1.1 	A bill for an act
1.2 	relating to taxation; making technical, administrative, and clarifying changes 
1.3 	to income, property, sales and use, insurance, minerals, gasoline, and other 
1.4 	various taxes and tax-related provisions; modifying tax-forfeited land provisions;
1.5 	amending Minnesota Statutes 2010, sections 270C.30; 273.1231, subdivision 4; 
1.6 	273.124, subdivisions 1, 14; 282.01, subdivisions 1a, 1c, 1d; 282.014; 282.12; 
1.7 	290.01, subdivisions 19a, 19b; 290.06, subdivision 2c; 290.091, subdivision 
1.8 	2; 290.0922, subdivisions 2, 3; 290.095, subdivision 11; 296A.083, by adding 
1.9 	a subdivision; 296A.18, subdivision 7, by adding a subdivision; 297A.61, 
1.10 	subdivision 3, by adding a subdivision; 297A.71, subdivision 23; 297A.89, 
1.11 	subdivision 2; 297B.08; 297I.15, by adding a subdivision; 298.225, subdivision 
1.12 	1; 298.28, subdivision 2; 469.319, subdivision 5; repealing Minnesota Statutes 
1.13 	2010, sections 272.02, subdivision 34; 273.124, subdivision 10; 281.37; 
1.14 	296A.18, subdivision 9.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	ARTICLE 1
1.17 	INCOME TAX

1.18 	Section 1. Minnesota Statutes 2010, section 290.01, subdivision 19a, is amended to 
1.19 	read:
1.20 		Subd. 19a.Additions to federal taxable income. For individuals, estates, and 
1.21 	trusts, there shall be added to federal taxable income:
1.22 	(1)(i) interest income on obligations of any state other than Minnesota or a political 
1.23 	or governmental subdivision, municipality, or governmental agency or instrumentality 
1.24 	of any state other than Minnesota exempt from federal income taxes under the Internal 
1.25 	Revenue Code or any other federal statute; and
1.26 	(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue 
1.27 	Code, except:
2.1 	(A) the portion of the exempt-interest dividends exempt from state taxation under 
2.2 	the laws of the United States; and
2.3 	(B) the portion of the exempt-interest dividends derived from interest income 
2.4 	on obligations of the state of Minnesota or its political or governmental subdivisions, 
2.5 	municipalities, governmental agencies or instrumentalities, but only if the portion of the 
2.6 	exempt-interest dividends from such Minnesota sources paid to all shareholders represents 
2.7 	95 percent or more of the exempt-interest dividends, including any dividends exempt 
2.8 	under subitem (A), that are paid by the regulated investment company as defined in section 
2.9 	851(a) of the Internal Revenue Code, or the fund of the regulated investment company as 
2.10 	defined in section 851(g) of the Internal Revenue Code, making the payment; and
2.11 	(iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal 
2.12 	government described in section 7871(c) of the Internal Revenue Code shall be treated as 
2.13 	interest income on obligations of the state in which the tribe is located;
2.14 	(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid 
2.15 	or accrued within the taxable year under this chapter and the amount of taxes based on 
2.16 	net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other 
2.17 	state or to any province or territory of Canada, to the extent allowed as a deduction 
2.18 	under section 63(d) of the Internal Revenue Code, but the addition may not be more 
2.19 	than the amount by which the itemized deductions as allowed under section 63(d) of 
2.20 	the Internal Revenue Code exceeds the amount of the standard deduction as defined in 
2.21 	section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under 
2.22 	sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of 
2.23 	this paragraph, the disallowance of itemized deductions under section 68 of the Internal 
2.24 	Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are 
2.25 	the last itemized deductions disallowed;
2.26 	(3) the capital gain amount of a lump-sum distribution to which the special tax under 
2.27 	section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
2.28 	(4) the amount of income taxes paid or accrued within the taxable year under this 
2.29 	chapter and taxes based on net income paid to any other state or any province or territory 
2.30 	of Canada, to the extent allowed as a deduction in determining federal adjusted gross 
2.31 	income. For the purpose of this paragraph, income taxes do not include the taxes imposed 
2.32 	by sections 290.0922, subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729;
2.33 	(5) the amount of expense, interest, or taxes disallowed pursuant to section 290.10 
2.34 	other than expenses or interest used in computing net interest income for the subtraction 
2.35 	allowed under subdivision 19b, clause (1);
3.1 	(6) the amount of a partner's pro rata share of net income which does not flow 
3.2 	through to the partner because the partnership elected to pay the tax on the income under 
3.3 	section 6242(a)(2) of the Internal Revenue Code;
3.4 	(7) 80 percent of the depreciation deduction allowed under section 168(k) of the 
3.5 	Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that 
3.6 	in the taxable year generates a deduction for depreciation under section 168(k) and the 
3.7 	activity generates a loss for the taxable year that the taxpayer is not allowed to claim for 
3.8 	the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is 
3.9 	limited to excess of the depreciation claimed by the activity under section 168(k) over the 
3.10 	amount of the loss from the activity that is not allowed in the taxable year. In succeeding 
3.11 	taxable years when the losses not allowed in the taxable year are allowed, the depreciation 
3.12 	under section 168(k) is allowed;
3.13 	(8) 80 percent of the amount by which the deduction allowed by section 179 of the 
3.14 	Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal 
3.15 	Revenue Code of 1986, as amended through December 31, 2003;
3.16 	(9) to the extent deducted in computing federal taxable income, the amount of the 
3.17 	deduction allowable under section 199 of the Internal Revenue Code;
3.18 	(10) the exclusion allowed under section 139A of the Internal Revenue Code for 
3.19 	federal subsidies for prescription drug plans;
3.20 	(11) the amount of expenses disallowed under section 290.10, subdivision 2;
3.21 	(12) the amount deducted for qualified tuition and related expenses under section 
3.22 	222 of the Internal Revenue Code, to the extent deducted from gross income;
3.23 	(13) the amount deducted for certain expenses of elementary and secondary school 
3.24 	teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted 
3.25 	from gross income;
3.26 	(14) the additional standard deduction for property taxes payable that is allowable 
3.27 	under section 63(c)(1)(C) of the Internal Revenue Code;
3.28 	(15) the additional standard deduction for qualified motor vehicle sales taxes 
3.29 	allowable under section 63(c)(1)(E) of the Internal Revenue Code;
3.30 	(16) discharge of indebtedness income resulting from reacquisition of business 
3.31 	indebtedness and deferred under section 108(i) of the Internal Revenue Code; and
3.32 	(17) the amount of unemployment compensation exempt from tax under section 
3.33 	85(c) of the Internal Revenue Code; and
3.34 	(18) changes to federal taxable income attributable to a net operating loss that the 
3.35 	taxpayer elected to carry back for more than two years for federal purposes but for which 
4.1 	the losses can be carried back for only two years under section 290.095, subdivision 
4.2 	11, paragraph (c).

4.3 	EFFECTIVE DATE. This section is effective retroactively for losses generated in 
4.4 	taxable years beginning after December 31, 2007.

4.5 	Sec. 2. Minnesota Statutes 2010, section 290.01, subdivision 19b, is amended to read:
4.6 		Subd. 19b.Subtractions from federal taxable income. For individuals, estates, 
4.7 	and trusts, there shall be subtracted from federal taxable income:
4.8 	(1) net interest income on obligations of any authority, commission, or 
4.9 	instrumentality of the United States to the extent includable in taxable income for federal 
4.10 	income tax purposes but exempt from state income tax under the laws of the United States;
4.11 	(2) if included in federal taxable income, the amount of any overpayment of income 
4.12 	tax to Minnesota or to any other state, for any previous taxable year, whether the amount 
4.13 	is received as a refund or as a credit to another taxable year's income tax liability;
4.14 	(3) the amount paid to others, less the amount used to claim the credit allowed under 
4.15 	section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten 
4.16 	to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and 
4.17 	transportation of each qualifying child in attending an elementary or secondary school 
4.18 	situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a 
4.19 	resident of this state may legally fulfill the state's compulsory attendance laws, which 
4.20 	is not operated for profit, and which adheres to the provisions of the Civil Rights Act 
4.21 	of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or 
4.22 	tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause, 
4.23 	"textbooks" includes books and other instructional materials and equipment purchased 
4.24 	or leased for use in elementary and secondary schools in teaching only those subjects 
4.25 	legally and commonly taught in public elementary and secondary schools in this state. 
4.26 	Equipment expenses qualifying for deduction includes expenses as defined and limited in 
4.27 	section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional 
4.28 	books and materials used in the teaching of religious tenets, doctrines, or worship, the 
4.29 	purpose of which is to instill such tenets, doctrines, or worship, nor does it include books 
4.30 	or materials for, or transportation to, extracurricular activities including sporting events, 
4.31 	musical or dramatic events, speech activities, driver's education, or similar programs. No 
4.32 	deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or 
4.33 	the qualifying child's vehicle to provide such transportation for a qualifying child. For 
4.34 	purposes of the subtraction provided by this clause, "qualifying child" has the meaning 
4.35 	given in section 32(c)(3) of the Internal Revenue Code;
5.1 	(4) income as provided under section 290.0802;
5.2 	(5) to the extent included in federal adjusted gross income, income realized on 
5.3 	disposition of property exempt from tax under section 290.491;
5.4 	(6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E) 
5.5 	of the Internal Revenue Code in determining federal taxable income by an individual 
5.6 	who does not itemize deductions for federal income tax purposes for the taxable year, an 
5.7 	amount equal to 50 percent of the excess of charitable contributions over $500 allowable 
5.8 	as a deduction for the taxable year under section 170(a) of the Internal Revenue Code, 
5.9 	under the provisions of Public Law 109-1 and Public Law 111-126;
5.10 	(7) for individuals who are allowed a federal foreign tax credit for taxes that do not 
5.11 	qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover 
5.12 	of subnational foreign taxes for the taxable year, but not to exceed the total subnational 
5.13 	foreign taxes reported in claiming the foreign tax credit. For purposes of this clause, 
5.14 	"federal foreign tax credit" means the credit allowed under section 27 of the Internal 
5.15 	Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed 
5.16 	under section 904(c) of the Internal Revenue Code minus national level foreign taxes to 
5.17 	the extent they exceed the federal foreign tax credit;
5.18 	(8) in each of the five tax years immediately following the tax year in which an 
5.19 	addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case 
5.20 	of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth 
5.21 	of the delayed depreciation. For purposes of this clause, "delayed depreciation" means 
5.22 	the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or 
5.23 	subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the 
5.24 	positive value of any net operating loss under section 172 of the Internal Revenue Code 
5.25 	generated for the tax year of the addition. The resulting delayed depreciation cannot be 
5.26 	less than zero;
5.27 	(9) job opportunity building zone income as provided under section 469.316;
5.28 	(10) to the extent included in federal taxable income, the amount of compensation 
5.29 	paid to members of the Minnesota National Guard or other reserve components of the 
5.30 	United States military for active service performed in Minnesota, excluding compensation 
5.31 	for services performed under the Active Guard Reserve (AGR) program. For purposes of 
5.32 	this clause, "active service" means (i) state active service as defined in section 190.05, 
5.33 	subdivision 5a, clause (1); or (ii) federally funded state active service as defined in 
5.34 	section 190.05, subdivision 5b; or (iii) federal active service as defined in section 190.05, 
5.35 	subdivision 5c, but "active service" excludes service performed in accordance with section 
5.36 	190.08, subdivision 3;
6.1 	(11) to the extent included in federal taxable income, the amount of compensation 
6.2 	paid to Minnesota residents who are members of the armed forces of the United States or 
6.3 	United Nations for active duty performed outside Minnesota under United States Code, 
6.4 	title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of 
6.5 	the United Nations;
6.6 	(12) an amount, not to exceed $10,000, equal to qualified expenses related to a 
6.7 	qualified donor's donation, while living, of one or more of the qualified donor's organs 
6.8 	to another person for human organ transplantation. For purposes of this clause, "organ" 
6.9 	means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow; 
6.10 	"human organ transplantation" means the medical procedure by which transfer of a human 
6.11 	organ is made from the body of one person to the body of another person; "qualified 
6.12 	expenses" means unreimbursed expenses for both the individual and the qualified donor 
6.13 	for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses 
6.14 	may be subtracted under this clause only once; and "qualified donor" means the individual 
6.15 	or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An 
6.16 	individual may claim the subtraction in this clause for each instance of organ donation for 
6.17 	transplantation during the taxable year in which the qualified expenses occur;
6.18 	(13) in each of the five tax years immediately following the tax year in which an 
6.19 	addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a 
6.20 	shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the 
6.21 	addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the 
6.22 	case of a shareholder of a corporation that is an S corporation, minus the positive value of 
6.23 	any net operating loss under section 172 of the Internal Revenue Code generated for the 
6.24 	tax year of the addition. If the net operating loss exceeds the addition for the tax year, a 
6.25 	subtraction is not allowed under this clause;
6.26 	(14) to the extent included in the federal taxable income of a nonresident of 
6.27 	Minnesota, compensation paid to a service member as defined in United States Code, title 
6.28 	10, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief 
6.29 	Act, Public Law 108-189, section 101(2);
6.30 	(15) international economic development zone income as provided under section 
6.31 	469.325;
6.32 	(16) to the extent included in federal taxable income, the amount of national service 
6.33 	educational awards received from the National Service Trust under United States Code, 
6.34 	title 42, sections 12601 to 12604, for service in an approved Americorps National Service 
6.35 	program; and
7.1 	(17) to the extent included in federal taxable income, discharge of indebtedness 
7.2 	income resulting from reacquisition of business indebtedness included in federal taxable 
7.3 	income under section 108(i) of the Internal Revenue Code. This subtraction applies only 
7.4 	to the extent that the income was included in net income in a prior year as a result of the 
7.5 	addition under section 290.01, subdivision 19a, clause (16); and
7.6 	(18) the amount of the net operating loss allowed under section 290.095, subdivision 
7.7 	11, paragraph (c).

7.8 	EFFECTIVE DATE. The changes to clauses (10), (11), and (14) are effective the 
7.9 	day following final enactment. Clause (18) is effective retroactively for losses generated 
7.10 	in taxable years beginning after December 31, 2007.

7.11 	Sec. 3. Minnesota Statutes 2010, section 290.06, subdivision 2c, is amended to read:
7.12 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income 
7.13 	taxes imposed by this chapter upon married individuals filing joint returns and surviving 
7.14 	spouses as defined in section 2(a) of the Internal Revenue Code must be computed by 
7.15 	applying to their taxable net income the following schedule of rates:
7.16 	(1) On the first $25,680, 5.35 percent;
7.17 	(2) On all over $25,680, but not over $102,030, 7.05 percent;
7.18 	(3) On all over $102,030, 7.85 percent.
7.19 	Married individuals filing separate returns, estates, and trusts must compute their 
7.20 	income tax by applying the above rates to their taxable income, except that the income 
7.21 	brackets will be one-half of the above amounts.
7.22 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
7.23 	computed by applying to taxable net income the following schedule of rates:
7.24 	(1) On the first $17,570, 5.35 percent;
7.25 	(2) On all over $17,570, but not over $57,710, 7.05 percent;
7.26 	(3) On all over $57,710, 7.85 percent.
7.27 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying 
7.28 	as a head of household as defined in section 2(b) of the Internal Revenue Code must be 
7.29 	computed by applying to taxable net income the following schedule of rates:
7.30 	(1) On the first $21,630, 5.35 percent;
7.31 	(2) On all over $21,630, but not over $86,910, 7.05 percent;
7.32 	(3) On all over $86,910, 7.85 percent.
7.33 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the 
7.34 	tax of any individual taxpayer whose taxable net income for the taxable year is less than 
7.35 	an amount determined by the commissioner must be computed in accordance with tables 
8.1 	prepared and issued by the commissioner of revenue based on income brackets of not 
8.2 	more than $100. The amount of tax for each bracket shall be computed at the rates set 
8.3 	forth in this subdivision, provided that the commissioner may disregard a fractional part of 
8.4 	a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
8.5 	(e) An individual who is not a Minnesota resident for the entire year must compute 
8.6 	the individual's Minnesota income tax as provided in this subdivision. After the 
8.7 	application of the nonrefundable credits provided in this chapter, the tax liability must 
8.8 	then be multiplied by a fraction in which:
8.9 	(1) the numerator is the individual's Minnesota source federal adjusted gross income 
8.10 	as defined in section 62 of the Internal Revenue Code and increased by the additions 
8.11 	required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), 
8.12 	(13), and (16), and (17) to (18), and reduced by the Minnesota assignable portion of 
8.13 	the subtraction for United States government interest under section 290.01, subdivision 
8.14 	19b, clause (1), and the subtractions under section 290.01, subdivision 19b, clauses (8), 
8.15 	(9), (13), (14), (15), and (17), and (18), after applying the allocation and assignability 
8.16 	provisions of section 290.081, clause (a), or 290.17; and
8.17 	(2) the denominator is the individual's federal adjusted gross income as defined in 
8.18 	section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in 
8.19 	section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16), and 
8.20 	(17) to (18), and reduced by the amounts specified in section 290.01, subdivision 19b, 
8.21 	clauses (1), (8), (9), (13), (14), (15), and (17), and (18).

8.22 	EFFECTIVE DATE. This section is effective retroactively for losses generated in 
8.23 	taxable years beginning after December 31, 2007.

8.24 	Sec. 4. Minnesota Statutes 2010, section 290.091, subdivision 2, is amended to read:
8.25 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
8.26 	terms have the meanings given:
8.27 	(a) "Alternative minimum taxable income" means the sum of the following for 
8.28 	the taxable year:
8.29 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
8.30 	55(b)(2) of the Internal Revenue Code;
8.31 	(2) the taxpayer's itemized deductions allowed in computing federal alternative 
8.32 	minimum taxable income, but excluding:
8.33 	(i) the charitable contribution deduction under section 170 of the Internal Revenue 
8.34 	Code;
8.35 	(ii) the medical expense deduction;
9.1 	(iii) the casualty, theft, and disaster loss deduction; and
9.2 	(iv) the impairment-related work expenses of a disabled person;
9.3 	(3) for depletion allowances computed under section 613A(c) of the Internal 
9.4 	Revenue Code, with respect to each property (as defined in section 614 of the Internal 
9.5 	Revenue Code), to the extent not included in federal alternative minimum taxable income, 
9.6 	the excess of the deduction for depletion allowable under section 611 of the Internal 
9.7 	Revenue Code for the taxable year over the adjusted basis of the property at the end of the 
9.8 	taxable year (determined without regard to the depletion deduction for the taxable year);
9.9 	(4) to the extent not included in federal alternative minimum taxable income, the 
9.10 	amount of the tax preference for intangible drilling cost under section 57(a)(2) of the 
9.11 	Internal Revenue Code determined without regard to subparagraph (E);
9.12 	(5) to the extent not included in federal alternative minimum taxable income, the 
9.13 	amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
9.14 	(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7) 
9.15 	to (9), (12), (13), and (16), and (17) to (18);
9.16 	less the sum of the amounts determined under the following:
9.17 	(1) interest income as defined in section 290.01, subdivision 19b, clause (1);
9.18 	(2) an overpayment of state income tax as provided by section 290.01, subdivision 
9.19 	19b, clause (2), to the extent included in federal alternative minimum taxable income;
9.20 	(3) the amount of investment interest paid or accrued within the taxable year on 
9.21 	indebtedness to the extent that the amount does not exceed net investment income, as 
9.22 	defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include 
9.23 	amounts deducted in computing federal adjusted gross income; and
9.24 	(4) amounts subtracted from federal taxable income as provided by section 290.01, 
9.25 	subdivision 19b, clauses (6), (8) to (15), and (17); and
9.26 	(5) the amount of the net operating loss allowed under section 290.095, subdivision 
9.27 	11, paragraph (c).
9.28 	In the case of an estate or trust, alternative minimum taxable income must be 
9.29 	computed as provided in section 59(c) of the Internal Revenue Code.
9.30 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) 
9.31 	of the Internal Revenue Code.
9.32 	(c) "Net minimum tax" means the minimum tax imposed by this section.
9.33 	(d) "Regular tax" means the tax that would be imposed under this chapter (without 
9.34 	regard to this section and section 290.032), reduced by the sum of the nonrefundable 
9.35 	credits allowed under this chapter.
10.1 	(e) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable 
10.2 	income after subtracting the exemption amount determined under subdivision 3.

10.3 	EFFECTIVE DATE. This section is effective retroactively for losses generated in 
10.4 	taxable years beginning after December 31, 2007.

10.5 	Sec. 5. Minnesota Statutes 2010, section 290.0922, subdivision 2, is amended to read:
10.6 		Subd. 2.Exemptions. The following entities are exempt from the tax imposed 
10.7 	by this section:
10.8 	(1) corporations exempt from tax under section 290.05;
10.9 	(2) real estate investment trusts;
10.10 	(3) regulated investment companies or a fund thereof; and
10.11 	(4) entities having a valid election in effect under section 860D(b) of the Internal 
10.12 	Revenue Code;
10.13 	(5) town and farmers' mutual insurance companies;
10.14 	(6) cooperatives organized under chapter 308A or 308B that provide housing 
10.15 	exclusively to persons age 55 and over and are classified as homesteads under section 
10.16 	273.124, subdivision 3;
10.17 	(7) an entity a qualified business as defined under section 469.310, subdivision 11, 
10.18 	if for the taxable year all of its property is located in a job opportunity building zone 
10.19 	designated under section 469.314 and all of its payroll is a job opportunity building zone 
10.20 	payroll under section 469.310; and
10.21 	(8) an entity, if for the taxable year all of its property is located in an international 
10.22 	economic development zone designated under section 469.322, and all of its payroll is 
10.23 	international economic development zone payroll under section 469.321. The exemption 
10.24 	under this clause applies to taxable years beginning during the duration of the international 
10.25 	economic development zone.
10.26 	Entities not specifically exempted by this subdivision are subject to tax under this 
10.27 	section, notwithstanding section 290.05.

10.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

10.29 	Sec. 6. Minnesota Statutes 2010, section 290.0922, subdivision 3, is amended to read:
10.30 		Subd. 3.Definitions. (a) "Minnesota sales or receipts" means the total sales 
10.31 	apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts 
10.32 	attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the 
11.1 	total sales or receipts apportioned or attributed to Minnesota pursuant to any other 
11.2 	apportionment formula applicable to the taxpayer.
11.3 	(b) "Minnesota property" means total Minnesota tangible property as provided in 
11.4 	section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota, 
11.5 	but does not include: (1) the property of a qualified business as defined under section 
11.6 	469.310, subdivision 11, that is located in a job opportunity building zone designated 
11.7 	under section 469.314, (2) property of a qualified business located in a biotechnology and 
11.8 	health sciences industry zone designated under section 469.334, or (3) for taxable years 
11.9 	beginning during the duration of the zone, property of a qualified business located in the 
11.10 	international economic development zone designated under section 469.322. Intangible 
11.11 	property shall not be included in Minnesota property for purposes of this section. 
11.12 	Taxpayers who do not utilize tangible property to apportion income shall nevertheless 
11.13 	include Minnesota property for purposes of this section. On a return for a short taxable 
11.14 	year, the amount of Minnesota property owned, as determined under section 290.191, 
11.15 	shall be included in Minnesota property based on a fraction in which the numerator is the 
11.16 	number of days in the short taxable year and the denominator is 365.
11.17 	(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section 
11.18 	290.191, subdivision 12, but does not include: (1) the job opportunity building zone 
11.19 	payrolls payroll under section 469.310, subdivision 8, of a qualified business as defined 
11.20 	under section 469.310, subdivision 11, (2) biotechnology and health sciences industry 
11.21 	zone payrolls under section 469.330, subdivision 8, or (3) for taxable years beginning 
11.22 	during the duration of the zone, international economic development zone payrolls under 
11.23 	section 469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income 
11.24 	shall nevertheless include Minnesota payrolls for purposes of this section.

11.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

11.26 	Sec. 7. Minnesota Statutes 2010, section 290.095, subdivision 11, is amended to read:
11.27 		Subd. 11.Carryback or carryover adjustments. (a) Except as provided in 
11.28 	paragraph (c), for individuals, estates, and trusts the amount of a net operating loss 
11.29 	that may be carried back or carried over shall be the same dollar amount allowable in 
11.30 	the determination of federal taxable income, provided that, notwithstanding any other 
11.31 	provision, estates and trusts must apply the following adjustments to the amount of the net 
11.32 	operating loss that may be carried back or carried over:
11.33 	(1) Nonassignable income or losses as required by section 290.17.
11.34 	(2) Deductions not allocable to Minnesota under section 290.17.
12.1 	(b) The net operating loss carryback or carryover applied as a deduction in the taxable 
12.2 	year to which the net operating loss is carried back or carried over shall be equal to the 
12.3 	net operating loss carryback or carryover applied in the taxable year in arriving at federal 
12.4 	taxable income provided that trusts and estates must apply the following modifications:
12.5 	(1) Increase the amount of carryback or carryover applied in the taxable year by 
12.6 	the amount of losses and interest, taxes and other expenses not assignable or allowable 
12.7 	to Minnesota incurred in the taxable year.
12.8 	(2) Decrease the amount of carryback or carryover applied in the taxable year by 
12.9 	the amount of income not assignable to Minnesota earned in the taxable year. For estates 
12.10 	and trusts, the net operating loss carryback or carryover to the next consecutive taxable 
12.11 	year shall be the net operating loss carryback or carryover as calculated in clause (b) 
12.12 	less the amount applied in the earlier taxable year(s). No additional net operating loss 
12.13 	carryback or carryover shall be allowed to estates and trusts if the entire amount has been 
12.14 	used to offset Minnesota income in a year earlier than was possible on the federal return. 
12.15 	However, if a net operating loss carryback or carryover was allowed to offset federal 
12.16 	income in a year earlier than was possible on the Minnesota return, an estate or trust 
12.17 	shall still be allowed to offset Minnesota income but only if the loss was assignable to 
12.18 	Minnesota in the year the loss occurred.
12.19 	(c) This paragraph does not apply to eligible small businesses that make a valid 
12.20 	election to carry back their losses for federal purposes under section 172(b)(1)(H) of the 
12.21 	Internal Revenue Code as amended through March 31, 2009.
12.22 	(1) A net operating loss of an individual, estate, or trust that is allowed under this 
12.23 	subdivision and for which the taxpayer elects to carry back for more than two years under 
12.24 	section 172(b)(1)(H) of the Internal Revenue Code is a net operating loss carryback to 
12.25 	each of the two taxable years preceding the loss, and unused portions may be carried 
12.26 	forward for 20 taxable years after the loss.
12.27 	(2) The entire amount of the net operating loss for any taxable year must be carried 
12.28 	to the earliest of the taxable years to which the loss may be carried. The portion of the loss 
12.29 	which may be carried to each of the other taxable years is the excess, if any, of the amount 
12.30 	of the loss over the greater of the taxable net income or alternative minimum taxable 
12.31 	income for each of the taxable years to which the loss may be carried.

12.32 	EFFECTIVE DATE. This section is effective retroactively for losses generated in 
12.33 	taxable years beginning after December 31, 2007.

13.1 	ARTICLE 2
13.2 	PROPERTY TAX

13.3 	Section 1. Minnesota Statutes 2010, section 273.1231, subdivision 4, is amended to 
13.4 	read:
13.5 		Subd. 4.Homestead property.  "Homestead property" means a homestead dwelling 
13.6 	that is classified as class 1a, 1b, 1c, or 2a property or a manufactured home or sectional 
13.7 	home used as a homestead and taxed pursuant to section 273.125, subdivision 8, paragraph 
13.8 	(b), (c), or (d).

13.9 	EFFECTIVE DATE. This section is effective the day following final enactment.

13.10 	Sec. 2. Minnesota Statutes 2010, section 273.124, subdivision 1, is amended to read:
13.11 		Subdivision 1.General rule. (a) Residential real estate that is occupied and used 
13.12 	for the purposes of a homestead by its owner, who must be a Minnesota resident, is 
13.13 	a residential homestead.
13.14 	Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and 
13.15 	used as a homestead by its owner, who must be a Minnesota resident, is an agricultural 
13.16 	homestead.
13.17 	Dates for establishment of a homestead and homestead treatment provided to 
13.18 	particular types of property are as provided in this section.
13.19 	Property held by a trustee under a trust is eligible for homestead classification if the 
13.20 	requirements under this chapter are satisfied.
13.21 	The assessor shall require proof, as provided in subdivision 13, of the facts upon 
13.22 	which classification as a homestead may be determined. Notwithstanding any other law, 
13.23 	the assessor may at any time require a homestead application to be filed in order to verify 
13.24 	that any property classified as a homestead continues to be eligible for homestead status. 
13.25 	Notwithstanding any other law to the contrary, the Department of Revenue may, upon 
13.26 	request from an assessor, verify whether an individual who is requesting or receiving 
13.27 	homestead classification has filed a Minnesota income tax return as a resident for the most 
13.28 	recent taxable year for which the information is available.
13.29 	When there is a name change or a transfer of homestead property, the assessor may 
13.30 	reclassify the property in the next assessment unless a homestead application is filed to 
13.31 	verify that the property continues to qualify for homestead classification.
13.32 	(b) For purposes of this section, homestead property shall include property which 
13.33 	is used for purposes of the homestead but is separated from the homestead by a road, 
13.34 	street, lot, waterway, or other similar intervening property. The term "used for purposes 
14.1 	of the homestead" shall include but not be limited to uses for gardens, garages, or other 
14.2 	outbuildings commonly associated with a homestead, but shall not include vacant land 
14.3 	held primarily for future development. In order to receive homestead treatment for 
14.4 	the noncontiguous property, the owner must use the property for the purposes of the 
14.5 	homestead, and must apply to the assessor, both by the deadlines given in subdivision 
14.6 	9. After initial qualification for the homestead treatment, additional applications for 
14.7 	subsequent years are not required.
14.8 	(c) Residential real estate that is occupied and used for purposes of a homestead by a 
14.9 	relative of the owner is a homestead but only to the extent of the homestead treatment 
14.10 	that would be provided if the related owner occupied the property. For purposes of this 
14.11 	paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild, 
14.12 	grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship 
14.13 	may be by blood or marriage. Property that has been classified as seasonal residential 
14.14 	recreational property at any time during which it has been owned by the current owner or 
14.15 	spouse of the current owner will not be reclassified as a homestead unless it is occupied as 
14.16 	a homestead by the owner; this prohibition also applies to property that, in the absence of 
14.17 	this paragraph, would have been classified as seasonal residential recreational property at 
14.18 	the time when the residence was constructed. Neither the related occupant nor the owner 
14.19 	of the property may claim a property tax refund under chapter 290A for a homestead 
14.20 	occupied by a relative. In the case of a residence located on agricultural land, only the 
14.21 	house, garage, and immediately surrounding one acre of land shall be classified as a 
14.22 	homestead under this paragraph, except as provided in paragraph (d).
14.23 	(d) Agricultural property that is occupied and used for purposes of a homestead by 
14.24 	a relative of the owner, is a homestead, only to the extent of the homestead treatment 
14.25 	that would be provided if the related owner occupied the property, and only if all of the 
14.26 	following criteria are met:
14.27 	(1) the relative who is occupying the agricultural property is a son, daughter, brother, 
14.28 	sister, grandson, granddaughter, father, or mother grandchild, child, sibling, or parent of 
14.29 	the owner of the agricultural property or a son, daughter, brother, sister, grandson, or 
14.30 	granddaughter of the spouse of the owner of the agricultural property;
14.31 	(2) the owner of the agricultural property must be a Minnesota resident;
14.32 	(3) the owner of the agricultural property must not receive homestead treatment on 
14.33 	any other agricultural property in Minnesota; and
14.34 	(4) the owner of the agricultural property is limited to only one agricultural 
14.35 	homestead per family under this paragraph.
15.1 	Neither the related occupant nor the owner of the property may claim a property 
15.2 	tax refund under chapter 290A for a homestead occupied by a relative qualifying under 
15.3 	this paragraph. For purposes of this paragraph, "agricultural property" means the house, 
15.4 	garage, other farm buildings and structures, and agricultural land.
15.5 	Application must be made to the assessor by the owner of the agricultural property to 
15.6 	receive homestead benefits under this paragraph. The assessor may require the necessary 
15.7 	proof that the requirements under this paragraph have been met.
15.8 	(e) In the case of property owned by a property owner who is married, the assessor 
15.9 	must not deny homestead treatment in whole or in part if only one of the spouses occupies 
15.10 	the property and the other spouse is absent due to: (1) marriage dissolution proceedings, 
15.11 	(2) legal separation, (3) employment or self-employment in another location, or (4) other 
15.12 	personal circumstances causing the spouses to live separately, not including an intent to 
15.13 	obtain two homestead classifications for property tax purposes. To qualify under clause 
15.14 	(3), the spouse's place of employment or self-employment must be at least 50 miles distant 
15.15 	from the other spouse's place of employment, and the homesteads must be at least 50 miles 
15.16 	distant from each other. Homestead treatment, in whole or in part, shall not be denied to 
15.17 	the owner's spouse who previously occupied the residence with the owner if the absence 
15.18 	of the owner is due to one of the exceptions provided in this paragraph.
15.19 	(f) The assessor must not deny homestead treatment in whole or in part if:
15.20 	(1) in the case of a property owner who is not married, the owner is absent due to 
15.21 	residence in a nursing home, boarding care facility, or an elderly assisted living facility 
15.22 	property as defined in section 273.13, subdivision 25a, and the property is not otherwise 
15.23 	occupied; or
15.24 	(2) in the case of a property owner who is married, the owner or the owner's spouse 
15.25 	or both are absent due to residence in a nursing home, boarding care facility, or an elderly 
15.26 	assisted living facility property as defined in section 273.13, subdivision 25a, and the 
15.27 	property is not occupied or is occupied only by the owner's spouse.
15.28 	(g) If an individual is purchasing property with the intent of claiming it as a 
15.29 	homestead and is required by the terms of the financing agreement to have a relative 
15.30 	shown on the deed as a co-owner, the assessor shall allow a full homestead classification. 
15.31 	This provision only applies to first-time purchasers, whether married or single, or to a 
15.32 	person who had previously been married and is purchasing as a single individual for the 
15.33 	first time. The application for homestead benefits must be on a form prescribed by the 
15.34 	commissioner and must contain the data necessary for the assessor to determine if full 
15.35 	homestead benefits are warranted.
16.1 	(h) If residential or agricultural real estate is occupied and used for purposes of a 
16.2 	homestead by a child of a deceased owner and the property is subject to jurisdiction of 
16.3 	probate court, the child shall receive relative homestead classification under paragraph (c) 
16.4 	or (d) to the same extent they would be entitled to it if the owner was still living, until 
16.5 	the probate is completed. For purposes of this paragraph, "child" includes a relationship 
16.6 	by blood or by marriage.
16.7 	(i) If a single-family home, duplex, or triplex classified as either residential 
16.8 	homestead or agricultural homestead is also used to provide licensed child care, the 
16.9 	portion of the property used for licensed child care must be classified as a part of the 
16.10 	homestead property.

16.11 	EFFECTIVE DATE. This section is effective for taxes payable in 2012 and 
16.12 	thereafter.

16.13 	Sec. 3. Minnesota Statutes 2010, section 273.124, subdivision 14, is amended to read:
16.14 		Subd. 14.Agricultural homesteads; special provisions.  (a) Real estate of less than 
16.15 	ten acres that is the homestead of its owner must be classified as class 2a under section 
16.16 	273.13, subdivision 23, paragraph (a), if:
16.17 	(1) the parcel on which the house is located is contiguous on at least two sides to (i) 
16.18 	agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 
16.19 	Service, or (iii) land administered by the Department of Natural Resources on which in 
16.20 	lieu taxes are paid under sections 477A.11 to 477A.14;
16.21 	(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 
16.22 	20 acres;
16.23 	(3) the noncontiguous land is located not farther than four townships or cities, or a 
16.24 	combination of townships or cities from the homestead; and
16.25 	(4) the agricultural use value of the noncontiguous land and farm buildings is equal 
16.26 	to at least 50 percent of the market value of the house, garage, and one acre of land.
16.27 	Homesteads initially classified as class 2a under the provisions of this paragraph shall 
16.28 	remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 
16.29 	properties, as long as the homestead remains under the same ownership, the owner owns a 
16.30 	noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 
16.31 	value qualifies under clause (4). Homestead classification under this paragraph is limited 
16.32 	to property that qualified under this paragraph for the 1998 assessment.
16.33 	(b)(i) Agricultural property shall be classified as the owner's homestead, to the same 
16.34 	extent as other agricultural homestead property, if all of the following criteria are met:
17.1 	(1) the agricultural property consists of at least 40 acres including undivided 
17.2 	government lots and correctional 40's;
17.3 	(2) the owner, the owner's spouse, the son or daughter of the owner or owner's 
17.4 	spouse, the brother or sister of the owner or owner's spouse, or the grandson or 
17.5 	granddaughter or a grandchild, child, sibling, or parent of the owner or of the owner's 
17.6 	spouse, is actively farming the agricultural property, either on the person's own behalf 
17.7 	as an individual or on behalf of a partnership operating a family farm, family farm 
17.8 	corporation, joint family farm venture, or limited liability company of which the person is 
17.9 	a partner, shareholder, or member;
17.10 	(3) both the owner of the agricultural property and the person who is actively 
17.11 	farming the agricultural property under clause (2), are Minnesota residents;
17.12 	(4) neither the owner nor the spouse of the owner claims another agricultural 
17.13 	homestead in Minnesota; and
17.14 	(5) neither the owner nor the person actively farming the agricultural property lives 
17.15 	farther than four townships or cities, or a combination of four townships or cities, from the 
17.16 	agricultural property, except that if the owner or the owner's spouse is required to live in 
17.17 	employer-provided housing, the owner or owner's spouse, whichever is actively farming 
17.18 	the agricultural property, may live more than four townships or cities, or combination of 
17.19 	four townships or cities from the agricultural property.
17.20 	The relationship under this paragraph may be either by blood or marriage.
17.21 	(ii) Real Agricultural property held by a trustee under a trust is eligible for 
17.22 	agricultural homestead classification under this paragraph if the qualifications in clause (i) 
17.23 	are met, except that "owner" means the grantor of the trust.
17.24 	(iii) Property containing the residence of an owner who owns qualified property 
17.25 	under clause (i) shall be classified as part of the owner's agricultural homestead, if that 
17.26 	property is also used for noncommercial storage or drying of agricultural crops.
17.27 	(iv) As used in this paragraph, "agricultural property" means class 2a property and 
17.28 	any class 2b property that is contiguous to and under the same ownership as the class 2a 
17.29 	property.
17.30 	(c) Noncontiguous land shall be included as part of a homestead under section 
17.31 	273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a 
17.32 	and the detached land is located in the same township or city, or not farther than four 
17.33 	townships or cities or combination thereof from the homestead. Any taxpayer of these 
17.34 	noncontiguous lands must notify the county assessor that the noncontiguous land is part of 
17.35 	the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer 
17.36 	must also notify the assessor of the other county.
18.1 	(d) Agricultural land used for purposes of a homestead and actively farmed by a 
18.2 	person holding a vested remainder interest in it must be classified as a homestead under 
18.3 	section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, 
18.4 	any other dwellings on the land used for purposes of a homestead by persons holding 
18.5 	vested remainder interests who are actively engaged in farming the property, and up to 
18.6 	one acre of the land surrounding each homestead and reasonably necessary for the use of 
18.7 	the dwelling as a home, must also be assessed class 2a.
18.8 	(e) Agricultural land and buildings that were class 2a homestead property under 
18.9 	section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain 
18.10 	classified as agricultural homesteads for subsequent assessments if:
18.11 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
18.12 	homestead as a result of the April 1997 floods;
18.13 	(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, 
18.14 	or Wilkin;
18.15 	(3) the agricultural land and buildings remain under the same ownership for the 
18.16 	current assessment year as existed for the 1997 assessment year and continue to be used 
18.17 	for agricultural purposes;
18.18 	(4) the dwelling occupied by the owner is located in Minnesota and is within 30 
18.19 	miles of one of the parcels of agricultural land that is owned by the taxpayer; and
18.20 	(5) the owner notifies the county assessor that the relocation was due to the 1997 
18.21 	floods, and the owner furnishes the assessor any information deemed necessary by the 
18.22 	assessor in verifying the change in dwelling. Further notifications to the assessor are not 
18.23 	required if the property continues to meet all the requirements in this paragraph and any 
18.24 	dwellings on the agricultural land remain uninhabited.
18.25 	(f) Agricultural land and buildings that were class 2a homestead property under 
18.26 	section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain 
18.27 	classified agricultural homesteads for subsequent assessments if:
18.28 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
18.29 	homestead as a result of damage caused by a March 29, 1998, tornado;
18.30 	(2) the property is located in the county of Blue Earth, Brown, Cottonwood, 
18.31 	LeSueur, Nicollet, Nobles, or Rice;
18.32 	(3) the agricultural land and buildings remain under the same ownership for the 
18.33 	current assessment year as existed for the 1998 assessment year;
18.34 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles 
18.35 	of one of the parcels of agricultural land that is owned by the taxpayer; and
19.1 	(5) the owner notifies the county assessor that the relocation was due to a March 29, 
19.2 	1998, tornado, and the owner furnishes the assessor any information deemed necessary by 
19.3 	the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 
19.4 	owner must notify the assessor by December 1, 1998. Further notifications to the assessor 
19.5 	are not required if the property continues to meet all the requirements in this paragraph 
19.6 	and any dwellings on the agricultural land remain uninhabited.
19.7 	(g) Agricultural property of a family farm corporation, joint family farm venture, 
19.8 	family farm limited liability company, or partnership operating a family farm as described 
19.9 	under subdivision 8 shall be classified homestead, to the same extent as other agricultural 
19.10 	homestead property, if all of the following criteria are met:
19.11 	(1) the property consists of at least 40 acres including undivided government lots 
19.12 	and correctional 40's;
19.13 	(2) a shareholder, member, or partner of that entity is actively farming the 
19.14 	agricultural property;
19.15 	(3) that shareholder, member, or partner who is actively farming the agricultural 
19.16 	property is a Minnesota resident;
19.17 	(4) neither that shareholder, member, or partner, nor the spouse of that shareholder, 
19.18 	member, or partner claims another agricultural homestead in Minnesota; and
19.19 	(5) that shareholder, member, or partner does not live farther than four townships or 
19.20 	cities, or a combination of four townships or cities, from the agricultural property.
19.21 	Homestead treatment applies under this paragraph for property leased to a family 
19.22 	farm corporation, joint farm venture, limited liability company, or partnership operating a 
19.23 	family farm if legal title to the property is in the name of an individual who is a member, 
19.24 	shareholder, or partner in the entity.
19.25 	(h) To be eligible for the special agricultural homestead under this subdivision, an 
19.26 	initial full application must be submitted to the county assessor where the property is 
19.27 	located. Owners and the persons who are actively farming the property shall be required 
19.28 	to complete only a one-page abbreviated version of the application in each subsequent 
19.29 	year provided that none of the following items have changed since the initial application:
19.30 	(1) the day-to-day operation, administration, and financial risks remain the same;
19.31 	(2) the owners and the persons actively farming the property continue to live within 
19.32 	the four townships or city criteria and are Minnesota residents;
19.33 	(3) the same operator of the agricultural property is listed with the Farm Service 
19.34 	Agency;
19.35 	(4) a Schedule F or equivalent income tax form was filed for the most recent year;
19.36 	(5) the property's acreage is unchanged; and
20.1 	(6) none of the property's acres have been enrolled in a federal or state farm program 
20.2 	since the initial application.
20.3 	The owners and any persons who are actively farming the property must include 
20.4 	the appropriate Social Security numbers, and sign and date the application. If any of the 
20.5 	specified information has changed since the full application was filed, the owner must 
20.6 	notify the assessor, and must complete a new application to determine if the property 
20.7 	continues to qualify for the special agricultural homestead. The commissioner of revenue 
20.8 	shall prepare a standard reapplication form for use by the assessors.
20.9 	(i) Agricultural land and buildings that were class 2a homestead property under 
20.10 	section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain 
20.11 	classified agricultural homesteads for subsequent assessments if:
20.12 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
20.13 	homestead as a result of damage caused by the August 2007 floods;
20.14 	(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, 
20.15 	Steele, Wabasha, or Winona;
20.16 	(3) the agricultural land and buildings remain under the same ownership for the 
20.17 	current assessment year as existed for the 2007 assessment year;
20.18 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles 
20.19 	of one of the parcels of agricultural land that is owned by the taxpayer; and
20.20 	(5) the owner notifies the county assessor that the relocation was due to the August 
20.21 	2007 floods, and the owner furnishes the assessor any information deemed necessary by 
20.22 	the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 
20.23 	owner must notify the assessor by December 1, 2008. Further notifications to the assessor 
20.24 	are not required if the property continues to meet all the requirements in this paragraph 
20.25 	and any dwellings on the agricultural land remain uninhabited.
20.26 	(j) Agricultural land and buildings that were class 2a homestead property under 
20.27 	section 273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain 
20.28 	classified as agricultural homesteads for subsequent assessments taxes payable in 2011 
20.29 	and 2012 if:
20.30 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
20.31 	homestead as a result of the March 2009 floods;
20.32 	(2) the property is located in the county of Marshall;
20.33 	(3) the agricultural land and buildings remain under the same ownership for the 
20.34 	current assessment year as existed for the 2008 assessment year and continue to be used 
20.35 	for agricultural purposes;
21.1 	(4) the dwelling occupied by the owner is located in Minnesota and is within 50 
21.2 	miles of one of the parcels of agricultural land that is owned by the taxpayer; and
21.3 	(5) the owner notifies the county assessor that the relocation was due to the 2009 
21.4 	floods, and the owner furnishes the assessor any information deemed necessary by the 
21.5 	assessor in verifying the change in dwelling. Further notifications to the assessor are not 
21.6 	required if the property continues to meet all the requirements in this paragraph and any 
21.7 	dwellings on the agricultural land remain uninhabited.

21.8 	EFFECTIVE DATE. This section is effective the day following final enactment 
21.9 	except that the change in paragraph (b), clause (i), item (2), is effective for taxes payable 
21.10 	in 2012 and thereafter.

21.11 	Sec. 4. Minnesota Statutes 2010, section 282.01, subdivision 1a, is amended to read:
21.12 		Subd. 1a.Conveyance to public entities. (a) Upon written request from a state 
21.13 	agency or a governmental subdivision of the state, a parcel of unsold tax-forfeited land 
21.14 	must be withheld from sale or lease to others for a maximum of six months. The request 
21.15 	must be submitted to the county auditor. Upon receipt, the county auditor must withhold 
21.16 	the parcel from sale or lease to any other party for six months, and must confirm the 
21.17 	starting date of the six-month withholding period to the requesting agency or subdivision. 
21.18 	If the request is from a governmental subdivision of the state, the governmental 
21.19 	subdivision must pay the maintenance costs incurred by the county during the period the 
21.20 	parcel is withheld. The county board may approve a sale or conveyance to the requesting 
21.21 	party during the withholding period. A conveyance of the property to the requesting 
21.22 	party terminates the withholding period.
21.23 	A governmental subdivision of the state must not make, and a county auditor must 
21.24 	not act upon, a second request to withhold a parcel from sale or lease within 18 months 
21.25 	of a previous request for that parcel. A county may reject a request made under this 
21.26 	paragraph if the request is made more than 30 days after the county has given notice to the 
21.27 	requesting state agency or governmental subdivision of the state that the county intends to 
21.28 	sell or otherwise dispose of the property.
21.29 	(b) Nonconservation tax-forfeited lands may be sold by the county board, for 
21.30 	their market value as determined by the county board, to an organized or incorporated 
21.31 	governmental subdivision of the state for any public purpose for which the subdivision is 
21.32 	authorized to acquire property. When the term "market value" is used in this section, it 
21.33 	means an estimate of the full and actual market value of the parcel as determined by the 
21.34 	county board, but in making this determination, the board and the persons employed by or 
22.1 	under contract with the board in order to perform, conduct, or assist in the determination, 
22.2 	are exempt from the licensure requirements of chapter 82B.
22.3 	(c) Nonconservation tax-forfeited lands may be released from the trust in favor of 
22.4 	the taxing districts on application to the county board by a state agency for an authorized 
22.5 	use at not less than their market value as determined by the county board.
22.6 	(d) Nonconservation tax-forfeited lands may be sold by the county board to an 
22.7 	organized or incorporated governmental subdivision of the state or state agency for less 
22.8 	than their market value if:
22.9 	(1) the county board determines that a sale at a reduced price is in the public interest 
22.10 	because a reduced price is necessary to provide an incentive to correct the blighted 
22.11 	conditions that make the lands undesirable in the open market, or the reduced price will 
22.12 	lead to the development of affordable housing; and
22.13 	(2) the governmental subdivision or state agency has documented its specific plans 
22.14 	for correcting the blighted conditions or developing affordable housing, and the specific 
22.15 	law or laws that empower it to acquire real property in furtherance of the plans.
22.16 	If the sale under this paragraph is to a governmental subdivision of the state, the 
22.17 	commissioner of revenue must convey the property on behalf of the state by quit claim 
22.18 	deed. If the sale under this paragraph is to a state agency, the commissioner must issue a 
22.19 	conveyance document that releases the property from the trust in favor of the taxing 
22.20 	districts.
22.21 	(e) Nonconservation tax-forfeited land held in trust in favor of the taxing districts 
22.22 	may be conveyed by the commissioner of revenue in the name of the state to a 
22.23 	governmental subdivision for an authorized public use, if an application is submitted to the 
22.24 	commissioner which includes a statement of facts as to the use to be made of the tract and 
22.25 	the favorable recommendation of the county board. For the purposes of this paragraph, 
22.26 	"authorized public use" means a use that allows an indefinite segment of the public to 
22.27 	physically use and enjoy the property in numbers appropriate to its size and use, or is for a 
22.28 	public service facility. Authorized public uses as defined in this paragraph are limited to:
22.29 	(1) a road, or right-of-way for a road;
22.30 	(2) a park that is both available to, and accessible by, the public that contains 
22.31 	amenities improvements such as campgrounds, playgrounds, athletic fields, trails, or 
22.32 	shelters;
22.33 	(3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along 
22.34 	with a reasonable amount of surrounding land maintained in its natural state;
23.1 	(4) transit facilities for buses, light rail transit, commuter rail or passenger rail, 
23.2 	including transit ways, park-and-ride lots, transit stations, maintenance and garage 
23.3 	facilities, and other facilities related to a public transit system;
23.4 	(5) public beaches or boat launches;
23.5 	(6) public parking;
23.6 	(7) civic recreation or conference facilities; and
23.7 	(8) public service facilities such as fire halls, police stations, lift stations, water 
23.8 	towers, sanitation facilities, water treatment facilities, and administrative offices.
23.9 	No monetary compensation or consideration is required for the conveyance, except as 
23.10 	provided in subdivision 1g, but the conveyance is subject to the conditions provided in 
23.11 	law, including, but not limited to, the reversion provisions of subdivisions 1c and 1d.
23.12 	(f) The commissioner of revenue shall convey a parcel of nonconservation 
23.13 	tax-forfeited land to a local governmental subdivision of the state by quit claim deed 
23.14 	on behalf of the state upon the favorable recommendation of the county board if the 
23.15 	governmental subdivision has certified to the board that prior to forfeiture the subdivision 
23.16 	was entitled to the parcel under a written development agreement or instrument, but 
23.17 	the conveyance failed to occur prior to forfeiture. No compensation or consideration is 
23.18 	required for, and no conditions attach to, the conveyance.
23.19 	(g) The commissioner of revenue shall convey a parcel of nonconservation 
23.20 	tax-forfeited land to the association of a common interest community by quit claim deed 
23.21 	upon the favorable recommendation of the county board if the association certifies to the 
23.22 	board that prior to forfeiture the association was entitled to the parcel under a written 
23.23 	agreement, but the conveyance failed to occur prior to forfeiture. No compensation or 
23.24 	consideration is required for, and no conditions attach to, the conveyance.
23.25 	(h) Conservation tax-forfeited land may be sold to a governmental subdivision of 
23.26 	the state for less than its market value for either: (1) creation or preservation of wetlands; 
23.27 	(2) drainage or storage of storm water under a storm water management plan; or (3) 
23.28 	preservation, or restoration and preservation, of the land in its natural state. The deed must 
23.29 	contain a restrictive covenant limiting the use of the land to one of these purposes for 
23.30 	30 years or until the property is reconveyed back to the state in trust. At any time, the 
23.31 	governmental subdivision may reconvey the property to the state in trust for the taxing 
23.32 	districts. The deed of reconveyance is subject to approval by the commissioner of revenue. 
23.33 	No part of a purchase price determined under this paragraph shall be refunded upon a 
23.34 	reconveyance, but the amount paid for a conveyance under this paragraph may be taken 
23.35 	into account by the county board when setting the terms of a future sale of the same 
23.36 	property to the same governmental subdivision under paragraph (b) or (d). If the lands 
24.1 	are unplatted and located outside of an incorporated municipality and the commissioner 
24.2 	of natural resources determines there is a mineral use potential, the sale is subject to the 
24.3 	approval of the commissioner of natural resources.
24.4 	(i) A park and recreation board in a city of the first class is a governmental 
24.5 	subdivision for the purposes of this section.

24.6 	EFFECTIVE DATE. This section is effective the day following final enactment.

24.7 	Sec. 5. Minnesota Statutes 2010, section 282.01, subdivision 1c, is amended to read:
24.8 		Subd. 1c.Deed of conveyance; form; approvals. The deed of conveyance for
24.9 	conveying property conveyed for an authorized public use under the authorities in 
24.10 	subdivision 1a, paragraph (e) this section, must be on a form approved by the attorney 
24.11 	general and must be conditioned on continued use of the property for the purpose stated in 
24.12 	the application as provided in this section. TheseAll deeds conveying property for an 
24.13 	authorized public use, regardless of when executed, are conditional use deeds that convey 
24.14 	a defeasible estate. Reversion of the estate occurs by operation of law and without the 
24.15 	requirement for any affirmative act by or on behalf of the state when there is a failure to 
24.16 	put the property to the approved authorized public use for which it was conveyed, or an 
24.17 	abandonment of that use, except as provided in subdivision 1d.

24.18 	EFFECTIVE DATE. This section is effective the day following final enactment.

24.19 	Sec. 6. Minnesota Statutes 2010, section 282.01, subdivision 1d, is amended to read:
24.20 		Subd. 1d.Reverter for failure to use; conveyance to state. (a) If After three years 
24.21 	from the date of the any conveyance of tax-forfeited land to a governmental subdivision 
24.22 	to which tax-forfeited land has been conveyed for an authorized public use as provided 
24.23 	in subdivision 1a, paragraph (e), fails this section, regardless of when the deed for the 
24.24 	authorized public use was executed, if the governmental subdivision has failed to put the 
24.25 	land to that use, or abandons that use, the governing body of the subdivision must: (1) 
24.26 	with the approval of the county board, purchase the property for an authorized public 
24.27 	purpose at the present market value as determined by the county board, or (2) authorize 
24.28 	the proper officers to convey the land, or the part of the land not required for an authorized 
24.29 	public use, to the state of Minnesota in trust for the taxing districts. If the governing 
24.30 	body purchases the property under clause (1), the commissioner of revenue shall, upon 
24.31 	proper application submitted by the county auditor, convey the property on behalf of the 
24.32 	state by quit claim deed to the subdivision free of a use restriction and the possibility of 
24.33 	reversion or defeasement. If the governing body decides to reconvey the property to the 
25.1 	state under this clause, the officers shall execute a deed of conveyance immediately. The 
25.2 	conveyance is subject to the approval of the commissioner and its form must be approved 
25.3 	by the attorney general. For the purposes of this paragraph 15 years from the date of 
25.4 	the conveyance, there is no failure to put the land to the authorized public use and no 
25.5 	abandonment of that use if a formal plan of the governmental subdivision, including, but 
25.6 	not limited to, a comprehensive plan or land use plan that, shows an intended future use 
25.7 	of the land for the authorized public use.
25.8 	(b) Property held by a governmental subdivision of the state under a conditional use 
25.9 	deed executed under subdivision 1a, paragraph (e), this section by the commissioner of 
25.10 	revenue on or after January 1, 2007, may be acquired by that governmental subdivision 
25.11 	after 15 years from the date of the conveyance if the commissioner determines upon 
25.12 	written application from the subdivision that the subdivision has in fact put the property 
25.13 	to the authorized public use for which it was conveyed, and the subdivision has made a 
25.14 	finding that it has no current plans to change the use of the lands. Prior to conveying the 
25.15 	property, the commissioner shall inquire whether the county board where the land is 
25.16 	located objects to a conveyance of the property to the subdivision without conditions and 
25.17 	without further act by or obligation of the subdivision. If the county does not object within 
25.18 	60 days, and the commissioner makes a favorable determination, the commissioner shall 
25.19 	issue a quit claim deed on behalf of the state unconditionally conveying the property to the 
25.20 	governmental subdivision. For purposes of this paragraph, demonstration of an intended 
25.21 	future use for the authorized public use in a formal plan of the governmental subdivision 
25.22 	does not constitute use for that authorized public use.
25.23 	(c) Property held by a governmental subdivision of the state under a conditional use 
25.24 	deed executed under subdivision 1a, paragraph (e), this section by the commissioner of 
25.25 	revenue before January 1, 2007, is released from the use restriction and possibility of 
25.26 	reversion on January 1, 2022, if the county board records a resolution describing the 
25.27 	land and citing this paragraph. The county board may authorize the county treasurer 
25.28 	to deduct the amount of the recording fees from future settlements of property taxes 
25.29 	to the subdivision.
25.30 	(d) All Property conveyed under a conditional use deed executed under subdivision 
25.31 	1a, paragraph (e), this section by the commissioner of revenue, regardless of when the 
25.32 	deed for the authorized public use was executed, is released from the use restriction and 
25.33 	reverter, and any use restriction or reverter for which no declaration of reversion has been 
25.34 	recorded with the county recorder or registrar of titles, as appropriate, is nullified on the 
25.35 	later of: (1) January 1, 2015; (2) 30 years from the date the deed was acknowledged; or 
25.36 	(3) final resolution of an appeal to district court under subdivision 1e, if a lis pendens 
26.1 	related to the appeal is recorded in the office of the county recorder or registrar of titles, 
26.2 	as appropriate, prior to January 1, 2015.

26.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

26.4 	Sec. 7. Minnesota Statutes 2010, section 282.014, is amended to read:
26.5 	282.014 COMPLETION OF SALE, FEE, CONVEYANCE RECORDED.
26.6 	(a) Upon compliance by the purchaser with the provisions of this chapter and with 
26.7 	the terms and conditions of the sale, and upon full payment for the land, plus a $25 fee 
26.8 	in addition to the sale price, the sale shall be complete and a conveyance of the land 
26.9 	shall be issued to the purchaser as provided by the appropriate statutes according to the 
26.10 	status of the land upon forfeiture.
26.11 	The conveyance must be forwarded to the county auditor who shall have the 
26.12 	conveyance recorded before issuing it to the purchaser.
26.13 	(b) In order for the commissioner of revenue to issue a conveyance of tax-forfeited 
26.14 	land under any provision of this chapter other than section 282.01, subdivision 1a, 
26.15 	paragraph (e), or 282.33, and that is not covered by paragraph (a), the grantee must pay 
26.16 	the fee provided in paragraph (a).
26.17 	The conveyance must be forwarded to the county auditor who shall have the 
26.18 	conveyance recorded before issuing it to the grantee.

26.19 	EFFECTIVE DATE. This section is effective for deeds executed by the 
26.20 	commissioner of revenue after June 30, 2011.

26.21 	Sec. 8. Minnesota Statutes 2010, section 282.12, is amended to read:
26.22 	282.12 ALL MINERALS RESERVED.
26.23 	Any sale of suchconveyance of forfeited lands shall be subject to exceptions and 
26.24 	reservations in this state, in trust for the taxing districts of all minerals and mineral rights.

26.25 	EFFECTIVE DATE. This section is effective retroactively from July 1, 2010.

26.26 	Sec. 9.  REPEALER.
 26.27 	Minnesota Statutes 2010, sections 272.02, subdivision 34; 273.124, subdivision 10; 
26.28 	and 281.37, are repealed.

26.29 	EFFECTIVE DATE. This section is effective the day following final enactment.

27.1 	ARTICLE 3
27.2 	SALES AND USE TAX

27.3 	Section 1. Minnesota Statutes 2010, section 297A.61, subdivision 3, is amended to 
27.4 	read:
27.5 		Subd. 3.Sale and purchase. (a) "Sale" and "purchase" include, but are not limited 
27.6 	to, each of the transactions listed in this subdivision.
27.7 	(b) Sale and purchase include:
27.8 	(1) any transfer of title or possession, or both, of tangible personal property, whether 
27.9 	absolutely or conditionally, for a consideration in money or by exchange or barter; and
27.10 	(2) the leasing of or the granting of a license to use or consume, for a consideration 
27.11 	in money or by exchange or barter, tangible personal property, other than a manufactured 
27.12 	home used for residential purposes for a continuous period of 30 days or more.
27.13 	(c) Sale and purchase include the production, fabrication, printing, or processing of 
27.14 	tangible personal property for a consideration for consumers who furnish either directly or 
27.15 	indirectly the materials used in the production, fabrication, printing, or processing.
27.16 	(d) Sale and purchase include the preparing for a consideration of food. 
27.17 	Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited 
27.18 	to, the following:
27.19 	(1) prepared food sold by the retailer;
27.20 	(2) soft drinks;
27.21 	(3) candy;
27.22 	(4) dietary supplements; and
27.23 	(5) all food sold through vending machines.
27.24 	(e) A sale and a purchase includes the furnishing for a consideration of electricity, 
27.25 	gas, water, or steam for use or consumption within this state.
27.26 	(f) A sale and a purchase includes the transfer for a consideration of prewritten 
27.27 	computer software whether delivered electronically, by load and leave, or otherwise.
27.28 	(g) A sale and a purchase includes the furnishing for a consideration of the following 
27.29 	services:
27.30 	(1) the privilege of admission to places of amusement, recreational areas, or athletic 
27.31 	events, and the making available of amusement devices, tanning facilities, reducing 
27.32 	salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
27.33 	(2) lodging and related services by a hotel, rooming house, resort, campground, 
27.34 	motel, or trailer camp, including furnishing the guest of the facility with access to 
27.35 	telecommunication services, and the granting of any similar license to use real property 
28.1 	in a specific facility, other than the renting or leasing of it for a continuous period of 
28.2 	30 days or more under an enforceable written agreement that may not be terminated 
28.3 	without prior notice;
28.4 	(3) nonresidential parking services, whether on a contractual, hourly, or other 
28.5 	periodic basis, except for parking at a meter;
28.6 	(4) the granting of membership in a club, association, or other organization if:
28.7 	(i) the club, association, or other organization makes available for the use of its 
28.8 	members sports and athletic facilities, without regard to whether a separate charge is 
28.9 	assessed for use of the facilities; and
28.10 	(ii) use of the sports and athletic facility is not made available to the general public 
28.11 	on the same basis as it is made available to members.
28.12 	Granting of membership means both onetime initiation fees and periodic membership 
28.13 	dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and 
28.14 	squash courts; basketball and volleyball facilities; running tracks; exercise equipment; 
28.15 	swimming pools; and other similar athletic or sports facilities;
28.16 	(5) delivery of aggregate materials by a third party, excluding delivery of aggregate 
28.17 	material used in road construction,; and delivery of concrete block by a third party if 
28.18 	the delivery would be subject to the sales tax if provided by the seller of the concrete 
28.19 	block; and
28.20 	(6) services as provided in this clause:
28.21 	(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering, 
28.22 	and storing clothes, linen services and supply, cleaning and blocking hats, and carpet, 
28.23 	drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not 
28.24 	include services provided by coin operated facilities operated by the customer;
28.25 	(ii) motor vehicle washing, waxing, and cleaning services, including services 
28.26 	provided by coin operated facilities operated by the customer, and rustproofing, 
28.27 	undercoating, and towing of motor vehicles;
28.28 	(iii) building and residential cleaning, maintenance, and disinfecting services and 
28.29 	pest control and exterminating services;
28.30 	(iv) detective, security, burglar, fire alarm, and armored car services; but not 
28.31 	including services performed within the jurisdiction they serve by off-duty licensed peace 
28.32 	officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit 
28.33 	organization for monitoring and electronic surveillance of persons placed on in-home 
28.34 	detention pursuant to court order or under the direction of the Minnesota Department 
28.35 	of Corrections;
28.36 	(v) pet grooming services;
29.1 	(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting 
29.2 	and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor 
29.3 	plant care; tree, bush, shrub, and stump removal, except when performed as part of a land 
29.4 	clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for 
29.5 	public utility lines. Services performed under a construction contract for the installation of 
29.6 	shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
29.7 	(vii) massages, except when provided by a licensed health care facility or 
29.8 	professional or upon written referral from a licensed health care facility or professional for 
29.9 	treatment of illness, injury, or disease; and
29.10 	(viii) the furnishing of lodging, board, and care services for animals in kennels and 
29.11 	other similar arrangements, but excluding veterinary and horse boarding services.
29.12 	In applying the provisions of this chapter, the terms "tangible personal property" 
29.13 	and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii), 
29.14 	and the provision of these taxable services, unless specifically provided otherwise. 
29.15 	Services performed by an employee for an employer are not taxable. Services performed 
29.16 	by a partnership or association for another partnership or association are not taxable if 
29.17 	one of the entities owns or controls more than 80 percent of the voting power of the 
29.18 	equity interest in the other entity. Services performed between members of an affiliated 
29.19 	group of corporations are not taxable. For purposes of the preceding sentence, "affiliated 
29.20 	group of corporations" means those entities that would be classified as members of an 
29.21 	affiliated group as defined under United States Code, title 26, section 1504, disregarding 
29.22 	the exclusions in section 1504(b).
29.23 	For purposes of clause (5), "road construction" means construction of (1) public 
29.24 	roads, (2) cartways, and (3) private roads in townships located outside of the seven-county 
29.25 	metropolitan area up to the point of the emergency response location sign.
29.26 	(h) A sale and a purchase includes the furnishing for a consideration of tangible 
29.27 	personal property or taxable services by the United States or any of its agencies or 
29.28 	instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political 
29.29 	subdivisions.
29.30 	(i) A sale and a purchase includes the furnishing for a consideration of 
29.31 	telecommunications services, ancillary services associated with telecommunication 
29.32 	services, cable television services, direct satellite services, and ring tones. 
29.33 	Telecommunication services include, but are not limited to, the following services, 
29.34 	as defined in section 297A.669: air-to-ground radiotelephone service, mobile 
29.35 	telecommunication service, postpaid calling service, prepaid calling service, prepaid 
30.1 	wireless calling service, and private communication services. The services in this 
30.2 	paragraph are taxed to the extent allowed under federal law.
30.3 	(j) A sale and a purchase includes the furnishing for a consideration of installation if 
30.4 	the installation charges would be subject to the sales tax if the installation were provided 
30.5 	by the seller of the item being installed.
30.6 	(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer 
30.7 	to a customer when (1) the vehicle is rented by the customer for a consideration, or (2) 
30.8 	the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section 
30.9 	59B.02, subdivision 11.

30.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

30.11 	Sec. 2. Minnesota Statutes 2010, section 297A.61, is amended by adding a subdivision 
30.12 	to read:
30.13 		Subd. 17c.Prewritten computer software; installation. (a) For purposes 
30.14 	of prewritten computer software, the term "installation," as defined in subdivision 7, 
30.15 	paragraph (a), clause (5), includes all the steps necessary to take the software from the 
30.16 	distribution files to its permanent location where it is executed.
30.17 	(b) Installation includes, but is not limited to, the following:
30.18 	(1) the labor to set an item into position or to connect or program it for use;
30.19 	(2) the addition, replacement, or upgrading of new or different items or components 
30.20 	for active operation or use; and
30.21 	(3) configuration services such as selecting programmable options or arranging 
30.22 	functional units to form a complete program under a customer's platform.

30.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

30.24 	Sec. 3. Minnesota Statutes 2010, section 297A.71, subdivision 23, is amended to read:
30.25 		Subd. 23.Construction materials for qualified low-income housing projects. (a) 
30.26 	Purchases of materials and supplies used or consumed in and equipment incorporated into 
30.27 	the construction, improvement, or expansion of qualified low-income housing projects are 
30.28 	exempt from the tax imposed under this chapter if the owner of the qualified low-income 
30.29 	housing project is:
30.30 	(1) the public housing agency or housing and redevelopment authority of a political 
30.31 	subdivision;
30.32 	(2) an entity exercising the powers of a housing and redevelopment authority within 
30.33 	a political subdivision;
31.1 	(3) a limited partnership in which the sole or managing general partner is an 
31.2 	authority under clause (1) or an entity under clause (2), (4), or (5);
31.3 	(4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying 
31.4 	under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended;
31.5 	(5) a limited liability company if it consists of a sole member that is an entity under 
31.6 	clause (4); or
31.7 	(6) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604, 
31.8 	for a qualified low-income housing project described in paragraph (b), clause (5).
31.9 	This exemption applies regardless of whether the purchases are made by the owner 
31.10 	of the facility or a contractor.
31.11 	(b) For purposes of this exemption, "qualified low-income housing project" means:
31.12 	(1) a housing or mixed use project in which at least 20 percent of the residential units 
31.13 	are qualifying low-income rental housing units as defined in section 273.126 273.128;
31.14 	(2) a federally assisted low-income housing project financed by a mortgage insured 
31.15 	or held by the United States Department of Housing and Urban Development under 
31.16 	United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United 
31.17 	States Code, title 42, section 1437f; the Native American Housing Assistance and 
31.18 	Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar 
31.19 	successor federal low-income housing program;
31.20 	(3) a qualified low-income housing project as defined in United States Code, title 
31.21 	26, section 42(g), meeting all of the requirements for a low-income housing credit under 
31.22 	section 42 of the Internal Revenue Code regardless of whether the project actually applies 
31.23 	for or receives a low-income housing credit;
31.24 	(4) a project that will be operated in compliance with Internal Revenue Service 
31.25 	revenue procedure 96-32; or
31.26 	(5) a housing or mixed use project in which all or a portion of the residential units 
31.27 	are subject to the requirements of section 5 of the United States Housing Act of 1937.
31.28 	(c) For a project, a portion of which is not used for low-income housing units, 
31.29 	the amount of purchases that are exempt under this subdivision must be determined by 
31.30 	multiplying the total purchases, as specified in paragraph (a), by the ratio of:
31.31 	(1) the total gross square footage of units subject to the income limits under section 
31.32 	273.126 273.128, the financing for the project, the federal low-income housing tax credit, 
31.33 	revenue procedure 96-32, or section 5 of the United States Housing Act of 1937, as 
31.34 	applicable to the project; and
31.35 	(2) the total gross square footage of all units in the project.
32.1 	(d) The tax must be imposed and collected as if the rate under section 297A.62, 
32.2 	subdivision 1, applied, and then refunded in the manner provided in section 297A.75.

32.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

32.4 	Sec. 4. Minnesota Statutes 2010, section 297A.89, subdivision 2, is amended to read:
32.5 		Subd. 2.Retailer does not collect. The retailer shall not collect the tax from a 
32.6 	purchaser who furnishes to the retailer a copy of a fully completed exemption certificate 
32.7 	issued by the commissioner authorizing as described in section 297A.72, indicating that
32.8 	the purchaser is authorized to pay any sales or use tax due on purchases made by the 
32.9 	purchaser directly to the commissioner under subdivision 1.

32.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

32.11 	Sec. 5. Minnesota Statutes 2010, section 297B.08, is amended to read:
32.12 	297B.08 TAX PAID IN OTHER STATE; CREDIT, RECIPROCITY.
32.13 	If any motor vehicle has been or is subject to a tax by any other state in respect to 
32.14 	its sale or use, in an amount less than the tax imposed by this chapter and chapter 297A, 
32.15 	the provisions of this chapter and chapter 297A, shall apply, but at a rate measured by 
32.16 	the difference only between the rate fixed in this chapter 297A, and the rate by which the 
32.17 	previous tax paid in the other state upon the sale or use was computed. If the rate of 
32.18 	tax imposed in such other state is the same or more than the rate of tax imposed by this 
32.19 	chapter 297A, then no tax shall be due on such motor vehicle. The provisions of this 
32.20 	section shall apply only if such other state allows a credit with respect to the excise tax 
32.21 	imposed by this chapter and chapter 297A, which is substantially similar in effect to 
32.22 	the credit allowed by this section.

32.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

32.24 	ARTICLE 4
32.25 	SPECIAL TAXES

32.26 	Section 1. Minnesota Statutes 2010, section 296A.083, is amended by adding a 
32.27 	subdivision to read:
32.28 		Subd. 4.Apportionment. The surcharge under this section is subject to the 
32.29 	apportionment provisions of section 296A.18.

32.30 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.1 	Sec. 2. Minnesota Statutes 2010, section 296A.18, is amended by adding a subdivision 
33.2 	to read:
33.3 		Subd. 6a.Computation of nonhighway use amounts. The nonhighway use 
33.4 	amounts determined in subdivisions 2 to 6 must be transferred from the highway user tax 
33.5 	distribution fund to the accounts as provided for in sections 84.794, 84.803, 84.83, 84.927, 
33.6 	and 86B.706. These amounts, together with interest and penalties for delinquency in 
33.7 	payment, paid or collected pursuant to the provisions of this chapter, must be computed 
33.8 	for each six-month period ending June 30 and December 31 and must be transferred on 
33.9 	November 1 and June 1 following each six-month period.

33.10 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.11 	Sec. 3. Minnesota Statutes 2010, section 296A.18, subdivision 7, is amended to read:
33.12 		Subd. 7.Forest road. Approximately 0.116 percent of the total annual unrefunded 
33.13 	revenue from the gasoline fuel tax on all gasoline and special fuel received in, produced, 
33.14 	or brought into this state, except gasoline and special fuel used for aviation purposes, is 
33.15 	derived from the operation of motor vehicles on state forest roads and county forest access 
33.16 	roads. This revenue, together with interest and penalties for delinquency in payment, paid 
33.17 	or collected pursuant to the provisions of this chapter, is appropriated from the highway 
33.18 	user tax distribution fund and must be transferred and credited in equal installments on 
33.19 	July 1 and January 1 to the state forest road account established in section 89.70. Of this 
33.20 	amount, 0.0605 percent is annually derived from motor vehicles operated on state forest 
33.21 	roads and 0.0555 percent is annually derived from motor vehicles operated on county 
33.22 	forest access roads in this state. An amount equal to 0.0555 percent of the unrefunded 
33.23 	revenue must be annually transferred to counties for the management and maintenance of 
33.24 	county forest roads. 

33.25 	EFFECTIVE DATE. This section is effective the day following final enactment.

33.26 	Sec. 4. Minnesota Statutes 2010, section 297I.15, is amended by adding a subdivision 
33.27 	to read:
33.28 		Subd. 12.Federal Employees Health Benefits Program. Premiums received 
33.29 	under the Federal Employees Health Benefits Act, United States Code, title 5, section 
33.30 	8909(f), as amended by the Omnibus Reconciliation Act of 1990, are exempt from the 
33.31 	taxes and surcharges imposed under this chapter.

33.32 	EFFECTIVE DATE. This section is effective the day following final enactment.

34.1 	Sec. 5. Minnesota Statutes 2010, section 298.225, subdivision 1, is amended to read:
34.2 		Subdivision 1.Guaranteed distribution. (a) The distribution of the taconite 
34.3 	production tax as provided in section 298.28, subdivisions 2, paragraph (a), 3 to 5, 6, 
34.4 	paragraph (b), 7, and 8, shall equal the lesser of the following amounts: 
34.5 	(1) the amount distributed pursuant to this section and section 298.28, with respect 
34.6 	to 1983 production if the production for the year prior to the distribution year is no less 
34.7 	than 42,000,000 taxable tons. If the production is less than 42,000,000 taxable tons, the 
34.8 	amount of the distributions shall be reduced proportionately at the rate of two percent 
34.9 	for each 1,000,000 tons, or part of 1,000,000 tons by which the production is less than 
34.10 	42,000,000 tons; or 
34.11 	(2)(i) for the distributions made pursuant to section 298.28, subdivisions 4, 
34.12 	paragraphs (b) and (c), and 6, paragraph (c), 31.2 percent of the amount distributed 
34.13 	pursuant to this section and section 298.28, with respect to 1983 production; 
34.14 	(ii) for the distributions made pursuant to section 298.28, subdivision 5, paragraphs 
34.15 	(b) and (d), 75 percent of the amount distributed pursuant to this section and section 
34.16 	298.28, with respect to 1983 production. 
34.17 	(b) The distribution of the taconite production tax as provided in section 298.28, 
34.18 	subdivision 2, paragraph (b), shall equal the following amount: 
34.19 	(1) if the production for the year prior to the distribution year is at least 42,000,000 
34.20 	taxable tons, the amount distributed pursuant to this section and section 298.28 with 
34.21 	respect to 1999 production; or 
34.22 	(2) if the production for the year prior to the distribution year is less than 42,000,000 
34.23 	taxable tons, the amount distributed pursuant to this section and section 298.28 with respect 
34.24 	to 1999 production, reduced proportionately at the rate of two percent for each 1,000,000 
34.25 	tons or part of 1,000,000 tons by which the production is less than 42,000,000 tons. 

34.26 	EFFECTIVE DATE. This section is effective the day following final enactment.

34.27 	Sec. 6. Minnesota Statutes 2010, section 298.28, subdivision 2, is amended to read:
34.28 		Subd. 2.City or town where quarried or produced. (a) 4.5 cents per gross ton of 
34.29 	merchantable iron ore concentrate, hereinafter referred to as "taxable ton," plus the amount 
34.30 	provided in paragraph (c), must be allocated to the city or town in the county in which 
34.31 	the lands from which taconite was mined or quarried were located or within which the 
34.32 	concentrate was produced. If the mining, quarrying, and concentration, or different steps 
34.33 	in either thereof are carried on in more than one taxing district, the commissioner shall 
34.34 	apportion equitably the proceeds of the part of the tax going to cities and towns among 
34.35 	such subdivisions upon the basis of attributing 50 percent of the proceeds of the tax to 
35.1 	the operation of mining or quarrying the taconite, and the remainder to the concentrating 
35.2 	plant and to the processes of concentration, and with respect to each thereof giving due 
35.3 	consideration to the relative extent of such operations performed in each such taxing 
35.4 	district. The commissioner's order making such apportionment shall be subject to review 
35.5 	by the Tax Court at the instance of any of the interested taxing districts, in the same 
35.6 	manner as other orders of the commissioner.
35.7 	(b) Four cents per taxable ton shall be allocated to cities and organized townships 
35.8 	affected by mining because their boundaries are within three miles of a taconite mine pit 
35.9 	that has been actively mined in at least one of the prior three years. If a city or town is 
35.10 	located near more than one mine meeting these criteria, the city or town is eligible to 
35.11 	receive aid calculated from only the mine producing the largest taxable tonnage. When 
35.12 	more than one municipality qualifies for aid based on one company's production, the aid 
35.13 	must be apportioned among the municipalities in proportion to their populations. Of the 
35.14 	amounts distributed under this paragraph to each municipality, one-half must be used for 
35.15 	infrastructure improvement projects, and one-half must be used for projects in which two 
35.16 	or more municipalities cooperate. Each municipality that receives a distribution under this 
35.17 	paragraph must report annually to the Iron Range Resources and Rehabilitation Board and 
35.18 	the commissioner of Iron Range resources and rehabilitation on the projects involving 
35.19 	cooperation with other municipalities.
35.20 	(c) The amount that would have been computed for the current year under Minnesota 
35.21 	Statutes 2008, section 126C.21, subdivision 4, for a school district within which the 
35.22 	taconite was mined or quarried or within which the concentrate is produced is added to 
35.23 	the amount to be distributed to the cities and towns located within that school district as 
35.24 	provided in paragraph (a) shall be distributed to the cities and townships within the school 
35.25 	district in the proportion that their taxable net tax capacity within the school district bears 
35.26 	to the taxable net tax capacity of the school district for property taxes payable in the 
35.27 	year prior to distribution.

35.28 	EFFECTIVE DATE. This section is effective the day following final enactment.

35.29 	Sec. 7.  REPEALER.
 35.30 	Minnesota Statutes 2010, section 296A.18, subdivision 9, is repealed.

35.31 	EFFECTIVE DATE. This section is effective the day following final enactment.

36.1 	ARTICLE 5
36.2 	MISCELLANEOUS

36.3 	Section 1. Minnesota Statutes 2010, section 270C.30, is amended to read:
36.4 	270C.30 RETURNS AND OTHER DOCUMENTS; FORMAT; FURNISHING.
36.5 	The commissioner shall prescribe the content and format of all returns and other 
36.6 	forms required to be filed under a law administered by the commissioner, and may furnish 
36.7 	them subject to charge on application.

36.8 	EFFECTIVE DATE. This section is effective the day following final enactment.

36.9 	Sec. 2. Minnesota Statutes 2010, section 469.319, subdivision 5, is amended to read:
36.10 		Subd. 5.Waiver authority. (a) The commissioner may waive all or part of a 
36.11 	repayment required under subdivision 1, if the commissioner, in consultation with 
36.12 	the commissioner of employment and economic development and appropriate officials 
36.13 	from the local government units in which the qualified business is located, determines 
36.14 	that requiring repayment of the tax is not in the best interest of the state or the local 
36.15 	government units and the business ceased operating as a result of circumstances beyond 
36.16 	its control including, but not limited to:
36.17 	(1) a natural disaster;
36.18 	(2) unforeseen industry trends; or
36.19 	(3) loss of a major supplier or customer.
36.20 	(b)(1) The commissioner shall waive repayment required under subdivision 1a if 
36.21 	the commissioner has waived repayment by the operating business under subdivision 1, 
36.22 	unless the person that received benefits without having to operate a business in the zone 
36.23 	was a contributing factor in the qualified business becoming subject to repayment under 
36.24 	subdivision 1;
36.25 	(2) the commissioner shall waive the repayment required under subdivision 1a, even 
36.26 	if the repayment has not been waived for the operating business if:
36.27 	(i) the person that received benefits without having to operate a business in the zone 
36.28 	and the business that operated in the zone are not related parties as defined in section 
36.29 	267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and
36.30 	(ii) actions of the person were not a contributing factor in the qualified business 
36.31 	becoming subject to repayment under subdivision 1.
36.32 	(c) Requests for waiver must be made no later than 60 days after the earlier of 
36.33 	the notice date of an order issued under subdivision 4, paragraph (d), or, in the case of 
37.1 	property taxes, within 60 days of the date of a tax statement issued under subdivision 4, 
37.2 	paragraph (c).

37.3 	EFFECTIVE DATE. This section is effective for waivers requested in response 
37.4 	to notices issued after the day following final enactment.