiable categories of affected parties, such as
separate classes of government units, businesses, or individuals;

(7) an assessment of any differences between the proposed rule and existing federal
regulations and a specific analysis of the need for and reasonableness of each difference; and

(8) an assessment of the cumulative effect of deleted text beginthe rule with other federal and state
regulations related to the specific purpose of the rule
deleted text endnew text begin all rules adopted by the agency or
any other agency, and all federal regulations and local ordinances or regulations, related to
the specific purpose for which the rule is being adopted; and
new text end

new text begin (9) the agency's findings and conclusions that support its determination that the
proposed rule does not have a substantial economic impact
new text end.

The statement must describe how the agency, in developing the rules, considered
and implemented the legislative policy supporting performance-based regulatory systems
set forth in section 14.002new text begin in a cost-effective and timely mannernew text end.

For purposes of clause (8), "cumulative effect" means the impact that results from
incremental impact of the proposed rule in addition to other rules, regardless of what
state or federal agency has adopted the other rules. Cumulative effects can result from
individually minor but collectively significant rules adopted over a period of time.

new text begin The statement must describe, with reasonable particularity, the scientific, technical,
and economic information that supports the proposed rule.
new text end

The statement must also describe the agency's efforts to provide additional
notification under section 14.14, subdivision 1a, to persons or classes of persons who may
be affected by the proposed rule or must explain why these efforts were not made.

The agency must consult with the commissioner of management and budget to
help evaluate the fiscal impact and fiscal benefits of the proposed rule on units of local
government. The agency must send a copy of the statement of need and reasonableness
to the Legislative Reference Library when the notice of hearing is mailed under section
14.14, subdivision 1a.

Sec. 7.

Minnesota Statutes 2014, section 14.19, is amended to read:


14.19 DEADLINE TO COMPLETE RULEMAKING.

Within 180 days after issuance of the administrative law judge's report or that of the
chief administrative law judge, the agency shall submit its notice of adoption, amendment,
or repeal to the State Register for publication. If the agency has not submitted its notice to
the State Register within 180 days, the rule is automatically withdrawn. The agency may
not adopt the withdrawn rules without again following the procedures of sections 14.05
to 14.28, with the exception of section 14.101, if the noncompliance is approved by the
chief administrative law judge. The agency shall report to the Legislative Coordinating
Commission, other appropriate committees of the legislature, and the governor its failure
to adopt rules and the reasons for that failure. The 180-day time limit of this section
does not include:

(1) any days used for review by the chief administrative law judge or the commission
if the review is required by law;new text begin or
new text end

(2) days during which the rule cannot be adopted, because of votes by legislative
committees under section 14.126deleted text begin; or (3) days during which the rule cannot be adopted
because approval of the legislature is required under section 14.127
deleted text end.

Sec. 8.

Minnesota Statutes 2014, section 14.388, subdivision 2, is amended to read:


Subd. 2.

Notice.

An agency proposing to adopt, amend, or repeal a rule under this
section must givenew text begin notice to the chairs and ranking minority members of the legislative
policy and budget committees with jurisdiction over the subject matter of the proposed
rules and to the Legislative Coordinating Commission, must give
new text end electronic notice of its
intent in accordance with section 16E.07, subdivision 3, and new text beginmust give new text endnotice by United
States mail or electronic mail to persons who have registered their names with the agency
under section 14.14, subdivision 1a. The notice must be given no later than the date the
agency submits the proposed rule to the Office of Administrative Hearings for review
of its legality and must include:

(1) the proposed rule, amendment, or repeal;

(2) an explanation of why the rule meets the requirements of the good cause
exemption under subdivision 1; and

(3) a statement that interested parties have five business days after the date of the
notice to submit comments to the Office of Administrative Hearings.

Sec. 9.

Minnesota Statutes 2014, section 14.389, subdivision 2, is amended to read:


Subd. 2.

Notice and comment.

The agency must publish notice of the proposed
rule in the State Register deleted text beginanddeleted text endnew text begin,new text end must mail the notice by United States mail or electronic
mail to persons who have registered with the agency to receive mailed noticesnew text begin, and must
give notice to the chairs and ranking minority members of the legislative policy and
budget committees with jurisdiction over the subject matter of the proposed rules and to
the Legislative Coordinating Commission
new text end. The mailed notice new text beginand the notice to legislators
new text endmust include either a copy of the proposed rule or a description of the nature and effect
of the proposed rule and a statement that a free copy is available from the agency upon
request. The notice in the State Register must include the proposed rule or the amended
rule in the form required by the revisor under section 14.07, an easily readable and
understandable summary of the overall nature and effect of the proposed rule, and a
citation to the most specific statutory authority for the rule, including authority for the
rule to be adopted under the process in this section. The agency must allow 30 days after
publication in the State Register for comment on the rule.

Sec. 10. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2014, section 14.127, new text end new text begin is repealed.
new text end

ARTICLE 3

TAX PROVISIONS

Section 1.

new text begin [116X.01] TITLE.
new text end

new text begin This chapter is titled and may be cited as the "Minnesota New Markets Jobs Act."
new text end

Sec. 2.

new text begin [116X.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of this chapter, the terms defined in this
section have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Affiliate. new text end

new text begin (a) For the purposes of subdivision 10, the term "affiliate"
includes:
new text end

new text begin (1) any entity, without regard to whether the entity is a qualified community
development entity under subdivision 10, that is the initial holder, either directly or
through one or more special purpose entities, of a qualified equity investment in the
qualified community development entity; and
new text end

new text begin (2) any entity, without regard to whether the entity is a qualified community
development entity under subdivision 10, that provides insurance or any other form of
guaranty to the ultimate recipient of tax credits under section 116X.03 with respect to a
recapture or forfeiture of tax credits under section 116X.06, either directly or through the
guaranty of any other economic benefit that is paid in lieu of the tax credits allowable
under section 116X.03.
new text end

new text begin (b) The determination of whether an entity is an affiliate must be made by taking
into account all relevant facts and circumstances, including the description of the proposed
amount, structure, and initial purchaser of the qualified equity investment required by
section 116X.05, subdivision 1, clause (4), and the determination assumes that the
information provided pursuant to section 116X.05, subdivision 1, clause (4), is true and
complete as of the date an application is submitted pursuant to section 116X.05.
new text end

new text begin Subd. 3. new text end

new text begin Applicable percentage. new text end

new text begin "Applicable percentage" means zero percent
for the first two credit allowance dates, eight percent for the third through sixth credit
allowance dates, and seven percent for the seventh credit allowance date.
new text end

new text begin Subd. 4. new text end

new text begin Code. new text end

new text begin "Code" or "the Code" means the Internal Revenue Code of 1986 as
amended through the date in section 290.01, subdivision 19.
new text end

new text begin Subd. 5. new text end

new text begin Credit allowance date. new text end

new text begin "Credit allowance date" means with respect to
any qualified equity investment:
new text end

new text begin (1) the date on which the investment is initially made; and
new text end

new text begin (2) each of the six anniversary dates of that date thereafter.
new text end

new text begin Subd. 6. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Employment and
Economic Development.
new text end

new text begin Subd. 7. new text end

new text begin Long-term debt security. new text end

new text begin "Long-term debt security" means any debt
instrument issued by a qualified community development entity at par value with an
original maturity date of at least seven years from the date of its issuance, with no
acceleration of repayment, amortization, or prepayment features prior to its original
maturity date. The qualified community development entity that issues the debt instrument
must not make cash interest payments on the debt instrument during the period beginning
on the date of issuance and ending on the final credit allowance date in an amount that
exceeds the cumulative operating income, as defined by regulations adopted under section
45D of the Code of the qualified community development entity for that period prior to
giving effect to the expense of the cash interest payments. This subdivision does not limit
the holder's ability to accelerate payments on the debt instrument in situations where the
issuer has defaulted on covenants designed to ensure compliance with this section or
section 45D of the Code.
new text end

new text begin Subd. 8. new text end

new text begin Purchase price. new text end

new text begin "Purchase price" means the amount paid to the issuer of a
qualified equity investment for such qualified equity investment.
new text end

new text begin Subd. 9. new text end

new text begin Qualified active low-income community business. new text end

new text begin (a) "Qualified active
low-income community business" means a business as defined in section 45D of the
Code and Code of Federal Regulations, title 26, section 1.45D-1, and that is engaged
primarily in a qualified high-technology field, as defined in section 116J.8737, subdivision
2, paragraph (g), clause (1), manufacturing, mining, or forestry. A business is considered
a qualified active low-income community business for the duration of the qualified
community development entity's investment in, or loan to, the business if the entity
reasonably expects, at the time it makes the investment or loan, that the business will
continue to satisfy the requirements for being a qualified active low-income community
business, throughout the entire period of the investment or loan.
new text end

new text begin (b) Qualified active low-income community business excludes any business that
derives or projects to derive 15 percent or more of its annual revenue from activities
described in section 116J.8737, subdivision 2, paragraph (c), clause (4).
new text end

new text begin Subd. 10. new text end

new text begin Qualified community development entity. new text end

new text begin (a) "Qualified community
development entity" has the meaning given in section 45D of the Code, provided that the
entity has entered into, for the current year or any prior year, an allocation agreement with
the Community Development Financial Institutions Fund of the United States Department
of the Treasury with respect to credits authorized by section 45D of the Code, which
includes Minnesota within the service area set forth in the allocation agreement. The
term includes subsidiary community development entities or affiliates of any qualified
community development entity, all of which are treated as a single applicant for purposes
of section 116X.05.
new text end

new text begin (b) Qualified community development entity excludes any regulated financial
institution that is subject to the Community Reinvestment Act of 1977, United States
Code, title 12, chapter 30, or any subsidiary or affiliate of a regulated financial institution.
new text end

new text begin (c) Paragraph (b) does not apply to a regulated financial institution, or its subsidiary or
affiliate, if the regulated financial institution is chartered by, or headquartered in, Minnesota
and the regulated financial institution otherwise meets the requirements of paragraph (a).
new text end

new text begin Subd. 11. new text end

new text begin Qualified equity investment. new text end

new text begin (a) "Qualified equity investment" means
any equity investment in, or long-term debt security issued by, a qualified community
development entity that:
new text end

new text begin (1) is acquired after January 1, 2016, at its original issuance solely in exchange
for cash;
new text end

new text begin (2) has at least 100 percent of its cash purchase price used by the issuer to make
qualified low-income community investments in qualified active low-income community
businesses located in this state by the first anniversary of the initial credit allowance
date; and
new text end

new text begin (3) is designated by the issuer as a qualified equity investment under this subdivision
and is certified by the department as not exceeding the limitation contained in section
116X.05, subdivision 4.
new text end

new text begin (b) Notwithstanding the restrictions on transferability contained in section 116X.04,
this term includes any qualified equity investment that does not meet the provisions of
paragraph (a) if the investment:
new text end

new text begin (1) is transferred to a subsequent holder; and
new text end

new text begin (2) was a qualified equity investment in the hands of any prior holder.
new text end

new text begin (c) Qualified entity investment does not include:
new text end

new text begin (1) any investment that entitles the holder to claim tax credits under section 45D
of the Code; or
new text end

new text begin (2) any investment, the proceeds of which are used to make debt or equity
investments in, directly or indirectly, any other qualified community development entity.
new text end

new text begin Subd. 12. new text end

new text begin Qualified low-income community investment. new text end

new text begin "Qualified low-income
community investment" means any capital or equity investment in, or loan to, any
qualified active low-income community business. With respect to any one qualified
active low-income community business, the maximum amount of qualified low-income
community investments that may be made in the business, on a collective basis with
all of its affiliates, with the proceeds of qualified equity investments that have been
certified under section 116X.05 is $10,000,000 whether made by one or several qualified
community development entities.
new text end

new text begin Subd. 13. new text end

new text begin Refundable performance fee. new text end

new text begin "Refundable performance fee" means a
fee that a qualified community development entity seeking to have an equity investment or
long-term debt security designated as a qualified equity investment and eligible for tax
credits under section 116X.05 must pay to the department as assurance of compliance
with certain requirements of this chapter. The amount of the fee equals one-half of one
percent of the amount of the equity investment or long-term debt security requested to be
designated as a qualified equity investment, up to a maximum performance fee of $500,000.
new text end

new text begin Subd. 14. new text end

new text begin State premium tax liability. new text end

new text begin "State premium tax liability" means any
liability incurred by any entity under chapter 297I.
new text end

Sec. 3.

new text begin [116X.03] CREDIT ESTABLISHED.
new text end

new text begin (a) Any entity that makes a qualified equity investment earns a vested right to credit
against the entity's state premium tax liability on a premium tax report filed under this
section that may be utilized as described in paragraphs (b) to (e).
new text end

new text begin (b) On each credit allowance date of the qualified equity investment, the entity, or
subsequent holder of the qualified equity investment, is entitled to utilize a portion of the
credit during the taxable year, including the credit allowance date.
new text end

new text begin (c) The credit amount equals the applicable percentage for the credit allowance date
multiplied by the purchase price paid to the issuer of the qualified equity investment.
new text end

new text begin (d) The amount of the credit claimed by an entity must not exceed the amount of the
entity's state premium tax liability for the tax year for which the credit is claimed. Any
amount of tax credit that the entity is prohibited from claiming in a taxable year as a result
of this chapter may be carried forward for use in any subsequent taxable year.
new text end

new text begin (e) An entity claiming a credit under this chapter is not required to pay any additional
retaliatory tax levied under section 297I.05 as a result of claiming that credit. In addition,
it is the intent of this section that an entity claiming a credit under this chapter is not
required to pay any additional tax that may arise as a result of claiming that credit.
new text end

Sec. 4.

new text begin [116X.04] TRANSFERABILITY.
new text end

new text begin No tax credit claimed under this chapter is refundable or saleable on the open
market. However, a participating investor may transfer credits to an affiliated insurance
company, if it notifies the department in writing. Tax credits earned by a partnership,
limited liability company, S corporation, or other "pass-through" entity may be allocated
to the partners, members, or shareholders of the entity for their direct use in accordance
with the provisions of any agreement among those partners, members, or shareholders.
Any allocation of tax credits made to a partner, member, or shareholder in accordance
with this section is not considered a sale of such tax credits for purposes of this chapter.
new text end

Sec. 5.

new text begin [116X.05] CERTIFICATION OF QUALIFIED EQUITY INVESTMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin A qualified community development entity that seeks
to have an equity investment or long-term debt security designated as a qualified equity
investment and eligible for tax credits under this chapter may apply to the department on
or after January 1, 2017. The application must include the following:
new text end

new text begin (1) evidence of the applicant's certification as a qualified community development
entity, including evidence of the service area of the entity that includes Minnesota;
new text end

new text begin (2) a copy of the allocation agreement executed by the applicant, or its controlling
entity, and the Community Development Financial Institutions Fund under section
116X.02, subdivision 10;
new text end

new text begin (3) a certificate executed by an executive officer of the applicant attesting that the
allocation agreement remains in effect and has not been revoked or canceled by the
Community Development Financial Institutions Fund;
new text end

new text begin (4) a description of the proposed amount, structure, and initial purchaser of the
qualified equity investment;
new text end

new text begin (5) the minimum amount of the qualified equity investment the qualified community
development entity is willing to accept if the amount proposed to be certified under clause
(4) is less than the applicant's proposed amount of qualified equity investment;
new text end

new text begin (6) a plan describing the proposed investment of the proceeds of the qualified equity
investment, including the types of qualified active low-income community businesses in
which the applicant expects to invest. Applicants are not required to identify qualified
active low-income community businesses in which they will invest when submitting
an application;
new text end

new text begin (7) a nonrefundable application fee of $5,000. This fee must be paid to the
department and is required for each application submitted; and
new text end

new text begin (8) the refundable performance fee required by section 116X.08.
new text end

new text begin Subd. 2. new text end

new text begin Consideration of application. new text end

new text begin Within 30 days after receipt of a completed
application containing the information in subdivision 1, including the payment of the
application fee and the refundable performance fee, the department shall grant or deny the
application in full or in part. If the department denies any part of the application, it shall
inform the qualified community development entity of the grounds for the denial. If the
qualified community development entity provides any additional information required
by the department or otherwise completes its application within 15 days of the notice of
denial, the application is considered completed as of the original date of submission. If
the qualified community development entity fails to provide the information or complete
its application within the 15-day period, the application remains denied and must be
resubmitted in full with a new submission date.
new text end

new text begin Subd. 3. new text end

new text begin Certification. new text end

new text begin If the application required under this section is complete, the
department shall certify the proposed equity investment or long-term debt security as a
qualified equity investment that is eligible for tax credits under this chapter, subject to the
limitations in subdivision 5. The department shall provide written notice of the certification
to the qualified community development entity. The notice must include the name of the
initial purchaser of the qualified equity investment and the credit amount. Before any tax
credits are claimed under this chapter, the qualified community development entity shall
provide written notice to the department of the names of the entities eligible to claim the
credits as a result of holding a qualified equity investment. If the names of the entities that
are eligible to utilize the credits change due to a transfer of a qualified equity investment
or an allocation or affiliate transfer pursuant to section 116X.04, the qualified community
development entity shall notify the department of the change.
new text end

new text begin Subd. 4. new text end

new text begin Amount certified. new text end

new text begin The department shall certify $250,000,000 in qualified
equity investments. The department shall certify qualified equity investments in the order
applications are received by the department. Applications received on the same day are
deemed to have been received simultaneously. For applications that are complete and
received on the same day, the department shall certify, consistent with remaining qualified
equity investment capacity, the qualified equity investments in proportionate percentages
based upon the ratio of the amount of qualified equity investment requested in an
application to the total amount of qualified equity investments requested in all applications
received on the same day. If any amount of qualified equity investment that would be
certified under this section is less than the acceptable minimum amount specified in the
application as required by subdivision 1, clause (5), the application is deemed withdrawn
and the amount of qualified equity investment is proportionately allocated among the
other applicants pursuant to this subdivision.
new text end

new text begin Subd. 5. new text end

new text begin Transfer of authority. new text end

new text begin An approved applicant may transfer all or a
portion of its certified qualified equity investment authority to its controlling entity or
any subsidiary qualified community development entity of the controlling entity, if the
applicant provides the information required in the application with respect to the transferee
and the applicant notifies the department of the transfer within 30 days of the transfer.
new text end

new text begin Subd. 6. new text end

new text begin Cash investment. new text end

new text begin Within 60 days of the applicant receiving notice
of certification, the qualified community development entity, or any transferee under
subdivision 5, shall issue the qualified equity investment and receive cash in the amount of
the certified amount. The qualified community development entity or transferee under
subdivision 5 must provide the department with evidence of the receipt of the cash
investment within ten business days after receipt. If the qualified community development
entity or any transferee under subdivision 5 does not receive the cash investment and issue
the qualified equity investment within 60 days following receipt of the certification notice,
the certification lapses and the entity may not issue the qualified equity investment without
reapplying to the department for certification. Lapsed certifications revert back to the
department and must be reissued, first, pro rata to other applicants whose qualified equity
investment allocations were reduced under subdivision 4 and, thereafter, in accordance
with the application process.
new text end

Sec. 6.

new text begin [116X.06] DISALLOWANCE OF TAX CREDITS AND PENALTIES.
new text end

new text begin (a) The department shall disallow the utilization of any tax credits earned as a result
of holding a qualified equity investment, but not yet claimed, if:
new text end

new text begin (1) the issuer redeems or makes principal repayment with respect to a qualified
equity investment prior to the seventh anniversary of the issuance of the qualified equity
investment. In this case, the department's disallowance of unclaimed tax credits are
proportionate to the amount of the redemption or repayment with respect to the qualified
equity investment;
new text end

new text begin (2) the issuer fails to invest an amount equal to 100 percent of the purchase price
of the qualified equity investment in qualified low-income community investments
in Minnesota within 12 months of the issuance of the qualified equity investment
and maintain at least 100 percent of the level of investment in qualified low-income
community investments in Minnesota until the last credit allowance date for the qualified
equity investment. For purposes of this section, an investment is considered held by an
issuer even if the investment has been sold or repaid if the issuer reinvests an amount
equal to the capital returned to or recovered by the issuer from the original investment,
exclusive of any profits realized, in another qualified low-income community investment
within 12 months of the receipt of the capital. An issuer is not required to reinvest capital
returned from qualified low-income community investments after the sixth anniversary
of the issuance of the qualified equity investment, if proceeds were used to make the
qualified low-income community investment, and the qualified low-income community
investment is considered to be held by the issuer through the seventh anniversary of the
qualified equity investment's issuance; or
new text end

new text begin (3) there is any violation of section 116X.10.
new text end

new text begin (b) Notwithstanding any contrary provision, any tax credit already claimed under
this chapter is not subject to recapture upon the occurrence of an event set forth in
paragraph (a), clause (1) or (2).
new text end

new text begin (c) If the department disallows the utilization of tax credits under this section, it may
also, at its discretion, impose penalties on the qualified community development entity that
issued the qualified equity investment for which tax credits are disallowed, not to exceed
the amount of the refundable performance fee required under section 116X.08 and without
regard to whether the fee has been refunded to the qualified community development entity.
new text end

Sec. 7.

new text begin [116X.07] NOTICE OF NONCOMPLIANCE.
new text end

new text begin Enforcement of each of the disallowance and penalty provisions is subject to a
six-month cure period. No disallowance or penalty may be imposed until the qualified
community development entity has been given notice of noncompliance and afforded six
months from the date of the notice to cure the noncompliance.
new text end

Sec. 8.

new text begin [116X.08] REFUNDABLE PERFORMANCE FEE.
new text end

new text begin Subdivision 1. new text end

new text begin Performance guarantee amount. new text end

new text begin A qualified community
development entity that seeks to have an equity investment or long-term debt security
designated as a qualified equity investment and eligible for tax credits under this section
shall pay a refundable performance fee to the department for deposit in the new markets
performance guarantee account, which is hereby established. The following amounts
are forfeited to the department:
new text end

new text begin (1) the performance fee in its entirety if the qualified community development entity
and its subsidiary qualified community development entities fail to issue the total amount
of qualified equity investments certified by the department and receive cash in the total
amount certified under section 116X.05, subdivision 3; or
new text end

new text begin (2) the amount of the performance fee equal to the product of the original amount of
the refundable performance fee multiplied by the percentage of the remaining amount of
the proceeds of the qualified equity investment not used to make qualified low-income
equity investments if the qualified community development entity or any subsidiary
qualified community development entity that issues a qualified equity investment certified
under this section fails to meet the investment requirement under section 116X.06 by
the second credit allowance date of the qualified equity investment. Forfeiture of the
fee or any portion thereof under this paragraph is subject to the six-month cure period
established under section 116X.07.
new text end

new text begin Subd. 2. new text end

new text begin Request for refund. new text end

new text begin The fee required under subdivision 1 must be paid
to the department and held in the new markets performance guarantee account until
compliance with subdivision 1 is established. The qualified community development
entity may request a refund of the fee from the department no sooner than 30 days after it
meets all the requirements of subdivision 1. The department has 30 days to comply with
the request or give notice of noncompliance.
new text end

Sec. 9.

new text begin [116X.09] PREAPPROVAL OF INVESTMENTS.
new text end

new text begin Before making a proposed qualified low-income community investment, a qualified
community development entity may request from the department a written determination
that the proposed investment will qualify as a qualified low-income community investment
and will satisfy all applicable provisions of this chapter. The department must notify a
qualified community development entity within ten business days from the receipt of a
request of its determination and an explanation thereof. Any determination made by the
department pursuant to this section is binding on the department.
new text end

Sec. 10.

new text begin [116X.10] USE OF PROCEEDS PROHIBITED.
new text end

new text begin A qualified active low-income community business that receives a qualified
low-income community investment under this chapter, or any affiliates of a qualified
active low-income community business, may not directly or indirectly use the proceeds
of the qualified active low-income community investment to lend to or invest in a
qualified community development entity or member or affiliate of a qualified community
development entity where the proceeds of the loan or investment are directly or indirectly
used to fund or refinance the purchase of a qualified equity investment under this chapter.
new text end

Sec. 11.

Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:


Subd. 19b.

Subtractions from federal taxable income.

For individuals, estates,
and trusts, there shall be subtracted from federal taxable income:

(1) net interest income on obligations of any authority, commission, or
instrumentality of the United States to the extent includable in taxable income for federal
income tax purposes but exempt from state income tax under the laws of the United States;

(2) if included in federal taxable income, the amount of any overpayment of income
tax to Minnesota or to any other state, for any previous taxable year, whether the amount
is received as a refund or as a credit to another taxable year's income tax liability;

(3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. No
deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
the qualifying child's vehicle to provide such transportation for a qualifying child. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

(5) to the extent included in federal adjusted gross income, income realized on
disposition of property exempt from tax under section 290.491;

(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
of the Internal Revenue Code in determining federal taxable income by an individual
who does not itemize deductions for federal income tax purposes for the taxable year, an
amount equal to 50 percent of the excess of charitable contributions over $500 allowable
as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
under the provisions of Public Law 109-1 and Public Law 111-126;

(7) for individuals who are allowed a federal foreign tax credit for taxes that do not
qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
of subnational foreign taxes for the taxable year, but not to exceed the total subnational
foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
"federal foreign tax credit" means the credit allowed under section 27 of the Internal
Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
the extent they exceed the federal foreign tax credit;

(8) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (12), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
clause (12), in the case of a shareholder of an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. The resulting delayed depreciation cannot be less than zero;

(9) job opportunity building zone income as provided under section 469.316;

(10) to the extent included in federal taxable income, the amount of compensation
paid to members of the Minnesota National Guard or other reserve components of the
United States military for active service, including compensation for services performed
under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
5b
, and "active service" includes service performed in accordance with section 190.08,
subdivision 3
;

(11) to the extent included in federal taxable income, the amount of compensation
paid to Minnesota residents who are members of the armed forces of the United States
or United Nations for active duty performed under United States Code, title 10; or the
authority of the United Nations;

(12) an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;

(13) in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (13), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (13), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
subtraction is not allowed under this clause;

(14) to the extent included in the federal taxable income of a nonresident of
Minnesota, compensation paid to a service member as defined in United States Code, title
10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
Act, Public Law 108-189, section 101(2);

(15) to the extent included in federal taxable income, the amount of national service
educational awards received from the National Service Trust under United States Code,
title 42, sections 12601 to 12604, for service in an approved Americorps National Service
program;

(16) to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under subdivision 19a, clause (13);

(17) the amount of the net operating loss allowed under section 290.095, subdivision
11
, paragraph (c);

(18) the amount of expenses not allowed for federal income tax purposes due
to claiming the railroad track maintenance credit under section 45G(a) of the Internal
Revenue Code;

(19) the amount of the limitation on itemized deductions under section 68(b) of the
Internal Revenue Code;

(20) the amount of the phaseout of personal exemptions under section 151(d) of
the Internal Revenue Code; deleted text beginand
deleted text end

(21) to the extent included in federal taxable income, the amount of qualified
transportation fringe benefits described in section 132(f)(1)(A) and (B) of the Internal
Revenue Code. The subtraction is limited to the lesser of the amount of qualified
transportation fringe benefits received in excess of the limitations under section
132(f)(2)(A) of the Internal Revenue Code for the year or the difference between the
maximum qualified parking benefits excludable under section 132(f)(2)(B) of the Internal
Revenue Code minus the amount of transit benefits excludable under section 132(f)(2)(A)
of the Internal Revenue Codenew text begin; and
new text end

new text begin (22) to the extent included in federal taxable income for the taxable year, ten percent
of the distributive share of income or loss, as defined in sections 703(a) and 1366(a)(2) of
the Internal Revenue Code, combined from all partnerships or S corporations in which the
taxpayer materially participates, as defined in section 469(h) of the Internal Revenue Code,
and that have employees or tangible property in this state, but in no case less than zero
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 12.

Minnesota Statutes 2014, section 290.068, subdivision 1, is amended to read:


Subdivision 1.

Credit allowed.

A corporation, partners in a partnership, or
shareholders in a corporation treated as an deleted text begin"deleted text endSdeleted text begin"deleted text end corporation under section 290.9725 are
allowed a credit against the tax computed under this chapter for the taxable year equal to:

(a) ten percent of the first $2,000,000 of the excess (if any) of

(1) the qualified research expenses for the taxable year, over

(2) the base amount; and

(b) deleted text begin2.5deleted text endnew text begin fournew text end percent on all of such excess expenses over $2,000,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2015.
new text end

Sec. 13.

Minnesota Statutes 2014, section 290.068, subdivision 3, is amended to read:


Subd. 3.

Limitation; carryover.

(a) new text beginExcept as provided in subdivision 6a,
paragraph (b),
new text endthe credit deleted text beginfor a taxable year beginning before January 1, 2010, and after
December 31, 2012,
deleted text end shall not exceed the liability for tax. "Liability for tax" for purposes
of this section means the sum of the tax imposed under section 290.06, subdivisions 1 and
2c
, for the taxable year reduced by the sum of the nonrefundable credits allowed under
this chapter, on all of the entities required to be included on the combined report of the
unitary business. If the amount of the credit allowed exceeds the liability for tax of the
taxpayer, but is allowed as a result of the liability for tax of other members of the unitary
group for the taxable year, the taxpayer must allocate the excess as a research credit
to another member of the unitary group.

(b) In the case of a corporation which is a partner in a partnership, the credit allowed
for the taxable year shall not exceed the lesser of the amount determined under paragraph
(a) for the taxable year or an amount (separately computed with respect to the corporation's
interest in the trade or business or entity) equal to the amount of tax attributable to that
portion of taxable income which is allocable or apportionable to the corporation's interest
in the trade or business or entity.

(c) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under paragraph (a) or (b), including amounts new text beginallowed as a refund
under subdivision 6a, paragraph (b), or
new text endallocated to other members of the unitary group,
the excess shall be a research credit carryover to each of the 15 succeeding taxable years.
The entire amount of the excess unused credit for the taxable year shall be carried first
to the earliest of the taxable years to which the credit may be carried and then to each
successive year to which the credit may be carried. The amount of the unused credit
which may be added under this clause shall not exceed the taxpayer's liability for tax
less the research credit for the taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 14.

Minnesota Statutes 2014, section 290.068, subdivision 6a, is amended to read:


Subd. 6a.

Credit to be refundable.

new text begin(a) new text endIf the amount of credit allowed in this
section for qualified research expenses incurred in taxable years beginning after December
31, 2009, and before January 1, 2013, exceeds the taxpayer's tax liability under this
chapter, the commissioner shall refund the excess amount. The credit allowed for qualified
research expenses incurred in taxable years beginning after December 31, 2009, and before
January 1, 2013, must be used before any research credit earned under subdivision 3.

new text begin (b) If the first $200,000 of the credit allowed in this section for qualified research
expenses incurred in taxable years beginning after December 31, 2014, exceeds the
taxpayer's tax liability under this chapter, the commissioner shall refund the excess amount.
The $200,000 limit must be applied at the corporation, partnership, or other entity level.
The credit allowed for qualified research expenses incurred in taxable years beginning
before January 1, 2015, must be used before any research credit earned under subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 15.

Minnesota Statutes 2014, section 290.091, subdivision 2, is amended to read:


Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given:

(a) "Alternative minimum taxable income" means the sum of the following for
the taxable year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative
minimum taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue
Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a disabled person;

(3) for depletion allowances computed under section 613A(c) of the Internal
Revenue Code, with respect to each property (as defined in section 614 of the Internal
Revenue Code), to the extent not included in federal alternative minimum taxable income,
the excess of the deduction for depletion allowable under section 611 of the Internal
Revenue Code for the taxable year over the adjusted basis of the property at the end of the
taxable year (determined without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the
amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
Internal Revenue Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the
amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), and (11) to (14);

less the sum of the amounts determined under the following:

(1) interest income as defined in section 290.01, subdivision 19b, clause (1);

(2) an overpayment of state income tax as provided by section 290.01, subdivision
19b
, clause (2), to the extent included in federal alternative minimum taxable income;

(3) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as
defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
amounts deducted in computing federal adjusted gross income;

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b
, clauses (6), (8) to (14), (16), deleted text beginanddeleted text end (21)new text begin, and (22)new text end; and

(5) the amount of the net operating loss allowed under section 290.095, subdivision
11
, paragraph (c).

In the case of an estate or trust, alternative minimum taxable income must be
computed as provided in section 59(c) of the Internal Revenue Code.

(b) "Investment interest" means investment interest as defined in section 163(d)(3)
of the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without
regard to this section and section 290.032), reduced by the sum of the nonrefundable
credits allowed under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 16. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 10 are effective the day following final enactment, and apply to
premium tax returns originally due on or after December 31, 2015.
new text end

ARTICLE 4

WORKFORCE HOUSING

Section 1.

new text begin [116J.549] WORKFORCE HOUSING GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of employment and economic
development shall establish a workforce housing grant program to award grants to
qualified cities to be used for qualified expenditures.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Market rate residential rental properties" means properties that are rented at
market value and excludes:
new text end

new text begin (1) properties constructed with financial assistance requiring the property to be
occupied by residents that meet income limits under federal or state law of initial
occupancy; and
new text end

new text begin (2) properties constructed with federal, state, or local flood recovery assistance,
regardless of whether that assistance imposed income limits as a condition of receiving
assistance.
new text end

new text begin (c) "Qualified city" means a home rule charter or statutory city with a population
exceeding 1,500.
new text end

new text begin (d) "Qualified expenditure" means expenditures for market rate residential rental
properties including acquisition of property; construction of improvements; provisions
of loans or subsidies, grants, interest rate subsidies, public infrastructure, and related
financing costs.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin The commissioner shall develop forms and procedures to
solicit and review applications for grants under this section. A city must include in its
application information sufficient to verify that it meets the program requirements under
this section and any additional evidence of the scarcity of workforce housing in the city
that it considers appropriate or that the commissioner requires.
new text end

new text begin Subd. 4. new text end

new text begin Program requirements. new text end

new text begin The commissioner must not award a grant to a
city under this section until the following determinations are made:
new text end

new text begin (1) the average vacancy rate for rental housing located in the city, and in any other
city located within 25 miles or less of the boundaries of the city, has been five percent or
less for at least the prior two-year period;
new text end

new text begin (2) one or more businesses located in the city, or within 25 miles of the city, that
employs a minimum of 20 full-time equivalent employees in aggregate have provided
a written statement to the city indicating that the lack of available rental housing has
impeded their ability to recruit and hire employees;
new text end

new text begin (3) the city has a population exceeding 1,500;
new text end

new text begin (4) fewer than five market rate residential rental units per 1,000 residents were
constructed in the city in each of the last ten years; and
new text end

new text begin (5) the city has certified that the grants will be used for qualified expenditures for
the development of rental housing to serve employees of businesses located in the city
or surrounding area.
new text end

new text begin Subd. 5. new text end

new text begin Allocation. new text end

new text begin The amount of a grant under this section may not exceed the
lesser of $....... per unit or ...... percent of the qualified expenditures for the project.
new text end

new text begin Subd. 6. new text end

new text begin Report. new text end

new text begin By January 15 of the year following the year in which the grant was
issued, each city receiving a grant under this section must submit a report to the chairs and
ranking minority members of the senate and house of representatives committees having
jurisdiction over taxes and workforce development specifying the projects that received
grants under this section and the specific purposes for which the grant funds were used.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2015.
new text end

Sec. 2.

Minnesota Statutes 2014, section 290.01, subdivision 19a, is amended to read:


Subd. 19a.

Additions to federal taxable income.

For individuals, estates, and
trusts, there shall be added to federal taxable income:

(1)(i) interest income on obligations of any state other than Minnesota or a political
or governmental subdivision, municipality, or governmental agency or instrumentality
of any state other than Minnesota exempt from federal income taxes under the Internal
Revenue Code or any other federal statute; and

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except:

(A) the portion of the exempt-interest dividends exempt from state taxation under
the laws of the United States; and

(B) the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends, including any dividends exempt
under subitem (A), that are paid by the regulated investment company as defined in section
851(a) of the Internal Revenue Code, or the fund of the regulated investment company as
defined in section 851(g) of the Internal Revenue Code, making the payment; and

(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
government described in section 7871(c) of the Internal Revenue Code shall be treated as
interest income on obligations of the state in which the tribe is located;

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid or
accrued within the taxable year under this chapter and the amount of taxes based on net
income paid, sales and use, motor vehicle sales, or excise taxes paid to any other state or
to any province or territory of Canada, to the extent allowed as a deduction under section
63(d) of the Internal Revenue Code, but the addition may not be more than the amount
by which the state itemized deduction exceeds the amount of the standard deduction as
defined in section 63(c) of the Internal Revenue Code, minus any addition that would have
been required under clause (17) if the taxpayer had claimed the standard deduction. For
the purpose of this clause, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed under clause (15);

(3) the capital gain amount of a lump-sum distribution to which the special tax under
section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;

(4) the amount of income taxes paid or accrued within the taxable year under this
chapter and taxes based on net income paid to any other state or any province or territory
of Canada, to the extent allowed as a deduction in determining federal adjusted gross
income. For the purpose of this paragraph, income taxes do not include the taxes imposed
by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;

(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10
other than expenses or interest used in computing net interest income for the subtraction
allowed under subdivision 19b, clause (1);

(6) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(7) 80 percent of the depreciation deduction allowed under section 168(k) of the
Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
in the taxable year generates a deduction for depreciation under section 168(k) and the
activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
limited to excess of the depreciation claimed by the activity under section 168(k) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k) is allowed;

(8) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(9) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(10) the amount of expenses disallowed under section 290.10, subdivision 2;

(11) for taxable years beginning before January 1, 2010, the amount deducted for
qualified tuition and related expenses under section 222 of the Internal Revenue Code, to
the extent deducted from gross income;

(12) for taxable years beginning before January 1, 2010, the amount deducted for
certain expenses of elementary and secondary school teachers under section 62(a)(2)(D)
of the Internal Revenue Code, to the extent deducted from gross income;

(13) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code;

(14) changes to federal taxable income attributable to a net operating loss that the
taxpayer elected to carry back for more than two years for federal purposes but for which
the losses can be carried back for only two years under section 290.095, subdivision
11
, paragraph (c);

(15) the amount of disallowed itemized deductions, but the amount of disallowed
itemized deductions plus the addition required under clause (2) may not be more than the
amount by which the itemized deductions as allowed under section 63(d) of the Internal
Revenue Code exceeds the amount of the standard deduction as defined in section 63(c) of
the Internal Revenue Code, and reduced by any addition that would have been required
under clause (17) if the taxpayer had claimed the standard deduction:

(i) the amount of disallowed itemized deductions is equal to the lesser of:

(A) three percent of the excess of the taxpayer's federal adjusted gross income
over the applicable amount; or

(B) 80 percent of the amount of the itemized deductions otherwise allowable to the
taxpayer under the Internal Revenue Code for the taxable year;

(ii) the term "applicable amount" means $100,000, or $50,000 in the case of a
married individual filing a separate return. Each dollar amount shall be increased by
an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof;

(iii) the term "itemized deductions" does not include:

(A) the deduction for medical expenses under section 213 of the Internal Revenue
Code;

(B) any deduction for investment interest as defined in section 163(d) of the Internal
Revenue Code; and

(C) the deduction under section 165(a) of the Internal Revenue Code for casualty or
theft losses described in paragraph (2) or (3) of section 165(c) of the Internal Revenue
Code or for losses described in section 165(d) of the Internal Revenue Code;

(16) the amount of disallowed personal exemptions for taxpayers with federal
adjusted gross income over the threshold amount:

(i) the disallowed personal exemption amount is equal to the number of personal
exemptions allowed under section 151(b) and (c) of the Internal Revenue Code multiplied
by the dollar amount for personal exemptions under section 151(d)(1) and (2) of the
Internal Revenue Code, as adjusted for inflation by section 151(d)(4) of the Internal
Revenue Code, and by the applicable percentage;

(ii) "applicable percentage" means two percentage points for each $2,500 (or
fraction thereof) by which the taxpayer's federal adjusted gross income for the taxable
year exceeds the threshold amount. In the case of a married individual filing a separate
return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500." In
no event shall the applicable percentage exceed 100 percent;

(iii) the term "threshold amount" means:

(A) $150,000 in the case of a joint return or a surviving spouse;

(B) $125,000 in the case of a head of a household;

(C) $100,000 in the case of an individual who is not married and who is not a
surviving spouse or head of a household; and

(D) $75,000 in the case of a married individual filing a separate return; and

(iv) the thresholds shall be increased by an amount equal to:

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) of the Internal
Revenue Code for the calendar year in which the taxable year begins, by substituting
"calendar year 1990" for "calendar year 1992" in subparagraph (B) thereof; deleted text beginand
deleted text end

(17) to the extent deducted in the computation of federal taxable income, for taxable
years beginning after December 31, 2010, and before January 1, 2014, the difference
between the standard deduction allowed under section 63(c) of the Internal Revenue Code
and the standard deduction allowed for 2011, 2012, and 2013 under the Internal Revenue
Code as amended through December 1, 2010new text begin; and
new text end

new text begin (18) to the extent deducted in the computation of federal taxable income,
contributions for which the taxpayer claims a credit under section 290.0682
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 3.

Minnesota Statutes 2014, section 290.01, subdivision 19c, is amended to read:


Subd. 19c.

Corporations; additions to federal taxable income.

For corporations,
there shall be added to federal taxable income:

(1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;

(2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;

(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;

(4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;

(5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247 and 965 of the Internal Revenue Code;

(6) losses from the business of mining, as defined in section 290.05, subdivision 1,
clause (a), that are not subject to Minnesota income tax;

(7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;

(8) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;

(9) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;

(10) the amount of a partner's pro rata share of net income which does not flow
through to the partner because the partnership elected to pay the tax on the income under
section 6242(a)(2) of the Internal Revenue Code;

(11) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section 303(b) of Public Law 110-343;

(12) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;

(13) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

(14) to the extent deducted in computing federal taxable income, the amount of the
deduction allowable under section 199 of the Internal Revenue Code;

(15) the amount of expenses disallowed under section 290.10, subdivision 2; deleted text beginand
deleted text end

(16) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Codenew text begin; and
new text end

new text begin (17) to the extent deducted in the computation of federal taxable income,
contributions for which the taxpayer claims a credit under section 290.0682
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 4.

new text begin [290.0682] CREDIT FOR CONTRIBUTIONS TO LAND TRUSTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms
have the meanings given.
new text end

new text begin (b) "Land trust" means a community land trust as defined in section 462A.30,
subdivision 8, and as used in section 462A.31.
new text end

new text begin (c) "Qualified city" means a city in Minnesota in which:
new text end

new text begin (1) the average vacancy rate for rental housing located in the city, and in any other
city located within 25 miles or less of the boundaries of the city, has been five percent or
less for at least the prior two-year period;
new text end

new text begin (2) fewer than five residential units per 1,000 residents were constructed in the city
in each of the last ten years; and
new text end

new text begin (3) the population exceeds 1,500.
new text end

new text begin (d) "Qualified employee" means a person employed by a qualified taxpayer at a
location within 25 miles of the boundaries of the qualified city in which the land trust
owns land.
new text end

new text begin (e) "Qualified housing" means newly constructed owner-occupied housing built on
land owned by a land trust and offered for sale at a price at or below 250 percent of the
median sale price for owner-occupied housing in the county.
new text end

new text begin (f) "Qualified taxpayer" means a taxpayer with at least 25 employees.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin A qualified taxpayer is allowed a credit against the
tax imposed under this chapter for contributions to land trusts used to buy land and
develop qualified housing in qualified cities. The credit equals five percent of the amount
contributed. A qualified taxpayer may claim the credit in each of the 20 years following
the year of the contribution, but may not claim the credit in any year in which the number
of qualified employees is less than the number employed in the year of the contribution.
new text end

new text begin Subd. 3. new text end

new text begin Proportional credits. new text end

new text begin A qualified taxpayer that is a pass-through entity
must provide each investor a statement indicating the investor's share of the credit amount
allowed to the pass-through entity based on its share of the pass-through entity's capital
assets at the time of the contribution.
new text end

new text begin Subd. 4. new text end

new text begin Credit refundable. new text end

new text begin If the amount of the credit under this section for
any taxable year exceeds the qualified taxpayer's liability for tax under this chapter, the
commissioner shall refund the excess to the taxpayer. An amount sufficient to pay the
refunds required by this section is appropriated to the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

Sec. 5. new text beginPROMOTION OF CREATION OF LAND TRUSTS.
new text end

new text begin By January 1, 2016, the commissioner of the Minnesota Housing Finance Agency
shall develop and implement a plan for promoting and facilitating the creation of land
trusts, focusing on areas of the state with shortages of workforce housing, demonstrated by
either low rental vacancy rates or low rates of new construction of owner-occupied housing.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6. new text beginAPPROPRIATION.
new text end

new text begin $5,000,000 in fiscal year 2016 is appropriated from the general fund to the
commissioner of employment and economic development to make grants under the
workforce housing grants pilot program in Minnesota Statutes, section 116J.549. Any
unused amounts carryover and remain available through fiscal year 2018. The base
for fiscal year 2018 is zero. Of these amounts, the commissioner of employment and
economic development may use up to five percent for administrative expenses.
new text end

ARTICLE 5

STEM AND LONG-TERM CARE EMPLOYMENT INCENTIVE

Section 1.

new text begin [290.0682] CREDIT FOR NEW STEM AND LONG-TERM CARE
EMPLOYEES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meanings given.
new text end

new text begin (b) "Eligible individual" means an individual who:
new text end

new text begin (1) graduated from a postsecondary educational institution with a qualifying degree;
and
new text end

new text begin (2) began employment after June 30, 2015, in a qualified economic development
region with an employer with a primary business activity in a qualified field.
new text end

new text begin (c) "Maximum qualifying amount" means the allowance for tuition and fees set
in law as required under section 136A.121, subdivision 6, for the calendar year in
which the eligible individual obtained the qualifying degree. For an eligible individual
with a qualifying degree from a two-year postsecondary educational institution, the
maximum qualifying amount equals the allowance for tuition and fees specified for
a two-year institution, and for an eligible individual with a qualifying degree from a
four-year postsecondary educational institution, the maximum qualifying amount equals
the allowance for tuition and fees specified for a four-year institution.
new text end

new text begin (d) "Qualifying degree" means a two- or four-year degree from an accredited
postsecondary educational institution in one of the following fields:
new text end

new text begin (1) science;
new text end

new text begin (2) technology;
new text end

new text begin (3) engineering;
new text end

new text begin (4) mathematics; or
new text end

new text begin (5) medicine.
new text end

new text begin (e) "Qualified economic development region" means an economic development
region in which the average number of job vacancies per capita in qualified fields for the
second and fourth quarters of the preceding calendar year exceeds by ten percent or more
the statewide average number of job vacancies per capita in qualified fields for the second
and fourth quarters of the preceding calendar year, as determined by the commissioner of
employment and economic development based on data reported in the Job Vacancy Survey.
new text end

new text begin (f) "Qualified field" means any one of the fields of science, technology, engineering,
mathematics, or long-term care.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin An eligible individual is allowed a credit against the tax
imposed under this chapter equal to 50 percent of the maximum qualifying amount. The
maximum credit allowed in a taxable year is $5,000 for eligible individuals with four-year
degrees, and $2,500 for eligible individuals with two-year degrees. An individual may
claim the credit under this section in the taxable year in which the individual first becomes
eligible and in each of the four following taxable years.
new text end

new text begin Subd. 3. new text end

new text begin Determination of qualified economic development regions. new text end

new text begin On or before
July 1, 2015, the commissioner of employment and economic development must identify
qualified economic development regions for taxable years beginning in 2015, based on
job vacancy data for calendar year 2014. On or before February 15 of each subsequent
year, the commissioner of employment and economic development must identify qualified
economic development regions for the current taxable year, based on job vacancy data for
the previous calendar year. The commissioner of employment and economic development
must make the list of qualified economic development regions available on the department
Web site and must share the list with the commissioner of revenue, who also must make
the list available on the department Web site.
new text end

new text begin Subd. 4. new text end

new text begin Credit refundable. new text end

new text begin If the amount of the credit under this section for any
taxable year exceeds the claimant's liability for tax under this chapter, the commissioner
shall refund the excess to the claimant. An amount sufficient to pay the refunds required
by this section is appropriated to the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2014.
new text end

ARTICLE 6

STATE AGENCY PENALTY REFORM

Section 1.

Minnesota Statutes 2014, section 16A.1285, is amended by adding a
subdivision to read:


new text begin Subd. 6. new text end

new text begin All penalties deposited in general fund. new text end

new text begin (a) Except as provided in
paragraph (b), and notwithstanding any law to the contrary, any civil or administrative
penalty or fine collected by a state agency must be deposited in the general fund.
new text end

new text begin (b) Paragraph (a) does not apply to a civil or administrative penalty or fine if:
new text end

new text begin (i) the constitution requires that the proceeds be deposited in a dedicated fund; or
new text end

new text begin (ii) the revenue from the civil or administrative penalty or fine is deposited by law in
a fund other than the general fund and is not statutorily appropriated to a state agency.
new text end

Sec. 2.

Minnesota Statutes 2014, section 17.102, subdivision 4, is amended to read:


Subd. 4.

Minnesota grown account.

The Minnesota grown account is established
as an account in the agricultural fund. License fee receipts deleted text beginand penaltiesdeleted text end collected under
this section must be deposited in the agricultural fund and credited to the Minnesota grown
account. The money in the account is continuously appropriated to the commissioner
for the direct costs of implementing the Minnesota grown program.new text begin Penalties must
be deposited in the general fund.
new text end

Sec. 3.

Minnesota Statutes 2014, section 17.102, subdivision 4a, is amended to read:


Subd. 4a.

Funding sources.

The Minnesota grown account shall consist of
license fees, deleted text beginpenalties,deleted text end advertising revenue, revenue from the development and sale of
promotional materials, gifts, and appropriations.

Sec. 4.

Minnesota Statutes 2014, section 17A.11, is amended to read:


17A.11 FEES FOR LIVESTOCK WEIGHING.

The commissioner shall prescribe the fee necessary to cover the cost of state
weighing, to be assessed and collected from the seller in the manner the commissioner
may prescribe. The fee assessed must be the same, and the manner of collection of the fee
must be uniform at all facilities. At any location where state weighing is performed in
accordance with this chapter and the total annual fees collected are insufficient to pay the
cost of the weighing, the annual deficit shall be assessed and collected in the manner the
commissioner may prescribe. Additional money arising from the weighing of animals
by the commissioner, which has been collected and retained by any person, shall be paid
on demand to the commissioner. new text beginExcept for penalty revenue, new text endall money collected by the
commissioner shall be deposited in the agricultural fund and credited to the livestock
weighing account. new text beginPenalties must be deposited in the general fund. new text endMoney in the account
is appropriated to the commissioner to carry out the duties of section 17A.10 and for
activities and duties required under chapter 31B.

Sec. 5.

Minnesota Statutes 2014, section 18B.05, is amended to read:


18B.05 PESTICIDE REGULATORY ACCOUNT.

Subdivision 1.

Establishment.

A pesticide regulatory account is established in the
agricultural fund. Feesdeleted text begin,deleted text end new text beginand new text endassessmentsdeleted text begin, and penaltiesdeleted text end collected under this chapter must
be deposited in the agricultural fund and credited to the pesticide regulatory account.
new text beginPenalties must be deposited in the general fund. new text endMoney in the account, including interest,
is appropriated to the commissioner for the administration and enforcement of this chapter.

Sec. 6.

Minnesota Statutes 2014, section 18C.131, is amended to read:


18C.131 FERTILIZER INSPECTION ACCOUNT.

A fertilizer inspection account is established in the state treasury. The fees collected
under this chapter and interest attributable to money in the account must be deposited in
the state treasury and credited to the fertilizer inspection account in the agricultural fund.
new text beginPenalties collected under this chapter or chapter 18D must be deposited in the general
fund.
new text endMoney in the account, including interest earned, is appropriated to the commissioner
for the administration and enforcement of this chapter.

Sec. 7.

Minnesota Statutes 2014, section 18D.323, is amended to read:


18D.323 CREDITING OF PENALTIES, FEES, AND COSTS.

Except for money repaid to the agricultural chemical response and reimbursement
account under section 18E.04, subdivision 6, deleted text beginpenalties,deleted text end cost reimbursements, fees, and
other moneys collected under this chapter must be deposited into the state treasury and
credited to the appropriate pesticide or fertilizer regulatory account.new text begin Penalties must be
deposited in the general fund.
new text end

Sec. 8.

Minnesota Statutes 2014, section 18G.10, subdivision 2, is amended to read:


Subd. 2.

Disposition and use of money received.

All fees deleted text beginand penaltiesdeleted text end collected
under this chapter and interest attributable to the money in the account must be deposited
in the state treasury and credited to the nursery and phytosanitary account in the
agricultural fund. new text beginPenalties must be deposited in the general fund. new text endMoney in the account,
including interest earned, is appropriated to the commissioner for the administration
and enforcement of this chapter.

Sec. 9.

Minnesota Statutes 2014, section 18H.17, is amended to read:


18H.17 NURSERY AND PHYTOSANITARY ACCOUNT.

A nursery and phytosanitary account is established in the state treasury. The fees
deleted text beginand penaltiesdeleted text end collected under this chapter and interest attributable to money in the account
must be deposited in the state treasury and credited to the nursery and phytosanitary
account in the agricultural fund. new text beginPenalties must be deposited in the general fund. new text endMoney
in the account, including interest earned, is annually appropriated to the commissioner
for the administration and enforcement for this chapter.

Sec. 10.

Minnesota Statutes 2014, section 18J.09, is amended to read:


18J.09 CREDITING OF PENALTIES, FEES, AND COSTS.

deleted text begin Penalties,deleted text end Cost reimbursements, fees, and other money collected under this chapter
must be deposited into the state treasury and credited to the appropriate nursery and
phytosanitary or seed account.new text begin Penalties must be deposited in the general fund.
new text end

Sec. 11.

Minnesota Statutes 2014, section 21.115, is amended to read:


21.115 FEES; SEED POTATO INSPECTION ACCOUNT.

The commissioner shall fix the fees for all inspections and certifications in such
amounts as from time to time may be found necessary to pay the expenses of carrying out
and enforcing the purposes of sections 21.111 to 21.122, with a reasonable reserve, and
shall require the same to be paid before such inspections or certifications are made. All
moneys collected as fees deleted text beginor as penalties for violations of any of the provisions of suchdeleted text end
deleted text begindeleted text endnew text beginunder these new text endsections shall be paid into the agricultural fund deleted text beginanddeleted text endnew text begin,new text end credited to the seed potato
inspection account deleted text beginof the commissioner, which account is hereby createddeleted text endnew text begin,new text end and appropriated
new text beginto the commissioner new text endfor deleted text begincarrying out thedeleted text end purposes of sections 21.111 to 21.122. Interest, if
any, received on deposits of these moneys shall be credited to the account, and there shall
be paid into this fund any sum provided by the legislature for the purpose of carrying out
the provisions of such sections.new text begin Penalties must be deposited in the general fund.
new text end

Sec. 12.

Minnesota Statutes 2014, section 21.92, is amended to read:


21.92 SEED INSPECTION ACCOUNT.

There is established in the agricultural fund an account known as the seed inspection
account. Fees deleted text beginand penaltiesdeleted text end collected by the commissioner under sections 21.80 to 21.92
and interest attributable to money in the account shall be deposited into this account. new text begin
Penalties must be deposited in the general fund.
new text endMoney in the account, including interest
earned, is appropriated to the commissioner for the administration and enforcement of
sections 21.80 to 21.92.

Sec. 13.

Minnesota Statutes 2014, section 25.39, subdivision 4, is amended to read:


Subd. 4.

Commercial feed inspection account.

A commercial feed inspection
account is established in the agricultural fund. Fees deleted text beginand penaltiesdeleted text end collected under this
chapter and interest attributable to money in the account must be deposited in the
agricultural fund and credited to the commercial feed inspection account. new text begin Penalties must
be deposited in the general fund.
new text endMoney in the account, including interest earned, is
appropriated to the commissioner for the administration and enforcement of this chapter.

Sec. 14.

Minnesota Statutes 2014, section 27.041, subdivision 3, is amended to read:


Subd. 3.

Account; appropriation.

A wholesale produce dealers account is created
in the agricultural fund. All feesdeleted text begin,deleted text end new text beginand new text endchargesdeleted text begin, and penaltiesdeleted text end collected under sections
27.01 to 27.069 and 27.11 to 27.19, including interest attributable to that money, must be
deposited in the wholesale produce dealers account. new text beginPenalties must be deposited in the
general fund.
new text endMoney in the account is appropriated to the commissioner for the purposes
of sections 27.01 to 27.069 and 27.11 to 27.19.

Sec. 15.

Minnesota Statutes 2014, section 32.21, subdivision 4, is amended to read:


Subd. 4.

Penalties.

(a) A person, other than a milk producer, who violates this
section is guilty of a misdemeanor or subject to a civil penalty up to $1,000.

(b) A milk producer may not change milk plants within 30 days, without permission
of the commissioner, after receiving notification from the commissioner under paragraph
(c) or (d) that the milk producer has violated this section.

(c) A milk producer who violates subdivision 3, clause (1), (2), (3), (4), or (5), is
subject to clauses (1) to (3) of this paragraph.

(1) Upon notification of the first violation in a 12-month period, the producer must
meet with the qualified dairy sanitarian to initiate corrective action within 30 days.

(2) Upon the second violation within a 12-month period, the producer is subject to
a civil penalty of $300. The commissioner shall notify the producer by certified mail
stating the penalty is payable in 30 days, the consequences of failure to pay the penalty,
and the consequences of future violations.

(3) Upon the third violation within a 12-month period, the producer is subject to
an additional civil penalty of $300 and possible revocation of the producer's permit or
certification. The commissioner shall notify the producer by certified mail that all civil
penalties owed must be paid within 30 days and that the commissioner is initiating
administrative procedures to revoke the producer's permit or certification to sell milk
for at least 30 days.

(d) The producer's shipment of milk must be immediately suspended if the producer
is identified as an individual source of milk containing residues causing a bulk load of
milk to test positive in violation of subdivision 3, clause (6) or (7). The Grade A or
manufacturing grade permit must be converted to temporary status for not more than
30 days and shipment may resume only after subsequent milk has been sampled by
the commissioner or the commissioner's agent and found to contain no residues above
established tolerances or safe levels.

The Grade A or manufacturing grade permit may be restored if the producer
completes the "Milk and Dairy Beef Residue Prevention Protocol" with a licensed
veterinarian, displays the signed certificate in the milkhouse, and sends verification to the
commissioner within the 30-day temporary permit status period. If the producer does
not comply within the temporary permit status period, the Grade A or manufacturing
grade permit must be suspended. A milk producer whose milk supply is in violation of
subdivision 3, clause (6) or (7), and has caused a bulk load to test positive is subject to
clauses (1) to (3) of this paragraph.

(1) For the first violation in a 12-month period, the penalty is the value of all milk on
the contaminated load plus any costs associated with the disposition of the contaminated
load. Future pickups are prohibited until subsequent testing reveals the milk is free of
drug residue. A farm inspection must be completed by a qualified dairy sanitarian and
the producer to determine the cause of the residue and actions required to prevent future
violations.

(2) For the second violation in a 12-month period, the penalty is the value of all
milk on the contaminated load plus any costs associated with the disposition of the
contaminated load. Future pickups are prohibited until subsequent testing reveals the milk
is free of drug residue. A farm inspection must be completed by a qualified dairy sanitarian
to determine the cause of the residue and actions required to prevent future violations.

(3) For the third or subsequent violation in a 12-month period, the penalty is the value
of all milk on the contaminated load plus any costs associated with the disposition of the
contaminated load. Future pickups are prohibited until subsequent testing reveals the milk
is free of drug residue. The commissioner or the commissioner's agent shall also notify the
producer by certified mail that the commissioner is initiating administrative procedures to
revoke the producer's permit or certification to sell milk for a minimum of 30 days.

(4) If a bulk load of milk tests negative for residues and there is a positive producer
sample on the load, no civil penalties may be assessed to the producer. The plant must
report the positive result within 24 hours and reject further milk shipments from that
producer until the producer's milk tests negative. A farm inspection must be completed
by a qualified dairy sanitarian to determine the cause of the residue and actions required
to prevent future violations. The department shall suspend the producer's permit and
count the violation on the producer's record. The Grade A or manufacturing grade permit
must be converted to temporary status for not more than 30 days during which time the
producer must review the "Milk and Dairy Beef Residue Prevention Protocol" with a
licensed veterinarian, display the signed certificate in the milkhouse, and send verification
to the commissioner. If these conditions are met, the Grade A or manufacturing grade
permit must be reinstated. If the producer does not comply within the temporary permit
status period, the Grade A or manufacturing grade permit must be suspended.

(e) A milk producer that has been certified as completing the "Milk and Dairy Beef
Residue Prevention Protocol" within 12 months of the first violation of subdivision 3,
clause (7), need only review the cause of the violation with a field service representative
within three days to maintain Grade A or manufacturing grade permit and shipping status
if all other requirements of this section are met.

(f) Civil penalties collected under this section must be deposited in the deleted text beginmilk
inspection services account established in this chapter
deleted text endnew text begin general fundnew text end.

Sec. 16.

Minnesota Statutes 2014, section 34.07, is amended to read:


34.07 BEVERAGE INSPECTION ACCOUNT; APPROPRIATION.

A beverage inspection account is created in the agricultural fund. All fees deleted text beginand
fines
deleted text end collected under this chapter shall be credited to the beverage inspection account.
new text beginPenalties must be deposited in the general fund. new text endMoney in the account is appropriated to
the commissioner for inspection and supervision under this chapter.

Sec. 17.

Minnesota Statutes 2014, section 62J.536, subdivision 2b, is amended to read:


Subd. 2b.

Compliance and investigations.

(a) The commissioner of health shall,
to the extent practicable, seek the cooperation of health care providers, health care
clearinghouses, and group purchasers in obtaining compliance with this section and may
provide technical assistance to health care providers, health care clearinghouses, and
group purchasers.

(b) A person who believes a health care provider, health care clearinghouse, or group
purchaser is not complying with the requirements of this section may file a complaint with
the commissioner of health. Complaints filed under this section must meet the following
requirements:

(1) A complaint must be filed in writing, either on paper or electronically.

(2) A complaint must name the person that is the subject of the complaint and
describe the acts or omissions believed to be in violation of this section.

(3) A complaint must be filed within 180 days of when the complainant knew or
should have known that the act or omission complained of occurred.

(4) The commissioner may prescribe additional procedures for the filing of
complaints as required to satisfy the requirements of this section.

(c) The commissioner of health may investigate complaints filed under this
section. The investigation may include a review of the pertinent policies, procedures,
or practices of the health care provider, health care clearinghouse, or group purchaser
and of the circumstances regarding any alleged violation. At the time of initial written
communication with the health care provider, health care clearinghouse, or group
purchaser about the complaint, the commissioner of health shall describe the acts or
omissions that are the basis of the complaint. The commissioner may conduct compliance
reviews to determine whether health care providers, health care clearinghouses, and group
purchasers are complying with this section.

(d) Health care providers, health care clearinghouses, and group purchasers must
cooperate with the commissioner of health if the commissioner undertakes an investigation
or compliance review of the policies, procedures, or practices of the health care provider,
health care clearinghouse, or group purchaser to determine compliance with this section.
This cooperation includes, but is not limited to:

(1) A health care provider, health care clearinghouse, or group purchaser must permit
access by the commissioner of health during normal business hours to its facilities, books,
records, accounts, and other sources of information that are pertinent to ascertaining
compliance with this section.

(2) If any information required of a health care provider, health care clearinghouse,
or group purchaser under this section is in the exclusive possession of any other agency,
institution, or person and the other agency, institution, or person fails or refuses to furnish
the information, the health care provider, health care clearinghouse, or group purchaser
must so certify and set forth what efforts it has made to obtain the information.

(3) Any individually identifiable health information obtained by the commissioner
of health in connection with an investigation or compliance review under this section
may not be used or disclosed by the commissioner of health, except as necessary for
ascertaining or enforcing compliance with this section.

(e) If an investigation of a complaint indicates noncompliance, the commissioner
of health shall attempt to reach a resolution of the matter by informal means. Informal
means may include demonstrated compliance or a completed corrective action plan or
other agreement. If the matter is resolved by informal means, the commissioner of health
shall so inform the health care provider, health care clearinghouse, or group purchaser
and, if the matter arose from a complaint, the complainant, in writing. If the matter is not
resolved by informal means, the commissioner of health shall:

(1) inform the health care provider, health care clearinghouse, or group purchaser
and provide an opportunity for the health care provider, health care clearinghouse, or group
purchaser to submit written evidence of any mitigating factors or other considerations.
The health care provider, health care clearinghouse, or group purchaser must submit
any such evidence to the commissioner of health within 30 calendar days of receipt of
the notification; and

(2) inform the health care provider, health care clearinghouse, or group purchaser,
through a notice of proposed determination according to paragraph (i), that the
commissioner of health finds that a civil money penalty should be imposed.

(f) If, after an investigation or a compliance review, the commissioner of health
determines that further action is not warranted, the commissioner of health shall so inform
the health care provider, health care clearinghouse, or group purchaser and, if the matter
arose from a complaint, the complainant, in writing.

(g) A health care provider, health care clearinghouse, or group purchaser may not
threaten, intimidate, coerce, harass, discriminate against, or take any other retaliatory
action against any individual or other person for:

(1) filing of a complaint under this section;

(2) testifying, assisting, or participating in an investigation, compliance review,
proceeding, or contested case proceeding under this section; or

(3) opposing any act or practice made unlawful by this section, provided the
individual or person has a good faith belief that the practice opposed is unlawful, and
the manner of opposition is reasonable and does not involve an unauthorized disclosure
of a patient's health information.

(h) The commissioner of health may impose a civil money penalty on a health care
provider, health care clearinghouse, or group purchaser if the commissioner of health
determines that the health care provider, health care clearinghouse, or group purchaser
has violated this section. If the commissioner of health determines that more than one
health care provider, health care clearinghouse, or group purchaser was responsible for
a violation, the commissioner of health may impose a civil money penalty against each
health care provider, health care clearinghouse, or group purchaser. The amount of a civil
money penalty shall be determined as follows:

(1) The amount of a civil money penalty shall be up to $100 for each violation, but
not exceed $25,000 for identical violations during a calendar year.

(2) In the case of continuing violation of this section, a separate violation occurs
each business day that the health care provider, health care clearinghouse, or group
purchaser is in violation of this section.

(3) In determining the amount of any civil money penalty, the commissioner of health
may consider as aggravating or mitigating factors, as appropriate, any of the following:

(i) the nature of the violation, in light of the purpose of the goals of this section;

(ii) the time period during which the violation occurred;

(iii) whether the violation hindered or facilitated an individual's ability to obtain
health care;

(iv) whether the violation resulted in financial harm;

(v) whether the violation was intentional;

(vi) whether the violation was beyond the direct control of the health care provider,
health care clearinghouse, or group purchaser;

(vii) any history of prior compliance with the provisions of this section, including
violations;

(viii) whether and to what extent the provider, health care clearinghouse, or group
purchaser has attempted to correct previous violations;

(ix) how the health care provider, health care clearinghouse, or group purchaser
has responded to technical assistance from the commissioner of health provided in the
context of a compliance effort; or

(x) the financial condition of the health care provider, health care clearinghouse,
or group purchaser including, but not limited to, whether the health care provider, health
care clearinghouse, or group purchaser had financial difficulties that affected its ability to
comply or whether the imposition of a civil money penalty would jeopardize the ability
of the health care provider, health care clearinghouse, or group purchaser to continue to
provide, or to pay for, health care.

(i) If a penalty is proposed according to this section, the commissioner of health
must deliver, or send by certified mail with return receipt requested, to the respondent
written notice of the commissioner of health's intent to impose a penalty. This notice
of proposed determination must include:

(1) a reference to the statutory basis for the penalty;

(2) a description of the findings of fact regarding the violations with respect to
which the penalty is proposed;

(3) the amount of the proposed penalty;

(4) any circumstances described in paragraph (i) that were considered in determining
the amount of the proposed penalty;

(5) instructions for responding to the notice, including a statement of the respondent's
right to a contested case proceeding and a statement that failure to request a contested case
proceeding within 30 calendar days permits the imposition of the proposed penalty; and

(6) the address to which the contested case proceeding request must be sent.

(j) A health care provider, health care clearinghouse, or group purchaser may contest
whether the finding of facts constitute a violation of this section, according to a contested
case proceeding as set forth in sections 14.57 to 14.62, subject to appeal according to
sections 14.63 to 14.68.

(k) Any data collected by the commissioner of health as part of an active
investigation or active compliance review under this section are classified as protected
nonpublic data pursuant to section 13.02, subdivision 13, in the case of data not on
individuals and confidential pursuant to section 13.02, subdivision 3, in the case of data
on individuals. Data describing the final disposition of an investigation or compliance
review are classified as public.

(l) Civil money penalties imposed and collected under this subdivision shall be
deposited deleted text begininto a revolving fund and are appropriated to the commissioner of health for
the purposes of this subdivision, including the provision of technical assistance
deleted text endnew text begin in the
general fund
new text end.

Sec. 18.

Minnesota Statutes 2014, section 116J.66, is amended to read:


116J.66 BUSINESS ASSISTANCEnew text begin; COMPLIANCE ASSISTANCE GRANT
PROGRAM; APPROPRIATION
new text end.

new text begin (a) new text endThe commissioner shall establish within the department a business assistance
center. The center shall consist of (1) a Bureau of Small Business which shall have as its
sole function the provision of assistance to small businesses in the state and (2) a bureau
of licenses to assist all businesses in obtaining state licenses and permits. This center
shall be accorded at least equal status with the other major operating units within the
department. A small business advocate office is established in the Business Assistance
Center to provide one-stop access for small businesses in need of information or assistance
in obtaining or renewing licenses, meeting state regulatory requirements, or resolving
disputes with state agencies.

new text begin (b) The small business advocate office may award a compliance assistance grant to a
small business with 15 or fewer employees if the small business:
new text end

new text begin (1) unknowingly violated state law and paid a monetary penalty to a state agency; or
new text end

new text begin (2) was required by a state agency to make a substantial investment in equipment in
order to comply with state law. A small business owner must apply to the small business
advocate office in the form required by the small business advocate office. A small
business must not receive more than one compliance assistance grant.
new text end

new text begin (c) Each fiscal year, an amount equal to five percent of all penalties and fines
collected by all state agencies in the prior fiscal year and deposited in the general fund as
required under section 16A.1285, subdivision 6, is appropriated from the general fund
to the commissioner of employment and economic development to award grants under
the compliance assistance grant program.
new text end

Sec. 19.

Minnesota Statutes 2014, section 169.685, subdivision 5, is amended to read:


Subd. 5.

Violation; petty misdemeanor.

(a) Every motor vehicle operator,
when transporting a child who is both under the age of eight and shorter than four feet
nine inches on the streets and highways of this state in a motor vehicle equipped with
factory-installed seat belts, shall equip and install for use in the motor vehicle, according
to the manufacturer's instructions, a child passenger restraint system meeting federal
motor vehicle safety standards.

(b) No motor vehicle operator who is operating a motor vehicle on the streets and
highways of this state may transport a child who is both under the age of eight and shorter
than four feet nine inches in a seat of a motor vehicle equipped with a factory-installed
seat belt, unless the child is properly fastened in the child passenger restraint system. Any
motor vehicle operator who violates this subdivision is guilty of a petty misdemeanor and
may be sentenced to pay a fine of not more than $50. The fine may be waived or the
amount reduced if the motor vehicle operator produces evidence that within 14 days after
the date of the violation a child passenger restraint system meeting federal motor vehicle
safety standards was purchased or obtained for the exclusive use of the operator.

(c) At the time of issuance of a citation under this subdivision, a peace officer
may provide to the violator information on obtaining a free or low-cost child passenger
restraint system.

(d) The fines collected for violations of this subdivision must be deposited in the
deleted text beginstate treasury and credited to a special account to be known as the Minnesota child
passenger restraint and education account
deleted text endnew text begin general fundnew text end.

(e) For the purposes of this section, "child passenger restraint system" means any
device that meets the standards of the United States Department of Transportation; is
designed to restrain, seat, or position children; and includes a booster seat.

Sec. 20.

Minnesota Statutes 2014, section 169.685, subdivision 7, is amended to read:


Subd. 7.

Appropriation; special account.

The Minnesota child passenger restraint
and education account is created in the state treasury, consisting of deleted text beginfines collected under
subdivision 5 and other
deleted text end money appropriated or donated. The money in the account is
annually appropriated to the commissioner of public safety to be used to provide child
passenger restraint systems to families in financial need, school districts and child care
providers that provide for the transportation of pupils to and from school using type III
vehicles or school buses with a gross vehicle weight rating of 10,000 pounds or less, and
to provide an educational program on the need for and proper use of child passenger
restraint systems. Information on the commissioner's activities and expenditure of funds
under this section must be available upon request.

Sec. 21.

Minnesota Statutes 2014, section 169.871, subdivision 5, is amended to read:


Subd. 5.

Fines; proceeds allocated.

Any penalty imposed and fines collected
deleted text beginpursuant todeleted text endnew text begin undernew text end this section deleted text beginshall be disposed of as provided in section 299D.03,
subdivision 5
, with the following exceptions:
deleted text endnew text begin must be deposited in the general fund.
new text end

deleted text begin (a) If the violation occurs in the county, and the county attorney appears in the action,
the remaining five-eighths shall be credited to the highway user tax distribution fund.
deleted text end

deleted text begin (b) If the violation occurs within the municipality, and the city attorney appears in
the action, the remaining one-third shall be paid to the highway user tax distribution fund.
deleted text end

deleted text begin (c) Except as provided in paragraph (d), when the attorney general appears in the
action, all penalties imposed and fines collected shall be credited to the highway user
tax distribution fund.
deleted text end

deleted text begin (d) If the violation occurs in Hennepin County, and the arrest or apprehension is
made by the county sheriff, three-eighths of the civil penalty shall be credited to the
general revenue fund of the county and the remaining five-eighths shall be credited to the
highway user tax distribution fund.
deleted text end

Sec. 22.

Minnesota Statutes 2014, section 169.999, subdivision 5, is amended to read:


Subd. 5.

Fines; disbursement.

(a) A person who commits an administrative
violation under subdivision 1 must pay a fine of $60.

(b) deleted text beginExcept as provided in paragraph (c), two-thirds ofdeleted text end A fine collected under this
section must be deleted text begincredited to the general revenue fund of the local unit of government that
employs the peace officer who issued the citation and one-third must be
deleted text end transferred to the
commissioner of management and budget to be deposited in the state general fund. deleted text beginA local
unit of government receiving fine proceeds under this section must use at least one-half of
the funds for law enforcement purposes. The funds must be used to supplement but not
supplant any existing law enforcement funding.
deleted text end

deleted text begin (c) For fines collected under this section from administrative citations issued by
state patrol troopers, one-third must be credited to the general fund of the local unit of
government or entity that collects the fine and provides a hearing officer and two-thirds
must be transferred to the commissioner of management and budget to be deposited in the
state general fund.
deleted text end

Sec. 23.

Minnesota Statutes 2014, section 174.30, subdivision 8, is amended to read:


Subd. 8.

Administrative penalties.

new text begin(a) new text endThe commissioner may issue an order
requiring violations of this section and the operating standards adopted under this section
to be corrected and assessing monetary penalties of up to $1,000 for all violations
identified during a single inspection, investigation, or audit. Section 221.036 applies
to administrative penalty orders issued under this section or section 174.315. The
commissioner shall suspend, without a hearing, a special transportation service provider's
certificate of compliance for failure to pay, or make satisfactory arrangements to pay, an
administrative penalty when due.

new text begin (b) new text endPenalties collected under this section must be deposited in the deleted text beginstate treasury and
credited to the trunk highway
deleted text endnew text begin generalnew text end fund.

Sec. 24.

Minnesota Statutes 2014, section 174.315, subdivision 3, is amended to read:


Subd. 3.

Penalties.

Notwithstanding section 174.30, subdivision 8, the
commissioner of transportation may issue an order assessing a monetary penalty of up
to $10,000 for a violation of this section. The minimum penalty for a third violation of
this section within three years shall be revocation of the certificate issued under section
174.30, subdivision 4a. A person whose certificate is revoked under this section may
appeal the commissioner's action in a contested case proceeding under chapter 14.new text begin A
penalty collected under this subdivision must be deposited in the general fund.
new text end

Sec. 25.

Minnesota Statutes 2014, section 221.036, subdivision 14, is amended to read:


Subd. 14.

deleted text beginCredited to trunk highway funddeleted text endnew text begin Deposit of penaltiesnew text end.

Penalties
collected under this section must be deposited in the deleted text beginstate treasury and credited to the
trunk highway
deleted text endnew text begin generalnew text end fund.

Sec. 26.

Minnesota Statutes 2014, section 221.84, subdivision 3, is amended to read:


Subd. 3.

Administrative penalties.

The commissioner may issue an order requiring
violations of statutes, rules, and local ordinances governing operation of limousines to be
corrected and assessing monetary penalties up to $1,000. The commissioner may suspend
or revoke a permit for violation of applicable statutes and rules and, upon the request of a
political subdivision, may immediately suspend a permit for multiple violations of local
ordinances. The commissioner shall immediately suspend a permit for failure to maintain
required insurance and shall not restore the permit until proof of insurance is provided. A
person whose permit is revoked or suspended or who is assessed an administrative penalty
may appeal the commissioner's action in a contested case proceeding under chapter 14.new text begin A
penalty collected under this subdivision must be deposited in the general fund.
new text end

Sec. 27.

Minnesota Statutes 2014, section 239.785, subdivision 6, is amended to read:


Subd. 6.

Liquefied petroleum gas account.

A liquefied petroleum gas account in
the special revenue fund is established in the state treasury. Fees deleted text beginand penaltiesdeleted text end collected
under this section must be deposited in the state treasury and credited to the liquefied
petroleum gas account. new text beginPenalties must be deposited in the general fund. new text endMoney in that
account, including interest earned, is appropriated to the commissioner of commerce for
programs to improve the energy efficiency of residential liquefied petroleum gas heating
equipment in low-income households, and, when necessary, to provide weatherization
services to the homes.

Sec. 28.

Minnesota Statutes 2014, section 297F.21, subdivision 3, is amended to read:


Subd. 3.

Inventory; judicial determination; appeal; disposition of seized
property.

(a) Within ten days after the seizure of any alleged contraband, the person
making the seizure shall serve by certified mail an inventory of the property seized on the
person from whom the seizure was made, if known, and on any person known or believed
to have any right, title, interest, or lien in the property, at the last known address, and file
a copy with the commissioner. The notice must include an explanation of the right to
demand a judicial forfeiture determination.

(b) Within 60 days after the date of service of the inventory, which is the date of
mailing, the person from whom the property was seized or any person claiming an interest
in the property may file a demand for a judicial determination of the question as to whether
the property was lawfully subject to seizure and forfeiture. The demand must be in the
form of a civil complaint and must be filed with the court administrator in the county in
which the seizure occurred, together with proof of service of a copy of the complaint
on the commissioner of revenue, and the standard filing fee for civil actions unless the
petitioner has the right to sue in forma pauperis under section 563.01. If the value of the
seized property is $10,000 or less, the claimant may file an action in conciliation court for
recovery of the property. If the value of the seized property is less than $500, the claimant
does not have to pay the conciliation court filing fee.

(c) The complaint must be captioned in the name of the claimant as plaintiff and
the seized property as defendant, and must state with specificity the grounds on which
the claimant alleges the property was improperly seized and the plaintiff's interest in the
property seized. No responsive pleading is required of the commissioner, and no court
fees may be charged for the commissioner's appearance in the matter. The proceedings
are governed by the Rules of Civil Procedure. Notwithstanding any law to the contrary,
an action for the return of property seized under this section may not be maintained by
or on behalf of any person who has been served with an inventory unless the person has
complied with this subdivision. The court shall decide whether the alleged contraband is
contraband, as defined in subdivision 1. The court shall hear the action without a jury and
shall try and determine the issues of fact and law involved.

(d) When a judgment of forfeiture is entered, unless the judgment is stayed pending
an appeal, the commissioner:

(1) may authorize the forfeited property to be used for the purpose of enforcing a
criminal provision of state or federal law;

(2) shall cause forfeited cigarette packages or tobacco products not used under
clause (1) to be destroyed and products used under clause (1) to be destroyed upon the
completion of use; and

(3) may cause the forfeited property, other than forfeited cigarette packages or
tobacco products, to be sold at public auction as provided by law.

The person making a sale, after deducting the expense of keeping the property, the
fee for seizure, and the costs of the sale, shall pay all liens according to their priority,
which are established as being bona fide and as existing without the lienor having any
notice or knowledge that the property was being used or was intended to be used for or in
connection with the violation. The balance of the proceeds must be paid 75 percent to the
deleted text beginDepartment of Revenue for deposit as a supplement to its operating fund or similar fund
for official use
deleted text endnew text begin general fundnew text end, and 25 percent to the county attorney or other prosecuting
agency that handled the court proceeding, if there is one, for deposit as a supplement to
its operating fund or similar fund for prosecutorial purposes. If there is no prosecuting
authority involved in the forfeiture, the 25 percent of the proceeds otherwise designated
for the prosecuting authority must be deposited into the general fund.

(e) If no demand for judicial determination is made, the property seized is considered
forfeited to the state by operation of law and may be disposed of by the commissioner as
provided in the case of a judgment of forfeiture.

Sec. 29.

Minnesota Statutes 2014, section 297G.20, subdivision 4, is amended to read:


Subd. 4.

Inventory; judicial determination; appeal; disposition of seized
property.

(a) Within ten days after the seizure of alleged contraband, the person making
the seizure shall serve by certified mail an inventory of the property seized on the person
from whom the property was seized, if known, and on any person known or believed to
have any right, title, interest, or lien in the property, at the last known address, and file a
copy with both the commissioners of revenue and public safety. The notice must include
an explanation of the right to demand a judicial forfeiture determination.

(b) Within 60 days after the date of service of the inventory, which is the date of
mailing, the person from whom the property was seized or any person claiming an interest
in the property may file a demand for judicial determination of whether the property was
lawfully subject to seizure and forfeiture. The demand must be in the form of a civil
complaint and must be filed with the court administrator in the county in which the seizure
occurred, together with proof of service of a copy of the complaint on the commissioner of
revenue or public safety, and the standard filing fee for civil actions unless the petitioner
has the right to sue in forma pauperis under section 563.01. If the value of the seized
property or vehicle is $10,000 or less, the claimant may file an action in conciliation court
for recovery of the property. If the value of the seized property is less than $500, the
claimant does not have to pay the conciliation court filing fee.

(c) The complaint must be captioned in the name of the claimant as plaintiff and
the seized property as defendant, and must state with specificity the grounds on which
the claimant alleges the property was improperly seized and the plaintiff's interest in the
property seized. No responsive pleading is required of the commissioner of revenue or
public safety and no court fees may be charged for either commissioner's appearance in the
matter. The proceedings are governed by the Rules of Civil Procedure. Notwithstanding
any law to the contrary, an action for the return of property seized under this section may
not be maintained by or on behalf of any person who has been served with an inventory
unless the person has complied with this subdivision. The court shall hear the action
without a jury and determine the issues of fact and law involved.

(d) If a judgment of forfeiture is entered, the seizing authority may, unless the
judgment is stayed pending an appeal, either:

(1) cause the forfeited property, other than a vehicle, to be destroyed; or

(2) cause it to be sold at a public auction as provided by law.

The person making a sale, after deducting the expense of keeping the property, the
fee for seizure, and the costs of the sale, shall pay all liens according to their priority,
which are established as being bona fide and as existing without the lienor having any
notice or knowledge that the property was being used or was intended to be used for or
in connection with the violation. The balance of the proceeds must be paid 75 percent
to the deleted text beginseizing authority for deposit as a supplement to its operating fund or similar fund
for official use
deleted text endnew text begin general fundnew text end, and 25 percent to the county attorney or other prosecuting
agency that handled the court proceeding, if there is one, for deposit as a supplement to
its operating fund or similar fund for prosecutorial purposes. If there is no prosecuting
authority involved in the forfeiture, the 25 percent of the proceeds otherwise designated
for the prosecuting authority must be deposited into the general fund.

(e) If no demand is made, the property seized is considered forfeited to the seizing
authority by operation of law and may be disposed of by the seizing authority as provided
for a judgment of forfeiture.

Sec. 30.

Minnesota Statutes 2014, section 341.321, is amended to read:


341.321 FEE SCHEDULE.

(a) The fee schedule for professional licenses issued by the commissioner is as
follows:

(1) referees, $80 for each initial license and each renewal;

(2) promoters, $700 for each initial license and each renewal;

(3) judges and knockdown judges, $80 for each initial license and each renewal;

(4) trainers, $80 for each initial license and each renewal;

(5) ring announcers, $80 for each initial license and each renewal;

(6) seconds, $80 for each initial license and each renewal;

(7) timekeepers, $80 for each initial license and each renewal;

(8) combatants, $100 for each initial license and each renewal;

(9) managers, $80 for each initial license and each renewal; and

(10) ringside physicians, $80 for each initial license and each renewal.

In addition to the license fee and the late filing penalty fee in section 341.32, subdivision
2
, if applicable, an individual who applies for a professional license on the same day the
combative sporting event is held shall pay a late fee of $100 plus the original license fee of
$120 at the time the application is submitted.

(b) The fee schedule for amateur licenses issued by the commissioner is as follows:

(1) referees, $80 for each initial license and each renewal;

(2) promoters, $700 for each initial license and each renewal;

(3) judges and knockdown judges, $80 for each initial license and each renewal;

(4) trainers, $80 for each initial license and each renewal;

(5) ring announcers, $80 for each initial license and each renewal;

(6) seconds, $80 for each initial license and each renewal;

(7) timekeepers, $80 for each initial license and each renewal;

(8) combatant, $60 for each initial license and each renewal;

(9) managers, $80 for each initial license and each renewal; and

(10) ringside physicians, $80 for each initial license and each renewal.

(c) The commissioner shall establish a contest fee for each combative sport contest.
The professional combative sport contest fee is $1,500 per event or not more than four
percent of the gross ticket sales, whichever is greater, as determined by the commissioner
when the combative sport contest is scheduled, the amateur combative sport contest fee
shall be $1,500 or not more than four percent of the gross ticket sales, whichever is
greater. The commissioner shall consider the size and type of venue when establishing a
contest fee. The commissioner may establish the maximum number of complimentary
tickets allowed for each event by rule. A professional or amateur combative sport contest
fee is nonrefundable.

(d) All fees deleted text beginand penaltiesdeleted text end collected by the commissioner must be deposited in the
commissioner account in the special revenue fund.new text begin All penalties must be deposited in the
general fund.
new text end