Minnesota Legislature
HF 2268
2nd Unofficial Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am
KEY: stricken = removed, old language.
underscored = added, new language.
1.2relating to the financing and operation of state and local government; making
1.3policy, technical, administrative, enforcement, collection, refund, and other
1.4changes to income, franchise, property, sales and use, motor vehicle sales,
1.5cigarette and tobacco products, insurance premiums, aggregate removal,
1.6mortgage, deed, and production taxes, and other taxes and tax-related provisions;
1.7providing for aids to local governments; increasing maximum property tax
1.8refunds; requiring withholding; providing and modifying income tax credits;
1.9modifying taxation of certain compensation paid to nonresidents; modifying
1.10taxation of foreign operating corporations; modifying sales tax exemptions;
1.11modifying and authorizing local government taxes; prohibiting new local
1.12sales taxes; authorizing and modifying levies, property valuation procedures,
1.13homestead provisions, property tax classes, class rates, and tax bases; changing
1.14and providing property tax exemptions; changing JOBZ, border city allocation,
1.15tax increment financing, and economic development powers and incentives;
1.16changing provisions relating to fiscal disparities, budget forecasts, local impact
1.17notes, securities filing fees, state debt collection procedures, revenue recapture,
1.18sustainable forest incentives programs, and tax-forfeited lands; extending a
1.19petrofund fee exemption; imposing a surcharge on certain hockey admissions;
1.20expanding the aggregate tax and distribution of the proceeds; changing
1.21distributions of production tax proceeds; providing for purchase of forest lands;
1.22providing for higher education grants in the taconite assistance area; providing
1.23terms and conditions related to the issuance of obligations and the financing of
1.24public improvements and services; extending the time for certain publications of
1.25notices; authorizing and validating trusts to pay certain public postemployment
1.26benefits; changing and imposing powers, duties, and requirements on certain
1.27local governments and authorities and state departments or agencies; authorizing
1.28local governments to provide certain development incentives; providing rules
1.29for operation of certain tax increment financing districts; establishing a task
1.30force on metrodome site redevelopment; requiring studies; authorizing release
1.31of certain data; transferring money to the budget reserve account; appropriating
1.32money; amending Minnesota Statutes 2006, sections 3.987, subdivision 1;
1.333.988, subdivision 3; 3.989, subdivisions 2, 3; 16A.103, subdivisions 1a, 1b, 2;
1.3416A.152, subdivisions 1b, 2; 16D.04, subdivisions 1, 2; 16D.11, subdivisions
1.352, 7; 62I.06, subdivision 6; 71A.04, subdivision 1; 80A.28, subdivision 1, as
1.36amended; 80A.65, subdivision 1, as amended; 97A.061, subdivision 2; 118A.03,
1.37subdivision 3; 123B.61; 126C.41, subdivision 2; 127A.48, subdivision 2; 268.19,
1.38subdivision 1; 270.071, subdivision 7; 270.072, subdivisions 2, 3, 6; 270.074,
1.39subdivision 3; 270.076, subdivision 1; 270.41, subdivisions 1, 2, 3, 5, by adding
2.1a subdivision; 270.44; 270.45; 270.46; 270.47; 270.48; 270.50; 270A.03,
2.2subdivisions 2, 5; 270A.10; 270B.15; 270C.03, subdivision 1; 270C.306;
2.3270C.34, subdivision 1; 270C.446, subdivision 2; 270C.56, subdivision 1;
2.4270C.63, subdivision 9; 272.02, subdivision 64, by adding subdivisions; 272.115,
2.5subdivision 1; 273.05, by adding a subdivision; 273.111, subdivisions 3, 6, by
2.6adding subdivisions; 273.117; 273.121; 273.123, subdivisions 2, 3, 7; 273.124,
2.7subdivisions 13, 14, by adding a subdivision; 273.125, subdivision 8; 273.128,
2.8subdivision 1; 273.13, subdivisions 22, 23, 24, 25, 33, by adding a subdivision;
2.9273.1398, subdivision 4; 273.33, subdivision 2; 273.37, subdivision 2; 273.371,
2.10subdivision 1; 274.01, subdivision 1; 274.13, subdivision 1; 275.025, subdivision
2.113; 275.065, subdivisions 3, 5a, by adding a subdivision; 275.066; 275.067;
2.12275.61, subdivision 1; 276.04, by adding a subdivision; 276A.01, subdivision 3;
2.13276A.04; 277.01, subdivision 2; 278.05, subdivision 6; 279.01, subdivision 1;
2.14279.37, subdivision 1a; 280.39; 287.22; 287.2205; 289A.08, subdivisions 11, 13;
2.15289A.09, subdivision 2; 289A.12, subdivisions 4, 14, by adding a subdivision;
2.16289A.18, subdivision 1; 289A.40, subdivision 2; 289A.56, by adding a
2.17subdivision; 289A.60, subdivisions 8, 12, 25, 27, by adding subdivisions;
2.18290.01, subdivisions 6b, 19a, 19b, as amended, 19c, 19d; 290.06, subdivision
2.1933, by adding a subdivision; 290.067, subdivision 2b; 290.0671, subdivision
2.207; 290.0677, subdivision 1; 290.091, subdivision 3; 290.0921, subdivision 3;
2.21290.10; 290.17, subdivision 2; 290.191, subdivision 8; 290.34, by adding a
2.22subdivision; 290.92, by adding a subdivision; 290A.03, subdivision 7; 290A.04,
2.23subdivision 2; 290B.03, subdivision 2; 290C.02, subdivision 3; 290C.04;
2.24290C.05; 290C.07; 290C.11; 291.215, subdivision 1; 295.52, subdivisions 4,
2.254a; 295.54, subdivision 2; 297A.61, subdivisions 3, 4, 7, 10, 24, by adding
2.26subdivisions; 297A.63, subdivision 1; 297A.665; 297A.668, by adding a
2.27subdivision; 297A.669, subdivisions 3, 13, 14, by adding subdivisions; 297A.67,
2.28subdivisions 7, 8, 9; 297A.68, subdivisions 11, 16, 35; 297A.69, subdivision
2.292; 297A.70, subdivisions 7, 8, by adding a subdivision; 297A.71, subdivision
2.3023; 297A.72; 297A.90, subdivision 2; 297A.99, subdivision 1; 297B.03;
2.31297B.035, subdivision 1; 297F.06, subdivision 4; 297F.21, subdivision 3;
2.32297F.25, by adding a subdivision; 297I.06, subdivisions 1, 2; 297I.15, by adding
2.33a subdivision; 297I.20, subdivision 2; 297I.40, subdivision 5; 298.22, by adding
2.34a subdivision; 298.2214, subdivision 2; 298.227; 298.24, subdivision 1; 298.25;
2.35298.28, subdivisions 3, 4, 5, 6, 9a, by adding a subdivision; 298.292, subdivision
2.362; 298.296, subdivision 2; 298.2961, subdivisions 4, 5; 298.75, subdivisions 1, 3,
2.377, by adding a subdivision; 331A.05, subdivision 2; 360.031; 365A.02; 365A.04;
2.38365A.08; 365A.095; 373.01, subdivision 3; 373.40, subdivision 4; 375B.09;
2.39383A.80, subdivision 4; 383A.81, subdivisions 1, 2; 383B.117, subdivision
2.402; 383B.77, subdivisions 1, 2; 383B.80, subdivision 4; 410.32; 412.301;
2.41424A.10, subdivision 3; 435.193; 453A.02, subdivision 3; 469.169, by adding a
2.42subdivision; 469.1734, subdivision 6; 469.174, subdivisions 10, 10a; 469.175,
2.43subdivisions 1, 3; 469.176, subdivisions 1, 2, 4l, 7; 469.1761, subdivision
2.441; 469.1763, subdivision 2; 469.177, subdivision 1; 469.178, subdivision 7;
2.45469.1791, subdivision 3; 469.312, by adding a subdivision; 469.3201; 473.39,
2.46by adding subdivisions; 475.51, subdivision 4; 475.52, subdivision 6; 475.53,
2.47subdivision 1; 475.58, subdivisions 1, 3b; 477A.011, subdivision 36; 477A.0124,
2.48subdivision 5; 477A.013, subdivisions 1, 8, 9; 477A.03; 477A.12, subdivision 1;
2.49477A.14, subdivision 1; Laws 1973, chapter 393, section 1, as amended; Laws
2.501980, chapter 511, section 1, subdivision 2, as amended; Laws 1987, chapter
2.51168, section 2; Laws 1988, chapter 645, section 3, as amended; Laws 1989,
2.52chapter 211, section 8, subdivision 4, as amended; Laws 1993, chapter 375,
2.53article 9, section 45, subdivisions 2, as amended, 3, as amended, 4, as amended;
2.54Laws 1994, chapter 587, article 9, section 14, subdivisions 1, 2, 3; Laws 1995,
2.55chapter 264, article 5, sections 44, subdivision 4, as amended; 45, subdivision 1,
2.56as amended; Laws 1999, chapter 243, article 4, section 18, subdivisions 1, 3, 4;
2.57Laws 2003, chapter 128, article 1, section 172, as amended; Laws 2005, First
2.58Special Session chapter 3, article 5, section 39; article 10, section 23; Laws 2006,
3.1chapter 236, article 1, section 21; Laws 2006, chapter 259, article 11, section 3;
3.2proposing coding for new law in Minnesota Statutes, chapters 270; 270C; 273;
3.3274; 290C; 295; 297A; 360; 383C; 383D; 383E; 471; 475; repealing Minnesota
3.4Statutes 2006, sections 16A.1522; 126C.21, subdivision 4; 270.073; 270.41,
3.5subdivision 4; 270.43; 270.51; 270.52; 270.53; 295.60; 297A.61, subdivision
3.620; 297A.668, subdivision 6; 297A.67, subdivision 22; 469.174, subdivision 29;
3.7Laws 1973, chapter 393, section 2; Laws 1994, chapter 587, article 9, section 8,
3.8subdivision 1, as amended; Laws 1998, chapter 389, article 11, section 18.
3.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
3.12 Section 1. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to
3.13read:
3.14 Subd. 2. Homeowners. A claimant whose property taxes payable are in excess
3.15of the percentage of the household income stated below shall pay an amount equal to
3.16the percent of income shown for the appropriate household income level along with the
3.17percent to be paid by the claimant of the remaining amount of property taxes payable.
3.18The state refund equals the amount of property taxes payable that remain, up to the state
3.19refund amount shown below.
4.33 The payment made to a claimant shall be the amount of the state refund calculated
4.34under this subdivision. No payment is allowed if the claimant's household income is
4.35$77,520 or more.
4.36EFFECTIVE DATE.This section is effective beginning with refunds based on
4.37property taxes payable in 2008.
4.38 Sec. 2. Minnesota Statutes 2006, section 477A.011, subdivision 36, is amended to read:
4.39 Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
4.40"city aid base" is zero.
4.41 (b) The city aid base for any city with a population less than 500 is increased by
4.42$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
5.1of total aid it may receive under section477A.013, subdivision 9 , paragraph (c), is also
5.2increased by $40,000 for aids payable in calendar year 1995 only, provided that:
5.3 (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
5.4 (ii) the city portion of the tax capacity rate exceeds 100 percent; and
5.5 (iii) its city aid base is less than $60 per capita.
5.6 (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
5.7the maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
5.8paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
5.9 (i) the city has a population in 1994 of 2,500 or more;
5.10 (ii) the city is located in a county, outside of the metropolitan area, which contains a
5.11city of the first class;
5.12 (iii) the city's net tax capacity used in calculating its 1996 aid under section
5.13477A.013
is less than $400 per capita; and
5.14 (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
5.15property located in the city is classified as railroad property.
5.16 (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
5.17the maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
5.18paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
5.19 (i) the city was incorporated as a statutory city after December 1, 1993;
5.20 (ii) its city aid base does not exceed $5,600; and
5.21 (iii) the city had a population in 1996 of 5,000 or more.
5.22 (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
5.23maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
5.24paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
5.25 (i) the city had a population in 1996 of at least 50,000;
5.26 (ii) its population had increased by at least 40 percent in the ten-year period ending
5.27in 1996; and
5.28 (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
5.29 (f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
5.30thereafter, and the maximum amount of total aid it may receive under section477A.013,
5.31subdivision 9 , paragraph (c), is also increased by $150,000 in calendar year 2000 only,
5.32provided that:
5.33 (1) the city has a population that is greater than 1,000 and less than 2,500;
5.34 (2) its commercial and industrial percentage for aids payable in 1999 is greater
5.35than 45 percent; and
6.1 (3) the total market value of all commercial and industrial property in the city
6.2for assessment year 1999 is at least 15 percent less than the total market value of all
6.3commercial and industrial property in the city for assessment year 1998.
6.4 (g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
6.5the maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
6.6paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
6.7 (1) the city had a population in 1997 of 2,500 or more;
6.8 (2) the net tax capacity of the city used in calculating its 1999 aid under section
6.9477A.013
is less than $650 per capita;
6.10 (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
6.11section477A.013 is greater than 12 percent;
6.12 (4) the 1999 local government aid of the city under section477A.013 is less than
6.1320 percent of the amount that the formula aid of the city would have been if the need
6.14increase percentage was 100 percent; and
6.15 (5) the city aid base of the city used in calculating aid under section477A.013
6.16is less than $7 per capita.
6.17 (h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
6.18the maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
6.19paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
6.20 (1) the city has a population in 1997 of 2,000 or more;
6.21 (2) the net tax capacity of the city used in calculating its 1999 aid under section
6.22477A.013
is less than $455 per capita;
6.23 (3) the net levy of the city used in calculating 1999 aid under section477A.013 is
6.24greater than $195 per capita; and
6.25 (4) the 1999 local government aid of the city under section477A.013 is less than
6.2638 percent of the amount that the formula aid of the city would have been if the need
6.27increase percentage was 100 percent.
6.28 (i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
6.29the maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
6.30paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
6.31 (1) the city has a population in 1998 that is greater than 200 but less than 500;
6.32 (2) the city's revenue need used in calculating aids payable in 2000 was greater
6.33than $200 per capita;
6.34 (3) the city net tax capacity for the city used in calculating aids available in 2000
6.35was equal to or less than $200 per capita;
7.1 (4) the city aid base of the city used in calculating aid under section477A.013
7.2is less than $65 per capita; and
7.3 (5) the city's formula aid for aids payable in 2000 was greater than zero.
7.4 (j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
7.5the maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
7.6paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
7.7 (1) the city had a population in 1998 that is greater than 200 but less than 500;
7.8 (2) the city's commercial industrial percentage used in calculating aids payable in
7.92000 was less than ten percent;
7.10 (3) more than 25 percent of the city's population was 60 years old or older according
7.11to the 1990 census;
7.12 (4) the city aid base of the city used in calculating aid under section477A.013
7.13is less than $15 per capita; and
7.14 (5) the city's formula aid for aids payable in 2000 was greater than zero.
7.15 (k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
7.16by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
7.17total aid it may receive under section477A.013, subdivision 9 , paragraph (c), is also
7.18increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
7.19only, provided that:
7.20 (1) the net tax capacity of the city used in calculating its 2000 aid under section
7.21477A.013
is less than $810 per capita;
7.22 (2) the population of the city declined more than two percent between 1988 and 1998;
7.23 (3) the net levy of the city used in calculating 2000 aid under section477A.013 is
7.24greater than $240 per capita; and
7.25 (4) the city received less than $36 per capita in aid under section477A.013,
7.26subdivision 9 , for aids payable in 2000.
7.27 (l) The city aid base for a city with a population of 10,000 or more which is located
7.28outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
7.29maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
7.30paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
7.31the lesser of:
7.32 (1)(i) the total population of the city, as determined by the United States Bureau of
7.33the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
7.34 (2) $2,500,000.
8.1 (m) The city aid base is increased by $50,000 in 2002 and thereafter, and the
8.2maximum amount of total aid it may receive under section477A.013, subdivision 9 ,
8.3paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
8.4 (1) the city is located in the seven-county metropolitan area;
8.5 (2) its population in 2000 is between 10,000 and 20,000; and
8.6 (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
8.7was greater than 25 percent.
8.8 (n) The city aid base for a city is increased by $150,000 in calendar years 2002 to
8.92011 and by an additional $75,000 in calendar years 2008 to 2013 and the maximum
8.10amount of total aid it may receive under section477A.013, subdivision 9 , paragraph (c), is
8.11also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
8.122008 only, provided that:
8.13 (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
8.14 (2) its home county is located within the seven-county metropolitan area;
8.15 (3) its pre-1940 housing percentage is less than 15 percent; and
8.16 (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
8.17per capita.
8.18 (o) The city aid base for a city is increased by $200,000 beginning in calendar
8.19year 2003 and the maximum amount of total aid it may receive under section477A.013,
8.20subdivision 9 , paragraph (c), is also increased by $200,000 in calendar year 2003 only,
8.21provided that the city qualified for an increase in homestead and agricultural credit aid
8.22under Laws 1995, chapter 264, article 8, section 18.
8.23 (p) The city aid base for a city is increased by $200,000 in 2004 only and the
8.24maximum amount of total aid it may receive under section477A.013, subdivision 9 , is
8.25also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
8.26dry cask storage facility.
8.27 (q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
8.28maximum total aid it may receive under section477A.013, subdivision 9 , is also increased
8.29by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
8.30designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
8.31more than 40 percent between 1990 and 2000.
8.32 (r) The city aid base for a city is increased by$25,000 $30,000 in 2006 only
8.332008 and thereafter and the maximum total aid it may receive under section477A.013,
8.34subdivision 9 , is also increased by $25,000 $30,000 in calendar year 2006 only if the city
8.35had a population in 2003 of at least 1,000 and has a state park for which the city provides
9.1rescue services and which comprised at least 14 percent of the total geographic area
9.2included within the city boundaries in 2000.
9.3 (s) The city aid base for a city with a population less than 5,000 is increased in
9.42006 and thereafter and the minimum and maximum amount of total aid it may receive
9.5under this section is also increased in calendar year 2006 only by an amount equal to
9.6$6 multiplied by its population.
9.7 (t) The city aid base for a city is increased by $80,000 in 2007only and thereafter and
9.8the minimum and maximum amount of total aid it may receive under section477A.013 ,
9.9subdivision 9, is also increased by $80,000 in calendar year 2007 only, if:
9.10 (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
9.11to be placed in trust status as tax-exempt Indian land;
9.12 (2) the placement of the land is being challenged administratively or in court; and
9.13 (3) due to the challenge, the land proposed to be placed in trust is still on the tax
9.14rolls as of May 1, 2006.
9.15 (u) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
9.16the minimum and maximum total amount of aid it may receive under this section is also
9.17increased in calendar year 2007 only, provided that:
9.18 (1) the city has a 2004 estimated population greater than 200 but less than 2,000;
9.19 (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
9.20 (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
9.21payable in 2006 was greater than 110 percent; and
9.22 (4) it is located in a county where at least 15,000 acres of land are classified as
9.23tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.
9.24 (v) The city aid base for a city is increased by $30,000 in 2008 only, and the
9.25maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
9.26by $30,000 in calendar year 2008 only if the city had a population in 2005 of less than
9.273,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
9.28and one township in 2002.
9.29 (w) The city aid base for a city is increased by $100,000 in 2008 and thereafter, and
9.30the maximum total aid it may receive under section 477A.013, subdivision 9, is also
9.31increased by $100,000 in calendar year 2008 only if the city had a city net tax capacity for
9.32aids payable in 2007 of less than $150 per capita and the city experienced flooding on
9.33March 14, 2007, that resulted in evacuation of at least 40 homes.
9.34 (x) The city aid base for a city is increased by $200,000 in 2008 through 2012, and
9.35the maximum total aid it may receive under section 477A.013, subdivision 9, is also
9.36increased by $200,000 in calendar year 2008 only if the city:
10.1 (i) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
10.2area;
10.3 (ii) has a 2005 population greater than 7,000 but less than 8,000; and
10.4 (iii) has a 2005 net tax capacity per capita of less than $500.
10.5EFFECTIVE DATE.This section is effective for sales and purchases made after
10.6June 30, 2007.
10.7 Sec. 3. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:
10.8 Subd. 5. County transition aid. (a) For 2005, a county is eligible for transition
10.9aid equal to the amount, if any, by which:
10.10 (1) the difference between:
10.11 (i) the aid the county received under subdivision 1 in 2004, divided by the total aid
10.12paid to all counties under subdivision 1, multiplied by $205,000,000; and
10.13 (ii) the amount of aid the county is certified to receive in 2005 under subdivisions
10.143 and 4;
10.15exceeds:
10.16 (2) three percent of the county's adjusted net tax capacity.
10.17A county's aid under this paragraph may not be less than zero.
10.18 (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received
10.19in 2005.
10.20 (c) In 2007 and subsequent years, a county is eligible to receive one-third of the
10.21transition aid it received in 2005.
10.22(d) No county shall receive aid under this subdivision after 2007. In 2008 only, a
10.23county with (1) a 2005 population greater than 10,000 and less than 29,000, and (2) an
10.24average Part I crimes per capita greater than 3.6 percent for aids payable in 2007 shall
10.25receive $250,000.
10.26 Sec. 4. Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read:
10.27 Subdivision 1. Towns.In 2002, no In 2008 and subsequent years, each town is
10.28eligible for a distribution under this subdivision equal to 20 percent of the amount of
10.29homestead and agricultural credit aid reimbursement it received under Minnesota Statutes
10.302000, section 273.1398, in calendar year 2001.
10.31 Sec. 5. Minnesota Statutes 2006, section 477A.013, subdivision 8, is amended to read:
11.1 Subd. 8. City formula aid. In calendar year 2004 and subsequent years, the
11.2formula aid for a city is equal to the need increase percentage multiplied by the difference
11.3between (1) the city's revenue need multiplied by its population, and (2)the sum of the
11.4city's net tax capacity multiplied by the tax effort rate; the taconite aids under sections
11.5298.28 and
298.282 to any city except a city directly impacted by a taconite mine or plant,
11.6multiplied by the following percentages:
11.7(i) zero percent for aids payable in 2004;
11.8(ii) 25 percent for aids payable in 2005;
11.9(iii) 50 percent for aids payable in 2006;
11.10(iv) 75 percent for aids payable in 2007; and
11.11(v) 100 percent for aids payable in 2008 and thereafter.
11.12For purposes of this subdivision, "a city directly impacted by a taconite mine or
11.13plant" means: (1) Babbit, (2) Eveleth, (3) Hibbing, (4) Keewatin, (5) Mountain Iron, (6)
11.14Silver Bay, or (7) Virginia.
11.15No city may have a formula aid amount less than zero. The need increase percentage
11.16must be the same for all cities.
11.17 The applicable need increase percentage must be calculated by the Department of
11.18Revenue so that the total of the aid under subdivision 9 equals the total amount available
11.19for aid under section477A.03 after the subtraction under section
477A.014, subdivisions
11.204 and 5 .
11.21EFFECTIVE DATE.This section is effective beginning with aids payable in 2008.
11.22 Sec. 6. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read:
11.23 Subd. 9. City aid distribution. (a) In calendar year2002 and thereafter 2008, each
11.24city shall receive an aid distribution equal to the sum of (1) the city formula aid under
11.25subdivision 8,and (2) its city aid base, and (3) one-half of the difference between its total
11.26aid in the previous year under this section and its city aid base in the previous year. For aids
11.27payable in 2009 and thereafter, each city shall receive an aid distribution equal to the sum
11.28of (1) the city formula aid under subdivision 8, (2) its city aid base, and (3) its formula aid
11.29under subdivision 8 in the previous year, prior to any adjustments under this subdivision.
11.30 (b) For aids payable in 2008, the total aid for any city shall not exceed the sum of (1)
11.3130 percent of its net levy for the year prior to the aid distribution plus (2) its total aid in the
11.32previous year. For aids payable in2005 2009 and thereafter, the total aid for any city shall
11.33not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid
11.34distribution plus (2) its total aid in the previous year. For aids payable in2005 2008 and
12.1thereafter, the total aid for any city with a population of 2,500 or more may notdecrease
12.2from be less than its total aid under this section in the previous year by an amount greater
12.3than minus the lesser of (1) $15 multiplied by its population, or (2) ten percent of its net
12.4levy in the year prior to the aid distribution.
12.5 (c)For aids payable in 2004 only, the total aid for a city with a population less than
12.62,500 may not be less than the amount it was certified to receive in 2003 minus the greater
12.7of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special Session
12.8chapter 21, article 5, or (2) five percent of its 2003 aid amount. For aids payable in 2005
12.92008 and thereafter, the total aid for a city with a population less than 2,500 must not be
12.10less than the amount it was certified to receive in the previous year minus the lesser of (1)
12.11$15 multiplied by its population, or (2) five percent of its 2003 certified aid amount.
12.12 (d) If a city's net tax capacity used in calculating aid under this section has decreased
12.13in any year by more than 25 percent from its net tax capacity in the previous year due to
12.14property becoming tax-exempt Indian land, the city's maximum allowed aid increase
12.15under paragraph (b) shall be increased by an amount equal to (1) the city's tax rate in the
12.16year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
12.17resulting from the property becoming tax exempt.
12.18EFFECTIVE DATE.This section is effective for aids payable in 2008 and
12.19thereafter.
12.20 Sec. 7. Minnesota Statutes 2006, section 477A.03, is amended to read:
12.21477A.03 APPROPRIATION.
12.22 Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed
12.23by sections477A.011 to
477A.014 is annually appropriated from the general fund to the
12.24commissioner of revenue.
12.25 Subd. 2a. Cities.For aids payable in 2004, the total aids paid under section
12.26477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the
12.27total aids paid under section
477A.013, subdivision 9, are limited to $437,052,000. For
12.28aids payable in2006 2008 and thereafter, the total aids paid under section
477A.013,
12.29subdivision 9 , is limited to $485,052,000 $565,052,000.
12.30 Subd. 2b. Counties. (a) For aids payable in calendar year2005 2008 and thereafter,
12.31the total aids paid to counties under section477A.0124, subdivision 3 , are limited to
12.32$100,500,000 $118,000,000. Each calendar year, $500,000 shall be retained by the
12.33commissioner of revenue to make reimbursements to the commissioner of finance
12.34for payments made under section611.27 . For calendar year 2004, the amount shall be
13.1in addition to the payments authorized under section
477A.0124, subdivision 1. For
13.2calendar year 2005 and subsequent years, The amount shall be deducted from the
13.3appropriation under this paragraph. The reimbursements shall be to defray the additional
13.4costs associated with court-ordered counsel under section611.27 . Any retained amounts
13.5not used for reimbursement in a year shall be included in the next distribution of county
13.6need aid that is certified to the county auditors for the purpose of property tax reduction
13.7for the next taxes payable year.
13.8 (b)For aids payable in 2005, the total aids under section
477A.0124, subdivision 4,
13.9are limited to $105,000,000. For aids payable in 2006 2008 and thereafter, the total aid
13.10under section477A.0124, subdivision 4 , is limited to $105,132,923 $122,632,923. The
13.11commissioner of finance shall bill the commissioner of revenue for the cost of preparation
13.12of local impact notes as required by section3.987 , not to exceed $207,000 in fiscal year
13.132004 and thereafter. The commissioner of education shall bill the commissioner of
13.14revenue for the cost of preparation of local impact notes for school districts as required by
13.15section3.987 , not to exceed $7,000 in fiscal year 2004 and thereafter. The commissioner
13.16of revenue shall deduct the amounts billed under this paragraph from the appropriation
13.17under this paragraph. The amounts deducted are appropriated to the commissioner of
13.18finance and the commissioner of education for the preparation of local impact notes.
13.19EFFECTIVE DATE.This section is effective for aids payable in calendar year
13.202008 and thereafter.
13.21 Sec. 8. Minnesota Statutes 2006, section 477A.12, subdivision 1, is amended to read:
13.22 Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred
13.23by counties and towns in support of natural resources lands, the following amounts are
13.24annually appropriated to the commissioner of natural resources from the general fund for
13.25transfer to the commissioner of revenue. The commissioner of revenue shall pay the
13.26transferred funds to counties as required by sections477A.11 to
477A.145 . The amounts
13.27are:
13.28 (1) for acquired natural resources land, $3, as adjusted for inflation under section
13.29477A.145
, multiplied by the total number of acres of acquired natural resources land or,
13.30at the county's option three-fourths of one percent of the appraised value of all acquired
13.31natural resources land in the county, whichever is greater;
13.32 (2) 75 cents, as adjusted for inflation under section477A.145 , multiplied by the
13.33number of acres of county-administered other natural resources land;
13.34 (3)75 cents $3, as adjusted for inflation under section
477A.145 , multiplied by
13.35the total number of acres of land utilization project land that is located entirely within a
14.1wildlife management area as described in section 86A.05, subdivision 8; and 75 cents, as
14.2adjusted for inflation under section 477A.145, multiplied by the total number of acres of
14.3land utilization project land not located within a wildlife management area; and
14.4 (4) 37.5 cents, as adjusted for inflation under section477A.145 , multiplied by the
14.5number of acres of commissioner-administered other natural resources land located in
14.6each county as of July 1 of each year prior to the payment year.
14.7 (b) The amount determined under paragraph (a), clause (1), is payable for land
14.8that is acquired from a private owner and owned by the Department of Transportation
14.9for the purpose of replacing wetland losses caused by transportation projects, but only
14.10if the county contains more than 500 acres of such land at the time the certification is
14.11made under subdivision 2.
14.12EFFECTIVE DATE.This section is effective for payments in 2008 and thereafter.
14.13 Sec. 9. Minnesota Statutes 2006, section 477A.14, subdivision 1, is amended to read:
14.14 Subdivision 1. General distribution. Except as provided in subdivision 2 or in
14.15section97A.061, subdivision 5 , 40 percent of the total payment to the county shall be
14.16deposited in the county general revenue fund to be used to provide property tax levy
14.17reduction. The remainder shall be distributed by the county in the following priority:
14.18 (a) 37.5 cents, as adjusted for inflation under section477A.145 , for each acre
14.19of county-administered other natural resources land shall be deposited in a resource
14.20development fund to be created within the county treasury for use in resource
14.21development, forest management, game and fish habitat improvement, and recreational
14.22development and maintenance of county-administered other natural resources land. Any
14.23county receiving less than $5,000 annually for the resource development fund may elect to
14.24deposit that amount in the county general revenue fund;
14.25 (b) From the funds remaining, within 30 days of receipt of the payment to the county,
14.26the county treasurer shall pay each organized township 30 cents, as adjusted for inflation
14.27under section477A.145 , for each acre of acquired natural resources land, each acre of
14.28land utilization project land located entirely within a wildlife management area, and each
14.29acre of land described in section477A.12, subdivision 1 , paragraph (b), and 7.5 cents, as
14.30adjusted for inflation under section477A.145 , for each acre of other natural resources land
14.31and each acre of land utilization project land not located within a wildlife management
14.32area, located within its boundaries. Payments for natural resources lands not located in
14.33an organized township shall be deposited in the county general revenue fund. Payments
14.34to counties and townships pursuant to this paragraph shall be used to provide property
14.35tax levy reduction, except that of the payments for natural resources lands not located in
15.1an organized township, the county may allocate the amount determined to be necessary
15.2for maintenance of roads in unorganized townships. Provided that, if the total payment
15.3to the county pursuant to section477A.12 is not sufficient to fully fund the distribution
15.4provided for in this clause, the amount available shall be distributed to each township and
15.5the county general revenue fund on a pro rata basis; and
15.6 (c) Any remaining funds shall be deposited in the county general revenue fund.
15.7Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
15.8excess shall be used to provide property tax levy reduction.
15.9EFFECTIVE DATE.This section is effective for payments in 2008 and thereafter.
15.10 Sec. 10. Laws 2006, chapter 259, article 11, section 3, is amended to read:
15.11 Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
15.12PROPERTY TAX REIMBURSEMENT; 2006 ONLY.
15.13 Subdivision 1. Aid appropriation. $600,000 is appropriated annually from the
15.14general fund to the commissioner of revenue to be used to make payments to compensate
15.15for the loss of property tax revenue due to the placement of land located in the city of
15.16Mahnomen that was put in trust status by the United Stated Department of the Interior,
15.17Bureau of Indian Affairs, during calendar year 2006. The commissioner shall pay the
15.18county of Mahnomen, $450,000; the city of Mahnomen, $80,000; and Independent School
15.19District No. 432, Mahnomen, $70,000, provided that these payments shall be reduced
15.20in 2007 and any subsequent year by the amount, if any, of payments to that political
15.21subdivision made during the previous calendar year by the owner of the land that was
15.22placed in trust. The payments shall be made on July 20, of 2006, and each subsequent year.
15.23 Subd. 2. School district tax base adjustments. The Department of Revenue
15.24must reduce the referendum market value and the adjusted net tax capacitycertified for
15.25assessment year 2005 used to calculate school levies for taxes payable in 2007 and
15.26subsequent years for Independent School District No. 432, Mahnomen, by the amounts of
15.27any values attributable to property that is no longer subject to property taxation because
15.28the land has been placed in trust in calendar year 2006 through action of the United States
15.29Department of Interior, Bureau of Indian Affairs. The Mahnomen County auditor must
15.30certify the reductions in value to the Department of Revenue in the form and manner
15.31specified by the Department of Revenue.
15.32 Sec. 11. MAHNOMEN COUNTY; CITY, COUNTY, AND SCHOOL DISTRICT
15.33TAX BASE ADJUSTMENTS.
16.1 (a) The commissioner of revenue must reduce the referendum market value and
16.2adjusted net tax capacity used to calculate school levies beginning with taxes payable in
16.32008 and subsequent years for Independent School District No. 432, Mahnomen, by the
16.4amounts attributable to the property that is pending placement into trust status by the
16.5United States Department of the Interior, Bureau of Indian Affairs. This adjustment shall
16.6be made for each assessment year that the property remains on the tax rolls.
16.7 (b) The commissioner of revenue must reduce the county and city net tax capacities
16.8used to calculate aids under sections 477A.011 to 477A.03, beginning with aids payable in
16.92008 for the county of Mahnomen and the city of Mahnomen, by the amounts attributable
16.10to property that is pending placement into trust status by the United States Department of
16.11the Interior, Bureau of Indian Affairs. This adjustment shall be made for each assessment
16.12year that the property remains on the tax rolls.
16.13EFFECTIVE DATE.This section is effective for aids and levies payable in 2008
16.14and thereafter.
16.15 Sec. 12. GRAND MARAIS FIRE AID.
16.16 $250,000 is appropriated in fiscal years 2008 and 2009 from the general fund to the
16.17commissioner of revenue to be paid to the city of Grand Marais for costs related to the
16.18Ham Lake fire of 2007.
16.19 Sec. 13. STATE AID TRANSITION RESERVE.
16.20 Subdivision 1. Reserve account. A state aid transition reserve account is established
16.21in the general fund to provide two additional years of transition funding for county
16.22program aid and local government aid.
16.23 Subd. 2. Transfer to account. On June 29, 2009, the commissioner of finance shall
16.24transfer $80,629,000 from the general fund to the state aid transition reserve account.
16.25 Subd. 3. Transfer to general fund. On July 1, 2009, the commissioner of finance
16.26shall transfer the balance in the state aid transition reserve account to the general fund.
16.27 Subd. 4. Expiration date. This section expires July 2, 2009.
16.30 Section 1. Minnesota Statutes 2006, section 97A.061, subdivision 2, is amended to
16.31read:
17.1 Subd. 2. Allocation. (a) Except as provided in subdivision 3, the county treasurer
17.2shall allocate the payment among the county, towns, and school districts on the same basis
17.3as if the payments were taxes on the land received in the year. Payment of a town's or a
17.4school district's allocation must be made by the county treasurer to the town or school
17.5district within 30 days of receipt of the payment to the county. The county's share of the
17.6payment shall be deposited in the county general revenue fund.
17.7 (b) The county treasurer of a county with a population over 39,000 but less than
17.842,000 in the 1950 federal census shall allocate the payment only among the towns and
17.9school districts on the same basis as if the payments were taxes on the lands received
17.10in the current year.
17.11 (c) If a town received a payment in calendar year 2006 or thereafter under this
17.12subdivision, and subsequently incorporated as a city, the city will continue to receive any
17.13future year's allocations that would have been made to the town had it not incorporated,
17.14provided that the payments will terminate if the governing body of the city passes an
17.15ordinance that prohibits hunting within the boundaries of the city.
17.16EFFECTIVE DATE.This section is effective for aid payments made in 2007
17.17and thereafter.
17.18 Sec. 2. Minnesota Statutes 2006, section 126C.41, subdivision 2, is amended to read:
17.19 Subd. 2. Retired employee health benefits. A district may levy an amount up to the
17.20amount the district is required by the collective bargaining agreement in effect on March
17.2130, 1992, to pay for health insurance or unreimbursed medical expenses for licensed
17.22and nonlicensed employees who have terminated services in the employing district and
17.23withdrawn from active teaching service or other active service, as applicable, before July 1,
17.241992, or in the case of a school district located within the taconite tax relief area defined in
17.25section 273.134, before July 1, 1998, if a sunset clause is in effect for the current collective
17.26bargaining agreement. The total amount of the levy each year may not exceed $600,000.
17.27 Sec. 3. Minnesota Statutes 2006, section 127A.48, subdivision 2, is amended to read:
17.28 Subd. 2. Methodology. In making its annual assessment/sales ratio studies, the
17.29Department of Revenue must use a methodology consistent with the most recent Standard
17.30on Assessment Ratio Studies published by the assessment standards committee of the
17.31International Association of Assessing Officers. The commissioner of revenue shall
17.32supplement this general methodology with specific procedures necessary for execution of
17.33the study in accordance with other Minnesota laws impacting the assessment/sales ratio
17.34study. The commissioner shall document these specific procedures in writing and shall
18.1publish the procedures in the State Register, but these procedures will not be considered
18.2"rules" pursuant to the Minnesota Administrative Procedure Act. When property is
18.3sold and the purchaser changes its use in a manner that would result in a change of
18.4classification of the property, the assessment sales ratio study under this subdivision must
18.5take into account that changed classification as soon as practicable. A change in status
18.6from homestead to nonhomestead or from nonhomestead to homestead is not a change
18.7under this subdivision. For purposes of this section, sections270.12, subdivision 2 ,
18.8clause (8), and278.05, subdivision 4 , the commissioner of revenue shall exclude from
18.9the assessment/sales ratio study the sale of any nonagricultural property which does not
18.10contain an improvement, if (1) the statutory basis on which the property's taxable value
18.11as most recently assessed is less than market value as defined in section273.11 , or (2)
18.12the property has undergone significant physical change or a change of use since the most
18.13recent assessment.
18.14EFFECTIVE DATE.This section is effective the day following final enactment.
18.15 Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
18.16to read:
18.17 Subd. 85. Modular homes used as models by dealers. (a) A modular home
18.18is exempt if it:
18.19 (1) is owned by a modular home dealer and is located on land owned or leased
18.20by that dealer;
18.21 (2) is a single-family model home;
18.22 (3) is not available for sale and is used exclusively as a model;
18.23 (4) is not permanently connected to any utilities except electricity; and
18.24 (5) is situated on a temporary foundation.
18.25 (b) The exemption under this subdivision is allowable for up to five assessment
18.26years after the date it becomes located on the property, provided that the modular home
18.27continues to meet all of the criteria under this subdivision each year. The owner of a
18.28modular model home must notify the county assessor within 60 days that it has been
18.29constructed or located on the property and must again notify the assessor if the modular
18.30home ceases to meet any of the criteria. If more than one modular home is constructed or
18.31situated on a property, the owner must notify the assessor within 60 days for each of the
18.32models placed on the property.
18.33 (c) For purposes of this subdivision, a "modular home" means a building or
18.34structural unit that has been in whole or substantial part manufactured or constructed at an
18.35off-site location to be wholly or partially assembled on-site as a single family dwelling.
19.1Construction of the modular home must comply with applicable standards adopted in
19.2Minnesota Rules authorized under Minnesota Statutes, chapter 16B. A modular home does
19.3not include a structure subject to the requirements of the National Manufactured Home
19.4Construction and Safety Standards Act of 1974 or prefabricated buildings, as defined in
19.5Minnesota Statutes, section 327.31, subdivision 6.
19.6EFFECTIVE DATE.This section is effective for assessment year 2007 and
19.7thereafter, for taxes payable in 2008 and thereafter. The five-year assessment time period
19.8begins with the 2007 assessment for a modular model home currently situated provided
19.9it meets all of the criteria and the county assessor is notified within 90 days of the day
19.10following final enactment.
19.11 Sec. 5. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
19.12to read:
19.13 Subd. 86. Electric generation facility; personal property. (a) Notwithstanding
19.14subdivision 9, clause (a), attached machinery and other personal property which is part of
19.15a simple-cycle combustion-turbine electric generation facility that exceeds 150 megawatts
19.16of installed capacity and that meets the requirements of this subdivision is exempt. At
19.17the time of construction, the facility must:
19.18 (1) utilize natural gas as a primary fuel;
19.19 (2) be owned by an electric generation and transmission cooperative;
19.20 (3) be located within one mile of an existing 16-inch natural gas pipeline and a
19.2169-kilovolt and a 230-kilovolt high-voltage electric transmission line;
19.22 (4) be designed to provide peaking, emergency backup, or contingency services;
19.23 (5) have received a certificate of need under section 216B.243 demonstrating
19.24demand for its capacity; and
19.25 (6) have received by resolution the approval from the governing bodies of the county
19.26and the city in which the proposed facility is to be located for the exemption of personal
19.27property under this subdivision.
19.28 (b) Construction of the facility must be commenced after January 1, 2008, and
19.29before January 1, 2012. Property eligible for this exemption does not include electric
19.30transmission lines and interconnections or gas pipelines and interconnections appurtenant
19.31to the property or the facility.
19.32EFFECTIVE DATE.This section is effective for the 2007 assessment payable in
19.332008 and thereafter.
20.1 Sec. 6. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
20.2to read:
20.3 Subd. 87. Apprenticeship training facilities. All or a portion of a property is
20.4exempt if: (1) the property is used exclusively for a state-approved apprenticeship program
20.5through the Department of Labor and Industry, (2) the property is owned and operated by
20.6a nonprofit corporation, and (3) the program participants receive no compensation.
20.7EFFECTIVE DATE.This section is effective for assessment year 2007 and
20.8thereafter, for taxes payable in 2008 and thereafter.
20.9 Sec. 7. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
20.10to read:
20.11 Subd. 88. Monosloped roofs for feedlots and manure storage areas. A
20.12monosloped, single-pitched roof installed over a feedlot or manure storage area to prevent
20.13runoff is exempt.
20.14EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
20.15payable in 2008, and thereafter.
20.16 Sec. 8. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
20.17 Subdivision 1. Requirement. Except as otherwise provided in subdivision 5,
20.18whenever any real estate is sold for a consideration in excess of $1,000, whether by
20.19warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
20.20grantee or the legal agent of either shall file a certificate of value with the county
20.21auditor in the county in which the property is located when the deed or other document
20.22is presented for recording. Contract for deeds are subject to recording under section
20.23507.235, subdivision 1
. Value shall, in the case of any deed not a gift, be the amount of
20.24the full actual consideration thereof, paid or to be paid, including the amount of any lien
20.25or liens assumed. The items and value of personal property transferred with the real
20.26property must be listed and deducted from the sale price. The certificate of value shall
20.27include the classification to which the property belongs for the purpose of determining
20.28the fair market value of the property, and shall include any proposed change in use of the
20.29property known to the person filing the certificate that could change the classification
20.30of the property. The certificate shall include financing terms and conditions of the sale
20.31which are necessary to determine the actual, present value of the sale price for purposes
20.32of the sales ratio study. If the property is being acquired as part of a like-kind exchange
20.33under section 1031 of the Internal Revenue Code of 1986, as amended through December
21.131, 2006, that must be indicated on the certificate. The commissioner of revenue shall
21.2promulgate administrative rules specifying the financing terms and conditions which must
21.3be included on the certificate. Pursuant to the authority of the commissioner of revenue in
21.4section270C.306 , the certificate of value must include the Social Security number or the
21.5federal employer identification number of the grantors and grantees. The identification
21.6numbers of the grantors and grantees are private data on individuals or nonpublic data
21.7as defined in section13.02, subdivisions 9 and 12 , but, notwithstanding that section, the
21.8private or nonpublic data may be disclosed to the commissioner of revenue for purposes of
21.9tax administration. The information required to be shown on the certificate of value is
21.10limited to the information required as of the date of the acknowledgment on the deed or
21.11other document to be recorded.
21.12EFFECTIVE DATE.This section is effective for certificates filed after June 30,
21.132007.
21.14 Sec. 9. Minnesota Statutes 2006, section 273.111, subdivision 6, is amended to read:
21.15 Subd. 6. Agricultural use. Real property qualifying under subdivision 3 shall be
21.16considered to be in agricultural use provided thatannually:
21.17 (1) in at least one of the three calendar years preceding the assessment year;
21.18at least 33-1/3 percent of the total family income of the owner is derived therefrom,
21.19or (i) the total production income including rental from the property is $300 plus $10
21.20per tillable acre no less than an amount equal to five percent of the per acre agricultural
21.21value determined under subdivision 16 for the county where the property is located for
21.22the previous assessment year, multiplied by the number of acres in the parcel subject to
21.23this section; or
21.24 (ii) the amount of total farm expenses shown on Schedule F of the property owner's
21.25federal income tax return exceeds 25 percent of the federal adjusted gross income of the
21.26owner for federal tax purposes; and
21.27 (2) it is devoted to the production for sale of agricultural products as defined in
21.28section273.13, subdivision 23 , paragraph (e).
21.29 In this subdivision, "total production income" means gross income as reported
21.30for federal income tax purposes on Schedule F for the calendar year ending in the year
21.31preceding the assessment year, plus rental income from the property.
21.32 Slough, wasteland, and woodland contiguous to or surrounded by land that is entitled
21.33to valuation and tax deferment under this section is considered to be in agricultural use if
21.34under the same ownership and management.
22.1EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
22.22009 and thereafter, provided that property that qualified under Minnesota Statutes 2006,
22.3section 273.111, for the 2007 assessment shall not be disqualified in any of the assessment
22.4years 2008 to 2012 because of a failure to meet the requirements of this section.
22.5 Sec. 10. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
22.6to read:
22.7 Subd. 16. Agricultural value determination. (a) In order to account for the
22.8presence of nonagricultural influences that may affect the sales of agricultural land, the
22.9commissioner of revenue shall develop a fair and uniform method of determining, for
22.10each county in the state, an agricultural value that is consistent with subdivision 4. The
22.11commissioner shall annually assign the resulting agricultural value to each county, and
22.12this value shall be used as the agricultural value for the county under this section.
22.13 (b) When property classified as agricultural is sold and the purchaser changes its use
22.14in a manner that would result in a change of classification of the property, and the sale
22.15price exceeds the agricultural value determined under paragraph (a), the assessor and
22.16the commissioner must review the sale along with other appropriate sales information
22.17to determine if there are nonagricultural influences on the value. If upon review it is
22.18determined that nonagricultural factors have affected the value, the resulting sales ratio
22.19shall be excluded from use in any study measuring agricultural value and applied to a
22.20study measuring market value.
22.21EFFECTIVE DATE.This section is effective for taxes levied in 2009, payable in
22.222010 and thereafter.
22.23 Sec. 11. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
22.24to read:
22.25 Subd. 17. Implementation of program. This section must be applied to eligible
22.26properties by all county assessors, beginning no later than assessments for taxes levied
22.27in 2008, payable in 2009, and thereafter, unless the commissioner of revenue determines
22.28that a county is unable to comply with this requirement, in which case the county must
22.29implement it for the earliest assessment year determined by the commissioner to be
22.30feasible.
22.31 Sec. 12. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
22.32to read:
23.1 Subd. 18. Applications; denied by county. For applications filed for the 2007 and
23.22008 assessment years, all applications for deferment of taxes and assessment under this
23.3section that have been denied by the county shall be forwarded to the commissioner of
23.4revenue by the county assessor within 30 days of denial. The assessor shall also provide
23.5the commissioner with a list of any property owners that requested an application and
23.6were denied, including names and addresses, and the reason for the denial. For the
23.7purpose of monitoring compliance with this section, the commissioner shall compile a
23.8report identifying all denied applications and requests for applications that were denied,
23.9the reason for the denial, and any commissioner action or recommendation. A report must
23.10be submitted to the chairs of the house and senate tax committees on or before February
23.111, 2008, and February 1, 2009, in compliance with Minnesota Statutes, sections 3.195
23.12and 3.197.
23.13EFFECTIVE DATE.This section is effective the day following final enactment.
23.14 Sec. 13. Minnesota Statutes 2006, section 273.123, subdivision 7, is amended to read:
23.15 Subd. 7. Local option; other property. The owner of homestead property
23.16not qualifying for an adjustment in valuation pursuant to subdivisions 1 to 5 or of
23.17nonhomestead property may receive a reduction in the amount of taxes payable on the
23.18property for the year in which the destruction occurs and in the following year if:
23.19 (a) 50 percent or more of the homestead dwelling or other structure, as established
23.20by the county assessor, is:
23.21 (1) unintentionally or accidentally destroyed, or
23.22 (2) destroyed by arson or vandalism, by someone other than the owner,
23.23and the homestead is uninhabitable or the other structure is not usable;
23.24 (b) the owner of the property makes written application to the county assessor as
23.25soon as practical after the damage has occurred; and
23.26 (c) the owner of the property makes written application to the county board.
23.27 The county board may grant a reduction in the amount of property tax which the
23.28owner must pay on the qualifying property in the year of destruction and in the following
23.29year. Any reduction in the amount of tax payable which is authorized by county board
23.30action shall be calculated based upon the number of months that the home is uninhabitable
23.31or the other structure is unusable. The amount of net tax due from the taxpayer shall be
23.32multiplied by a fraction, the numerator of which is the number of months the dwelling
23.33was occupied by that taxpayer, or the number of months the other structure was used by
23.34the taxpayer, and the denominator of which is 12. For purposes of this subdivision, if a
24.1structure is occupied or used for a fraction of a month, it is considered a month. "Net tax"
24.2is defined as the amount of tax after the subtraction of all of the state paid property tax
24.3credits. If application is made following payment of all property taxes due for the year of
24.4destruction, the amount of the reduction granted by the county board shall be refunded to
24.5the taxpayer by the county treasurer as soon as practical.
24.6 Any reductions or refunds approved by the county board shall not be subject to
24.7approval by the commissioner of revenue.
24.8 The county board may levy in the following year the amount of tax dollars lost to the
24.9county government as a result of the reductions granted pursuant to this subdivision.
24.10EFFECTIVE DATE.This section is effective for destruction that occurs in calendar
24.11year 2006 and thereafter.
24.12 Sec. 14. Minnesota Statutes 2006, section 273.124, subdivision 14, is amended to read:
24.13 Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than
24.14ten acres that is the homestead of its owner must be classified as class 2a under section
24.15273.13, subdivision 23
, paragraph (a), if:
24.16 (1) the parcel on which the house is located is contiguous on at least two sides to (i)
24.17agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
24.18Service, or (iii) land administered by the Department of Natural Resources on which in
24.19lieu taxes are paid under sections477A.11 to
477A.14 ;
24.20 (2) its owner also owns a noncontiguous parcel of agricultural land that is at least
24.2120 acres;
24.22 (3) the noncontiguous land is located not farther than four townships or cities, or a
24.23combination of townships or cities from the homestead; and
24.24 (4) the agricultural use value of the noncontiguous land and farm buildings is equal
24.25to at least 50 percent of the market value of the house, garage, and one acre of land.
24.26 Homesteads initially classified as class 2a under the provisions of this paragraph shall
24.27remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
24.28properties, as long as the homestead remains under the same ownership, the owner owns a
24.29noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
24.30value qualifies under clause (4). Homestead classification under this paragraph is limited
24.31to property that qualified under this paragraph for the 1998 assessment.
24.32 (b)(i) Agricultural propertyconsisting of at least 40 acres shall be classified as the
24.33owner's homestead, to the same extent as other agricultural homestead property, if all
24.34of the following criteria are met:
25.1 (1) the property consists of at least 40 acres including undivided government lots
25.2and correctional 40's, or at least 20 acres if used exclusively and intensively for raising
25.3or cultivating agricultural products as defined under section 273.13, subdivision 23,
25.4paragraph (e);
25.5(1) (2) the owner, the owner's spouse, the son or daughter of the owner or owner's
25.6spouse, or the grandson or granddaughter of the owner or the owner's spouse, is actively
25.7farming the agricultural property, either on the person's own behalf as an individual or
25.8on behalf of a partnership operating a family farm, family farm corporation, joint family
25.9farm venture, or limited liability company of which the person is a partner, shareholder, or
25.10member;
25.11(2) (3) both the owner of the agricultural property and the person who is actively
25.12farming the agricultural property under clause(1) (2), are Minnesota residents;
25.13(3) (4) neither the owner nor the spouse of the owner claims another agricultural
25.14homestead in Minnesota; and
25.15(4) (5) neither the owner nor the person actively farming the property lives farther
25.16than four townships or cities, or a combination of four townships or cities, from the
25.17agricultural property, except that if the owner or the owner's spouse is required to live in
25.18employer-provided housing, the owner or owner's spouse, whichever is actively farming
25.19the agricultural property, may live more than four townships or cities, or combination of
25.20four townships or cities from the agricultural property.
25.21 The relationship under this paragraph may be either by blood or marriage.
25.22 (ii) Real property held by a trustee under a trust is eligible for agricultural homestead
25.23classification under this paragraph if the qualifications in clause (i) are met, except that
25.24"owner" means the grantor of the trust.
25.25 (iii) Property containing the residence of an owner who owns qualified property
25.26under clause (i) shall be classified as part of the owner's agricultural homestead, if that
25.27property is also used for noncommercial storage or drying of agricultural crops.
25.28 (c) Noncontiguous land shall be included as part of a homestead under section
25.29273.13, subdivision 23
, paragraph (a), only if the homestead is classified as class 2a
25.30and the detached land is located in the same township or city, or not farther than four
25.31townships or cities or combination thereof from the homestead. Any taxpayer of these
25.32noncontiguous lands must notify the county assessor that the noncontiguous land is part of
25.33the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer
25.34must also notify the assessor of the other county.
25.35 (d) Agricultural land used for purposes of a homestead and actively farmed by a
25.36person holding a vested remainder interest in it must be classified as a homestead under
26.1section273.13, subdivision 23 , paragraph (a). If agricultural land is classified class 2a,
26.2any other dwellings on the land used for purposes of a homestead by persons holding
26.3vested remainder interests who are actively engaged in farming the property, and up to
26.4one acre of the land surrounding each homestead and reasonably necessary for the use of
26.5the dwelling as a home, must also be assessed class 2a.
26.6 (e) Agricultural land and buildings that were class 2a homestead property under
26.7section273.13, subdivision 23 , paragraph (a), for the 1997 assessment shall remain
26.8classified as agricultural homesteads for subsequent assessments if:
26.9 (1) the property owner abandoned the homestead dwelling located on the agricultural
26.10homestead as a result of the April 1997 floods;
26.11 (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
26.12or Wilkin;
26.13 (3) the agricultural land and buildings remain under the same ownership for the
26.14current assessment year as existed for the 1997 assessment year and continue to be used
26.15for agricultural purposes;
26.16 (4) the dwelling occupied by the owner is located in Minnesota and is within 30
26.17miles of one of the parcels of agricultural land that is owned by the taxpayer; and
26.18 (5) the owner notifies the county assessor that the relocation was due to the 1997
26.19floods, and the owner furnishes the assessor any information deemed necessary by the
26.20assessor in verifying the change in dwelling. Further notifications to the assessor are not
26.21required if the property continues to meet all the requirements in this paragraph and any
26.22dwellings on the agricultural land remain uninhabited.
26.23 (f) Agricultural land and buildings that were class 2a homestead property under
26.24section273.13, subdivision 23 , paragraph (a), for the 1998 assessment shall remain
26.25classified agricultural homesteads for subsequent assessments if:
26.26 (1) the property owner abandoned the homestead dwelling located on the agricultural
26.27homestead as a result of damage caused by a March 29, 1998, tornado;
26.28 (2) the property is located in the county of Blue Earth, Brown, Cottonwood,
26.29LeSueur, Nicollet, Nobles, or Rice;
26.30 (3) the agricultural land and buildings remain under the same ownership for the
26.31current assessment year as existed for the 1998 assessment year;
26.32 (4) the dwelling occupied by the owner is located in this state and is within 50 miles
26.33of one of the parcels of agricultural land that is owned by the taxpayer; and
26.34 (5) the owner notifies the county assessor that the relocation was due to a March 29,
26.351998, tornado, and the owner furnishes the assessor any information deemed necessary by
26.36the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
27.1owner must notify the assessor by December 1, 1998. Further notifications to the assessor
27.2are not required if the property continues to meet all the requirements in this paragraph
27.3and any dwellings on the agricultural land remain uninhabited.
27.4 (g) Agricultural propertyconsisting of at least 40 acres of a family farm corporation,
27.5joint family farm venture, family farm limited liability company, or partnership operating
27.6a family farm as described under subdivision 8 shall be classified homestead, to the same
27.7extent as other agricultural homestead property, if all of the following criteria are met:
27.8 (1) the property consists of at least 40 acres including undivided government lots
27.9and correctional 40's, or at least 20 acres if used exclusively and intensively for raising
27.10or cultivating agricultural products as defined under section 273.13, subdivision 23,
27.11paragraph (e);
27.12(1) (2) a shareholder, member, or partner of that entity is actively farming the
27.13agricultural property;
27.14(2) (3) that shareholder, member, or partner who is actively farming the agricultural
27.15property is a Minnesota resident;
27.16(3) (4) neither that shareholder, member, or partner, nor the spouse of that
27.17shareholder, member, or partner claims another agricultural homestead in Minnesota; and
27.18(4) (5) that shareholder, member, or partner does not live farther than four townships
27.19or cities, or a combination of four townships or cities, from the agricultural property.
27.20 Homestead treatment applies under this paragraph for property leased to a family
27.21farm corporation, joint farm venture, limited liability company, or partnership operating a
27.22family farm if legal title to the property is in the name of an individual who is a member,
27.23shareholder, or partner in the entity.
27.24 (h) To be eligible for the special agricultural homestead under this subdivision, an
27.25initial full application must be submitted to the county assessor where the property is
27.26located. Owners and the persons who are actively farming the property shall be required
27.27to complete only a one-page abbreviated version of the application in each subsequent
27.28year provided that none of the following items have changed since the initial application:
27.29 (1) the day-to-day operation, administration, and financial risks remain the same;
27.30 (2) the owners and the persons actively farming the property continue to live within
27.31the four townships or city criteria and are Minnesota residents;
27.32 (3) the same operator of the agricultural property is listed with the Farm Service
27.33Agency;
27.34 (4) a Schedule F or equivalent income tax form was filed for the most recent year;
27.35 (5) the property's acreage is unchanged; and
28.1 (6) none of the property's acres have been enrolled in a federal or state farm program
28.2since the initial application.
28.3 The owners and any persons who are actively farming the property must include
28.4the appropriate Social Security numbers, and sign and date the application. If any of the
28.5specified information has changed since the full application was filed, the owner must
28.6notify the assessor, and must complete a new application to determine if the property
28.7continues to qualify for the special agricultural homestead. The commissioner of revenue
28.8shall prepare a standard reapplication form for use by the assessors.
28.9EFFECTIVE DATE.This section is effective for assessment year 2007, taxes
28.10payable in 2008 and thereafter.
28.11 Sec. 15. Minnesota Statutes 2006, section 273.124, is amended by adding a subdivision
28.12to read:
28.13 Subd. 22. Annual registration of certain relative homesteads. If the owner of
28.14property or the owner's relative who occupies property that is classified as a homestead
28.15under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any
28.16part of that property for a period that exceeds 31 consecutive days during the calendar
28.17year, the recipient of the compensation must register the property with the city in which
28.18it is located no later than 60 days after the initial rental period began. This requirement
28.19applies to property located in a city that has a population over 25,000. Each city must
28.20maintain a file of these property registrations that is open to the public, and retain the
28.21registrations for one year after the date of filing.
28.22EFFECTIVE DATE.This section is effective July 1, 2007.
28.23 Sec. 16. Minnesota Statutes 2006, section 273.125, subdivision 8, is amended to read:
28.24 Subd. 8. Manufactured homes; sectional structures. (a) In this section,
28.25"manufactured home" means a structure transportable in one or more sections, which is
28.26built on a permanent chassis, and designed to be used as a dwelling with or without a
28.27permanent foundation when connected to the required utilities, and contains the plumbing,
28.28heating, air conditioning, and electrical systems in it. Manufactured home includes any
28.29accessory structure that is an addition or supplement to the manufactured home and, when
28.30installed, becomes a part of the manufactured home.
28.31 (b) Except as provided in paragraph (c), a manufactured home that meets each of the
28.32following criteria must be valued and assessed as an improvement to real property, the
29.1appropriate real property classification applies, and the valuation is subject to review and
29.2the taxes payable in the manner provided for real property:
29.3 (1) the owner of the unit holds title to the land on which it is situated;
29.4 (2) the unit is affixed to the land by a permanent foundation or is installed at its
29.5location in accordance with the Manufactured Home Building Code in sections327.31
29.6to327.34 , and rules adopted under those sections, or is affixed to the land like other real
29.7property in the taxing district; and
29.8 (3) the unit is connected to public utilities, has a well and septic tank system, or is
29.9serviced by water and sewer facilities comparable to other real property in the taxing
29.10district.
29.11 (c) A manufactured home that meets each of the following criteria must be assessed
29.12at the rate provided by the appropriate real property classification but must be treated as
29.13personal property, and the valuation is subject to review and the taxes payable in the
29.14manner provided in this section:
29.15 (1) the owner of the unit is a lessee of the land under the terms of a lease, or the unit
29.16is located in a manufactured home park but is not the homestead of the park owner;
29.17 (2) the unit is affixed to the land by a permanent foundation or is installed at its
29.18location in accordance with the Manufactured Home Building Code contained in sections
29.19327.31
to
327.34 , and the rules adopted under those sections, or is affixed to the land like
29.20other real property in the taxing district; and
29.21 (3) the unit is connected to public utilities, has a well and septic tank system, or is
29.22serviced by water and sewer facilities comparable to other real property in the taxing
29.23district.
29.24 (d) Sectional structures must be valued and assessed as an improvement to real
29.25property if the owner of the structure holds title to the land on which it is located or is a
29.26qualifying lessee of the land under section273.19 . In this paragraph "sectional structure"
29.27means a building or structural unit that has been in whole or substantial part manufactured
29.28or constructed at an off-site location to be wholly or partially assembled on-site alone or
29.29with other units and attached to a permanent foundation.
29.30 (e) The commissioner of revenue may adopt rules under the Administrative
29.31Procedure Act to establish additional criteria for the classification of manufactured homes
29.32and sectional structures under this subdivision.
29.33 (f) A storage shed, deck, or similar improvement constructed on property that is
29.34leased or rented as a site for a manufactured home, sectional structure, park trailer, or
29.35travel trailer is taxable as provided in this section. In the case of property that is leased or
29.36rented as a site for a travel trailer, a storage shed, deck, or similar improvement on the
30.1site that is considered personal property under this paragraph is taxable only if its total
30.2estimated market value is over$500 $1,000. The property is taxable as personal property
30.3to the lessee of the site if it is not owned by the owner of the site. The property is taxable
30.4as real estate if it is owned by the owner of the site. As a condition of permitting the owner
30.5of the manufactured home, sectional structure, park trailer, or travel trailer to construct
30.6improvements on the leased or rented site, the owner of the site must obtain the permanent
30.7home address of the lessee or user of the site. The site owner must provide the name
30.8and address to the assessor upon request.
30.9EFFECTIVE DATE.This section is effective for assessment year 2007 and
30.10thereafter, for taxes payable in 2008 and thereafter.
30.11 Sec. 17. Minnesota Statutes 2006, section 273.128, subdivision 1, is amended to read:
30.12 Subdivision 1. Requirement. Low-income rental property classified as class 4d
30.13under section273.13, subdivision 25 , is entitled to valuation under this section if at
30.14least75 20 percent of the units in the rental housing property meet any of the following
30.15qualifications:
30.16 (1) the units are subject to a housing assistance payments contract under Section 8
30.17of the United States Housing Act of 1937, as amended;
30.18 (2) the units are rent-restricted and income-restricted units of a qualified low-income
30.19housing project receiving tax credits under section 42(g) of the Internal Revenue Code of
30.201986, as amended;
30.21 (3) the units are financed by the Rural Housing Service of the United States
30.22Department of Agriculture and receive payments under the rental assistance program
30.23pursuant to section 521(a) of the Housing Act of 1949, as amended; or
30.24 (4) the units are subject to rent and income restrictions under the terms of financial
30.25assistance provided to the rental housing property by the federal government or the
30.26state of Minnesota, or a local unit of government, as evidenced by a document recorded
30.27against the property.
30.28 The restrictions must require assisted units to be occupied by residents whose
30.29household income at the time of initial occupancy does not exceed 60 percent of the
30.30greater of area or state median income, adjusted for family size, as determined by the
30.31United States Department of Housing and Urban Development. The restriction must also
30.32require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of
30.33area or state median income, adjusted for family size, as determined by the United States
30.34Department of Housing and Urban Development.
31.1EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
31.2payable in 2008, and thereafter.
31.3 Sec. 18. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
31.4 Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
31.5and (c), real estate which is residential and used for homestead purposes is class 1a. In the
31.6case of a duplex or triplex in which one of the units is used for homestead purposes, the
31.7entire property is deemed to be used for homestead purposes. The market value of class 1a
31.8property must be determined based upon the value of the house, garage, and land.
31.9 The first $500,000 of market value of class 1a property has a net class rate of
31.10one percent of its market value; and the market value of class 1a property that exceeds
31.11$500,000 has a class rate of 1.25 percent of its market value.
31.12 (b) Class 1b property includes homestead real estate or homestead manufactured
31.13homes used for the purposes of a homestead by
31.14 (1) any person who is blind as defined in section256D.35 , or the blind person and
31.15the blind person's spouse; or
31.16 (2)any person, hereinafter referred to as "veteran," who:
31.17(i) served in the active military or naval service of the United States; and
31.18(ii) is entitled to compensation under the laws and regulations of the United States
31.19for permanent and total service-connected disability due to the loss, or loss of use, by
31.20reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both
31.21lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or
31.22a wheelchair; and
31.23(iii) has acquired a special housing unit with special fixtures or movable facilities
31.24made necessary by the nature of the veteran's disability, or the surviving spouse of the
31.25deceased veteran for as long as the surviving spouse retains the special housing unit
31.26as a homestead; or
31.27(3) any person who is permanently and totally disabled.
31.28 Property is classified and assessed under clause (3) only if the government agency or
31.29income-providing source certifies, upon the request of the homestead occupant, that the
31.30homestead occupant satisfies the disability requirements of this paragraph.
31.31 Property is classified and assessed pursuant to clause (1) only if the commissioner of
31.32revenue certifies to the assessor that the homestead occupant satisfies the requirements of
31.33this paragraph.
31.34 Permanently and totally disabled for the purpose of this subdivision means a
31.35condition which is permanent in nature and totally incapacitates the person from working
32.1at an occupation which brings the person an income. The first$32,000 $50,000 market
32.2value of class 1b property has a net class rate of .45 percent of its market value. The
32.3remaining market value of class 1b property has a class rate using the rates for class 1a or
32.4class 2a property, whichever is appropriate, of similar market value.
32.5 (c) Class 1c property is commercial use real and personal property that abuts
32.6a lakeshore line public water as defined in section 103G.005, subdivision 15, and is
32.7devoted to temporary and seasonal residential occupancy for recreational purposes but
32.8not devoted to commercial purposes for more than 250 days in the year preceding the
32.9year of assessment, and that includes a portion used as a homestead by the owner, which
32.10includes a dwelling occupied as a homestead by a shareholder of a corporation that owns
32.11the resort, a partner in a partnership that owns the resort, or a member of a limited liability
32.12company that owns the resort even if the title to the homestead is held by the corporation,
32.13partnership, or limited liability company. For purposes of this clause, property is devoted
32.14to a commercial purpose on a specific day if any portion of the property, excluding the
32.15portion used exclusively as a homestead, is used for residential occupancy and a fee is
32.16charged for residential occupancy. Class 1c property must contain three or more rental
32.17units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
32.18or individual camping site equipped with water and electrical hookups for recreational
32.19vehicles. Class 1c property must provide recreational activities such as the rental of ice
32.20fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment;
32.21provide marina services, launch services, or guide services; or sell bait and fishing tackle.
32.22Any unit in which the right to use the property is transferred to an individual or entity
32.23by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even
32.24though it may remain available for rent. A camping pad offered for rent by a property
32.25that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental
32.26agreement, as long as the use of the camping pad does not exceed 250 days. The portion of
32.27the property used as a homestead is class 1a property under paragraph (a). The remainder
32.28of the property is classified as follows: the first$500,000 $600,000 of market value is tier
32.29I, the next $1,700,000 of market value is tier II, and any remaining market value is tier
32.30III. The class rates for class 1c are: tier I,0.55 0.50 percent; tier II, 1.0 percent; and tier
32.31III, 1.25 percent.If a class 1c resort property has any market value in tier III, the entire
32.32property must meet the requirements of subdivision 25, paragraph (d), clause (1), to
32.33qualify for class 1c treatment under this paragraph. Owners of real and personal property
32.34devoted to temporary and seasonal residential occupancy for recreation purposes in which
32.35all or a portion of the property was devoted to commercial purposes for not more than 250
32.36days in the year preceding the year of assessment desiring classification as class 1c, must
33.1submit a declaration to the assessor designating the cabins or units occupied for 250 days
33.2or less in the year preceding the year of assessment by January 15 of the assessment year.
33.3Those cabins or units and a proportionate share of the land on which they are located must
33.4be designated as class 1c as otherwise provided. The remainder of the cabins or units and
33.5a proportionate share of the land on which they are located must be designated as class
33.63a commercial. The owner of property desiring designation as class 1c property must
33.7provide guest registers or other records demonstrating that the units for which class 1c
33.8designation is sought were not occupied for more than 250 days in the year preceding the
33.9assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar,
33.10(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility
33.11operated on a commercial basis not directly related to temporary and seasonal residential
33.12occupancy for recreation purposes does not qualify for class 1c.
33.13 (d) Class 1d property includes structures that meet all of the following criteria:
33.14 (1) the structure is located on property that is classified as agricultural property under
33.15section273.13, subdivision 23 ;
33.16 (2) the structure is occupied exclusively by seasonal farm workers during the time
33.17when they work on that farm, and the occupants are not charged rent for the privilege of
33.18occupying the property, provided that use of the structure for storage of farm equipment
33.19and produce does not disqualify the property from classification under this paragraph;
33.20 (3) the structure meets all applicable health and safety requirements for the
33.21appropriate season; and
33.22 (4) the structure is not salable as residential property because it does not comply
33.23with local ordinances relating to location in relation to streets or roads.
33.24 The market value of class 1d property has the same class rates as class 1a property
33.25under paragraph (a).
33.26EFFECTIVE DATE.The portion of this section modifying the market value and
33.27class rate of the first tier of class 1c resorts and striking the language relating to class 1b
33.28veterans' homesteads is effective for taxes payable in 2008 and thereafter. The remaining
33.29portion of this section relating to class 1c resorts is effective for taxes payable in 2009
33.30and thereafter.
33.31 Sec. 19. Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:
33.32 Subd. 23. Class 2. (a) Class 2a property is agricultural land including any
33.33improvements that is homesteaded. The market value of the house and garage and
33.34immediately surrounding one acre of land has the same class rates as class 1a property
33.35under subdivision 22. The value of the remaining land including improvements up to the
34.1first tier valuation limit of agricultural homestead property has a net class rate of0.55 0.5
34.2percent of market value. The remaining property over the first tier has a class rate of one
34.3percent of market value. For purposes of this subdivision, the "first tier valuation limit of
34.4agricultural homestead property" and "first tier" means the limit certified under section
34.5273.11
, subdivision 23.
34.6 (b) Class 2b property is (1) unplatted real estate, rural in characterand used
34.7exclusively for growing trees for timber, lumber, and wood and wood products; (2)
34.8real estate, that is not improved with a structure and is used exclusively for growing
34.9trees for timber, lumber, and wood and wood products, if the owner has participated
34.10or is participating in a cost-sharing program for afforestation, reforestation, or timber
34.11stand improvement on that particular property, administered or coordinated by the
34.12commissioner of natural resources; (3) and that consists of at least ten acres, including
34.13land used for growing trees for timber, lumber, and wood and wood products, but not
34.14including land used for agricultural purposes, provided that the presence of a minor,
34.15ancillary nonresidential structure does not disqualify property from classification under
34.16this clause, (2) real estate that is nonhomestead agricultural land; or(4) (3) a landing area
34.17or public access area of a privately owned public use airport. Class 2b property has a net
34.18class rate of one percent of market value, except that property described in clause (1)
34.19has a net class rate of .65 percent if it consists of no more than 1,920 acres and is being
34.20managed under a forest management plan that meets the requirements of chapter 290C,
34.21but is not enrolled in the sustainable forest resource management incentive program,
34.22provided that the owner of the property must apply to the assessor annually to receive the
34.23reduced class rate and provide the information required by the assessor to verify that
34.24the property qualifies for the reduced rate.
34.25 (c) Agricultural land as used in this section means contiguous acreage of ten acres or
34.26more, used during the preceding year for agricultural purposes. "Agricultural purposes" as
34.27used in this section means the raising or cultivation of agricultural products. "Agricultural
34.28purposes" also includes enrollment in the Reinvest in Minnesota program under sections
34.29103F.501
to
103F.535 or the federal Conservation Reserve Program as contained in Public
34.30Law 99-198 if the property was classified as agricultural (i) under this subdivision for
34.31the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage
34.32on the same parcel, or contiguous acreage on an immediately adjacent parcel under the
34.33same ownership, may also qualify as agricultural land, but only if it is pasture, timber,
34.34waste, unusable wild land, or land included in state or federal farm programs. Agricultural
34.35classification for property shall be determined excluding the house, garage, and
35.1immediately surrounding one acre of land, and shall not be based upon the market value of
35.2any residential structures on the parcel or contiguous parcels under the same ownership.
35.3 (d) Real estate, excluding the house, garage, and immediately surrounding one acre
35.4of land, of less than ten acres which is exclusively and intensively used for raising or
35.5cultivating agricultural products, shall be considered as agricultural land.
35.6 Land shall be classified as agricultural even if all or a portion of the agricultural use
35.7of that property is the leasing to, or use by another person for agricultural purposes.
35.8 Classification under this subdivision is not determinative for qualifying under
35.9section273.111 .
35.10 The property classification under this section supersedes, for property tax purposes
35.11only, any locally administered agricultural policies or land use restrictions that define
35.12minimum or maximum farm acreage.
35.13 (e) The term "agricultural products" as used in this subdivision includes production
35.14for sale of:
35.15 (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
35.16animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
35.17bees, and apiary products by the owner;
35.18 (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
35.19for agricultural use;
35.20 (3) the commercial boarding of horses if the boarding is done in conjunction with
35.21raising or cultivating agricultural products as defined in clause (1);
35.22 (4) property which is owned and operated by nonprofit organizations used for
35.23equestrian activities, excluding racing;
35.24 (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
35.25under section97A.115 ;
35.26 (6) insects primarily bred to be used as food for animals;
35.27 (7) trees, grown for sale as a crop, including short rotation woody crops, and not
35.28sold for timber, lumber, wood, or wood products; and
35.29 (8) maple syrup taken from trees grown by a person licensed by the Minnesota
35.30Department of Agriculture under chapter 28A as a food processor.
35.31 (f) If a parcel used for agricultural purposes is also used for commercial or industrial
35.32purposes, including but not limited to:
35.33 (1) wholesale and retail sales;
35.34 (2) processing of raw agricultural products or other goods;
35.35 (3) warehousing or storage of processed goods; and
36.1 (4) office facilities for the support of the activities enumerated in clauses (1), (2),
36.2and (3),
36.3the assessor shall classify the part of the parcel used for agricultural purposes as class
36.41b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
36.5use. The grading, sorting, and packaging of raw agricultural products for first sale is
36.6considered an agricultural purpose. A greenhouse or other building where horticultural
36.7or nursery products are grown that is also used for the conduct of retail sales must be
36.8classified as agricultural if it is primarily used for the growing of horticultural or nursery
36.9products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
36.10those products. Use of a greenhouse or building only for the display of already grown
36.11horticultural or nursery products does not qualify as an agricultural purpose.
36.12 The assessor shall determine and list separately on the records the market value of
36.13the homestead dwelling and the one acre of land on which that dwelling is located. If any
36.14farm buildings or structures are located on this homesteaded acre of land, their market
36.15value shall not be included in this separate determination.
36.16 (g) To qualify for classification under paragraph (b), clause (4), a privately owned
36.17public use airport must be licensed as a public airport under section360.018 . For purposes
36.18of paragraph (b), clause (4), "landing area" means that part of a privately owned public use
36.19airport properly cleared, regularly maintained, and made available to the public for use by
36.20aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
36.21or navigational aids. A landing area also includes land underlying both the primary surface
36.22and the approach surfaces that comply with all of the following:
36.23 (i) the land is properly cleared and regularly maintained for the primary purposes of
36.24the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
36.25facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
36.26 (ii) the land is part of the airport property; and
36.27 (iii) the land is not used for commercial or residential purposes.
36.28The land contained in a landing area under paragraph (b), clause (4), must be described
36.29and certified by the commissioner of transportation. The certification is effective until
36.30it is modified, or until the airport or landing area no longer meets the requirements of
36.31paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area"
36.32means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival
36.33and departure building in connection with the airport.
36.34EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
36.35in 2008, and thereafter.
37.1 Sec. 20. Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:
37.2 Subd. 24. Class 3. (a) Commercial and industrial property and utility real and
37.3personal property is class 3a.
37.4 (1) Except as otherwise provided, each parcel of commercial, industrial, or utility
37.5real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
37.6of the remaining market value. In the case of contiguous parcels of property owned by the
37.7same person or entity, only the value equal to the first-tier value of the contiguous parcels
37.8qualifies for the reduced class rate, except that contiguous parcels owned by the same
37.9person or entity shall be eligible for the first-tier value class rate on each separate business
37.10operated by the owner of the property, provided the business is housed in a separate
37.11structure. For the purposes of this subdivision, the first tier means the first $150,000 of
37.12market value. Real property owned in fee by a utility for transmission line right-of-way
37.13shall be classified at the class rate for the higher tier.
37.14 For purposes of this subdivision, parcels are considered to be contiguous even if
37.15they are separated from each other by a road, street, waterway, or other similar intervening
37.16type of property. Connections between parcels that consist of power lines or pipelines do
37.17not cause the parcels to be contiguous. Property owners who have contiguous parcels of
37.18property that constitute separate businesses that may qualify for the first-tier class rate shall
37.19notify the assessor by July 1, for treatment beginning in the following taxes payable year.
37.20 (2)All Personal property that is: (i) part of an electric generation, transmission, or
37.21distribution system; or (ii), including tools, implements, and machinery, has a class rate
37.22of 2.5 percent for taxes levied in 2007, payable in 2008, and 3.0 percent for taxes levied
37.23in 2008, payable in 2009, and thereafter.
37.24 (3) Personal property that is either: (i) part of a pipeline system transporting
37.25or distributing water, gas, crude oil, or petroleum products; and (iii) not described in
37.26clause (3), and all, including tools, implements, and machinery, or (ii) part of an electric
37.27transmission or distribution system, including tools, implements, and machinery, has a
37.28class rate of 2.15 percent for taxes levied in 2007, payable in 2008, and 2.25 percent for
37.29taxes levied in 2008, payable in 2009, and thereafter.
37.30 (4) railroad operating property has a class rate as provided under clause (1) for
37.31the first tier of market value and the remaining market value. In the case of multiple
37.32parcels in one county that are owned by one person or entity, only one first tier amount
37.33is eligible for the reduced rate.
37.34(3) The entire market value of personal property that is: (i) tools, implements, and
37.35machinery of an electric generation, transmission, or distribution system; (ii) tools,
37.36implements, and machinery of a pipeline system transporting or distributing water, gas,
38.1crude oil, or petroleum products; or (iii) the (5) Personal property consisting of mains
38.2and pipes used in the distribution of steam or hot or chilled water for heating or cooling
38.3buildings, has a class rate as provided under clause (1) for the remaining market value
38.4in excess of the first tier.
38.5 (b) Employment property defined in section469.166 , during the period provided
38.6in section469.170 , shall constitute class 3b. The class rates for class 3b property are
38.7determined under paragraph (a).
38.8EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
38.9in 2008, and thereafter.
38.10 Sec. 21. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
38.11 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
38.12units and used or held for use by the owner or by the tenants or lessees of the owner
38.13as a residence for rental periods of 30 days or more, excluding property qualifying for
38.14class 4d. Class 4a also includes hospitals licensed under sections144.50 to
144.56 , other
38.15than hospitals exempt under section272.02 , and contiguous property used for hospital
38.16purposes, without regard to whether the property has been platted or subdivided. The
38.17market value of class 4a property has a class rate of 1.25 percent.
38.18 (b) Class 4b includes:
38.19 (1) residential real estate containing less than four units that does not qualify as class
38.204bb, other than seasonal residential recreational property;
38.21 (2) manufactured homes not classified under any other provision;
38.22 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
38.23farm classified under subdivision 23, paragraph (b) containing two or three units; and
38.24 (4) unimproved property that is classified residential as determined under subdivision
38.2533.
38.26 The market value of class 4b property has a class rate of 1.25 percent.
38.27 (c) Class 4bb includes:
38.28 (1) nonhomestead residential real estate containing one unit, other than seasonal
38.29residential recreational property; and
38.30 (2) a single family dwelling, garage, and surrounding one acre of property on a
38.31nonhomestead farm classified under subdivision 23, paragraph (b).
38.32 Class 4bb property has the same class rates as class 1a property under subdivision 22.
38.33 Property that has been classified as seasonal residential recreational property at
38.34any time during which it has been owned by the current owner or spouse of the current
38.35owner does not qualify for class 4bb.
39.1 (d) Class 4c property includes:
39.2 (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
39.3(b), clause (1), real and personal property devoted to temporary and seasonal residential
39.4occupancy for recreation purposes, including real and personal property devoted to
39.5temporary and seasonal residential occupancy for recreation purposes and not devoted to
39.6commercial purposes for more than 250 days in the year preceding the year of assessment.
39.7For purposes of this clause, property is devoted to a commercial purpose on a specific
39.8day if any portion of the property is used for residential occupancy, and a fee is charged
39.9for residential occupancy. Class 4c property must contain three or more rental units. A
39.10"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
39.11camping site equipped with water and electrical hookups for recreational vehicles. Class
39.124c property must provide recreational activities such as renting ice fishing houses, boats
39.13and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
39.14services, launch services, or guide services; or sell bait and fishing tackle. A camping
39.15pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
39.16regardless of the term of the rental agreement, as long as the use of the camping pad
39.17does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
39.18residential recreational for commercial purposes, at least 40 percent of the annual gross
39.19lodging receipts related to the property must be from business conducted during 90
39.20consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests
39.21during the year must be for periods of at least two consecutive nights; or (ii) at least 20
39.22percent of the annual gross receipts must be from charges for rental of fish houses, boats
39.23and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
39.24services, launch services, and guide services, or the sale of bait and fishing tackle. For
39.25purposes of this determination, a paid booking of five or more nights shall be counted as
39.26two bookings. Class 4c also includes commercial use real property used exclusively
39.27for recreational purposes in conjunction with class 4c property devoted to temporary
39.28and seasonal residential occupancy for recreational purposes, up to a total of two acres,
39.29provided the property is not devoted to commercial recreational use for more than 250
39.30days in the year preceding the year of assessment and is located within two miles of the
39.31class 4c property with which it is used. Owners of real and personal property devoted to
39.32temporary and seasonal residential occupancy for recreation purposes and all or a portion
39.33of which was devoted to commercial purposes for not more than 250 days in the year
39.34preceding the year of assessment desiring classification as class1c or 4c, must submit a
39.35declaration to the assessor designating the cabins or units occupied for 250 days or less in
39.36the year preceding the year of assessment by January 15 of the assessment year. Those
40.1cabins or units and a proportionate share of the land on which they are locatedwill must be
40.2designated class1c or 4c as otherwise provided. The remainder of the cabins or units and
40.3a proportionate share of the land on which they are located will be designated as class 3a.
40.4The owner of property desiring designation as class1c or 4c property must provide guest
40.5registers or other records demonstrating that the units for which class1c or 4c designation
40.6is sought were not occupied for more than 250 days in the year preceding the assessment if
40.7so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
40.8(4) conference center or meeting room, and(4) (5) other nonresidential facility operated
40.9on a commercial basis not directly related to temporary and seasonal residential occupancy
40.10for recreation purposesshall does not qualify for class 1c or 4c;
40.11 (2) qualified property used as a golf course if:
40.12 (i) it is open to the public on a daily fee basis. It may charge membership fees or
40.13dues, but a membership fee may not be required in order to use the property for golfing,
40.14and its green fees for golfing must be comparable to green fees typically charged by
40.15municipal courses; and
40.16 (ii) it meets the requirements of section273.112, subdivision 3 , paragraph (d).
40.17 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
40.18with the golf course is classified as class 3a property;
40.19 (3) real property up to a maximum ofone acre three acres of land owned and used
40.20by a nonprofit community service oriented organization; provided that and that is not used
40.21for residential purposes on either a temporary or permanent basis, qualifies for class 4c
40.22provided that it meets either of the following:
40.23 (i) the property is not used for a revenue-producing activity for more than six days
40.24in the calendar year preceding the year of assessmentand the property is not used for
40.25residential purposes on either a temporary or permanent basis; or
40.26 (ii) the organization makes annual charitable contributions and donations at least
40.27equal to the property's previous year's property taxes and the property is allowed to be
40.28used for public and community meetings or events for no charge, as appropriate to the
40.29size of the facility.
40.30 For purposes of this clause,
40.31 (A) "charitable contributions and donations" has the same meaning as lawful
40.32gambling purposes under section 349.12, subdivision 25, excluding those purposes
40.33relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
40.34 (B) "property taxes" excludes the state general tax;
40.35 (C) a "nonprofit community service oriented organization" means any corporation,
40.36society, association, foundation, or institution organized and operated exclusively for
41.1charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
41.2federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
41.3Code of 1986, as amended through December 31, 1990. For purposes of this clause,; and
41.4 (D) "revenue-producing activities" shall include but not be limited to property or that
41.5portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
41.6liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
41.7alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
41.8insurance business, or office or other space leased or rented to a lessee who conducts a
41.9for-profit enterprise on the premises.
41.10Any portion of the property qualifying under item (i) which is used for revenue-producing
41.11activities for more than six days in the calendar year preceding the year of assessment
41.12shall be assessed as class 3a. The use of the property for social events open exclusively
41.13to members and their guests for periods of less than 24 hours, when an admission is
41.14not charged nor any revenues are received by the organization shall not be considered a
41.15revenue-producing activity;.
41.16 The organization shall maintain records of its charitable contributions and donations
41.17and of public meetings and events held on the property and make them available upon
41.18request any time to the assessor to ensure eligibility. An organization meeting the
41.19requirement under item (ii) must file an application by May 1 with the assessor for
41.20eligibility for the current year's assessment. The commissioner shall prescribe a uniform
41.21application form and instructions;
41.22 (4) postsecondary student housing of not more than one acre of land that is owned by
41.23a nonprofit corporation organized under chapter 317A and is used exclusively by a student
41.24cooperative, sorority, or fraternity for on-campus housing or housing located within two
41.25miles of the border of a college campus;
41.26 (5) manufactured home parks as defined in section327.14, subdivision 3 ;
41.27 (6) real property that is actively and exclusively devoted to indoor fitness, health,
41.28social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
41.29and is located within the metropolitan area as defined in section473.121, subdivision 2 ;
41.30 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
41.31under section272.01, subdivision 2 , and the land on which it is located, provided that:
41.32 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
41.33Airports Commission, or group thereof; and
41.34 (ii) the land lease, or any ordinance or signed agreement restricting the use of the
41.35leased premise, prohibits commercial activity performed at the hangar.
42.1 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
42.2be filed by the new owner with the assessor of the county where the property is located
42.3within 60 days of the sale;
42.4 (8) a privately owned noncommercial aircraft storage hangar not exempt under
42.5section272.01, subdivision 2 , and the land on which it is located, provided that:
42.6 (i) the land abuts a public airport; and
42.7 (ii) the owner of the aircraft storage hangar provides the assessor with a signed
42.8agreement restricting the use of the premises, prohibiting commercial use or activity
42.9performed at the hangar; and
42.10 (9) residential real estate, a portion of which is used by the owner for homestead
42.11purposes, and that is also a place of lodging, if all of the following criteria are met:
42.12 (i) rooms are provided for rent to transient guests that generally stay for periods
42.13of 14 or fewer days;
42.14 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
42.15in the basic room rate;
42.16 (iii) meals are not provided to the general public except for special events on fewer
42.17than seven days in the calendar year preceding the year of the assessment; and
42.18 (iv) the owner is the operator of the property.
42.19The market value subject to the 4c classification under this clause is limited to five rental
42.20units. Any rental units on the property in excess of five, must be valued and assessed as
42.21class 3a. The portion of the property used for purposes of a homestead by the owner must
42.22be classified as class 1a property under subdivision 22.
42.23 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
42.24parcel of seasonal residential recreational property not used for commercial purposes has
42.25the same class rates as class 4bb property, (ii) manufactured home parks assessed under
42.26clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
42.27residential recreational property has a class rate of one percent for the first $500,000 of
42.28market value, and 1.25 percent for the remaining market value, (iv) the market value of
42.29property described in clause (4) has a class rate of one percent, (v) the market value of
42.30property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
42.31portion of the market value of property in clause (9) qualifying for class 4c property
42.32has a class rate of 1.25 percent.
42.33 (e) Class 4d property is qualifying low-income rental housing certified to the assessor
42.34by the Housing Finance Agency under section273.128, subdivision 3 . If only a portion
42.35of the units in the building qualify as low-income rental housing units as certified under
42.36section273.128, subdivision 3 , only the proportion of qualifying units to the total number
43.1of units in the building qualify for class 4d. The remaining portion of the building shall be
43.2classified by the assessor based upon its use. Class 4d also includes the same proportion of
43.3land as the qualifying low-income rental housing units are to the total units in the building.
43.4For all properties qualifying as class 4d, the market value determined by the assessor must
43.5be based on the normal approach to value using normal unrestricted rents.
43.6 Class 4d property has a class rate of 0.75 percent.
43.7EFFECTIVE DATE.The portion of this section relating to class 4c resorts in
43.8paragraph (d), clause (1), is effective for assessment year 2008 and thereafter, for taxes
43.9payable in 2009 and thereafter. The portion of this section relating to nonprofit community
43.10service oriented organizations is effective for assessment year 2007 and thereafter, for
43.11taxes payable in 2008 and thereafter, except that the application date in paragraph (d),
43.12clause (3), item (ii), for the 2007 assessment is extended to September 1, 2007.
43.13 Sec. 22. Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:
43.14 Subd. 33. Classification of unimproved property. (a) All real property that is not
43.15improved with a structure must be classified according to its current use.
43.16 (b) Except as provided in subdivision 23, paragraph (b), clause (1), real property that
43.17is not improved with a structure and for which there is no identifiable current use must be
43.18classified according to its highest and best use permitted under the local zoning ordinance.
43.19If the ordinance permits more than one use, the land must be classified according to the
43.20highest and best use permitted under the ordinance. If no such ordinance exists, the
43.21assessor shall consider the most likely potential use of the unimproved land based upon
43.22the use made of surrounding land or land in proximity to the unimproved land.
43.23EFFECTIVE DATE.This section is effective for assessment year 2007 and
43.24thereafter, for taxes payable in 2008 and thereafter.
43.25 Sec. 23. Minnesota Statutes 2006, section 273.13, is amended by adding a subdivision
43.26to read:
43.27 Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value
43.28of property qualifying for homestead classification under subdivision 22 or 23 is excluded
43.29in determining the property's taxable market value if it serves as the homestead of a
43.30military veteran, as defined in section 197.447, who has a service-connected disability of
43.3170 percent or more. To qualify for exclusion under this subdivision, the veteran must have
43.32been honorably discharged from the United States armed forces, as indicated by United
43.33States Government Form DD214 or other official military discharge papers, and must be
44.1certified by the United States Veterans Administration as having a service-connected
44.2disability.
44.3 (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
44.4excluded, except as provided in clause (2); and
44.5 (2) for a total (100 percent) and permanent disability, $300,000 of market value is
44.6excluded.
44.7 (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
44.8clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
44.9spouse holds the legal or beneficial title to the homestead and permanently resides there,
44.10the exclusion shall carry over to the benefit of the veteran's spouse until such time as the
44.11spouse sells, transfers, or otherwise disposes of the property.
44.12 (d) In the case of an agricultural homestead, only the portion of the property
44.13consisting of the house and garage and immediately surrounding one acre of land qualifies
44.14for the valuation exclusion under this subdivision.
44.15 (e) A property qualifying for a valuation exclusion under this subdivision is not
44.16eligible for the credit under section 273.1384, subdivision 1.
44.17 (f) To qualify for a valuation exclusion under this subdivision a property owner must
44.18apply to the assessor by July 1 of each assessment year, except that an annual reapplication
44.19is not required once a property has been accepted for a valuation exclusion under paragraph
44.20(b), clause (2), and the property continues to qualify until there is a change in ownership.
44.21EFFECTIVE DATE.This section is effective for assessment year 2007 and
44.22thereafter, for taxes payable in 2008 and thereafter.
44.23 Sec. 24. Minnesota Statutes 2006, section 275.025, subdivision 3, is amended to read:
44.24 Subd. 3. Seasonal residential recreational tax capacity. For the purposes of this
44.25section, "seasonal residential recreational tax capacity" means the tax capacity of tier III of
44.26class 1c under section273.13, subdivision 22 , and all class 4c(1) and 4c(3)(ii) property
44.27under section273.13, subdivision 25 , except that the first $76,000 of market value of each
44.28noncommercial class 4c(1) property has a tax capacity for this purpose equal to 40 percent
44.29of its tax capacity under section273.13 .
44.30EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
44.31thereafter.
44.32 Sec. 25. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
44.33to read:
45.1 Subd. 6c. Joint public hearing; nonmetropolitan county, cities, and school
45.2districts. (a) Notwithstanding any other provision of law, the county board may hold a
45.3joint hearing with the governing bodies of all taxing authorities located wholly or partially
45.4within the county that are required to hold a public hearing under this section, excluding
45.5special taxing districts. The primary purpose of the joint hearing is for taxpayer efficiency
45.6by allowing taxpayers to come to a single public hearing to discuss the budgets and
45.7proposed property tax levies of most taxing authorities that impact the taxes on their
45.8property.
45.9 (b) This subdivision applies only to counties located outside the metropolitan area
45.10as defined under section473.121 , subdivision 2. If a city or school district is located
45.11partially within the metropolitan area, that taxing jurisdiction may participate in its
45.12nonmetropolitan county's joint hearing, if it so chooses.
45.13 (c) Upon the adoption of a resolution by the county board to hold a joint public
45.14hearing, the county shall notify each city with a population over 500 and each school
45.15district located wholly or partially within the county of its intention to hold the joint
45.16hearing and ask each of the taxing authorities if it would like to participate. Participation
45.17is voluntary, and participation in the joint hearing is in lieu of the requirement for the
45.18governing body to hold a separate public hearing under subdivision 6. If a participating
45.19city or school district is located in more than one county, the hearing under this subdivision
45.20is in lieu of the requirement to hold a separate public hearing if 75 percent or more
45.21of that city or school district's previous year's net tax capacity is in the county where
45.22the hearing is held.
45.23 (d) The initial joint hearing must be held on the first Thursday in December. The
45.24county may hold an additional joint hearing on another date before December 20 if the
45.25majority of the participating taxing authorities want an additional hearing.
45.26 The county board shall obtain a meeting space to hold the joint hearing, preferably
45.27at a public building such as the courthouse, school, or community center. The location
45.28shall be as centrally located within the county as possible. The meeting shall generally be
45.29structured in the following general manner:
45.30 (1) 30 to 60 minutes must be devoted to discussion of the county's budget and levy;
45.31 (2) 30 to 60 minutes must be devoted to discussion of the city's budget and levy,
45.32with each city's discussion held in a separate room, preferably in the same building;
45.33 (3) 30 to 60 minutes must be devoted to discussion of the school district's levy,
45.34with each school district's discussion held in a separate room, preferably in the same
45.35building; and
46.1 (4) during the last 30 minutes the governing bodies must reassemble in a joint
46.2meeting to entertain any follow-up questions that have arisen from the separate discussions.
46.3 The county shall attempt to keep the total public hearing to within three hours.
46.4 (e) In lieu of the public advertisement requirement in subdivision 5a, the county shall
46.5have a single advertisement listing the county, each city with a population of over 500, and
46.6each school district participating in the joint public hearing listing. Any taxing authority
46.7participating under this subdivision is exempt from the separate public advertisement
46.8requirement under subdivision 5a. The cost of the joint hearing advertisement shall be
46.9apportioned in the same manner provided in subdivision 4. The notice must be published
46.10not less than two business days nor more than six business days before the hearing. The
46.11newspaper selected must be one of general interest and readership in the county, and not
46.12one of limited subject matter. The advertisement must appear in a newspaper that is
46.13published at least once per week. The advertisement must be in the following form:
46.17The property tax amounts below compare that portion of the current budget levied in
46.18property taxes in the county, cities, and school districts for (year) with the property
46.19taxes the county, cities, and school districts propose to collect in (year) for those taxing
46.20authorities participating in the joint public hearing.
46.27All residents are invited to attend the joint public hearing of the county/cities/school
46.28districts to express your opinions on the proposed amount of (year) property taxes. The
46.29hearing will be held on:
46.32If the discussion cannot be completed, and another hearing is scheduled, a time and place
46.33for that hearing will be announced at this hearing. You are also invited to send your
46.34written comments to the county auditor. If the comments relate to the city or school
46.35district's levy, please identify that on the envelope so the county auditor can direct the
46.36correspondence to the right jurisdiction."
47.1 The formal adoption of the taxing authority's levy must not be made at the joint
47.2public hearing held under this subdivision. The formal adoption must be made at one of
47.3the regularly scheduled meetings of the taxing authority's governing body. However, the
47.4property tax levy amount that is subsequently adopted cannot exceed the amount shown to
47.5taxpayers at the joint public hearing.
47.6EFFECTIVE DATE.This section is effective for hearings held in 2007 and
47.7thereafter.
47.8 Sec. 26. Minnesota Statutes 2006, section 275.066, is amended to read:
47.9275.066 SPECIAL TAXING DISTRICTS; DEFINITION.
47.10 For the purposes of property taxation and property tax state aids, the term "special
47.11taxing districts" includes the following entities:
47.12 (1) watershed districts under chapter 103D;
47.13 (2) sanitary districts under sections115.18 to
115.37 ;
47.14 (3) regional sanitary sewer districts under sections115.61 to
115.67 ;
47.15 (4) regional public library districts under section134.201 ;
47.16 (5) park districts under chapter 398;
47.17 (6) regional railroad authorities under chapter 398A;
47.18 (7) hospital districts under sections447.31 to
447.38 ;
47.19 (8) St. Cloud Metropolitan Transit Commission under sections458A.01 to
458A.15 ;
47.20 (9) Duluth Transit Authority under sections458A.21 to
458A.37 ;
47.21 (10) regional development commissions under sections462.381 to
462.398 ;
47.22 (11) housing and redevelopment authorities under sections469.001 to
469.047 ;
47.23 (12) port authorities under sections469.048 to
469.068 ;
47.24 (13) economic development authorities under sections469.090 to
469.1081 ;
47.25 (14) Metropolitan Council under sections473.123 to
473.549 ;
47.26 (15) Metropolitan Airports Commission under sections473.601 to
473.680 ;
47.27 (16) Metropolitan Mosquito Control Commission under sections473.701 to
473.716 ;
47.28 (17) Morrison County Rural Development Financing Authority under Laws 1982,
47.29chapter 437, section 1;
47.30 (18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section
47.316;
47.32 (19) East Lake County Medical Clinic District under Laws 1989, chapter 211,
47.33sections 1 to 6;
48.1 (20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article
48.25, section 39;
48.3 (21) Middle Mississippi River Watershed Management Organization under sections
48.4103B.211
and
103B.241 ;
48.5 (22) emergency medical services special taxing districts under section144F.01 ;
48.6 (23) a county levying under the authority of section103B.241 ,
103B.245 , or
48.7103B.251
;
48.8 (24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home
48.9under Laws 2003, First Special Session chapter 21, article 4, section 12;and
48.10 (25) an airport authority created under section 360.0426; and
48.11 (26) any other political subdivision of the state of Minnesota, excluding counties,
48.12school districts, cities, and towns, that has the power to adopt and certify a property tax
48.13levy to the county auditor, as determined by the commissioner of revenue.
48.14EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
48.15in 2008, and thereafter.
48.16 Sec. 27. Minnesota Statutes 2006, section 278.05, subdivision 6, is amended to read:
48.17 Subd. 6. Dismissal of petition; exclusion of certain evidence. (a) In cases where
48.18the petitioner contests the valuation of income-producing property, information, including
48.19income and expense figures in the form of (1) year-end financial statements for the
48.20year prior to the assessment date, (2) year-end financial statements for the year of the
48.21assessment date, and (3) rent rolls on the assessment date including tenant name, lease start
48.22and end dates, option terms, base rent, square footage leased and vacant space, verified net
48.23rentable areas in the form of net rentable square footage of the building or buildings, and
48.24anticipated income and expenses in the form of proposed budgets for the year subsequent
48.25to the year of the assessment date,for income-producing property must be provided to
48.26the county assessor no later than 60 days after the applicable filing deadline contained
48.27in section278.01, subdivision 1 or 4. Failure to provide the information required in this
48.28paragraph shall result in the dismissal of the petition, unless (1) the failure to provide it was
48.29due to the unavailability of the evidence at the time that the information was due, or (2)
48.30the petitioner was not aware of or informed of the requirement to provide the information.
48.31If the petitioner proves that the requirements under clause (2) are met, the petitioner has
48.32an additional 30 days to provide the information from the time the petitioner became
48.33aware of or was informed of the requirement to provide the information, otherwise the
48.34petition shall be dismissed.
49.1 (b) Provided that the information as contained in paragraph (a) is timely submitted to
49.2the county assessor, the county assessor shall furnish the petitioner at least five days before
49.3the hearing under this chapter with the property's appraisal, if any, which will be presented
49.4to the court at the hearing. The petitioner shall furnish to the county assessor at least five
49.5days before the hearing under this chapter with the property's appraisal, if any, which
49.6will be presented to the court at the hearing. An appraisal of the petitioner's property
49.7done by or for the county shall not be admissible as evidence if the county assessor does
49.8not comply with the provisions in this paragraph. The petition shall be dismissed if the
49.9petitioner does not comply with the provisions in this paragraph.
49.10EFFECTIVE DATE.This section is effective for petitions filed on or after July
49.111, 2007.
49.12 Sec. 28. Minnesota Statutes 2006, section 279.37, subdivision 1a, is amended to read:
49.13 Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property
49.14which was classified class 3a, for the previous year's assessment and had a total market
49.15value of$200,000 $500,000 or less for that same assessment shall be eligible to be
49.16composed into a confession of judgment. Property qualifying under this subdivision
49.17shall be subject to the same provisions as provided in this section except as provided
49.18in paragraphs (b) to (d).
49.19 (b) Current year taxes and penalty due at the time the confession of judgment
49.20is entered must be paid.
49.21 (c) The down payment must include all special assessments due in the current tax
49.22year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties,
49.23and interest accrued against the parcel. The balance remaining is payable in four equal
49.24annual installments.
49.25 (d) The amounts entered in judgment bear interest at the rate provided in section
49.26279.03, subdivision 1a
, commencing with the date the judgment is entered. The interest
49.27rate is subject to change each year on the unpaid balance in the manner provided in section
49.28279.03, subdivision 1a
.
49.29EFFECTIVE DATE.This section is effective for confessions of judgment entered
49.30into July 1, 2007, and thereafter.
49.31 Sec. 29. Minnesota Statutes 2006, section 280.39, is amended to read:
49.32280.39 DELINQUENT TAXES MAY BE PAID IN INVERSE ORDER.
50.1 In any case where taxes for two or more years are delinquent against a parcel of land,
50.2such taxes for one or moreentire years, if held by the state, may be paid in the inverse
50.3order to that in which the taxes were levied, with accrued penalties, interest, and costs
50.4upon the taxes so paid, without payment of the taxes for the first of such years; provided,
50.5that such payment shall not affect the lien of any unpaid taxes or tax judgment.
50.6EFFECTIVE DATE.This section is effective the day following final enactment.
50.7 Sec. 30. Minnesota Statutes 2006, section 289A.08, subdivision 13, is amended to read:
50.8 Subd. 13. Long and short forms; local use tax instructions; property tax refund
50.9information. (a) The commissioner shall provide a long form individual income tax
50.10return and may provide a short form individual income tax return. The returns shall be in
50.11a form that is consistent with the provisions of chapter 290, notwithstanding any other
50.12law to the contrary. The nongame wildlife checkoff provided in section290.431 and the
50.13dependent care credit provided in section290.067 must be included on the short form.
50.14 (b) The commissioner must provide information on local use taxes in the individual
50.15income tax instruction booklet. The commissioner must provide this information in the
50.16same section of the booklet that provides information on the state use tax.
50.17 (c) The commissioner must refer to the property tax refunds allowed under chapter
50.18290A on the front cover of the individual income tax instruction booklet, as well as
50.19information within the booklet on income eligibility for the homestead and renter refunds,
50.20and maximum refund amounts allowed in the current year.
50.21EFFECTIVE DATE.This section is effective the day following final enactment.
50.22 Sec. 31. Minnesota Statutes 2006, section 290C.07, is amended to read:
50.23290C.07 CALCULATION OF INCENTIVE PAYMENT.
50.24 An approved claimant under the sustainable forest incentive program is eligible to
50.25receive an annual payment. The payment shall equal the greater of:
50.26 (1) the difference between the property tax that would be paid on the land using the
50.27previous year's statewide average total township tax rate and the class rate for class 2b
50.28timberland under section273.13, subdivision 23 , paragraph (b), if the land were valued
50.29at (i) the average statewide timberland market value per acre calculated under section
50.30290C.06
, and (ii) the average statewide timberland current use value per acre calculated
50.31under section290C.02, subdivision 5 ; or
50.32 (2) two-thirds of the property tax amount determined by using the previous year's
50.33statewide average total township tax rate, the estimated market value per acre as calculated
51.1in section290C.06 , and the class rate for 2b timberland under section
273.13, subdivision
51.223 , paragraph (b); or
51.3(3) $1.50, provided that the payment shall be no less than $5 per acre for each acre
51.4enrolled in the sustainable forest incentive program.
51.5EFFECTIVE DATE.This section is effective for payments made after June 30,
51.62007.
51.7 Sec. 32. Minnesota Statutes 2006, section 360.031, is amended to read:
51.8360.031 DEFINITION OF MUNICIPALITY.
51.9 For the purposes of sections360.031 to
360.045 , inclusive (except section 360.042),
51.10only, "municipality" means any county, city, or town, or airport authority of this state.
51.11 Sec. 33. [360.0425] GENERAL POWERS OF AUTHORITY.
51.12 An airport authority created under section 360.0426 has all the powers granted a
51.13municipality under sections 360.032 to 360.046.
51.14 Sec. 34. [360.0426] CREATION OF AN AIRPORT AUTHORITY,
51.15DISSOLUTION.
51.16 Subdivision 1. Members; definition. A city together with another city, county,
51.17town, or an Indian tribe may create an airport authority. For purposes of this chapter,
51.18"airport authority" means a governmental entity created pursuant to this section for the
51.19purpose of acquiring, establishing, constructing, maintaining, improving, and operating
51.20airports and other air navigation facilities.
51.21 Subd. 2. Process to establish authority. A city that owns an airport by joint
51.22resolution together with other willing governmental units may create an airport authority
51.23that is authorized to exercise its functions upon passage of a joint resolution by each of
51.24their governing bodies, including a proposed date for the first meeting of the authority.
51.25 Subd. 3. Airport authority commission. The powers of the airport authority shall
51.26be vested in the airport authority commissioners. The commission shall consist of at
51.27least five commissioners. Each governmental unit that is a member of the authority shall
51.28be represented by at least one commissioner. If fewer than five governmental units are
51.29members of the authority, there must be two commissioners appointed from each member
51.30unit of government. The terms of each commissioner are three years, provided that the
51.31length of the initial appointments must be staggered so that the terms of approximately
51.32one-third of the commissioners expire each calendar year.
52.1 Subd. 4. Appointment of commissioners. The governmental body of each member
52.2governmental unit shall appoint a resident of that governmental unit to be a commissioner
52.3of the airport authority. Upon vacancy of a commissioner prior to the end of a normal term,
52.4the appropriate governmental body shall appoint a commissioner to fill the unexpired term.
52.5 Subd. 5. Compensation; meetings; officers. Commissioners shall receive no
52.6compensation for services, but are entitled to payment for necessary expenses, including
52.7travel expenses, incurred in the discharge of the commissioners' duties.
52.8 The commission shall establish a regular meeting schedule. A majority of the
52.9commissioners of the authority constitutes a quorum for purposes of conducting business
52.10of the authority. Action may be taken by the majority vote of not less than a majority of
52.11the commissioners present, providing there is a quorum.
52.12 The commission shall elect a chair, a vice-chair, a secretary, and a treasurer at its
52.13organizational meeting. The authority may hire an executive director, a legal advisor,
52.14technical experts, and other employees, permanent and temporary, as it may require.
52.15 Subd. 6. Process to increase size of authority. An airport authority may be
52.16increased in size by adding additional governmental entities if each of the additional
52.17entities and each of the governmental entities currently included in the existing authority
52.18adopt a resolution agreeing to the size increase.
52.19 Subd. 7. Process to decrease size of authority. An airport authority may be
52.20decreased in size if each of the governmental entities that are members of the authority
52.21and the current commissioners consent to change and make provisions for the retention
52.22or disposition of its assets and liabilities.
52.23 Subd. 8. Process to dissolve authority. An airport authority may be dissolved after
52.24payment of all debts and adoption of a joint resolution of the governing bodies of all of
52.25the participating units of government. Before dissolution, the property of the airport
52.26authority must be sold, transferred, or distributed as agreed to by the participating units
52.27of government. Any remaining funds must be distributed to the general funds of the
52.28participating units of government in proportion to their relative shares of the most recent
52.29levy under section 360.0427.
52.30 Sec. 35. [360.0427] TAX LEVY MAY BE CERTIFIED BY AN AIRPORT
52.31AUTHORITY.
52.32 In any year in which it imposes a property tax levy, an airport authority must certify
52.33to the auditor of any county that contains property within the boundaries of the airport
52.34authority a uniform tax rate to be levied on all taxable property within the boundaries
52.35of the airport authority.
53.1EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
53.2in 2008, and thereafter.
53.3 Sec. 36. Minnesota Statutes 2006, section 435.193, is amended to read:
53.4435.193 HARDSHIP ASSESSMENT DEFERRAL FOR SENIORSOR,
53.5DISABLED, OR MILITARY PERSONS.
53.6 (a) Notwithstanding the provisions of any law to the contrary, any county, statutory
53.7or home rule charter city, or town, making a special assessment may, at its discretion, defer
53.8the payment of that assessment for any homestead property:
53.9 (1) owned by a person 65 years of age or older or retired by virtue of a permanent
53.10and total disability for whom it would be a hardship to make the payments; or
53.11 (2) owned by a person who is a member of the Minnesota National Guard or other
53.12military reserves who is ordered into active military service, as defined in section 190.05,
53.13subdivision 5b or 5c, as stated in the person's military orders, for whom it would be a
53.14hardship to make the payments.
53.15 (b) Any county, statutory or home rule charter city, or town electing to defer
53.16special assessments shall adopt an ordinance or resolution establishing standards and
53.17guidelines for determining the existence of a hardship and for determining the existence of
53.18a disability, but nothing herein shall be construed to prohibit the determination of hardship
53.19on the basis of exceptional and unusual circumstances not covered by the standards and
53.20guidelines where the determination is made in a nondiscriminatory manner and does not
53.21give the applicant an unreasonable preference or advantage over other applicants.
53.22EFFECTIVE DATE.This section is effective the day following final enactment,
53.23and applies to any special assessment for which payment is due on or after that date.
53.24 Sec. 37. Laws 1973, chapter 393, section 1, as amended by Laws 1974, chapter 153,
53.25section 1, is amended to read:
53.26 Section 1. MINNEAPOLIS, CITY OF; STREET MAINTENANCE AND
53.27LIGHTING.
53.28 Notwithstanding the provisions of any statute or the charter of the city of
53.29Minneapolis to the contrary, the city council of said city may provide that all or part of the
53.30costs of construction, operation, and maintenance of streets and street lighting within the
53.31city may hereafter be paid from the general revenues of the city of Minneapolis; provided
53.32that the portion of the costs assessable against nongovernmental real property exempt from
53.33ad valorem taxation may be levied as a special assessment against the property.
54.1 Sec. 38. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
54.2article 6, section 9, and Laws 2000, chapter 490, article 6, section 15, is amended to read:
54.3 Sec. 3. TAX; PAYMENT OF EXPENSES.
54.4 (a) The tax levied by the hospital district under Minnesota Statutes, section447.34 ,
54.5must not be levied at a rate that exceeds0.063 percent of taxable market value the amount
54.6authorized to be levied under that section. The proceeds of the tax may be used for all
54.7purposes of the hospital district, except as provided in paragraph (b).
54.8 (b)0.048 percent of taxable market value of tax in paragraph (a) may be used only
54.9for acquisition, betterment, and maintenance of the district's hospital and nursing home
54.10facilities and equipment, and not for administrative or salary expenses.
54.11(c) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
54.12solely for the purpose of capital expenditures as it relates to ambulance acquisitions for
54.13the Cook ambulance service and the Orr ambulance service and not for administrative
54.14or salary expenses.
54.15 The part of the levy referred to in paragraph(c) (b) must be administered by the
54.16Cook Hospital and passed on directly to the Cook area ambulance service board and the
54.17city of Orr to be held in trust until funding for a new ambulance is needed by either the
54.18Cook ambulance service or the Orr ambulance service.
54.19EFFECTIVE DATE.This section is effective upon compliance with Minnesota
54.20Statutes, section 645.021, subdivision 3, by the governing body of the Cook-Orr Hospital
54.21District.
54.22 Sec. 39. Laws 1989, chapter 211, section 8, subdivision 4, as amended by Laws 2002,
54.23chapter 390, section 24, and Laws 2003, chapter 127, article 2, section 22, subdivision 4,
54.24is amended to read:
54.25 Subd. 4. Tax levy. The tax levied under Minnesota Statutes, section447.34 , shall
54.26not exceed$300,000 for taxes levied in 2002. For taxes levied in 2003 and subsequent
54.27years, the tax must not exceed the lesser of:
54.28(1) the product of the hospital district's property tax levy limitation for the previous
54.29year determined under this subdivision, multiplied by 103 percent; or
54.30(2) the product of the hospital district's property tax levy limitation for the previous
54.31year determined under this subdivision multiplied by the ratio of the most recent available
54.32annual medical care expenditure category of the revised Consumer Price Index, U.S.
54.33citywide average, for all urban consumers prepared by the United States Department of
54.34Labor to the same annual index for the previous year the amount authorized to be levied
54.35under that section.
55.1 The proceeds of the tax may be used for all purposes of the hospital district.
55.2EFFECTIVE DATE.This section is effective upon compliance with Minnesota
55.3Statutes, section 645.021, subdivision 3, by the governing body of the Cook County
55.4Hospital District.
55.5 Sec. 40. Laws 2006, chapter 236, article 1, section 21, is amended to read:
55.6 Sec. 21. EXCHANGE OF TAX-FORFEITED LAND; PRIVATE SALE;
55.7ITASCA COUNTY.
55.8 (a) For the purpose of a land exchange for use in connection with a proposed
55.9steel mill in Itasca County referenced in Laws 1999, chapter 240, article 1, section 8,
55.10subdivision 3, title examination and approval of the land described in paragraph (b)
55.11shall be undertaken as a condition of exchange of the land for class B land, and shall be
55.12governed by Minnesota Statutes, section94.344, subdivisions 9 and 10, and the provisions
55.13of this section. Notwithstanding the evidence of title requirements in Minnesota Statutes,
55.14section94.344, subdivisions 9 and 10, the county attorney shall examine one or more title
55.15reports or title insurance commitments prepared or underwritten by a title insurer licensed
55.16to conduct title insurance business in this state, regardless of whether abstracts were
55.17created or updated in the preparation of the title reports or commitments. The opinion of
55.18the county attorney, and approval by the attorney general, shall be based on those title
55.19reports or commitments.
55.20 (b) The land subject to this section is located in Itasca County and is described as:
55.21 (1) Sections 3, 4, 7, 10, 14, 15, 16, 17, 18, 20, 21, 22, 23, 26, 28, and 29, Township
55.2256 North, Range 22 West;
55.23 (2) Sections 3, 4, 9, 10, 13, and 14, Township 56 North, Range 23 West;
55.24 (3) Section 30, Township 57 North, Range 22 West; and
55.25 (4) Sections 25, 26, 34, 35, and 36, Township 57 North, Range 23 West.
55.26 (c) Riparian land given in exchange by Itasca County for the purpose of the steel
55.27mill referenced in paragraph (a), is exempt from the restrictions imposed by Minnesota
55.28Statutes, section94.342, subdivision 3 .
55.29 (d) Notwithstanding Minnesota Statutes, sections92.45 and
282.018, subdivision 1 ,
55.30and the public sale provisions of Minnesota Statutes, chapter 282, Itasca County may sell,
55.31by private sale, any land received in exchange for the purpose of the steel mill referenced
55.32in paragraph (a), under the remaining provisions of Minnesota Statutes, chapter 282. The
55.33sale must be in a form approved by the attorney general.
55.34 (e) Notwithstanding Minnesota Statutes, section 284.28, subdivision 8, or any other
55.35law to the contrary, land acquired through an exchange under this section is exempt from
56.1payment of three percent of the sales price required to be collected by the county auditor
56.2at the time of sale for deposit in the state treasury.
56.3EFFECTIVE DATE.This section is effective the day following final enactment.
56.4 Sec. 41. FISCAL DISPARITIES STUDY.
56.5 The commissioner of revenue shall conduct a study of the metropolitan revenue
56.6distribution program contained in Minnesota Statutes, chapter 473F, commonly known
56.7as the fiscal disparities program. On or before February 1, 2009, the commissioner shall
56.8make a report to the chairs of the house of representatives and senate tax committees
56.9consisting of the findings of the study and any recommendations resulting from the study.
56.10 The study must consider to what extent the program is meeting the following goals,
56.11and what changes could be made to the program in the furtherance of meeting those goals:
56.12 (1) reducing the extent to which the property tax encourages development patterns
56.13that do not make cost-effective use of public infrastructure or impose other high public
56.14costs;
56.15 (2) ensuring that the benefits of economic growth of the region are shared throughout
56.16the region, especially for growth that results from state and/or regional decisions;
56.17 (3) improving the ability of each jurisdiction within the region to deliver services at
56.18a level commensurate with its tax effort;
56.19 (4) compensating jurisdictions containing properties that provide regional benefits
56.20for the costs those properties impose on their host jurisdictions in excess of their tax
56.21payments;
56.22 (5) promoting a fair distribution of property tax burdens across jurisdictions of
56.23the region; and
56.24 (6) reducing the economic losses that result from competition among communities
56.25for commercial-industrial tax base.
56.26EFFECTIVE DATE.This section is effective July 1, 2007.
56.27 Sec. 42. CITY OF BROOKLYN CENTER; PARTICIPATION IN CRIME-FREE
56.28MULTIHOUSING PROGRAM.
56.29 (a) In addition to the requirements of Minnesota Statutes, section 273.128, if
56.30property located in the city of Brooklyn Center qualifies under paragraph (b), the owners
56.31or managers must complete the three phases of the city's crime-free multihousing program
56.32and the qualifying property must be annually certified by the police as participating
56.33in the program. If a qualifying property is not certified within one year after it is first
57.1determined to be a qualifying property under paragraph (b), or does not annually maintain
57.2its certification in the program, the city shall notify the property owner that the qualifying
57.3property must comply with the requirements of this section to maintain its classification
57.4as class 4d property. If a qualifying property is not in compliance within one year after
57.5receiving the notice from the city, the city shall issue a second notice and require the
57.6owners to enter into a plan to achieve compliance within one year. If, upon expiration
57.7of the one-year time period, the qualifying property has not been certified by the police
57.8as completing the program, the city shall notify the commissioner of the Housing
57.9Finance Agency and the commissioner shall remove the property from the list of class 4d
57.10properties certified to the assessor under Minnesota Statutes, section 273.128, subdivision
57.113. Once removed from the list, the property is not eligible for class 4d classification until
57.12it complies with this section and its compliance has been certified to the Housing Finance
57.13Agency by the city. Certification to the Housing Finance Agency must be made by May
57.1415 to be effective for taxes payable in the following year.
57.15 (b) A property is a qualifying property for purposes of this section's requirements if
57.16it satisfies each of the following requirements:
57.17 (1) the city offers a crime-free multihousing program through its city police;
57.18 (2) over the preceding three-year period, the number of police calls to the property
57.19exceeded the city's average number of calls for multiunit rental properties for the period
57.20by at least 25 percent, adjusted for the number of rental units;
57.21 (3) the police department has requested, in writing, the owners or managers of the
57.22property to enroll in the crime-free multihousing program and the owners or managers
57.23refused or failed to enroll within 60 days after the request, or failed to complete phases
57.24one and three within 90 days and all three phases of the program within a one-year time
57.25period; and
57.26 (4) the governing body of the city, by resolution, determines the property is a
57.27qualifying property under clauses (1) to (3).
57.28 (c) Calls for police or emergency assistance in response to domestic abuse or
57.29medical assistance shall not be counted toward the number of calls in paragraph (b), clause
57.30(2). For purposes of this section, "domestic abuse" has the meaning given in Minnesota
57.31Statutes, section 518B.01, subdivision 2.
57.32 (d) Low-income qualifying rental housing property classified as class 4d property
57.33for taxes payable in 2007 must meet the requirements of this section by May 15, 2010.
57.34EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
57.35compliance by the governing body of the city of Brooklyn Center and its chief clerical
58.1officer with Minnesota Statutes, section 645.021, subdivisions 2 and 3, and applies to
58.2property taxes levied in 2007, payable in 2008, and thereafter.
58.3 Sec. 43. CLAIR A. NELSON MEMORIAL FOREST, LAKE COUNTY;
58.4TEMPORARY SUSPENSION OF APPORTIONMENT OF PROCEEDS FROM
58.5TAX-FORFEITED LANDS.
58.6 (a) Upon approval of an affected political subdivision within Lake County, the
58.7Lake County Board may suspend the apportionment of the balance of net proceeds from
58.8tax-forfeited lands within the affected political subdivision under Minnesota Statutes,
58.9section 282.08, clause (4), item (iii), and retain the net proceeds. The authority under this
58.10paragraph is available until Lake County suspends the apportionment of net proceeds
58.11subject to item (iii) in the amount of $2,200,000 plus any interest costs incurred by the
58.12county to purchase land described in this section. The money received by Lake County is
58.13to reimburse the county for the purchase in 2006 of 6,085 acres of forest land named the
58.14Clair A. Nelson Memorial Forest.
58.15 (b) Any revenue derived from acquired land that was reimbursed under paragraph
58.16(a) is subject to apportionment as provided in Minnesota Statutes, section 282.08.
58.17EFFECTIVE DATE.This section is effective retroactively from January 1, 2006.
58.18 Sec. 44. LAKEVIEW CEMETERY ASSOCIATION.
58.19 Subdivision 1. Authorized. Any two or more of the following cities and towns in
58.20Itasca County may enter into a joint powers agreement under Minnesota Statutes, section
58.21471.59, to establish the Lakeview Cemetery Association with the powers and duties of a
58.22cemetery association under Minnesota Statutes, chapter 306: the cities of Bovey, Calumet,
58.23Coleraine, Marble, and Taconite, and the towns of Greenway, Iron Range, Lawrence,
58.24and Trout Lake.
58.25 Subd. 2. Additions; withdrawals. (a) A city or town listed in subdivision 1 that
58.26does not join the association at the time of the initial agreement may join as provided in
58.27the joint powers agreement, or if the joint powers agreement does not provide for later
58.28additions, by providing the association a copy of the adopted resolution to join. If the
58.29joint powers agreement does not provide for adding members, a city or town that joins
58.30after the initial agreement is effective, may join prior to July 1 of the levy year, for taxes
58.31payable in the following year.
58.32 (b) A city or town may withdraw from the association as otherwise provided in the
58.33joint powers agreement, or providing to the association a copy of the adopted resolution of
58.34the city or town, prior to July 1 of the levy year for taxes payable in the following year.
59.1 Subd. 3. Operation; tax levy. The joint powers agreement for the association may
59.2provide for each participating city and town to levy a tax against all taxable properties
59.3located within the city or town. The maximum amount that may be levied by all
59.4participating cities and towns combined shall not exceed a total of $200,000 per year. If
59.5levied, the tax is in addition to all other taxes permitted to be levied on the property,
59.6including taxes permitted to be levied for cemetery purposes by a participating city or
59.7town. The levy under this section must be disregarded in the calculation of all other
59.8rate or per capita levy limitations imposed by law. One of the cities or towns within the
59.9association, chosen by the members of the association, shall certify a tax levy to the
59.10Itasca County auditor. When collected, the Itasca County auditor shall pay the Lakeview
59.11Cemetery Association directly.
59.12EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
59.13in 2008, and thereafter.
59.14 Sec. 45. TAX-FORFEITED LANDS LEASE; ITASCA COUNTY.
59.15 Notwithstanding Minnesota Statutes, section 282.04, or other law to the contrary,
59.16the Itasca County auditor may lease tax-forfeited land to Minnesota Steel for a period of
59.1720 years, for use as a tailings basin and buffer area. A lease entered under this section
59.18is renewable.
59.19EFFECTIVE DATE.This section is effective the day following final enactment.
59.20 Sec. 46. HAM LAKE FIRE; PROPERTY TAX REDUCTION; STATE
59.21REIMBURSEMENT.
59.22 Subdivision 1. Property tax reduction. The owner of property that was destroyed
59.23in the Ham Lake fire in 2007 may apply to the Cook County assessor to receive a reduction
59.24in the amount of taxes payable on the property for 2007 and 2008. The reduction provided
59.25under this section must be granted if 50 percent or more of the homestead dwelling or
59.26nonhomestead structure, as established by the county assessor, has been destroyed by the
59.27fire and related effects and the homestead is uninhabitable or the other structure is not
59.28useable. For property that meets the requirements of this section, the tax liabilities for the
59.29second half of property taxes due in October 2007 and for all property taxes due in 2008
59.30are reduced to zero. If application is made following payment of all property taxes due for
59.312007, the amount of the reduction shall be refunded to the taxpayer by the county treasurer
59.32as soon as practical. A reduction granted under this section is in lieu of a reduction under
59.33Minnesota Statutes, section 273.123.
60.1 Subd. 2. State reimbursement. The Cook County auditor shall calculate the tax
60.2on the property described in subdivision 1 based on the assessment made on January 2,
60.32007, paid in 2007 and 2008 after the reduction granted in subdivision 1. The difference
60.4between the tax determined on the January 2 tax capacity and the tax actually paid
60.5pursuant to this section shall be reimbursed to each taxing jurisdiction in which the
60.6damaged property is located. The amount shall be certified by the county auditor and
60.7reported to the commissioner of revenue. The commissioner shall make the payments to
60.8the taxing jurisdictions containing the property on the settlement dates in Minnesota
60.9Statutes, sections 276.11 and 276.111, for the second half of 2007 payments and for both
60.102008 payments in the same proportion that the ad valorem tax is distributed.
60.11 Subd. 3. Computation of credits. The amounts of the market value homestead
60.12credit provided in Minnesota Statutes, section 273.1384, shall be computed on the
60.13tax determined before the reduction under subdivision 1. For purposes of the property
60.14tax refund, property taxes payable, as defined in Minnesota Statutes, section 290A.03,
60.15subdivision 13, must be computed upon the tax determined under subdivision 1.
60.16 Subd. 4. Appropriation. $500,000 is appropriated from the general fund to the
60.17commissioner of revenue to make the payments required by this section. This amount
60.18does not cancel, but remains available until June 30, 2009.
60.19EFFECTIVE DATE.This section is effective the day following final enactment.
60.20 Sec. 47. REPEALER.
60.21(a) Laws 1973, chapter 393, section 2, is repealed.
60.22(b) Laws 1994, chapter 587, article 9, section 8, subdivision 1, as amended by Laws
60.232005, First Special Session chapter 3, article 1, section 36, is repealed, effective for the
60.24same levy year in which the association initially levies under section 44.
60.27 Section 1. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read:
60.28 Subd. 6b. Foreign operating corporation. The term "foreign operating
60.29corporation," when applied to a corporation, means a domestic corporation with the
60.30following characteristics:
60.31 (1) it is part of a unitary business at least one member of which is taxable in this state;
60.32 (2) it is not a foreign sales corporation under section 922 of the Internal Revenue
60.33Code, as amended through December 31, 1999, for the taxable year;
61.1 (3) either (i) the average of the percentages of its property and payrolls, including
61.2the pro rata share of its unitary partnerships' property and payrolls, assigned to locations
61.3outside the United States, where the United States includes the District of Columbia and
61.4excludes the commonwealth of Puerto Rico and possessions of the United States, as
61.5determined under section
290.191 or
290.20, is 80 percent or more; or (ii) it has in effect a
61.6valid election under section 936 of the Internal Revenue Code; or (ii) at least 80 percent of
61.7the gross income from all sources of the corporation in the tax year isand
61.8(4) it has $1,000,000 of payroll and $2,000,000 of property, as determined under
61.9section
290.191 or
290.20, that are located outside the United States. If the domestic
61.10corporation does not have payroll as determined under section
290.191 or
290.20, but it
61.11or its partnerships have paid $1,000,000 for work, performed directly for the domestic
61.12corporation or the partnerships, outside the United States, then paragraph (3)(i) shall not
61.13require payrolls to be included in the average calculation derived from sources without
61.14the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal
61.15Revenue Code.
61.16EFFECTIVE DATE.This section is effective for taxable years beginning after
61.17December 31, 2006.
61.18 Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
61.19 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
61.20there shall be added to federal taxable income:
61.21 (1) the amount of any deduction taken for federal income tax purposes for income,
61.22excise, or franchise taxes based on net income or related minimum taxes, including but not
61.23limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
61.24another state, a political subdivision of another state, the District of Columbia, or any
61.25foreign country or possession of the United States;
61.26 (2) interest not subject to federal tax upon obligations of: the United States, its
61.27possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
61.28state, any of its political or governmental subdivisions, any of its municipalities, or any
61.29of its governmental agencies or instrumentalities; the District of Columbia; or Indian
61.30tribal governments;
61.31 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
61.32Revenue Code;
61.33 (4) the amount of any net operating loss deduction taken for federal income tax
61.34purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
61.35deduction under section 810 of the Internal Revenue Code;
62.1 (5) the amount of any special deductions taken for federal income tax purposes
62.2under sections 241 to 247 and 965 of the Internal Revenue Code;
62.3 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
62.4clause (a), that are not subject to Minnesota income tax;
62.5 (7) the amount of any capital losses deducted for federal income tax purposes under
62.6sections 1211 and 1212 of the Internal Revenue Code;
62.7 (8) the exempt foreign trade income of a foreign sales corporation under sections
62.8921(a) and 291 of the Internal Revenue Code;
62.9 (9) the amount of percentage depletion deducted under sections 611 through 614 and
62.10291 of the Internal Revenue Code;
62.11 (10) for certified pollution control facilities placed in service in a taxable year
62.12beginning before December 31, 1986, and for which amortization deductions were elected
62.13under section 169 of the Internal Revenue Code of 1954, as amended through December
62.1431, 1985, the amount of the amortization deduction allowed in computing federal taxable
62.15income for those facilities;
62.16 (11) the amount of any deemed dividend from a foreign operating corporation
62.17determined pursuant to section290.17, subdivision 4 , paragraph (g). The deemed dividend
62.18shall be reduced by the amount of the addition to income required by clauses (19), (20),
62.19(21), and (22);
62.20 (12) the amount of a partner's pro rata share of net income which does not flow
62.21through to the partner because the partnership elected to pay the tax on the income under
62.22section 6242(a)(2) of the Internal Revenue Code;
62.23 (13) the amount of net income excluded under section 114 of the Internal Revenue
62.24Code;
62.25 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
62.26Revenue Code, for the taxable year when subpart F income is calculated without regard
62.27to the provisions of section 103 of Public Law 109-222;
62.28 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
62.29and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
62.30has an activity that in the taxable year generates a deduction for depreciation under
62.31section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
62.32that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
62.33under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
62.34depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
62.35amount of the loss from the activity that is not allowed in the taxable year. In succeeding
63.1taxable years when the losses not allowed in the taxable year are allowed, the depreciation
63.2under section 168(k)(1)(A) and (k)(4)(A) is allowed;
63.3 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
63.4Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
63.5Revenue Code of 1986, as amended through December 31, 2003;
63.6 (17) to the extent deducted in computing federal taxable income, the amount of the
63.7deduction allowable under section 199 of the Internal Revenue Code;and
63.8 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
63.9federal subsidies for prescription drug plans;
63.10 (19) an amount equal to the interest and intangible expenses, losses, and costs paid,
63.11accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
63.12of a corporation that is a member of the taxpayer's unitary business group that qualifies
63.13as a foreign operating corporation. For purposes of this clause, intangible expenses and
63.14costs include:
63.15 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
63.16use, maintenance or management, ownership, sale, exchange, or any other disposition of
63.17intangible property;
63.18 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
63.19transactions;
63.20 (iii) royalty, patent, technical, and copyright fees;
63.21 (iv) licensing fees; and
63.22 (v) other similar expenses and costs.
63.23For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
63.24applications, trade names, trademarks, service marks, copyrights, mask works, trade
63.25secrets, and similar types of intangible assets.
63.26This clause does not apply to any item of interest or intangible expenses or costs paid,
63.27accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
63.28to such item of income to the extent that the income to the foreign operating corporation
63.29is income from sources without the United States as defined in subtitle A, chapter 1,
63.30subchapter N, part 1, of the Internal Revenue Code;
63.31 (20) except as already included in the taxpayer's taxable income pursuant to clause
63.32(19), any interest income and income generated from intangible property received or
63.33accrued by a foreign operating corporation that is a member of the taxpayer's unitary
63.34group. For purposes of this clause, income generated from intangible property includes:
63.35 (i) income related to the direct or indirect acquisition, use, maintenance or
63.36management, ownership, sale, exchange, or any other disposition of intangible property;
64.1 (ii) income from factoring transactions or discounting transactions;
64.2 (iii) royalty, patent, technical, and copyright fees;
64.3 (iv) licensing fees; and
64.4 (v) other similar income.
64.5For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
64.6applications, trade names, trademarks, service marks, copyrights, mask works, trade
64.7secrets, and similar types of intangible assets.
64.8This clause does not apply to any item of interest or intangible income received or accrued
64.9by a foreign operating corporation with respect to such item of income to the extent that
64.10the income is income from sources without the United States as defined in subtitle A,
64.11chapter 1, subchapter N, part 1, of the Internal Revenue Code;
64.12 (21) the dividends attributable to the income of a foreign operating corporation that
64.13is a member of the taxpayer's unitary group in an amount that is equal to the dividends
64.14paid deduction of a real estate investment trust under section 561(a) of the Internal
64.15Revenue Code for amounts paid or accrued by the real estate investment trust to the
64.16foreign operating corporation; and
64.17 (22) the income of a foreign operating corporation that is a member of the taxpayer's
64.18unitary group in an amount that is equal to gains derived from the sale of real or personal
64.19property located in the United States.
64.20EFFECTIVE DATE.This section is effective for taxable years beginning after
64.21December 31, 2006.
64.22 Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
64.23 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
64.24corporations, there shall be subtracted from federal taxable income after the increases
64.25provided in subdivision 19c:
64.26 (1) the amount of foreign dividend gross-up added to gross income for federal
64.27income tax purposes under section 78 of the Internal Revenue Code;
64.28 (2) the amount of salary expense not allowed for federal income tax purposes due to
64.29claiming the federal jobs credit under section 51 of the Internal Revenue Code;
64.30 (3) any dividend (not including any distribution in liquidation) paid within the
64.31taxable year by a national or state bank to the United States, or to any instrumentality of
64.32the United States exempt from federal income taxes, on the preferred stock of the bank
64.33owned by the United States or the instrumentality;
65.1 (4) amounts disallowed for intangible drilling costs due to differences between
65.2this chapter and the Internal Revenue Code in taxable years beginning before January
65.31, 1987, as follows:
65.4 (i) to the extent the disallowed costs are represented by physical property, an amount
65.5equal to the allowance for depreciation under Minnesota Statutes 1986, section290.09,
65.6subdivision 7 , subject to the modifications contained in subdivision 19e; and
65.7 (ii) to the extent the disallowed costs are not represented by physical property, an
65.8amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
65.9290.09, subdivision 8
;
65.10 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
65.11Internal Revenue Code, except that:
65.12 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
65.13capital loss carrybacks shall not be allowed;
65.14 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
65.15a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
65.16allowed;
65.17 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
65.18capital loss carryback to each of the three taxable years preceding the loss year, subject to
65.19the provisions of Minnesota Statutes 1986, section290.16 , shall be allowed; and
65.20 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
65.21a capital loss carryover to each of the five taxable years succeeding the loss year to the
65.22extent such loss was not used in a prior taxable year and subject to the provisions of
65.23Minnesota Statutes 1986, section290.16 , shall be allowed;
65.24 (6) an amount for interest and expenses relating to income not taxable for federal
65.25income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
65.26expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
65.27291 of the Internal Revenue Code in computing federal taxable income;
65.28 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
65.29which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a
65.30reasonable allowance for depletion based on actual cost. In the case of leases the deduction
65.31must be apportioned between the lessor and lessee in accordance with rules prescribed
65.32by the commissioner. In the case of property held in trust, the allowable deduction must
65.33be apportioned between the income beneficiaries and the trustee in accordance with the
65.34pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
65.35of the trust's income allocable to each;
66.1 (8) for certified pollution control facilities placed in service in a taxable year
66.2beginning before December 31, 1986, and for which amortization deductions were elected
66.3under section 169 of the Internal Revenue Code of 1954, as amended through December
66.431, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
66.51986, section290.09, subdivision 7 ;
66.6 (9) amounts included in federal taxable income that are due to refunds of income,
66.7excise, or franchise taxes based on net income or related minimum taxes paid by the
66.8corporation to Minnesota, another state, a political subdivision of another state, the
66.9District of Columbia, or a foreign country or possession of the United States to the extent
66.10that the taxes were added to federal taxable income under section290.01, subdivision 19c ,
66.11clause (1), in a prior taxable year;
66.12 (10) 80 percent of royalties, fees, or other like income accrued or received from a
66.13foreign operating corporation or a foreign corporation which is part of the same unitary
66.14business as the receiving corporation, unless the income resulting from such payments or
66.15accruals is income from sources within the United States as defined in subtitle A, chapter
66.161, subchapter N, part 1, of the Internal Revenue Code;
66.17 (11) income or gains from the business of mining as defined in section290.05,
66.18subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
66.19 (12) the amount of disability access expenditures in the taxable year which are not
66.20allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
66.21 (13) the amount of qualified research expenses not allowed for federal income tax
66.22purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
66.23the amount exceeds the amount of the credit allowed under section290.068 ;
66.24 (14) the amount of salary expenses not allowed for federal income tax purposes due
66.25to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
66.26Code;
66.27 (15) the amount of any refund of environmental taxes paid under section 59A of the
66.28Internal Revenue Code;
66.29 (16) for taxable years beginning before January 1, 2008, the amount of the federal
66.30small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
66.31which is included in gross income under section 87 of the Internal Revenue Code;
66.32 (17) for a corporation whose foreign sales corporation, as defined in section 922
66.33of the Internal Revenue Code, constituted a foreign operating corporation during any
66.34taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
66.35claiming the deduction under section290.21, subdivision 4 , for income received from
66.36the foreign operating corporation, an amount equal to1.23 multiplied by the amount of
67.1income excluded under section 114 of the Internal Revenue Code, provided the income is
67.2not income of a foreign operating company;
67.3 (18) any decrease in subpart F income, as defined in section 952(a) of the Internal
67.4Revenue Code, for the taxable year when subpart F income is calculated without regard
67.5to the provisions of section 614 of Public Law 107-147;
67.6 (19) in each of the five tax years immediately following the tax year in which an
67.7addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
67.8the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
67.9amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
67.10resulting delayed depreciation cannot be less than zero; and
67.11 (20) in each of the five tax years immediately following the tax year in which an
67.12addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the
67.13amount of the addition.
67.14EFFECTIVE DATE.This section is effective for taxable years beginning after
67.15December 31, 2006.
67.16 Sec. 4. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
67.17 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
67.18income" is Minnesota net income as defined in section290.01, subdivision 19 , and
67.19includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
67.20(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
67.21Minnesota tax return, the minimum tax must be computed on a separate company basis.
67.22If a corporation is part of a tax group filing a unitary return, the minimum tax must be
67.23computed on a unitary basis. The following adjustments must be made.
67.24 (1) For purposes of the depreciation adjustments under section 56(a)(1) and
67.2556(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
67.26service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
67.27income tax purposes, including any modification made in a taxable year under section
67.28290.01, subdivision 19e
, or Minnesota Statutes 1986, section
290.09, subdivision 7 ,
67.29paragraph (c).
67.30 For taxable years beginning after December 31, 2000, the amount of any remaining
67.31modification made under section290.01, subdivision 19e , or Minnesota Statutes 1986,
67.32section290.09, subdivision 7 , paragraph (c), not previously deducted is a depreciation
67.33allowance in the first taxable year after December 31, 2000.
67.34 (2) The portion of the depreciation deduction allowed for federal income tax
67.35purposes under section 168(k) of the Internal Revenue Code that is required as an addition
68.1under section290.01, subdivision 19c , clause (16) (15), is disallowed in determining
68.2alternative minimum taxable income.
68.3 (3) The subtraction for depreciation allowed under section290.01, subdivision 19d ,
68.4clause (19), is allowed as a depreciation deduction in determining alternative minimum
68.5taxable income.
68.6 (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
68.7of the Internal Revenue Code does not apply.
68.8 (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
68.9Revenue Code does not apply.
68.10 (6) The special rule for dividends from section 936 companies under section
68.1156(g)(4)(C)(iii) does not apply.
68.12 (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
68.13Code does not apply.
68.14 (8) The tax preference for intangible drilling costs under section 57(a)(2) of the
68.15Internal Revenue Code must be calculated without regard to subparagraph (E) and the
68.16subtraction under section290.01, subdivision 19d , clause (4).
68.17 (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
68.18Revenue Code does not apply.
68.19 (10) The tax preference for charitable contributions of appreciated property under
68.20section 57(a)(6) of the Internal Revenue Code does not apply.
68.21 (11) For purposes of calculating the tax preference for accelerated depreciation or
68.22amortization on certain property placed in service before January 1, 1987, under section
68.2357(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
68.24deduction allowed under section290.01, subdivision 19e .
68.25 For taxable years beginning after December 31, 2000, the amount of any remaining
68.26modification made under section290.01, subdivision 19e , not previously deducted is a
68.27depreciation or amortization allowance in the first taxable year after December 31, 2004.
68.28 (12) For purposes of calculating the adjustment for adjusted current earnings in
68.29section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
68.30income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
68.31minimum taxable income as defined in this subdivision, determined without regard to the
68.32adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
68.33 (13) For purposes of determining the amount of adjusted current earnings under
68.34section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
68.3556(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
68.36gross-up subtracted as provided in section290.01, subdivision 19d , clause (1), or (ii) the
69.1amount of refunds of income, excise, or franchise taxes subtracted as provided in section
69.2290.01, subdivision 19d
, clause (10) (9), or (iii) the amount of royalties, fees or other like
69.3income subtracted as provided in section290.01, subdivision 19d , clause (11) (10).
69.4 (14) Alternative minimum taxable income excludes the income from operating in a
69.5job opportunity building zone as provided under section469.317 .
69.6 (15) Alternative minimum taxable income excludes the income from operating in a
69.7biotechnology and health sciences industry zone as provided under section469.337 .
69.8 (16) Alternative minimum taxable income excludes the income from operating in an
69.9international economic development zone as provided under section469.326 .
69.10 Items of tax preference must not be reduced below zero as a result of the
69.11modifications in this subdivision.
69.12EFFECTIVE DATE.This section is effective for taxable years beginning after
69.13December 31, 2006.
69.14 Sec. 5. Minnesota Statutes 2006, section 290.34, is amended by adding a subdivision
69.15to read:
69.16 Subd. 3a. Transactions without economic substance. (a) When any person,
69.17directly or indirectly, engages in a transaction or series of transactions without economic
69.18substance to create a loss or to reduce taxable income or to increase credits allowed in
69.19determining Minnesota tax, the commissioner must determine the amount of a taxpayer's
69.20taxable income or tax so as to reflect what would have been the taxpayer's taxable income
69.21or tax but for the transaction or transactions without economic substance causing the
69.22reduction in taxable income or tax.
69.23 (b) A transaction has economic substance only if a taxpayer shows by clear and
69.24convincing evidence:
69.25 (1) the transaction changes in a meaningful way (apart from federal, state, local, and
69.26foreign tax effects) the taxpayer's economic position; and
69.27 (2) the taxpayer has a substantial nontax purpose for entering into a transaction and
69.28the transaction is a reasonable means of accomplishing the substantial nontax purpose.
69.29A transaction does not have a substantial nontax purpose if it does not have a potential
69.30for profit. A transaction has a substantial nontax purpose when the taxpayer reasonably
69.31expects that the pretax profit for the transaction is substantial in relation to the present
69.32value of the expected net tax benefits that would be allowed if the transaction were
69.33respected for tax purposes, and the reasonably expected pretax profit from the transaction
69.34exceeds the risk-free rate of return.
70.1 (c) It is the intent of the legislature that the provisions of this subdivision must not
70.2be construed as supplanting any existing Minnesota law.
70.3EFFECTIVE DATE.This section is effective for taxable years beginning after
70.4December 31, 2006.
70.7 Section 1. Minnesota Statutes 2006, section 289A.12, subdivision 4, is amended to
70.8read:
70.9 Subd. 4. Returns by persons, corporations, cooperatives, governmental entities,
70.10or school districts. (a) The commissioner may by notice and demand require to the
70.11extent required by section 6041 of the Internal Revenue Code, a person, corporation,
70.12or cooperative, the state of Minnesota and its political subdivisions, and a city, county,
70.13and school district in Minnesota, making payments in the regular course of a trade or
70.14business during the taxable year to any person or corporation of $600 or more on account
70.15of rents or royalties, or of $10 or more on account of interest, or $10 or more on account
70.16of dividends or patronage dividends, or $600 or more on account of either wages, salaries,
70.17commissions, fees, prizes, awards, pensions, annuities, or any other fixed or determinable
70.18gains, profits or income, not otherwise reportable under section289A.09, subdivision 2 , or
70.19on account of earnings of $10 or more distributed to its members by savings associations
70.20or credit unions chartered under the laws of this state or the United States, (1) to file with
70.21the commissioner a return (except in cases where a valid agreement to participate in the
70.22combined federal and state information reporting system has been entered into, and the
70.23return is filed only with the commissioner of internal revenue under the applicable filing
70.24and informational reporting requirements of the Internal Revenue Code) with respect to
70.25the payments in excess of the amounts named, giving the names and addresses of the
70.26persons to whom the payments were made, the amounts paid to each, and (2) to make
70.27a return with respect to the total number of payments and total amount of payments,
70.28for each category of income named, which were in excess of the amounts named. This
70.29subdivision does not apply to the payment of interest or dividends to a person who was a
70.30nonresident of Minnesota for the entire year.
70.31 (b) For payments for which a return is covered by paragraph (a), regardless of
70.32whether the commissioner has required filing under paragraph (a), the payor must file a
70.33copy of the return with the commissioner if:
71.1 (i) the return is for a payment made to a Minnesota resident, to a recipient with a
71.2Minnesota address, or for activity occurring in the state of Minnesota; and
71.3 (ii) the payment is for wages, salaries, or other compensation for services provided.
71.4The commissioner may require this information to be filed in electronic or another form
71.5that the commissioner determines is appropriate, notwithstanding the provisions of
71.6paragraph (c).
71.7 (c) A person, corporation, or cooperative required to file returns under this
71.8subdivision must file the returns on magnetic media if magnetic media was used to satisfy
71.9the federal reporting requirement under section 6011(e) of the Internal Revenue Code,
71.10unless the person establishes to the satisfaction of the commissioner that compliance with
71.11this requirement would be an undue hardship.
71.12EFFECTIVE DATE.This section is effective for forms required to be filed by
71.13federal law after December 31, 2007.
71.14 Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to read:
71.15 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
71.16trusts, there shall be added to federal taxable income:
71.17 (1)(i) interest income on obligations of any state other than Minnesota or a political
71.18or governmental subdivision, municipality, or governmental agency or instrumentality
71.19of any state other than Minnesota exempt from federal income taxes under the Internal
71.20Revenue Code or any other federal statute; and
71.21 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
71.22Code, except the portion of the exempt-interest dividends derived from interest income
71.23on obligations of the state of Minnesota or its political or governmental subdivisions,
71.24municipalities, governmental agencies or instrumentalities, but only if the portion of the
71.25exempt-interest dividends from such Minnesota sources paid to all shareholders represents
71.2695 percent or more of the exempt-interest dividends that are paid by the regulated
71.27investment company as defined in section 851(a) of the Internal Revenue Code, or the
71.28fund of the regulated investment company as defined in section 851(g) of the Internal
71.29Revenue Code, making the payment; and
71.30 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
71.31government described in section 7871(c) of the Internal Revenue Code shall be treated as
71.32interest income on obligations of the state in which the tribe is located;
71.33 (2) the amount of income or sales and use taxes paid or accrued within the taxable
71.34year under this chapter and the amount of taxes based on net income paid or sales and use
71.35taxes paid to any other state or to any province or territory of Canada, to the extent allowed
72.1as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not
72.2be more than the amount by which the itemized deductions as allowed under section 63(d)
72.3of the Internal Revenue Code exceeds the amount of the standard deduction as defined
72.4in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the
72.5disallowance of itemized deductions under section 68 of the Internal Revenue Code of
72.61986, income or sales and use tax is the last itemized deduction disallowed;
72.7 (3) the capital gain amount of a lump sum distribution to which the special tax under
72.8section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
72.9 (4) the amount of income taxes paid or accrued within the taxable year under this
72.10chapter and taxes based on net income paid to any other state or any province or territory
72.11of Canada, to the extent allowed as a deduction in determining federal adjusted gross
72.12income. For the purpose of this paragraph, income taxes do not include the taxes imposed
72.13by sections290.0922, subdivision 1 , paragraph (b),
290.9727 ,
290.9728 , and
290.9729 ;
72.14 (5) the amount of expense, interest, or taxes disallowed pursuant to section290.10
72.15other than expenses or interest used in computing net interest income for the subtraction
72.16allowed under subdivision 19b, clause (1);
72.17 (6) the amount of a partner's pro rata share of net income which does not flow
72.18through to the partner because the partnership elected to pay the tax on the income under
72.19section 6242(a)(2) of the Internal Revenue Code;
72.20 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
72.21Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
72.22in the taxable year generates a deduction for depreciation under section 168(k) and the
72.23activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
72.24the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
72.25limited to excess of the depreciation claimed by the activity under section 168(k) over the
72.26amount of the loss from the activity that is not allowed in the taxable year. In succeeding
72.27taxable years when the losses not allowed in the taxable year are allowed, the depreciation
72.28under section 168(k) is allowed;
72.29 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
72.30Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
72.31Revenue Code of 1986, as amended through December 31, 2003;
72.32 (9) to the extent deducted in computing federal taxable income, the amount of the
72.33deduction allowable under section 199 of the Internal Revenue Code;and
72.34 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
72.35federal subsidies for prescription drug plans; and
72.36 (11) the amount of expenses disallowed under section 290.10, subdivision 2.
73.1EFFECTIVE DATE.This section is effective for taxable years beginning after
73.2December 31, 2006.
73.3 Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19b, is amended to read:
73.4 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
73.5and trusts, there shall be subtracted from federal taxable income:
73.6 (1) net interest income on obligations of any authority, commission, or
73.7instrumentality of the United States to the extent includable in taxable income for federal
73.8income tax purposes but exempt from state income tax under the laws of the United States;
73.9 (2) if included in federal taxable income, the amount of any overpayment of income
73.10tax to Minnesota or to any other state, for any previous taxable year, whether the amount
73.11is received as a refund or as a credit to another taxable year's income tax liability;
73.12 (3) the amount paid to others, less the amount used to claim the credit allowed under
73.13section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten
73.14to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
73.15transportation of each qualifying child in attending an elementary or secondary school
73.16situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
73.17resident of this state may legally fulfill the state's compulsory attendance laws, which
73.18is not operated for profit, and which adheres to the provisions of the Civil Rights Act
73.19of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
73.20tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this clause,
73.21"textbooks" includes books and other instructional materials and equipment purchased
73.22or leased for use in elementary and secondary schools in teaching only those subjects
73.23legally and commonly taught in public elementary and secondary schools in this state.
73.24Equipment expenses qualifying for deduction includes expenses as defined and limited in
73.25section290.0674, subdivision 1 , clause (3). "Textbooks" does not include instructional
73.26books and materials used in the teaching of religious tenets, doctrines, or worship, the
73.27purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
73.28or materials for, or transportation to, extracurricular activities including sporting events,
73.29musical or dramatic events, speech activities, driver's education, or similar programs. For
73.30purposes of the subtraction provided by this clause, "qualifying child" has the meaning
73.31given in section 32(c)(3) of the Internal Revenue Code;
73.32 (4) income as provided under section290.0802 ;
73.33 (5) to the extent included in federal adjusted gross income, income realized on
73.34disposition of property exempt from tax under section290.491 ;
74.1 (6) to the extent not deducted in determining federal taxable income by an individual
74.2who does not itemize deductions for federal income tax purposes for the taxable year, an
74.3amount equal to 50 percent of the excess of charitable contributions over $500 allowable
74.4as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
74.5under the provisions of Public Law 109-1;
74.6 (7) for taxable years beginning before January 1, 2008, the amount of the federal
74.7small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
74.8which is included in gross income under section 87 of the Internal Revenue Code;
74.9 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
74.10qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
74.11of subnational foreign taxes for the taxable year, but not to exceed the total subnational
74.12foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
74.13"federal foreign tax credit" means the credit allowed under section 27 of the Internal
74.14Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
74.15under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
74.16the extent they exceed the federal foreign tax credit;
74.17 (9) in each of the five tax years immediately following the tax year in which an
74.18addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
74.19of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
74.20of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
74.21the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
74.22subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
74.23positive value of any net operating loss under section 172 of the Internal Revenue Code
74.24generated for the tax year of the addition. The resulting delayed depreciation cannot be
74.25less than zero;
74.26 (10) job opportunity building zone income as provided under section469.316 ;
74.27 (11) to the extent included in federal taxable income, the amount of compensation
74.28paid to members of the Minnesota National Guard or other reserve components of the
74.29United States military for active service performed in Minnesota, excluding compensation
74.30for services performed under the Active Guard Reserve (AGR) program. For purposes of
74.31this clause, "active service" means (i) state active service as defined in section190.05,
74.32subdivision 5a , clause (1); (ii) federally funded state active service as defined in section
74.33190.05, subdivision 5b
; or (iii) federal active service as defined in section
190.05,
74.34subdivision 5c , but "active service" excludes services performed exclusively for purposes
74.35of basic combat training, advanced individual training, annual training, and periodic
75.1inactive duty training; special training periodically made available to reserve members;
75.2and service performed in accordance with section190.08, subdivision 3 ;
75.3 (12) to the extent included in federal taxable income, the amount of compensation
75.4paid to Minnesota residents who are members of the armed forces of the United States or
75.5United Nations for active duty performed outside Minnesota under United States Code,
75.6title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
75.7the United Nations;
75.8 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
75.9qualified donor's donation, while living, of one or more of the qualified donor's organs
75.10to another person for human organ transplantation. For purposes of this clause, "organ"
75.11means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
75.12"human organ transplantation" means the medical procedure by which transfer of a human
75.13organ is made from the body of one person to the body of another person; "qualified
75.14expenses" means unreimbursed expenses for both the individual and the qualified donor
75.15for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
75.16may be subtracted under this clause only once; and "qualified donor" means the individual
75.17or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
75.18individual may claim the subtraction in this clause for each instance of organ donation for
75.19transplantation during the taxable year in which the qualified expenses occur;
75.20 (14) in each of the five tax years immediately following the tax year in which an
75.21addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
75.22shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
75.23addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
75.24case of a shareholder of a corporation that is an S corporation, minus the positive value of
75.25any net operating loss under section 172 of the Internal Revenue Code generated for the
75.26tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
75.27subtraction is not allowed under this clause;
75.28 (15) to the extent included in federal taxable income, compensation paid to a
75.29nonresident who is a service member as defined in United States Code, title 10, section
75.30101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
75.31Law 108-189, section 101(2);and
75.32 (16) international economic development zone income as provided under section
75.33469.325
.; and
75.34 (17) to the extent included in federal taxable income, the amount of national service
75.35educational awards received from the National Service Trust under United States Code,
76.1title 42, sections 12601 to 12604, for service in an approved AmeriCorps national service
76.2program.
76.3EFFECTIVE DATE.This section is effective retroactively for tax years beginning
76.4after December 31, 2004, except that clause (17) is effective for tax years beginning
76.5after December 31, 2006.
76.6 Sec. 4. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
76.7 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
76.8there shall be added to federal taxable income:
76.9 (1) the amount of any deduction taken for federal income tax purposes for income,
76.10excise, or franchise taxes based on net income or related minimum taxes, including but not
76.11limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
76.12another state, a political subdivision of another state, the District of Columbia, or any
76.13foreign country or possession of the United States;
76.14 (2) interest not subject to federal tax upon obligations of: the United States, its
76.15possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
76.16state, any of its political or governmental subdivisions, any of its municipalities, or any
76.17of its governmental agencies or instrumentalities; the District of Columbia; or Indian
76.18tribal governments;
76.19 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
76.20Revenue Code;
76.21 (4) the amount of any net operating loss deduction taken for federal income tax
76.22purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
76.23deduction under section 810 of the Internal Revenue Code;
76.24 (5) the amount of any special deductions taken for federal income tax purposes
76.25under sections 241 to 247 and 965 of the Internal Revenue Code;
76.26 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
76.27clause (a), that are not subject to Minnesota income tax;
76.28 (7) the amount of any capital losses deducted for federal income tax purposes under
76.29sections 1211 and 1212 of the Internal Revenue Code;
76.30 (8) the exempt foreign trade income of a foreign sales corporation under sections
76.31921(a) and 291 of the Internal Revenue Code;
76.32 (9) the amount of percentage depletion deducted under sections 611 through 614 and
76.33291 of the Internal Revenue Code;
76.34 (10) for certified pollution control facilities placed in service in a taxable year
76.35beginning before December 31, 1986, and for which amortization deductions were elected
77.1under section 169 of the Internal Revenue Code of 1954, as amended through December
77.231, 1985, the amount of the amortization deduction allowed in computing federal taxable
77.3income for those facilities;
77.4 (11) the amount of any deemed dividend from a foreign operating corporation
77.5determined pursuant to section290.17, subdivision 4 , paragraph (g);
77.6 (12) the amount of a partner's pro rata share of net income which does not flow
77.7through to the partner because the partnership elected to pay the tax on the income under
77.8section 6242(a)(2) of the Internal Revenue Code;
77.9 (13) the amount of net income excluded under section 114 of the Internal Revenue
77.10Code;
77.11 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
77.12Revenue Code, for the taxable year when subpart F income is calculated without regard
77.13to the provisions of section 103 of Public Law 109-222;
77.14 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
77.15and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
77.16has an activity that in the taxable year generates a deduction for depreciation under
77.17section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
77.18that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
77.19under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
77.20depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
77.21amount of the loss from the activity that is not allowed in the taxable year. In succeeding
77.22taxable years when the losses not allowed in the taxable year are allowed, the depreciation
77.23under section 168(k)(1)(A) and (k)(4)(A) is allowed;
77.24 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
77.25Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
77.26Revenue Code of 1986, as amended through December 31, 2003;
77.27 (17) to the extent deducted in computing federal taxable income, the amount of the
77.28deduction allowable under section 199 of the Internal Revenue Code;and
77.29 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
77.30federal subsidies for prescription drug plans; and
77.31 (19) the amount of expenses disallowed under section 290.10, subdivision 2.
77.32EFFECTIVE DATE.This section is effective for taxable years beginning after
77.33December 31, 2006.
77.34 Sec. 5. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
77.35to read:
78.1 Subd. 34. Investment tax credit. (a) A credit is allowed against the tax imposed by
78.2this chapter for a qualified taxpayer's investment in a qualified new business venture. The
78.3credit shall equal 25 percent of the taxpayer's investment made in the business, but shall
78.4not exceed the lesser of:
78.5 (1) the liability for tax under this chapter, including the applicable alternative
78.6minimum tax;
78.7 (2) $25,000 for an individual not part of a partnership; or
78.8 (3) $300,000 for a pass-through entity.
78.9 (b) For purposes of this subdivision, a qualified taxpayer means:
78.10 (1) an accredited investor within the meaning of Regulation D of the Securities and
78.11Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether
78.12part of a pass-through entity or not; and
78.13 (2) an accredited investor who does not own, control, or hold power to vote 20
78.14percent or more of the outstanding securities of the qualified business venture in which the
78.15eligible investment is proposed.
78.16 (c) Pass-through entities and individuals may apply to the commissioner of
78.17employment and economic development for certification as a qualifying pass-through
78.18entity or individual. The application must be in the form and made under the procedures
78.19specified by the commissioner of employment and economic development. The
78.20commissioner of employment and economic development may provide certificates
78.21entitling investors to tax credit under this subdivision, but must not issue a total amount of
78.22certificates of more than $2,000,000. In awarding certificates under this paragraph, the
78.23commissioner of employment and economic development shall award them to qualified
78.24applicants in the order in which the applications are received.
78.25 (d) Each pass-through entity must provide each investor a statement indicating the
78.26investor's share of the credit amount certified to the pass-through entity under paragraph
78.27(c) based on its share of the pass-through entity's assets. The credit shall not exceed
78.28$25,000 for each individual part of a pass-through entity.
78.29 (e) If the amount of the credit under this subdivision or any taxable year exceeds the
78.30limitation under paragraph (a), clause (1), the excess shall be a credit carryover to each
78.31of the ten succeeding years but shall not exceed $25,000 for an individual not part of a
78.32partnership and $300,000 for a pass-through entity. The entire amount of the excess
78.33unused credit must be carried first to the earliest of the taxable years to which the credit
78.34may be carried, and then to each successive year to which the credit may be carried. The
78.35amount of the unused credit that may be added under this paragraph may not exceed the
78.36taxpayer's liability for tax less the credit for the taxable year.
79.1 (f) Unless otherwise provided under the rules of the Department of Employment and
79.2Economic Development, a business is a qualified business venture for purposes of this
79.3subdivision only if the business satisfies all of the following conditions:
79.4 (1) the business has its headquarters in Minnesota;
79.5 (2) at least 51 percent of the business's employees are employed in Minnesota;
79.6 (3) the business is engaged in, or is committed to engage in:
79.7 (i) manufacturing, processing, or assembling biotechnology or medical device
79.8products, including biotechnology and device products for use in agriculture;
79.9 (ii) conducting research in and development of biotechnology or medical device
79.10products or services; or
79.11 (iii) developing a new biotechnology or medical device product or business process;
79.12 (4) the business is not engaged in real estate development, insurance, banking,
79.13lending, lobbying, political consulting, wholesale or retail trade, leisure, hospitality,
79.14transportation, construction, or professional services provided by attorneys, accountants,
79.15business consultants, physicians, or health care consultants;
79.16 (5) the business has less than 25 employees;
79.17 (6) the business has not been in operation for more than ten consecutive years;
79.18 (7) the business has not received more than $1,000,000 in investments that have
79.19qualified for and received tax credits under this section;
79.20 (8) the business has less than $1,000,000 in annual gross sales receipts;
79.21 (9) the business is not a subsidiary or an affiliate of a business that employs more
79.22than 100 employees or has gross sales receipts for the previous year of more than
79.23$1,000,000, computed by aggregating all of the employees and gross sales receipts of the
79.24business entities affiliated with the business; and
79.25 (10) the business has not received private equity investments of more than
79.26$2,000,000.
79.27EFFECTIVE DATE.This section is effective for taxable years beginning after
79.28December 31, 2009.
79.29 Sec. 6. Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read:
79.30 Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
79.31due under this chapter equal to $59 for each month or portion thereof that the individual
79.32was in active military service in a designated area after September 11, 2001, and before
79.33January 1, 2007, while a Minnesota domiciliary.
80.1 (b) An individual is allowed a credit against the tax due under this chapter equal to
80.2$120 for each month or portion thereof that the individual was in active military service in
80.3a designated area after December 31, 2006, while a Minnesota domiciliary.
80.4 (c) For active service performed after September 11, 2001, and before December 31,
80.52006, the individual may claim the credit in the taxable year beginning after December 31,
80.62005, and before January 1, 2007.
80.7(c) (d) For active service performed after December 31, 2006, the individual may
80.8claim the credit for the taxable year in which the active service was performed.
80.9(d) (e) If a Minnesota domiciliary is killed while performing active military service
80.10in a designated area, the individual's surviving spouse or dependent child may take the
80.11credit in the taxable year of the death. If a Minnesota domiciliary was killed while
80.12performing active military service in a designated area between September 11, 2001, and
80.13December 31, 2006, the individual's surviving spouse or dependent child may claim this
80.14credit in the taxable year beginning after December 31, 2005, and before January 1, 2007
80.15an individual entitled to the credit died prior to January 1, 2006, the individual's estate or
80.16heirs at law, if the individual's probate estate has closed or the estate was not probated,
80.17may claim the credit.
80.18EFFECTIVE DATE.This section is effective for taxable years beginning after
80.19December 31, 2006, except that paragraph (e) is effective retroactively for tax years
80.20beginning after December 31, 2005.
80.21 Sec. 7. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
80.22 Subd. 3. Exemption amount. (a) For purposes of computing the alternative
80.23minimum tax, the exemption amount is:
80.24(1) for taxable years beginning before January 1, 2006, the exemption determined
80.25under section 55(d) of the Internal Revenue Code, as amended through December 31,
80.261992; and
80.27(2), for taxable years beginning after December 31, 2005, $60,000 for married
80.28couples filing joint returns, $30,000 for married individuals filing separate returns, estates,
80.29and trusts, and $45,000 for unmarried individuals.
80.30 (b) The exemption amount determined under this subdivision is subject to the phase
80.31out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum
80.32taxable income as determined under this section must be substituted in the computation
80.33of the phase out, and the income threshold used in the phaseout must be adjusted for
80.34inflation as provided in paragraph (c).
81.1 (c) For taxable years beginning after December 31, 2006, the exemption amount
81.2under paragraph (a),clause (2), and the income threshold for the phaseout under paragraph
81.3(b) must be adjusted for inflation.The commissioner shall make the inflation adjustments
81.4in accordance with section 1(f) of the Internal Revenue Code except that for the purposes
81.5of this subdivision the percentage increase must be determined from the year starting
81.6September 1, 2005, and ending August 31, 2006, as the base year for adjusting for inflation
81.7for the tax year beginning after December 31, 2006. The commissioner shall adjust the
81.8exemption amount and phaseout threshold by the percentage determined pursuant to the
81.9provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B)
81.10the word "2005" shall be substituted for the word "1992." For 2007, the commissioner
81.11shall then determine the percentage change from the 12 months ending on August 31,
81.122005, to the 12 months ending on August 31, 2006, and in each subsequent year, from the
81.1312 months ending on August 31, 2005, to the 12 months ending on August 31 of the year
81.14preceding the taxable year. The exemption amount and phaseout threshold as adjusted
81.15must be rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the
81.16nearest $10 amount. The determination of the commissioner under this subdivision is not
81.17a rule under the Administrative Procedure Act.
81.18EFFECTIVE DATE.This section is effective for taxable years beginning after
81.19December 31, 2006.
81.20 Sec. 8. Minnesota Statutes 2006, section 290.10, is amended to read:
81.21290.10 NONDEDUCTIBLE ITEMS.
81.22 Subdivision 1. Expenses, interest, and taxes. Except as provided in section290.17,
81.23subdivision 4 , paragraph (i), in computing the net income of a taxpayer no deduction
81.24shall in any case be allowed for expenses, interest and taxes connected with or allocable
81.25against the production or receipt of all income not included in the measure of the tax
81.26imposed by this chapter, except that for corporations engaged in the business of mining
81.27or producing iron ore, the mining of which is subject to the occupation tax imposed by
81.28section298.01, subdivision 4 , this shall not prevent the deduction of expenses and other
81.29items to the extent that the expenses and other items are allowable under this chapter and
81.30are not deductible, capitalizable, retainable in basis, or taken into account by allowance
81.31or otherwise in computing the occupation tax and do not exceed the amounts taken for
81.32federal income tax purposes for that year. Occupation taxes imposed under chapter 298,
81.33royalty taxes imposed under chapter 299, or depletion expenses may not be deducted
81.34under thisclause subdivision.
82.1 Subd. 2. Fines, fees, and penalties. (a) Except as provided in this subdivision, no
82.2deduction from taxable income for a trade or business expense under section 162(a) of
82.3the Internal Revenue Code shall be allowed for any amount paid or incurred, whether by
82.4suit, agreement, or otherwise, to, or at the direction of, a government or entity described in
82.5paragraph (d) in relation to the violation of any law or the investigation or inquiry by such
82.6government or entity into the potential violation of any law.
82.7 (b) Exception for amounts constituting restitution or paid to come into compliance
82.8with the law. Paragraph (a) does not apply to any amount which:
82.9 (1) the taxpayer establishes:
82.10 (i) constitutes restitution, including remediation of property for damage or harm
82.11caused by or which may be caused by the violation of any law or the potential violation
82.12of any law; or
82.13 (ii) is paid to come into compliance with any law which was violated or involved in
82.14the investigation or inquiry; and
82.15 (2) is identified as restitution or as an amount paid to come into compliance with the
82.16law, as the case may be, in the court order or settlement agreement.
82.17 This paragraph does not apply to any amount paid or incurred as reimbursement to
82.18the government or entity for the costs of any investigation or litigation.
82.19 (c) Paragraph (a) does not apply to any amount paid or incurred by order of a court
82.20in a suit in which no government or entity described in paragraph (d) is a party.
82.21 (d) An entity is described in this paragraph if it is:
82.22 (1) a nongovernmental entity which exercises self-regulatory powers, including
82.23imposing sanctions, in connection with a qualified board or exchange, as defined in section
82.241256(g)(7) of the Internal Revenue Code, or;
82.25 (2) to the extent provided in regulations, a nongovernmental entity which exercises
82.26self-regulatory powers, including imposing sanctions, as part of performing an essential
82.27governmental function.
82.28 (e) Paragraph (a) does not apply to any amount paid or incurred as taxes due.
82.29EFFECTIVE DATE.This section is effective for taxable years beginning after
82.30December 31, 2006, and for fines, fees, and penalties assessed after the date of enactment.
82.31 Sec. 9. Minnesota Statutes 2006, section 290.17, subdivision 2, is amended to read:
82.32 Subd. 2. Income not derived from conduct of a trade or business. The income of
82.33a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or
82.34business must be assigned in accordance with paragraphs (a) to (f):
83.1 (a)(1) Subject to paragraphs (a)(2), and (a)(3), and (a)(4), income from wages as
83.2defined in section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if,
83.3and to the extent that, the work of the employee is performed within it; all other income
83.4from such sources is treated as income from sources without this state.
83.5 Severance pay shall be considered income from labor or personal or professional
83.6services.
83.7 (2) In the case of an individual who is a nonresident of Minnesota and who is an
83.8athlete or entertainer, income from compensation for labor or personal services performed
83.9within this state shall be determined in the following manner:
83.10 (i) The amount of income to be assigned to Minnesota for an individual who is a
83.11nonresident salaried athletic team employee shall be determined by using a fraction in
83.12which the denominator contains the total number of days in which the individual is under
83.13a duty to perform for the employer, and the numerator is the total number of those days
83.14spent in Minnesota. For purposes of this paragraph, off-season training activities, unless
83.15conducted at the team's facilities as part of a team imposed program, are not included in
83.16the total number of duty days. Bonuses earned as a result of play during the regular season
83.17or for participation in championship, play-off, or all-star games must be allocated under
83.18the formula. Signing bonuses are not subject to allocation under the formula if they are
83.19not conditional on playing any games for the team, are payable separately from any other
83.20compensation, and are nonrefundable; and
83.21 (ii) The amount of income to be assigned to Minnesota for an individual who is a
83.22nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's
83.23athletic or entertainment performance in Minnesota shall be determined by assigning to
83.24this state all income from performances or athletic contests in this state.
83.25 (3) For purposes of this section, amounts received by a nonresident as "retirement
83.26income" as defined in section (b)(1) of the State Income Taxation of Pension Income
83.27Act, Public Law 104-95, are not considered income derived from carrying on a trade
83.28or business or from wages or other compensation for work an employee performed in
83.29Minnesota, and are not taxable under this chapter.
83.30(4) Wages, otherwise assigned to this state under clause (1) and not qualifying under
83.31clause (3), are not taxable under this chapter if the following conditions are met:
83.32(i) the recipient was not a resident of this state for any part of the taxable year in
83.33which the wages were received; and
83.34(ii) the wages are for work performed while the recipient was a resident of this state.
83.35 (b) Income or gains from tangible property located in this state that is not employed
83.36in the business of the recipient of the income or gains must be assigned to this state.
84.1 (c) Income or gains from intangible personal property not employed in the business
84.2of the recipient of the income or gains must be assigned to this state if the recipient of the
84.3income or gains is a resident of this state or is a resident trust or estate.
84.4 Gain on the sale of a partnership interest is allocable to this state in the ratio of the
84.5original cost of partnership tangible property in this state to the original cost of partnership
84.6tangible property everywhere, determined at the time of the sale. If more than 50 percent
84.7of the value of the partnership's assets consists of intangibles, gain or loss from the sale
84.8of the partnership interest is allocated to this state in accordance with the sales factor of
84.9the partnership for its first full tax period immediately preceding the tax period of the
84.10partnership during which the partnership interest was sold.
84.11 Gain on the sale of goodwill or income from a covenant not to compete that is
84.12connected with a business operating all or partially in Minnesota is allocated to this state
84.13to the extent that the income from the business in the year preceding the year of sale was
84.14assignable to Minnesota under subdivision 3.
84.15 When an employer pays an employee for a covenant not to compete, the income
84.16allocated to this state is in the ratio of the employee's service in Minnesota in the calendar
84.17year preceding leaving the employment of the employer over the total services performed
84.18by the employee for the employer in that year.
84.19 (d) Income from winnings on a bet made by an individual while in Minnesota is
84.20assigned to this state. In this paragraph, "bet" has the meaning given in section609.75,
84.21subdivision 2 , as limited by section
609.75, subdivision 3 , clauses (1), (2), and (3).
84.22 (e) All items of gross income not covered in paragraphs (a) to (d) and not part of the
84.23taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
84.24 (f) For the purposes of this section, working as an employee shall not be considered
84.25to be conducting a trade or business.
84.26EFFECTIVE DATE.This section is effective for taxable years beginning after
84.27December 31, 2006.
84.28 Sec. 10. Minnesota Statutes 2006, section 290.92, is amended by adding a subdivision
84.29to read:
84.30 Subd. 31. Payments to persons who are not employees. (a) For purposes of this
84.31subdivision, "contractor" means a person carrying on a trade or business described in
84.32industry code numbers 23 through 238990 of the North American Industry Classification
84.33System.
84.34 (b) A contractor or a third-party bulk filer acting on behalf of a contractor, who
84.35makes payments to an individual, carrying on a trade or business described in paragraph
85.1(a) as a sole proprietorship, must deduct and withhold two percent of the payment as
85.2Minnesota withholding tax when the amount the contractor paid to that individual during
85.3the calendar year exceeds $600.
85.4 (c) A payment subject to withholding under this subdivision must be treated as if
85.5the payment were a wage paid by an employer to an employee. The requirements in the
85.6definitions of "employee" and "employer" in subdivision 1 relating to geographic location
85.7apply in determining whether withholding tax applies under this subdivision, but without
85.8regard to whether the contractor or the individual otherwise satisfy the definition of an
85.9employer or an employee. Each recipient of a payment subject to withholding under this
85.10subdivision must furnish the contractor with a statement of the recipient's name, address,
85.11and Social Security account number.
85.12EFFECTIVE DATE.This section is effective for payments made after December
85.1331, 2007.
85.14 Sec. 11. AUDIT AND REPORT TO LEGISLATURE.
85.15 The commissioner must conduct a random sample audit of withholdings under
85.16Minnesota Statutes, section 290.92, subdivision 31, and returns associated with those
85.17withholdings. The commissioner must report on the findings of the audit to the committees
85.18of the senate and house of representatives with jurisdiction over taxes, in compliance with
85.19Minnesota Statutes, sections 3.195 and 3.197, no later than February 1, 2010. The report
85.20must also include information on the number and amount of payments received, and on
85.21the types of contractors making payments, grouped by specialty skills definitions provided
85.22in the North American Industry Classification System.
85.25 Section 1. Minnesota Statutes 2006, section 297A.668, is amended by adding a
85.26subdivision to read:
85.27 Subd. 8. Manufactured and modular housing. (a) Notwithstanding other
85.28subdivisions of this section, a sale of a manufactured or modular home shall be sourced to
85.29the site where the housing is first set up or installed.
85.30 (b) For purposes of this section, "manufactured home" has the meaning given
85.31in section 327.31, subdivision 6. For purposes of this section, "modular home" means
85.32a building or structural unit that has been substantially manufactured or constructed,
85.33in whole or in part, at an off-site location, with the final assembly occurring on-site
86.1alone or with other units and attached to a permanent foundation site and occupied
86.2as a single-family dwelling. Modular home construction must comply with applicable
86.3standards adopted in Minnesota Rules authorized under chapter 16B. A modular home
86.4does not include a structure subject to the requirements of the National Manufactured
86.5Home Construction and Safety Standards Act of 1974 or a manufactured home.
86.6EFFECTIVE DATE.This section is effective for sales and purchases made after
86.7June 30, 2007.
86.8 Sec. 2. Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read:
86.9 Subd. 8. Regionwide public safety radio communication system; products and
86.10services. Products and services including, but not limited to, end user equipment used
86.11for construction, ownership, operation, maintenance, and enhancement of the backbone
86.12system of the regionwide public safety radio communication system established under
86.13sections403.21 to
403.34 403.40
86.14system is defined in section403.21, subdivision 9 . This subdivision is effective for
86.15purchases, sales, storage, use, or consumption for use in the first and second phases of the
86.16system, as defined in section403.21, subdivisions 3, 10, and 11 , and that portion of the
86.17third phase of the system that is located in the southeast district of the State Patrol and
86.18the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
86.19that is located in Itasca County.
86.20 Sec. 3. Minnesota Statutes 2006, section 297A.71, subdivision 23, is amended to read:
86.21 Subd. 23. Construction materials for qualified low-income housing projects. (a)
86.22Purchases of materials and supplies used or consumed in and equipment incorporated into
86.23the construction, improvement, or expansion of qualified low-income housing projects are
86.24exempt from the tax imposed under this chapter if the owner of the qualified low-income
86.25housing project is:
86.26 (1) the public housing agency or housing and redevelopment authority of a political
86.27subdivision;
86.28 (2) an entity exercising the powers of a housing and redevelopment authority within
86.29a political subdivision;
86.30 (3) a limited partnership in which the sole or managing general partner is an
86.31authority under clause (1) or an entity under clause (2) or (4);
86.32 (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
86.33under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or
87.1 (5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
87.2for a qualified low-income housing project described in paragraph (b), clause (5).
87.3 This exemption applies regardless of whether the purchases are made by the owner
87.4of the facility or a contractor.
87.5 (b) For purposes of this exemption, "qualified low-income housing project" means:
87.6 (1) a housing or mixed use project in which at least 20 percent of the residential units
87.7are qualifying low-income rental housing units as defined in section273.126 ;
87.8 (2) a federally assisted low-income housing project financed by a mortgage insured
87.9or held by the United States Department of Housing and Urban Development under
87.10United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
87.11States Code, title 42, section 1437f; the Native American Housing Assistance and
87.12Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
87.13successor federal low-income housing program;
87.14 (3) a qualified low-income housing project as defined in United States Code, title
87.1526, section 42(g), meeting all of the requirements for a low-income housing credit under
87.16section 42 of the Internal Revenue Code regardless of whether the project actually applies
87.17for or receives a low-income housing credit;
87.18 (4) a project that will be operated in compliance with Internal Revenue Service
87.19revenue procedure 96-32; or
87.20 (5) a housing or mixed use project in which all or a portion of the residential units
87.21are subject to the requirements of section 5 of the United States Housing Act of 1937.
87.22 (c) For a project, a portion of which is not used for low-income housing units,
87.23the amount of purchases that are exempt under this subdivision must be determined by
87.24multiplying the total purchases, as specified in paragraph (a), by the ratio of:
87.25 (1) the total gross square footage of units subject to the income limits under section
87.26273.126
, the financing for the project, the federal low-income housing tax credit, revenue
87.27procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable
87.28to the project; and
87.29 (2) the total gross square footage of all units in the project.
87.30 (d) The tax must be imposed and collected as if the rate under section297A.62,
87.31subdivision 1 , applied, and then refunded in the manner provided in section
297A.75 .
87.32EFFECTIVE DATE.This section is effective for sales and purchases made after
87.33June 30, 2009.
87.34 Sec. 4. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to read:
88.1 Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
88.2impose a general sales tax if permitted by special law enacted prior to January 1, 2008, or
88.3if the political subdivision enacted and imposed the tax before the effective date of section
88.4477A.016
and its predecessor provision.
88.5 (b) This section governs the imposition of a general sales tax by the political
88.6subdivision. The provisions of this section preempt the provisions of any special law:
88.7 (1) enacted before June 2, 1997, or
88.8 (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
88.9provision from this section's rules by reference.
88.10 (c) This section does not apply to or preempt a sales tax on motor vehicles or a
88.11special excise tax on motor vehicles.
88.12 (d) From June 1, 2007, through December 31, 2010, a political subdivision must not
88.13advertise, promote, expend funds, or hold a referendum to support imposing a local option
88.14sales tax unless authorized by a special law enacted prior to June 1, 2007.
88.15EFFECTIVE DATE.This section is effective the day following final enactment.
88.16 Sec. 5. Minnesota Statutes 2006, section 297B.03, is amended to read:
88.17297B.03 EXEMPTIONS.
88.18 There is specifically exempted from the provisions of this chapter and from
88.19computation of the amount of tax imposed by it the following:
88.20 (1) purchase or use, including use under a lease purchase agreement or installment
88.21sales contract made pursuant to section465.71 , of any motor vehicle by the United States
88.22and its agencies and instrumentalities and by any person described in and subject to the
88.23conditions provided in section297A.67, subdivision 11 ;
88.24 (2) purchase or use of any motor vehicle by any person who was a resident of
88.25another state or country at the time of the purchase and who subsequently becomes a
88.26resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
88.27such person began residing in the state of Minnesota and the motor vehicle was registered
88.28in the person's name in the other state or country;
88.29 (3) purchase or use of any motor vehicle by any person making a valid election to be
88.30taxed under the provisions of section297A.90 ;
88.31 (4) purchase or use of any motor vehicle previously registered in the state of
88.32Minnesota when such transfer constitutes a transfer within the meaning of section 118,
88.33331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
88.34Revenue Code of 1986, as amended through December 31, 1999;
89.1 (5) purchase or use of any vehicle owned by a resident of another state and leased
89.2to a Minnesota-based private or for-hire carrier for regular use in the transportation of
89.3persons or property in interstate commerce provided the vehicle is titled in the state of
89.4the owner or secured party, and that state does not impose a sales tax or sales tax on
89.5motor vehicles used in interstate commerce;
89.6 (6) purchase or use of a motor vehicle by a private nonprofit or public educational
89.7institution for use as an instructional aid in automotive training programs operated by the
89.8institution. "Automotive training programs" includes motor vehicle body and mechanical
89.9repair courses but does not include driver education programs;
89.10 (7) purchase of a motor vehicle for use as an ambulance by an ambulance service
89.11licensed under section144E.10 ;
89.12 (8) purchase of a motor vehicle by or for a public library, as defined in section
89.13134.001, subdivision 2
, as a bookmobile or library delivery vehicle;
89.14 (9) purchase of a ready-mixed concrete truck;
89.15 (10) purchase or use of a motor vehicle by a town for use exclusively for road
89.16maintenance, including snowplows and dump trucks, but not including automobiles,
89.17vans, or pickup trucks;
89.18 (11) purchase or use of a motor vehicle by a corporation, society, association,
89.19foundation, or institution organized and operated exclusively for charitable, religious,
89.20or educational purposes, except a public school, university, or library, but only if the
89.21vehicle is:
89.22 (i) a truck, as defined in section168.011 , a bus, as defined in section
168.011 , or a
89.23passenger automobile, as defined in section168.011 , if the automobile is designed and
89.24used for carrying more than nine persons including the driver; and
89.25 (ii) intended to be used primarily to transport tangible personal property or
89.26individuals, other than employees, to whom the organization provides service in
89.27performing its charitable, religious, or educational purpose;
89.28 (12) purchase of a motor vehicle for use by a transit provider exclusively to provide
89.29transit service is exempt if the transit provider is either (i) receiving financial assistance or
89.30reimbursement under section174.24 or
473.384 , or (ii) operating under section
174.29 ,
89.31473.388
, or
473.405 ;
89.32 (13) purchase or use of a motor vehicle by a qualified business, as defined in section
89.33469.310
, located in a job opportunity building zone, if the motor vehicle is principally
89.34garaged in the job opportunity building zone and is primarily used as part of or in direct
89.35support of the person's operations carried on in the job opportunity building zone. The
89.36exemption under this clause applies to sales, if the purchase was made and delivery
90.1received during the duration of the job opportunity building zone. The exemption under
90.2this clause also applies to any local sales and use tax;
90.3 (14) purchase of a leased vehicle by the lessee who was a participant in a
90.4lease-to-own program from a charitable organization that is:
90.5 (i) described in section 501(c)(3) of the Internal Revenue Code; and
90.6 (ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4.
90.7EFFECTIVE DATE.This section is effective for sales and purchases made after
90.8June 30, 2007.
90.9 Sec. 6. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
90.10chapter 291, article 8, section 22, and Laws 1998, chapter 389, article 8, section 25, and
90.11Laws 2003, First Special Session chapter 21, article 8, section 11, is amended to read:
90.12 Subd. 2. Notwithstanding Minnesota Statutes, Section477A.016 , or any other law,
90.13ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
90.14impose an additional sales tax of up toone and one-half two and one-quarter percent on
90.15sales transactions which are described in Minnesota Statutes 2000, Section297A.01 ,
90.16Subdivision 3, Clause (c). When the city council determines that the taxes imposed
90.17under this subdivision and under Laws 1998, chapter 389, article 8, section 26, at a rate
90.18of one-half of one percent have produced revenue sufficient to pay (1) the debt service
90.19on bonds in a principal amount of $8,000,000 issued for capital improvements to the
90.20Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds
90.21originally issued in the principal amount of $4,970,000 to finance capital improvements
90.22to the Great Lakes Aquarium since the imposition of the taxes at the rate of one and
90.23one-half percent, the rate of the tax under this subdivision is reducedto by one-half of
90.24one percent. The imposition of this tax shall not be subject to voter referendum under
90.25either state law or city charter provisions. When the city council determines that the taxes
90.26imposed under this subdivision at a rate of three-quarters of one percent and other sources
90.27of revenue produce revenue sufficient to pay debt service on bonds in the principal amount
90.28of $37,931,000 plus issuance and discount costs, issued for capital improvements at the
90.29Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
90.30under this subdivision must be reduced by three-quarters of one percent.
90.31EFFECTIVE DATE.This section is effective the day after the governing body of
90.32the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
90.33645.021 , subdivisions 2 and 3.
91.1 Sec. 7. Laws 1987, chapter 168, section 2, is amended to read:
91.2 Sec. 2. LODGING TAX IN TOWNS.
91.3 Notwithstanding Minnesota Statutes, section477A.016 , or other law, the Cook
91.4county board may impose a tax of up to two percent on the gross receipts from the
91.5furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court or
91.6resort, other than the renting or leasing of it for a continuous period of 30 days or more,
91.7located in the towns of Lutsen, Tofte, and Schroeder. The tax may be imposed in one or
91.8more of the towns. The tax may be imposed in a town only with the agreement of the
91.9town expressed by its voters at an annual or special meeting. The tax shall be collected
91.10by and its proceeds paid to the county.The proceeds of the tax shall be dedicated for the
91.11construction, debt service, and maintenance of a public recreational facility within the
91.12towns. The proceeds of the tax must be used to fund a new Cook County Event and
91.13Visitors Bureau.
91.14 Sec. 8. Laws 1993, chapter 375, article 9, section 45, subdivision 2, as amended by
91.15Laws 1997, chapter 231, article 7, section 36, is amended to read:
91.16 Subd. 2. Use of revenues. (a) Revenues received from taxes authorized by
91.17subdivision 1 shall be used by Cook county to pay the cost of collecting the tax and to pay
91.18all or a portion of the costs of expanding and improving the health care facility located
91.19in the county and known as North Shore hospital. Authorized costs include, but are not
91.20limited to, securing or paying debt service on bonds or other obligations issued to finance
91.21the expansion and improvement of North Shore hospital. The total capital expenditures
91.22payable from bond proceeds, excluding investment earnings on bond proceeds and tax
91.23revenues, shall not exceed $4,000,000.
91.24 (b) Additional revenues received from taxes authorized by subdivision 1 may be
91.25used by Cook county to pay all or a portion of the costs of betterment of North Shore
91.26care center and providing additional improvements to North Shore hospital. Authorized
91.27costs include, but are not limited to, securing or paying debt service on bonds or other
91.28obligations issued to finance the remodeling of North Shore care center and additional
91.29improvements to North Shore hospital. The total capital expenditures payable from bond
91.30proceeds, excluding investment earnings on bond proceeds and tax revenues, shall not
91.31exceed $2,200,000.
91.32 (c) If approved by the voters at a special election held before December 31, 2007,
91.33additional revenues received from taxes authorized by subdivision 1 may be used by Cook
91.34County to pay for the following projects:
92.1 (1) construction and improvements to community centers, museums, interpretive
92.2centers, associated trails, and recreation areas, including, but not limited to, improvements
92.3and additions to the skateboard park, hockey rink, ball fields, community center addition,
92.4county parking area, tennis courts, and all associated improvements;
92.5 (2) construction and improvement to the Grand Marais pool;
92.6 (3) construction and improvement to the Grand Marais Public Library; and
92.7 (4) debt service to retire bonds for improvements to the Superior National Golf
92.8Course.
92.9 Authorized expenses include, but are not limited to, paying construction expenses
92.10related to these improvements, and paying debt service on bonds or other obligations
92.11issued to finance acquisition and construction of these improvements.
92.12 Sec. 9. Laws 1993, chapter 375, article 9, section 45, subdivision 3, as amended by
92.13Laws 1997, chapter 231, article 7, section 37, is amended to read:
92.14 Subd. 3. Expiration of taxing authority and expenditure limitation. The
92.15authority granted by subdivision 1 to Cook county to impose a sales tax shall expire
92.16when the principal and interest on any bonds or obligations issued under subdivision 4,
92.17paragraph (a),to finance the expansion and improvement of North Shore hospital described
92.18in subdivision 2, paragraph (a),have been paid, or at an earlier time as the county shall, by
92.19resolution, determine when the county determines that the amount of revenues received is
92.20sufficient to pay for the principal and interest on any bonds or obligations issued to finance
92.21the projects in subdivision 2. Any funds remaining after completion of the improvements
92.22and retirement or redemption of the bonds may be placed in the general fund of the county.
92.23 Sec. 10. Laws 1993, chapter 375, article 9, section 45, subdivision 4, as amended by
92.24Laws 1997, chapter 231, article 7, section 38, is amended to read:
92.25 Subd. 4. Bonds. (a) Cook county may issue general obligation bonds in an amount
92.26not to exceed $4,000,000 for the expansion and improvement of North Shore hospital.
92.27 (b) Additionally, Cook county may issue general obligation bonds in an amount
92.28not to exceed $2,200,000 for the betterment of North Shore care center and additional
92.29improvements to North Shore hospital.
92.30 (c) The bonds may be issued without election under Minnesota Statutes, chapter
92.31475, on the question of issuance of the bonds or a property tax to pay them. The debt
92.32represented by the bonds shall not be included in computing any debt limitations applicable
92.33to Cook county, and the levy of taxes required by Minnesota Statutes, section475.61 , to
93.1pay principal of and interest on the bonds shall not be subject to any levy limitation or be
93.2included in computing or applying any levy limitation applicable to the county.
93.3 (d) Cook County may issue bonds under Minnesota Statutes, chapter 475, to pay
93.4capital and administrative expenses for the improvements authorized in subdivision 2,
93.5paragraph (c), in an amount that does not exceed $14,000,000. An election to approve the
93.6bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds
93.7under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61.
93.8The debt represented by the bonds is not included in computing any debt limitation
93.9applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61,
93.10to pay principal and interest on the bonds is not subject to any levy limitation.
93.11 Sec. 11. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to
93.12read:
93.13 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
93.14297A.48, subdivision 1a
,
477A.016 , or any other provision of law, ordinance, or city
93.15charter, if approved by the city voters at the first municipal general election held after the
93.16date of final enactment of this act or at a special election held November 2, 1999, the city
93.17of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent
93.18for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section
93.19297A.48 297A.99
, govern the imposition, administration, collection, and enforcement of
93.20the tax authorized under this subdivision.
93.21 Sec. 12. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to
93.22read:
93.23 Subd. 3. Use of revenues. (a) Revenues received from taxes authorized by
93.24subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to
93.25pay for construction and improvement of the following city facilities:
93.26 (1) streets; and
93.27 (2) constructing and equipping the Proctor community activity center.
93.28 Authorized expenses include, but are not limited to, acquiring property, paying
93.29construction and operating expenses related to the development of an authorized facility,
93.30and paying debt service on bonds or other obligations, including lease obligations, issued
93.31to finance the construction, expansion, or improvement of an authorized facility. The
93.32capital expenses for all projects authorized under this paragraph that may be paid with
93.33these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance
93.34of the bonds.
94.1 (b) Additional revenues received from taxes authorized by subdivision 1, may be
94.2used by the city to pay for the following capital improvement projects: public utilities,
94.3including water, sanitary sewer, storm sewer, and electric; bikeways and trails; and parks
94.4and recreation.
94.5EFFECTIVE DATE.This section is effective the day following final enactment,
94.6upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
94.7subdivision 3.
94.8 Sec. 13. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to
94.9read:
94.10 Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
94.11Statutes, chapter 475, to finance the capital expenditure and improvement projects
94.12described in subdivision 3. An election to approve the bonds under Minnesota Statutes,
94.13section475.58 , is not required.
94.14 (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
94.15sections275.60 and
279.61 275.61
94.16 (c) The bonds are not included in computing any debt limitation applicable to the
94.17city, and the levy of taxes under Minnesota Statutes, section475.61 , to pay principal of
94.18and interest on the bonds is not subject to any levy limitation.
94.19 (d) For projects described in subdivision 3, paragraph (a), the aggregate principal
94.20amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital
94.21expenditures and improvements, may not exceed $3,600,000, plus an amount equal to
94.22the costs related to issuance of the bonds, including interest on the bonds. For projects
94.23described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may
94.24not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds,
94.25including interest on the bonds.
94.26 (e) The sales and use and excise taxes authorized in this section may be pledged to
94.27and used for the payment of the bonds and any bonds issued to refund them only if the
94.28bonds and any refunding bonds are general obligations of the city.
94.29EFFECTIVE DATE.This section is effective the day following final enactment,
94.30upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
94.31subdivision 3.
94.32 Sec. 14. Laws 2005, First Special Session chapter 3, article 5, section 39, is amended
94.33to read:
95.1 Sec. 39. CITY OF BEMIDJI.
95.2 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
95.3section477A.016 , or any other provision of law, ordinance, or city charter, pursuant to the
95.4approval of the city voters at the general election held on November 5, 2002, and at the
95.5general election held November 7, 2006, the city of Bemidji may impose by ordinance
95.6a sales and use tax of one-half of one percent for the purposes specified in subdivision
95.72. The provisions of Minnesota Statutes, section297A.99 , govern the imposition,
95.8administration, collection, and enforcement of the tax authorized under this subdivision.
95.9 Subd. 2. Use of revenues. Revenues received from the tax authorized by
95.10subdivision 1 must be used for the cost of collecting and administering the tax and to pay
95.11for the projects listed in this subdivision:
95.12 (1) To pay all or part of the capital or administrative costs of the acquisition,
95.13construction, and improvement of parks and trails within the city, as provided for in the
95.14city of Bemidji's parks, open space, and trail system plan, adopted by the Bemidji City
95.15Council on November 21, 2001. Authorized expenses include, but are not limited to,
95.16acquiring property, paying construction expenses related to the development of these
95.17facilities and improvements, and securing and paying debt service on bonds or other
95.18obligations issued to finance acquisition, construction, improvement, or development of
95.19parks and trails within the city of Bemidji.
95.20 (2) To pay all or part of the city's share of costs for acquisition, design, and
95.21construction of a regional event center, not to exceed $40,000,000 plus any associated
95.22bond costs. Authorized expenses include, but are not limited to, acquiring property,
95.23paying demolition and construction expenses, improving associated infrastructure, and
95.24purchasing furniture, fixtures, and equipment for the regional event center, and securing
95.25and paying debt service on bonds or other obligations issued to finance the regional event
95.26center project.
95.27 Subd. 3. Bonds. (a) Pursuant to the approval of the city voters at the general
95.28election held on November 5, 2002, the city of Bemidji may issue, without an additional
95.29election, general obligation bonds of the city in an amount not to exceed $9,826,000 to
95.30pay capital and administrative expenses for the acquisition, construction, improvement,
95.31and development of parks and trails as specified in subdivision 2. The debt represented by
95.32the bonds must not be included in computing any debt limitations applicable to the city,
95.33and the levy of taxes required by Minnesota Statutes, section475.61 , to pay the principal
95.34of any interest on the bonds must not be subject to any levy limitations or be included in
95.35computing or applying any levy limitation applicable to the city.
96.1 (b) Pursuant to the approval of the city voters at the general election held on
96.2November 7, 2006, the city of Bemidji may issue, without an additional election, general
96.3obligation bonds of the city in an amount not to exceed $40,000,000 to pay capital and
96.4administrative expenses for the acquisition, construction, improvement, and development
96.5of the regional event center specified in subdivision 2. The debt represented by the bonds
96.6must not be included in computing any debt limitations applicable to the city, and the levy
96.7of taxes required by Minnesota Statutes, section475.61 , to pay the principal of any interest
96.8on the bonds must not be subject to any levy limitations or be included in computing or
96.9applying any levy limitation applicable to the city.
96.10 Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires
96.11when the Bemidji City Council determines that the amount described in subdivision 3,
96.12paragraph (a), has been received from the tax to finance the capital and administrative
96.13costs for acquisition, construction, improvement, and development of parks and trails and
96.14to repay or retire at maturity the principal, interest, and premium due on any bonds issued
96.15for the park and trail improvements under subdivision 3, paragraph (a), plus the earlier
96.16of (1) 30 years, or (2) when the city council first determines that the additional revenues
96.17received from the extension of the tax equals or exceeds the amount authorized to be spent
96.18for the regional event center under subdivision 2, clause (2). Any funds remaining after
96.19completion of thepark and trail improvements authorized projects and retirement or
96.20redemption of the bonds may be placed in the general fund of the city. The tax imposed
96.21under subdivision 1 may expire at an earlier time if the city so determines by ordinance.
96.22EFFECTIVE DATE.This section is effective the day after compliance by the
96.23governing body of the city of Bemidji and its chief clerical officer with Minnesota
96.24Statutes, section 645.021, subdivisions 2 and 3.
96.25 Sec. 15. CITY OF CLEARWATER; TAXES AUTHORIZED.
96.26 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
96.27477A.016, or any other provision of law, ordinance, or city charter, pursuant to the
96.28approval of the voters on November 7, 2006, the city of Clearwater may impose by
96.29ordinance a sales and use tax of up to one-half of one percent for the purposes specified in
96.30subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota
96.31Statutes, section 297A.99, govern the imposition, administration, collection, and
96.32enforcement of the tax authorized under this subdivision.
96.33 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
96.34477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater
96.35may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
97.1to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
97.2engaged within the city in the business of selling motor vehicles at retail.
97.3 Subd. 3. Use of revenues. The proceeds of the tax imposed under this section shall
97.4be used to pay for the costs of acquisition, construction, improvement, and development
97.5of a pedestrian bridge, and land and buildings for a community and recreation center.
97.6 Subd. 4. Bonding authority. The city of Clearwater may issue bonds in an amount
97.7not to exceed $12,000,000 under Minnesota Statutes, chapter 475, to finance the capital
97.8expenditures and improvements authorized by the referendum under subdivision 3. An
97.9election to approve the bonds under Minnesota Statutes, section 475.59, is not required.
97.10The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section
97.11275.60 or 275.61. The debt represented by the bonds must not be included in computing
97.12any debt limitations applicable to the city, and the levy of taxes required by Minnesota
97.13Statutes, section 475.61, to pay the principal or any interest on the bonds must not be
97.14subject to any levy limitation.
97.15 Subd. 5. Termination of tax. The tax authorized under subdivision 1 terminates at
97.16the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the
97.17city council determines that sufficient funds have been raised from the tax to finance the
97.18capital and administrative costs of the improvements described in subdivision 3, plus the
97.19additional amount needed to pay the costs related to issuance of bonds under subdivision
97.204, including interest on the bonds. Any funds remaining after completion of the projects
97.21specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may
97.22be placed in the general fund of the city. The tax imposed under subdivision 1 may expire
97.23at an earlier time if the city so determines by ordinance.
97.24EFFECTIVE DATE.This section is effective the day after compliance by the
97.25governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
97.26subdivisions 2 and 3.
97.27 Sec. 16. COOK COUNTY; LODGING AND ADMISSIONS TAXES.
97.28 Subdivision 1. Lodging tax. Notwithstanding Minnesota Statutes, section
97.29477A.016, or any other provision of law, ordinance, or city charter, the Board of
97.30Commissioners of Cook County may impose, by ordinance, a tax of up to one percent on
97.31the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190.
97.32This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and
97.33the total tax imposed under that section and this provision must not exceed four percent.
97.34 Subd. 2. Admissions and recreation tax. Notwithstanding Minnesota Statutes,
97.35section 477A.016, or any other provision of law, ordinance, or city charter, the Board of
98.1Commissioners of Cook County may impose, by ordinance, a tax of up to three percent on
98.2admissions to entertainment and recreational facilities and rental of recreation equipment.
98.3 In its ordinance, the Board of Commissioners of Cook County may provide that
98.4entities exempt from the tax imposed under Minnesota Statutes, section 297A.70, are
98.5not required to collect the taxes in subdivisions 1 and 2. The Board of Commissioners
98.6of Cook County may also create lodging districts smaller than the county in which to
98.7impose the tax.
98.8 Subd. 3. Use of taxes. The taxes imposed in subdivisions 1 and 2 must be used
98.9to fund a new Cook County Event and Visitors Bureau as established by the Board of
98.10Commissioners of Cook County. The Board of Commissioners of Cook County must
98.11annually review the budget of the Cook County Event and Visitors Bureau.
98.12 Subd. 4. Termination of taxes. The taxes authorized under subdivisions 1 and 2
98.13terminate ten years after the date of initial imposition of the taxes.
98.14 Subd. 5. Cook County Event and Visitors Bureau. (a) The Cook County Event
98.15and Visitors Bureau shall be governed by a 14-member board of directors composed of:
98.16 (1) four directors to be appointed by the Grand Marais Area Tourism Association;
98.17 (2) two directors to be appointed by the Gunflint Trail Association;
98.18 (3) seven directors to be appointed by the Lutsen-Tofte Tourism Association; and
98.19 (4) one nonvoting member appointed by Grand Portage.
98.20 (b) The Cook County Event and Visitors Bureau may adjust its membership upon a
98.21vote of approval by at least nine members.
98.22EFFECTIVE DATE.This section is effective for sales and purchases after June
98.2330, 2007.
98.24 Sec. 17. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
98.25 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
98.26section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
98.27the approval of the voters on November 7, 2006, the city of North Mankato may impose
98.28by ordinance a sales and use tax of one-half of one percent for the purposes specified
98.29in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the
98.30imposition, administration, collection, and enforcement of the taxes authorized under
98.31this subdivision.
98.32 Subd. 2. Use of revenues. Revenues received from the tax authorized by
98.33subdivision 1 must be used to pay all or part of the capital costs of the following projects:
98.34 (1) the local share of the Trunk Highway 14/County State Aid Highway 41
98.35interchange project;
99.1 (2) development of regional parks and hiking and biking trails; and
99.2 (3) lake improvement projects.
99.3 The total amount of revenues from the tax in subdivision 1 that may be used to fund
99.4these projects is $4,500,000 plus any associated bond costs.
99.5 Subd. 3. Bonds. (a) The city of North Mankato, pursuant to the approval of the
99.6voters at the November 7, 2006, referendum authorizing the imposition of the taxes in
99.7this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
99.8administrative expenses for the projects described in subdivision 2, in an amount that
99.9does not exceed $4,500,000. A separate election to approve the bonds under Minnesota
99.10Statutes, section 475.58, is not required.
99.11 (b) The debt represented by the bonds is not included in computing any debt
99.12limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
99.13475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
99.14 Subd. 4. Termination of taxes. The tax imposed under subdivision 1 expires
99.15when the city council determines that the amount of revenues received from the taxes
99.16to pay for the projects under subdivision 2, first equals or exceeds $4,000,000 plus the
99.17additional amount needed to pay the costs related to issuance of bonds under subdivision
99.183, including interest on the bonds. Any funds remaining after completion of the projects
99.19and retirement or redemption of the bonds shall be placed in a capital facilities and
99.20equipment replacement fund of the city. The tax imposed under subdivision 1 may expire
99.21at an earlier time if the city so determines by ordinance.
99.22EFFECTIVE DATE.This section is effective the day after compliance by the
99.23governing body of the city of North Mankato with Minnesota Statutes, section 645.021,
99.24subdivision 3.
99.25 Sec. 18. MINNETONKA WATER TREATMENT FACILITY.
99.26 Capital equipment used in or incorporated into the construction of a water treatment
99.27facility owned by the city of Minnetonka is exempt from sales tax regardless of whether
99.28purchased by the owner, contractor, subcontractor, or builder. The tax must be imposed
99.29and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1,
99.30applied and then refunded to the city of Minnetonka in the manner provided in Minnesota
99.31Statutes, section 297A.75.
99.32EFFECTIVE DATE.This section is effective for sales and purchases made before
99.33December 31, 2006.
100.3 Section 1. Minnesota Statutes 2006, section 268.19, subdivision 1, is amended to read:
100.4 Subdivision 1. Use of data. (a) Except as otherwise provided by this section, data
100.5gathered from any person pursuant to the administration of the Minnesota Unemployment
100.6Insurance Law are private data on individuals or nonpublic data not on individuals as
100.7defined in section13.02, subdivisions 9 and 12 , and may not be disclosed except pursuant
100.8to a district court order or section13.05 . A subpoena shall not be considered a district
100.9court order. These data may be disseminated to and used by the following agencies
100.10without the consent of the subject of the data:
100.11 (1) state and federal agencies specifically authorized access to the data by state
100.12or federal law;
100.13 (2) any agency of any other state or any federal agency charged with the
100.14administration of an unemployment insurance program;
100.15 (3) any agency responsible for the maintenance of a system of public employment
100.16offices for the purpose of assisting individuals in obtaining employment;
100.17 (4) human rights agencies within Minnesota that have enforcement powers;
100.18 (5) the Department of Revenue only to the extent necessary for its duties under
100.19Minnesota laws;
100.20 (6) public and private agencies responsible for administering publicly financed
100.21assistance programs for the purpose of monitoring the eligibility of the program's
100.22recipients;
100.23 (7) the Department of Labor and Industry and the Division of Insurance Fraud
100.24Prevention in the Department of Commerce on an interchangeable basis with the
100.25department for uses consistent with the administration of their duties under Minnesota law;
100.26 (8) local and state welfare agencies for monitoring the eligibility of the data subject
100.27for assistance programs, or for any employment or training program administered by those
100.28agencies, whether alone, in combination with another welfare agency, or in conjunction
100.29with the department or to monitor and evaluate the statewide Minnesota family investment
100.30program by providing data on recipients and former recipients of food stamps or food
100.31support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
100.32under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;
100.33 (9) local and state welfare agencies for the purpose of identifying employment,
100.34wages, and other information to assist in the collection of an overpayment debt in an
100.35assistance program;
101.1 (10) local, state, and federal law enforcement agencies for the sole purpose of
101.2ascertaining the last known address and employment location of a person who is the
101.3subject of a criminal investigation;
101.4 (11) the federal Immigration and Naturalization Service shall have access to data on
101.5specific individuals and specific employers provided the specific individual or specific
101.6employer is the subject of an investigation by that agency;and
101.7 (12) the Department of Health solely for the purposes of epidemiologic
101.8investigations.; and
101.9 (13) the state auditor to the extent necessary to conduct audits of job opportunity
101.10building zones as required under section 469.3201.
101.11 (b) Data on individuals and employers that are collected, maintained, or used by the
101.12department in an investigation pursuant to section268.182 are confidential as to data on
101.13individuals and protected nonpublic data not on individuals as defined in section13.02,
101.14subdivisions 3 and 13 , and must not be disclosed except pursuant to statute or district
101.15court order or to a party named in a criminal proceeding, administrative or judicial, for
101.16preparation of a defense.
101.17 (c) Data gathered by the department pursuant to the administration of the Minnesota
101.18unemployment insurance program must not be made the subject or the basis for any
101.19suit in any civil proceedings, administrative or judicial, unless the action is initiated by
101.20the department.
101.21EFFECTIVE DATE.This section is effective the day following final enactment.
101.22 Sec. 2. Minnesota Statutes 2006, section 270B.15, is amended to read:
101.23270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE
101.24AUDITOR.
101.25 (a) Returns and return information must be disclosed to the legislative auditor to the
101.26extent necessary for the legislative auditor to carry out sections3.97 to
3.979 .
101.27 (b) The commissioner must disclose return information, including the report
101.28required under section 289A.12, subdivision 15, to the state auditor to the extent necessary
101.29to conduct audits of job opportunity building zones as required under section 469.3201.
101.30EFFECTIVE DATE.This section is effective the day following final enactment.
101.31 Sec. 3. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
101.32 Subd. 64. Job opportunity building zone property. (a) Improvements to real
101.33property, and personal property, classified under section273.13, subdivision 24 , and
102.1located within a job opportunity building zone, designated under section469.314 , are
102.2exempt from ad valorem taxes levied under chapter 275.
102.3 (b) Improvements to real property, and tangible personal property, of an agricultural
102.4production facility located within an agricultural processing facility zone, designated
102.5under section469.314 , is exempt from ad valorem taxes levied under chapter 275.
102.6 (c) For property to qualify for exemption under paragraph (a), the occupant must be
102.7a qualified business, as defined in section469.310 .
102.8 (d) The exemption applies beginning for the first assessment year after designation
102.9of the job opportunity building zone by the commissioner of employment and economic
102.10development. The exemption applies to each assessment year that begins during the
102.11duration of the job opportunity building zone. To be exempt, the property must be
102.12occupied by July 1 of the assessment year by a qualified business that has signed the
102.13business subsidy agreement and relocation agreement, if required, by July 1 of the
102.14assessment year. This exemption does not apply to:
102.15 (1) the levy under section475.61 or similar levy provisions under any other law to
102.16pay general obligation bonds; or
102.17 (2) a levy under section126C.17 , if the levy was approved by the voters before the
102.18designation of the job opportunity building zone.
102.19EFFECTIVE DATE.This section is effective beginning for taxes payable in 2008.
102.20 Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
102.21to read:
102.22 Subd. 85. Fergus Falls historical zone. (a) Property located in the area of the
102.23campus of the former state regional treatment center in the city of Fergus Falls, including
102.24the five buildings and associated land that were acquired by the city prior to January 1,
102.252007, is exempt from ad valorem taxes levied under chapter 275.
102.26 (b) The exemption applies for 15 calendar years on the date specified by resolution,
102.27by the governing body of the city of Fergus Falls. For the final three assessment years
102.28of the duration limit, the exemption applies to the following percentages of estimated
102.29market value of the property:
102.30 (1) for the third to the last assessment year of the duration, 75 percent;
102.31 (2) for the second to the last assessment year of the duration, 50 percent; and
102.32 (3) for the last assessment year of the duration, 25 percent.
102.33EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
102.34payable in 2008, and thereafter.
103.1 Sec. 5. Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision
103.2to read:
103.3 Subd. 15. Report of job opportunity zone benefits; penalty for failure to file
103.4report. (a) By October 15 of each year, every qualified business, as defined under section
103.5469.310, subdivision 11, must file with the commissioner, on a form prescribed by the
103.6commissioner, a report listing the tax benefits under section 469.315 received by the
103.7business for the previous year.
103.8 (b) The commissioner shall send notice to each business that fails to timely submit
103.9the report required under paragraph (a). The notice shall demand that the business submit
103.10the report within 60 days. Where good cause exists, the commissioner may extend
103.11the period for submitting the report as long as a request for extension is filed by the
103.12business before the expiration of the 60-day period. The commissioner shall notify the
103.13commissioner of the Department of Employment and Economic Development and the
103.14appropriate job opportunity subzone administrator whenever notice is sent to a business
103.15under this paragraph.
103.16 (c) A business that fails to submit the report as required under paragraph (b) is no
103.17longer a qualified business under section 469.310, subdivision 11, and is subject to the
103.18repayment provisions of section 469.319.
103.19EFFECTIVE DATE.This section is effective beginning with reports required to be
103.20filed October 15, 2008.
103.21 Sec. 6. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
103.22to read:
103.23 Subd. 34. Tax-free renaissance zone; historic rehabilitation credit. (a) A
103.24taxpayer who incurs costs that are eligible for a credit under section 47 of the Internal
103.25Revenue Code for the rehabilitation of a property in the Fergus Falls historical zone, as
103.26defined under section 272.02, subdivision 85, is allowed a credit against the tax imposed
103.27under this chapter, including the taxes under sections 290.091 and 290.0922, equal to 100
103.28percent of the credit allowed for rehabilitation of a certified historic structure under section
103.2947(a)(2) of the Internal Revenue Code, but is limited to credits generated by rehabilitation
103.30of certified historic structures that are placed in service during the taxable year.
103.31 (b) If the amount of the credit under this subdivision exceeds the tax liability under
103.32this chapter for the year in which the cost is incurred, the amount that exceeds the tax
103.33liability may be carried back to any of the three preceding taxable years or carried forward
103.34to each of the ten taxable years succeeding the taxable year in which the expense was
103.35incurred. The entire amount of the credit must be carried to the earliest taxable year to
104.1which the amount may be carried. The unused portion of the credit must be carried to
104.2the following taxable year.
104.3EFFECTIVE DATE.This section is effective for taxable years beginning after
104.4December 31, 2007.
104.5 Sec. 7. Minnesota Statutes 2006, section 469.169, is amended by adding a subdivision
104.6to read:
104.7 Subd. 18. Additional border city allocations; 2007. (a) In addition to tax
104.8reductions authorized in subdivisions 7 to 17, the commissioner shall allocate $750,000
104.9for tax reductions to border city enterprise zones in cities located on the western border
104.10of the state. The commissioner shall make allocations to zones in cities on the western
104.11border on a per capita basis. Allocations made under this subdivision may be used for
104.12tax reductions as provided in section 469.171, or for other offsets of taxes imposed on
104.13or remitted by businesses located in the enterprise zone, but only if the municipality
104.14determines that the granting of the tax reduction or offset is necessary in order to retain a
104.15business within or attract a business to the zone. The city alternatively may elect to use
104.16any portion of the allocation provided in this paragraph for tax reductions under section
104.17469.1732 or 469.1734.
104.18 (b) The commissioner shall allocate $750,000 for tax reductions under section
104.19469.1732 or 469.1734 to cities with border city enterprise zones located on the western
104.20border of the state. The commissioner shall allocate this amount among the cities on a per
104.21capita basis. The city alternatively may elect to use any portion of the allocation provided
104.22in this paragraph for tax reductions as provided in section 469.171.
104.23EFFECTIVE DATE.This section is effective the day following final enactment.
104.24 Sec. 8. Minnesota Statutes 2006, section 469.174, subdivision 10, is amended to read:
104.25 Subd. 10. Redevelopment district. (a) "Redevelopment district" means a type of
104.26tax increment financing district consisting of a project, or portions of a project, within
104.27which the authority finds by resolution that one or more of the following conditions,
104.28reasonably distributed throughout the district, exists:
104.29 (1) parcels consisting of 70 percent of the area of the district are occupied by
104.30buildings, streets, utilities, paved or gravel parking lots, or other similar structures
104.31and more than 50 percent of the buildings, not including outbuildings, are structurally
104.32substandard to a degree requiring substantial renovation or clearance;
105.1 (2) the property consists of vacant, unused, underused, inappropriately used,
105.2or infrequently used railyards, rail storage facilities, or excessive or vacated railroad
105.3rights-of-way;
105.4 (3) tank facilities, or property whose immediately previous use was for tank
105.5facilities, as defined in section115C.02, subdivision 15 , if the tank facilities:
105.6 (i) have or had a capacity of more than 1,000,000 gallons;
105.7 (ii) are located adjacent to rail facilities; and
105.8 (iii) have been removed or are unused, underused, inappropriately used, or
105.9infrequently used; or
105.10 (4) a qualifying disaster area, as defined in subdivision 10b.
105.11 (b) For purposes of this subdivision, "structurally substandard" shall mean
105.12containing defects in structural elements or a combination of deficiencies in essential
105.13utilities and facilities, light and ventilation, fire protection including adequate egress,
105.14layout and condition of interior partitions, or similar factors, which defects or deficiencies
105.15are of sufficient total significance to justify substantial renovation or clearance.
105.16 (c) A building is not structurally substandard if it is in compliance with the building
105.17code applicable to new buildings or could be modified to satisfy the building code at
105.18a cost of less than 15 percent of the cost of constructing a new structure of the same
105.19square footage and type on the site. The municipality may find that a building is not
105.20disqualified as structurally substandard under the preceding sentence on the basis of
105.21reasonably available evidence, such as the size, type, and age of the building, the average
105.22cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. The
105.23municipality may not make such a determination without an interior inspection of the
105.24property, but need not have an independent, expert appraisal prepared of the cost of repair
105.25and rehabilitation of the building. An interior inspection of the property is not required,
105.26if the municipality finds that (1) the municipality or authority is unable to gain access to
105.27the property after using its best efforts to obtain permission from the party that owns or
105.28controls the property; and (2) the evidence otherwise supports a reasonable conclusion that
105.29the building is structurally substandard. Items of evidence that support such a conclusion
105.30include recent fire or police inspections, on-site property tax appraisals or housing
105.31inspections, exterior evidence of deterioration, or other similar reliable evidence. Written
105.32documentation of the findings and reasons why an interior inspection was not conducted
105.33must be made and retained under section469.175, subdivision 3 , clause (1). Failure of a
105.34building to be disqualified under the provisions of this paragraph is a necessary, but not a
105.35sufficient, condition to determining that the building is substandard.
106.1 (d) A parcel is deemed to be occupied by a structurally substandard building
106.2for purposes of the finding under paragraph (a) or by the improvements described in
106.3paragraph (e) if all of the following conditions are met:
106.4 (1) the parcel was occupied by a substandard building or met the requirements
106.5of paragraph (e), as the case may be, within three years of the filing of the request for
106.6certification of the parcel as part of the district with the county auditor;
106.7 (2) the substandard buildingwas or the improvements described in paragraph (e)
106.8were demolished or removed by the authority or the demolition or removal was financed
106.9by the authority or was done by a developer under a development agreement with the
106.10authority;
106.11 (3) the authority found by resolution before the demolition or removal that the
106.12parcel was occupied by a structurally substandard building or met the requirements of
106.13paragraph (e) and that after demolition and clearance the authority intended to include
106.14the parcel within a district; and
106.15 (4) upon filing the request for certification of the tax capacity of the parcel as part
106.16of a district, the authority notifies the county auditor that the original tax capacity of the
106.17parcel must be adjusted as provided by section469.177, subdivision 1 , paragraph (f).
106.18 (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets,
106.19utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the
106.20area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or
106.21other similar structures.
106.22 (f) For districts consisting of two or more noncontiguous areas, each area must
106.23qualify as a redevelopment district under paragraph (a) to be included in the district, and
106.24the entire area of the district must satisfy paragraph (a).
106.25EFFECTIVE DATE.This section is effective for requests for certification made
106.26after June 30, 2007.
106.27 Sec. 9. Minnesota Statutes 2006, section 469.174, subdivision 10a, is amended to read:
106.28 Subd. 10a. Renewal and renovation district. (a) "Renewal and renovation district"
106.29means a type of tax increment financing district consisting of a project, or portions of a
106.30project, within which the authority finds by resolution that:
106.31 (1)(i) parcels consisting of 70 percent of the area of the district are occupied by
106.32buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii)
106.3320 percent of the buildings are structurally substandard; and (iii) 30 percent of the other
106.34buildings require substantial renovation or clearance to remove existing conditions such
106.35as: inadequate street layout, incompatible uses or land use relationships, overcrowding of
107.1buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for
107.2improvement or conversion, or other identified hazards to the health, safety, and general
107.3well-being of the community; and
107.4 (2) the conditions described in clause (1) are reasonably distributed throughout the
107.5geographic area of the district.
107.6 (b) For purposes of determining whether a building is structurally substandard,
107.7whether parcels are occupied by buildings, streets, utilities, paved or gravel parking lots,
107.8or other similar structures, or whether noncontiguous areas qualify, the provisions of
107.9subdivision 10, paragraphs(c), (e), and (b) through (f) apply.
107.10EFFECTIVE DATE.This section is effective for requests for certification made
107.11after June 30, 2007.
107.12 Sec. 10. Minnesota Statutes 2006, section 469.175, subdivision 1, is amended to read:
107.13 Subdivision 1. Tax increment financing plan. (a) A tax increment financing plan
107.14shall contain:
107.15 (1) a statement of objectives of an authority for the improvement of a project;
107.16 (2) a statement as to the development program for the project, including the property
107.17within the project, if any, that the authority intends to acquire, identified by parcel number,
107.18identifiable property name, block, or other appropriate means indicating the area in which
107.19the authority intends to acquire properties;
107.20 (3) a list of any development activities that the plan proposes to take place within
107.21the project, for which contracts have been entered into at the time of the preparation of
107.22the plan, including the names of the parties to the contract, the activity governed by the
107.23contract, the cost stated in the contract, and the expected date of completion of that activity;
107.24 (4) identification or description of the type of any other specific development
107.25reasonably expected to take place within the project, and the date when the development is
107.26likely to occur;
107.27 (5) estimates of the following:
107.28 (i) cost of the project, including administrative expenses, except that if part of the
107.29cost of the project is paid or financed with increment from the tax increment financing
107.30district, the tax increment financing plan for the district must contain an estimate of the
107.31amount of the cost of the project, including administrative expenses, that will be paid or
107.32financed with tax increments from the district;
107.33 (ii) amount of bonded indebtedness to be incurred;
107.34 (iii) sources of revenue to finance or otherwise pay public costs;
108.1 (iv) the most recent net tax capacity of taxable real property within the tax increment
108.2financing district and within any subdistrict;
108.3 (v) the estimated captured net tax capacity of the tax increment financing district
108.4at completion; and
108.5 (vi) the duration of the tax increment financing district's and any subdistrict's
108.6existence;
108.7 (6) statements of the authority's alternate estimates of the impact of tax increment
108.8financing on the net tax capacities of all taxing jurisdictions in which the tax increment
108.9financing district is located in whole or in part. For purposes of one statement, the
108.10authority shall assume that the estimated captured net tax capacity would be available to
108.11the taxing jurisdictions without creation of the district, and for purposes of the second
108.12statement, the authority shall assume that none of the estimated captured net tax capacity
108.13would be available to the taxing jurisdictions without creation of the district or subdistrict;
108.14 (7) identification and description of studies and analyses used to make the
108.15determination set forth in subdivision 3, clause (2); and
108.16 (8) identification of all parcels to be included in the district or any subdistrict.
108.17 (b) The authority may specify in the tax increment financing plan the first year in
108.18which it elects to receive increment, up to four years following the year of approval of the
108.19district. This paragraph does not apply to an economic development district.
108.20EFFECTIVE DATE.This section is effective for districts for which the request for
108.21certification is made after June 30, 2007.
108.22 Sec. 11. Minnesota Statutes 2006, section 469.175, subdivision 3, is amended to read:
108.23 Subd. 3. Municipality approval. (a) A county auditor shall not certify the original
108.24net tax capacity of a tax increment financing district until the tax increment financing plan
108.25proposed for that district has been approved by the municipality in which the district
108.26is located. If an authority that proposes to establish a tax increment financing district
108.27and the municipality are not the same, the authority shall apply to the municipality in
108.28which the district is proposed to be located and shall obtain the approval of its tax
108.29increment financing plan by the municipality before the authority may use tax increment
108.30financing. The municipality shall approve the tax increment financing plan only after a
108.31public hearing thereon after published notice in a newspaper of general circulation in the
108.32municipality at least once not less than ten days nor more than 30 days prior to the date
108.33of the hearing. The published notice must include a map of the area of the district from
108.34which increments may be collected and, if the project area includes additional area, a map
108.35of the project area in which the increments may be expended. The hearing may be held
109.1before or after the approval or creation of the project or it may be held in conjunction with
109.2a hearing to approve the project.
109.3 (b) Before or at the time of approval of the tax increment financing plan, the
109.4municipality shall make the following findings, and shall set forth in writing the reasons
109.5and supporting facts for each determination:
109.6 (1) that the proposed tax increment financing district is a redevelopment district, a
109.7renewal or renovation district, a housing district, a soils condition district, or an economic
109.8development district; if the proposed district is a redevelopment district or a renewal or
109.9renovation district, the reasons and supporting facts for the determination that the district
109.10meets the criteria of section469.174, subdivision 10 , paragraph (a), clauses (1) and (2), or
109.11subdivision 10a, must be documented in writing and retained and made available to the
109.12public by the authority until the district has been terminated;
109.13 (2) that, in the opinion of the municipality:
109.14 (i) the proposed development or redevelopment would not reasonably be expected to
109.15occur solely through private investment within the reasonably foreseeable future; and
109.16 (ii) the increased market value of the site that could reasonably be expected to
109.17occur without the use of tax increment financing would be less than the increase in the
109.18market value estimated to result from the proposed development after subtracting the
109.19present value of the projected tax increments for the maximum duration of the district
109.20permitted by the plan. The requirements of this item do not apply if the district is a
109.21qualified housing district;
109.22 (3) that the tax increment financing plan conforms to the general plan for the
109.23development or redevelopment of the municipality as a whole;
109.24 (4) that the tax increment financing plan will afford maximum opportunity,
109.25consistent with the sound needs of the municipality as a whole, for the development or
109.26redevelopment of the project by private enterprise;
109.27 (5) that the municipality elects the method of tax increment computation set forth in
109.28section469.177, subdivision 3, paragraph (b) , if applicable.
109.29 (c) When the municipality and the authority are not the same, the municipality shall
109.30approve or disapprove the tax increment financing plan within 60 days of submission by
109.31the authority. When the municipality and the authority are not the same, the municipality
109.32may not amend or modify a tax increment financing plan except as proposed by the
109.33authority pursuant to subdivision 4. Once approved, the determination of the authority
109.34to undertake the project through the use of tax increment financing and the resolution of
109.35the governing body shall be conclusive of the findings therein and of the public need for
109.36the financing.
110.1 (d) For a district that is subject to the requirements of paragraph (b), clause (2),
110.2item (ii), the municipality's statement of reasons and supporting facts must include all of
110.3the following:
110.4 (1) an estimate of the amount by which the market value of the site will increase
110.5without the use of tax increment financing;
110.6 (2) an estimate of the increase in the market value that will result from the
110.7development or redevelopment to be assisted with tax increment financing; and
110.8 (3) the present value of the projected tax increments for the maximum duration of
110.9the district permitted by the tax increment financing plan.
110.10 (e) For purposes of this subdivision, "site" means the parcels on which the
110.11development or redevelopment to be assisted with tax increment financing will be located.
110.12EFFECTIVE DATE.This section is effective the day following final enactment
110.13and applies to all districts, regardless of when the request for certification was made.
110.14 Sec. 12. Minnesota Statutes 2006, section 469.176, subdivision 1, is amended to read:
110.15 Subdivision 1. Duration of tax increment financing districts. (a) Subject to the
110.16limitations contained in subdivisions 1a to 1f, any tax increment financing district as to
110.17which bonds are outstanding, payment for which the tax increment and other revenues
110.18have been pledged, shall remain in existence at least as long as the bonds continue to be
110.19outstanding. The municipality may, at the time of approval of the initial tax increment
110.20financing plan, provide for one or both of the following:
110.21 (1) a shorter maximum duration limit than specified in subdivisions 1a to 1f.;
110.22 (2) an election as provided under section 469.175, subdivision 1, paragraph (b).
110.23The specified limit applies in place of the otherwise applicable limit, unless the authority
110.24modifies the plan following the procedures under section469.175 , subdivision 4,
110.25paragraph (b).
110.26 (b) The tax increment pledged to the payment of the bonds and interest thereon may
110.27be discharged and the tax increment financing district may be terminated if sufficient funds
110.28have been irrevocably deposited in the debt service fund or other escrow account held in
110.29trust for all outstanding bonds to provide for the payment of the bonds at maturity or date
110.30of redemption and interest thereon to the maturity or redemption date.
110.31 (c) For bonds issued pursuant to section469.178, subdivisions 2 and 3 , the full
110.32faith and credit and any taxing powers of the municipality or authority are pledged to the
110.33payment of the bonds until the principal of and interest on the bonds has been paid in full.
111.1EFFECTIVE DATE.This section is effective for districts for which the request for
111.2certification is made after June 30, 2007.
111.3 Sec. 13. Minnesota Statutes 2006, section 469.176, subdivision 2, is amended to read:
111.4 Subd. 2. Excess increments. (a) The authority shall annually determine the amount
111.5of excess increments for a district, if any. This determination must be based on the tax
111.6increment financing plan in effect on December 31 of the year and the increments and
111.7other revenues received as of December 31 of the year. The authority must spend or return
111.8the excess increments under paragraph (c) within nine months after the end of the year.
111.9 (b) For purposes of this subdivision, "excess increments" equals the excess of:
111.10 (1) total increments collected from the district since its certification, reduced by any
111.11excess increments paid under paragraph (c), clause (4), for a prior year, over
111.12 (2) the total costs authorized by the tax increment financing plan to be paid with
111.13increments from the district, reduced, but not below zero, by the sum of:
111.14 (i) the amounts of those authorized costs that have been paid from sources other than
111.15tax increments from the district;
111.16 (ii) revenues, other than tax increments from the district, that are dedicated for or
111.17otherwise required to be used to pay those authorized costs and that the authority has
111.18received and that are not included in item (i);
111.19 (iii) the amount of principal and interest obligations due on outstanding bonds after
111.20December 31 of the year and not prepaid under paragraph (c) in a prior year; and
111.21 (iv) increased by the sum of the transfers of increments made under section469.1763,
111.22subdivision 6 , to reduce deficits in other districts made by December 31 of the year.
111.23 (c) The authority shall use excess increment only to do one or more of the following:
111.24 (1) prepay any outstanding bonds;
111.25 (2) discharge the pledge of tax increment for any outstanding bonds;
111.26 (3) pay into an escrow account dedicated to the payment of any outstanding bonds; or
111.27 (4) return the excess amount to the county auditor who shall distribute the excess
111.28amount to the city or town, county, and school district in which the tax increment financing
111.29district is located in direct proportion to their respective local tax rates.
111.30 (d) For purposes of a district for which the request for certification was made prior to
111.31August 1, 1979, excess increments equal the amount of increments on hand on December
111.3231, less the principal and interest obligations due on outstanding bonds or advances,
111.33qualifying under subdivision 1c, clauses (1), (2), (4), and (5), after December 31 of the
111.34year and not prepaid under paragraph (c).
112.1 (e) The county auditor must report to the commissioner of education the amount of
112.2any excess tax increment distributed to a school district within 30 days of the distribution.
112.3 (f) For purposes of this subdivision, "outstanding bonds" means bonds which are
112.4secured by increments from the district.
112.5 (g) The state auditor may exempt an authority from reporting the amounts calculated
112.6under this subdivision for a calendar year, if the authority certifies to the auditor in
112.7its report that the total amount authorized by the tax increment plan to be paid with
112.8increments from the district exceeds the sum of the total increments collected for the
112.9district for all years by 20 percent.
112.10EFFECTIVE DATE.This section is effective the day following final enactment and
112.11applies to all districts regardless of when the request for certification was made, including
112.12districts for which the request for certification was made on or before August 1, 1979.
112.13 Sec. 14. Minnesota Statutes 2006, section 469.176, subdivision 7, is amended to read:
112.14 Subd. 7. Parcels not includable in districts. (a) The authority may request
112.15inclusion in a tax increment financing district and the county auditor may certify the
112.16original tax capacity of a parcel or a part of a parcel that qualified under the provisions of
112.17section273.111 or
273.112 or chapter 473H for taxes payable in any of the five calendar
112.18years before the filing of the request for certification only for:
112.19 (1) a district in which 85 percent or more of the planned buildings and facilities
112.20(determined on the basis of square footage) are a qualified manufacturing facility or a
112.21qualified distribution facility or a combination of both; or
112.22 (2) aqualified housing district.
112.23 (b)(1) A distribution facility means buildings and other improvements to real
112.24property that are used to conduct activities in at least each of the following categories:
112.25 (i) to store or warehouse tangible personal property;
112.26 (ii) to take orders for shipment, mailing, or delivery;
112.27 (iii) to prepare personal property for shipment, mailing, or delivery; and
112.28 (iv) to ship, mail, or deliver property.
112.29 (2) A manufacturing facility includes space used for manufacturing or producing
112.30tangible personal property, including processing resulting in the change in condition of the
112.31property, and space necessary for and related to the manufacturing activities.
112.32 (3) To be a qualified facility, the owner or operator of a manufacturing or distribution
112.33facility must agree to pay and pay 90 percent or more of the employees of the facility at
112.34a rate equal to or greater than 160 percent of the federal minimum wage for individuals
112.35over the age of 20.
113.1EFFECTIVE DATE.This section is effective the day following final enactment
113.2and applies to all districts regardless of when the request for certification was made.
113.3 Sec. 15. Minnesota Statutes 2006, section 469.176, subdivision 4l, is amended to read:
113.4 Subd. 4l. Prohibited facilities. (a) No tax increment from any district may be
113.5used for:
113.6 (1) a commons area used as a public park; or
113.7 (2) a facility used for social, recreational, or conference purposes.
113.8 (b) This subdivision does not apply to a privately owned facility for conference
113.9purposes or a parking structure, whether it is public or privately owned or whether it is
113.10ancillary to a use listed in paragraph (a).
113.11EFFECTIVE DATE.This section confirms the original intent of the legislature
113.12in enacting Minnesota Statutes, section 469.176, subdivision 4l, and is effective the day
113.13following final enactment and applies to any expenditure subject to Minnesota Statutes,
113.14section 469.176, subdivision 4l.
113.15 Sec. 16. Minnesota Statutes 2006, section 469.1761, subdivision 1, is amended to read:
113.16 Subdivision 1. Requirement imposed. (a) In order for a tax increment financing
113.17district to qualify as a housing district:
113.18 (1) the income limitations provided in this section must be satisfied; and
113.19 (2) no more than 20 percent of the square footage of buildings that receive assistance
113.20from tax increments may consist of commercial, retail, or other nonresidential uses.
113.21 (b) The requirements imposed by this section apply to property receiving assistance
113.22financed with tax increments, including interest reduction, land transfers at less than the
113.23authority's cost of acquisition, utility service or connections, roads, parking facilities, or
113.24other subsidies. The provisions of this section do not apply to districts located in a targeted
113.25area as defined in section462C.02, subdivision 9 , clause (e).
113.26 (c) For purposes of the requirements of paragraph (a), the authority may elect to treat
113.27an addition to an existing structure as a separate building if:
113.28 (1) construction of the addition begins more than three years after construction of
113.29the existing structure was completed; and
113.30 (2) for an addition that does not meet the requirements of paragraph (a), clause (2), if
113.31it is treated as a separate building, the addition was not contemplated by the tax increment
113.32financing plan which includes the existing structure.
114.1EFFECTIVE DATE.This section is effective for expenditures of tax increment
114.2authorized and made after the day following final enactment, regardless of when the
114.3request for certification of the district was made.
114.4 Sec. 17. Minnesota Statutes 2006, section 469.1763, subdivision 2, is amended to read:
114.5 Subd. 2. Expenditures outside district. (a) For each tax increment financing
114.6district, an amount equal to at least 75 percent of the total revenue derived from tax
114.7increments paid by properties in the district must be expended on activities in the district
114.8or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
114.9in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
114.10For districts, other than redevelopment districts for which the request for certification
114.11was made after June 30, 1995, the in-district percentage for purposes of the preceding
114.12sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
114.13increments paid by properties in the district may be expended, through a development fund
114.14or otherwise, on activities outside of the district but within the defined geographic area of
114.15the project except to pay, or secure payment of, debt service on credit enhanced bonds.
114.16For districts, other than redevelopment districts for which the request for certification was
114.17made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
114.1820 percent. The revenue derived from tax increments for the district that are expended on
114.19costs under section469.176, subdivision 4h , paragraph (b), may be deducted first before
114.20calculating the percentages that must be expended within and without the district.
114.21 (b) In the case of a housing district, a housing project, as defined in section469.174,
114.22subdivision 11 , is an activity in the district.
114.23 (c) All administrative expenses are for activities outside of the district, except that
114.24if the only expenses for activities outside of the district under this subdivision are for
114.25the purposes described in paragraph (d), administrative expenses will be considered as
114.26expenditures for activities in the district.
114.27 (d) The authority may elect, in the tax increment financing plan for the district,
114.28to increase by up to ten percentage points the permitted amount of expenditures for
114.29activities located outside the geographic area of the district under paragraph (a). As
114.30permitted by section469.176, subdivision 4k , the expenditures, including the permitted
114.31expenditures under paragraph (a), need not be made within the geographic area of the
114.32project. Expenditures that meet the requirements of this paragraph are legally permitted
114.33expenditures of the district, notwithstanding section469.176, subdivisions 4b, 4c, and 4j .
114.34To qualify for the increase under this paragraph, the expenditures must:
115.1 (1) be used exclusively to assist housing that meets the requirement for a qualified
115.2low-income building, as that term is used in section 42 of the Internal Revenue Code;
115.3 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
115.4the Internal Revenue Code, less the amount of any credit allowed under section 42 of
115.5the Internal Revenue Code; and
115.6 (3) be used to:
115.7 (i) acquire and prepare the site of the housing;
115.8 (ii) acquire, construct, or rehabilitate the housing; or
115.9 (iii) make public improvements directly related to the housing.
115.10 (e) For a district created within a biotechnology and health sciences industry zone
115.11as defined in section469.330, subdivision 6 , or for an existing district located within
115.12such a zone, tax increment derived from such a district may be expended outside of the
115.13district but within the zone only for expenditures required for the construction of public
115.14infrastructure necessary to support the activities of the zone, land acquisition, and other
115.15redevelopment costs as defined in section 469.176, subdivision 4j.Public infrastructure
115.16These expenditures are considered as expenditures for activities within the district.
115.17EFFECTIVE DATE.This section is effective for all districts located in bioscience
115.18zones, regardless of when the request for certification was made.
115.19 Sec. 18. Minnesota Statutes 2006, section 469.177, subdivision 1, is amended to read:
115.20 Subdivision 1. Original net tax capacity. (a) Upon or after adoption of a tax
115.21increment financing plan, the auditor of any county in which the district is situated shall,
115.22upon request of the authority, certify the original net tax capacity of the tax increment
115.23financing district and that portion of the district overlying any subdistrict as described in
115.24the tax increment financing plan and shall certify in each year thereafter the amount by
115.25which the original net tax capacity has increased or decreased as a result of a change in tax
115.26exempt status of property within the district and any subdistrict, reduction or enlargement
115.27of the district or changes pursuant to subdivision 4. The auditor shall certify the amount
115.28within 30 days after receipt of the request and sufficient information to identify the parcels
115.29included in the district. The certification relates to the taxes payable year as provided in
115.30subdivision 6.
115.31 (b) If the classification under section273.13 of property located in a district changes
115.32to a classification that has a different assessment ratio, the original net tax capacity of that
115.33property must be redetermined at the time when its use is changed as if the property had
115.34originally been classified in the same class in which it is classified after its use is changed.
116.1 (c) The amount to be added to the original net tax capacity of the district as a result
116.2of previously tax exempt real property within the district becoming taxable equals the net
116.3tax capacity of the real property as most recently assessed pursuant to section273.18 or, if
116.4that assessment was made more than one year prior to the date of title transfer rendering
116.5the property taxable, the net tax capacity assessed by the assessor at the time of the
116.6transfer. If improvements are made to tax exempt property after the municipality approves
116.7the district and before the parcel becomes taxable, the assessor shall, at the request of
116.8the authority, separately assess the estimated market value of the improvements. If the
116.9property becomes taxable, the county auditor shall add to original net tax capacity, the net
116.10tax capacity of the parcel, excluding the separately assessed improvements. If substantial
116.11taxable improvements were made to a parcel after certification of the district and if the
116.12property later becomes tax exempt, in whole or part, as a result of the authority acquiring
116.13the property through foreclosure or exercise of remedies under a lease or other revenue
116.14agreement or as a result of tax forfeiture, the amount to be added to the original net tax
116.15capacity of the district as a result of the property again becoming taxable is the amount
116.16of the parcel's value that was included in original net tax capacity when the parcel was
116.17first certified. The amount to be added to the original net tax capacity of the district as a
116.18result of enlargements equals the net tax capacity of the added real property as most
116.19recently certified by the commissioner of revenue as of the date of modification of the tax
116.20increment financing plan pursuant to section469.175, subdivision 4 .
116.21 (d) If the net tax capacity of a property increases because the property no longer
116.22qualifies under the Minnesota Agricultural Property Tax Law, section273.111 ; the
116.23Minnesota Open Space Property Tax Law, section273.112 ; or the Metropolitan
116.24Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is
116.25improved or market value is increased after approval of the plat under section273.11,
116.26subdivision 14 , 14a, or 14b, the increase in net tax capacity must be added to the original
116.27net tax capacity.
116.28 (e) The amount to be subtracted from the original net tax capacity of the district
116.29as a result of previously taxable real property within the district becoming tax exempt,
116.30or a reduction in the geographic area of the district, shall be the amount of original net
116.31tax capacity initially attributed to the property becoming tax exempt or being removed
116.32from the district. If the net tax capacity of property located within the tax increment
116.33financing district is reduced by reason of a court-ordered abatement, stipulation agreement,
116.34voluntary abatement made by the assessor or auditor or by order of the commissioner of
116.35revenue, the reduction shall be applied to the original net tax capacity of the district when
116.36the property upon which the abatement is made has not been improved since the date of
117.1certification of the district and to the captured net tax capacity of the district in each year
117.2thereafter when the abatement relates to improvements made after the date of certification.
117.3The county auditor may specify reasonable form and content of the request for certification
117.4of the authority and any modification thereof pursuant to section469.175, subdivision 4 .
117.5 (f) If a parcel of property contained a substandard building or improvements
117.6described in section 469.174, subdivision 10, paragraph (e), thatwas were demolished
117.7or removed and if the authority elects to treat the parcel as occupied by a substandard
117.8building under section469.174, subdivision 10 , paragraph (b), or by improvements under
117.9section 469.174, subdivision 10, paragraph (e), the auditor shall certify the original net
117.10tax capacity of the parcel using the greater of (1) the current net tax capacity of the
117.11parcel, or (2) the estimated market value of the parcel for the year in which the building
117.12was or other improvements were demolished or removed, but applying the class rates
117.13for the current year.
117.14 (g) For a redevelopment district qualifying under section469.174, subdivision 10 ,
117.15paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of
117.16the land as the original tax capacity for any parcel in the district that contains a building
117.17that suffered substantial damage as a result of the disaster or emergency.
117.18EFFECTIVE DATE.This section is effective for requests for certification made
117.19after June 30, 2007.
117.20 Sec. 19. Minnesota Statutes 2006, section 469.178, subdivision 7, is amended to read:
117.21 Subd. 7. Interfund loans. The authority or municipality may advance or loan
117.22money to finance expenditures under section469.176, subdivision 4 , from its general
117.23fund or any other fund under which it has legal authority to do so. The loan or advance
117.24must be authorized, by resolution of the governing body or of the authority, whichever
117.25has jurisdiction over the fund from which the advance or loan is made, before money
117.26is transferred, advanced, or spent, whichever is earliest. The resolution may generally
117.27grant to the authority the power to make interfund loans under one or more tax increment
117.28financing plans or for one or more districts. The terms and conditions for repayment of the
117.29loan must be provided in writing and include, at a minimum, the principal amount, the
117.30interest rate, and maximum term. The maximum rate of interest permitted to be charged
117.31is limited to the greater of the rates specified under section270C.40 or
549.09 as of the
117.32date the loan or advance is made, unless the written agreement states that the maximum
117.33interest rate will fluctuate as the interest rates specified under section270C.40 or
549.09
117.34are from time to time adjusted.
118.1EFFECTIVE DATE.This section is effective the day following final enactment
118.2and applies to all districts subject to Minnesota Statutes, section 469.178, subdivision 7,
118.3regardless of when the request for certification was made.
118.4 Sec. 20. Minnesota Statutes 2006, section 469.1791, subdivision 3, is amended to read:
118.5 Subd. 3. Preconditions to establish district. (a) A city may establish a special
118.6taxing district within a tax increment financing district under this section only if the
118.7conditions under paragraphs (b) and (c) are met or if the city elects to exercise the
118.8authority under paragraph (d).
118.9 (b) The city has determined that:
118.10 (1) total tax increments from the district, including unspent increments from
118.11previous years and increments transferred under paragraph (c), will be insufficient to pay
118.12the amounts due in a year on preexisting obligations; and
118.13 (2) this insufficiency of increments resulted from the reduction in property tax class
118.14rates enacted in the 1997 and 1998 legislative sessions.
118.15 (c) The city has agreed to transfer any available increments from other tax increment
118.16financing districts in the city to pay the preexisting obligations of the district under section
118.17469.1763, subdivision 6
. This requirement does not apply to any available increments of a
118.18qualified housing district.
118.19 (d) If a tax increment financing district does not qualify under paragraphs (b) and
118.20(c), the governing body may elect to establish a special taxing district under this section.
118.21If the city elects to exercise this authority, increments from the tax increment financing
118.22district and the proceeds of the tax imposed under this section may only be used to pay
118.23preexisting obligations and reasonable administrative expenses of the authority for the tax
118.24increment financing district. The tax increment financing district must be decertified when
118.25all preexisting obligations have been paid.
118.26EFFECTIVE DATE.This section is effective the day following final enactment
118.27and applies to districts regardless of when the request for certification was made.
118.28 Sec. 21. Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision
118.29to read:
118.30 Subd. 6. Restrictions on relocations. (a) If a business relocates or intends to
118.31relocate under a proposed project more than 25 full-time equivalent jobs from a location
118.32in Minnesota into a job opportunity building zone, the business must notify the local
118.33government unit, the commissioner of employment and economic development, and the
118.34city and the county governments from which the jobs are being or would be relocated.
119.1A city or county that objects to the relocation of jobs must file a copy of the resolution
119.2with the commissioner of employment and economic development and the local unit
119.3of government.
119.4 (b) If the governing body of the city or county from which the jobs are being
119.5relocated adopts a qualified resolution objecting to the relocation within 60 days after its
119.6receipt of the notice, the following rules apply until the requirements of paragraph (c) are
119.7satisfied:
119.8 (1) if the business has not entered into a business subsidy agreement, the local unit
119.9of government may not enter into a business subsidy agreement with the business; or
119.10 (2) if the local unit of government has entered into a business subsidy agreement
119.11with the business, the business ceases to be a qualified business, effective for the current
119.12taxable year, the current assessment year, and for taxable purchases made after the first
119.13day of the month beginning after the filing of the objecting resolution.
119.14 (c) To be a qualified resolution for purposes of this subdivision, the resolution must
119.15identify one or more sites in the city or county that could serve as an appropriate site for
119.16the facility proposed by the business. To satisfy this requirement a site must:
119.17 (1) be of adequate size;
119.18 (2) have appropriate transportation access, given the nature of the business;
119.19 (3) be served by adequate public infrastructure and public utilities or the
119.20governmental unit will provide reasonably necessary public infrastructure and public
119.21utilities for the project in a timely manner; and
119.22 (4) be under the ownership or control of either the governmental unit or the business
119.23or be available for sale.
119.24 (d) When each city and county that objected to the relocation rescinds its objection
119.25by resolution, the provisions of paragraph (b) no longer apply to the business.
119.26EFFECTIVE DATE.This section is effective the day following final enactment
119.27and applies to business subsidy agreements entered into after that date.
119.28 Sec. 22. Minnesota Statutes 2006, section 469.3201, is amended to read:
119.29469.3201JOBZ EXPENDITURE LIMITATIONS; AUDITS STATE
119.30AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND
119.31BUSINESS SUBSIDY AGREEMENTS.
119.32 The Tax Increment Financing, Investment and Finance Division of the Office of the
119.33State Auditor must annually audit the creation and operation of all job opportunity building
119.34zones and business subsidy agreements entered into under Minnesota Statutes, sections
120.1469.310
to
469.320 . To the extent necessary to perform this audit, the state auditor may
120.2request from the commissioner of revenue tax return information of taxpayers who are
120.3eligible to receive tax benefits authorized under section 469.315. To the extent necessary
120.4to perform this audit, the state auditor may request from the commissioner of employment
120.5and economic development wage detail report information required under section 268.044
120.6of taxpayers eligible to receive tax benefits authorized under section 469.315.
120.7EFFECTIVE DATE.This section is effective the day following final enactment.
120.8 Sec. 23. Laws 1994, chapter 587, article 9, section 14, subdivision 1, is amended to
120.9read:
120.10 Subdivision 1. Establishment. The city of Brooklyn Center may establishan
120.11a redevelopment tax increment financing district in which 15 percent of the revenues
120.12generated from tax increment in any year is deposited in the housing and environmental
120.13remediation development account of the authority and expended according to the tax
120.14increment financing plan.
120.15EFFECTIVE DATE.This section is effective the day following final enactment.
120.16 Sec. 24. Laws 1994, chapter 587, article 9, section 14, subdivision 2, is amended to
120.17read:
120.18 Subd. 2. Eligible activities. The authority must identify in the plan the housing
120.19activities that will be assisted by the housing and environmental remediation development
120.20account. Housing activities may include rehabilitation, acquisition, construction,
120.21demolition, and financing of new or existing single family or multifamily housing.
120.22Housing and environmental remediation activities listed in the plan need not be located
120.23within the district or project area but must be activities that meet the income requirements
120.24of a qualified housing district under Minnesota Statutes, section
273.1399 or
469.1761,
120.25subdivision 2
.
120.26EFFECTIVE DATE.This section is effective the day following final enactment.
120.27 Sec. 25. Laws 1994, chapter 587, article 9, section 14, subdivision 3, is amended to
120.28read:
120.29 Subd. 3. Housing account. Tax increment to be expended for housing and
120.30environmental remediation activities under this section must be segregated by the
120.31authority into a special account on its official books and records. The account may also
120.32receive funds from other public and private sources.
121.1EFFECTIVE DATE.This section is effective the day following final enactment.
121.2 Sec. 26. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by
121.3Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10,
121.4section 12, is amended to read:
121.5 Subd. 4. Authority. For housing replacement projects in the city of Crystal,
121.6"authority" means the Crystal economic development authority. For housing replacement
121.7projects in the city of Fridley, "authority" means the housing and redevelopment authority
121.8in and for the city of Fridley or a successor in interest. For housing replacement
121.9projects in the city of Minneapolis, "authority" means the Minneapolis community
121.10development agency or its successors and assigns. For housing replacement projects
121.11in the city of St. Paul, "authority" means the St. Paul housing and redevelopment
121.12authority. For housing replacement projects in the city of Duluth, "authority" means the
121.13Duluth economic development authority. For housing replacement projects in the city of
121.14Richfield, "authority" is the authority as defined in Minnesota Statutes, section469.174,
121.15subdivision 2 , that is designated by the governing body of the city of Richfield. For
121.16housing replacement projects in the city of Columbia Heights, "authority" is the authority
121.17as defined in Minnesota Statutes, section469.174, subdivision 2 , that is designated by the
121.18governing body of the city of Columbia Heights.
121.19EFFECTIVE DATE.This section is effective the day following final enactment
121.20and upon compliance by the governing body of the city of Minneapolis with Minnesota
121.21Statutes, section 645.021, subdivision 3.
121.22 Sec. 27. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by
121.23Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10,
121.24section 13, and Laws 2002, chapter 377, article 7, section 6, is amended to read:
121.25 Subdivision 1. Creation of projects. (a) An authority may create a housing
121.26replacement project under sections 44 to 47, as provided in this section.
121.27 (b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, the authority
121.28may designate up to 50 parcels in the city to be included in a housing replacement
121.29district. No more than ten parcels may be included in year one of the district, with up
121.30to ten additional parcels added to the district in each of the following nine years. For
121.31the cities ofMinneapolis, St. Paul, and Duluth, each authority may designate not more
121.32than 200 parcels in the city to be included in a housing replacement district over the life
121.33of the district. For the city of Minneapolis, the authority may designate not more than
121.34400 parcels in the city to be included in a housing replacement district over the life of
122.1the district. The only parcels that may be included in a district are (1) vacant sites, (2)
122.2parcels containing vacant houses, or (3) parcels containing houses that are structurally
122.3substandard, as defined in Minnesota Statutes, section469.174, subdivision 10 .
122.4 (c) The city in which the authority is located must pay at least 25 percent of the
122.5housing replacement project costs from its general fund, a property tax levy, or other
122.6unrestricted money, not including tax increments.
122.7 (d) The housing replacement district plan must have as its sole object the acquisition
122.8of parcels for the purpose of preparing the site to be sold for market rate housing. As
122.9used in this section, "market rate housing" means housing that has a market value that
122.10does not exceed 150 percent of the average market value of single-family housing in that
122.11municipality.
122.12EFFECTIVE DATE.This section is effective the day following final enactment
122.13and upon compliance by the governing body of the city of Minneapolis with Minnesota
122.14Statutes, section 645.021, subdivision 3.
122.15 Sec. 28. Laws 2005, First Special Session chapter 3, article 10, section 23, is amended
122.16to read:
122.17 Sec. 23. GRANTS TO QUALIFYING BUSINESSES.
122.18 $750,000 is appropriated in fiscal year 2006 from the general fund to the
122.19commissioner of employment and economic development to be distributed to the
122.20foreign trade zone authority to provide grants to qualified businesses as determined
122.21by the authority, subject to Minnesota Statutes, sections116J.993 to
116J.995 , to
122.22provide incentives for the businesses to locate their operations in an international
122.23economic development zone. Of this appropriation, up to $250,000 may be used by the
122.24commissioner for a study to determine the economic viability of business plans for
122.25international economic development zones. If the money is not distributed during fiscal
122.26year 2006, it remains available for distribution under this section during fiscal year 2007.
122.27EFFECTIVE DATE.This section is effective the day following final enactment.
122.28 Sec. 29. BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT
122.29FINANCING.
122.30 Subdivision 1. Definitions. (a) For the purposes of this section, the words and
122.31phrases defined have the meanings given them in this subdivision.
122.32 (b) "City" means the city of Burnsville.
123.1 (c) "Project area" means the area in the city bounded on the south, southeast, and
123.2southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east
123.3by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest
123.4by the Minnesota River; and on the west by the westerly corporate limits of the city,
123.5together with a single parcel to the east of said Interstate Highway I-35W described as
123.6the North 1370 feet of the West 1075 feet of the NW Quarter of Section 34 Township 27
123.7Range 24 in the city of Burnsville, Dakota County, except the North 50 feet thereof;
123.8provided that the project area includes the rights-of-way for all present and future highway
123.9interchanges abutting the area described in this paragraph.
123.10 (d) "Soil deficiency district" means a type of tax increment financing district
123.11consisting of a portion of the project area in which the city finds by resolution that the
123.12following conditions exist:
123.13 (1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district
123.14require substantial filling, grading, or other physical preparation for use; and
123.15 (2) the estimated cost of the physical preparation under clause (1), but excluding
123.16costs directly related to roads as defined in Minnesota Statutes, section 160.01, and
123.17local improvements as described in Minnesota Statutes, sections 429.021, subdivision 1,
123.18clauses (1) to (7), (11), and (12), and 430.01, exceeds the fair market value of the land
123.19before completion of the preparation.
123.20 Subd. 2. Special rules. (a) If the city elects, upon the adoption of the tax increment
123.21financing plan for a district, the rules under this section apply to a redevelopment district,
123.22renewal and renovation district, soil condition district, or a soil deficiency district
123.23established by the city or a development authority of the city in the project area.
123.24 (b) Prior to or upon the adoption of the first tax increment plan subject to the special
123.25rules under this subdivision, the city must find by resolution that parcels consisting of at
123.26least 80 percent of the acreage of the project area (excluding street and railroad right of
123.27way) are characterized by one or more of the following conditions:
123.28 (1) peat or other soils with geotechnical deficiencies that impair development of
123.29residential or commercial buildings or infrastructure;
123.30 (2) soils or terrain that requires substantial filling in order to permit the development
123.31of commercial or residential buildings or infrastructure;
123.32 (3) landfills, dumps, or similar deposits of municipal or private waste;
123.33 (4) quarries or similar resource extraction sites;
123.34 (5) floodway; and
123.35 (6) substandard buildings within the meaning of Minnesota Statutes, section
123.36469.174, subdivision 10.
124.1 (c) For the purposes of paragraph (b), clauses (1) through (5), a parcel is deemed to
124.2be characterized by the relevant condition if at least 70 percent of the area of the parcel
124.3contains the relevant condition. For the purposes of paragraph (b), clause (6), a parcel is
124.4deemed to be characterized by substandard buildings if the buildings occupy at least 30
124.5percent of the area of the parcel.
124.6 (d) The five-year rule under Minnesota Statutes, section 469.1763, subdivision
124.73, is extended to ten years for any district, and section 469.1763, subdivision 4, does
124.8not apply to any district.
124.9 (e) Notwithstanding anything to the contrary in section 469.1763, subdivision 2,
124.10paragraph (a), not more than 80 percent of the total revenue derived from tax increments
124.11paid by properties in any district (measured over the life of the district) may be expended
124.12on activities outside the district but within the project area.
124.13 (f) For a soil deficiency district:
124.14 (1) increments may be collected through 20 years after the receipt by the authority of
124.15the first increment from the district; and
124.16 (2) except as otherwise provided in this subdivision, increments may be used only to:
124.17 (i) acquire parcels on which the improvements described in item (ii) will occur;
124.18 (ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the
124.19additional cost of installing public improvements directly caused by the deficiencies; and
124.20 (iii) pay for the administrative expenses of the authority allocable to the district.
124.21 (g) Increments spent for any infrastructure costs, whether inside a district or outside
124.22a district but within the project area, are deemed to satisfy the requirements of paragraph
124.23(f) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j.
124.24 (h) Increments from any district may not be used to pay the costs of landfill closure or
124.25public infrastructure located on the following parcels within the plat known as Burnsville
124.26Amphitheater: Lot 1, Block 1; Lots 1 and 2, Block 2; and Outlots A, B, C and D.
124.27 (i) The authority to approve tax increment financing plans to establish tax increment
124.28financing districts under this section expires on December 31, 2017.
124.29EFFECTIVE DATE.This section is effective upon compliance with Minnesota
124.30Statutes, section 645.021, subdivision 3.
124.31 Sec. 30. CITY OF EAGAN; TAX INCREMENT FINANCING DISTRICT.
124.32 Subdivision 1. Authorization; location. The city of Eagan may establish within
124.33the corporate boundaries of the city one or more economic development tax increment
124.34financing districts subject to the special rules under subdivision 2. The districts must be
125.1located within the "area" defined for purposes of this section as Section 13, Township
125.227, Range 23, Dakota County, Minnesota.
125.3 Subd. 2. Special rules. (a) If the city elects upon adoption of the tax increment
125.4financing plan for the district, the rules under this subdivision apply to the district.
125.5 (b) The limitations in Minnesota Statutes, section 469.176, subdivision 4c, on
125.6spending increment for developments more than 15 percent of the square footage of which
125.7is used for purposes other than those listed in that subdivision, do not apply.
125.8 (c) Increments may be expended on surface parking, sanitary sewer, storm sewer,
125.9water, and street improvements inside and outside the area whether or not included in a tax
125.10increment financing district, and without regard to any limitations in Minnesota Statutes,
125.11section 469.1763, subdivision 2, if the improvements are related to development within
125.12the area and on administrative expenses.
125.13 Subd. 3. Business subsidy agreement required. Prior to approval of a tax
125.14increment financing plan for a district authorized by this section, the city must enter
125.15a business subsidy agreement with the recipient or beneficiary of expenditures of the
125.16increments. The agreement must set minimum full-time employment goals, minimum
125.17compensation amounts of the employment positions, and minimum investment amounts
125.18for the project and must provide for repayment of all or part of the assistance, if the
125.19established goals are not met by the recipient or beneficiaries.
125.20 Subd. 4. Expiration of authority. The authority to approve tax increment financing
125.21plans to establish tax increment financing districts under this section expires on December
125.2231, 2008.
125.23EFFECTIVE DATE.This section is effective upon compliance by the city of
125.24Eagan with Minnesota Statutes, section 645.021.
125.25 Sec. 31. CITY OF EYOTA; TAX INCREMENT FINANCING DISTRICT.
125.26 Subdivision 1. Authorization. Notwithstanding the mileage limitation in Minnesota
125.27Statutes, section 469.174, subdivision 27, the city of Eyota is deemed to be a small city for
125.28the purposes of Minnesota Statutes, section 469.174 to 469.1799, as long as its population
125.29does not exceed the population limit in that section.
125.30 Subd. 2. Local approval. This section is effective for the city of Eyota upon
125.31approval of Eyota's governing body and compliance with Minnesota Statutes, section
125.32645.021, subdivisions 2 and 3.
125.33 Sec. 32. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT;
125.34SPECIAL RULES.
126.1 (a) If the city elects upon the adoption of a tax increment financing plan for a district,
126.2the rules under this section apply to a redevelopment tax increment financing district
126.3established by the city of Fridley or the housing and redevelopment authority of the city.
126.4The redevelopment tax increment district includes the following parcels and adjacent
126.5railroad property and shall be referred to as the Northstar Transit Station District: parcel
126.6numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018,
126.7223024120012, 223024120011, 223024120005, 223024120004, 223024120003,
126.8223024120013, 223024120008, 223024120007, 223024120006, 223024130005,
126.9223024130010, 223024130011, 223024130003, 153024440039, 153024440037,
126.10153024440041, 153024440042, 223024110013, 223024110016, 223024110017,
126.11223024140008, 223024130002, 223024420004, 223024410002, 223024410003,
126.12223024110008, 223024110007, 223024110019, 223024110018, 223024110003,
126.13223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.
126.14 (b) The requirements for qualifying a redevelopment tax increment district under
126.15Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located
126.16within the Northstar Transit Station District, which are deemed eligible for inclusion
126.17in a redevelopment tax increment district.
126.18 (c) In addition to the costs permitted by Minnesota Statutes, section 469.176,
126.19subdivision 4j, eligible expenditures within the Northstar Transit Station District include
126.20those costs necessary to provide for the construction and land acquisition for a tunnel
126.21under the Burlington Northern Santa Fe railroad tracks.
126.22 (d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763,
126.23subdivision 2, the city of Fridley may expend increments generated from its tax increment
126.24financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota
126.25Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing
126.26districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District.
126.27 (e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3,
126.28does not apply to the Northstar Transit Station District or to tax increment financing
126.29districts Nos. 11, 12, and 13.
126.30 (f) The use of revenues for decertification under Minnesota Statutes, section
126.31469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11,
126.3212, and 13.
126.33EFFECTIVE DATE.This section is effective upon approval by the governing body
126.34of the city of Fridley and upon compliance by the city with Minnesota Statutes, section
126.35645.021, subdivision 3.
127.1 Sec. 33. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING;
127.2EXPENDITURES OUTSIDE DISTRICT.
127.3 Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision
127.42, the city of New Brighton may expend increments generated from its tax increment
127.5financing district No. 26 to facilitate eligible activities as permitted by Minnesota Statutes,
127.6section 469.176, subdivision 4e, outside the boundaries of tax increment financing district
127.7No. 26, but only within the area described in Laws 1998, chapter 389, article 11, section
127.824, subdivision 1, and commonly referred to as the Northwest Quadrant. Minnesota
127.9Statutes, section 469.1763, subdivisions 3 and 4, do not apply to expenditures permitted
127.10by this section.
127.11EFFECTIVE DATE.This section is effective upon approval by the governing
127.12body of the city of New Brighton and compliance by the city with Minnesota Statutes,
127.13section 645.021, subdivision 3.
127.14 Sec. 34. APPROPRIATION.
127.15 $200,000 in fiscal year 2008 and $200,000 in fiscal year 2009 are appropriated
127.16from the general fund to the commissioner of employment and economic development to
127.17provide a grant to the city of Fergus Falls to market and promote economic development
127.18of the site formerly used as a regional treatment facility.
127.19 Sec. 35. REPEALER.
127.20(a) Minnesota Statutes 2006, section 469.174, subdivision 29, is repealed.
127.21(b) Laws 1998, chapter 389, article 11, section 18, is repealed.
127.22EFFECTIVE DATE.Paragraph (a) is effective the day following final enactment.
127.23For purposes of any special law authorizing or limiting the use of increments to projects
127.24meeting the requirements of a qualified housing district, expenditures for housing districts
127.25satisfying the requirements of Minnesota Statutes, sections 469.174, subdivision 11;
127.26469.176, subdivision 4d; and 469.1761, as amended, also satisfy the requirements of
127.27the special law.
127.28 Paragraph (b) is effective upon compliance with Minnesota Statutes, section
127.29645.021, subdivision 3, by the governing body of the city of Burnsville. The balance of
127.30tax increments derived from tax increment financing district No. 2-1 as of the effective
127.31date of this section must be returned to the county for distribution in accordance with
127.32Minnesota Statutes, section 469.176, subdivision 2.
128.3 Section 1. Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read:
128.4 Subd. 3. Amount. The total amount of the collateral computed at its market value
128.5shall be at least ten percent more than the amount on depositplus accrued interest at
128.6the close of the financial institution's banking day, except that where the collateral is
128.7irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of
128.8collateral shall be at least equal to the amount on depositplus accrued interest at the close
128.9of the financial institution's banking day. The financial institution may furnish both a
128.10surety bond and collateral aggregating the required amount.
128.11 Sec. 2. Minnesota Statutes 2006, section 123B.61, is amended to read:
128.12123B.61 PURCHASE OF CERTAIN EQUIPMENT.
128.13 The board of a district may issue general obligation certificates of indebtedness
128.14or capital notes subject to the district debt limits to: (a) purchase vehicles, computers,
128.15telephone systems, cable equipment, photocopy and office equipment, technological
128.16equipment for instruction, and other capital equipment having an expected useful life at
128.17least as long as the terms of the certificates or notes; (b) purchase computer hardware and
128.18software, without regard to its expected useful life, whether bundled with machinery or
128.19equipment or unbundled, together with application development services and training
128.20related to the use of the computer; and (c) prepay special assessments. The certificates or
128.21notes must be payable in not more thanfive ten years and must be issued on the terms
128.22and in the manner determined by the board, except that certificates or notes issued to
128.23prepay special assessments must be payable in not more than 20 years. The certificates
128.24or notes may be issued by resolution and without the requirement for an election. The
128.25certificates or notes are general obligation bonds for purposes of section126C.55 . A tax
128.26levy must be made for the payment of the principal and interest on the certificates or
128.27notes, in accordance with section475.61 , as in the case of bonds. The sum of the tax
128.28levies under this section and section123B.62 for each year must not exceed the lesser
128.29of the amount of the district's total operating capital revenue or the sum of the district's
128.30levy in the general and community service funds excluding the adjustments under this
128.31section for the year preceding the year the initial debt service levies are certified. The
128.32district's general fund levy for each year must be reduced by the sum of (1) the amount
128.33of the tax levies for debt service certified for each year for payment of the principal and
128.34interest on the certificates or notes issued under this section as required by section475.61 ,
129.1(2) the amount of the tax levies for debt service certified for each year for payment of the
129.2principal and interest on bonds issued under section123B.62 , and (3) any excess amount
129.3in the debt redemption fund used to retire bonds, certificates, or notes issued under this
129.4section or section123B.62 after April 1, 1997, other than amounts used to pay capitalized
129.5interest. If the district's general fund levy is less than the amount of the reduction, the
129.6balance shall be deducted first from the district's community service fund levy, and next
129.7from the district's general fund or community service fund levies for the following year. A
129.8district using an excess amount in the debt redemption fund to retire the certificates or
129.9notes shall report the amount used for this purpose to the commissioner by July 15 of the
129.10following fiscal year. A district having an outstanding capital loan under section126C.69
129.11or an outstanding debt service loan under section126C.68 must not use an excess amount
129.12in the debt redemption fund to retire the certificates or notes.
129.13 Sec. 3. Minnesota Statutes 2006, section 275.61, subdivision 1, is amended to read:
129.14 Subdivision 1. Market value. (a) For local governmental subdivisions other than
129.15school districts, any levy, including the issuance of debt obligations payable in whole or in
129.16part from property taxes, required to be approved and approved by the voters at a general
129.17or special election for taxes payable in 1993 and thereafter, shall be levied against the
129.18referendum market value of all taxable property within the governmental subdivision, as
129.19defined in section126C.01, subdivision 3 . Any levy amount subject to the requirements of
129.20this section shall be certified separately to the county auditor under section275.07 .
129.21 (b) The ballot shall state the maximum amount of the increased levy as a percentage
129.22of market value and the amount that will be raised by the new referendum tax rate in the
129.23first year it is to be levied.
129.24 (c) This subdivision does not apply to tax levies for the payment of debt obligations
129.25that are approved by the voters after June 30, 2007.
129.26EFFECTIVE DATE.This section is effective the day following final enactment.
129.27 Sec. 4. Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:
129.28 Subd. 2. Time of notice. Unless otherwise specified bya particular statute law, or
129.29by order of a court, publication of a public notice shall be as follows:
129.30 (a) the notice shall be published once;
129.31 (b) if the notice is intended to inform the public about a future event, the last
129.32publication shall occur not more than14 30 days and not less than seven days before
129.33the event;
130.1 (c) if the notice is intended to inform the public about a past action or event, the last
130.2publication shall occur not more than 45 days after occurrence of the action or event.
130.3 Sec. 5. Minnesota Statutes 2006, section 365A.02, is amended to read:
130.4365A.02DEFINITION DEFINITIONS.
130.5 Subdivision 1. Subordinate service district. "Subordinate service district" means a
130.6defined area within the town in whichone or more governmental services or additions to
130.7townwide special services are provided by the town specially for the area and financed
130.8from revenues from the area. The boundaries of a single subordinate service district
130.9may not embrace an entire town.
130.10 Subd. 2. Special services. "Special services" means one or more governmental
130.11services or additions to townwide services provided by the town specially for the area
130.12and financed from revenues from the area.
130.13 Sec. 6. Minnesota Statutes 2006, section 365A.04, is amended to read:
130.14365A.04 CREATIONBY PETITION.
130.15 Subdivision 1. Petition. A petition signed by at least 50 percent of the property
130.16owners in the part of the town proposed for the subordinate service district may be
130.17submitted to the town board requesting the establishment of a subordinate service district
130.18to provide a service that the town is otherwise authorized by law to provide. The petition
130.19must include the territorial boundaries of the proposed district and specify the kinds of
130.20services to be provided within the district.
130.21 Subd. 1a. Creation by town board. The town board may establish a subordinate
130.22service district in a portion of the town by adoption of a resolution, subject to the
130.23requirements of subdivision 2.
130.24 Subd. 2. Public hearing. Upon receipt of the petition, and the verification of the
130.25signatures by the town clerk or prior to adoption of the resolution specified in subdivision
130.261a, the town board shall, within 30 days following verification or prior to adoption of the
130.27resolution specified in subdivision 1a, hold a public hearing on the question of whether or
130.28not the requested district shall be established. The notice of public hearing must specify
130.29the special services to be provided within the subordinate service district and must specify
130.30the territorial boundaries of the requested district. The notice of public hearing must be
130.31published once in a newspaper of general circulation in the town at least 14 days prior
130.32to the date of the public hearing.
130.33 Subd. 3. Approval; disapproval. Within 30 days after the public hearing, the
130.34town board by resolution shall approve or disapprove the establishment of the requested
131.1district. An approving resolution must specify the special services to be provided within
131.2the subordinate service district and must specify the territorial boundaries of the district.
131.3A resolution approving the establishment of the district may contain amendments or
131.4modifications of the district's boundaries or functions as set forth in the petition or the
131.5resolution specified in subdivision 1a.
131.6 Sec. 7. Minnesota Statutes 2006, section 365A.08, is amended to read:
131.7365A.08 FINANCING.
131.8 Subdivision 1. Budget. (a) Upon adoption of the next annual budget following
131.9the creation of a subordinate service district the town board shall include in the budget
131.10appropriate provisions for the operation of the district including either a property tax
131.11levied only on property of the users of the service within the boundaries of the district
131.12or a levy of a service charge against the users of the service within the district, or a
131.13combination of a property tax and a service charge on the users of the service.
131.14 (b) A tax or service charge or a combination of them may be imposed to finance a
131.15function or service in the district that the town ordinarily provides throughout the town
131.16only to the extent that there is an increase in the level of the function or service provided
131.17in the service district over that provided throughout the town. In that case, in addition
131.18to the townwide tax levy, an amount necessary to pay for the increase in the level of the
131.19function or service may be imposed in the district.
131.20 Subd. 2. Bonds. At any time after the requirements of section 356A.06 have been
131.21met and the subordinate service district created, the town board may issue obligations
131.22in an amount it deems necessary to defray in whole or in part the expense incurred
131.23and estimated to be incurred in making capital improvements necessary to operate the
131.24subordinate service district and provide the special services in the district, including every
131.25item of cost from inception to completion and all fees and expenses incurred in connection
131.26with the capital improvements or the financing. The obligations are payable primarily
131.27out of the proceeds of the taxes and service charges imposed under subdivision 1, net
131.28revenues as described in section 444.075, and special assessments under chapter 429. The
131.29town board may by resolution pledge the full faith credit and taxing power of the town
131.30to ensure payment of the principal and interest on the obligations if the proceeds of the
131.31taxes and service charges are insufficient to pay the principal and interest. Obligations
131.32must be issued in accordance with chapter 475, except that an election is not required, and
131.33the amount of the obligations is not included in determining the net indebtedness of the
131.34town under the provisions of any law limiting indebtedness.
132.1 Subd. 3. Covenants to secure obligations. In resolutions authorizing the issuance
132.2of general or special obligations and pledging taxes and service charges imposed under
132.3subdivision 1, net revenues, or special assessments to their payment, the town board
132.4may make covenants for the protection of holders of the obligations and taxpayers of the
132.5town as it deems necessary, including a covenant that the town will impose and collect
132.6charges of the nature authorized by this chapter at the time and in the amounts required to
132.7produce, together with any taxes or special assessments designated as a primary source
132.8of payment of the obligations, funds adequate to pay all principal and interest when due
132.9on the obligations, and to create and maintain reserves securing the payments as may be
132.10provided in the resolutions.
132.11 Sec. 8. Minnesota Statutes 2006, section 365A.095, is amended to read:
132.12365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
132.13 Subdivision 1. Petition. A petition signed by at least 75 percent of the property
132.14owners in the territory of the subordinate service district requesting the removal of the
132.15district may be presented to the town board. Within 30 days after the town board receives
132.16the petition, the town clerk shall determine the validity of the signatures on the petition. If
132.17the requisite number of signatures are certified as valid, the town board must hold a public
132.18hearing on the petitioned matter. Within 30 days after the end of the hearing, the town
132.19board must decide whether to discontinue the subordinate service district, continue as it is,
132.20or take some other action with respect to it.
132.21 Subd. 2. Bonds. If obligations have been issued for the benefit of the subordinate
132.22service district, the rates, charges, and tax levies, if any, continue until the obligations and
132.23any obligations issued to refund them have been paid in full.
132.24 Sec. 9. Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:
132.25 Subd. 3. Capital notes. (a) A county board may, by resolution and without
132.26referendum, issue capital notes subject to the county debt limit to purchase capital
132.27equipment useful for county purposes that has an expected useful life at least equal to the
132.28term of the notes. The notes shall be payable in not more than ten years and shall be
132.29issued on terms and in a manner the board determines. A tax levy shall be made for
132.30payment of the principal and interest on the notes, in accordance with section475.61 ,
132.31as in the case of bonds.
132.32 (b) For purposes of this subdivision, "capital equipment" means:
132.33 (1) public safety, ambulance, road construction or maintenance, and medical
132.34equipment; and
133.1 (2) computer hardware and software, whether bundled with machinery or equipment
133.2or unbundled.The authority to issue capital notes for software expires on July 1, 2007.
133.3 Sec. 10. Minnesota Statutes 2006, section 373.40, subdivision 4, is amended to read:
133.4 Subd. 4. Limitations on amount. A county, other than Ramsey, may not issue
133.5bonds under this section if the maximum amount of principal and interest to become due in
133.6any year on all the outstanding bonds issued pursuant to this section (including the bonds
133.7to be issued) will equal or exceed0.05367 0.12 percent of taxable market value of property
133.8in the county.Ramsey county may not issue bonds under this section if the maximum
133.9amount of principal and interest to become due in any year on all the outstanding bonds
133.10issued pursuant to this section (including the bonds to be issued) will equal or exceed
133.110.06455 percent of taxable market value of property in the county. Calculation of the
133.12limit must be made using the taxable market value for the taxes payable year in which
133.13the obligations are issued and sold. This section does not limit the authority to issue
133.14bonds under any other special or general law.
133.15EFFECTIVE DATE.This section is effective for bonds issued after June 30, 2007.
133.16 Sec. 11. Minnesota Statutes 2006, section 375B.09, is amended to read:
133.17375B.09 FINANCING.
133.18 Subdivision 1. Budget. (a) Upon adoption of the next annual budget following the
133.19creation of a subordinate service district the county board shall include in the budget
133.20appropriate provisions for the operation of the district including, as appropriate, either a
133.21property tax levied only on property within the boundaries of the district or a levy of a
133.22service charge against the users of the service within the district, or any combination of a
133.23property tax and a service charge.
133.24 (b) A tax or service charge or a combination thereof shall not be imposed to finance a
133.25function or service in the subordinate service district which the county generally provides
133.26throughout the county unless an increase in the level of the service is to be supplied in the
133.27subordinate service district in which case, in addition to the countywide tax levy, only an
133.28amount necessary to pay for the increased level of service may be imposed.
133.29 Subd. 2. Bonds. At any time after the requirements of section 375B.07 have been
133.30met and the subordinate service district created, the county board may issue obligations
133.31in an amount it deems necessary to defray in whole or in part the expense incurred
133.32and estimated to be incurred in making capital improvements necessary to operate the
133.33subordinate service district and provide the special services in the district, including every
134.1item of cost from inception to completion and all fees and expenses incurred in connection
134.2with the capital improvements or the financing. The obligations shall be payable primarily
134.3out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net
134.4revenues as described in section 444.075, and special assessments under chapter 429. The
134.5county board may by resolution pledge the full faith credit and taxing power of the county
134.6to ensure payment of the principal and interest on the obligations if the proceeds of the
134.7taxes and service charges are insufficient to pay the principal and interest. Obligations
134.8must be issued in accordance with chapter 475, except that an election is not required, and
134.9the amount of the obligations is not included in determining the net indebtedness of the
134.10county under the provisions of any law limiting indebtedness.
134.11 Subd. 3. Covenants to secure obligations. In resolutions authorizing the issuance
134.12of general or special obligations and pledging taxes and service charges imposed under
134.13subdivision 1, net revenues, or special assessments to their payment, the county board
134.14may make covenants for the protection of holders of the obligations and taxpayers of the
134.15county as it deems necessary, including a covenant that the county will impose and collect
134.16charges of the nature authorized by this chapter at the time and in the amounts required to
134.17produce, together with any taxes or special assessments designated as a primary source
134.18of payment of the obligations, funds adequate to pay all principal and interest when due
134.19on the obligations and to create and maintain reserves securing the payments as may be
134.20provided in the resolutions.
134.21 Subd. 4. Continuance in the event of withdrawal. If obligations have been issued
134.22for the benefit of the subordinate service district, and the district is withdrawn or removed
134.23pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in
134.24the withdrawn or removed district must continue until the obligations and any obligations
134.25issued to refund them have been paid in full.
134.26 Sec. 12. Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:
134.27 Subd. 2. Equipment acquisition; capital notes. The board may, by resolution and
134.28without public referendum, issue capital notes within existing debt limits for the purpose
134.29of purchasing ambulance and other medical equipment, road construction or maintenance
134.30equipment, public safety equipment and other capital equipment having an expected
134.31useful life at least equal to the term of the notes issued. The notes shall be payable in
134.32not more thanfive ten years and shall be issued on terms and in a manner as the board
134.33determines. The total principal amount of the notes issued for any fiscal year shall not
134.34exceed one percent of the total annual budget for that year and shall be issued solely for
134.35the purchases authorized in this subdivision. A tax levy shall be made for the payment
135.1of the principal and interest on such notes as in the case of bonds. For purposes of this
135.2subdivision, "equipment" includes computer hardware and software, whether bundled with
135.3machinery or equipment or unbundled. For purposes of this subdivision, the term "medical
135.4equipment" includes computer hardware and software and other intellectual property for
135.5use in medical diagnosis, medical procedures, research, record keeping, billing, and other
135.6hospital applications, together with application development services and training related
135.7to the use of the computer hardware and software and other intellectual property, all
135.8without regard to their useful life. For purposes of determining the amount of capital notes
135.9which the county may issue in any year, the budget of the county and Hennepin Healthcare
135.10System, Inc. shall be combined and the notes issuable under this subdivision shall be in
135.11addition to obligations issuable under section373.01, subdivision 3 .
135.12 Sec. 13. Minnesota Statutes 2006, section 383B.77, subdivision 1, is amended to read:
135.13 Subdivision 1. Creation. The Hennepin County Housing and Redevelopment
135.14Authority is created in the county of Hennepin. It shall have all of the powers and duties
135.15of a housing and redevelopment authority under sections469.001 to
469.047 . For the
135.16purposes of applying the municipal housing and redevelopment act to Hennepin County,
135.17the county has all of the powers and duties of a city, the county board has all the powers
135.18and duties of a governing body, the chair of the county board has all of the powers and
135.19duties of a mayor, and, notwithstanding section 469.008, the area of operation includes the
135.20area within the territorial boundaries of the county.
135.21EFFECTIVE DATE.Because the population of Hennepin County is more than
135.221,000,000, under Minnesota Statutes, section 645.023, this section is effective without
135.23local approval.
135.24 Sec. 14. Minnesota Statutes 2006, section 383B.77, subdivision 2, is amended to read:
135.25 Subd. 2. Limitation. This section does not limit or restrict any existing housing
135.26and redevelopment authority or prevent a municipality from creating an authority. For
135.27purposes of this subdivision, "housing and redevelopment authority" includes any
135.28municipal department, agency, or authority of the city of Minneapolis which exercises the
135.29powers of a housing and redevelopment authority pursuant to section469.003 or other
135.30law. The county authority shall notify a municipal authority by January 31 of each year
135.31as to the activities the county authority plans to participate in within the municipality.
135.32The municipal authority shall notify the county authority within 45 days of the date of
135.33the notice from the county authority, if the municipal authority does not consent to the
135.34activities of the county authority.The county authority shall not exercise its powers in a
136.1municipality where a housing and redevelopment authority was created under Minnesota
136.2Statutes 1969, chapter 462, before June 8, 1971, except as provided in this subdivision. If a
136.3city housing and redevelopment authority requests the county housing and redevelopment
136.4authority to exercise any power or perform any function of the municipal authority, the
136.5county authority may do so.
136.6EFFECTIVE DATE.Because the population of Hennepin County is more than
136.71,000,000, under Minnesota Statutes, section 645.023, this section is effective without
136.8local approval.
136.9 Sec. 15. Minnesota Statutes 2006, section 410.32, is amended to read:
136.10410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
136.11 (a) Notwithstanding any contrary provision of other law or charter, a home rule
136.12charter city may, by resolution and without public referendum, issue capital notes subject
136.13to the city debt limit to purchase capital equipment.
136.14 (b) For purposes of this section, "capital equipment" means:
136.15 (1) public safety equipment, ambulance and other medical equipment, road
136.16construction and maintenance equipment, and other capital equipment; and
136.17 (2) computer hardware and software, whether bundled with machinery or equipment
136.18or unbundled.
136.19 (c) The equipment or software must have an expected useful life at least as long as the
136.20term of the notes.The authority to issue capital notes for software expires on July 1, 2007.
136.21 (d) The notes shall be payable in not more than ten years and be issued on terms and
136.22in the manner the city determines. The total principal amount of the capital notes issued
136.23in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
136.24in the city for that year.
136.25 (e) A tax levy shall be made for the payment of the principal and interest on the
136.26notes, in accordance with section475.61 , as in the case of bonds.
136.27 (f) Notes issued under this section shall require an affirmative vote of two-thirds of
136.28the governing body of the city.
136.29 (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
136.30city may also issue capital notes subject to its debt limit in the manner and subject to the
136.31limitations applicable to statutory cities pursuant to section412.301 .
136.32 Sec. 16. Minnesota Statutes 2006, section 412.301, is amended to read:
136.33412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
137.1 (a) The council may issue certificates of indebtedness or capital notes subject to the
137.2city debt limits to purchase capital equipment.
137.3 (b) For purposes of this section, "capital equipment" means:
137.4 (1) public safety equipment, ambulance and other medical equipment, road
137.5construction and maintenance equipment, and other capital equipment; and
137.6 (2) computer hardware and software, whether bundled with machinery or equipment
137.7or unbundled.
137.8 (c) The equipment or software must have an expected useful life at least as long as
137.9the terms of the certificates or notes.The authority to issue capital notes for software
137.10expires on July 1, 2007.
137.11 (d) Such certificates or notes shall be payable in not more than ten years and shall be
137.12issued on such terms and in such manner as the council may determine.
137.13 (e) If the amount of the certificates or notes to be issued to finance any such purchase
137.14exceeds 0.25 percent of the market value of taxable property in the city, they shall not
137.15be issued for at least ten days after publication in the official newspaper of a council
137.16resolution determining to issue them; and if before the end of that time, a petition asking
137.17for an election on the proposition signed by voters equal to ten percent of the number of
137.18voters at the last regular municipal election is filed with the clerk, such certificates or notes
137.19shall not be issued until the proposition of their issuance has been approved by a majority
137.20of the votes cast on the question at a regular or special election.
137.21 (f) A tax levy shall be made for the payment of the principal and interest on such
137.22certificates or notes, in accordance with section475.61 , as in the case of bonds.
137.23 Sec. 17. Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:
137.24 Subd. 3. City. "City" means a city organized and existing under the laws of
137.25Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or
137.26charter to engage in the local distribution and sale of gas, provided that any city so
137.27engaged on January 1, 1979 is authorized to continue such distribution and sale, and every
137.28city now or hereafter so authorized may exercise, either individually or as a member of a
137.29municipal gas agency, all of the powers granted in sections453A.01 to
453A.12 .
137.30 City also includes a city organized and existing under the laws of another state or
137.31a city charter adopted pursuant thereto which participates in a municipal gas agency
137.32with Minnesota cities.
137.33 Sec. 18. [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
138.1 Subdivision 1. Authorization; establishment. A political subdivision or other
138.2public entity that creates or has created an actuarial liability to pay postemployment
138.3benefits to employees or officers after their termination of service may establish a trust to
138.4pay those benefits. For purposes of this section, the term "postemployment benefits" means
138.5benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting
138.6Standards Board and the term "trust" means a trust, a trust account, or a custodial account
138.7or contract authorized under section 401(f) of the Internal Revenue Code.
138.8 Subd. 2. Purpose of trust. The trust established under this section may only be
138.9used to pay postemployment benefits and may be either revocable or irrevocable.
138.10 Subd. 3. Trust administrator. The trust administrator of a trust established under
138.11this section shall be either:
138.12 (1) the Public Employees Retirement Association;
138.13 (2) a bank or banking association incorporated under the laws of the United States or
138.14of any state and authorized by the laws under which it is organized to exercise corporate
138.15trust powers; or
138.16 (3) an insurance company or agency qualified to do business in Minnesota which has
138.17at least five years' experience in investment products and services for group retirement
138.18benefits and which has a specialized department dedicated to services for retirement
138.19investment products.
138.20 A political subdivision or public entity may, in its discretion and in compliance
138.21with any applicable trust document, change trust administrators and transfer trust assets
138.22accordingly.
138.23 Subd. 4. Account maintenance. (a) A political subdivision or other public entity
138.24may establish a trust account to be held under the supervision of the trust administrator for
138.25the purposes of this section. A trust administrator shall establish a separate account for
138.26each participating political subdivision or public entity. The trust administrator may charge
138.27participating political subdivisions and public entities fees for reasonable administrative
138.28costs. The amount of any fees charged by the Public Employees Retirement Association is
138.29appropriated to the association from the account. A trust administrator may establish other
138.30reasonable terms and conditions for creation and maintenance of these accounts.
138.31 (b) The trust administrator must report to the political subdivision or other public
138.32entity on the investment returns of invested trust assets and on all investment fees or costs
138.33incurred by the trust. The annual rates of return, along with investment and administrative
138.34fees and costs for the trust, must be disclosed in the political subdivision's or public entity's
138.35annual financial audit in a manner prescribed by the state auditor.
139.1 (c) Effective for fiscal years beginning after December 31, 2009, the trust
139.2administrator must report electronically to the state auditor the portfolio and performance
139.3information specified in section 356.219, subdivision 3, in the manner prescribed by
139.4the state auditor.
139.5 Subd. 5. Investment. (a) The assets of a trust or trust account shall be invested and
139.6held as stipulated in paragraphs (b) to (e).
139.7 (b) The Public Employees Retirement Association must certify all money in the trust
139.8accounts for which it is trust administrator to the State Board of Investment for investment
139.9under section 11A.14, subject to the policies and procedures established by the State
139.10Board of Investment. Investment earnings must be credited to the trust account of the
139.11individual political subdivision or public entity.
139.12 (c) A trust administrator, other than the Public Employees Retirement Association,
139.13must ensure that all money in the trust accounts for which it is trust administrator is
139.14invested by a registered investment adviser, a bank investment trust department, or an
139.15insurance company or agency retirement investment department. Investment earnings
139.16must be credited to the trust account of the individual political subdivision or public entity.
139.17 (d) For trust assets invested by the State Board of Investment, the investment
139.18restrictions shall be the same as those generally applicable to the State Board of
139.19Investment. For trust assets invested by a trust administrator other than the Public
139.20Employees Retirement Association, the assets may only be invested in investments
139.21authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified
139.22in the applicable trust document.
139.23 (e) A political subdivision or public entity may provide investment direction to a
139.24trust administrator in compliance with any applicable trust document.
139.25 Subd. 6. Limit on deposit. A political subdivision or public entity may not
139.26deposit money in a trust or trust account created pursuant to this section if the total
139.27amount invested by that political subdivision or public entity would exceed the political
139.28subdivision's or public entity's actuarially determined liabilities for postemployment
139.29benefits due to officers and employees, as determined under the applicable standards of the
139.30Governmental Accounting Standards Board.
139.31 Subd. 7. Withdrawal of funds and termination of account. (a) For a revocable
139.32account, a political subdivision or public entity may withdraw some or all of its money
139.33or terminate the trust account. Money and accrued investment earnings withdrawn
139.34from a revocable account must be deposited in a fund separate and distinct from any
139.35other funds of the political subdivision or public entity. This money, with accrued
139.36investment earnings, must be used to pay legally enforceable postemployment benefits
140.1to former officers and employees, unless (i) there has been a change in state or federal
140.2law affecting that political subdivision's or public entity's liabilities for postemployment
140.3benefits, or (ii) there has been a change in the demographic composition of that political
140.4subdivision's or public entity's employees eligible for postemployment benefits, or (iii)
140.5there has been a change in the provisions or terms of the postemployment benefits in that
140.6political subdivision or public entity including, but not limited to, the portion of the costs
140.7eligible employees must pay to receive the benefits, or (iv) other factors exist that have
140.8a material effect on that political subdivision's or public entity's actuarially determined
140.9liabilities for postemployment benefits, in which event any amount in excess of 100
140.10percent of that political subdivision's or public entity's actuarially determined liabilities for
140.11postemployment benefits, as determined under standards of the Government Accounting
140.12Standards Board, may be withdrawn and used for any purpose.
140.13 (b) For an irrevocable account, a political subdivision or public entity may withdraw
140.14money only:
140.15 (1) as needed to pay postemployment benefits owed to former officers and employees
140.16of the political subdivision or public entity; or
140.17 (2) when all postemployment benefit liability owed to former officers or employees
140.18of the political subdivision or public entity has been satisfied or otherwise defeased.
140.19 (c) A political subdivision or public entity requesting withdrawal of money from
140.20an account created under this section must do so at a time and in the manner required by
140.21the executive director of the Public Employees Retirement Association or specified in an
140.22applicable trust document. The political subdivision or public entity that created the trust
140.23must ensure that withdrawals comply with the requirements of this section.
140.24 (d) The legislature may not divert funds in these trusts or trust accounts for use
140.25for another purpose.
140.26 Subd. 8. Status of irrevocable trust. (a) All money in an irrevocable trust or trust
140.27account created in this section is held in trust for the exclusive benefit of former officers
140.28and employees of the participating political subdivision or public entity, and is not subject
140.29to claims by creditors of the state, the participating political subdivision or public entity,
140.30the current or former officers and employees of the political subdivision or public entity,
140.31or the trust administrator.
140.32 (b) An irrevocable trust fund or trust account created in this section shall be deemed
140.33an arrangement equivalent to a trust for all legal purposes.
140.34EFFECTIVE DATE.This section is effective the day following final enactment,
140.35and is applicable immediately to all political subdivisions or public entities subject to
140.36Statement No. 45 of the Governmental Accounting Standards Board in 2007, to those
141.1political subdivisions or public entities whose trusts or trust accounts are validated
141.2by section 27, and to those political subdivisions or public entities that have begun
141.3consideration of measures to implement Statement No. 45 in 2007. This section is
141.4applicable on July 1, 2008, for all other political subdivisions or public entities.
141.5 Sec. 19. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
141.6to read:
141.7 Subd. 1m. Obligations. After July 1, 2007, in addition to other authority in this
141.8section, the council may issue certificates of indebtedness, bonds, or other obligations
141.9under this section in an amount not exceeding $33,600,000 for capital expenditures as
141.10prescribed in the council's regional transit master plan and transit capital improvement
141.11program and for related costs, including the costs of issuance and sale of the obligations.
141.12APPLICATION AND EFFECTIVE DATE.This section applies in the counties of
141.13Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the
141.14day following final enactment.
141.15 Sec. 20. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
141.16to read:
141.17 Subd. 5. Anticipation of grants. In addition to other authority granted in this
141.18section, the council may exercise the authority granted to an issuing political subdivision
141.19by section 475.522.
141.20APPLICATION AND EFFECTIVE DATE.This section applies in the counties of
141.21Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the
141.22day following final enactment.
141.23 Sec. 21. Minnesota Statutes 2006, section 475.51, subdivision 4, is amended to read:
141.24 Subd. 4. Net debt. "Net debt" means the amount remaining after deducting from its
141.25gross debt the amount of current revenues which are applicable within the current fiscal
141.26year to the payment of any debt and the aggregate of the principal of the following:
141.27 (1) Obligations issued for improvements which are payable wholly or partly from the
141.28proceeds of special assessments levied upon property specially benefited thereby, including
141.29those which are general obligations of the municipality issuing them, if the municipality is
141.30entitled to reimbursement in whole or in part from the proceeds of the special assessments.
141.31 (2) Warrants or orders having no definite or fixed maturity.
142.1 (3) Obligations payable wholly from the income from revenue producing
142.2conveniences.
142.3 (4) Obligations issued to create or maintain a permanent improvement revolving
142.4fund.
142.5 (5) Obligations issued for the acquisition, and betterment of public waterworks
142.6systems, and public lighting, heating or power systems, and of any combination thereof or
142.7for any other public convenience from which a revenue is or may be derived.
142.8 (6) Debt service loans and capital loans made to a school district under the provisions
142.9of sections126C.68 and
126C.69 .
142.10 (7) Amount of all money and the face value of all securities held as a debt service
142.11fund for the extinguishment of obligations other than those deductible under this
142.12subdivision.
142.13 (8) Obligations to repay loans made under section216C.37 .
142.14 (9) Obligations to repay loans made from money received from litigation or
142.15settlement of alleged violations of federal petroleum pricing regulations.
142.16 (10) Obligations issued to pay pension fund or other postemployment benefit
142.17liabilities under section475.52, subdivision 6 , or any charter authority.
142.18 (11) Obligations issued to pay judgments against the municipality under section
142.19475.52, subdivision 6
, or any charter authority.
142.20 (12) All other obligations which under the provisions of law authorizing their
142.21issuance are not to be included in computing the net debt of the municipality.
142.22EFFECTIVE DATE.This section is effective for obligations issued after June
142.2330, 2007.
142.24 Sec. 22. Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:
142.25 Subd. 6. Certain purposes. Any municipality may issue bonds for paying
142.26judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
142.27for funding actuarial liabilities to pay postemployment benefits to employees or officers
142.28after their termination of service; or for funding all or part of the municipality's current
142.29and future unfunded liability for a pension or retirement fund or plan referred to in
142.30section356.20, subdivision 2 , as those liabilities are most recently computed pursuant
142.31to sections356.215 and
356.216 . The board of trustees or directors of a pension fund or
142.32relief association referred to in section69.77 or chapter 422A must consent and must
142.33be a party to any contract made under this section with respect to the fund held by it
142.34for the benefit of and in trust for its members. For purposes of this section, the term
143.1"postemployment benefits" means benefits giving rise to a liability under Statement No.
143.245 of the Governmental Accounting Standards Board.
143.3 Sec. 23. [475.522] GRANT ANTICIPATION FINANCING OF
143.4TRANSPORTATION OR TRANSIT PROJECTS.
143.5 Subdivision 1. Definitions. For purposes of this section, the term "political
143.6subdivision" means a county or a statutory or home rule charter city, and the term
143.7"issuing political subdivision" means a political subdivision that issues obligations under
143.8subdivision 2.
143.9 Subd. 2. Authorization. An issuing political subdivision may enter into agreements
143.10with any other political subdivision of the state, within or without its jurisdiction, and any
143.11state agency, with respect to federal grants for transportation or transit projects to be
143.12received directly or indirectly by or on behalf of the political subdivision or agency,
143.13under an executed grant agreement with the relevant federal agency. The agreements
143.14may provide that the political subdivision or agency will pledge to the issuing political
143.15subdivision all or a specified portion of the federal grants received by or on behalf of the
143.16political subdivision or agency for a specified period of years, or until all obligations issued
143.17by the issuing political subdivision under subdivision 3 with respect to those federal grants
143.18have been paid or legally defeased. If the issuing political subdivision issues obligations
143.19under subdivision 3, the agreements must provide the method by which the proceeds of
143.20the obligations will be used to pay or reimburse the costs of the transportation or transit
143.21projects relating to the federal grants described in the executed federal grant agreement.
143.22 Subd. 3. Issuance of obligations. In anticipation of any federal grants for
143.23transportation or transit projects to be received directly or indirectly by any political
143.24subdivision or agency as specified in subdivision 1, or by an issuing political subdivision
143.25with respect to any transportation or transit projects within its jurisdiction, an issuing
143.26political subdivision may issue its obligations payable from the collections of those
143.27federal grants. The obligations may be issued in the principal amount the issuing political
143.28subdivision determines provided that the estimated collections of the federal grants under
143.29the relevant executed federal grant agreement in each year in which the obligations will
143.30be outstanding must be at least equal to:
143.31 (1) if the obligations are to be issued as revenue obligations, 150 percent of the
143.32maximum annual debt service on the obligations; or
143.33 (2) if the obligations are to be issued as general obligations, 110 percent of the
143.34maximum annual debt service on the obligations.
144.1 Except as otherwise provided in this section, the issuing political subdivision shall
144.2provide for the issuance, sale, and security of the obligations as provided in chapter 475,
144.3and has the same powers and duties as a municipality issuing bonds under that law, except
144.4that no election is required and the net debt limitations in chapter 475 do not apply to the
144.5obligations. The issuing political subdivision may determine to issue the obligations as
144.6revenue obligations, payable solely from the collections of the federal grants anticipated,
144.7or may pledge its full faith and credit to the payment of the obligations.
144.8 Subd. 4. Use of proceeds. The proceeds of the obligations must be used:
144.9 (1) to pay or reimburse the costs of the transportation or transit projects relating to
144.10the federal grants being anticipated;
144.11 (2) to pay the costs of issuance of the obligations, including credit enhancement;
144.12 (3) to pay interest on the obligations for a period not exceeding three years from
144.13their date of issue; and
144.14 (4) if the full faith and credit of the issuing political subdivision is not pledged to the
144.15payment of the obligations, to fund a debt service reserve fund for the obligations.
144.16 Sec. 24. Minnesota Statutes 2006, section 475.53, subdivision 1, is amended to read:
144.17 Subdivision 1. Generally. Except as otherwise provided in sections475.51 to
144.18475.74
, no municipality, except a school district or a city of the first class, shall incur or
144.19be subject to a net debt in excess oftwo three percent of the market value of taxable
144.20property in the municipality.
144.21EFFECTIVE DATE.This section is effective for obligations issued after June
144.2230, 2007.
144.23 Sec. 25. Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:
144.24 Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or
144.25charter may be issued by any municipality upon obtaining the approval of a majority of
144.26the electors voting on the question of issuing the obligations, but an election shall not be
144.27required to authorize obligations issued:
144.28 (1) to pay any unpaid judgment against the municipality;
144.29 (2) for refunding obligations;
144.30 (3) for an improvement or improvement program, which obligation is payable wholly
144.31or partly from the proceeds of special assessments levied upon property specially benefited
144.32by the improvement or by an improvement within the improvement program, or from tax
144.33increments, as defined in section469.174 , subdivision 25, including obligations which are
144.34the general obligations of the municipality, if the municipality is entitled to reimbursement
145.1in whole or in part from the proceeds of such special assessments or tax increments and
145.2not less than 20 percent of the cost of the improvement or the improvement program is to
145.3be assessed against benefited property or is to be paid from the proceeds of federal grant
145.4funds or a combination thereof, or is estimated to be received from tax increments;
145.5 (4) payable wholly from the income of revenue producing conveniences;
145.6 (5) under the provisions of a home rule charter which permits the issuance of
145.7obligations of the municipality without election;
145.8 (6) under the provisions of a law which permits the issuance of obligations of a
145.9municipality without an election;
145.10 (7) to fund pension or retirement fund or postemployment benefit liabilities pursuant
145.11to section475.52, subdivision 6 ;
145.12 (8) under a capital improvement plan under section373.40 ; and
145.13 (9) under sections469.1813 to
469.1815 (property tax abatement authority bonds), if
145.14the proceeds of the bonds are not used for a purpose prohibited under section469.176,
145.15subdivision 4g , paragraph (b).
145.16 Sec. 26. Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:
145.17 Subd. 3b. Street reconstruction. (a) A municipality may, without regard to
145.18the election requirement under subdivision 1, issue and sell obligations for street
145.19reconstruction, if the following conditions are met:
145.20 (1) the streets are reconstructed under a street reconstruction plan that describes the
145.21streets to be reconstructed street reconstruction to be financed, the estimated costs, and
145.22any planned reconstruction of other streets in the municipality over the next five years,
145.23and the plan and issuance of the obligations has been approved by a vote of all of the
145.24members of the governing body present at the meeting following a public hearing for
145.25which notice has been published in the official newspaper at least ten days but not more
145.26than 28 days prior to the hearing; and
145.27 (2) if a petition requesting a vote on the issuance is signed by voters equal to
145.28five percent of the votes cast in the last municipal general election and is filed with the
145.29municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
145.30only after obtaining the approval of a majority of the voters voting on the question of
145.31the issuance of the obligations.
145.32 (b) Obligations issued under this subdivision are subject to the debt limit of the
145.33municipality and are not excluded from net debt under section475.51, subdivision 4 .
145.34 (c) For purposes of this subdivision, street reconstruction includes utility
145.35replacement and relocation and other activities incidental to the street reconstruction, turn
146.1lanes and other improvements having a substantial public safety function, realignments,
146.2other modifications to intersect with state and county roads, and the local share of state
146.3and county road projects.
146.4 (d) Except in the case of turn lanes, safety improvements, realignments, intersection
146.5modifications, and the local share of state and county road projects, street reconstruction
146.6does not include the portion of project cost allocable to widening a street or adding curbs
146.7and gutters where none previously existed.
146.8 Sec. 27. VALIDATION.
146.9 Any trust or trust account or other custodial account or contract authorized under
146.10section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay
146.11postemployment benefits to employees or officers after termination of service, is hereby
146.12validated, may continue in full force and effect, and shall have continuing authority
146.13to accept new funds; however, this section does not validate or correct defects in any
146.14previously created trust document. Any funds held by a validated trust or account
146.15under this section may be invested as provided in Minnesota Statutes, section 471.6175,
146.16subdivision 5. A validated trust or account shall have until January 1, 2008, to bring
146.17its trust documents and procedures into compliance with Minnesota Statutes, section
146.18471.6175.
146.19EFFECTIVE DATE.This section is effective the day following final enactment.
146.20 Sec. 28. TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
146.21 Notwithstanding Minnesota Statutes, section 366.095, or any other law to the
146.22contrary, the town board of the town of Crane Lake in St. Louis County may issue one
146.23or more certificates of indebtedness in a total amount not to exceed $225,000, which
146.24are not subject to the debt limits of the town. The proceeds of the certificates must be
146.25used to acquire property and pay other costs related to a land exchange with the United
146.26States Forest Service. The certificates shall be payable in not more than 30 years and be
146.27issued on the terms and in the manner as the board may determine. Minnesota Statutes,
146.28sections 475.54, subdivision 1, and 475.56, paragraph (c), do not apply to the certificates
146.29issued under this section. A tax levy shall be made to pay the principal and interest on the
146.30certificates as in the case of bonds.
146.31EFFECTIVE DATE.This section is effective the day after the governing body of
146.32the town of Crane Lake and its chief clerical officer timely complete their compliance with
146.33Minnesota Statutes, section 645.021, subdivisions 2 and 3.
147.1 Sec. 29. CITY OF WINSTED; BONDING AUTHORITY.
147.2 (a) The city of Winsted may issue general obligation bonds under Minnesota
147.3Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of
147.4a city hall, community center, and police station; park improvements, including trails
147.5and an amphitheater; related public improvements; and substantial landscaping for the
147.6improvements.
147.7 (b) The bonds may be issued as general obligations of the city without an election to
147.8approve the bonds under Minnesota Statutes, section 475.58.
147.9 (c) The bonds are not included in computing any debt limitation applicable to the
147.10city, including, but not limited to, the net debt limits under Minnesota Statutes, section
147.11475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
147.12and interest on the bonds is not subject to any levy limitation.
147.13 (d) The aggregate principal amount of bonds used to pay costs of the acquisition and
147.14betterment of the facility consisting of a city hall, community center, and police station;
147.15park improvements, including trails and an amphitheater; related public improvements;
147.16and substantial landscaping for the improvements may not exceed $4,900,000, plus an
147.17amount equal to the costs related to issuance of the bonds and capitalized interest.
147.18EFFECTIVE DATE.This section is effective upon compliance by the governing
147.19body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.
147.22 Section 1. Minnesota Statutes 2006, section 276A.01, subdivision 3, is amended to
147.23read:
147.24 Subd. 3. Commercial-industrial property. "Commercial-industrial property"
147.25means the following categories of property, as defined in section273.13 , excluding that
147.26portion of the property (i) that may, by law, constitute the tax base for a tax increment
147.27pledged pursuant to section469.042 or
469.162 or sections
469.174 to
469.178 ,
147.28certification of which was requested prior to May 1, 1996, to the extent and while the tax
147.29increment is so pledged; or (ii) that is exempt from taxation under section272.02 :
147.30 (1) that portion of class 5 property consisting of unmined iron ore and low-grade
147.31iron-bearing formations as defined in section273.14 , tools, implements, and machinery,
147.32except the portion of high voltage transmission lines, the value of which is deducted from
147.33net tax capacity under section273.425 ; and
148.1 (2) that portion of class 3 and class 5 property which is either used or zoned for use
148.2for any commercial or industrial purpose, including property that becomes taxable under
148.3section 7, except for such property which is, or, in the case of property under construction,
148.4will when completed be used exclusively for residential occupancy and the provision of
148.5services to residential occupants thereof. Property must be considered as used exclusively
148.6for residential occupancy only if each of not less than 80 percent of its occupied residential
148.7units is, or, in the case of property under construction, will when completed be occupied
148.8under an oral or written agreement for occupancy over a continuous period of not less
148.9than 30 days.
148.10 If the classification of property prescribed by section273.13 is modified by
148.11legislative amendment, the references in this subdivision are to the successor class or
148.12classes of property, or portions thereof, that include the kinds of property designated
148.13in this subdivision.
148.14 Sec. 2. Minnesota Statutes 2006, section 276A.04, is amended to read:
148.15276A.04 INCREASE IN NET TAX CAPACITY.
148.16 By July 15 of 1997 and each subsequent year, the auditor of each county in the
148.17area shall determine the amount, if any, by which the net tax capacity determined in the
148.18preceding year pursuant to section276A.03 , of commercial-industrial property subject to
148.19taxation within each municipality in the county exceeds the net tax capacity in 1995 of
148.20commercial-industrial property subject to taxation within that municipality, including the
148.21total net tax capacity of property that becomes taxable under section 7. If a municipality is
148.22located in two or more counties within the area, the auditors of those counties shall certify
148.23the data required by section276A.03 to the county auditor responsible for allocating
148.24the levies of that municipality between or among the affected counties. That county
148.25auditor shall determine the amount of the net excess, if any, for the municipality under
148.26this section, and certify that amount under section276A.05 . The increase in total net tax
148.27capacity determined by this section must be reduced by the amount of any decreases in
148.28the net tax capacity of commercial-industrial property resulting from any court decisions,
148.29court-related stipulation agreements, or abatements for a prior year, and only in the
148.30amount of such decreases made during the 12-month period ending on May 1 of the
148.31current assessment year, where the decreases, if originally reflected in the determination of
148.32a prior year's net tax capacity under section276A.03 , would have resulted in a smaller
148.33contribution from the municipality in that year. An adjustment for the decreases shall be
148.34made only if the municipality made a contribution in a prior year based on the higher net
148.35tax capacity of the commercial-industrial property.
149.1 Sec. 3. Minnesota Statutes 2006, section 298.22, is amended by adding a subdivision
149.2to read:
149.3 Subd. 5a. Forest trust. The commissioner, upon the affirmative vote of a majority
149.4of the members of the board, may purchase forest lands in the taconite assistance area
149.5defined in under section 273.1341 with funds specifically authorized for the purchase. The
149.6acquired forest lands must be held in trust for the benefit of the citizens of the taconite
149.7assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall be
149.8managed and developed for recreation and economic development purposes. Proceeds
149.9derived from the management of the lands and from the sale of timber or removal of
149.10gravel or other minerals from these forest lands shall be deposited into an Iron Range
149.11Miners' Memorial Forest account that is established within the state financial accounts.
149.12Funds may be expended from the account upon approval of a majority of the members of
149.13the board to purchase, manage, administer, convey interests in, and improve the forest
149.14lands. By majority vote of the members of the board, money in the Iron Range Miners'
149.15Memorial Forest account may be transferred into the corpus of the Douglas J. Johnson
149.16economic protection trust fund established under sections 298.291 to 298.294. The
149.17property acquired under the authority granted by this subdivision and income derived from
149.18the property or the operation or management of the property are exempt from taxation
149.19by the state or its political subdivisions.
149.20 Sec. 4. Minnesota Statutes 2006, section 298.2214, subdivision 2, is amended to read:
149.21 Subd. 2. Iron Range Higher Education Committee; membership. The members
149.22of the committee shall consist of:
149.23 (1) one member appointed by the governor;
149.24 (2) one member appointed by the president of the University of Minnesota;
149.25 (3) two membersappointed by the commissioner of the Iron Range resources and
149.26rehabilitation appointed by the chair;and
149.27 (4) the commissioner of Iron Range resources and rehabilitation; and
149.28 (5) the President of the Northeast Higher Education District.
149.29 Sec. 5. Minnesota Statutes 2006, section 298.227, is amended to read:
149.30298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
149.31 Subdivision 1. Fund for producers. An amount equal to that distributed pursuant
149.32to each taconite producer's taxable production and qualifying sales under section298.28,
149.33subdivision 9a , shall be held by the Iron Range Resources and Rehabilitation Board in
150.1a separate taconite economic development fund for each taconite and direct reduced
150.2ore producer.
150.3 Subd. 2. Committee review. Money from the fund for each producer shall be
150.4released by the commissioner after review by a joint committee consisting of an equal
150.5number of representatives of the salaried employees and the nonsalaried production and
150.6maintenance employees of that producer. The District 11 director of the United States
150.7Steelworkers of America, on advice of each local employee president, shall select
150.8the employee members. In nonorganized operations, the employee committee shall be
150.9elected by the nonsalaried production and maintenance employees. The review must be
150.10completed no later than six months after the producer presents a proposal for expenditure
150.11of the funds to the committee.
150.12 Subd. 3. Release of funds. The funds held pursuant to this section may be
150.13released only for acquisition of equipment and facilities for the producer or for research
150.14and development in Minnesota on new mining, or taconite, iron, or steel production
150.15technology, but only if the producer provides a matching expenditure to be used for
150.16the same purpose of at least 50 percent of the distribution based on14.7 cents per ton
150.17beginning with distributions in 2002 for distributions in 2007, 11.7 cents per ton for
150.18distributions in 2008, 8.7 cents per ton for distributions in 2009, 5.7 cents per ton for
150.19distributions in 2010, 2.7 cents per ton for distributions in 2011, and 1 cent per ton for
150.20distributions in 2012.
150.21 Subd. 4. Repayment required. If a producer uses money from the fund to procure
150.22haulage trucks, mobile equipment, or mining shovels, and the producer removes the piece
150.23of equipment from the taconite tax relief area defined in section273.134 within ten years
150.24from the date of receipt of the money from the fund, a portion of the money granted
150.25from the fund must be repaid to the taconite economic development fund. The portion
150.26of the money to be repaid is 100 percent of the grant if the equipment is removed from
150.27the taconite tax relief area within 12 months after receipt of the money from the fund,
150.28declining by ten percent for each of the subsequent nine years during which the equipment
150.29remains within the taconite tax relief area.
150.30 Subd. 5. Sale of facility. If a taconite production facility is sold after operations at
150.31the facility had ceased, any money remaining in the fund for the former producer may be
150.32released to the purchaser of the facility on the terms otherwise applicable to the former
150.33producer under this section.
150.34 Subd. 6. Other distributions. If a producer fails to provide matching funds for
150.35a proposed expenditure within six months after the commissioner approves release of
150.36the funds, the funds are available for release to another producer in proportion to the
151.1distribution provided and under the conditions of this section. Any portion of the fund
151.2which is not released by the commissioner within two years of its deposit in the fund shall
151.3be divided between the taconite environmental protection fund created in section298.223
151.4and the Douglas J. Johnson economic protection trust fund created in section298.292 for
151.5placement in their respective special accounts. Two-thirds of the unreleased funds shall be
151.6distributed to the taconite environmental protection fund and one-third to the Douglas J.
151.7Johnson economic protection trust fund.
151.8EFFECTIVE DATE.This section is effective for distributions in 2008 and
151.9thereafter.
151.10 Sec. 6. Minnesota Statutes 2006, section 298.24, subdivision 1, is amended to read:
151.11 Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002,
151.12and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and
151.13quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon
151.14the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore
151.15concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the
151.16same rate imposed for concentrates produced in 2004.
151.17 (b) For concentrates produced in 2006 and subsequent years, the tax rate shall be
151.18equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate
151.19multiplied by the percentage increase in the implicit price deflator from the fourth quarter
151.20of the second preceding year to the fourth quarter of the preceding year. "Implicit price
151.21deflator" means the implicit price deflator for the gross domestic product prepared by the
151.22Bureau of Economic Analysis of the United States Department of Commerce.
151.23 (c) On concentrates produced in 1997 and thereafter, an additional tax is imposed
151.24equal to three cents per gross ton of merchantable iron ore concentrate for each one
151.25percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees
151.26Fahrenheit.
151.27 (d) The tax shall be imposed on the average of the production for the current year
151.28and the previous two years. The rate of the tax imposed will be the current year's tax rate.
151.29This clause shall not apply in the case of the closing of a taconite facility if the property
151.30taxes on the facility would be higher if this clause and section298.25 were not applicable.
151.31 (e) If the tax or any part of the tax imposed by this subdivision is held to be
151.32unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate
151.33produced shall be imposed.
151.34 (f) Consistent with the intent of this subdivision to impose a tax based upon the
151.35weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
152.1determine the weight of merchantable iron ore concentrate included in fluxed pellets by
152.2subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
152.3flux additives included in the pellets from the weight of the pellets. For purposes of this
152.4paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
152.5olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
152.6No subtraction from the weight of the pellets shall be allowed for binders, mineral and
152.7chemical additives other than basic flux additives, or moisture.
152.8 (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
152.9of a plant's commercial production of direct reduced ore, no tax is imposed under this
152.10section. As used in this paragraph, "commercial production" is production of more than
152.1150,000 tons of direct reduced ore in the current year or in any prior year, "noncommercial
152.12production" is production of 50,000 tons or less of direct reduced ore in any year, and
152.13"direct reduced ore" is ore that results in a product that has an iron content of at least 75
152.14percent. For the third year of a plant's commercial production of direct reduced ore, the
152.15rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined
152.16under this subdivision. For the fourth commercial production year, the rate is 50 percent of
152.17the rate otherwise determined under this subdivision; for the fifth commercial production
152.18year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for
152.19all subsequent commercial production years, the full rate is imposed.
152.20 (2) Subject to clause (1), production of direct reduced ore in this state is subject to
152.21the tax imposed by this section, but if that production is not produced by a producer
152.22of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the
152.23production of direct reduced iron in this state is not subject to the tax imposed by this
152.24section on taconite or iron sulfides.
152.25 (3) Notwithstanding any other provision of this subdivision, no tax is imposed
152.26on direct reduced ore under this section during the facility's noncommercial production
152.27of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
152.28production of direct reduced ore is subject to the tax imposed by this section on taconite
152.29and iron sulphides. Three-year average production of direct reduced ore does not
152.30include production of direct reduced ore in any noncommercial year. Three-year average
152.31production for a direct reduced ore facility that has noncommercial production is the
152.32average of the commercial production of direct reduced ore for the current year and the
152.33previous two commercial years.
152.34 (4) This paragraph applies only to plants for which all environmental permits have
152.35been obtained and construction has begun before July 1, 2008.
153.1 Sec. 7. Minnesota Statutes 2006, section 298.25, is amended to read:
153.2298.25 TAXES ADDITIONAL TO OCCUPATION TAX; IN LIEU OF OTHER
153.3TAXES.
153.4 The taxes imposed under section298.24 shall be in addition to the occupation tax
153.5imposed upon the business of mining and producing iron ore. Except as herein otherwise
153.6provided, such taxes shall be in lieu of all other taxes upon such taconite, iron sulphides,
153.7and direct reduced ore or the lands in which they are contained, or upon the mining or
153.8quarrying thereof, or the production of concentrate or direct reduced ore therefrom, or
153.9upon the concentrate or direct reduced ore produced, or upon the machinery, equipment,
153.10tools, supplies and buildings used in such mining, quarrying or production, or upon the
153.11lands occupied by, or used in connection with, such mining, quarrying or production
153.12facilities. If electric or steam power for the mining, transportation or concentration of
153.13such taconite, concentrates or direct reduced ore produced therefrom is generated in
153.14plants principally devoted to the generation of power for such purposes, the plants in
153.15which such power is generated and all machinery, equipment, tools, supplies, transmission
153.16and distribution lines used in the generation and distribution of such power, shall not be
153.17considered to be machinery, equipment, tools, supplies and buildings used in the mining,
153.18quarrying, or production of taconite, taconite concentrates or direct reduced ore within
153.19the meaning of this section, and shall be subject to general property taxation.If part
153.20of the power generated in such a plant is used for purposes other than the mining or
153.21concentration of taconite or direct reduced ore or the transportation or loading of taconite,
153.22the concentrates thereof or direct reduced ore, a proportionate share of the value of such
153.23generating facilities, equal to the proportion that the power used for such other purpose
153.24bears to the generating capacity of the plant, shall be subject to the general property tax
153.25in the same manner as other property; provided, power generated in such a plant and
153.26exchanged for an equivalent amount of power which is used for the mining, transportation,
153.27or concentration of such taconite, concentrates or direct reduced ore produced therefrom,
153.28shall be considered as used for such purposes within the meaning of this section. Nothing
153.29herein shall prevent the assessment and taxation of the surface of reserve land containing
153.30taconite and not occupied by such facilities or used in connection therewith at the value
153.31thereof without regard to the taconite or iron sulphides therein, nor the assessment and
153.32taxation of merchantable iron ore or other minerals, or iron-bearing materials other than
153.33taconite or iron sulphides in such lands in the manner provided by law, nor the assessment
153.34and taxation of facilities used in producing sulphur or sulphur products from iron sulphide
153.35concentrates, or in refining such sulphur products, under the general property tax laws.
153.36Nothing herein shall except from general taxation or from taxation as provided by other
154.1laws any property used for residential or townsite purposes, including utility services
154.2thereto. This section does not provide an exemption from general property taxation for ore
154.3docks even if located at the site of a taconite production facility.
154.4EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
154.5in 2008, and thereafter.
154.6 Sec. 8. Minnesota Statutes 2006, section 298.28, subdivision 3, is amended to read:
154.7 Subd. 3. Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed
154.8under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid
154.9account to be distributed as provided in section298.282 .
154.10 (b) An amount must be allocated to towns or cities that is annually certified by
154.11the county auditor of a county containing a taconite tax relief area as defined in section
154.12273.134, paragraph (b)
, within which there is (1) an organized township if, as of January
154.132, 1982, more than 75 percent of the assessed valuation of the township consists of iron
154.14ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation
154.15of the city consists of iron ore.
154.16 (c) The amount allocated under paragraph (b) will be the portion of a township's or
154.17city's certified levy equal to the proportion of (1) the difference between 50 percent of
154.18January 2, 1982, assessed value in the case of a township and 50 percent of the January 2,
154.191980, assessed value in the case of a city and its current assessed value to (2) the sum of
154.20its current assessed value plus the difference determined in (1), provided that the amount
154.21distributed shall not exceed $55 per capita in the case of a township or $75 per capita in
154.22the case of a city. For purposes of this limitation, population will be determined according
154.23to the 1980 decennial census conducted by the United States Bureau of the Census. If the
154.24current assessed value of the township exceeds 50 percent of the township's January 2,
154.251982, assessed value, or if the current assessed value of the city exceeds 50 percent of the
154.26city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this
154.27paragraph, "assessed value," when used in reference to years other than 1980 or 1982,
154.28means the appropriate net tax capacities multiplied by 10.2.
154.29 (d) In addition to other distributions under this subdivision, 3 cents per taxable ton
154.30must be allocated for distribution to towns that are entirely located within the taconite tax
154.31relief area defined in section 273.134, paragraph (b). The amount available under this
154.32paragraph will be distributed to eligible towns on a per capita basis.
154.33EFFECTIVE DATE.This section is effective for distributions in 2008 and
154.34thereafter.
155.1 Sec. 9. Minnesota Statutes 2006, section 298.28, subdivision 4, is amended to read:
155.2 Subd. 4. School districts. (a)17.15 22.65
155.3provided in paragraph (d) must be allocated to qualifying school districts to be distributed,
155.4based upon the certification of the commissioner of revenue, under paragraphs (b) and (c),
155.5except as otherwise provided in paragraph (f).
155.6 (b)(i) 3.43 cents per taxable ton must be distributed to the school districts in which
155.7the lands from which taconite was mined or quarried were located or within which the
155.8concentrate was produced. The distribution must be based on the apportionment formula
155.9prescribed in subdivision 2.
155.10 (ii) Three cents per taxable ton from each taconite facility must be distributed to
155.11each affected school district for deposit in a fund dedicated to building maintenance
155.12and repairs, as follows:
155.13 (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
155.14School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
155.15districts;
155.16 (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
155.17Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
155.18districts;
155.19 (3) proceeds from the Mittal Steel Company and Minntac or their successors are
155.20distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
155.212711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
155.22 (4) proceeds from the Northshore Mining Company or its successor are distributed
155.23to Independent School Districts Nos. 2142, St. Louis County, and 318, Lake Superior,
155.24or their successor districts; and
155.25 (5) proceeds from United Taconite or its successor are distributed to Independent
155.26School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
155.27successor districts.
155.28 (c)(i)13.72 16.22 cents per taxable ton, less any amount distributed under paragraph
155.29(e), shall be distributed to a group of school districts comprised of those school districts
155.30which qualify as a tax relief area under section273.134, paragraph (b) , or in which there is
155.31a qualifying municipality as defined by section273.134, paragraph (a) , in direct proportion
155.32to school district indexes as follows: for each school district, its pupil units determined
155.33under section126C.05 for the prior school year shall be multiplied by the ratio of the
155.34average adjusted net tax capacity per pupil unit for school districts receiving aid under
155.35this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
155.36ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
156.1Each district shall receive that portion of the distribution which its index bears to the sum
156.2of the indices for all school districts that receive the distributions.
156.3 (ii) Notwithstanding clause (i), each school district that receives a distribution
156.4under sections298.018 ;
298.23 to
298.28 , exclusive of any amount received under this
156.5clause;298.34 to
298.39 ;
298.391 to
298.396 ;
298.405 ; or any law imposing a tax on
156.6severed mineral values after reduction for any portion distributed to cities and towns under
156.7section126C.48, subdivision 8 , paragraph (5), that is less than the amount of its levy
156.8reduction under section126C.48, subdivision 8 , for the second year prior to the year of the
156.9distribution shall receive a distribution equal to the difference; the amount necessary to
156.10make this payment shall be derived from proportionate reductions in the initial distribution
156.11to other school districts under clause (i).
156.12 (d) Any school district described in paragraph (c) where a levy increase pursuant to
156.13section126C.17, subdivision 9 , was authorized by referendum for taxes payable in 2001,
156.14shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
156.15pupil units identified in section126C.05, subdivision 1 , enrolled in the second previous
156.16year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
156.17times the district's taxable net tax capacity in the second previous year.
156.18 If the total amount provided by paragraph (d) is insufficient to make the payments
156.19herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
156.20so as not to exceed the funds available. Any amounts received by a qualifying school
156.21district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
156.22education aid which the district receives pursuant to section126C.13 or the permissible
156.23levies of the district. Any amount remaining after the payments provided in this paragraph
156.24shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
156.25deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
156.26economic protection trust fund as provided in subdivision 11.
156.27 Each district receiving money according to this paragraph shall reserve the lesser of
156.28the amount received under this paragraph or $25 times the number of pupil units served
156.29in the district. It may use the money for early childhood programs or for outcome-based
156.30learning programs that enhance the academic quality of the district's curriculum. The
156.31outcome-based learning programs must be approved by the commissioner of education.
156.32 (e) There shall be distributed to any school district the amount which the school
156.33district was entitled to receive under section298.32 in 1975.
156.34 (f) Effective for the distribution in 2003 only, five percent of the distributions to
156.35school districts under paragraphs (b), (c), and (e); subdivision 6, paragraph (c); subdivision
156.3611; and section298.225 , shall be distributed to the general fund. The remainder less any
157.1portion distributed to cities and towns under section126C.48, subdivision 8 , paragraph
157.2(5), shall be distributed to the Douglas J. Johnson economic protection trust fund created
157.3in section298.292 . Fifty percent of the amount distributed to the Douglas J. Johnson
157.4economic protection trust fund shall be made available for expenditure under section
157.5298.293
as governed by section
298.296 . Effective in 2003 only, 100 percent of the
157.6distributions to school districts under section477A.15 less any portion distributed to
157.7cities and towns under section126C.48, subdivision 8 , paragraph (5), shall be distributed
157.8to the general fund.
157.9EFFECTIVE DATE.This section is effective for distributions in 2008 and
157.10thereafter.
157.11 Sec. 10. Minnesota Statutes 2006, section 298.28, subdivision 5, is amended to read:
157.12 Subd. 5. Counties. (a)26.05 cents per taxable ton is allocated to counties to be
157.13distributed, based upon certification by the commissioner of revenue, under paragraphs
157.14(b) to(d) (c).
157.15 (b)20.525
157.16the taconite is mined or quarried or in which the concentrate is produced, less any
157.17amount which is to be distributed pursuant to paragraph (c). The apportionment formula
157.18prescribed in subdivision 2 is the basis for the distribution.
157.19 (c) If an electric power plant owned by and providing the primary source of power
157.20for a taxpayer mining and concentrating taconite is located in a county other than the
157.21county in which the mining and the concentrating processes are conducted, one cent per
157.22taxable ton of the tax distributed to the counties pursuant to paragraph (b) and imposed
157.23on and collected from such taxpayer shall be paid to the county in which the power plant
157.24is located.
157.25 (d)5.525 10.525 cents per taxable ton shall be paid to the county from which the
157.26taconite was mined, quarried or concentrated to be deposited in the county road and
157.27bridge fund. If the mining, quarrying and concentrating, or separate steps in any of those
157.28processes are carried on in more than one county, the commissioner shall follow the
157.29apportionment formula prescribed in subdivision 2.
157.30EFFECTIVE DATE.This section is effective for distributions in 2008 and
157.31thereafter.
157.32 Sec. 11. Minnesota Statutes 2006, section 298.28, subdivision 6, is amended to read:
158.1 Subd. 6. Property tax relief. (a) In2002 2008 and thereafter,
33.9 30.9
158.2taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or
158.3section298.2961 , subdivision 5, must be allocated to St. Louis County acting as the
158.4counties' fiscal agent, to be distributed as provided in sections273.134 to
273.136 .
158.5 (b) If an electric power plant owned by and providing the primary source of power
158.6for a taxpayer mining and concentrating taconite is located in a county other than the
158.7county in which the mining and the concentrating processes are conducted, .1875 cent per
158.8taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
158.9 (c) If an electric power plant owned by and providing the primary source of power
158.10for a taxpayer mining and concentrating taconite is located in a school district other than
158.11a school district in which the mining and concentrating processes are conducted, .4541
158.12cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
158.13the school district.
158.14 Sec. 12. Minnesota Statutes 2006, section 298.28, subdivision 9a, is amended to read:
158.15 Subd. 9a. Taconite economic development fund. (a)30.1 cents per ton for
158.16distributions in 2002 and thereafter For distributions in 2007 to 2012, the amount provided
158.17in this subdivision must be paid to the taconite economic development fund. The amount
158.18of the distributions is at the following amounts per ton:
158.19 (1) for distribution in 2007, 30.1 cents;
158.20 (2) for distribution in 2008, 25.1 cents;
158.21 (3) for distribution in 2009, 20.1 cents;
158.22 (4) for distribution in 2010, 15.1 cents;
158.23 (5) for distribution in 2011, 10.1 cents; and
158.24 (6) for distribution in 2012, 5.1 cents.
158.25 No distribution shall be made under this paragraph in2004 or any subsequent year
158.26in which total industry production falls below 30 million tons. Distribution shall only be
158.27made to a taconite producer's fund under section298.227 if the producer timely pays its
158.28tax under section298.24 by the dates provided under section
298.27 , or pursuant to the
158.29due dates provided by an administrative agreement with the commissioner.
158.30 (b) An amount equal to 50 percent of the tax under section298.24 for concentrate
158.31sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including
158.32crushed pellets shall be paid to the taconite economic development fund. The amount
158.33paid shall not exceed $700,000 annually for all companies. If the initial amount to be
158.34paid to the fund exceeds this amount, each company's payment shall be prorated so the
158.35total does not exceed $700,000.
159.1 (c) No distributions will be made under this subdivision after 2012. Any amount
159.2remaining in this fund on January 1, 2013, shall be distributed, two-thirds to the
159.3environmental protection fund and one-third to the Douglas J. Johnson economic
159.4protection trust fund.
159.5 Sec. 13. Minnesota Statutes 2006, section 298.28, is amended by adding a subdivision
159.6to read:
159.7 Subd. 9d. Iron Range higher education account. Two cents per taxable ton must
159.8be allocated to the Iron Range Resources and Rehabilitation Board to be deposited in
159.9an Iron Range higher education account that is hereby created, to be used for higher
159.10education programs, including apprenticeship and training programs certified by the
159.11Minnesota Department of Labor and Industry, conducted at educational institutions and
159.12apprenticeship and training facilities located in the taconite assistance area defined in
159.13section 273.1341. The Iron Range Higher Education committee under section 298.2214
159.14and the Iron Range Resources and Rehabilitation Board must approve all expenditures
159.15from the account.
159.16EFFECTIVE DATE.This section is effective for production in 2008, distributions
159.17in 2009, and thereafter.
159.18 Sec. 14. Minnesota Statutes 2006, section 298.292, subdivision 2, is amended to read:
159.19 Subd. 2. Use of money. Money in the Douglas J. Johnson economic protection trust
159.20fund may be used for the following purposes:
159.21 (1) to provide loans, loan guarantees, interest buy-downs and other forms of
159.22participation with private sources of financing, but a loan to a private enterprise shall be
159.23for a principal amount not to exceed one-half of the cost of the project for which financing
159.24is sought, and the rate of interest on a loan to a private enterprise shall be no less than the
159.25lesser of eight percent or an interest rate three percentage points less than a full faith
159.26and credit obligation of the United States government of comparable maturity, at the
159.27time that the loan is approved;
159.28 (2) to fund reserve accounts established to secure the payment when due of the
159.29principal of and interest on bonds issued pursuant to section298.2211 ;
159.30 (3) to pay in periodic payments or in a lump sum payment any or all of the interest
159.31on bonds issued pursuant to chapter 474 for the purpose of constructing, converting,
159.32or retrofitting heating facilities in connection with district heating systems or systems
159.33utilizing alternative energy sources;and
160.1 (4) to invest in a venture capital fund or enterprise that will provide capital to other
160.2entities that are engaging in, or that will engage in, projects or programs that have the
160.3purposes set forth in subdivision 1. No investments may be made in a venture capital fund
160.4or enterprise unless at least two other unrelated investors make investments of at least
160.5$500,000 in the venture capital fund or enterprise, and the investment by the Douglas
160.6J. Johnson economic protection trust fund may not exceed the amount of the largest
160.7investment by an unrelated investor in the venture capital fund or enterprise. For purposes
160.8of this subdivision, an "unrelated investor" is a person or entity that is not related to
160.9the entity in which the investment is made or to any individual who owns more than 40
160.10percent of the value of the entity, in any of the following relationships: spouse, parent,
160.11child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of
160.12the value of all interests in it. For purposes of determining the limitations under this
160.13clause, the amount of investments made by an investor other than the Douglas J. Johnson
160.14economic protection trust fund is the sum of all investments made in the venture capital
160.15fund or enterprise during the period beginning one year before the date of the investment
160.16by the Douglas J. Johnson economic protection trust fund; and
160.17 (5) to purchase forest land in the taconite assistance area defined in section 273.1341
160.18to be held and managed as a public trust for the benefit of the area for the purposes
160.19authorized in section 298.22, subdivision 5a.
160.20 Money from the trust fund shall be expended only in or for the benefit of the taconite
160.21assistance area defined in section273.1341 .
160.22 Sec. 15. Minnesota Statutes 2006, section 298.296, subdivision 2, is amended to read:
160.23 Subd. 2. Expenditure of funds. (a) Before January 1, 2028, funds may be expended
160.24on projects and for administration of the trust fund only from the net interest, earnings,
160.25and dividends arising from the investment of the trust at any time, including net interest,
160.26earnings, and dividends that have arisen prior to July 13, 1982, plus $10,000,000 made
160.27available for use in fiscal year 1983, except that any amount required to be paid out of the
160.28trust fund to provide the property tax relief specified in Laws 1977, chapter 423, article
160.29X, section 4, and to make school bond payments and payments to recipients of taconite
160.30production tax proceeds pursuant to section298.225 , may be taken from the corpus of
160.31the trust.
160.32 (b) Additionally, upon recommendation by the board, up to $13,000,000 from the
160.33corpus of the trust may be made available for use as provided in subdivision 4, and up to
160.34$10,000,000 from the corpus of the trust may be made available for use as provided in
160.35section298.2961 .
161.1 (c) Additionally, an amount equal to 20 percent of the value of the corpus of the trust
161.2on May 18, 2002, not including the funds authorized in paragraph (b), plus the amounts
161.3made available under section298.28, subdivision 4 , and Laws 2002, chapter 377, article
161.48, section 17, may be expended on projects. Funds may be expended for projects under
161.5this paragraph only if the project:
161.6 (1) is for the purposes established under section298.292, subdivision 1 , clause
161.7(1) or (2); and
161.8 (2) is approved by the board upon an affirmative vote of at least ten of its members.
161.9No money made available under this paragraph or paragraph (d) can be used for
161.10administrative or operating expenses of the Iron Range Resources and Rehabilitation
161.11Board or expenses relating to any facilities owned or operated by the board on May 18,
161.122002.
161.13 (d) Upon recommendation by a unanimous vote of all members of the board,
161.14amounts in addition to those authorized under paragraphs (a), (b), and (c) may be
161.15expended on projects described in section298.292, subdivision 1 .
161.16 (e) Annual administrative costs, not including detailed engineering expenses for the
161.17projects, shall not exceed five percent of the net interest, dividends, and earnings arising
161.18from the trust in the preceding fiscal year.
161.19 (f) Principal and interest received in repayment of loans made pursuant to this
161.20section, and earnings on other investments made under section298.292, subdivision 2 ,
161.21clause (4), shall be deposited in the state treasury and credited to the trust. These receipts
161.22are appropriated to the board for the purposes of sections298.291 to
298.298 .
161.23 (g) Additionally, notwithstanding section 298.293, upon affirmative vote of a
161.24majority of the members of the board, money from the corpus of the trust may be expanded
161.25to purchase forest lands within the taconite assistance area as provided in sections 298.22,
161.26subdivision 5a, and 298.292, subdivision 2, clause (5).
161.27 Sec. 16. Minnesota Statutes 2006, section 298.2961, subdivision 4, is amended to read:
161.28 Subd. 4. Grant and loan fund. (a) A fund is established to receive distributions
161.29under section298.28, subdivision 9b , and to make grants or loans as provided in this
161.30subdivision. Any grant or loan made under this subdivision must be approved by
161.31a majority of the members of the Iron Range Resources and Rehabilitation Board,
161.32established under section298.22 .
161.33 (b) Distributions received in calendar year 2005 are allocated to the city of Virginia
161.34for improvements and repairs to the city's steam heating system.
162.1 (c) Distributions received in calendar year 2006 are allocated to a project of the
162.2public utilities commissions of the cities of Hibbing and Virginia to convert their electrical
162.3generating plants to the use of biomass products, such as wood.
162.4 (d) Distributions received in calendar year 2007 must be paid to the city of Tower to
162.5be used for the East Two Rivers project in or near the city of Tower.
162.6 (e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution
162.7must be paid to St. Louis County for deposit in its county road and bridge fund to be used
162.8for relocation of St. Louis County Road 715, commonly referred to as Pike River Road.
162.9The remainder of the 2008 distributionand the full must be paid to St. Louis County for a
162.10grant to the City of Virginia for connecting sewer and water lines to the St. Louis County
162.11maintenance garage on Highway 135, further extending the lines to interconnect with the
162.12city of Gilbert's sewer and water lines. The total amount of the distributions in 2009 and
162.13subsequent years is allocated for projects under section298.223 , subdivision 1.
162.14EFFECTIVE DATE.This section is effective the day following final enactment.
162.15 Sec. 17. Minnesota Statutes 2006, section 298.2961, subdivision 5, is amended to read:
162.16 Subd. 5. Public works and local economic development fund. For distributions in
162.172007 only, a special fund is established to receive38.4 cents per ton that otherwise would
162.18be allocated under section298.28 , subdivision 6. The following amounts are allocated to
162.19St. Louis County acting as the fiscal agent for the recipients for the specific purposes:
162.20 (1)13.4 cents per ton for the Central Iron Range Sanitary Sewer District for
162.21construction of a combined wastewater facility and notwithstanding section 298.28,
162.22subdivision 11, paragraph (a), or any other law, interest accrued on this money while held
162.23by St. Louis County shall also be distributed to the recipient;
162.24 (2) six cents per ton to the city of Eveleth to redesign and design and construct
162.25improvements to renovate its water treatment facility;
162.26 (3) one cent per ton for the East Range Joint Powers Board to acquire land for and to
162.27design a central wastewater collection and treatment system;
162.28 (4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;
162.29 (5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;
162.30 (6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;
162.31 (7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and
162.32Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment
162.33and Economic Development;
162.34 (8) 0.4 cents per ton to the city of Keewatin for a new city well;
163.1 (9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous
163.2materials center;
163.3 (10) 0.9 cents per ton to Aitkin County Growth for an economic development
163.4project for peat harvesting;
163.5 (11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;
163.6 (12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive
163.7plan;
163.8 (13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;
163.9 (14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake
163.10Environmental Learning Center;
163.11 (15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;
163.12 (16) 0.5 cents per ton to the Economic Development Authority of the city of Grand
163.13Rapids for planning for the North Central Research and Technology Laboratory;
163.14 (17) 0.6 cents per ton to the city of Bovey for sewer and water extension;
163.15 (18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and
163.16 (19) ten cents per ton toan economic development authority in a city through which
163.17State Highway 1 passes, or a city in Independent School District No. 2142 that has an
163.18active mine, the commissioner of Iron Range Resources and Rehabilitation for deposit
163.19in a Highway 1 Corridor Account established by the commissioner, to be distributed by
163.20the commissioner to any of the cities of Babbitt, Cook, Ely, or Tower, foran economic
163.21developmentproject projects approved by the Iron Range Resources and Rehabilitation
163.22Board; notwithstanding section 298.28, subdivision 11, paragraph (a), or any other law,
163.23interest accrued on this money while held by St. Louis County or the commissioner
163.24shall also be distributed to the recipient.
163.25 Sec. 18. Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:
163.26 Subdivision 1. Definitions. Except as may otherwise be provided, the following
163.27words, when used in this section, shall have the meanings herein ascribed to them.
163.28(1) (a) "Aggregate material" shall mean means:
163.29 (1) nonmetallic natural mineral aggregate including, but not limited to sand, silica
163.30sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is
163.31transported on a public road, street, or highway., provided that nonmetallic aggregate
163.32materialshall does not include dimension stone and dimension granite; and
163.33 (2) taconite tailings, crushed rock, and architectural or dimension stone and
163.34dimension granite removed from a taconite mine or the site of a previously operated
163.35taconite mine.
164.1 Aggregate material must be measured or weighed after it has been extracted from
164.2the pit, quarry, or deposit.
164.3(2) (b) "Person" shall mean means any individual, firm, partnership, corporation,
164.4organization, trustee, association, or other entity.
164.5(3) (c) "Operator" shall mean means any person engaged in the business of removing
164.6aggregate material from the surface or subsurface of the soil, for the purpose of sale,
164.7either directly or indirectly, through the use of the aggregate material in a marketable
164.8product or service.
164.9(4) (d) "Extraction site" shall mean means a pit, quarry, or deposit containing
164.10aggregate material and any contiguous property to the pit, quarry, or deposit which is used
164.11by the operator for stockpiling the aggregate material.
164.12(5) (e) "Importer" shall mean means any person who buys aggregate material
164.13produced from a county not listed in paragraph(6) (f) or another state and causes the
164.14aggregate material to be imported into a county in this state which imposes a tax on
164.15aggregate material.
164.16(6) (f) "County" shall mean means the counties of Pope, Stearns, Benton, Sherburne,
164.17Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman,
164.18Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley,
164.19Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose
164.20board has voted after a public hearing to impose the tax under this section and has notified
164.21the commissioner of revenue of the imposition of the tax.
164.22(7) (g) "Borrow" shall mean means granular borrow, consisting of durable particles
164.23of gravel and sand, crushed quarry or mine rock, crushed gravel or stone, or any
164.24combination thereof, the ratio of the portion passing the (#200) sieve divided by the
164.25portion passing the (1 inch) sieve may not exceed 20 percent by mass.
164.26 Sec. 19. Minnesota Statutes 2006, section 298.75, subdivision 3, is amended to read:
164.27 Subd. 3. Report and remittance. (a) By the 14th day following the last day of each
164.28calendar quarter, every operator or importer shall make and file with the county auditor of
164.29the county in which the aggregate material is removed or imported, a correct report under
164.30oath, in such form and containing such information as the auditor shall require relative to
164.31the quantity of aggregate material removed or imported during the preceding calendar
164.32quarter. The report shall be accompanied by a remittance of the amount of tax due.
164.33 (b) If any of the proceeds of the tax is to be apportioned as provided in subdivision
164.342, the operator or importer shall also include on the report any relevant information
164.35concerning the amount of aggregate material transported, the tax and the county of
165.1destination. The county auditor shall notify the county treasurer of the amount of such
165.2tax and the county to which it is due. The county treasurer shall remit the tax to the
165.3appropriate county within 30 days, except as provided in paragraph (c).
165.4 (c) The proceeds of the tax on aggregate material as defined in subdivision 1,
165.5paragraph (a), clause (2), must be remitted to the commissioner of iron range resources
165.6and rehabilitation to be deposited in the taconite area environmental protection fund under
165.7section 298.223, and used for the purposes of that fund.
165.8 Sec. 20. Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:
165.9 Subd. 7. Proceeds of taxes. All money collected as taxes under this section on
165.10aggregate material as defined in subdivision 1, paragraph (a), clause (1), shall be deposited
165.11in the county treasury and credited as follows, for expenditure by the county board:
165.12 (a) Sixty percent to the county road and bridge fund for expenditure for the
165.13maintenance, construction and reconstruction of roads, highways and bridges;
165.14 (b) Thirty percent to the road and bridge fund of those towns as determined by the
165.15county board and to the general fund or other designated fund of those cities as determined
165.16by the county board, to be expended for maintenance, construction and reconstruction of
165.17roads, highways and bridges; and
165.18 (c) Ten percent to a special reserve fund which is hereby established, for expenditure
165.19for the restoration of abandoned pits, quarries, or deposits located upon public and tax
165.20forfeited lands within the county.
165.21 If there are no abandoned pits, quarries or deposits located upon public or tax
165.22forfeited lands within the county, this portion of the tax shall be deposited in the county
165.23road and bridge fund for expenditure for the maintenance, construction and reconstruction
165.24of roads, highways and bridges.
165.25 Sec. 21. Minnesota Statutes 2006, section 298.75, is amended by adding a subdivision
165.26to read:
165.27 Subd. 11. Tax may be imposed; Otter Tail County. (a) If Otter Tail County
165.28does not impose a tax under this section and approves imposition of the tax under this
165.29subdivision, the town of Scambler in Otter Tail County may impose the aggregate
165.30materials tax under this section.
165.31 (b) For purposes of exercising the powers contained in this section, the "town" is
165.32deemed to be the "county."
166.1 (c) All provisions in this section apply to the town of Scambler, except that all
166.2proceeds of the tax must be retained by the town and used for the purposes described in
166.3subdivision 7.
166.4 (d) If Otter Tail County imposes an aggregate materials tax under this section, the
166.5tax imposed by the town of Scambler under this subdivision is repealed on the effective
166.6date of the Otter Tail County tax.
166.7EFFECTIVE DATE.This section is effective the day after the governing body
166.8of the town of Scambler and its chief clerical officer comply with section 645.021,
166.9subdivisions 2 and 3.
166.10 Sec. 22. IRON RANGE RESOURCES AND REHABILITATION BOARD;
166.11APPROPRIATION; RETIRE BONDS.
166.12 Commencing with taxes payable in 2008 there is annually appropriated from
166.13the distribution of the taconite production tax revenues to the taconite environmental
166.14protection fund under Minnesota Statutes, section 298.28, subdivision 11, and to the
166.15Douglas J. Johnson economic protection trust fund under Minnesota Statutes, section
166.16298.28, subdivisions 9 and 11, in equal shares, an amount of $500,000 per year.
166.17 The revenue received under this section shall be used only to retire Mesabi East
166.18School District No. 2711 bonds in the amount of $9,000,000 issued September 1, 2006,
166.19and in the amount of $6,250,000 issued March 1, 2007. The payments shall continue for a
166.20period of ten years ending with taxes payable in 2017. Payments to the school district
166.21shall be made on March 1.
166.22EFFECTIVE DATE.This section is effective the day following final enactment.
166.23 Sec. 23. APPROPRIATIONS; DEPARTMENT OF EDUCATION.
166.24 Subdivision 1. Department of Education The sums indicated in this section are
166.25appropriated from the general fund to the Department of Education. These appropriations
166.26are added to any appropriations for the same purpose in 2007 H.F. No. 6, if enacted, for
166.27the fiscal years indicated.
166.28 Subd. 2. General education aid. For general education aid under Minnesota
166.29Statutes, section 126C.13, subdivision 4:
166.31 The 2009 appropriation includes $1,041,000 for fiscal year 2008 and $0 for fiscal
166.32year 2009.
167.1 Sec. 24. REPEALER.
167.2Minnesota Statutes 2006, section 126C.21, subdivision 4, is repealed.
167.5 Section 1. [295.90] HOCKEY HERITAGE SURCHARGE.
167.6 Subdivision 1. Imposition. A surcharge of ten cents is imposed on each ticket or
167.7admission to a professional men's hockey game held in the state.
167.8 Subd. 2. Collection, remittance. The surcharge imposed under this subdivision
167.9shall be collected by the professional men's hockey team or association sponsoring or
167.10holding the hockey game. The team or association shall annually report the surcharge on a
167.11form prescribed by the commissioner of revenue and remit the surcharge with the return to
167.12the commissioner of revenue by March 15 of the following calendar year.
167.13 Subd. 3. Administration. The commissioner of revenue shall have authority to
167.14administer, collect, enforce, refund, and audit the surcharge under this section. Interest
167.15on late payments or refunds of the surcharge shall be at the rates specified under section
167.16289A.55, and penalties for failure to file, pay, or underpay the surcharge shall be at the
167.17rates provided under section 289A.60, subdivision 1, paragraph (e), and subdivision 2.
167.18 Subd. 4. Deposit of revenues. The commissioner of revenue shall deposit all
167.19revenues, including penalty and interest, derived from the surcharge imposed in this
167.20section in the hockey surcharge account in the special revenue fund. The amount deposited
167.21under this section is appropriated to the Iron Range Resources and Rehabilitation Board
167.22for payment to the city of Eveleth to be used for the support of the Hockey Hall of Fame
167.23Museum provided that it continues to operate in the city. Payments under this section for
167.24the Hockey Hall of Fame Museum are in addition to and must not be used to supplant
167.25funding under section 298.28, subdivision 9c.
167.26 Sec. 2. Minnesota Statutes 2006, section 297F.21, subdivision 3, is amended to read:
167.27 Subd. 3. Inventory; judicial determination; appeal; disposition of seized
167.28property. (a) Within ten days after the seizure of any alleged contraband, the person
167.29making the seizure shall serve by certified mail an inventory of the property seized on the
167.30person from whom the seizure was made, if known, and on any person known or believed
167.31to have any right, title, interest, or lien in the property, at the last known address, and file
167.32a copy with the commissioner. The notice must include an explanation of the right to
167.33demand a judicial forfeiture determination.
168.1 (b) Within 60 days after the date of service of the inventory, which is the date of
168.2mailing, the person from whom the property was seized or any person claiming an interest
168.3in the property may file a demand for a judicial determination of the question as to whether
168.4the property was lawfully subject to seizure and forfeiture. The demand must be in the
168.5form of a civil complaint and must be filed with the court administrator in the county in
168.6which the seizure occurred, together with proof of service of a copy of the complaint
168.7on the commissioner of revenue, and the standard filing fee for civil actions unless the
168.8petitioner has the right to sue in forma pauperis under section563.01 . If the value of the
168.9seized property is $7,500 or less, the claimant may file an action in conciliation court for
168.10recovery of the property. If the value of the seized property is less than $500, the claimant
168.11does not have to pay the conciliation court filing fee.
168.12 (c) The complaint must be captioned in the name of the claimant as plaintiff and
168.13the seized property as defendant, and must state with specificity the grounds on which
168.14the claimant alleges the property was improperly seized and the plaintiff's interest in the
168.15property seized. No responsive pleading is required of the commissioner, and no court
168.16fees may be charged for the commissioner's appearance in the matter. The proceedings
168.17are governed by the Rules of Civil Procedure. Notwithstanding any law to the contrary,
168.18an action for the return of property seized under this section may not be maintained by
168.19or on behalf of any person who has been served with an inventory unless the person has
168.20complied with this subdivision. The court shall decide whether the alleged contraband is
168.21contraband, as defined in subdivision 1. The court shall hear the action without a jury and
168.22shall try and determine the issues of fact and law involved.
168.23 (d) When a judgment of forfeiture is entered,the commissioner may, unless the
168.24judgment is stayed pending an appeal,either the commissioner:
168.25 (1)deliver the forfeited cigarette packages or tobacco products to the commissioner
168.26of human services for use by patients in state institutions may authorize the forfeited
168.27property to be used for the purpose of enforcing a criminal provision of state or federal law;
168.28 (2) shall causethe property in clause (1) forfeited cigarette packages or tobacco
168.29products not used under clause (1) to be destroyed; or and products used under clause (1)
168.30to be destroyed upon the completion of use; and
168.31 (3) may cause the forfeited property, other than forfeited cigarette packages or
168.32tobacco products, to be sold at public auction as provided by law.
168.33The person making a sale, after deducting the expense of keeping the property, the fee
168.34for seizure, and the costs of the sale, shall pay all liens according to their priority, which
168.35are established as being bona fide and as existing without the lienor having any notice
168.36or knowledge that the property was being used or was intended to be used for or in
169.1connection with the violation. The balance of the proceeds must be paid 75 percent to the
169.2Department of Revenue for deposit as a supplement to its operating fund or similar fund
169.3for official use, and 25 percent to the county attorney or other prosecuting agency that
169.4handled the court proceeding, if there is one, for deposit as a supplement to its operating
169.5fund or similar fund for prosecutorial purposes. If there is no prosecuting authority
169.6involved in the forfeiture, the 25 percent of the proceeds otherwise designated for the
169.7prosecuting authority must be deposited into the general fund.
169.8 (e) If no demand for judicial determination is made, the property seized is considered
169.9forfeited to the state by operation of law and may be disposed of by the commissioner as
169.10provided in the case of a judgment of forfeiture.
169.11EFFECTIVE DATE.This section is effective for forfeitures after June 30, 2007.
169.12 Sec. 3. Minnesota Statutes 2006, section 297I.15, is amended by adding a subdivision
169.13to read:
169.14 Subd. 11. Premiums paid to certain foreign insurance companies. With respect
169.15to the state employees group insurance program established under sections 43A.23 to
169.1643A.31, premiums paid for life insurance and accidental death and dismemberment
169.17insurance for eligible employees and dependents, including premiums paid by employees
169.18or dependents for optional coverage, are exempt from the taxes imposed under this chapter
169.19to the extent the premiums are paid to a foreign insurance company domiciled in a state
169.20that exempts its state employee group life insurance program from premium taxes.
169.21EFFECTIVE DATE.This section is effective for premiums paid after December
169.2231, 2006.
169.23 Sec. 4. Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read:
169.24 Subd. 4. Expiration. The authority to impose the tax under this section expires
169.25January 1,2008 2013.
169.26 Sec. 5. Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read:
169.27 Subdivision 1. Creation. An environmental response fund is created for the
169.28purposes specified in this section. The taxes imposed by section383A.80 must be
169.29deposited in the fund. The board of county commissioners shall administer the fund either
169.30as a county board, or a housing and redevelopment authority, or a regional rail authority.
169.31 Sec. 6. Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read:
170.1 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
170.2following purposes:
170.3 (1) acquisition through purchase or condemnation of lands or property which are
170.4polluted or contaminated with hazardous substances;
170.5 (2) paying the costs associated with indemnifying or holding harmless the
170.6entity taking title to lands or property from any liability arising out of the ownership,
170.7remediation, or use of the land or property;
170.8 (3) paying for the costs of remediating the acquired land or property; or
170.9 (4) paying the costs associated with remediating lands or property which are polluted
170.10or contaminated with hazardous substances; or
170.11(5) paying for the costs associated with improving the property for economic
170.12development, recreational, housing, transportation or rail traffic.
170.13 Sec. 7. Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read:
170.14 Subd. 4. Expiration. The authority to impose the tax under this section expires
170.15January 1,2008 2013.
170.16 Sec. 8. [383C.798] COUNTY DEED AND MORTGAGE TAX.
170.17 Subdivision 1. Authority to impose; rate. (a) The governing body of St. Louis
170.18County may impose a mortgage registry and deed tax.
170.19 (b) The rate of the mortgage registry tax equals .0001 of the principal.
170.20 (c) The rate of the deed tax equals .0001 of the amount.
170.21 Subd. 2. General law provisions apply. The taxes under this section apply to
170.22the same base and must be imposed, collected, administered, and enforced in the same
170.23manner as provided under chapter 287 for the state mortgage registry and deed taxes.
170.24All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
170.25subdivision 1, the term "St. Louis County" must be substituted for "the state," and the
170.26revenue must be deposited as provided in subdivision 3.
170.27 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of the
170.28St. Louis County Board of Commissioners and must be deposited in the county's
170.29environmental response fund under section 383C.799.
170.30 Subd. 4. Expiration. The authority to impose the tax under this section expires
170.31January 1, 2013.
170.32 Sec. 9. [383C.799] ENVIRONMENTAL RESPONSE FUND.
171.1 Subdivision 1. Creation. An environmental response fund is created for the
171.2purposes specified in this section. The taxes imposed under section 383C.798 must be
171.3deposited in the fund. The Board of County Commissioners shall administer the fund
171.4either as a county board or a housing and redevelopment authority.
171.5 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
171.6following purposes:
171.7 (1) acquisition through purchase or condemnation of lands or property which are
171.8polluted or contaminated with hazardous substances;
171.9 (2) paying the costs associated with indemnifying or holding harmless the
171.10entity taking title to lands or property from any liability arising out of the ownership,
171.11remediation, or use of the land or property;
171.12 (3) paying for the costs of remediating the acquired land or property; or
171.13 (4) paying the costs associated with remediating lands or property which are polluted
171.14or contaminated with hazardous substances.
171.15 Subd. 3. Matching funds. In expending funds under this section, the county shall
171.16seek matching funds from contamination cleanup funds administered by the commissioner
171.17of the Department of Employment and Economic Development, the federal government,
171.18the private sector, and any other source.
171.19 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
171.20section 383C.798 to bonds issued under this section and chapters 462, 469, and 475.
171.21 Subd. 5. Land sales. Land or property acquired under this section may be resold
171.22at fair market value. Proceeds from the sale of the land must be deposited in the
171.23environmental response fund.
171.24 Sec. 10. [383D.75] COUNTY DEED AND MORTGAGE TAX.
171.25 Subdivision 1. Authority to impose; rate. (a) The governing body of Dakota
171.26County may impose a mortgage registry and deed tax.
171.27 (b) The rate of the mortgage registry tax equals .0001 of the principal.
171.28 (c) The rate of the deed tax equals .0001 of the amount.
171.29 Subd. 2. General law provisions apply. The taxes under this section apply to
171.30the same base and must be imposed, collected, administered, and enforced in the same
171.31manner as provided under chapter 287 for the state mortgage registry and deed taxes.
171.32All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
171.33subdivision 1, the term "Dakota County" must be substituted for "the state," and the
171.34revenue must be deposited as provided in subdivision 3.
172.1 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of
172.2the Dakota County Board of Commissioners and must be deposited in the county's
172.3environmental response fund under section383D.76.
172.4 Subd. 4. Expiration. The authority to impose the tax under this section expires
172.5January 1, 2013.
172.6 Sec. 11. [383D.76] ENVIRONMENTAL RESPONSE FUND.
172.7 Subdivision 1. Creation. An environmental response fund is created for the
172.8purposes specified in this section. The taxes imposed under section 383D.75 must be
172.9deposited in the fund. The Board of County Commissioners shall administer the fund
172.10either as a county board or a housing and redevelopment authority.
172.11 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
172.12following purposes:
172.13 (1) acquisition through purchase or condemnation of lands or property which are
172.14polluted or contaminated with hazardous substances;
172.15 (2) paying the costs associated with indemnifying or holding harmless the
172.16entity taking title to lands or property from any liability arising out of the ownership,
172.17remediation, or use of the land or property;
172.18 (3) paying for the costs of remediating the acquired land or property; or
172.19 (4) paying the costs associated with remediating lands or property which are polluted
172.20or contaminated with hazardous substances.
172.21 Subd. 3. Matching funds. In expending funds under this section, the county shall
172.22seek matching funds from contamination cleanup funds administered by the commissioner
172.23of the Department of Employment and Economic Development, the Metropolitan Council,
172.24the federal government, the private sector, and any other source.
172.25 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
172.26section383D.75 to bonds issued under this chapter and chapters 462, 469, and 475.
172.27 Subd. 5. Land sales. Land or property acquired under this section may be resold
172.28at fair market value. Proceeds from the sale of the land must be deposited in the
172.29environmental response fund.
172.30 Sec. 12. [383E.235] COUNTY DEED AND MORTGAGE TAX.
172.31 Subdivision 1. Authority to impose; rate. (a) The governing body of Anoka
172.32County may impose a mortgage registry and deed tax.
172.33 (b) The rate of the mortgage registry tax equals .0001 of the principal.
172.34 (c) The rate of the deed tax equals .0001 of the amount.
173.1 Subd. 2. General law provisions apply. The taxes under this section apply to
173.2the same base and must be imposed, collected, administered, and enforced in the same
173.3manner as provided under chapter 287 for the state mortgage registry and deed taxes.
173.4All the provisions of chapter 287 apply to these taxes, except the rate is as specified
173.5in subdivision 1, the term "Anoka County" must be substituted for "the state," and the
173.6revenue must be deposited as provided in subdivision 3.
173.7 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of the Anoka
173.8County Board of Commissioners and must be deposited in the county's environmental
173.9response fund under section 383E.236.
173.10 Subd. 4. Expiration. The authority to impose the tax under this section expires
173.11January 1, 2013.
173.12 Sec. 13. [383E.236] ENVIRONMENTAL RESPONSE FUND.
173.13 Subdivision 1. Creation. An environmental response fund is created for the
173.14purposes specified in this section. The taxes imposed under section 383E.235 must be
173.15deposited in the fund. The Board of County Commissioners shall administer the fund
173.16either as a county board or a housing and redevelopment authority.
173.17 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
173.18following purposes:
173.19 (1) acquisition through purchase or condemnation of lands or property which are
173.20polluted or contaminated with hazardous substances;
173.21 (2) paying the costs associated with indemnifying or holding harmless the
173.22entity taking title to lands or property from any liability arising out of the ownership,
173.23remediation, or use of the land or property;
173.24 (3) paying for the costs of remediating the acquired land or property; or
173.25 (4) paying the costs associated with remediating lands or property which are polluted
173.26or contaminated with hazardous substances.
173.27 Subd. 3. Matching funds. In expending funds under this section, the county shall
173.28seek matching funds from contamination cleanup funds administered by the commissioner
173.29of the Department of Employment and Economic Development, the Metropolitan Council,
173.30the federal government, the private sector, and any other source.
173.31 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
173.32section 383E.235 to bonds issued under this section and chapters 462, 469, and 475.
173.33 Subd. 5. Land sales. Land or property acquired under this section may be resold
173.34at fair market value. Proceeds from the sale of the land must be deposited in the
173.35environmental response fund.
174.1 Subd. 6. DOT assistance. The commissioner of transportation shall collaborate with
174.2the county and any affected municipality by providing technical assistance and support in
174.3cleaning up a contaminated site related to a trunk highway or railroad improvement.
174.4 Sec. 14. Laws 2003, chapter 128, article 1, section 172, as amended by Laws 2005,
174.5First Special Session chapter 1, article 4, section 118, is amended to read:
174.6 Sec. 172. TEMPORARY PETROFUND FEE EXEMPTION FOR
174.7MINNESOTA COMMERCIAL AIRLINES.
174.8 (a) A commercial airline providing regularly scheduled jet service and with its
174.9corporate headquarters in Minnesota is exempt from the fee established in Minnesota
174.10Statutes, section115C.08, subdivision 3 , until July 1, 2007 2009, provided the airline
174.11develops a plan approved by the commissioner of commerce demonstrating that the
174.12savings from this exemption will go towards minimizing job losses in Minnesota, and to
174.13support the airline's efforts toavoid filing for resolve federal bankruptcy protections
174.14proceedings.
174.15 (b) A commercial airline exempted from the fee is ineligible to receive
174.16reimbursement under Minnesota Statutes, chapter 115C, until July 1,2007 2009. A
174.17commercial airline that has a release during the fee exemption period is ineligible to
174.18receive reimbursement under Minnesota Statutes, chapter 115C, for the costs incurred in
174.19response to that release.
174.22 Section 1. Minnesota Statutes 2006, section 270A.03, subdivision 5, is amended to
174.23read:
174.24 Subd. 5. Debt. (a) "Debt" means a legal obligation of a natural person to pay a fixed
174.25and certain amount of money, which equals or exceeds $25 and which is due and payable
174.26to a claimant agency. The term includes criminal fines imposed under section609.10 or
174.27609.125
, fines imposed for petty misdemeanors as defined in section
609.02, subdivision
174.284a , and restitution. The term also includes the co-payment for the appointment of a district
174.29public defender imposed under section611.17, paragraph (c) . A debt may arise under a
174.30contractual or statutory obligation, a court order, or other legal obligation, but need not
174.31have been reduced to judgment.
174.32 A debt includes any legal obligation of a current recipient of assistance which is
174.33based on overpayment of an assistance grant where that payment is based on a client
174.34waiver or an administrative or judicial finding of an intentional program violation;
175.1or where the debt is owed to a program wherein the debtor is not a client at the time
175.2notification is provided to initiate recovery under this chapter and the debtor is not a
175.3current recipient of food support, transitional child care, or transitional medical assistance.
175.4 (b) A debt does not include any legal obligation to pay a claimant agency for medical
175.5care, including hospitalization if the income of the debtor at the time when the medical
175.6care was rendered does not exceed the following amount:
175.7 (1) for an unmarried debtor, an income of $8,800 or less;
175.8 (2) for a debtor with one dependent, an income of $11,270 or less;
175.9 (3) for a debtor with two dependents, an income of $13,330 or less;
175.10 (4) for a debtor with three dependents, an income of $15,120 or less;
175.11 (5) for a debtor with four dependents, an income of $15,950 or less; and
175.12 (6) for a debtor with five or more dependents, an income of $16,630 or less.
175.13The income amounts in this subdivision shall be adjusted for inflation for debts
175.14incurred in calendar years 2001 and thereafter. The dollar amount of each income level
175.15that applied to debts incurred in the prior year shall be increased in the same manner
175.16as provided in section 1(f) of the Internal Revenue Code of 1986, as amended through
175.17December 31, 2000, except that for the purposes of this subdivision the percentage
175.18increase shall be determined from the year starting September 1, 1999, and ending August
175.1931, 2000, as the base year for adjusting for inflation for debts incurred after December
175.2031, 2000. (c) The commissioner shall adjust the income amounts in paragraph (b) by the
175.21percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
175.22Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word
175.23"1992." For 2001, the commissioner shall then determine the percent change from the 12
175.24months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in
175.25each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months
175.26ending on August 31 of the year preceding the taxable year. The determination of the
175.27commissioner pursuant to this subdivision shall not be considered a "rule" and shall not
175.28be subject to the Administrative Procedure Act contained in chapter 14. The income
175.29amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
175.30$5, the amount is rounded up to the nearest $10 amount.
175.31 (d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of
175.32the dollar amount of the premium authorized under section256L.15, subdivision 1a .
175.33EFFECTIVE DATE.This section is effective for debts incurred after December
175.3431, 2006.
175.35 Sec. 2. Minnesota Statutes 2006, section 289A.08, subdivision 11, is amended to read:
176.1 Subd. 11. Information included in income tax return. (a) The return must state:
176.2 (1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the
176.3address of the taxpayer in the same name or names and same address as the taxpayer has
176.4used in making the taxpayer's income tax return to the United States, and must state;
176.5 (2) the date or dates of birth of the taxpayer or taxpayers;
176.6 (3) the Social Security number of the taxpayer, or taxpayers, if a Social Security
176.7number has been issued by the United States with respect to the taxpayers, and must
176.8state; and
176.9 (4) the amount of the taxable income of the taxpayer as it appears on the federal
176.10return for the taxable year to which the Minnesota state return applies.
176.11 (b) The taxpayer must attach to the taxpayer's Minnesota state income tax return
176.12a copy of the federal income tax return that the taxpayer has filed or is about to file for
176.13the period, unless the taxpayer is eligible to telefile the federal return and does file the
176.14Minnesota return by telefiling.
176.15EFFECTIVE DATE.This section is effective for tax years beginning after
176.16December 31, 2006.
176.17 Sec. 3. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:
176.18 Subd. 2. Withholding statement to employee or payee and to commissioner. (a)
176.19A person required to deduct and withhold from an employee a tax under section290.92,
176.20subdivision 2a or 3, or
290.923, subdivision 2 , or who would have been required to
176.21deduct and withhold a tax under section290.92, subdivision 2a or 3, or persons required
176.22to withhold tax under section290.923, subdivision 2 , determined without regard to
176.23section290.92, subdivision 19 , if the employee or payee had claimed no more than one
176.24withholding exemption, or who paid wages or made payments not subject to withholding
176.25under section290.92, subdivision 2a or 3, or
290.923, subdivision 2 , to an employee or
176.26person receiving royalty payments in excess of $600, or who has entered into a voluntary
176.27withholding agreement with a payee under section290.92, subdivision 20 , must give
176.28every employee or person receiving royalty payments in respect to the remuneration paid
176.29by the person to the employee or person receiving royalty payments during the calendar
176.30year, on or before January 31 of the succeeding year, or, if employment is terminated
176.31before the close of the calendar year, within 30 days after the date of receipt of a written
176.32request from the employee if the 30-day period ends before January 31, a written statement
176.33showing the following:
176.34 (1) name of the person;
177.1 (2) the name of the employee or payee and the employee's or payee's Social Security
177.2account number;
177.3 (3) the total amount of wages as that term is defined in section290.92, subdivision
177.41 , paragraph (1); the total amount of remuneration subject to withholding under section
177.5290.92, subdivision 20
; the amount of sick pay as required under section 6051(f) of the
177.6Internal Revenue Code; and the amount of royalties subject to withholding under section
177.7290.923, subdivision 2
; and
177.8 (4) the total amount deducted and withheld as tax under section290.92, subdivision
177.92a or 3, or
290.923, subdivision 2 .
177.10 (b) The statement required to be furnished bythis paragraph (a) with respect to any
177.11remuneration must be furnished at those times, must contain the information required, and
177.12must be in the form the commissioner prescribes.
177.13 (c) The commissioner may prescribe rules providing for reasonable extensions of
177.14time, not in excess of 30 days, to employers or payers required to give the statements to
177.15their employees or payees under this subdivision.
177.16 (d) A duplicate of any statement made under this subdivision and in accordance
177.17with rules prescribed by the commissioner, along with a reconciliation in the form the
177.18commissioner prescribes of the statements for the calendar year, including a reconciliation
177.19of the quarterly returns required to be filed under subdivision 1, must be filed with the
177.20commissioner on or before February 28 of the year after the payments were made.
177.21 (e) If an employer cancels the employer's Minnesota withholding account number
177.22required by section290.92, subdivision 24 , the information required by paragraph (d),
177.23must be filed with the commissioner within 30 days of the end of the quarter in which
177.24the employer cancels its account number.
177.25 (f) The employer must submit the statements required to be sent to the commissioner
177.26on magnetic media, if the magnetic media was in the same manner required to satisfy the
177.27federal reporting requirements of section 6011(e) of the Internal Revenue Code and the
177.28regulations issued under it. For wages paid in calendar year 2007, an employer must
177.29submit statements to the commissioner required by this section by electronic means if the
177.30employer is required to send more than 100 statements to the commissioner, even though
177.31the employer is not required to submit the returns federally by electronic means. For
177.32calendar year 2008, the 100 statements threshold is reduced to 50, and for calendar year
177.332009, the threshold is reduced to 25, and for 2010 and after, the threshold is reduced to ten.
177.34 (g) A "third-party bulk filer" as defined in section290.92, subdivision 30 , paragraph
177.35(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
177.36paragraph (a), with the commissioner by electronic means.
178.1EFFECTIVE DATE.This section is effective for wages paid after December 31,
178.22006.
178.3 Sec. 4. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:
178.4 Subd. 14. Regulated investment companies; reporting exempt-interest
178.5dividends. (a) A regulated investment company paying $10 or more in exempt-interest
178.6dividends to an individual who is a resident of Minnesota must make a return indicating
178.7the amount of the exempt-interest dividends, the name, address, and Social Security
178.8number of the recipient, and any other information that the commissioner specifies. The
178.9return must be provided to the shareholder no later than 30 days after the close of the
178.10taxable year. The return provided to the shareholder must include a clear statement, in the
178.11form prescribed by the commissioner, that the exempt-interest dividends must be included
178.12in the computation of Minnesota taxable income. The commissioner may by notice and
178.13demand require the regulated investment company is required in a manner prescribed by
178.14the commissioner to file a copy of the return with the commissioner.
178.15 (b) This subdivision applies to regulated investment companies required to register
178.16under chapter 80A.
178.17 (c) For purposes of this subdivision, the following definitions apply.
178.18 (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
178.19section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
178.20exempt-interest dividends that are not required to be added to federal taxable income
178.21under section290.01, subdivision 19a , clause (1)(ii).
178.22 (2) "Regulated investment company" means regulated investment company as
178.23defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
178.24investment company as defined in section 851(g) of the Internal Revenue Code.
178.25EFFECTIVE DATE.This section is effective for tax years beginning after
178.26December 31, 2006.
178.27 Sec. 5. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:
178.28 Subdivision 1. Individual income, fiduciary income, corporate franchise, and
178.29entertainment taxes; partnership and S corporation returns; information returns;
178.30mining company returns. The returns required to be made under sections289A.08 and
178.31289A.12
must be filed at the following times:
178.32 (1) returns made on the basis of the calendar year must be filed on April 15 following
178.33the close of the calendar year, except that returns of corporations must be filed on March
178.3415 following the close of the calendar year;
179.1 (2) returns made on the basis of the fiscal year must be filed on the 15th day of the
179.2fourth month following the close of the fiscal year, except that returns of corporations
179.3must be filed on the 15th day of the third month following the close of the fiscal year;
179.4 (3) returns for a fractional part of a year must be filed on the 15th day of the fourth
179.5month following the end of the month in which falls the last day of the period for which
179.6the return is made, except that the returns of corporations must be filed on the 15th day of
179.7the third month following the end of the tax year of the unitary group in which falls the
179.8last day of the period for which the return is made;
179.9 (4) in the case of a final return of a decedent for a fractional part of a year, the return
179.10must be filed on the 15th day of the fourth month following the close of the 12-month
179.11period that began with the first day of that fractional part of a year;
179.12 (5) in the case of the return of a cooperative association, returns must be filed on or
179.13before the 15th day of the ninth month following the close of the taxable year;
179.14 (6) if a corporation has been divested from a unitary group and files a return for
179.15a fractional part of a year in which it was a member of a unitary business that files a
179.16combined report under section290.34, subdivision 2 , the divested corporation's return
179.17must be filed on the 15th day of the third month following the close of the common
179.18accounting period that includes the fractional year;
179.19 (7) returns of entertainment entities must be filed on April 15 following the close of
179.20the calendar year;
179.21 (8) returns required to be filed under section289A.08, subdivision 4 , must be filed
179.22on the 15th day of the fifth month following the close of the taxable year;
179.23 (9) returns of mining companies must be filed on May 1 following the close of the
179.24calendar year; and
179.25 (10) returns required to be filed with the commissioner under section289A.12,
179.26subdivision 2 , or 4 to 10, or 14, must be filed within 30 days after being demanded by
179.27the commissioner.
179.28EFFECTIVE DATE.This section is effective for tax years beginning after
179.29December 31, 2006.
179.30 Sec. 6. Minnesota Statutes 2006, section 289A.60, subdivision 8, is amended to read:
179.31 Subd. 8.Penalty for Penalties; failure to file informational return; incorrect
179.32taxpayer identification number. (a) In the case of a failure to file an informational return
179.33required by section289A.12 with the commissioner on the date prescribed (determined
179.34with regard to any extension of time for filing), the person failing to file the return shall pay
179.35a penalty of $50 for each failure or in the case of a partnership, S corporation, or fiduciary
180.1return, $50 for each partner, shareholder, or beneficiary; but the total amount imposed on
180.2the delinquent person for all failures during any calendar year must not exceed $25,000. If
180.3a failure to file a return is due to intentional disregard of the filing requirement, then the
180.4penalty imposed under the preceding sentence must not be less than an amount equal to:
180.5 (1) in the case of a return not described in clause (2) or (3), ten percent of the
180.6aggregate amount of the items required to be reported;
180.7 (2) in the case of a return required to be filed under section289A.12, subdivision 5 ,
180.8five percent of the gross proceeds required to be reported; and
180.9 (3) in the case of a return required to be filed under section289A.12, subdivision 9 ,
180.10relating to direct sales, $100 for each failure; however, the total amount imposed on the
180.11delinquent person for intentional failures during a calendar year must not exceed $50,000.
180.12The penalty must be collected in the same manner as a delinquent income tax.
180.13 (b) If a partnership or S corporation files a partnership or S corporation return with
180.14an incorrect tax identification number used for a partner or shareholder after being notified
180.15by the commissioner that the identification number is incorrect, the partnership or S
180.16corporation must pay a penalty of $50 for each such incorrect number.
180.17EFFECTIVE DATE.This section is effective for returns filed after December
180.1831, 2007.
180.19 Sec. 7. Minnesota Statutes 2006, section 289A.60, subdivision 12, is amended to read:
180.20 Subd. 12. Penalties relating to property tax refunds. (a) If it is determined that a
180.21property tax refund claim is excessive and was negligently prepared, a claimant is liable
180.22for a penalty of ten percent of thecorrected claim must be disallowed claim. If the claim
180.23has been paid, the amount disallowed must be recovered by assessment and collection.
180.24 (b) An owner who without reasonable cause fails to give a certificate of rent
180.25constituting property tax to a renter, as required by section290A.19, paragraph (a) , is
180.26liable to the commissioner for a penalty of $100 for each failure.
180.27 (c) If the owner or managing agent knowingly gives rent certificates that report total
180.28rent constituting property taxes in excess of the amount of actual rent constituting property
180.29taxes paid on the rented part of a property, the owner or managing agent is liable for a
180.30penalty equal to the greater of (1) $100 or (2) 50 percent of the excess that is reported. An
180.31overstatement of rent constituting property taxes is presumed to be knowingly made if it
180.32exceeds by ten percent or more the actual rent constituting property taxes.
180.33EFFECTIVE DATE.This section is effective for property tax refund claims filed
180.34on or after July 1, 2007.
181.1 Sec. 8. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:
181.2 Subd. 27. Reportable transaction understatement. (a) If a taxpayer has a
181.3reportable transaction understatement for any taxable year, an amount equal to 20 percent
181.4of the amount of the reportable transaction understatement must be added to the tax.
181.5 (b)(1) For purposes of this subdivision, "reportable transaction understatement"
181.6means the product of:
181.7 (i) the amount of the increase, if any, in taxable income that results from a difference
181.8between the proper tax treatment of an item to which this section applies and the taxpayer's
181.9treatment of that item as shown on the taxpayer's tax return; and
181.10 (ii) the highest rate of tax imposed on the taxpayer under section290.06 determined
181.11without regard to the understatement.
181.12 (2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed
181.13for the taxable year over gross income for that year, and any reduction in the amount of
181.14capital losses which would, without regard to section 1211 of the Internal Revenue Code,
181.15be allowed for that year, must be treated as an increase in taxable income.
181.16 (c) This subdivision applies to any item that is attributable to:
181.17 (1) any listed transaction under section289A.121 ; and
181.18 (2) any reportable transaction, other than a listed transaction, if a significant purpose
181.19of that transaction is the avoidance or evasion of federal income tax liability.
181.20 (d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect
181.21to the portion of any reportable transaction understatement with respect to which the
181.22disclosure requirements of section289A.121, subdivision 5 , and section 6664(d)(2)(A)
181.23of the Internal Revenue Code are not met.
181.24 (e)(1) No penalty applies under this subdivision with respect to any portion of a
181.25reportable transaction understatement if the taxpayer shows that there was reasonable
181.26cause for the portion and that the taxpayer acted in good faith with respect to the portion.
181.27This paragraph applies only if:
181.28 (i) the relevant facts affecting the tax treatment of the item are adequately disclosed
181.29as required under section289A.121 ;
181.30 (ii) there is or was substantial authority for the treatment; and
181.31 (iii) the taxpayer reasonably believed that the treatment was more likely than not
181.32the proper treatment.
181.33 (2) A taxpayer who did not adequately disclose under section289A.121 meets
181.34the requirements of clause (1)(i), if the commissioner abates the penalty imposed by
181.35subdivision 26, paragraph (d), undersection
270C.34
182.1 (3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief
182.2with respect to the tax treatment of an item only if the belief:
182.3 (i) is based on the facts and law that exist when the return of tax which includes the
182.4tax treatment is filed; and
182.5 (ii) relates solely to the taxpayer's chances of success on the merits of the treatment
182.6and does not take into account the possibility that a return will not be audited, the
182.7treatment will not be raised on audit, or the treatment will be resolved through settlement
182.8if it is raised.
182.9 (4) An opinion of a tax advisor may not be relied upon to establish the reasonable
182.10belief of a taxpayer if:
182.11 (i) the tax advisor:
182.12 (A) is a material advisor, as defined in section289A.121 , and participates in the
182.13organization, management, promotion, or sale of the transaction or is related (within the
182.14meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person
182.15who so participates;
182.16 (B) is compensated directly or indirectly by a material advisor with respect to the
182.17transaction;
182.18 (C) has a fee arrangement with respect to the transaction which is contingent on all
182.19or part of the intended tax benefits from the transaction being sustained; or
182.20 (D) has a disqualifying financial interest with respect to the transaction, as
182.21determined under United States Treasury regulations prescribed to implement the
182.22provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or
182.23 (ii) the opinion:
182.24 (A) is based on unreasonable factual or legal assumptions, including assumptions
182.25as to future events;
182.26 (B) unreasonably relies on representations, statements, findings, or agreements of
182.27the taxpayer or any other person;
182.28 (C) does not identify and consider all relevant facts; or
182.29 (D) fails to meet any other requirement as the Secretary of the Treasury may
182.30prescribe under federal law.
182.31 (f) The penalty imposed by this subdivision applies in lieu of the penalty imposed
182.32under subdivision 4.
182.33EFFECTIVE DATE.This section is effective the day following final enactment.
182.34 Sec. 9. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision
182.35to read:
183.1 Subd. 28. Preparer identification number. Any Minnesota individual income tax
183.2return or claim for refund prepared by a "tax refund or return preparer" as defined in
183.3subdivision 13, paragraph (f), shall bear the identification number the preparer is required
183.4to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund
183.5or return preparer who prepares a Minnesota individual income tax return or claim for
183.6refund and fails to include the required number on the return or claim is subject to a
183.7penalty of $50 for each failure.
183.8EFFECTIVE DATE.This section is effective for returns prepared for tax years
183.9beginning after December 31, 2006.
183.10 Sec. 10. Minnesota Statutes 2006, section 290.01, subdivision 19b, as amended by
183.11Laws 2007, chapter 1, section 2, is amended to read:
183.12 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
183.13and trusts, there shall be subtracted from federal taxable income:
183.14 (1) net interest income on obligations of any authority, commission, or
183.15instrumentality of the United States to the extent includable in taxable income for federal
183.16income tax purposes but exempt from state income tax under the laws of the United States;
183.17 (2) if included in federal taxable income, the amount of any overpayment of income
183.18tax to Minnesota or to any other state, for any previous taxable year, whether the amount
183.19is received as a refund or as a credit to another taxable year's income tax liability;
183.20 (3) the amount paid to others, less the amount used to claim the credit allowed under
183.21section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten
183.22to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
183.23transportation of each qualifying child in attending an elementary or secondary school
183.24situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
183.25resident of this state may legally fulfill the state's compulsory attendance laws, which
183.26is not operated for profit, and which adheres to the provisions of the Civil Rights Act
183.27of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
183.28tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this clause,
183.29"textbooks" includes books and other instructional materials and equipment purchased
183.30or leased for use in elementary and secondary schools in teaching only those subjects
183.31legally and commonly taught in public elementary and secondary schools in this state.
183.32Equipment expenses qualifying for deduction includes expenses as defined and limited in
183.33section290.0674, subdivision 1 , clause (3). "Textbooks" does not include instructional
183.34books and materials used in the teaching of religious tenets, doctrines, or worship, the
183.35purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
184.1or materials for, or transportation to, extracurricular activities including sporting events,
184.2musical or dramatic events, speech activities, driver's education, or similar programs. For
184.3purposes of the subtraction provided by this clause, "qualifying child" has the meaning
184.4given in section 32(c)(3) of the Internal Revenue Code;
184.5 (4) income as provided under section290.0802 ;
184.6 (5) to the extent included in federal adjusted gross income, income realized on
184.7disposition of property exempt from tax under section290.491 ;
184.8 (6) to the extent not deducted in determining federal taxable income by an individual
184.9who does not itemize deductions for federal income tax purposes for the taxable year, an
184.10amount equal to 50 percent of the excess of charitable contributions over $500 allowable
184.11as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
184.12under the provisions of Public Law 109-1;
184.13 (7) for taxable years beginning before January 1, 2008, the amount of the federal
184.14small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
184.15which is included in gross income under section 87 of the Internal Revenue Code;
184.16 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
184.17qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
184.18of subnational foreign taxes for the taxable year, but not to exceed the total subnational
184.19foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
184.20"federal foreign tax credit" means the credit allowed under section 27 of the Internal
184.21Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
184.22under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
184.23the extent they exceed the federal foreign tax credit;
184.24 (9) in each of the five tax years immediately following the tax year in which an
184.25addition is required under subdivision 19a, clause (7), or 19c, clause(15) (14), in the case
184.26of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
184.27of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
184.28the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
184.29subdivision 19c, clause(15) (14), in the case of a shareholder of an S corporation, minus
184.30the positive value of any net operating loss under section 172 of the Internal Revenue
184.31Code generated for the tax year of the addition. The resulting delayed depreciation
184.32cannot be less than zero;
184.33 (10) job opportunity building zone income as provided under section469.316 ;
184.34 (11) to the extent included in federal taxable income, the amount of compensation
184.35paid to members of the Minnesota National Guard or other reserve components of the
184.36United States military for active service performed in Minnesota, excluding compensation
185.1for services performed under the Active Guard Reserve (AGR) program. For purposes of
185.2this clause, "active service" means (i) state active service as defined in section190.05,
185.3subdivision 5a , clause (1); (ii) federally funded state active service as defined in section
185.4190.05, subdivision 5b
; or (iii) federal active service as defined in section
190.05,
185.5subdivision 5c , but "active service" excludes services performed exclusively for purposes
185.6of basic combat training, advanced individual training, annual training, and periodic
185.7inactive duty training; special training periodically made available to reserve members;
185.8and service performed in accordance with section190.08, subdivision 3 ;
185.9 (12) to the extent included in federal taxable income, the amount of compensation
185.10paid to Minnesota residents who are members of the armed forces of the United States or
185.11United Nations for active duty performed outside Minnesota;
185.12 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
185.13qualified donor's donation, while living, of one or more of the qualified donor's organs
185.14to another person for human organ transplantation. For purposes of this clause, "organ"
185.15means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
185.16"human organ transplantation" means the medical procedure by which transfer of a human
185.17organ is made from the body of one person to the body of another person; "qualified
185.18expenses" means unreimbursed expenses for both the individual and the qualified donor
185.19for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
185.20may be subtracted under this clause only once; and "qualified donor" means the individual
185.21or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
185.22individual may claim the subtraction in this clause for each instance of organ donation for
185.23transplantation during the taxable year in which the qualified expenses occur;
185.24 (14) in each of the five tax years immediately following the tax year in which an
185.25addition is required under subdivision 19a, clause (8), or 19c, clause(16) (15), in the case
185.26of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
185.27of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause
185.28(16) (15), in the case of a shareholder of a corporation that is an S corporation, minus the
185.29positive value of any net operating loss under section 172 of the Internal Revenue Code
185.30generated for the tax year of the addition. If the net operating loss exceeds the addition for
185.31the tax year, a subtraction is not allowed under this clause;
185.32 (15) to the extent included in federal taxable income, compensation paid to a
185.33nonresident who is a service member as defined in United States Code, title 10, section
185.34101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
185.35Law 108-189, section 101(2); and
186.1 (16) international economic development zone income as provided under section
186.2469.325
.
186.3EFFECTIVE DATE.Clauses (11) and (12) are effective retroactively for taxable
186.4years beginning after December 31, 2004.
186.5 Sec. 11. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
186.6 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
186.7there shall be added to federal taxable income:
186.8 (1) the amount of any deduction taken for federal income tax purposes for income,
186.9excise, or franchise taxes based on net income or related minimum taxes, including but not
186.10limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
186.11another state, a political subdivision of another state, the District of Columbia, or any
186.12foreign country or possession of the United States;
186.13 (2) interest not subject to federal tax upon obligations of: the United States, its
186.14possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
186.15state, any of its political or governmental subdivisions, any of its municipalities, or any
186.16of its governmental agencies or instrumentalities; the District of Columbia; or Indian
186.17tribal governments;
186.18 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
186.19Revenue Code;
186.20 (4) the amount of any net operating loss deduction taken for federal income tax
186.21purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
186.22deduction under section 810 of the Internal Revenue Code;
186.23 (5) the amount of any special deductions taken for federal income tax purposes
186.24under sections 241 to 247 and 965 of the Internal Revenue Code;
186.25 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
186.26clause (a), that are not subject to Minnesota income tax;
186.27 (7) the amount of any capital losses deducted for federal income tax purposes under
186.28sections 1211 and 1212 of the Internal Revenue Code;
186.29 (8) the exempt foreign trade income of a foreign sales corporation under sections
186.30921(a) and 291 of the Internal Revenue Code;
186.31 (9) the amount of percentage depletion deducted under sections 611 through 614 and
186.32291 of the Internal Revenue Code;
186.33 (10)for certified pollution control facilities placed in service in a taxable year
186.34beginning before December 31, 1986, and for which amortization deductions were elected
186.35under section 169 of the Internal Revenue Code of 1954, as amended through December
187.131, 1985, the amount of the amortization deduction allowed in computing federal taxable
187.2income for those facilities;
187.3(11) the amount of any deemed dividend from a foreign operating corporation
187.4determined pursuant to section290.17, subdivision 4 , paragraph (g);
187.5(12) (11) the amount of a partner's pro rata share of net income which does not flow
187.6through to the partner because the partnership elected to pay the tax on the income under
187.7section 6242(a)(2) of the Internal Revenue Code;
187.8(13) (12) the amount of net income excluded under section 114 of the Internal
187.9Revenue Code;
187.10(14) (13) any increase in subpart F income, as defined in section 952(a) of the
187.11Internal Revenue Code, for the taxable year when subpart F income is calculated without
187.12regard to the provisions of section 103 of Public Law 109-222;
187.13(15) (14) 80 percent of the depreciation deduction allowed under section
187.14168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
187.15the taxpayer has an activity that in the taxable year generates a deduction for depreciation
187.16under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
187.17year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
187.18allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
187.19of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
187.20over the amount of the loss from the activity that is not allowed in the taxable year. In
187.21succeeding taxable years when the losses not allowed in the taxable year are allowed, the
187.22depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
187.23(16) (15) 80 percent of the amount by which the deduction allowed by section 179 of
187.24the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
187.25Revenue Code of 1986, as amended through December 31, 2003;
187.26(17) (16) to the extent deducted in computing federal taxable income, the amount of
187.27the deduction allowable under section 199 of the Internal Revenue Code; and
187.28(18) (17) the exclusion allowed under section 139A of the Internal Revenue Code
187.29for federal subsidies for prescription drug plans.
187.30EFFECTIVE DATE.This section is effective for tax years beginning after
187.31December 31, 2006.
187.32 Sec. 12. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
187.33 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
187.34corporations, there shall be subtracted from federal taxable income after the increases
187.35provided in subdivision 19c:
188.1 (1) the amount of foreign dividend gross-up added to gross income for federal
188.2income tax purposes under section 78 of the Internal Revenue Code;
188.3 (2) the amount of salary expense not allowed for federal income tax purposes due
188.4to claiming thefederal jobs work opportunity credit under section 51 of the Internal
188.5Revenue Code;
188.6 (3) any dividend (not including any distribution in liquidation) paid within the
188.7taxable year by a national or state bank to the United States, or to any instrumentality of
188.8the United States exempt from federal income taxes, on the preferred stock of the bank
188.9owned by the United States or the instrumentality;
188.10 (4) amounts disallowed for intangible drilling costs due to differences between
188.11this chapter and the Internal Revenue Code in taxable years beginning before January
188.121, 1987, as follows:
188.13 (i) to the extent the disallowed costs are represented by physical property, an amount
188.14equal to the allowance for depreciation under Minnesota Statutes 1986, section290.09,
188.15subdivision 7 , subject to the modifications contained in subdivision 19e; and
188.16 (ii) to the extent the disallowed costs are not represented by physical property, an
188.17amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
188.18290.09, subdivision 8
;
188.19 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
188.20Internal Revenue Code, except that:
188.21 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
188.22capital loss carrybacks shall not be allowed;
188.23 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
188.24a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
188.25allowed;
188.26 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
188.27capital loss carryback to each of the three taxable years preceding the loss year, subject to
188.28the provisions of Minnesota Statutes 1986, section290.16 , shall be allowed; and
188.29 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
188.30a capital loss carryover to each of the five taxable years succeeding the loss year to the
188.31extent such loss was not used in a prior taxable year and subject to the provisions of
188.32Minnesota Statutes 1986, section290.16 , shall be allowed;
188.33 (6) an amount for interest and expenses relating to income not taxable for federal
188.34income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
188.35expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
188.36291 of the Internal Revenue Code in computing federal taxable income;
189.1 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
189.2which percentage depletion was disallowed pursuant to subdivision 19c, clause(11) (9), a
189.3reasonable allowance for depletion based on actual cost. In the case of leases the deduction
189.4must be apportioned between the lessor and lessee in accordance with rules prescribed
189.5by the commissioner. In the case of property held in trust, the allowable deduction must
189.6be apportioned between the income beneficiaries and the trustee in accordance with the
189.7pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
189.8of the trust's income allocable to each;
189.9 (8)for certified pollution control facilities placed in service in a taxable year
189.10beginning before December 31, 1986, and for which amortization deductions were elected
189.11under section 169 of the Internal Revenue Code of 1954, as amended through December
189.1231, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
189.131986, section
290.09, subdivision 7;
189.14(9) amounts included in federal taxable income that are due to refunds of income,
189.15excise, or franchise taxes based on net income or related minimum taxes paid by the
189.16corporation to Minnesota, another state, a political subdivision of another state, the
189.17District of Columbia, or a foreign country or possession of the United States to the extent
189.18that the taxes were added to federal taxable income under section290.01, subdivision 19c ,
189.19clause (1), in a prior taxable year;
189.20(10) (9) 80 percent of royalties, fees, or other like income accrued or received from a
189.21foreign operating corporation or a foreign corporation which is part of the same unitary
189.22business as the receiving corporation;
189.23(11) (10) income or gains from the business of mining as defined in section
290.05,
189.24subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
189.25(12) (11) the amount of disability access expenditures in the taxable year which are
189.26not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue
189.27Code;
189.28(13) (12) the amount of qualified research expenses not allowed for federal income
189.29tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
189.30that the amount exceeds the amount of the credit allowed under section290.068 ;
189.31(14) (13) the amount of salary expenses not allowed for federal income tax purposes
189.32due to claiming the Indian employment credit under section 45A(a) of the Internal
189.33Revenue Code;
189.34(15) the amount of any refund of environmental taxes paid under section 59A of the
189.35Internal Revenue Code;
190.1(16) (14) for taxable years beginning before January 1, 2008, the amount of the
190.2federal small ethanol producer credit allowed under section 40(a)(3) of the Internal
190.3Revenue Code which is included in gross income under section 87 of the Internal Revenue
190.4Code;
190.5(17) (15) for a corporation whose foreign sales corporation, as defined in section
190.6922 of the Internal Revenue Code, constituted a foreign operating corporation during any
190.7taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
190.8claiming the deduction under section290.21, subdivision 4 , for income received from
190.9the foreign operating corporation, an amount equal to1.23 multiplied by the amount of
190.10income excluded under section 114 of the Internal Revenue Code, provided the income is
190.11not income of a foreign operating company;
190.12(18) (16) any decrease in subpart F income, as defined in section 952(a) of the
190.13Internal Revenue Code, for the taxable year when subpart F income is calculated without
190.14regard to the provisions of section614 103 of Public Law 107-147 109-222;
190.15(19) (17) in each of the five tax years immediately following the tax year in which an
190.16addition is required under subdivision 19c, clause(15) (14), an amount equal to one-fifth
190.17of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
190.18amount of the addition made by the taxpayer under subdivision 19c, clause(15) (14). The
190.19resulting delayed depreciation cannot be less than zero; and
190.20(20) (18) in each of the five tax years immediately following the tax year in which an
190.21addition is required under subdivision 19c, clause(16) (15), an amount equal to one-fifth
190.22of the amount of the addition.
190.23EFFECTIVE DATE.The amendment to clause (2) is effective the day following
190.24final enactment. The rest of this section is effective for taxable years beginning after
190.25December 31, 2006.
190.26 Sec. 13. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:
190.27 Subd. 33. Bovine testing credit. (a) An owner of cattle in Minnesota may take a
190.28credit against the tax due under this chapter for an amount equal to one-half the expenses
190.29incurred during the taxable year to conduct tuberculosis testing on those cattle.
190.30 (b) If the amount of credit which the taxpayer is eligible to receive under this
190.31subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
190.32revenue shall refund the excess to the taxpayer.
190.33 (c) The amount necessary to pay claims for the refund provided in this subdivision is
190.34appropriated from the general fund to the commissioner of revenue.
191.1 (d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in
191.2Minnesota is not federally required are not allowed in claiming the credit under paragraph
191.3(a).
191.4EFFECTIVE DATE.This section is effective for tax years beginning after
191.5December 31, 2007.
191.6 Sec. 14. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:
191.7 Subd. 2b. Inflation adjustment. The commissioner shall adjust the dollar amount
191.8of the income threshold at which the maximum credit begins to be reduced under
191.9subdivision 2must be adjusted for inflation. The commissioner shall make the inflation
191.10adjustments in accordance with section 1(f) of the Internal Revenue Code except that for
191.11the purposes of this subdivision the percentage increase must be determined from the year
191.12starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting
191.13for inflation for the tax year beginning after December 31, 2000. The determination of
191.14the commissioner under this subdivision is not a rule under the Administrative Procedure
191.15Act. by the percentage determined pursuant to the provisions of section 1(f) of the Internal
191.16Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for
191.17the word "1992." For 2001, the commissioner shall then determine the percent change
191.18from the 12 months ending on August 31, 1999, to the 12 months ending on August 31,
191.192000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the
191.2012 months ending on August 31 of the year preceding the taxable year. The determination
191.21of the commissioner pursuant to this subdivision must not be considered a "rule" and is
191.22not subject to the Administrative Procedure Act contained in chapter 14. The threshold
191.23amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
191.24$5, the amount is rounded up to the nearest $10 amount.
191.25EFFECTIVE DATE.This section is effective for tax years beginning after
191.26December 31, 2006.
191.27 Sec. 15. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:
191.28 Subd. 7. Inflation adjustment. The earned income amounts used to calculate the
191.29credit and the income thresholds at which the maximum credit begins to be reduced in
191.30subdivision 1 must be adjusted for inflation. The commissioner shallmake the inflation
191.31adjustments in accordance with section 1(f) of the Internal Revenue Code except that for
191.32the purposes of this subdivision the percentage increase shall be determined from the year
191.33starting September 1, 1999, and ending August 31, 2000, as the base year for adjusting for
192.1inflation for the tax year beginning after December 31, 2000. adjust by the percentage
192.2determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
192.3that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For
192.42001, the commissioner shall then determine the percent change from the 12 months
192.5ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each
192.6subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending
192.7on August 31 of the year preceding the taxable year. The earned income thresholds as
192.8adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends
192.9in $5, the amount is rounded up to the nearest $10 amount. The determination of the
192.10commissioner under this subdivision is not a rule under the Administrative Procedure Act.
192.11EFFECTIVE DATE.This section is effective for tax years beginning after
192.12December 31, 2006.
192.13 Sec. 16. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
192.14 Subd. 3. Exemption amount. (a) For purposes of computing the alternative
192.15minimum tax, the exemption amount is:
192.16(1) for taxable years beginning before January 1, 2006, the exemption determined
192.17under section 55(d) of the Internal Revenue Code, as amended through December 31,
192.181992; and
192.19(2), for taxable years beginning after December 31, 2005, $60,000 for married
192.20couples filing joint returns, $30,000 for married individuals filing separate returns, estates,
192.21and trusts, and $45,000 for unmarried individuals.
192.22 (b) The exemption amount determined under this subdivision is subject to the phase
192.23out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum
192.24taxable income as determined under this section must be substituted in the computation of
192.25the phase out.
192.26 (c) For taxable years beginning after December 31, 2006, the exemption amount
192.27under paragraph (a), clause (2), must be adjusted for inflation.The commissioner shall
192.28make the inflation adjustments in accordance with section 1(f) of the Internal Revenue
192.29Code except that for the purposes of this subdivision the percentage increase must be
192.30determined from the year starting September 1, 2005, and ending August 31, 2006, as the
192.31base year for adjusting for inflation for the tax year beginning after December 31, 2006.
192.32The commissioner shall adjust the exemption amount by the percentage determined
192.33pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
192.34section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007,
192.35the commissioner shall then determine the percent change from the 12 months ending on
193.1August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent
193.2year, from the 12 months ending on August 31, 2005, to the 12 months ending on August
193.331 of the year preceding the taxable year. The exemption amount as adjusted must be
193.4rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest
193.5$10 amount. The determination of the commissioner under this subdivision is not a rule
193.6under the Administrative Procedure Act.
193.7EFFECTIVE DATE.This section is effective for tax years beginning after
193.8December 31, 2006.
193.9 Sec. 17. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
193.10 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
193.11income" is Minnesota net income as defined in section290.01, subdivision 19 , and
193.12includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
193.13(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
193.14Minnesota tax return, the minimum tax must be computed on a separate company basis.
193.15If a corporation is part of a tax group filing a unitary return, the minimum tax must be
193.16computed on a unitary basis. The following adjustments must be made.
193.17 (1) For purposes of the depreciation adjustments under section 56(a)(1) and
193.1856(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
193.19service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
193.20income tax purposes, including any modification made in a taxable year under section
193.21290.01, subdivision 19e
, or Minnesota Statutes 1986, section
290.09, subdivision 7 ,
193.22paragraph (c).
193.23 For taxable years beginning after December 31, 2000, the amount of any remaining
193.24modification made under section290.01, subdivision 19e , or Minnesota Statutes 1986,
193.25section290.09, subdivision 7 , paragraph (c), not previously deducted is a depreciation
193.26allowance in the first taxable year after December 31, 2000.
193.27 (2) The portion of the depreciation deduction allowed for federal income tax
193.28purposes under section 168(k) of the Internal Revenue Code that is required as an addition
193.29under section290.01, subdivision 19c , clause (16) (14), is disallowed in determining
193.30alternative minimum taxable income.
193.31 (3) The subtraction for depreciation allowed under section290.01, subdivision
193.3219d , clause (19) (17), is allowed as a depreciation deduction in determining alternative
193.33minimum taxable income.
193.34 (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
193.35of the Internal Revenue Code does not apply.
194.1 (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
194.2Revenue Code does not apply.
194.3 (6) The special rule for dividends from section 936 companies under section
194.456(g)(4)(C)(iii) does not apply.
194.5 (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
194.6Code does not apply.
194.7 (8) The tax preference for intangible drilling costs under section 57(a)(2) of the
194.8Internal Revenue Code must be calculated without regard to subparagraph (E) and the
194.9subtraction under section290.01, subdivision 19d , clause (4).
194.10 (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
194.11Revenue Code does not apply.
194.12 (10) The tax preference for charitable contributions of appreciated property under
194.13section 57(a)(6) of the Internal Revenue Code does not apply.
194.14 (11) For purposes of calculating the tax preference for accelerated depreciation or
194.15amortization on certain property placed in service before January 1, 1987, under section
194.1657(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
194.17deduction allowed under section290.01, subdivision 19e .
194.18 For taxable years beginning after December 31, 2000, the amount of any remaining
194.19modification made under section290.01, subdivision 19e , not previously deducted is a
194.20depreciation or amortization allowance in the first taxable year after December 31, 2004.
194.21 (12) For purposes of calculating the adjustment for adjusted current earnings in
194.22section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
194.23income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
194.24minimum taxable income as defined in this subdivision, determined without regard to the
194.25adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
194.26 (13) For purposes of determining the amount of adjusted current earnings under
194.27section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
194.2856(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
194.29gross-up subtracted as provided in section290.01, subdivision 19d , clause (1), (ii) the
194.30amount of refunds of income, excise, or franchise taxes subtracted as provided in section
194.31290.01, subdivision 19d
, clause (10) (8), or (iii) the amount of royalties, fees or other like
194.32income subtracted as provided in section290.01, subdivision 19d , clause (11) (9).
194.33 (14) Alternative minimum taxable income excludes the income from operating in a
194.34job opportunity building zone as provided under section469.317 .
194.35 (15) Alternative minimum taxable income excludes the income from operating in a
194.36biotechnology and health sciences industry zone as provided under section469.337 .
195.1 (16) Alternative minimum taxable income excludes the income from operating in an
195.2international economic development zone as provided under section469.326 .
195.3 Items of tax preference must not be reduced below zero as a result of the
195.4modifications in this subdivision.
195.5EFFECTIVE DATE.This section is effective for taxable years beginning after
195.6December 31, 2006.
195.7 Sec. 18. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:
195.8 Subd. 8. Deposit; definition. (a) "Deposit," as used in subdivision7 6, paragraph
195.9(n), has the meanings in this subdivision.
195.10 (b) "Deposit" means the unpaid balance of money or its equivalent received or
195.11held by a financial institution in the usual course of business and for which it has given
195.12or is obligated to give credit, either conditionally or unconditionally, to a commercial,
195.13checking, savings, time, or thrift account whether or not advance notice is required to
195.14withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift
195.15certificate, investment certificate, or certificate of indebtedness, or other similar name, or a
195.16check or draft drawn against a deposit account and certified by the financial institution,
195.17or a letter of credit or a traveler's check on which the financial institution is primarily
195.18liable. However, without limiting the generality of the term "money or its equivalent," any
195.19such account or instrument must be regarded as evidencing the receipt of the equivalent
195.20of money when credited or issued in exchange for checks or drafts or for a promissory
195.21note upon which the person obtaining the credit or instrument is primarily or secondarily
195.22liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other
195.23instruments forwarded to the bank for collection.
195.24 (c) "Deposit" means trust funds received or held by the financial institution, whether
195.25held in the trust department or held or deposited in any other department of the financial
195.26institution.
195.27 (d) "Deposit" means money received or held by a financial institution, or the credit
195.28given for money or its equivalent received or held by a financial institution, in the usual
195.29course of business for a special or specific purpose, regardless of the legal relationship so
195.30established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds,
195.31funds held as security for an obligation due to the financial institution or others, including
195.32funds held as dealers reserves, or for securities loaned by the financial institution, funds
195.33deposited by a debtor to meet maturing obligations, funds deposited as advance payment
195.34on subscriptions to United States government securities, funds held for distribution or
195.35purchase of securities, funds held to meet its acceptances or letters of credit, and withheld
196.1taxes. It does not include funds received by the financial institution for immediate
196.2application to the reduction of an indebtedness to the receiving financial institution, or
196.3under condition that the receipt of the funds immediately reduces or extinguishes the
196.4indebtedness.
196.5 (e) "Deposit" means outstanding drafts, including advice or another such institution,
196.6cashier's checks, money orders, or other officer's checks issued in the usual course
196.7of business for any purpose, but not including those issued in payment for services,
196.8dividends, or purchases or other costs or expenses of the financial institution itself.
196.9 (f) "Deposit" means money or its equivalent held as a credit balance by a financial
196.10institution on behalf of its customer if the entity is engaged in soliciting and holding such
196.11balances in the regular course of its business.
196.12 (g) Interinstitution fund transfers are not deposits.
196.13EFFECTIVE DATE.This section is effective the day following final enactment.
196.14 Sec. 19. Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read:
196.15 Subd. 7. Dependent. "Dependent" means any person who is considered a
196.16dependent under sections 151 and 152 of the Internal Revenue Code.In the case of a son,
196.17stepson, daughter, or stepdaughter of the claimant, amounts received as a Minnesota
196.18family investment program grant, allowance to or on behalf of the child, surplus food, or
196.19other relief in kind supplied by a governmental agency must not be taken into account
196.20in determining whether the child received more than half of the child's support from
196.21the claimant.
196.22EFFECTIVE DATE.This section is effective for property tax refunds based on
196.23rents paid after December 31, 2006, and property taxes payable after December 31, 2007.
196.24 Sec. 20. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
196.25 Subdivision 1. Determination. All property includable in the Minnesota gross
196.26estate of a decedent shall be valued in accordance with the provisions of sections 2031 or
196.272032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in
196.28valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate.
196.29Values for purposes of the estate tax on both probate and nonprobate assets shall be the
196.30same as those finally determined for purposes of the federal estate tax on a decedent's
196.31estate. Except as otherwise provided in section 291.075, the value of all property
196.32includable in the Minnesota gross estate of a decedent may be independently determined
196.33under those sections for Minnesota estate tax purposes.
197.1EFFECTIVE DATE.This section is effective retroactively for estates of decedents
197.2dying after December 31, 2005.
197.3 Sec. 21. TRANSITION; POLLUTION CONTROL FACILITIES
197.4AMORTIZATION.
197.5 The amount of additions to federal taxable income pursuant to Minnesota Statutes,
197.6section 290.01, subdivision 19c, clause (10), that are properly subtractable pursuant
197.7to Minnesota Statutes, section 290.01, subdivision 19d, clause (8), for taxable years
197.8beginning after December 31, 2006, and have not been subtracted pursuant to Minnesota
197.9Statutes, section 290.01, subdivision 19d, clause (8), are subtractable in the taxpayer's first
197.10taxable year beginning after December 31, 2006.
197.13 Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to
197.14read:
197.15 Subd. 2. Bad debt loss. If a claim relates to an overpayment because of a failure to
197.16deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered
197.17timely if filed within seven years from the date prescribed for the filing of the return. A
197.18claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2
197.19years from the dateprescribed for filing the return, plus any extensions granted for filing
197.20the return, but only if filed within the extended time when the bad debt was (1) written off
197.21as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted
197.22for federal income tax purposes or would have been eligible for a bad debt deduction for
197.23federal income tax purposes if the taxpayer were required to file a federal income tax
197.24return, or within one year from the date the taxpayer's federal income tax return is timely
197.25filed claiming the bad debt deduction, whichever period is later. The refund or credit is
197.26limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes
197.27of this subdivision, has the same meaning as that term is used in United States Code,
197.28title 26, section 166, except that for a claim relating to an overpayment of taxes under
197.29chapter 297A the following are excluded from the calculation of bad debt: financing
197.30charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts
197.31on property that remain in the possession of the seller until the full purchase price is
197.32paid; expenses incurred in attempting to collect any debt; and repossessed property. For
197.33purposes of reporting a payment received on previously claimed bad debt under chapter
197.34297A, any payments made on a debt or account are applied first proportionally to the
198.1taxable price of the property or service and the sales tax on it, and secondly to interest,
198.2service charges, and any other charges.
198.3EFFECTIVE DATE.This section is effective the day following final enactment.
198.4 Sec. 2. Minnesota Statutes 2006, section 289A.56, is amended by adding a subdivision
198.5to read:
198.6 Subd. 8. Border city zone refunds. Notwithstanding subdivision 3, for refunds
198.7payable under section 469.1734, subdivision 6, interest is computed from 90 days after the
198.8refund claim is filed with the commissioner.
198.9EFFECTIVE DATE.This section is effective for refund claims filed on or after
198.10July 1, 2007.
198.11 Sec. 3. Minnesota Statutes 2006, section 289A.60, subdivision 25, is amended to read:
198.12 Subd. 25. Penalty for failure to properly complete sales and use tax return. A
198.13person who fails to report localsales tax taxes required to be reported on a sales and use
198.14tax return or who fails to report localsales tax taxes on separate tax lines on the sales
198.15and use tax return is subject to a penalty of five percent of the amount of tax not properly
198.16reported on the return. A person who files a consolidated tax return but fails to report
198.17location information is subject to a $500 penalty for each return not containing location
198.18information. In addition, the commissioner may revoke the privilege for a taxpayer to
198.19file consolidated returns and may require the taxpayer to separately register each location
198.20and to file a tax return for each location.
198.21EFFECTIVE DATE.This section is effective for returns filed after June 30, 2007.
198.22 Sec. 4. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision
198.23to read:
198.24 Subd. 29. Penalty for failure to report liquor sales. In the case of a failure to file
198.25an informational return required by section 297A.8155 with the commissioner on or before
198.26the date prescribed, the person failing to file the report shall pay a penalty of $500 each
198.27failure. If a failure to file a report is intentional, the penalty shall be $1,000 each failure.
198.28EFFECTIVE DATE.This section is effective the day following final enactment.
198.29 Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
199.1 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
199.2to, each of the transactions listed in this subdivision.
199.3 (b) Sale and purchase include:
199.4 (1) any transfer of title or possession, or both, of tangible personal property, whether
199.5absolutely or conditionally, for a consideration in money or by exchange or barter; and
199.6 (2) the leasing of or the granting of a license to use or consume, for a consideration
199.7in money or by exchange or barter, tangible personal property, other than a manufactured
199.8home used for residential purposes for a continuous period of 30 days or more.
199.9 (c) Sale and purchase include the production, fabrication, printing, or processing of
199.10tangible personal property for a consideration for consumers who furnish either directly or
199.11indirectly the materials used in the production, fabrication, printing, or processing.
199.12 (d) Sale and purchase include the preparing for a consideration of food.
199.13Notwithstanding section297A.67, subdivision 2 , taxable food includes, but is not limited
199.14to, the following:
199.15 (1) prepared food sold by the retailer;
199.16 (2) soft drinks;
199.17 (3) candy;
199.18 (4) dietary supplements; and
199.19 (5) all food sold through vending machines.
199.20 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
199.21gas, water, or steam for use or consumption within this state.
199.22 (f) A sale and a purchase includes the transfer for a consideration of prewritten
199.23computer software whether delivered electronically, by load and leave, or otherwise.
199.24 (g) A sale and a purchase includes the furnishing for a consideration of the following
199.25services:
199.26 (1) the privilege of admission to places of amusement, recreational areas, or athletic
199.27events, and the making available of amusement devices, tanning facilities, reducing
199.28salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
199.29 (2) lodging and related services by a hotel, rooming house, resort, campground,
199.30motel, or trailer camp, including furnishing the guest of the facility with access to
199.31telecommunication services, and the granting of any similar license to use real property
199.32in a specific facility, other than the renting or leasing of it for a continuous period of
199.3330 days or more under an enforceable written agreement that may not be terminated
199.34without prior notice;
199.35 (3) nonresidential parking services, whether on a contractual, hourly, or other
199.36periodic basis, except for parking at a meter;
200.1 (4) the granting of membership in a club, association, or other organization if:
200.2 (i) the club, association, or other organization makes available for the use of its
200.3members sports and athletic facilities, without regard to whether a separate charge is
200.4assessed for use of the facilities; and
200.5 (ii) use of the sports and athletic facility is not made available to the general public
200.6on the same basis as it is made available to members.
200.7Granting of membership means both onetime initiation fees and periodic membership
200.8dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
200.9squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
200.10swimming pools; and other similar athletic or sports facilities;
200.11 (5) delivery of aggregate materialsand concrete block by a third party, excluding
200.12delivery of aggregate material used in road construction, and delivery of concrete block by
200.13a third party if the delivery would be subject to the sales tax if provided by the seller of the
200.14aggregate material or concrete block; and
200.15 (6) services as provided in this clause:
200.16 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
200.17and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
200.18drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
200.19include services provided by coin operated facilities operated by the customer;
200.20 (ii) motor vehicle washing, waxing, and cleaning services, including services
200.21provided by coin operated facilities operated by the customer, and rustproofing,
200.22undercoating, and towing of motor vehicles;
200.23 (iii) building and residential cleaning, maintenance, and disinfecting services and
200.24pest control and exterminating services;
200.25 (iv) detective, security, burglar, fire alarm, and armored car services; but not
200.26including services performed within the jurisdiction they serve by off-duty licensed peace
200.27officers as defined in section626.84, subdivision 1 , or services provided by a nonprofit
200.28organization for monitoring and electronic surveillance of persons placed on in-home
200.29detention pursuant to court order or under the direction of the Minnesota Department
200.30of Corrections;
200.31 (v) pet grooming services;
200.32 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
200.33and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
200.34plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
200.35clearing contract as defined in section297A.68, subdivision 40 ; and tree trimming for
201.1public utility lines. Services performed under a construction contract for the installation of
201.2shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
201.3 (vii) massages, except when provided by a licensed health care facility or
201.4professional or upon written referral from a licensed health care facility or professional for
201.5treatment of illness, injury, or disease; and
201.6 (viii) the furnishing of lodging, board, and care services for animals in kennels and
201.7other similar arrangements, but excluding veterinary and horse boarding services.
201.8 In applying the provisions of this chapter, the terms "tangible personal property"
201.9and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
201.10and the provision of these taxable services, unless specifically provided otherwise.
201.11Services performed by an employee for an employer are not taxable. Services performed
201.12by a partnership or association for another partnership or association are not taxable if
201.13one of the entities owns or controls more than 80 percent of the voting power of the
201.14equity interest in the other entity. Services performed between members of an affiliated
201.15group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
201.16group of corporations" means those entities that would be classified as members of an
201.17affiliated group as defined under United States Code, title 26, section 1504, disregarding
201.18the exclusions in section 1504(b).
201.19 For purposes of clause (5), "road construction" means construction of (1) public
201.20roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
201.21metropolitan area up to the point of the emergency response location sign.
201.22 (h) A sale and a purchase includes the furnishing for a consideration of tangible
201.23personal property or taxable services by the United States or any of its agencies or
201.24instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
201.25subdivisions.
201.26 (i) A sale and a purchase includes the furnishing for a consideration
201.27of telecommunications services,including ancillary services associated with
201.28telecommunication services, cable television servicesand, direct satellite services, and
201.29ring tones.Telecommunications Telecommunication services include, but are not limited
201.30to, the following services, as defined in section 297A.669: air-to-ground radiotelephone
201.31service, mobile telecommunication service, postpaid calling service, prepaid calling
201.32service, prepaid wireless calling service, and private communication services. The
201.33services in this paragraph are taxed to the extent allowed under federal law.
201.34 (j) A sale and a purchase includes the furnishing for a consideration of installation if
201.35the installation charges would be subject to the sales tax if the installation were provided
201.36by the seller of the item being installed.
202.1 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
202.2to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
202.3the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
202.465B.29, subdivision 1
, clause (1).
202.5EFFECTIVE DATE.This section is effective for sales and purchases made after
202.6June 30, 2007, except that the amendments to paragraphs (g), clause (2), and (i), are
202.7effective for sales and purchases made on or after January 1, 2008.
202.8 Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 4, is amended to read:
202.9 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
202.10purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
202.11course of business as defined in subdivision 21.
202.12 (b) A sale of property used by the owner only by leasing it to others or by holding it
202.13in an effort to lease it, and put to no use by the owner other than resale after the lease or
202.14effort to lease, is a sale of property for resale.
202.15 (c) A sale of master computer software that is purchased and used to make copies for
202.16sale or lease is a sale of property for resale.
202.17 (d) A sale of building materials, supplies, and equipment to owners, contractors,
202.18subcontractors, or builders for the erection of buildings or the alteration, repair, or
202.19improvement of real property is a retail sale in whatever quantity sold, whether the sale is
202.20for purposes of resale in the form of real property or otherwise.
202.21 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
202.22for installation of the floor covering is a retail sale and not a sale for resale since a sale
202.23of floor covering which includes installation is a contract for the improvement of real
202.24property.
202.25 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
202.26for installation of the items is a retail sale and not a sale for resale since a sale of
202.27shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
202.28the improvement of real property.
202.29 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
202.30is not considered a sale of property for resale.
202.31 (h) A sale of tangible personal property utilized or employed in the furnishing or
202.32providing of services under subdivision 3, paragraph (g), clause (1), including, but not
202.33limited to, property given as promotional items, is a retail sale and is not considered a
202.34sale of property for resale.
203.1 (i) A sale of tangible personal property used in conducting lawful gambling under
203.2chapter 349 or the State Lottery under chapter 349A, including, but not limited to,
203.3property given as promotional items, is a retail sale and is not considered a sale of
203.4property for resale.
203.5 (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
203.6dispense goods or services, including, but not limited to, coin-operated devices, is a retail
203.7sale and is not considered a sale of property for resale.
203.8 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
203.9payment becomes due under the terms of the agreement or the trade practices of the
203.10lessor or (2) in the case of a lease of a motor vehicle, as defined in section297B.01,
203.11subdivision 5 , but excluding vehicles with a manufacturer's gross vehicle weight rating
203.12greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
203.13the lease is executed.
203.14 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
203.15title or possession of the tangible personal property.
203.16 (m) A sale of a bundled transaction in which one or more of the products included
203.17in the bundle is a taxable product is a retail sale, except that if one of the products
203.18is a telecommunication service, ancillary service, Internet access, or audio or video
203.19programming service, and the seller has maintained books and records identifying through
203.20reasonable and verifiable standards the portions of the price that are attributable to the
203.21distinct and separately identifiable products, then the products are not considered part of a
203.22bundled transaction. For purposes of this paragraph:
203.23 (1) the books and records maintained by the seller must be maintained in the regular
203.24course of business, and do not include books and records created and maintained by the
203.25seller primarily for tax purposes;
203.26 (2) books and records maintained in the regular course of business include, but are
203.27not limited to, financial statements, general ledgers, invoicing and billing systems and
203.28reports, and reports for regulatory tariffs and other regulatory matters; and
203.29 (3) books and records are maintained primarily for tax purposes when the books
203.30and records identify taxable and nontaxable portions of the price, but the seller maintains
203.31other books and records that identify different prices attributable to the distinct products
203.32included in the same bundled transaction.
203.33EFFECTIVE DATE.This section is effective for sales and purchases made on
203.34or after January 1, 2008.
203.35 Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:
204.1 Subd. 7. Sales price. (a) "Sales price" means the measure subject to sales tax, and
204.2means the total amount of consideration, including cash, credit, personal property, and
204.3services, for which personal property or services are sold, leased, or rented, valued in
204.4money, whether received in money or otherwise, without any deduction for the following:
204.5 (1) the seller's cost of the property sold;
204.6 (2) the cost of materials used, labor or service cost, interest, losses, all costs of
204.7transportation to the seller, all taxes imposed on the seller, and any other expenses of
204.8the seller;
204.9 (3) charges by the seller for any services necessary to complete the sale, other than
204.10delivery and installation charges;
204.11 (4) delivery charges, except the percentage of the delivery charge allocated to
204.12delivery of tax exempt property, when the delivery charge is allocated by using either (i) a
204.13percentage based on the total sales price of the taxable property compared to the total sales
204.14price of all property in the shipment, or (ii) a percentage based on the total weight of the
204.15taxable property compared to the total weight of all property in the shipment; and
204.16 (5) installation charges; and.
204.17(6) the value of exempt property given to the purchaser when taxable and exempt
204.18personal property have been bundled together and sold by the seller as a single product
204.19or piece of merchandise.
204.20 (b) Sales price does not include:
204.21 (1) discounts, including cash, terms, or coupons, that are not reimbursed by a third
204.22party and that are allowed by the seller and taken by a purchaser on a sale;
204.23 (2) interest, financing, and carrying charges from credit extended on the sale of
204.24personal property or services, if the amount is separately stated on the invoice, bill of sale,
204.25or similar document given to the purchaser; and
204.26 (3) any taxes legally imposed directly on the consumer that are separately stated on
204.27the invoice, bill of sale, or similar document given to the purchaser.
204.28 (c) Sales price includes consideration received by the seller from third parties if:
204.29 (1) the seller actually receives consideration from a party other than the purchaser
204.30and the consideration is directly related to a price reduction or discount on the sale;
204.31 (2) the seller has an obligation to pass the price reduction or discount through to
204.32the purchaser;
204.33 (3) the amount of the consideration attributable to the sale is fixed and determinable
204.34by the seller at the time of the sale of the item to the purchaser; and
204.35 (4) one of the following criteria is met:
205.1 (i) the purchaser presents a coupon, certificate, or other documentation to the seller
205.2to claim a price reduction or discount when the coupon, certificate, or documentation is
205.3authorized, distributed, or granted by a third party with the understanding that the third
205.4party will reimburse any seller to whom the coupon, certificate, or documentation is
205.5presented;
205.6 (ii) the purchaser identifies himself or herself to the seller as a member of a group or
205.7organization entitled to a price reduction or discount. A "preferred customer" card that is
205.8available to any customer does not constitute membership in such a group; or
205.9 (iii) the price reduction or discount is identified as a third-party price reduction or
205.10discount on the invoice received by the purchaser or on a coupon, certificate, or other
205.11documentation presented by the purchaser.
205.12EFFECTIVE DATE.This section is effective for sales and purchases made on or
205.13after January 1, 2008, except that the amendment to paragraph (a), clause (4), is effective
205.14the day following final enactment.
205.15 Sec. 8. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:
205.16 Subd. 10. Tangible personal property. (a) "Tangible personal property" means
205.17personal property that can be seen, weighed, measured, felt, or touched, or that is in any
205.18other manner perceptible to the senses. "Tangible personal property" includes, but is not
205.19limited to, electricity, water, gas, steam, and prewritten computer software, and prepaid
205.20calling cards.
205.21 (b) Tangible personal property does not include:
205.22 (1) large ponderous machinery and equipment used in a business or production
205.23activity which at common law would be considered to be real property;
205.24 (2) property which is subject to an ad valorem property tax;
205.25 (3) property described in section272.02, subdivision 9 , clauses (a) to (d); and
205.26 (4) property described in section272.03, subdivision 2 , clauses (3) and (5).
205.27EFFECTIVE DATE.This section is effective for sales and purchases made on
205.28or after January 1, 2008.
205.29 Sec. 9. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:
205.30 Subd. 24. Telecommunications services. (a) "Telecommunications services" means
205.31the electronic transmission, conveyance, or routing of voice, data, audio, video, or any
205.32other information or signals to a point, or between or among points, by or through any
205.33electronic, satellite, optical, microwave, or other medium or method now in existence or
206.1hereafter devised, regardless of the protocol used for such transmission, conveyance,
206.2or routing.
206.3 (b) Telecommunications servicesincludes the furnishing for consideration of access
206.4to telephone services by a hotel to its guests. include transmission, conveyance, or routing
206.5in which computer processing applications are used to act on the form, code, or protocol
206.6of the content for purposes of transmission, conveyance, or routing, without regard to
206.7whether the service is referred to as voice over Internet protocol services or is classified by
206.8the Federal Communications Commission as enhanced or value added.
206.9 (c) Telecommunications services do not include:
206.10(1) services purchased with a prepaid telephone calling card;
206.11(2) private communication service purchased by an agent acting on behalf of the
206.12State Lottery;
206.13(3) information services; and
206.14(4) purchases of telecommunications when the purchaser uses the purchased services
206.15as a component part of or integrates such service into another telecommunications service
206.16that is sold by the purchaser in the normal course of business.
206.17(d) For purposes of this subdivision, "information services" means the offering of
206.18the capability for generating, acquiring, storing, transforming, processing, retrieving,
206.19utilizing, or making available information.
206.20 (1) data processing and information services that allow data to be generated,
206.21acquired, stored, processed, or retrieved and delivered by an electronic transmission to
206.22a purchaser when the purchaser's primary purpose for the underlying transaction is the
206.23processed data or information;
206.24 (2) installation or maintenance of wiring or equipment on a customer's premises;
206.25 (3) tangible personal property;
206.26 (4) advertising, including, but not limited to, directory advertising;
206.27 (5) billing and collection services provided to third parties;
206.28 (6) Internet access service;
206.29 (7) radio and television audio and video programming services, regardless of the
206.30medium, including the furnishing of transmission, conveyance, and routing of such
206.31services by the programming service provider. Radio and television audio and video
206.32programming services includes, but is not limited to, cable service as defined in United
206.33States Code, title 47, section 522(6), and audio and video programming services delivered
206.34by commercial mobile radio service providers, as defined in Code of Federal Regulations,
206.35title 47, section 20.3;
206.36 (8) ancillary services; or
207.1 (9) digital products delivered electronically, including, but not limited to, software,
207.2music, video, reading materials, or ring tones.
207.3EFFECTIVE DATE.This section is effective for sales and purchases made on
207.4or after January 1, 2008.
207.5 Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a
207.6subdivision to read:
207.7 Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale
207.8of two or more products when the products are otherwise distinct and identifiable, and
207.9the products are sold for one nonitemized price. As used in this subdivision, "product"
207.10includes tangible personal property, services, intangibles, and digital goods, but does not
207.11include real property or services to real property. A bundled transaction does not include
207.12the sale of any products in which the sales price varies, or is negotiable, based on the
207.13selection by the purchaser of the products included in the transaction.
207.14 (b) For purposes of this subdivision, "distinct and identifiable" products does not
207.15include:
207.16 (1) packaging and other materials, such as containers, boxes, sacks, bags, and
207.17bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
207.18products and are incidental or immaterial to the retail sale. Examples of packaging that are
207.19incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
207.20and express delivery envelopes and boxes;
207.21 (2) a promotional product provided free of charge with the required purchase of
207.22another product. A promotional product is provided free of charge if the sales price of
207.23another product, which is required to be purchased in order to receive the promotional
207.24product, does not vary depending on the inclusion of the promotional product; and
207.25 (3) items included in the definition of sales price.
207.26 (c) For purposes of this subdivision, the term "one nonitemized price" does not
207.27include a price that is separately identified by product on binding sales or other supporting
207.28sales-related documentation made available to the customer in paper or electronic form
207.29including, but not limited to an invoice, bill of sale, receipt, contract, service agreement,
207.30lease agreement, periodic notice of rates and services, rate card, or price list.
207.31 (d) A transaction that otherwise meets the definition of a bundled transaction is
207.32not a bundled transaction if it is:
207.33 (1) the retail sale of tangible personal property and a service and the tangible
207.34personal property is essential to the use of the service, and is provided exclusively in
207.35connection with the service, and the true object of the transaction is the service;
208.1 (2) the retail sale of services if one service is provided that is essential to the use or
208.2receipt of a second service and the first service is provided exclusively in connection with
208.3the second service and the true object of the transaction is the second service;
208.4 (3) a transaction that includes taxable products and nontaxable products and the
208.5purchase price or sales price of the taxable products is de minimis; or
208.6 (4) the retail sale of exempt tangible personal property and taxable tangible personal
208.7property if:
208.8 (i) the transaction includes food and food ingredients, drugs, durable medical
208.9equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
208.10or medical supplies; and
208.11 (ii) the seller's purchase price or sales price of the taxable tangible personal property
208.12is 50 percent or less of the total purchase price or sales price of the bundled tangible
208.13personal property. Sellers must not use a combination of the purchase price and sales
208.14price of the tangible personal property when making the 50 percent determination for
208.15a transaction.
208.16 (e) For purposes of this subdivision, "purchase price" means the measure subject to
208.17use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
208.18price or sales price of the taxable products is ten percent or less of the total purchase
208.19price or sales price of the bundled products. Sellers shall use either the purchase price
208.20or the sales price of the products to determine if the taxable products are de minimis.
208.21Sellers must not use a combination of the purchase price and sales price of the products
208.22to determine if the taxable products are de minimis. Sellers shall use the full term of a
208.23service contract to determine if the taxable products are de minimis.
208.24EFFECTIVE DATE.This section is effective for sales and purchases made on
208.25or after January 1, 2008.
208.26 Sec. 11. Minnesota Statutes 2006, section 297A.61, is amended by adding a
208.27subdivision to read:
208.28 Subd. 39. Ancillary services. "Ancillary services" means services that are
208.29associated with or incidental to the provision of telecommunications services, including,
208.30but not limited to, conference bridging service, detailed telecommunications billing,
208.31directory assistance, vertical service, and voice mail services.
208.32EFFECTIVE DATE.This section is effective for sales and purchases made on
208.33or after January 1, 2008.
209.1 Sec. 12. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.2subdivision to read:
209.3 Subd. 40. Conference bridging service. "Conference bridging service" means an
209.4ancillary service that links two or more participants of an audio or video conference call
209.5and may include the provision of a telephone number. Conference bridging service does
209.6not include the telecommunications services used to reach the conference bridge.
209.7EFFECTIVE DATE.This section is effective for sales and purchases made on
209.8or after January 1, 2008.
209.9 Sec. 13. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.10subdivision to read:
209.11 Subd. 41. Detailed telecommunications billing service. "Detailed
209.12telecommunications billing service" means an ancillary service of separately stating
209.13information pertaining to individual calls on a customer's billing statement.
209.14EFFECTIVE DATE.This section is effective for sales and purchases made on
209.15or after January 1, 2008.
209.16 Sec. 14. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.17subdivision to read:
209.18 Subd. 42. Directory assistance. "Directory assistance" means an ancillary service
209.19of providing telephone number information or address information, or both.
209.20EFFECTIVE DATE.This section is effective for sales and purchases made on
209.21or after January 1, 2008.
209.22 Sec. 15. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.23subdivision to read:
209.24 Subd. 43. Vertical service. "Vertical service" means an ancillary service that is
209.25offered in connection with one or more telecommunications services and which offers
209.26advanced calling features that allow customers to identify callers and to manage multiple
209.27calls and call connections, including conference bridging services.
209.28EFFECTIVE DATE.This section is effective for sales and purchases made on
209.29or after January 1, 2008.
210.1 Sec. 16. Minnesota Statutes 2006, section 297A.61, is amended by adding a
210.2subdivision to read:
210.3 Subd. 44. Voice mail service. "Voice mail service" means an ancillary service that
210.4enables the customer to store, send, or receive recorded messages. Voice mail service
210.5does not include any vertical services that the customer may be required to have in order
210.6to utilize the voice mail service.
210.7EFFECTIVE DATE.This section is effective for sales and purchases made on
210.8or after January 1, 2008.
210.9 Sec. 17. Minnesota Statutes 2006, section 297A.61, is amended by adding a
210.10subdivision to read:
210.11 Subd. 45. Ring tone. "Ring tone" means a digitized sound file that is downloaded
210.12onto a device and that may be used to alert the customer of a telecommunication service
210.13with respect to a communication.
210.14EFFECTIVE DATE.This section is effective the day following final enactment.
210.15 Sec. 18. Minnesota Statutes 2006, section 297A.61, is amended by adding a
210.16subdivision to read:
210.17 Subd. 46. Fur clothing. "Fur clothing" means human wearing apparel that is
210.18required by the Federal Fur Products Labeling Act, United States Code, title 15, section
210.1969, to be labeled as a fur product, and the value of the fur components in the product
210.20is more than three times the value of the next most valuable tangible component. For
210.21purposes of this subdivision, "fur" means any animal skin or part of an animal skin with
210.22hair, fleece, or fur fibers attached to it, either in its raw or processed state, but does not
210.23include animal skins that have been converted into leather or suede, or from which the
210.24hair, fleece, or fur fiber has been completely removed in processing the skins.
210.25EFFECTIVE DATE.This section is effective for sales and purchases made on or
210.26after July 1, 2007.
210.27 Sec. 19. Minnesota Statutes 2006, section 297A.63, subdivision 1, is amended to read:
210.28 Subdivision 1. Use of tangible personal property or taxable services. (a) For the
210.29privilege of using, storing, distributing, or consuming in Minnesota tangible personal
210.30property or taxable services purchased for use, storage, distribution, or consumption in
210.31this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the
210.32purchase price of retail sales of the tangible personal property or taxable services at the
211.1rate of tax imposed under section297A.62 . A person that purchases property from a
211.2Minnesota retailer and returns the tangible personal property to a point within Minnesota,
211.3except in the course of interstate commerce, after it was delivered outside of Minnesota,
211.4is subject to the use tax.
211.5 (b) No tax is imposed under paragraph (a) if the tax imposed by section297A.62
211.6was paid on the sales price of the tangible personal property or taxable services.
211.7 (c) No tax is imposed under paragraph (a) if the purchase meets the requirements for
211.8exemption under section297A.67, subdivision 21 .
211.9 (d) When a transaction otherwise meets the definition of a bundled transaction, but
211.10is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and
211.11the seller's purchase price of the taxable product or taxable tangible personal property is
211.12equal to or greater than $100, then use tax is imposed on the purchase price of the taxable
211.13product or taxable personal property. For purposes of this paragraph, "purchase price"
211.14means the measure subject to use tax on purchases made by the seller.
211.15EFFECTIVE DATE.This section is effective for sales and purchases made on
211.16or after January 1, 2008.
211.17 Sec. 20. Minnesota Statutes 2006, section 297A.665, is amended to read:
211.18297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
211.19 (a) For the purpose of the proper administration of this chapter and to prevent
211.20evasion of the tax, until the contrary is established, it is presumed that:
211.21 (1) all gross receipts are subject to the tax; and
211.22 (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
211.23in Minnesota.
211.24 (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
211.25However, the seller may take from the purchaser at the time of the sale a fully completed
211.26exemption certificate which conclusively relieves the seller from collecting and remitting
211.27the tax. This However, a seller is relieved of liability if:
211.28 (1) the seller obtains a fully completed exemption certificate or all the relevant
211.29information required by section 297A.72, subdivision 2, at the time of the sale or within
211.3090 days after the date of the sale; or
211.31 (2) if the seller has not obtained a fully completed exemption certificate or all the
211.32relevant information required by section 297A.72, subdivision 2, within the time provided
211.33in clause (1), within 120 days after a request for substantiation by the commissioner,
211.34the seller either:
212.1 (i) obtains in good faith a fully completed exemption certificate or all the relevant
212.2information required by section 297A.72, subdivision 2, from the purchaser; or
212.3 (ii) proves by other means that the transaction was not subject to tax.
212.4 (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
212.5 (1) fraudulently fails to collect the tax; or
212.6 (2) solicits purchasers to participate in the unlawful claim of an exemption.If a
212.7seller claiming that certain sales are exempt is not in possession of the required exemption
212.8certificates within 60 days after receiving written notice from the commissioner that the
212.9certificates are required, deductions claimed by the seller that required delivery of the
212.10certificates must be disallowed. If the certificates are delivered to the commissioner within
212.11the 60-day period, the commissioner may verify the reason or basis for the exemption
212.12claimed in the certificates before allowing any deductions. A deduction must not be
212.13granted on the basis of certificates delivered to the commissioner after the 60-day period.
212.14(c) (d) A purchaser of tangible personal property or any items listed in section
212.15297A.63
that are shipped or brought to Minnesota by the purchaser has the burden
212.16of proving that the property was not purchased from a retailer for storage, use, or
212.17consumption in Minnesota.
212.18EFFECTIVE DATE.This section is effective for sales and purchases made on
212.19or after January 1, 2008.
212.20 Sec. 21. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:
212.21 Subd. 3. Defined telecommunications services sourcing. The sale of the following
212.22telecommunication services shall be sourced to each level of taxing jurisdiction in
212.23paragraphs (a) to (d).
212.24 (a) A sale of mobile telecommunications services, other than air-to-ground
212.25radiotelephone service and prepaid calling service, is sourced to the customer's place of
212.26primary use as required by the Mobile Telecommunications Sourcing Act.
212.27 (b) A sale of postpaid calling service is sourced to the origination point of the
212.28telecommunications signal as first identified by either:
212.29 (1) the seller's telecommunications system; or
212.30 (2) information received by the seller from its service provider, where the system
212.31used to transport such signals is not that of the seller.
212.32 (c) A sale of prepaid calling service or prepaid wireless calling service is sourced in
212.33accordance with section297A.668, subdivision 2 . However, in the case of a sale of mobile
212.34telecommunications service that is a prepaid telecommunications wireless calling service,
213.1the rule provided in section297A.668, subdivision 2 , paragraph (f), shall include as an
213.2option the location associated with the mobile telephone number.
213.3 (d) A sale of a private communication service is sourced as follows:
213.4 (1) service for a separate charge related to a customer channel termination point is
213.5sourced to each level of jurisdiction in which the customer channel termination point
213.6is located;
213.7 (2) service where all customer termination points are located entirely within one
213.8jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer
213.9channel termination points are located;
213.10 (3) service for segments of a channel between two customer channel termination
213.11points located in different jurisdictions and which segment of channel are separately
213.12charged is sourced 50 percent in each level of jurisdiction in which the customer channel
213.13termination points are located; and
213.14 (4) service for segments of a channel located in more than one jurisdiction or
213.15levels of jurisdiction and which segments are not separately billed is sourced in each
213.16jurisdiction based on the percentage determined by dividing the number of customer
213.17channel termination points in the jurisdiction by the total number of customer channel
213.18termination points.
213.19EFFECTIVE DATE.This section is effective for sales and purchases made on
213.20or after January 1, 2008.
213.21 Sec. 22. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to
213.22read:
213.23 Subd. 13. Postpaid calling service. "Postpaid calling service," for purposes of
213.24this section, means the telecommunications service obtained by making a payment
213.25on a call-by-call basis either through the use of a credit card or payment mechanism
213.26such as a bank card, travel card, credit card, or debit card, or by a charge made to
213.27a telephone number that is not associated with the origination or termination of the
213.28telecommunications service. A postpaid calling service includes a telecommunications
213.29service, except a prepaid wireless calling service, that would be a prepaid calling service
213.30except it is not exclusively a telecommunication service.
213.31EFFECTIVE DATE.This section is effective for sales and purchases made on
213.32or after January 1, 2008.
214.1 Sec. 23. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to
214.2read:
214.3 Subd. 14. Prepaid calling service. "Prepaid calling service," for purposes of this
214.4section, means a telecommunications service that:
214.5 (1) provides the right to access exclusively telecommunications services, which;
214.6 (2) must be paid for in advanceand which;
214.7 (3) enables the origination of calls using an access number or authorization code,
214.8whether manually or electronically dialed,; and that
214.9 (4) is sold in predetermined units or dollars of which the number declines with
214.10use in a known amount.
214.11EFFECTIVE DATE.This section is effective the day following final enactment.
214.12 Sec. 24. Minnesota Statutes 2006, section 297A.669, is amended by adding a
214.13subdivision to read:
214.14 Subd. 14a. Prepaid wireless calling service. "Prepaid wireless calling service," for
214.15purposes of this section, means a telecommunications service that:
214.16 (1) provides the right to utilize mobile wireless service as well as other
214.17nontelecommunications services, including the download of digital products delivered
214.18electronically, content, and ancillary services;
214.19 (2) must be paid for in advance; and
214.20 (3) is sold in predetermined units or dollars of which the number declines with
214.21use in a known amount.
214.22EFFECTIVE DATE.This section is effective for sales and purchases made on
214.23or after January 1, 2008.
214.24 Sec. 25. Minnesota Statutes 2006, section 297A.669, is amended by adding a
214.25subdivision to read:
214.26 Subd. 17. Ancillary service. The sale of an ancillary service is sourced to the
214.27customer's place of primary use.
214.28EFFECTIVE DATE.This section is effective for sales and purchases made on
214.29or after January 1, 2008.
214.30 Sec. 26. Minnesota Statutes 2006, section 297A.67, subdivision 7, is amended to read:
214.31 Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
214.32devices are exempt:
215.1 (1) drugs for human use, including over-the-counter drugs;
215.2 (2) single-use finger-pricking devices for the extraction of blood and other single-use
215.3devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
215.4diabetes;
215.5 (3) insulin and medical oxygen for human use, regardless of whether prescribed
215.6or sold over the counter;
215.7 (4) prosthetic devices;
215.8 (5) durable medical equipment for home use only;
215.9 (6) mobility enhancing equipment;and
215.10 (7) prescription corrective eyeglasses.; and
215.11 (8) kidney dialysis equipment, including repair and replacement parts.
215.12 (b) For purposes of this subdivision:
215.13 (1) "Drug" means a compound, substance, or preparation, and any component of
215.14a compound, substance, or preparation, other than food and food ingredients, dietary
215.15supplements, or alcoholic beverages that is:
215.16 (i) recognized in the official United States Pharmacopoeia, official Homeopathic
215.17Pharmacopoeia of the United States, or official National Formulary, and supplement
215.18to any of them;
215.19 (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
215.20of disease; or
215.21 (iii) intended to affect the structure or any function of the body.
215.22 (2) "Durable medical equipment" means equipment, including repair and
215.23replacement parts, but not including mobility enhancing equipment, that:
215.24 (i) can withstand repeated use;
215.25 (ii) is primarily and customarily used to serve a medical purpose;
215.26 (iii) generally is not useful to a person in the absence of illness or injury; and
215.27 (iv) is not worn in or on the body.
215.28 (3) "Mobility enhancing equipment" means equipment, including repair and
215.29replacement parts, but not including durable medical equipment, that:
215.30 (i) is primarily and customarily used to provide or increase the ability to move from
215.31one place to another and that is appropriate for use either in a home or a motor vehicle;
215.32 (ii) is not generally used by persons with normal mobility; and
215.33 (iii) does not include any motor vehicle or equipment on a motor vehicle normally
215.34provided by a motor vehicle manufacturer.
215.35 (4) "Over-the-counter drug" means a drug that contains a label that identifies the
215.36product as a drug as required by Code of Federal Regulations, title 21, section201.66 . The
216.1label must include a "drug facts" panel or a statement of the active ingredients with a list of
216.2those ingredients contained in the compound, substance, or preparation. Over-the-counter
216.3drugs do not include grooming and hygiene products, regardless of whether they otherwise
216.4meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
216.5shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
216.6 (5) "Prescribed" and "prescription" means a direction in the form of an order,
216.7formula, or recipe issued in any form of oral, written, electronic, or other means of
216.8transmission by a duly licensed health care professional.
216.9 (6) "Prosthetic device" means a replacement, corrective, or supportive device,
216.10including repair and replacement parts, worn on or in the body to:
216.11 (i) artificially replace a missing portion of the body;
216.12 (ii) prevent or correct physical deformity or malfunction; or
216.13 (iii) support a weak or deformed portion of the body.
216.14Prosthetic device does not include corrective eyeglasses.
216.15 (7) "Kidney dialysis equipment" means equipment that:
216.16 (i) is used to remove waste products that build up in the blood when the kidneys are
216.17not able to do so on their own; and
216.18 (ii) can withstand repeated use, including multiple use by a single patient.
216.19EFFECTIVE DATE.This section is effective the day following final enactment.
216.20 Sec. 27. Minnesota Statutes 2006, section 297A.67, subdivision 8, is amended to read:
216.21 Subd. 8. Clothing. (a) Clothing is exempt. For purposes of this subdivision,
216.22"clothing" means all human wearing apparel suitable for general use.
216.23 (b) Clothing includes, but is not limited to, aprons, household and shop; athletic
216.24supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts
216.25and suspenders; boots; coats and jackets; costumes; children and adult diapers, including
216.26disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and
216.27mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties;
216.28overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces;
216.29slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic
216.30and nonathletic; and wedding apparel.
216.31 (c) Clothing does not include the following:
216.32 (1) belt buckles sold separately;
216.33 (2) costume masks sold separately;
216.34 (3) patches and emblems sold separately;
217.1 (4) sewing equipment and supplies, including but not limited to, knitting needles,
217.2patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles;
217.3 (5) sewing materials that become part of clothing, including but not limited to,
217.4buttons, fabric, lace, thread, yarn, and zippers;
217.5 (6) clothing accessories or equipment;
217.6 (7) sports or recreational equipment; and
217.7 (8) protective equipment.
217.8Clothing also does not includeapparel made from fur if a uniform definition of "apparel
217.9made from fur" is developed by the member states of the Streamlined Sales and Use Tax
217.10Agreement "fur clothing" as defined in section 297A.61, subdivision 46.
217.11 For purposes of this subdivision, "clothing accessories or equipment" means
217.12incidental items worn on the person or in conjunction with clothing. Clothing accessories
217.13and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including
217.14barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription
217.15sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational
217.16equipment" means items designed for human use and worn in conjunction with an athletic
217.17or recreational activity that are not suitable for general use. Sports and recreational
217.18equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic
217.19shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf
217.20gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller
217.21and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins.
217.22"Protective equipment" means items for human wear and designed as protection of the
217.23wearer against injury or disease or as protection against damage or injury of other persons
217.24or property but not suitable for general use. Protective equipment includes, but is not
217.25limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors;
217.26face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves;
217.27safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.
217.28EFFECTIVE DATE.This section is effective for sales and purchases made on or
217.29after July 1, 2007.
217.30 Sec. 28. Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read:
217.31 Subd. 9. Baby products. Breast pumps, baby bottles and nipples, pacifiers, teething
217.32rings, and infant syringes are exempt.
217.33EFFECTIVE DATE.This section is effective for sales and purchases made on or
217.34after the day following final enactment.
218.1 Sec. 29. Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read:
218.2 Subd. 11. Advertising materials. Materials designed to advertise and promote the
218.3sale of merchandise or services are exempt if these materials are mailed or transferred to a
218.4person outside the state for use solely outside the state. Mailing and reply envelopes and
218.5cards and other shipping materials including, but not limited to, boxes, labels, containers,
218.6and banding, used exclusively in connection with these advertising and promotional
218.7materials are included in this exemption. The exemption applies regardless of where the
218.8mailing occurs. The storage of these materials in the state for the purpose of subsequently
218.9shipping or otherwise transferring the material out of state is also exempt if the other
218.10conditions in this subdivision are met. For purposes of this subdivision, materials that have
218.11a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing
218.12nonadvertising information, are not materials designed to advertise and promote the sale
218.13of merchandise or services even if they do include advertising content.
218.14EFFECTIVE DATE.This section is effective the day following final enactment.
218.15 Sec. 30. Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read:
218.16 Subd. 16. Packing materials. Packing materials used to pack and ship household
218.17goods and that are provided to and remain with the customer of a for-hire carrier are
218.18exempt if the ultimate destination of the goods is outside Minnesota and if thegoods
218.19packing materials are not later returned to a point within Minnesota, except in the course
218.20of interstate commerce. This exemption does not apply to tools, equipment, pads, or
218.21accessories owned or leased by the for-hire carrier.
218.22EFFECTIVE DATE.This section is effective for sales and purchases made after
218.23June 30, 2007.
218.24 Sec. 31. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:
218.25 Subd. 35. Telecommunications, cable television, and direct satellite equipment.
218.26 (a) Telecommunications, cable television, or direct satellite machinery and equipment
218.27purchased or leased for use directly by a telecommunications, cable television, or
218.28direct satellite service provider primarily in the provision of telecommunications, cable
218.29television, or direct satellite services that are ultimately to be sold at retail are exempt,
218.30regardless of whether purchased by the owner, a contractor, or a subcontractor.
218.31 (b) For purposes of this subdivision, "telecommunications, cable television, or direct
218.32satellite machinery and equipment" includes, but is not limited to:
219.1 (1) machinery, equipment, and fixtures utilized in receiving, initiating,
219.2amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring
219.3telecommunications, cable television, or direct satellite services, such as computers,
219.4transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items
219.5performing comparable functions;
219.6 (2) machinery, equipment, and fixtures used in the transportation of
219.7telecommunications, cable television, or direct satellite services, radio transmitters and
219.8receivers, satellite equipment, microwave equipment, and other transporting media, but
219.9not wire, cable, fiber, poles, or conduit;
219.10 (3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or
219.11enable the machinery in clauses (1) and (2) to accomplish its intended function, such as
219.12auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning
219.13equipment necessary to the operation of the telecommunications, cable television, or direct
219.14satellite equipment; and software necessary to the operation of the telecommunications,
219.15cable television, or direct satellite equipment; and
219.16 (4) repair and replacement parts, including accessories, whether purchased as spare
219.17parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
219.18(c) For purposes of this subdivision, "telecommunications services" means
219.19telecommunications services as defined in section
297A.61, subdivision 24, paragraphs
219.20(a), (c), and (d).
219.21EFFECTIVE DATE.This section is effective for sales and purchases made on
219.22or after January 1, 2008.
219.23 Sec. 32. Minnesota Statutes 2006, section 297A.69, subdivision 2, is amended to read:
219.24 Subd. 2. Materials consumed in agricultural production. Materials stored, used,
219.25or consumed in agricultural production of personal property intended to be sold ultimately
219.26at retail are exempt, whether or not the item becomes an ingredient or constituent part
219.27of the property produced. Materials that qualify for this exemption include, but are not
219.28limited to, the following:
219.29 (1) feeds, seeds, trees, fertilizers, and herbicides, including when purchased for use
219.30by farmers in a federal or state farm or conservation program;
219.31 (2) materials sold to a veterinarian to be used or consumed in the care, medication,
219.32and treatment of agricultural production animals and horses;
219.33 (3) chemicals, including chemicals used for cleaning food processing machinery
219.34and equipment;
220.1 (4) materials, including chemicals, fuels, and electricity purchased by persons
220.2engaged in agricultural production to treat waste generated as a result of the production
220.3process;
220.4 (5) fuels, electricity, gas, and steam used or consumed in the production process,
220.5except that including electricity, gas, or steam used for space heating, cooling, or lighting
220.6is exempt if (i) it is in excess of the average climate control or lighting for the production
220.7area, and (ii) it is necessary to produce that particular product of facilities housing
220.8agricultural animals;
220.9 (6) petroleum products and lubricants;
220.10 (7) packaging materials, including returnable containers used in packaging food and
220.11beverage products; and
220.12 (8) accessory tools and equipment that are separate detachable units with an ordinary
220.13useful life of less than 12 months used in producing a direct effect upon the product.
220.14Machinery, equipment, implements, tools, accessories, appliances, contrivances, and
220.15furniture and fixtures, except those listed in this clause are not included within this
220.16exemption.
220.17EFFECTIVE DATE.This section is effective the day following final enactment.
220.18 Sec. 33. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:
220.19 Subd. 7. Hospitals and outpatient surgical centers. (a) Sales, except for those
220.20listed in paragraph (c), to a hospital are exempt, if the items purchased are used in
220.21providing hospital services. For purposes of this subdivision, "hospital" means a hospital
220.22organized and operated for charitable purposes within the meaning of section 501(c)(3) of
220.23the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction,
220.24and "hospital services" are services authorized or required to be performed by a "hospital"
220.25under chapter 144.
220.26 (b) Sales, except for those listed in paragraph (c), to an outpatient surgical center
220.27are exempt, if the items purchased are used in providing outpatient surgical services. For
220.28purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
220.29center organized and operated for charitable purposes within the meaning of section
220.30501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
220.31jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
220.32(1) services authorized or required to be performed by an outpatient surgical center under
220.33chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
220.34health services furnished to a person whose medical condition is sufficiently acute to
221.1require treatment unavailable through, or inappropriate to be provided by, a clinic or
221.2physician's office, but not so acute as to require treatment in a hospital emergency room.
221.3 (c) This exemption does not apply to the following products and services:
221.4 (1) purchases made by a clinic, physician's office, or any other medical facility not
221.5operating as a hospital or outpatient surgical center, even though the clinic, office, or
221.6facility may be owned and operated by a hospital or outpatient surgical center;
221.7 (2) sales under section297A.61, subdivision 3 , paragraph (g), clause (2), and
221.8prepared food, candy, and soft drinks;
221.9 (3) building and construction materials used in constructing buildings or facilities
221.10that will not be used principally by the hospital or outpatient surgical center;
221.11 (4) building, construction, or reconstruction materials purchased by a contractor
221.12or a subcontractor as a part of a lump-sum contract or similar type of contract with a
221.13guaranteed maximum price covering both labor and materials for use in the construction,
221.14alteration, or repair of a hospital or outpatient surgical center; or
221.15 (5) the leasing of a motor vehicle as defined in section297B.01, subdivision 5 .
221.16 (d) A limited liability company also qualifies for exemption under this subdivision if
221.17(1) it consists of a sole member that would qualify for the exemption, and (2) the items
221.18purchased qualify for the exemption.
221.19 (e) An entity that contains both a hospital and a nonprofit unit may claim this
221.20exemption on purchases made for both the hospital and nonprofit unit provided that:
221.21 (1) the nonprofit unit would have qualified for exemption under subdivision 4; and
221.22 (2) the items purchased would have qualified for the exemption.
221.23EFFECTIVE DATE.This section is effective the day following final enactment.
221.24 Sec. 34. Minnesota Statutes 2006, section 297A.70, is amended by adding a
221.25subdivision to read:
221.26 Subd. 18. Private communication service for State Lottery. Private
221.27communication service, as defined in section 297A.61, subdivision 26, is exempt if the
221.28service is purchased by an agent acting on behalf of the State Lottery.
221.29EFFECTIVE DATE.This section is effective for sales and purchases made on
221.30or after January 1, 2008.
221.31 Sec. 35. Minnesota Statutes 2006, section 297A.72, is amended to read:
221.32297A.72 EXEMPTION CERTIFICATES.
222.1 Subd. 2. Content and form of exemption certificate. An exemption certificate
222.2must be substantially in the form prescribed by the commissionerand. To be fully
222.3completed, the exemption certificate must:
222.4 (1) either be signed by the purchaser if it is a paper form, or meet the requirements
222.5of section270C.304 if in electronic form;
222.6 (2) bear the name and address of the purchaser;and
222.7 (3) indicate thesales tax account identification number, if any, issued to the
222.8purchaser. as follows:
222.9 (i) the purchaser's Minnesota tax identification number;
222.10 (ii) if the purchaser does not have a Minnesota tax identification number, then the
222.11purchaser's state tax identification number that is issued by a state other than Minnesota,
222.12and the name of that state;
222.13 (iii) if the purchaser does not have an identification number described in either item
222.14(i) or (ii), then the purchaser's federal Employer Identification Number; or
222.15 (iv) if the purchaser does not have an identification number described in item (i), (ii),
222.16or (iii), then either the number of the purchaser's state-issued driver's license, if valid in
222.17the state of issue, or if the purchaser does not have a driver's license, a valid state-issued
222.18identification number, and the name of the state of issue;
222.19 (4) indicate the purchaser's type of business, using a business-type coding system
222.20prescribed by the commissioner; and
222.21 (5) indicate the reason for the exemption, using an exemption reason coding system
222.22prescribed by the commissioner.
222.23 Subd. 3. Purchaser requirement. A blanket exemption certificate is an exemption
222.24certificate used for continuing future purchases. A purchaser using a blanket exemption
222.25certificate must update it as needed to accurately reflect the information that is required
222.26under subdivision 2.
222.27EFFECTIVE DATE.This section is effective the day following final enactment.
222.28 Sec. 36. [297A.8155] LIQUOR REPORTING REQUIREMENTS; PENALTY.
222.29 A person who sells liquor, as defined in section 295.75, subdivision 1, in Minnesota
222.30to a retailer that sells liquor, shall file with the commissioner an annual informational
222.31report, in the form and manner prescribed by the commissioner, indicating the volume of
222.32liquor sold to each retailer in the previous calendar year. The report must be filed on or
222.33before February 28 of each calendar year beginning in 2008. A person failing to file this
222.34report is subject to the penalty imposed under Minnesota Statutes, section 289A.60.
223.1EFFECTIVE DATE.This section is effective the day following final enactment.
223.2 Sec. 37. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:
223.3 Subd. 2. Payment of tax. (a) Persons who are registered as retailers may make
223.4purchases in this state or import property into this state without payment of the sales or use
223.5taxes imposed by this chapter at the time of purchase or importation, if the purchases or
223.6importations come within the provisions of this section and are made in strict compliance
223.7with the rules of the commissioner.
223.8 (b) A person described in subdivision 1 may elect to pay directly to the commissioner
223.9any sales or use tax that may be due under this chapter for the acquisition of mobile
223.10transportation equipment and parts and accessories attached or to be attached to such
223.11equipment registered under section168.187 .
223.12 (c) The total cost of such equipment and parts and accessories attached or to be
223.13attached to such equipment must be multiplied by a fraction. The numerator of the fraction
223.14is the Minnesota mileage as reported on the current pro rata application provided for in
223.15section168.187 and the denominator of the fraction is the total mileage reported on the
223.16current pro rata registration application. The amount so determined must be multiplied by
223.17the tax rate to obtain the tax due.
223.18In computing the tax under this section "sales price" does not include the amount of any
223.19tax, except any manufacturer's or importer's excise tax, imposed by the United States
223.20upon or with respect to retail sales, whether taxes imposed directly on the retailer or the
223.21consumer that are separately stated on the invoice, bill of sale, or similar document given
223.22to the purchaser.
223.23 (d) A retailer covered by this section shall make a return and remit to the
223.24commissioner the tax due for the preceding calendar month in accordance with sections
223.25289A.11
and
289A.20, subdivision 4 .
223.26EFFECTIVE DATE.This section is effective the day following final enactment.
223.27 Sec. 38. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:
223.28 Subdivision 1. Ordinary course of business. Except as provided in this section,
223.29motor vehicles purchased solely for resale in the ordinary course of business by any motor
223.30vehicle dealer, as defined in section168.011, subdivision 21 , who is licensed under section
223.31168.27, subdivision 2
or 3, including vehicles which bear dealer plates as authorized by
223.32section168.27, subdivision 16 , shall be exempt from the provisions of this chapter.
223.33EFFECTIVE DATE.This section is effective the day following final enactment.
224.1 Sec. 39. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:
224.2 Subd. 6. Sales tax exemption; equipment; construction materials. (a) The gross
224.3receipts from the sale of machinery and equipment and repair parts are exempt from
224.4taxation under chapter 297A, if the machinery and equipment:
224.5 (1) are used in connection with a trade or business;
224.6 (2) are placed in service in a city that is authorized to designate a zone under section
224.7469.1731
, regardless of whether the machinery and equipment are used in a zone; and
224.8 (3) have a useful life of 12 months or more.
224.9 (b) The gross receipts from the sale of construction materials are exempt, if they are
224.10used to construct:
224.11 (1) a facility for use in a trade or business located in a city that is authorized to
224.12designate a zone under section469.1731 , regardless of whether the facility is located in a
224.13zone; or
224.14 (2) housing that is located in a zone.
224.15The exemptions under this paragraph apply regardless of whether the purchase is made by
224.16the owner, the user, or a contractor.
224.17 (c) A purchaser may claim an exemption under this subdivision for tax on the
224.18purchases up to, but not exceeding:
224.19 (1) the amount of the tax credit certificates received from the city, less
224.20 (2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and
224.21section469.1732, subdivision 2 .
224.22 (d) The tax on sales of items exempted under this subdivision shall be imposed and
224.23collected as if the applicable rate under section297A.62 applied. Upon application by the
224.24purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall
224.25be paid to the purchaser. The application must include sufficient information to permit
224.26the commissioner to verify the sales tax paid and the eligibility of the claimant to receive
224.27the credit. No more than two applications for refunds may be filed under this subdivision
224.28in a calendar year. The provisions of section289A.40 apply to the refunds payable
224.29under this subdivision. There is annually appropriated to the commissioner of revenue
224.30the amount required to make the refunds, which must be deducted from the amount of
224.31the city's allocation under section469.169, subdivision 12 , that remains available and its
224.32limitation under section469.1735 .
224.33 (e) The amount to be refunded shall bear interest at the rate in section270C.405
224.34fromthe date 90 days after the refund claim is filed with the commissioner.
225.1EFFECTIVE DATE.This section is effective for refund claims filed on or after
225.2July 1, 2007.
225.3 Sec. 40. FUR TAX PAYMENTS.
225.4 (a) Furriers must file the annual return, required by Minnesota Statutes, section
225.5295.60, subdivision 5, which otherwise would be due March 15, 2008, by September
225.615, 2007.
225.7 (b) If a furrier is required by Minnesota Statutes, section 295.60, subdivision 3, to
225.8make installments of quarterly estimates, then the furrier shall make the last installment by
225.9July 15, 2007.
225.10EFFECTIVE DATE.Effective July 1, 2007, for sales and purchases made prior to
225.11July 1, 2007.
225.12 Sec. 41. REPEALER.
225.13(a) Minnesota Statutes 2006, section 295.60, is repealed.
225.14(b) Minnesota Statutes 2006, section 297A.61, subdivision 20, is repealed.
225.15(c) Minnesota Statutes 2006, section 297A.668, subdivision 6, is repealed.
225.16(d) Minnesota Statutes 2006, section 297A.67, subdivision 22, is repealed.
225.17EFFECTIVE DATE.Paragraph (a) is effective for sales and purchases made on
225.18or after July 1, 2007; paragraph (b) is effective for sales and purchases made on or after
225.19January 1, 2008; and paragraphs (c) and (d) are effective the day following final enactment.
225.22 Section 1. Minnesota Statutes 2006, section 270.071, subdivision 7, is amended to read:
225.23 Subd. 7. Flight property. "Flight property" means all aircraft and flight equipment
225.24used in connection therewith, including spare flight equipment. Flight property also
225.25includes computers and computer software used in operating, controlling, or regulating
225.26aircraft and flight equipment.
225.27EFFECTIVE DATE.This section is effective the day following final enactment.
225.28 Sec. 2. Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read:
225.29 Subd. 2. Assessment of flight property.The Flight property of all that is owned
225.30by, or is leased, loaned, or otherwise made available to an airlinecompanies company
226.1operating in Minnesota shall be assessed and appraised annually by the commissioner
226.2with reference to its value on January 2 of the assessment year in the manner prescribed
226.3by sections270.071 to
270.079 . Aircraft with a gross weight of less than 30,000 pounds
226.4and used on intermittent or irregularly timed flights shall be excluded from the provisions
226.5of sections270.071 to
270.079 .
226.6EFFECTIVE DATE.This section is effective the day following final enactment.
226.7 Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:
226.8 Subd. 3. Report by airline company. Each year, on or before July 1, every airline
226.9company engaged in air commerce in this state shall file with the commissioneron or
226.10before the time fixed by the commissioner a report under oath setting forth specifically
226.11the information prescribed by the commissioner to enable the commissioner to make the
226.12assessment required in sections270.071 to
270.079 , unless the commissioner determines
226.13that the airline company or person should be excluded from filing because its activities do
226.14not constitute air commerce as defined herein.A penalty of five percent of the tax being
226.15assessed is imposed on a late filing of the annual report. If the report is not filed within
226.1630 days, an additional penalty of five percent of the assessed tax is imposed for each
226.17additional 30 days or fraction of 30 days until the return is filed. The penalty imposed
226.18under this section must not exceed the lesser of $25,000 or 25 percent of the assessed tax.
226.19EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
226.20payable in 2008 and thereafter.
226.21 Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:
226.22 Subd. 6. Airflight property tax lien. The tax imposed under sections270.071 to
226.23270.079
is a lien on all real and personal property within this state of the airline company
226.24in whose name the property is assessed.For purposes of sections
270C.62 and
270C.63,
226.25the date of assessment for the tax imposed under sections
270.071 to
270.079 is The lien
226.26attaches on January 2 of each year for the taxes payable in the following year.
226.27EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
226.28payable in 2008 and thereafter.
226.29 Sec. 5. [270.0725] PENALTIES.
226.30 Subdivision 1. Penalty for late filing. If an airline company does not file its annual
226.31report by the date designated in section 270.072, subdivision 3, a penalty of five percent
226.32of the tax being assessed is imposed on that company. On August 1, and on the first day
227.1of each succeeding calendar month, an additional five percent penalty is imposed if the
227.2report has not yet been filed. For each airline company, the penalties imposed under
227.3this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of
227.4the assessed tax.
227.5 Subd. 2. Penalty for repeated instances of late filing. If there is a pattern of
227.6repeated failures by an airline company to timely file the report required by this section, a
227.7penalty of ten percent of the tax being assessed is imposed on that company.
227.8 Subd. 3. Penalty for frivolous report. If an airline company files a frivolous annual
227.9report, a penalty of 25 percent of the tax being assessed is imposed on that company. A
227.10frivolous report under this section is a report that would fulfill the criteria for a frivolous
227.11return under section 289A.60, subdivision 7, notwithstanding the restriction in section
227.12289A.01. In a proceeding involving the issue of whether or not an airline company is
227.13liable for this penalty, the burden of proof is on the commissioner.
227.14 Subd. 4. Penalty for fraudulent report. If an airline company files a false or
227.15fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50
227.16percent of the tax being assessed is imposed on that company.
227.17 Subd. 5. Penalties added to tax. Penalties imposed under this section are added to
227.18the tax and collected as a part of it.
227.19EFFECTIVE DATE.This section is effective for annual reports due on or after
227.20July 1, 2007.
227.21 Sec. 6. [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
227.22 In addition to the powers granted to the commissioner in this chapter, and in order to
227.23determine net tax capacities and issue notices of net tax capacity and tax under sections
227.24270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and
227.25270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes
227.26an airline company.
227.27EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
227.28payable in 2008 and thereafter.
227.29 Sec. 7. Minnesota Statutes 2006, section 270.074, subdivision 3, is amended to read:
227.30 Subd. 3. Tax capacity. (a) The net tax capacity of the flight property of every airline
227.31companyshall have a tax capacity of is 70 percent of the value thereof apportioned to this
227.32state under subdivision 1, except that the net tax capacity of quiet aircraftshall have a
227.33tax capacity of is 40 percent of the value determined under subdivision 1. Quiet aircraft
228.1shall include "Quiet aircraft" means turboprops and aircraft defined as stage III or IV by
228.2the Federal Aeronautics Administration. If, in the opinion of the commissioner, other
228.3aircraft may be qualified as quiet aircraft, the commissioner may adopt rules providing
228.4additional qualifications.
228.5 (b) The flight property of an airline company that owns or leases aircraft the majority
228.6of which are turboprops, and which provides, during six months or more of the year that
228.7taxes are levied, scheduled passenger service to three or more airports inside or outside of
228.8this state that serve small or medium sized communities, shall be assessed at 50 percent of
228.9the assessment percentage otherwise set by paragraph (a).
228.10EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
228.11payable in 2008 and thereafter.
228.12 Sec. 8. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:
228.13 Subdivision 1. Appeal.Any airline company against which a tax has been imposed
228.14under sections
270.071 to
270.079 shall have the right to appeal within 60 days from the
228.15date of notice of the levy of the tax The notices of net tax capacity and of tax required
228.16under section 270.075, subdivision 2, are orders of the commissioner. These orders must
228.17be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject
228.18to administrative review under section 270C.35. These orders may be appealed to the Tax
228.19Court in the manner providedby law in section 271.06 for appealing official orders of
228.20the commissioner that do not deal with valuation, assessment, or taxation for property
228.21tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter
228.22278 do not apply.
228.23EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
228.24payable in 2008 and thereafter.
228.25 Sec. 9. Minnesota Statutes 2006, section 270.41, subdivision 1, is amended to read:
228.26 Subdivision 1. Creation; purpose; powers. A Board of Assessors is created.
228.27The board shallestablish, conduct, review, supervise, coordinate, and approve courses
228.28in assessment practices, and establish criteria for determining assessor's qualifications.
228.29The board shall also consider other matters relating to assessment administration brought
228.30before it by the commissioner of revenue. The board may grant, renew, suspend, or revoke
228.31an assessor's license.
228.32EFFECTIVE DATE.This section is effective the day following final enactment.
229.1 Sec. 10. Minnesota Statutes 2006, section 270.41, is amended by adding a subdivision
229.2to read:
229.3 Subd. 1a. Definition. For purposes of sections 270.41 to 270.50, "board" means
229.4the Board of Assessors.
229.5EFFECTIVE DATE.This section is effective the day following final enactment.
229.6 Sec. 11. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:
229.7 Subd. 2. Members. The board shall consist of nine members, who shall be
229.8appointed by the commissioner of revenue, in the manner provided herein. The members
229.9shall include:
229.10 (1) two from the Department of Revenue;
229.11 (2) two county assessors;
229.12 (3) two assessors who are not county assessors, one of whom shall be a township
229.13assessor;
229.14 (4) one from the private appraisal field holding a professional appraisal designation;
229.15and
229.16 (5) two public members as defined by section214.02 .
229.17 The appointment provided in clauses (2) and (3) may be made from two lists a list
229.18of not less than three nameseach, one submitted to the commissioner of revenue by the
229.19Minnesota Association of Assessing Officers or its successor organization containing
229.20recommendations for the appointment of appointees described inclause clauses (2),
229.21and one by the Minnesota Association of Assessors, Inc. or its successor organization
229.22containing recommendations for the appointees described in clause (3) and (3). The lists
229.23list must be submitted 30 days before the commencement of the term. In the case of a
229.24vacancy, a new list shall be furnished to the commissionerby the respective organization
229.25immediately. A member of the board who is no longer engaged in the capacitylisted
229.26above that was the basis of appointment is disqualified from membership in the board.
229.27 The board shall annually elect a chair and asecretary vice-chair of the board.
229.28EFFECTIVE DATE.This section is effective the day following final enactment.
229.29 Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:
229.30 Subd. 3. Licenses; refusal or revocation. The board may refuse to grant or renew,
229.31or may suspend or revoke, a license of an applicant or licensee for any of the following
229.32causes or acts:
229.33 (1) failure to complete required training;
230.1 (2) inefficiency or neglect of duty;
230.2 (3)"unprofessional conduct" which means knowingly neglecting to perform a duty
230.3required by law, or violation of the laws of this state relating to the assessment of property
230.4or unlawfully exempting property or knowingly and intentionally listing property on the
230.5tax list at substantially less than its market value or the level required by law in order to
230.6gain favor or benefit, or knowingly and intentionally misclassifying property in order to
230.7gain favor or benefit failure to comply with the Code of Conduct and Ethics for Licensed
230.8Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session
230.9chapter 3, article 1, section 38;
230.10 (4) conviction of a crime involving moral turpitude; or
230.11 (5) any other cause or act that in the board's opinion warrants a refusal to issue
230.12or suspension or revocation of a license.
230.13EFFECTIVE DATE.This section is effective the day following final enactment.
230.14 Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:
230.15 Subd. 5. Prohibited activity.An assessor, deputy assessor, assistant assessor,
230.16appraiser, A licensed assessor or other person employed by an assessment jurisdiction
230.17or contracting with an assessment jurisdiction for the purpose of valuing or classifying
230.18property for property tax purposes is prohibited from making appraisals or analyses,
230.19accepting an appraisal assignment, or preparing an appraisal report as defined in section
230.2082B.02, subdivisions 2 to 5
, on any property within the assessment jurisdiction where the
230.21individual is employed or performing the duties of the assessor under contract. Violation
230.22of this prohibition shall result in immediate revocation of the individual's license to assess
230.23property for property tax purposes. This prohibition must not be construed to prohibit an
230.24individual from carrying out any duties required for the proper assessment of property
230.25for property tax purposes. If a formal resolution has been adopted by the governing body
230.26of a governmental unit, which specifies the purposes for which such work will be done,
230.27this prohibition does not apply to appraisal activities undertaken on behalf of and at the
230.28request of the governmental unit that has employed or contracted with the individual.
230.29The resolution may only allow appraisal activities which are related to condemnations,
230.30right-of-way acquisitions, or special assessments.
230.31EFFECTIVE DATE.This section is effective the day following final enactment.
230.32 Sec. 14. Minnesota Statutes 2006, section 270.44, is amended to read:
230.33270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.
231.1 The board shall charge the following fees:
231.2 (1) $105 for a senior accredited Minnesota assessor license;
231.3 (2) $80 for an accredited Minnesota assessor license;
231.4 (3) $65 for a certified Minnesota assessor specialist license;
231.5 (4) $55 for a certified Minnesota assessor license;
231.6(5) $50 for a course challenge examination;
231.7(6) (5) $35 for grading a form appraisal;
231.8(7) (6) $60 for grading a narrative appraisal;
231.9(8) (7) $30 for a reinstatement fee;
231.10(9) (8) $25 for a record retention fee; and
231.11(10) (9) $20 for an educational transcript; and.
231.12(11) $30 for all retests of board-sponsored educational courses.
231.13EFFECTIVE DATE.This section is effective the day following final enactment.
231.14 Sec. 15. Minnesota Statutes 2006, section 270.45, is amended to read:
231.15270.45 DISPOSITION OF FEES.
231.16 All fees so established and collected shall be paid to the commissioner of finance for
231.17deposit in the general fund. The expenses of carrying out the provisions of sections270.41
231.18to270.53 shall be paid from appropriations made to the board of Assessors.
231.19EFFECTIVE DATE.This section is effective the day following final enactment.
231.20 Sec. 16. Minnesota Statutes 2006, section 270.46, is amended to read:
231.21270.46 TRAINING COURSES,ESTABLISHMENT; OTHER COURSES,
231.22REGULATION.
231.23 The board shallestablish review and approve training courses on assessment
231.24practicesand shall review and approve courses on assessment practices, techniques of
231.25assessment, and ethics offered by schools, collegesand, universities as well as courses that
231.26are offered by any units of government on techniques of assessment. Courses shall be
231.27established in various places throughout the state and be offered on regular intervals, units
231.28of government, and other entities.
231.29EFFECTIVE DATE.This section is effective the day following final enactment.
231.30 Sec. 17. Minnesota Statutes 2006, section 270.47, is amended to read:
231.31270.47 RULES.
232.1 The board shallestablish the adopt rules necessary to accomplish the purpose of
232.2section sections
270.41 to 270.51, and shall establish criteria required of assessing officials
232.3in the state. Separate criteria may be established depending upon the responsibilities of the
232.4assessor.The board shall prepare and give examinations from time to time to determine
232.5whether assessing officials possess the necessary qualifications for performing the
232.6functions of the office. Such tests shall be given immediately upon completion of courses
232.7required by the board, or to persons who already possess the requisite qualifications under
232.8the rules of the board. An action of the board in refusing to grant or renew a license or in
232.9suspending or revoking a license is subject to review in accordance with chapter 14.
232.10EFFECTIVE DATE.This section is effective the day following final enactment.
232.11 Sec. 18. Minnesota Statutes 2006, section 270.48, is amended to read:
232.12270.48 LICENSURE OF QUALIFIED PERSONS.
232.13 The boardshall may license persons as possessing the necessary qualifications of an
232.14assessing official. Different levels of licensure may be established as to classes of property
232.15which assessors may be certified to assess at the discretion of the board. Every person,
232.16except a local or county assessor, regularly employed by the assessor to assist in making
232.17decisions regarding valuing and classifying property for assessment purposesshall be
232.18required to must become licensed within three years of the date of employment. Licensure
232.19shall be required for local and county assessors asotherwise provided in sections
270.41
232.20to
270.53
232.21EFFECTIVE DATE.This section is effective the day following final enactment.
232.22 Sec. 19. Minnesota Statutes 2006, section 270.50, is amended to read:
232.23270.50 EMPLOYMENT OF LICENSED ASSESSORS.
232.24 No assessor shall be employed who has not been licensed as qualified by the board,
232.25provided the time to comply may be extended after application to the board upon a
232.26showing that licensed assessors are not available for employment. The board may license
232.27that a county or local assessor who has not received the training, but possesses the
232.28necessary qualifications for performing the functions of the office by the passage of an
232.29approved examination or may waive the examination if such person has demonstrated
232.30competence in performing the functions of the office for a period of time the board deems
232.31reasonable.The county or local assessing district shall assume the cost of training of its
232.32assessors in courses approved by the board for the purpose of obtaining the assessor's
232.33license to the extent of course fees, mileage, meals and lodging, and recognized travel
233.1expenses not paid by the state. If the governing body of any township or city fails to
233.2employ an assessor as required by sections
270.41 to
270.53, the assessment shall be
233.3made by the county assessor.
233.4In the case of cities incorporated or townships organized after April 11, 1974, except
233.5cities or towns located in Ramsey county or which have elected a county assessor system
233.6in accordance with section
273.055, the board shall allow the city or town 90 days from
233.7the date of incorporation or organization to employ a licensed assessor.
233.8EFFECTIVE DATE.This section is effective the day following final enactment.
233.9 Sec. 20. Minnesota Statutes 2006, section 270C.306, is amended to read:
233.10270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR
233.11IDENTIFYING NUMBERS ON FORMS.
233.12 Notwithstanding the provisions of any other law except section 272.115, the
233.13commissioner may require that a form required to be filed with the commissioner include
233.14the Social Security number, federal employer identification number, or Minnesota
233.15taxpayer identification number of the taxpayer or applicant.
233.16EFFECTIVE DATE.This section is effective July 1, 2007.
233.17 Sec. 21. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:
233.18 Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
233.19penalty or interest that is imposed by a law administered by the commissioner as a result
233.20of the late payment of tax or late filing of a return, if the failure to timely pay the tax or
233.21failure to timely file the return is due to reasonable cause, or if the taxpayer is located
233.22in a presidentially declared disaster area.
233.23 (b) The commissioner shall abate any part of a penalty or additional tax charge
233.24under section289A.25, subdivision 2 , or
289A.26, subdivision 4 , attributable to erroneous
233.25advice given to the taxpayer in writing by an employee of the department acting in
233.26an official capacity, if the advice:
233.27 (1) was reasonably relied on and was in response to a specific written request of the
233.28taxpayer; and
233.29 (2) was not the result of failure by the taxpayer to provide adequate or accurate
233.30information.
233.31 (c) The commissioner may abate a penalty imposed under section 270.0725,
233.32subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline
233.33company is located in a presidentially declared disaster area.
234.1EFFECTIVE DATE.This section is effective July 1, 2007.
234.2 Sec. 22. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
234.3 Subd. 64. Job opportunity building zone property. (a) Improvements to real
234.4property, and personal property, classified under section273.13, subdivision 24 , and
234.5located within a job opportunity building zone, designated under section469.314 , are
234.6exempt from ad valorem taxes levied under chapter 275.
234.7 (b) Improvements to real property, and tangible personal property, of an agricultural
234.8production facility located within an agricultural processing facility zone, designated
234.9under section469.314 , is exempt from ad valorem taxes levied under chapter 275.
234.10 (c) For property to qualify for exemption under paragraph (a), the occupant must be
234.11a qualified business, as defined in section469.310 .
234.12 (d) The exemption applies beginning for the first assessment year after designation
234.13of the job opportunity building zone by the commissioner of employment and economic
234.14development. The exemption applies to each assessment year that begins during the
234.15duration of the job opportunity building zone. To be exempt, the property must be
234.16occupied by July 1 of the assessment year by a qualified business that has signed the
234.17business subsidy agreement and relocation agreement, if required, by July 1 of the
234.18assessment year. This exemption does not apply to:
234.19 (1) the levy under section475.61 or similar levy provisions under any other law to
234.20pay general obligation bonds; or
234.21 (2) a levy under section126C.17 , if the levy was approved by the voters before the
234.22designation of the job opportunity building zone.
234.23 (e) Except for property of a business that was exempt under this subdivision for
234.24taxes payable in 2007, a business must notify the county assessor in writing of eligibility
234.25under this subdivision by July 1 in order to begin receiving the exemption under this
234.26subdivision for taxes payable in the following year. The business need not annually notify
234.27the county assessor of its continued exemption under this subdivision, but must notify the
234.28county assessor immediately if the exemption no longer applies.
234.29EFFECTIVE DATE.This section is effective the day following final enactment.
234.30 Sec. 23. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
234.31 Subdivision 1. Requirement. Except as otherwise provided in subdivision 5,
234.32whenever any real estate is sold for a consideration in excess of $1,000, whether by
234.33warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
234.34grantee or the legal agent of either shall file a certificate of value with the county auditor
235.1in the county in which the property is located when the deed or other document is
235.2presented for recording. Contract for deeds are subject to recording under section507.235,
235.3subdivision 1 . Value shall, in the case of any deed not a gift, be the amount of the full
235.4actual consideration thereof, paid or to be paid, including the amount of any lien or liens
235.5assumed. The items and value of personal property transferred with the real property
235.6must be listed and deducted from the sale price. The certificate of value shall include
235.7the classification to which the property belongs for the purpose of determining the fair
235.8market value of the property. The certificate shall include financing terms and conditions
235.9of the sale which are necessary to determine the actual, present value of the sale price
235.10for purposes of the sales ratio study. The commissioner of revenue shall promulgate
235.11administrative rules specifying the financing terms and conditions which must be included
235.12on the certificate.Pursuant to the authority of the commissioner of revenue in section
235.13270C.306, The certificate of value must include the Social Security number or the federal
235.14employer identification number of the grantors and grantees. However, a married person
235.15who is not an owner of record and who is signing a conveyance instrument along with
235.16the person's spouse solely to release and convey their marital interest, if any, in the real
235.17property being conveyed is not a grantor for the purpose of the preceding sentence. A
235.18statement in the deed that is substantially in the following form is sufficient to allow the
235.19county auditor to accept a certificate for filing without the Social Security number of the
235.20named spouse: " (Name) claims no ownership interest in the real property being conveyed
235.21and is executing this instrument solely to release and convey a marital interest, if any, in
235.22that real property." The identification numbers of the grantors and grantees are private
235.23data on individuals or nonpublic data as defined in section13.02, subdivisions 9 and 12 ,
235.24but, notwithstanding that section, the private or nonpublic data may be disclosed to the
235.25commissioner of revenue for purposes of tax administration. The information required to
235.26be shown on the certificate of value is limited to the information required as of the date of
235.27the acknowledgment on the deed or other document to be recorded.
235.28EFFECTIVE DATE.This section is effective for certificates of value filed on or
235.29after July 1, 2007.
235.30 Sec. 24. Minnesota Statutes 2006, section 273.05, is amended by adding a subdivision
235.31to read:
235.32 Subd. 3. Cities and townships; employment of licensed assessor. In the case
235.33of cities or townships, except cities or towns located in Ramsey County or which have
235.34elected a county assessor system in accordance with section 273.055, the commissioner
236.1shall allow the city or town 90 days from the date of incorporation or organization to
236.2employ a licensed assessor.
236.3EFFECTIVE DATE.This section is effective the day following final enactment.
236.4 Sec. 25. [273.0535] COUNTY OR LOCAL ASSESSING DISTRICT TO ASSUME
236.5COST OF TRAINING.
236.6 The county or local assessing district must assume the cost of training its assessors
236.7in courses approved by the board for the purpose of obtaining the assessor's license to
236.8the extent of course fees, mileage, meals, and lodging, and recognized travel expenses
236.9not paid by the state.
236.10EFFECTIVE DATE.This section is effective the day following final enactment.
236.11 Sec. 26. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:
236.12 Subd. 3. Requirements. (a) Real estate consisting of ten acres or more or a nursery
236.13or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section273.13,
236.14shall be entitled to valuation and tax deferment under this section only if it is primarily
236.15devoted to agricultural use, and meets the qualifications in subdivision 6, and either:
236.16 (1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
236.17owner or is real estate which is farmed with the real estate which contains the homestead
236.18property; or
236.19 (2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
236.20or any combination thereof, for a period of at least seven years prior to application for
236.21benefits under the provisions of this section, or is real estate which is farmed with the
236.22real estate which qualifies under this clause and is within four townships or cities or
236.23combination thereof from the qualifying real estate; or
236.24 (3) is the homestead of a shareholder in a family farm corporation as defined in
236.25section500.24 , notwithstanding the fact that legal title to the real estate may be held in the
236.26name of the family farm corporation; or
236.27 (4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
236.28partnership, or corporation which also owns the nursery or greenhouse operations on
236.29the parcel or parcels.
236.30 (b) Valuation of real estate under this section is limited to parcels the ownership of
236.31which is in noncorporate entities except for:
236.32 (1) family farm corporations organized pursuant to section500.24 ; and
237.1 (2) corporations that derive 80 percent or more of their gross receipts from the
237.2wholesale or retail sale of horticultural or nursery stock.
237.3Corporate entities who previously qualified for tax deferment pursuant to this section
237.4and who continue to otherwise qualify under subdivisions 3 and 6 for a period of at least
237.5three years following the effective date of Laws 1983, chapter 222, section 8, will not be
237.6required to make payment of the previously deferred taxes, notwithstanding the provisions
237.7of subdivision 9. Special assessments are payable at the end of the three-year period
237.8or at time of sale, whichever comes first.
237.9 (c) Land that previously qualified for tax deferment under this section and no longer
237.10qualifies because it is not primarily used for agricultural purposes but would otherwise
237.11qualify under subdivisions 3 and 6 for a period of at least three years will not be required
237.12to make payment of the previously deferred taxes, notwithstanding the provisions of
237.13subdivision 9. Sale of the land prior to the expiration of the three-year period requires
237.14payment of deferred taxes as follows: sale in the year the land no longer qualifies requires
237.15payment of the current year's deferred taxes plus payment of deferred taxes for the two
237.16prior years; sale during the second year the land no longer qualifies requires payment of
237.17the current year's deferred taxes plus payment of the deferred taxes for the prior year; and
237.18sale during the third year the land no longer qualifies requires payment of the current
237.19year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to
237.20subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or
237.21at the end of the three-year period, whichever comes first, all deferred special assessments
237.22plus interest are payable in equal installments spread over the time remaining until the last
237.23maturity date of the bonds issued to finance the improvement for which the assessments
237.24were levied. If the bonds have matured, the deferred special assessments plus interest
237.25are payable within 90 days. The provisions of section429.061, subdivision 2 , apply
237.26to the collection of these installments. Penalties are not imposed on any such special
237.27assessments if timely paid.
237.28EFFECTIVE DATE.This section is effective the day following final enactment.
237.29 Sec. 27. Minnesota Statutes 2006, section 273.117, is amended to read:
237.30273.117 CONSERVATION PROPERTY TAX VALUATION.
237.31 The value of real property which is subject to a conservation restriction or easement
237.32shall be entitled to reduced valuation under this section may be adjusted by the assessor if:
237.33 (a) The restriction or easement is for a conservation purpose as defined in section
237.3484.64, subdivision 2
, and is recorded on the property;
238.1 (b) The property is being used in accordance with the terms of the conservation
238.2restriction or easement.
238.3EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
238.4in 2008, and thereafter.
238.5 Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read:
238.6273.121 VALUATION OF REAL PROPERTY, NOTICE.
238.7 Any county assessor or city assessor having the powers of a county assessor, valuing
238.8or classifying taxable real property shall in each year notify those persons whose property
238.9is to be included on the assessment roll that year if the person's address is known to the
238.10assessor, otherwise the occupant of the property. The notice shall be in writing and shall be
238.11sent by ordinary mail at least ten days before the meeting of the local board of appeal and
238.12equalization under section274.01 or the review process established under section
274.13,
238.13subdivision 1c . Upon written request by the owner of the property, the assessor may send
238.14the notice in electronic form or by electronic mail instead of on paper or by ordinary mail.
238.15It shall contain: (1) the market value for the current and prior assessment, (2) the limited
238.16market value under section273.11, subdivision 1a , for the current and prior assessment,
238.17(3) the qualifying amount of any improvements under section273.11, subdivision 16 ,
238.18for the current assessment, (4) the market value subject to taxation after subtracting the
238.19amount of any qualifying improvements for the current assessment, (5) the classification
238.20of the property for the current and prior assessment, (6) a note that if the property is
238.21homestead and at least 45 years old, improvements made to the property may be eligible
238.22for a valuation exclusion under section273.11, subdivision 16 , (7) the assessor's office
238.23address, and (8) the dates, places, and times set for the meetings of the local board of
238.24appeal and equalization, the review process established under section274.13, subdivision
238.251c , and the county board of appeal and equalization. The commissioner of revenue shall
238.26specify the form of the notice. The assessor shall attach to the assessment roll a statement
238.27that the notices required by this section have been mailed. Any assessor who is not
238.28provided sufficient funds from the assessor's governing body to provide such notices,
238.29may make application to the commissioner of revenue to finance such notices. The
238.30commissioner of revenue shall conduct an investigation and, if satisfied that the assessor
238.31does not have the necessary funds, issue a certification to the commissioner of finance
238.32of the amount necessary to provide such notices. The commissioner of finance shall
238.33issue a warrant for such amount and shall deduct such amount from any state payment
238.34to such county or municipality. The necessary funds to make such payments are hereby
239.1appropriated. Failure to receive the notice shall in no way affect the validity of the
239.2assessment, the resulting tax, the procedures of any board of review or equalization, or
239.3the enforcement of delinquent taxes by statutory means.
239.4EFFECTIVE DATE.This section is effective for notices required in 2008 and
239.5thereafter.
239.6 Sec. 29. Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read:
239.7 Subd. 2. Reassessment of homestead property. The county assessor shall reassess
239.8all homestead property located within a disaster or emergency area which is physically
239.9damaged by the disaster or emergency and shall adjust the valuation for taxes payable the
239.10following year to reflect the loss in market value caused by the damage as follows: Subtract
239.11the market value of the property as reassessed from the market value of the property as
239.12assessed under section 273.01 forJanuary 1 of the year in which the disaster or emergency
239.13occurred; multiply the remainder by a fraction, the numerator of which is the number of
239.14full months remaining in the year on the date the disaster or emergency occurred, and the
239.15denominator of which is 12; subtract the product of the calculation from the market value
239.16of the property as assessed forJanuary 1 of the year in which the disaster or emergency
239.17occurred; the remainder is the estimated market value to be used for taxes payable the
239.18following year. The assessor shall report to the county auditor the net tax capacity based
239.19on the assessmentof January 1 of for the year in which the disaster or emergency occurred
239.20and the net tax capacity based on the reassessment made pursuant to this subdivision.
239.21EFFECTIVE DATE.This section is effective the day following final enactment.
239.22 Sec. 30. Minnesota Statutes 2006, section 273.123, subdivision 3, is amended to read:
239.23 Subd. 3. Computation of local tax rates.When computing Local tax rates, must
239.24be computed by the county auditorshall use based upon the valuation as of January 2 as
239.25reported by the assessor for the assessmentmade on January 1 of the year in which the
239.26disaster or emergency occurred, and as returned by the local, county, and state boards of
239.27review and equalization and the commissioner of revenue.
239.28EFFECTIVE DATE.This section is effective the day following final enactment.
239.29 Sec. 31. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:
239.30 Subd. 13. Homestead application. (a) A person who meets the homestead
239.31requirements under subdivision 1 must file a homestead application with the county
239.32assessor to initially obtain homestead classification.
240.1 (b)On or before January 2, 1993, each county assessor shall mail a homestead
240.2application to the owner of each parcel of property within the county which was
240.3classified as homestead for the 1992 assessment year. The format and contents of a
240.4uniform homestead application shall be prescribed by the commissioner of revenue.The
240.5commissioner shall consult with the chairs of the house and senate tax committees on the
240.6contents of the homestead application form. The application must clearly inform the
240.7taxpayer that this application must be signed by all owners who occupy the property or
240.8by the qualifying relative and returned to the county assessor in order for the property to
240.9continue receiving receive homestead treatment. The envelope containing the homestead
240.10application shall clearly identify its contents and alert the taxpayer of its necessary
240.11immediate response.
240.12 (c) Every property owner applying for homestead classification must furnish to the
240.13county assessor the Social Security number of each occupant who is listed as an owner
240.14of the property on the deed of record, the name and address of each owner who does not
240.15occupy the property, and the name and Social Security number of each owner's spouse who
240.16occupies the property. The application must be signed by each owner who occupies the
240.17property and by each owner's spouse who occupies the property, or, in the case of property
240.18that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
240.19 If a property owner occupies a homestead, the property owner's spouse may not
240.20claim another property as a homestead unless the property owner and the property owner's
240.21spouse file with the assessor an affidavit or other proof required by the assessor stating that
240.22the property qualifies as a homestead under subdivision 1, paragraph (e).
240.23 Owners or spouses occupying residences owned by their spouses and previously
240.24occupied with the other spouse, either of whom fail to include the other spouse's name
240.25and Social Security number on the homestead application or provide the affidavits or
240.26other proof requested, will be deemed to have elected to receive only partial homestead
240.27treatment of their residence. The remainder of the residence will be classified as
240.28nonhomestead residential. When an owner or spouse's name and Social Security number
240.29appear on homestead applications for two separate residences and only one application is
240.30signed, the owner or spouse will be deemed to have elected to homestead the residence for
240.31which the application was signed.
240.32 The Social Security numbers or affidavits or other proofs of the property owners
240.33and spouses are private data on individuals as defined by section13.02, subdivision 12 ,
240.34but, notwithstanding that section, the private data may be disclosed to the commissioner
240.35of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover
240.36personal property taxes owing, to the county treasurer.
241.1 (d) If residential real estate is occupied and used for purposes of a homestead by a
241.2relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
241.3order for the property to receive homestead status, a homestead application must be filed
241.4with the assessor. The Social Security number of each relative and spouse of a relative
241.5occupying the propertyand the Social Security number of each owner who is related to an
241.6occupant of the property shall be required on the homestead application filed under this
241.7subdivision. If a different relative of the owner subsequently occupies the property, the
241.8owner of the property must notify the assessor within 30 days of the change in occupancy.
241.9The Social Security number of a relative or relative's spouse occupying the property
241.10is private data on individuals as defined by section13.02, subdivision 12 , but may be
241.11disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
241.12Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
241.13 (e) The homestead application shall also notify the property owners that the
241.14application filed under this section will not be mailed annually and that if the property
241.15is granted homestead status forthe 1993 assessment, or any assessment year thereafter,
241.16that same property shall remain classified as homestead until the property is sold or
241.17transferred to another person, or the owners, the spouse of the owner, or the relatives no
241.18longer use the property as their homestead. Upon the sale or transfer of the homestead
241.19property, a certificate of value must be timely filed with the county auditor as provided
241.20under section272.115 . Failure to notify the assessor within 30 days that the property has
241.21been sold, transferred, or that the owner, the spouse of the owner, or the relative is no
241.22longer occupying the property as a homestead, shall result in the penalty provided under
241.23this subdivision and the property will lose its current homestead status.
241.24 (f) If the homestead application is not returned within 30 days, the county will send a
241.25second application to the present owners of record. The notice of proposed property taxes
241.26prepared under section275.065, subdivision 3 , shall reflect the property's classification.
241.27Beginning with assessment year 1993 for all properties, If a homestead application has
241.28not been filed with the county by December 15, the assessor shall classify the property
241.29as nonhomestead for the current assessment year for taxes payable in the following year,
241.30provided that the owner may be entitled to receive the homestead classification by proper
241.31application under section375.192 .
241.32 (g) At the request of the commissioner, each county must give the commissioner a
241.33list that includes the name and Social Security number of each occupant of homestead
241.34property who is the property ownerand the, property owner's spouse occupying the
241.35property, or, qualifying relative of a property owner, applying for homestead classification
241.36under this subdivision or a spouse of a qualifying relative. The commissioner shall use the
242.1information provided on the lists as appropriate under the law, including for the detection
242.2of improper claims by owners, or relatives of owners, under chapter 290A.
242.3 (h) If the commissioner finds that a property owner may be claiming a fraudulent
242.4homestead, the commissioner shall notify the appropriate counties. Within 90 days of
242.5the notification, the county assessor shall investigate to determine if the homestead
242.6classification was properly claimed. If the property owner does not qualify, the county
242.7assessor shall notify the county auditor who will determine the amount of homestead
242.8benefits that had been improperly allowed. For the purpose of this section, "homestead
242.9benefits" means the tax reduction resulting from the classification as a homestead under
242.10section273.13 , the taconite homestead credit under section
273.135 , the residential
242.11homestead and agricultural homestead credits under section273.1384 , and the
242.12supplemental homestead credit under section273.1391 .
242.13 The county auditor shall send a notice to the person who owned the affected property
242.14at the time the homestead application related to the improper homestead was filed,
242.15demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
242.16of the homestead benefits. The person notified may appeal the county's determination
242.17by serving copies of a petition for review with county officials as provided in section
242.18278.01
and filing proof of service as provided in section
278.01 with the Minnesota Tax
242.19Court within 60 days of the date of the notice from the county. Procedurally, the appeal
242.20is governed by the provisions in chapter 271 which apply to the appeal of a property tax
242.21assessment or levy, but without requiring any prepayment of the amount in controversy. If
242.22the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
242.23has been filed, the county auditor shall certify the amount of taxes and penalty to the county
242.24treasurer. The county treasurer will add interest to the unpaid homestead benefits and
242.25penalty amounts at the rate provided in section279.03 for real property taxes becoming
242.26delinquent in the calendar year during which the amount remains unpaid. Interest may be
242.27assessed for the period beginning 60 days after demand for payment was made.
242.28 If the person notified is the current owner of the property, the treasurer may add the
242.29total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
242.30otherwise payable on the property by including the amounts on the property tax statements
242.31under section276.04, subdivision 3 . The amounts added under this paragraph to the ad
242.32valorem taxes shall include interest accrued through December 31 of the year preceding
242.33the taxes payable year for which the amounts are first added. These amounts, when added
242.34to the property tax statement, become subject to all the laws for the enforcement of real or
242.35personal property taxes for that year, and for any subsequent year.
243.1 If the person notified is not the current owner of the property, the treasurer may
243.2collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
243.3the powers granted in sections277.20 and
277.21 without exclusion, to enforce payment
243.4of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
243.5tax obligations of the person who owned the property at the time the application related
243.6to the improperly allowed homestead was filed. The treasurer may relieve a prior owner
243.7of personal liability for the homestead benefits, penalty, interest, and costs, and instead
243.8extend those amounts on the tax lists against the property as provided in this paragraph
243.9to the extent that the current owner agrees in writing. On all demands, billings, property
243.10tax statements, and related correspondence, the county must list and state separately the
243.11amounts of homestead benefits, penalty, interest and costs being demanded, billed or
243.12assessed.
243.13 (i) Any amount of homestead benefits recovered by the county from the property
243.14owner shall be distributed to the county, city or town, and school district where the
243.15property is located in the same proportion that each taxing district's levy was to the total
243.16of the three taxing districts' levy for the current year. Any amount recovered attributable
243.17to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
243.18deposited in the taconite property tax relief account. Any amount recovered that is
243.19attributable to supplemental homestead credit is to be transmitted to the commissioner of
243.20revenue for deposit in the general fund of the state treasury. The total amount of penalty
243.21collected must be deposited in the county general fund.
243.22 (j) If a property owner has applied for more than one homestead and the county
243.23assessors cannot determine which property should be classified as homestead, the county
243.24assessors will refer the information to the commissioner. The commissioner shall make
243.25the determination and notify the counties within 60 days.
243.26 (k) In addition to lists of homestead properties, the commissioner may ask the
243.27counties to furnish lists of all properties and the record owners. The Social Security
243.28numbers and federal identification numbers that are maintained by a county or city
243.29assessor for property tax administration purposes, and that may appear on the lists retain
243.30their classification as private or nonpublic data; but may be viewed, accessed, and used by
243.31the county auditor or treasurer of the same county for the limited purpose of assisting the
243.32commissioner in the preparation of microdata samples under section270C.12 .
243.33 (l) On or before April 30 each year beginning in 2007, each county must provide the
243.34commissioner with the following data for each parcel of homestead property by electronic
243.35means as defined in section289A.02, subdivision 8 :
244.1 (i) the property identification number assigned to the parcel for purposes of taxes
244.2payable in the current year;
244.3 (ii) the name and Social Security number of each occupant of homestead property
244.4who is the property ownerand, property owner's spouse, as shown on the tax rolls for the
244.5current and the prior assessment year qualifying relative of a property owner, or spouse
244.6of a qualifying relative;
244.7 (iii) the classification of the property under section273.13 for taxes payable in the
244.8current year and in the prior year;
244.9 (iv) an indication of whether the property was classified as a homestead for taxes
244.10payable in the current yearor for taxes payable in the prior year because of occupancy by
244.11a relative of the owner or by a spouse of a relative;
244.12 (v) the property taxes payable as defined in section290A.03, subdivision 13 , for the
244.13current year and the prior year;
244.14 (vi) the market value of improvements to the property first assessed for tax purposes
244.15for taxes payable in the current year;
244.16 (vii) the assessor's estimated market value assigned to the property for taxes payable
244.17in the current year and the prior year;
244.18 (viii) the taxable market value assigned to the property for taxes payable in the
244.19current year and the prior year;
244.20 (ix) whether there are delinquent property taxes owing on the homestead;
244.21 (x) the unique taxing district in which the property is located; and
244.22 (xi) such other information as the commissioner decides is necessary.
244.23 The commissioner shall use the information provided on the lists as appropriate
244.24under the law, including for the detection of improper claims by owners, or relatives
244.25of owners, under chapter 290A.
244.26EFFECTIVE DATE.This section is effective the day following final enactment.
244.27 Sec. 32. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:
244.28 Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
244.29class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1)
244.30the property is located in a border city that has an enterprise zone designated pursuant
244.31to section469.168, subdivision 4 ; (2) the property is located in a city with a population
244.32greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the
244.33city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city
244.34in another state; and (4) the adjacent city in the other state has a population of greater than
244.355,000 and less than 75,000 according to the 1980 decennial census.
245.1 (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
245.2property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class
245.33b property to 2.3 percent of market value.
245.4 (c) The county auditor shall annually certify the costs of the credits to the
245.5Department of Revenue. The department shall reimburse local governments for the
245.6property taxes foregone as the result of the credits in proportion to their total levies.
245.7EFFECTIVE DATE.This section is effective retroactively for taxes payable in
245.82001 and thereafter.
245.9 Sec. 33. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:
245.10 Subd. 2. Listing and assessment by commissioner. The personal property,
245.11consisting of the pipeline system of mains, pipes, and equipment attached thereto, of
245.12pipeline companies and others engaged in the operations or business of transporting
245.13natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed
245.14with and assessed by the commissioner of revenue and the values provided to the city
245.15or county assessor by order. This subdivision shall not apply to the assessment of
245.16the products transported through the pipelines nor to the lines of local commercial gas
245.17companies engaged primarily in the business of distributing gas to consumers at retail nor
245.18to pipelines used by the owner thereof to supply natural gas or other petroleum products
245.19exclusively for such owner's own consumption and not for resale to others. If more than
245.2085 percent of the natural gas or other petroleum products actually transported over the
245.21pipeline is used for the owner's own consumption and not for resale to others, then this
245.22subdivision shall not apply; provided, however, that in that event, the pipeline shall be
245.23assessed in proportion to the percentage of gas actually transported over such pipeline that
245.24is not used for the owner's own consumption. On or before June 30, the commissioner
245.25shall certify to the auditor of each county, the amount of such personal property assessment
245.26against each company in each district in which such property is located.
245.27EFFECTIVE DATE.This section is effective the day following final enactment.
245.28 Sec. 34. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:
245.29 Subd. 2. Listing and assessment by commissioner. Transmission lines of less
245.30than 69 kv, transmission lines of 69 kv and above located in an unorganized township,
245.31and distribution lines, and equipment attached thereto, having a fixed situs outside the
245.32corporate limits of cities except distribution lines taxed as provided in sections273.40
245.33and273.41 , shall be listed with and assessed by the commissioner of revenue in the
246.1county where situated and the values provided to the city or county assessor by order.
246.2The commissioner shall assess such property at the percentage of market value fixed by
246.3law; and, on or before June 30, shall certify to the auditor of each county in which such
246.4property is located the amount of the assessment made against each company and person
246.5owning such property.
246.6EFFECTIVE DATE.This section is effective the day following final enactment.
246.7 Sec. 35. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:
246.8 Subdivision 1. Report required. Every electric light, power, gas, water, express,
246.9stage, and transportation company and pipeline doing business in Minnesota shall
246.10annually file with the commissioner on or before March 31 a report under oath setting
246.11forth the information prescribed by the commissioner to enable the commissioner to make
246.12valuations, recommended valuations, and equalization required under sections273.33 ,
246.13273.35
,
273.36 , and
273.37 , and 273.3711. If all the required information is not available
246.14on March 31, the company or pipeline shall file the information that is available on or
246.15before March 31, and the balance of the information as soon as it becomes available.
246.16EFFECTIVE DATE.This section is effective the day following final enactment.
246.17 Sec. 36. [273.3711] RECOMMENDED AND ORDERED VALUES.
246.18 For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372,
246.19all values not required to be listed and assessed by the commissioner of revenue are
246.20recommended values.
246.21EFFECTIVE DATE.This section is effective the day following final enactment.
246.22 Sec. 37. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:
246.23 Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town
246.24board of a town, or the council or other governing body of a city, is the board of appeal
246.25and equalization except (1) in cities whose charters provide for a board of equalization or
246.26(2) in any city or town that has transferred its local board of review power and duties to
246.27the county board as provided in subdivision 3. The county assessor shall fix a day and
246.28time when the board or the board of equalization shall meet in the assessment districts
246.29of the county. Notwithstanding any law or city charter to the contrary, a city board of
246.30equalization shall be referred to as a board of appeal and equalization. On or before
246.31February 15 of each year the assessor shall give written notice of the time to the city or
246.32town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings
247.1must be held between April 1 and May 31 each year. The clerk shall give published and
247.2posted notice of the meeting at least ten days before the date of the meeting.
247.3 The board shall meet at the office of the clerk to review the assessment and
247.4classification of property in the town or city. No changes in valuation or classification
247.5which are intended to correct errors in judgment by the county assessor may be made by
247.6the county assessor after the board has adjourned in those cities or towns that hold a
247.7local board of review; however, corrections of errors that are merely clerical in nature or
247.8changes that extend homestead treatment to property are permitted after adjournment until
247.9the tax extension date for that assessment year. The changes must be fully documented and
247.10maintained in the assessor's office and must be available for review by any person. A copy
247.11of the changes made during this period in those cities or towns that hold a local board of
247.12review must be sent to the county board no later than December 31 of the assessment year.
247.13 (b) The board shall determine whether the taxable property in the town or city has
247.14been properly placed on the list and properly valued by the assessor. If real or personal
247.15property has been omitted, the board shall place it on the list with its market value, and
247.16correct the assessment so that each tract or lot of real property, and each article, parcel,
247.17or class of personal property, is entered on the assessment list at its market value. No
247.18assessment of the property of any person may be raised unless the person has been
247.19duly notified of the intent of the board to do so. On application of any person feeling
247.20aggrieved, the board shall review the assessment or classification, or both, and correct
247.21it as appears just. The board may not make an individual market value adjustment or
247.22classification change that would benefit the property if the owner or other person having
247.23control over the property has refused the assessor access to inspect the property and the
247.24interior of any buildings or structures as provided in section273.20 . A board member
247.25shall not participate in any actions of the board which result in market value adjustments
247.26or classification changes to property owned by the board member, the spouse, parent,
247.27stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew,
247.28or niece of a board member, or property in which a board member has a financial interest.
247.29The relationship may be by blood or marriage.
247.30 (c) A local board may reduce assessments upon petition of the taxpayer but the total
247.31reductions must not reduce the aggregate assessment made by the county assessor by more
247.32than one percent. If the total reductions would lower the aggregate assessments made by
247.33the county assessor by more than one percent, none of the adjustments may be made. The
247.34assessor shall correct any clerical errors or double assessments discovered by the board
247.35without regard to the one percent limitation.
248.1 (d) A local board does not have authority to grant an exemption or to order property
248.2removed from the tax rolls.
248.3 (e) A majority of the members may act at the meeting, and adjourn from day to day
248.4until they finish hearing the cases presented. The assessor shall attend, with the assessment
248.5books and papers, and take part in the proceedings, but must not vote. The county assessor,
248.6or an assistant delegated by the county assessor shall attend the meetings. The board shall
248.7list separately, on a form appended to the assessment book, all omitted property added
248.8to the list by the board and all items of property increased or decreased, with the market
248.9value of each item of property, added or changed by the board, placed opposite the item.
248.10The county assessor shall enter all changes made by the board in the assessment book.
248.11 (f) Except as provided in subdivision 3, if a person fails to appear in person, by
248.12counsel, or by written communication before the board after being duly notified of the
248.13board's intent to raise the assessment of the property, or if a person feeling aggrieved by an
248.14assessment or classification fails to apply for a review of the assessment or classification,
248.15the person may not appear before the county board of appeal and equalization for a review
248.16of the assessment or classification. This paragraph does not apply if an assessment was
248.17made after the local board meeting, as provided in section273.01 , or if the person can
248.18establish not having received notice of market value at least five days before the local
248.19board meeting.
248.20 (g) The local board must complete its work and adjourn within 20 days from the
248.21time of convening stated in the notice of the clerk, unless a longer period is approved by
248.22the commissioner of revenue. No action taken after that date is valid. All complaints
248.23about an assessment or classification made after the meeting of the board must be heard
248.24and determined by the county board of equalization. A nonresident may, at any time,
248.25before the meeting of the board file written objections to an assessment or classification
248.26with the county assessor. The objections must be presented to the board at its meeting by
248.27the county assessor for its consideration.
248.28EFFECTIVE DATE.This section is effective the day following final enactment.
248.29 Sec. 38. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:
248.30 Subdivision 1. Members; meetings; rules for equalizing assessments. The county
248.31commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be
248.32present, the deputy county auditor, or, if there is no deputy, the court administrator of the
248.33district court, shall form a board for the equalization of the assessment of the property
248.34of the county, including the property of all cities whose charters provide for a board of
248.35equalization. This board shall be referred to as the county board of appeal and equalization.
249.1The board shall meet annually, on the date specified in section274.14 , at the office of the
249.2auditor. Each member shall take an oath to fairly and impartially perform duties as a
249.3member. Members shall not participate in any actions of the board which result in market
249.4value adjustments or classification changes to property owned by the board member, the
249.5spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle,
249.6aunt, nephew, or niece of a board member, or property in which a board member has a
249.7financial interest. The relationship may be by blood or marriage. The board shall examine
249.8and compare the returns of the assessment of property of the towns or districts, and
249.9equalize them so that each tract or lot of real property and each article or class of personal
249.10property is entered on the assessment list at its market value, subject to the following rules:
249.11 (1) The board shall raise the valuation of each tract or lot of real property which
249.12in its opinion is returned below its market value to the sum believed to be its market
249.13value. The board must first give notice of intention to raise the valuation to the person in
249.14whose name it is assessed, if the person is a resident of the county. The notice must fix
249.15a time and place for a hearing.
249.16 (2) The board shall reduce the valuation of each tract or lot which in its opinion is
249.17returned above its market value to the sum believed to be its market value.
249.18 (3) The board shall raise the valuation of each class of personal property which
249.19in its opinion is returned below its market value to the sum believed to be its market
249.20value. It shall raise the aggregate value of the personal property of individuals, firms, or
249.21corporations, when it believes that the aggregate valuation, as returned, is less than the
249.22market value of the taxable personal property possessed by the individuals, firms, or
249.23corporations, to the sum it believes to be the market value. The board must first give notice
249.24to the persons of intention to do so. The notice must set a time and place for a hearing.
249.25 (4) The board shall reduce the valuation of each class of personal property that
249.26is returned above its market value to the sum it believes to be its market value. Upon
249.27complaint of a party aggrieved, the board shall reduce the aggregate valuation of the
249.28individual's personal property, or of any class of personal property for which the individual
249.29is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes
249.30was the market value of the individual's personal property of that class.
249.31 (5) The board must not reduce the aggregate value of all the property of its county, as
249.32submitted to the county board of equalization, with the additions made by the auditor under
249.33this chapter, by more than one percent of its whole valuation. The board may raise the
249.34aggregate valuation of real property, and of each class of personal property, of the county,
249.35or of any town or district of the county, when it believes it is below the market value of the
249.36property, or class of property, to the aggregate amount it believes to be its market value.
250.1 (6) The board shall change the classification of any property which in its opinion
250.2is not properly classified.
250.3 (7) The board does not have the authority to grant an exemption or to order property
250.4removed from the tax rolls.
250.5EFFECTIVE DATE.This section is effective the day following final enactment.
250.6 Sec. 39. [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION
250.7COURSE AND MEETING REQUIREMENTS.
250.8 Subdivision 1. Handbook for county boards. By no later than January 1, 2009, the
250.9commissioner of revenue must develop a handbook detailing procedures, responsibilities,
250.10and requirements for county boards of appeal and equalization. The handbook must
250.11include, but need not be limited to, the role of the county board in the assessment process,
250.12the legal and policy reasons for fair and impartial appeal and equalization hearings, county
250.13board meeting procedures that foster fair and impartial assessment reviews and other best
250.14practices recommendations, quorum requirements for county boards, and explanations
250.15of alternate methods of appeal.
250.16 Subd. 2. Appeals and equalization course. Beginning in 2009, and each year
250.17thereafter, there must be at least one member at each meeting of a county board of appeal
250.18and equalization who has attended an appeals and equalization course developed or
250.19approved by the commissioner within the last four years, as certified by the commissioner.
250.20The course may be offered in conjunction with a meeting of the Minnesota Association
250.21of Assessment Officers. The course content must include, but need not be limited to, a
250.22review of the handbook developed by the commissioner under subdivision 1.
250.23 Subd. 3. Proof of compliance; transfer of duties. (a) Any county that
250.24conducts county boards of appeal and equalization meetings must provide proof to the
250.25commissioner by December 1, 2009, and each year thereafter, that it is in compliance
250.26with the requirements of subdivision 2. Beginning in 2009, this notice must also verify
250.27that there was a quorum of voting members at each meeting of the board of appeal and
250.28equalization in the current year. A county that does not comply with these requirements
250.29is deemed to have transferred its board of appeal and equalization powers to the special
250.30board of equalization appointed pursuant to section 274.13, subdivision 2, beginning
250.31with the following year's assessment and continuing unless the powers are reinstated
250.32under paragraph (c). A county that does not comply with the requirements of subdivision
250.332 and has not appointed a special board of equalization shall appoint a special board of
250.34equalization before the following year's assessment.
251.1 (b) The county shall notify the taxpayers when the board of appeal and equalization
251.2for a county has been transferred to the special board of equalization under this subdivision
251.3and, prior to the meeting time of the special board of equalization, the county shall make
251.4available to those taxpayers a procedure for a review of the assessments, including, but
251.5not limited to, open book meetings. This alternate review process must take place in
251.6April and May.
251.7 (c) A county board whose powers are transferred to the special board of equalization
251.8under this subdivision may be reinstated by resolution of the county board and upon proof
251.9of compliance with the requirements of subdivision 2. The resolution and proofs must be
251.10provided to the commissioner by December 1 in order to be effective for the following
251.11year's assessment.
251.12EFFECTIVE DATE.This section is effective the day following final enactment.
251.13 Sec. 40. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
251.14 Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
251.15and the county treasurer shall deliver after November 10 and on or before November 24
251.16each year, by first class mail to each taxpayer at the address listed on the county's current
251.17year's assessment roll, a notice of proposed property taxes. Upon written request by
251.18the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
251.19instead of on paper or by ordinary mail.
251.20 (b) The commissioner of revenue shall prescribe the form of the notice.
251.21 (c) The notice must inform taxpayers that it contains the amount of property taxes
251.22each taxing authority proposes to collect for taxes payable the following year. In the case
251.23of a town, or in the case of the state general tax, the final tax amount will be its proposed
251.24tax. In the case of taxing authorities required to hold a public meeting under subdivision 6,
251.25the notice must clearly state that each taxing authority, including regional library districts
251.26established under section134.201 , and including the metropolitan taxing districts as
251.27defined in paragraph (i), but excluding all other special taxing districts and towns, will
251.28hold a public meeting to receive public testimony on the proposed budget and proposed or
251.29final property tax levy, or, in case of a school district, on the current budget and proposed
251.30property tax levy. It must clearly state the time and place of each taxing authority's
251.31meeting, a telephone number for the taxing authority that taxpayers may call if they have
251.32questions related to the notice, and an address where comments will be received by mail.
251.33 (d) The notice must state for each parcel:
251.34 (1) the market value of the property as determined under section273.11 , and used
251.35for computing property taxes payable in the following year and for taxes payable in the
252.1current year as each appears in the records of the county assessor on November 1 of the
252.2current year; and, in the case of residential property, whether the property is classified as
252.3homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
252.4which the market values apply and that the values are final values;
252.5 (2) the items listed below, shown separately by county, city or town, and state general
252.6tax, net of the residential and agricultural homestead credit under section273.1384 , voter
252.7approved school levy, other local school levy, and the sum of the special taxing districts,
252.8and as a total of all taxing authorities:
252.9 (i) the actual tax for taxes payable in the current year; and
252.10 (ii) the proposed tax amount.
252.11 If the county levy under clause (2) includes an amount for a lake improvement
252.12district as defined under sections103B.501 to
103B.581 , the amount attributable for that
252.13purpose must be separately stated from the remaining county levy amount.
252.14 In the case of a town or the state general tax, the final tax shall also be its proposed
252.15tax unless the town changes its levy at a special town meeting under section365.52 . If a
252.16school district has certified under section126C.17, subdivision 9 , that a referendum will
252.17be held in the school district at the November general election, the county auditor must
252.18note next to the school district's proposed amount that a referendum is pending and that,
252.19if approved by the voters, the tax amount may be higher than shown on the notice. In
252.20the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the
252.21levy for Minneapolis Park and Recreation shall be listed separately from the remaining
252.22amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul
252.23Library Agency must be listed separately from the remaining amount of the city's levy.
252.24In the case of Ramsey County, any amount levied under section134.07 may be listed
252.25separately from the remaining amount of the county's levy. In the case of a parcel where
252.26tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies,
252.27the proposed tax levy on the captured value or the proposed tax levy on the tax capacity
252.28subject to the areawide tax must each be stated separately and not included in the sum of
252.29the special taxing districts; and
252.30 (3) the increase or decrease between the total taxes payable in the current year and
252.31the total proposed taxes, expressed as a percentage.
252.32 For purposes of this section, the amount of the tax on homesteads qualifying under
252.33the senior citizens' property tax deferral program under chapter 290B is the total amount
252.34of property tax before subtraction of the deferred property tax amount.
252.35 (e) The notice must clearly state that the proposed or final taxes do not include
252.36the following:
253.1 (1) special assessments;
253.2 (2) levies approved by the voters after the date the proposed taxes are certified,
253.3including bond referenda and school district levy referenda;
253.4 (3) a levy limit increase approved by the voters by the first Tuesday after the first
253.5Monday in November of the levy year as provided under section275.73 ;
253.6 (4) amounts necessary to pay cleanup or other costs due to a natural disaster
253.7occurring after the date the proposed taxes are certified;
253.8 (5) amounts necessary to pay tort judgments against the taxing authority that become
253.9final after the date the proposed taxes are certified; and
253.10 (6) the contamination tax imposed on properties which received market value
253.11reductions for contamination.
253.12 (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
253.13the county treasurer to deliver the notice as required in this section does not invalidate the
253.14proposed or final tax levy or the taxes payable pursuant to the tax levy.
253.15 (g) If the notice the taxpayer receives under this section lists the property as
253.16nonhomestead, and satisfactory documentation is provided to the county assessor by the
253.17applicable deadline, and the property qualifies for the homestead classification in that
253.18assessment year, the assessor shall reclassify the property to homestead for taxes payable
253.19in the following year.
253.20 (h) In the case of class 4 residential property used as a residence for lease or rental
253.21periods of 30 days or more, the taxpayer must either:
253.22 (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
253.23renter, or lessee; or
253.24 (2) post a copy of the notice in a conspicuous place on the premises of the property.
253.25 The notice must be mailed or posted by the taxpayer by November 27 or within
253.26three days of receipt of the notice, whichever is later. A taxpayer may notify the county
253.27treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
253.28which the notice must be mailed in order to fulfill the requirements of this paragraph.
253.29 (i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
253.30taxing districts" means the following taxing districts in the seven-county metropolitan area
253.31that levy a property tax for any of the specified purposes listed below:
253.32 (1) Metropolitan Council under section473.132 ,
473.167 ,
473.249 ,
473.325 ,
253.33473.446
,
473.521 ,
473.547 , or
473.834 ;
253.34 (2) Metropolitan Airports Commission under section473.667 ,
473.671 , or
473.672 ;
253.35and
253.36 (3) Metropolitan Mosquito Control Commission under section473.711 .
254.1 For purposes of this section, any levies made by the regional rail authorities in the
254.2county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
254.3398A shall be included with the appropriate county's levy and shall be discussed at that
254.4county's public hearing.
254.5 (j) The governing body of a county, city, or school district may, with the consent
254.6of the county board, include supplemental information with the statement of proposed
254.7property taxes about the impact of state aid increases or decreases on property tax
254.8increases or decreases and on the level of services provided in the affected jurisdiction.
254.9This supplemental information may include information for the following year, the current
254.10year, and for as many consecutive preceding years as deemed appropriate by the governing
254.11body of the county, city, or school district. It may include only information regarding:
254.12 (1) the impact of inflation as measured by the implicit price deflator for state and
254.13local government purchases;
254.14 (2) population growth and decline;
254.15 (3) state or federal government action; and
254.16 (4) other financial factors that affect the level of property taxation and local services
254.17that the governing body of the county, city, or school district may deem appropriate to
254.18include.
254.19 The information may be presented using tables, written narrative, and graphic
254.20representations and may contain instruction toward further sources of information or
254.21opportunity for comment.
254.22EFFECTIVE DATE.This section is effective for notices required in 2007 and
254.23thereafter, for taxes payable in 2008 and thereafter.
254.24 Sec. 41. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:
254.25 Subd. 5a. Public advertisement. (a) A city that has a population of more than
254.262,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph
254.27(i), a regional library district established under section134.201 , or school district shall
254.28advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or,
254.29in the case of a school district, to review its current budget and proposed property taxes
254.30payable in the following year, at a public hearing, if a public hearing is required under
254.31subdivision 6. The notice must be published not less than two business days nor more
254.32than six business days before the hearing.
254.33 The advertisement must be at least one-eighth page in size of a standard-size or a
254.34tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper
254.35where legal notices and classified advertisements appear. The advertisement must be
255.1published in an official newspaper of general circulation in the taxing authority. The
255.2newspaper selected must be one of general interest and readership in the community, and
255.3not one of limited subject matter. The advertisement must appear in a newspaper that is
255.4published at least once per week.
255.5 For purposes of this section, the metropolitan special taxing district's advertisement
255.6must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer
255.7Press.
255.8 In addition to other requirements, a county and a city having a population of
255.9more than 2,500 must show in the public advertisement required under this subdivision
255.10the current local tax rate, the proposed local tax rate if no property tax levy increase
255.11is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this
255.12subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by
255.13the city's or county's taxable net tax capacity.
255.14 (b) Subject to the provisions of paragraph (g), the advertisement for school districts,
255.15metropolitan special taxing districts, and regional library districts must be in the following
255.16form, except that the notice for a school district may include references to the current
255.17budget in regard to proposed property taxes.
255.19PROPOSED PROPERTY TAXES
255.21Special Taxing District/Regional
255.22Library District) of .........
255.23The governing body of ........ will soon hold budget hearings and vote on the property
255.24taxes for (metropolitan special taxing district/regional library district services that will be
255.25provided in (year)/school district services that will be provided in (year) and (year)).
255.27All concerned citizens are invited to attend a public hearing and express their opinions
255.28on the proposed (school district/metropolitan special taxing district/regional library
255.29district) budget and property taxes, or in the case of a school district, its current budget
255.30and proposed property taxes, payable in the following year. The hearing will be held on
255.31(Month/Day/Year) at (Time) at (Location, Address)."
255.32 (c) Subject to the provisions of paragraph (g), the advertisement for cities and
255.33counties must be in the following form.
255.35TOTAL BUDGET AND PROPERTY TAXES
256.1The (city/county) governing body or board of commissioners will hold a public hearing to
256.2discuss the budget and to vote on the amount of property taxes to collect for services the
256.3(city/county) will provide in (year).
256.4SPENDING: The total budget amounts below compare (city's/county's) (year) total actual
256.5budget with the amount the (city/county) proposes to spend in (year).
256.9TAXES: The property tax amounts below compare that portion of the current budget
256.10levied in property taxes in (city/county) for (year) with the property taxes the (city/county)
256.11proposes to collect in (year).
256.15LOCAL TAX RATE COMPARISON: The current local tax rate, the local tax rate if no tax
256.16levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.
256.21All (city/county) residents are invited to attend the public hearing of the (city/county) to
256.22express your opinions on the budget and the proposed amount of (year) property taxes.
256.23The hearing will be held on:
256.25(Location/Address)
256.26If the discussion of the budget cannot be completed, a time and place for continuing the
256.27discussion will be announced at the hearing. You are also invited to send your written
256.28comments to:
256.30(Location/Address)"
256.31 (d) For purposes of this subdivision, the budget amounts listed on the advertisement
256.32mean:
256.33 (1) for cities, the total government fund expenditures, as defined by the state auditor
256.34under section471.6965 , less any expenditures for improvements or services that are
257.1specially assessed or charged under chapter 429, 430, 435, or the provisions of any other
257.2law or charter; and
257.3 (2) for counties, the total government fund expenditures, as defined by the state
257.4auditor under section375.169 , less any expenditures for direct payments to recipients or
257.5providers for the human service aids listed below:
257.6 (i) Minnesota family investment program under chapters 256J and 256K;
257.7 (ii) medical assistance under sections256B.041, subdivision 5 , and
256B.19,
257.8subdivision 1 ;
257.9 (iii) general assistance medical care under section256D.03, subdivision 6 ;
257.10 (iv) general assistance under section256D.03, subdivision 2 ;
257.11 (v) emergency assistance under section256J.48 ;
257.12 (vi) Minnesota supplemental aid under section256D.36, subdivision 1 ;
257.13 (vii) preadmission screening under section256B.0911 , and alternative care grants
257.14under section256B.0913 ;
257.15 (viii) general assistance medical care claims processing, medical transportation and
257.16related costs under section256D.03, subdivision 4 ;
257.17 (ix) medical transportation and related costs under section256B.0625, subdivisions
257.1817 to 18a ;
257.19 (x) group residential housing under section256I.05, subdivision 8 , transferred from
257.20programs in clauses (iv) and (vi); or
257.21 (xi) any successor programs to those listed in clauses (i) to (x).
257.22 (e) A city with a population of over 500 but not more than 2,500 that is required to
257.23hold a public hearing under subdivision 6 must advertise by posted notice as defined in
257.24section645.12, subdivision 1 . The advertisement must be posted at the time provided in
257.25paragraph (a). It must be in the form required in paragraph (b).
257.26 (f) For purposes of this subdivision, the population of a city is the most recent
257.27population as determined by the state demographer under section4A.02 .
257.28 (g) The commissioner of revenue, subject to the approval of the chairs of the house
257.29and senate tax committees, shall annually prescribe the specific form and format of the
257.30advertisements required under this subdivision, including such details as font size and
257.31style, and spacing for the required items. The commissioner may prescribe alternate and
257.32additional language for the advertisement for a taxing authority or for groups of taxing
257.33authorities. At least two weeks before November 29 each year, the commissioner shall
257.34provide a copy of the prescribed advertisements to the chairs of the committees of the
257.35house of representatives and the senate with jurisdiction over taxes.
258.1EFFECTIVE DATE.This section is effective for advertisements in 2007 and
258.2thereafter, for proposed taxes payable in 2008 and thereafter.
258.3 Sec. 42. Minnesota Statutes 2006, section 275.067, is amended to read:
258.4275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE;
258.5CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.
258.6 Special taxing districts as defined in section275.066 organized on or before July 1 in
258.7a the current calendar year may, and special taxing districts organized in a prior year that
258.8have not previously certified a levy to the county auditor, are allowed to certify a levy to
258.9the county auditor inthat same the current year for property taxes or special assessments
258.10to be payable in the following calendar year to the extent that the special taxing district is
258.11authorized by statute or special act to levy taxes or special assessments, but only if the
258.12county auditor receives written notice from the district on or before July 1 of the current
258.13year that the district may be certifying a levy in the current year, and the notice includes a
258.14complete list or other description of the tax parcels in the district and a map showing the
258.15boundaries of the district. Special taxing districts organized after July 1 in a calendar year
258.16may not certify a levy of property taxes or special assessments to the county auditor under
258.17the powers granted to them by statute or special act and subject to the requirements of
258.18this section until the following calendar year. All special taxing districts must notify the
258.19county auditor by July 1 in order for its boundaries for the levy to be certified that year
258.20to be different than its boundaries for levies certified in prior years, and the notice must
258.21include a complete list or other description of the tax parcels within the new boundaries
258.22and a map showing the new boundaries of the district.
258.23EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
258.24thereafter.
258.25 Sec. 43. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision
258.26to read:
258.27 Subd. 5. Electronic tax statements. Upon written request by the owner of real
258.28property located in the county, or by the owner's agent, a county may send tax statements
258.29by electronic means instead of by mailing. For the purposes of the payment deadlines
258.30specified in section 279.01, the postmark date on the envelope containing these property
258.31tax statements is the date the statements were sent by electronic means.
258.32EFFECTIVE DATE.This section is effective for tax statements for taxes payable
258.33in 2008 and thereafter.
259.1 Sec. 44. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:
259.2 Subd. 2. Partial payments. The county treasurer may accept payments of more or
259.3less than the exact amount of a tax installment due. Payments must be applied first to the
259.4oldest installment that is due but which has not been fully paid. If the accepted payment is
259.5less than the amount due,payments must be the payment is applied first to the penalty
259.6accrued for the yearthe payment is made or the installment being paid. Acceptance of
259.7partial payment of tax does not constitute a waiver of the minimum payment required as a
259.8condition for filing an appeal under section278.03 or any other law, nor does it affect the
259.9order of payment of delinquent taxes under section280.39 .
259.10EFFECTIVE DATE.This section is effective for payments made on or after the
259.11day following final enactment.
259.12 Sec. 45. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:
259.13 Subdivision 1. Due dates; penalties. Except as provided in subdivision 3 or 4, on
259.14May 16 or 21 days after the postmark date on the envelope containing the property tax
259.15statement, whichever is later, a penaltyshall accrue accrues and thereafter be is charged
259.16upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer.
259.17The penaltyshall be is at a rate of two percent on homestead property until May 31 and
259.18four percent on June 1. The penalty on nonhomestead propertyshall be is at a rate of four
259.19percent until May 31 and eight percent on June 1. This penaltyshall does not accrue until
259.20June 1 of each year, or 21 days after the postmark date on the envelope containing the
259.21property tax statements, whichever is later, on commercial use real property used for
259.22seasonal residential recreational purposes and classified as class 1c or 4c, and on other
259.23commercial use real property classified as class 3a, provided that over 60 percent of the
259.24gross income earned by the enterprise on the class 3a property is earned during the months
259.25of May, June, July, and August.Any property owner of such class 3a property who pays
259.26In order for the first half of the tax due onthe class 3a property to be paid after May 15
259.27and before June 1, or 21 days after the postmark date on the envelope containing the
259.28property tax statement, whichever is later,shall without penalty, the owner of the property
259.29must attach an affidavit to the payment attesting to compliance with the income provision
259.30of this subdivision. Thereafter, for both homestead and nonhomestead property, on the
259.31first day of each month beginning July 1, up to and including October 1 following, an
259.32additional penalty of one percent for each monthshall accrue accrues and be is charged on
259.33all such unpaid taxes provided that if the due date was extended beyond May 15 as the
259.34result of any delay in mailing property tax statements no additional penalty shall accrue
259.35if the tax is paid by the extended due date. If the tax is not paid by the extended due
260.1date, then all penalties that would have accrued if the due date had been May 15 shall be
260.2charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid
260.3prior to May 16 or 21 days after the postmark date on the envelope containing the property
260.4tax statement, whichever is later; and, if so paid, no penaltyshall attach attaches; the
260.5remaining one-halfshall may be paid at any time prior to October 16 following, without
260.6penalty; but, if not so paid, then a penalty of two percentshall accrue accrues thereon for
260.7homestead property and a penalty of four percent on nonhomestead property. Thereafter,
260.8for homestead property, on the first day of November an additional penalty of four percent
260.9shall accrue accrues and on the first day of December following, an additional penalty of
260.10two percentshall accrue accrues and be is charged on all such unpaid taxes. Thereafter,
260.11for nonhomestead property, on the first day of November and December following, an
260.12additional penalty of four percent for each monthshall accrue accrues and be is charged
260.13on all such unpaid taxes. If one-half of such taxesshall are not be paid prior to May 16 or
260.1421 days after the postmark date on the envelope containing the property tax statement,
260.15whichever is later, the same may be paid at any time prior to October 16, with accrued
260.16penalties to the date of payment added, and thereupon no penaltyshall attach attaches to
260.17the remaining one-half until October 16 following.
260.18 This section applies to payment of personal property taxes assessed against
260.19improvements to leased property, except as provided by section277.01, subdivision 3 .
260.20 A county may provide by resolution that in the case of a property owner that has
260.21multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in
260.22installments as provided in this subdivision.
260.23 The county treasurer may accept payments of more or less than the exact amount of
260.24a tax installment due. Payments must be applied first to the oldest installment that is due
260.25but which has not been fully paid. If the accepted payment is less than the amount due,
260.26payments must be applied first to the penalty accrued for the yearthe payment is made
260.27or the installment being paid. Acceptance of partial payment of tax does not constitute
260.28a waiver of the minimum payment required as a condition for filing an appeal under
260.29section278.03 or any other law, nor does it affect the order of payment of delinquent
260.30taxes under section280.39 .
260.31EFFECTIVE DATE.This section is effective for payments made on or after the
260.32day following final enactment.
260.33 Sec. 46. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read:
260.34 Subd. 2. Qualifying homestead; defined. Qualifying homestead property is defined
260.35as the dwelling occupied as the homeowner's principal residence and so much of the land
261.1surrounding it as is reasonably necessary for use of the dwelling as a home and any other
261.2property used for purposes of a homestead as defined in section273.13, subdivisions
261.322 and 23 , but not to exceed one acre. The homestead may be part of a multidwelling
261.4building and the land on which it is built. Property is not qualifying homestead property if
261.5a person or entity other than the applicant or the applicant's spouse holds an interest in the
261.6property as the vendor under a contract for deed or as a remainderperson.
261.7EFFECTIVE DATE.This section is effective for applications submitted on or
261.8after January 1, 2007.
261.9 Sec. 47. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:
261.10 Subd. 3. Claimant. (a) "Claimant" means:
261.11 (1) a person, as that term is defined in section290.01, subdivision 2 , who owns
261.12forest land in Minnesota and files an application authorized by the Sustainable Forest
261.13Incentive Act. Claimant includes;
261.14 (2) a purchaser or grantee if property enrolled in the program was sold or transferred
261.15after the original application was filed and prior to the annual incentive payment being
261.16made.; or
261.17 (3) an owner of land previously covered by an auxiliary forest contract that
261.18automatically qualifies for inclusion in the Sustainable Forest Incentive Act program
261.19pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
261.20 The purchaser or grantee must notify the commissioner in writing of the sale or
261.21transfer of the property. Owners of land that qualifies for inclusion pursuant to section
261.2288.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing
261.23of the expiration of the auxiliary forest contract or land trade with a governmental unit and
261.24submit an application to the commissioner by August 15 in order to be eligible to receive a
261.25payment by October 1 of that same year. For purposes of section290C.11 , claimant also
261.26includes any person bound by the covenant required in section290C.04 .
261.27 (b) No more than one claimant is entitled to a payment under this chapter with
261.28respect to any tract, parcel, or piece of land enrolled under this chapter that has been
261.29assigned the same parcel identification number. When enrolled forest land is owned by
261.30two or more persons, the owners must determine between them which person is eligible to
261.31claim the payments provided under sections290C.01 to
290C.11 . In the case of property
261.32sold or transferred, the former owner and the purchaser or grantee must determine between
261.33them which person is eligible to claim the payments provided under sections290C.01 to
261.34290C.11
. The owners, transferees, or grantees must notify the commissioner in writing
261.35which person is eligible to claim the payments.
262.1EFFECTIVE DATE.This section is effective the day following final enactment.
262.2 Sec. 48. Minnesota Statutes 2006, section 290C.04, is amended to read:
262.3290C.04 APPLICATIONS.
262.4 (a) A landowner may apply to enroll forest land for the sustainable forest incentive
262.5program under this chapter. The claimant must complete, sign, and submit an application
262.6to the commissioner by September 30 in order for the land to become eligible beginning
262.7in the next year. The application shall be on a form prescribed by the commissioner and
262.8must include the information the commissioner deems necessary. At a minimum, the
262.9application must show the following information for the land and the claimant: (i) the
262.10claimant's Social Security number or state or federal business tax registration number and
262.11date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's
262.12parcel identification numbers for the tax parcels that completely contain the claimant's
262.13forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment
262.14in the program, (vi) the approved plan writer's signature and identification number, and
262.15(vii) proof, in a form specified by the commissioner, that the claimant has executed and
262.16acknowledged in the manner required by law for a deed, and recorded, a covenant that the
262.17land is not and shall not be developed in a manner inconsistent with the requirements and
262.18conditions of this chapter. The covenant shall state in writing that the covenant is binding
262.19on the claimant and the claimant's successor or assignee, and that it runs with the land
262.20for a period of not less than eight years. The commissioner shall specify the form of the
262.21covenant and provide copies upon request. The covenant must include a legal description
262.22that encompasses all the forest land that the claimant wishes to enroll under this section or
262.23the certificate of title number for that land if it is registered land.
262.24 (b) In all cases, the commissioner shall notify the claimant within 90 days after
262.25receipt of a completed application that either the land has or has not been approved for
262.26enrollment. A claimant whose application is denied may appeal the denial as provided in
262.27section290C.11, paragraph (a) 290C.13
262.28 (c) Within 90 days after the denial of an application, or within 90 days after the
262.29final resolution of any appeal related to the denial, the commissioner shall execute and
262.30acknowledge a document releasing the land from the covenant required under this chapter.
262.31The document must be mailed to the claimant and is entitled to be recorded.
262.32 (d) The Social Security numbers collected from individuals under this section are
262.33private data as provided in section13.355 . The federal business tax registration number
262.34and date of birth data collected under this section are also private data on individuals or
262.35nonpublic data, as defined in section13.02, subdivisions 9 and 12 , but may be shared
263.1with county assessors for purposes of tax administration and with county treasurers for
263.2purposes of the revenue recapture under chapter 270A.
263.3EFFECTIVE DATE.This section is effective the day following final enactment.
263.4 Sec. 49. Minnesota Statutes 2006, section 290C.05, is amended to read:
263.5290C.05 ANNUAL CERTIFICATION.
263.6 On or before July 1 of each year, beginning with the year after the original claimant
263.7has received an approved application, the commissioner shall send each claimant enrolled
263.8under the sustainable forest incentive program a certification form. For purposes of this
263.9section, the original claimant is the person that filed the first application under section
263.10290C.04 to enroll the land in the program. The claimant must sign the certification,
263.11attesting that the requirements and conditions for continued enrollment in the program are
263.12currently being met, and must return the signed certification form to the commissioner by
263.13August 15 of that same year. If the claimant does not return an annual certification form
263.14by the due date, the provisions in section290C.11 apply.
263.15EFFECTIVE DATE.This section is effective the day following final enactment.
263.16 Sec. 50. Minnesota Statutes 2006, section 290C.11, is amended to read:
263.17290C.11 PENALTIES FOR REMOVAL.
263.18 (a) If the commissioner determines that land enrolled in the sustainable forest
263.19incentive program is in violation of the conditions for enrollment as specified in section
263.20290C.03
, the commissioner shall notify the claimant of the intent to remove all enrolled
263.21land from the sustainable forest incentive program. The claimant has 60 days to appeal
263.22this determination under the provisions of section 290C.13.The appeal must be made
263.23in writing to the commissioner, who shall, within 60 days, notify the claimant as to the
263.24outcome of the appeal. Within 60 days after the commissioner denies an appeal, or within
263.25120 days after the commissioner received a written appeal if the commissioner has not
263.26made a determination in that time, the owner may appeal to Tax Court under chapter 271
263.27as if the appeal is from an order of the commissioner.
263.28 (b) If the commissioner determines the land is to be removed from the sustainable
263.29forest incentive program, the claimant is liable for payment to the commissioner in the
263.30amount equal to the payments received under this chapter for the previous four-year
263.31period, plus interest. The claimant has 90 days to satisfy the payment for removal of land
263.32from the sustainable forest incentive program under this section. If the penalty is not paid
263.33within the 90-day period under this paragraph, the commissioner shall certify the amount
264.1to the county auditor for collection as a part of the general ad valorem real property taxes
264.2on the land in the following taxes payable year.
264.3EFFECTIVE DATE.This section is effective the day following final enactment.
264.4 Sec. 51. [290C.13] APPEALS.
264.5 Subdivision 1. Claimant right to reconsideration. A claimant may obtain
264.6reconsideration by the commissioner of a determination removing enrolled land from the
264.7sustainable forest incentive program, a determination denying an application to enroll land
264.8in the program, or a denial of part or all of an incentive payment by filing an administrative
264.9appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if
264.10the action taken by the commissioner is the outcome of an administrative appeal.
264.11 Subd. 2. Appeal by claimant. A claimant who wishes to seek administrative review
264.12must follow the procedures in subdivision 4.
264.13 Subd. 3. Notice date. For purposes of this section, the term "notice date" means
264.14the date of the determination removing enrolled land or the date of the notice denying an
264.15application to enroll land or denying part or all of an incentive payment.
264.16 Subd. 4. Time and content for administrative appeal. Within 60 days after the
264.17notice date, the claimant must file a written appeal with the commissioner. The appeal
264.18need not be in any particular form but must contain the following information:
264.19 (1) name and address of the claimant;
264.20 (2) if a corporation, the state of incorporation of the claimant, and the principal
264.21place of business of the corporation;
264.22 (3) the Minnesota or federal business identification number or Social Security
264.23number of the claimant;
264.24 (4) the date;
264.25 (5) the periods involved and the amount of payment involved for each year or period;
264.26 (6) the findings in the notice that the claimant disputes;
264.27 (7) a summary statement that the claimant relies on for each exception; and
264.28 (8) the claimant's signature or signature of the claimant's duly authorized agent.
264.29 Subd. 5. Extensions. When requested in writing and within the time allowed for
264.30filing an administrative appeal, the commissioner may extend the time for filing an appeal
264.31for a period not more than 30 days from the expiration of the 60 days from the notice date.
264.32 Subd. 6. Determination of appeal. On the basis of applicable law and available
264.33information, the commissioner shall determine the validity, if any, in whole or in part,
264.34of the appeal and notify the claimant of the decision. This notice must be in writing
264.35and contain the basis for the determination.
265.1 Subd. 7. Agreement determining issues under appeal. When it appears to be in
265.2the best interests of the state, the commissioner may settle the amount of any incentive
265.3payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties,
265.4or interest that the commissioner has under consideration by virtue of an appeal filed
265.5under this section. An agreement must be in writing and signed by the commissioner and
265.6the claimant, or the claimant's representative authorized by the claimant to enter into an
265.7agreement. The agreement is final and conclusive and, except upon a showing of fraud or
265.8malfeasance, or misrepresentation of a material fact, the case must not be reopened as to
265.9the matters agreed upon.
265.10 Subd. 8. Appeal to Tax Court. Within 60 days after the commissioner denies
265.11an appeal, or within 120 days after the commissioner received a written appeal if the
265.12commissioner has not made a determination in that time, the claimant may appeal to Tax
265.13Court under chapter 271 as if the appeal is from an order of the commissioner.
265.14 Subd. 9. Exemption from Administrative Procedure Act. This section is not
265.15subject to chapter 14.
265.16EFFECTIVE DATE.This section is effective the day following final enactment.
265.17 Sec. 52. REPEALER.
265.18(a) Minnesota Statutes 2006, section 270.073, is repealed.
265.19(b) Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52;
265.20and 270.53, are repealed.
265.21EFFECTIVE DATE.Paragraph (a) of this section is effective beginning January 2,
265.222007, for taxes payable in 2008 and thereafter. Paragraph (b) of this section is effective
265.23the day following final enactment.
265.26 Section 1. Minnesota Statutes 2006, section 62I.06, subdivision 6, is amended to read:
265.27 Subd. 6.Deficits Deficit assessments. The association shall certify to the
265.28commissioner the estimated amount of any deficit remaining after the stabilization reserve
265.29fund has been exhausted and payment of the maximum final premium for all policyholders
265.30of the association. Within 60 days after the certification, the commissioner shall authorize
265.31the association to recover the members' respective shares of the deficit by assessing
265.32all members an amount sufficient to fully fund the obligations of the association. The
265.33assessment of each member shall be determined in the manner provided in section62I.07 .
266.1An assessment made pursuant to this section shall be deductible by the member frompast
266.2or future premium taxes due the state as provided in section 297I.20, subdivision 2.
266.3EFFECTIVE DATE.This section is effective for tax returns due on or after January
266.41, 2008.
266.5 Sec. 2. Minnesota Statutes 2006, section 71A.04, subdivision 1, is amended to read:
266.6 Subdivision 1. Premium tax. The attorney-in-fact, in lieu of all taxes, state, county,
266.7and municipal, shall file with the commissioner of revenue all returns and pay to the
266.8commissioner of revenue all amounts required under chapter 297I.
266.9EFFECTIVE DATE.This section is effective the day following final enactment.
266.10 Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read:
266.11287.22 EXEMPTIONS.
266.12 The tax imposed by section287.21 does not apply to:
266.13 (1) An executory contract for the sale of real property under which the purchaser is
266.14entitled to or does take possession of the real property, or any assignment or cancellation
266.15of the contract;
266.16 (2) A mortgage or an amendment, assignment, extension, partial release, or
266.17satisfaction of a mortgage;
266.18 (3) A will;
266.19 (4) A plat;
266.20 (5) A lease, amendment of lease, assignment of lease, or memorandum of lease;
266.21 (6) A deed, instrument, or writing in which the United States or any agency or
266.22instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
266.23 (7) A deed for a cemetery lot or lots;
266.24 (8) A deed of distribution by a personal representative;
266.25 (9) A deed to or from a co-owner partitioning their undivided interest in the same
266.26piece of real property;
266.27 (10) A deed or other instrument of conveyance issued pursuant to a permanent
266.28school fund land exchange under section92.121 and related laws;
266.29 (11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
266.30 (12) A referee's, sheriff's, or certificate holder's certificate of redemption from a
266.31mortgage or lien foreclosure sale issuedto the redeeming mortgagor or lienee pursuant to
266.32section 580.23 or other statute applicable to redemption by an owner of real property;
267.1 (13) A deed, instrument, or writing which grants, creates, modifies, or terminates an
267.2easement; and
267.3 (14) A decree of marriage dissolution, as defined in section287.01, subdivision 4 ,
267.4or a deed or other instrument between the parties to the dissolution made pursuant to
267.5the terms of the decree.
267.6EFFECTIVE DATE.This section is effective the day following final enactment.
267.7 Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read:
267.8287.2205 TAX-FORFEITED LAND.
267.9 Before a state deed for tax-forfeited land may be issued, the deed tax must be paid
267.10by the purchaser of tax-forfeited land whether the purchase is the result of a public
267.11auction or private sale or a repurchase of tax-forfeited land. State agencies and local
267.12units of government that acquire tax-forfeited land by purchase or any other means are
267.13subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a
267.14governmental subdivision for an authorized public use under section 282.01, subdivision
267.151a, or for redevelopment purposes under section 282.01, subdivision 1b.
267.16EFFECTIVE DATE.This section is effective the day following final enactment.
267.17 Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:
267.18 Subd. 4. Use tax; prescription drugs. (a) A person that receives prescription drugs
267.19for resale or use in Minnesota, other than from a wholesale drug distributor that is subject
267.20to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug
267.21distributor multiplied by the tax percentage specified in this section. Liability for the tax is
267.22incurred when prescription drugs are received or delivered in Minnesota by the person.
267.23(b) A person that receives prescription drugs for use in Minnesota from a nonresident
267.24pharmacy required to be registered under section
151.19 is subject to a tax equal to
267.25the price paid by the nonresident pharmacy to the wholesale drug distributor or the
267.26price received by the nonresident pharmacy, whichever is lower, multiplied by the tax
267.27percentage specified in this section. Liability for the tax is incurred when prescription
267.28drugs are received in Minnesota by the person.
267.29(c) (b) A tax imposed under this subdivision does not apply to purchases by an
267.30individual for personal consumption.
267.31EFFECTIVE DATE.This section is effective the day following final enactment.
268.1 Sec. 6. Minnesota Statutes 2006, section 295.52, subdivision 4a, is amended to read:
268.2 Subd. 4a. Tax collection. A wholesale drug distributor with nexus in Minnesota,
268.3who is not subject to tax under subdivision 3, on all or a particular transactionor a
268.4nonresident pharmacy with nexus in Minnesota, is required to collect the tax imposed
268.5under subdivision 4, from the purchaser of the drugs and give the purchaser a receipt
268.6for the tax paid. The tax collected shall be remitted to the commissioner in the manner
268.7prescribed by section295.55, subdivision 3 .
268.8EFFECTIVE DATE.This section is effective the day following final enactment.
268.9 Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read:
268.10 Subd. 2. Pharmacy refund. A pharmacy may claim an annual refund against the
268.11total amount of tax, if any, the pharmacy owes during that calendar year under section
268.12295.52, subdivision 2
. The refund shall equal the amount paid by the pharmacy to a
268.13wholesale drug distributor subject to tax under section295.52, subdivision 3 , for legend
268.14drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage
268.15specified in section295.52 . If the amount of the refund exceeds the tax liability of the
268.16pharmacy under section295.52, subdivision 1b 2 , the commissioner shall provide the
268.17pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply
268.18for the refund on the annual return as provided under section295.55, subdivision 5 . The
268.19refund must be claimed within one year of the due date of the return. Interest on refunds
268.20paid under this subdivision will begin to accrue 60 days after the date a claim for refund is
268.21filed. For purposes of this subdivision, the date a claim is filed is the due date of the return
268.22or the date of the actual claim for refund, whichever is later.
268.23EFFECTIVE DATE.This section is effective the day following final enactment.
268.24 Sec. 8. Minnesota Statutes 2006, section 297F.06, subdivision 4, is amended to read:
268.25 Subd. 4. Tobacco products use tax. The tobacco products use tax does not apply to
268.26the possession, use, or storage of tobacco productsthat if (1) the tobacco products have an
268.27aggregate cost in any calendar month to the consumer of$100 $50 or less, and (2) the
268.28tobacco products were carried into this state by that consumer.
268.29EFFECTIVE DATE.This section is effective for the possession, use, or storage of
268.30tobacco products on or after July 1, 2007.
268.31 Sec. 9. Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision
268.32to read:
269.1 Subd. 3a. Consumer use tax; use tax return; cigarette consumer. (a) On or before
269.2the 18th day of each calendar month, a consumer who, during the preceding calendar
269.3month, has acquired title to or possession of cigarettes for use or storage in this state, upon
269.4which the sales tax imposed by this section has not been paid, shall file a return with the
269.5commissioner showing the quantity of cigarettes so acquired or possessed. The return
269.6must be made in the form and manner prescribed by the commissioner, and must contain
269.7any other information required by the commissioner. The return must be accompanied by
269.8a remittance for the full unpaid sales tax liability shown by it.
269.9 (b) The tax imposed under paragraph (a) does not apply if (1) the consumer has
269.10acquired title to or possession of cigarettes for use or storage in this state in quantities
269.11of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that
269.12consumer.
269.13EFFECTIVE DATE.This section is effective for cigarettes which a consumer has
269.14acquired title to or possession of on or after July 1, 2007.
269.15 Sec. 10. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:
269.16 Subdivision 1. Insurance policies surcharge. (a) Except as otherwise provided in
269.17subdivision 2, each licensed insurer engaged in writing policies of homeowner's insurance
269.18authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or
269.19commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the
269.20gross premiums and assessments, less return premiums, on direct business received by
269.21the company, or by its agents for it, for homeowner's insurance policies, commercial fire
269.22policies, and commercial nonliability insurance policies in this state.
269.23 (b) The surcharge amount collected under paragraph (a) or subdivision 2, paragraph
269.24(b), may not be considered premium for any other purpose. The surcharge amount
269.25under paragraph (a) must be separately stated on either a billing or policy declaration or
269.26document containing similar information sent to an insured.
269.27 (c) Amounts collected by the commissioner under this section must be deposited in
269.28the fire safety account established pursuant to subdivision 3.
269.29EFFECTIVE DATE.This section is effective July 1, 2007, and applies to policies
269.30written or renewed on or after July 1, 2007.
269.31 Sec. 11. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:
270.1 Subd. 2. Exemptions. (a) This section does not apply to a farmers' mutual fire
270.2insurance company or township mutual fire insurance company in Minnesota organized
270.3under chapter 67A.
270.4 (b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to
270.5transact business in Minnesota shall elect to remit to the Department of Revenue for
270.6deposit in the fire safety account either (1) the surcharge amountcollected imposed under
270.7this section subdivision 1 on all premiums subject to that surcharge, or (2) a surcharge of
270.8one-half of one percent on the gross fire premiums and assessments, less return premiums,
270.9on all direct business received by the insurer or agents of the insurer in Minnesota, in
270.10cash or otherwise, during the year.
270.11 (c) The election must be made prior to July 1, 2007, for policies written or renewed
270.12between July 1, 2007, and December 31, 2007, and by December 31 of each year for
270.13insurance for policies written or renewed in the succeeding calendar year. An insurer
270.14who elects to remit the one-half of one percent surcharge on gross fire premiums and
270.15assessments must not charge the insured the surcharge imposed under subdivision 1.
270.16(c) (d) For purposes of this subdivision, "gross fire premiums and assessments"
270.17includes premiums on policies covering fire risks only on automobiles, whether written or
270.18under floater form or otherwise.
270.19EFFECTIVE DATE.The requirement for certain insurers to make an election
270.20before July 1, 2007, is effective the day following final enactment. The rest of this section
270.21is effective July 1, 2007, and applies to insurance policies written or renewed on or after
270.22that date.
270.23 Sec. 12. Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read:
270.24 Subd. 2. Joint Underwriting Association offset. An insurance company may offset
270.25against its premium tax liability to this state any amount paid for an assessment made
270.26pursuant to section62I.06, subdivision 6 , shall be deductible by the member from past
270.27or future premium taxes due the state. The offset against premium tax liability must be
270.28claimed beginning with the taxable year that the assessment is paid. To the extent that the
270.29allowable offset exceeds the tax liability, the remaining offset must be carried forward to
270.30succeeding taxable years until the entire offset has been credited against the insurance
270.31company's liability for premium tax under this chapter.
270.32EFFECTIVE DATE.This section is effective for tax returns due on or after January
270.331, 2008.
271.1 Sec. 13. Minnesota Statutes 2006, section 297I.40, subdivision 5, is amended to read:
271.2 Subd. 5. Definition of tax. The term "tax" as used in this section means the tax
271.3imposed by section297I.05, subdivisions 1 to 6 , 11, and 12, paragraphs (a), clauses (1)
271.4to (5), (b), and(e) (d), without regard to the retaliatory provisions of section
297I.05,
271.5subdivision 11
, and the less any offset in section
297I.20 .
271.6EFFECTIVE DATE.This section is effective for tax returns due on or after January
271.71, 2008.
271.10 Section 1. Minnesota Statutes 2006, section 16D.04, subdivision 1, is amended to read:
271.11 Subdivision 1. Duties. The commissioner shall provide services to the state andits
271.12referring agencies to collect debtsowed the state referred for collection under this chapter.
271.13The commissioner is not a collection agency as defined by section332.31, subdivision 3 ,
271.14and is not licensed, bonded, or regulated by the commissioner of commerce under sections
271.15332.31
to
332.35 or
332.38 to
332.45 . The commissioner is subject to section
332.37 ,
271.16except clause (9), (10), (12), or (19). Debts referred to the commissioner for collection
271.17under section256.9792 may in turn be referred by the commissioner to the enterprise.
271.18An audited financial statement may not be required as a condition of debt placement with
271.19a private agency if the private agency: (1) has errors and omissions coverage under a
271.20professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond
271.21to cover actions of its employees, in an amount of at least $100,000. In cases of debts
271.22referred under section256.9792 , the provisions of this chapter and section
256.9792 apply
271.23to the extent they are not in conflict. If they are in conflict, the provisions of section
271.24256.9792
control. For purposes of this chapter, the referring agency for such debts remains
271.25the Department of Human Services.
271.26EFFECTIVE DATE.This section is effective the day following final enactment.
271.27 Sec. 2. Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read:
271.28 Subd. 2. Agency participation. (a) A referring agency may, at its option, must
271.29refer, by electronic means, debts to the commissioner for collection.The ultimate
271.30Responsibility for the debt, including the reporting of the debt to the commissioner of
271.31finance and the decision with regard to the continuing collection and uncollectibility of the
271.32debt, remains with the referring agency.
272.1 (b) Before a debt becomes 121 days past due, a referring agency may refer the
272.2debt to the commissioner for collection at any time after a debt becomes delinquent and
272.3uncontested and the debtor has no further administrative appeal of the amount of the
272.4debt. When a debt owed to astate referring agency becomes 121 days past due, the state
272.5referring agency must refer the debt to the commissioner for collection. This requirement
272.6does not apply if there is a dispute over the amount or validity of the debt, if the debt is the
272.7subject of legal action or administrative proceedings, or the agency determines that the
272.8debtor is adhering to acceptable payment arrangements. The commissioner, in consultation
272.9with the commissioner of finance, may provide that certain types of debt need not be
272.10referred to the commissioner for collection under this paragraph. Methods and procedures
272.11for referral must follow internal guidelines prepared by the commissionerof finance.
272.12 (c) If the referring agency is a court, the court must furnish a debtor's Social Security
272.13number to the commissioner when the court refers the debt.
272.14EFFECTIVE DATE.This section is effective for debts referred on or after January
272.151, 2008.
272.16 Sec. 3. Minnesota Statutes 2006, section 16D.11, subdivision 2, is amended to read:
272.17 Subd. 2. Computation. At the time a debt is referred, the amount of collection
272.18costs is equal to15 17 percent of the debt, or 25 percent of the debt remaining unpaid if
272.19the commissioner or private collection agency has to take enforced collection action
272.20by serving a summons and complaint on or entering judgment against the debtor, or by
272.21utilizing any of the remedies authorized under section
16D.08, subdivision 2, except for
272.22the remedies in sections
270C.32 and
270C.65 or when referred by the commissioner for
272.23additional collection activity by a private collection agency. If, after referral of a debt to
272.24a private collection agency, the debtor requests cancellation of collection costs under
272.25subdivision 3, the debt must be returned to the commissioner for resolution of the request.
272.26EFFECTIVE DATE.This section is effective for debts referred on or after January
272.271, 2008.
272.28 Sec. 4. Minnesota Statutes 2006, section 16D.11, subdivision 7, is amended to read:
272.29 Subd. 7. Adjustment of rate. By June 1 of each year, the commissionerof finance
272.30shall determine the rate of collection costs for debts referred to the enterprise during
272.31the next fiscal year. The rate is a percentage of the debts in an amount that most nearly
272.32equals the costs of the enterprise necessary to process and collect referred debts under this
272.33chapter. In no eventshall the rate of collection costs when a debt is first referred exceed
273.1three-fifths of the maximum collection costs, and in no event shall the rate of the maximum
273.2collection costs exceed 25 percent of the debt. Determination of the rate of collection costs
273.3under this section is not subject to the fee setting requirements of section16A.1285 .
273.4EFFECTIVE DATE.This section is effective January 1, 2008.
273.5 Sec. 5. [270C.435] REFUNDS NOT SUBJECT TO ATTACHMENT OR
273.6GARNISHMENT.
273.7 No amount of a tax refund or other payment payable by the commissioner to
273.8a taxpayer is assignable or subject to execution, levy, attachment, garnishment, lien
273.9foreclosure, or other legal process, except as specifically provided by law.
273.10EFFECTIVE DATE.This section is effective the day following final enactment.
273.11 Sec. 6. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:
273.12 Subd. 2. Required and excluded tax preparers. (a) Subject to the limitations
273.13of paragraph (b), the commissioner must publish lists of tax preparers as defined in
273.14section 289A.60, subdivision 13, paragraph (f), who have been convicted under section
273.15289A.63
or assessed penalties in excess of $1,000 under section 289A.60, subdivision
273.1613, paragraph (a).
273.17 (b) For the purposes of this section, tax preparers are not subject to publication if:
273.18 (1) an administrative or court action contesting the penalty has been filed or served
273.19and is unresolved at the time when notice would be given under subdivision 3;
273.20 (2) an appeal period to contest the penalty has not expired; or
273.21 (3) the commissioner has been notified that the tax preparer is deceased.
273.22EFFECTIVE DATE.This section is effective for penalties on returns filed after
273.23December 31, 2007.
273.24 Sec. 7. Minnesota Statutes 2006, section 270C.56, subdivision 1, is amended to read:
273.25 Subdivision 1. Liability imposed. A person who, either singly or jointly with
273.26others, has the control of, supervision of, or responsibility for filing returns or reports,
273.27paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or
273.28a person who is liable under any other law, is liable for the payment of taxes, penalties,
273.29and interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections290.92
273.30and297E.02 , and, for the taxes listed in this subdivision, the applicable penalties for
273.31nonpayment under section 289A.60.
274.1EFFECTIVE DATE.This section is effective for personal liability assessments
274.2made on or after the day following final enactment.
274.3 Sec. 8. Minnesota Statutes 2006, section 270C.63, subdivision 9, is amended to read:
274.4 Subd. 9. Period of limitations. The lien imposed by this section shall,
274.5notwithstanding any other provision of law to the contrary, be enforceable from the time
274.6the lien arises and for ten years from the date of filing the notice of lien, which must be
274.7filed by the commissioner within five years after the date of assessment of the tax or final
274.8administrative or judicial determination of the assessment. A notice of lien filed at the
274.9Office of the Secretary of State may be transcribed to any county within ten years after the
274.10date of its filing, but the transcription does not extend the period during which the lien is
274.11enforceable. A notice of lien filed in one county may be transcribed to the secretary of
274.12state or to any other county within ten years after the date of its filing, but the transcription
274.13shall not extend the period during which the lien is enforceable. A notice of lien may be
274.14renewed by the commissioner before the expiration of the ten-year period for an additional
274.15ten years. The taxpayer must receive written notice of the renewal.
274.16EFFECTIVE DATE.This section is effective for liens transcribed on or after the
274.17day following final enactment.
274.18 Sec. 9. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:
274.19 Subd. 3. State reimbursement. (a)By February 15 of each year, the treasurer of
274.20the relief association shall apply to the commissioner of revenue Each year, to be eligible
274.21for state reimbursement of the amount of supplemental benefits paid under subdivision 2
274.22during the preceding calendar year, the relief association must apply to the commissioner
274.23of revenue by February 15. By March 15 the commissioner shall reimburse the relief
274.24association for the amount of the supplemental benefits paid to qualified recipients.
274.25 (b) The commissioner of revenue shall prescribe the form of and supporting
274.26information that must be supplied as part of the application for state reimbursement.
274.27The commissioner of revenue shall reimburse the relief association by paying the
274.28reimbursement amount to the treasurer of the municipality where the association is located.
274.29Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement
274.30to the treasurer of the association if the association has filed a financial report with the
274.31municipality. If the relief association has not filed a financial report with the municipality,
274.32the municipal treasurer shall delay transmission of the reimbursement payment to the
274.33association until the complete financial report is filed. If the association has dissolved or
274.34has been removed as a trustee of state aid, the treasurer shall deposit the money in a
275.1special account in the municipal treasury, and the money may be disbursed only for the
275.2purposes and in the manner provided in section 424A.08. When paid to the association,
275.3(c) the reimbursement payment must be deposited in the special fund of the relief
275.4association.
275.5(d) (c) A sum sufficient to make the payments is appropriated from the general fund
275.6to the commissioner of revenue.
275.7EFFECTIVE DATE.This section is effective January 1, 2007, and thereafter.
275.10 Section 1. Minnesota Statutes 2006, section 3.987, subdivision 1, is amended to read:
275.11 Subdivision 1. Local impact notes. The commissioner of finance shall coordinate
275.12the development of a local impact note for any proposed legislation introduced after June
275.1330, 1997,or any rule proposed after December 31, 1999, upon request of the chair or the
275.14ranking minority member of either legislative Tax Committee. Upon receipt of a request
275.15to prepare a local impact note, the commissioner must notify the authors of the proposed
275.16legislationor, for an administrative rule, the head of the relevant executive agency or
275.17department, that the request has been made. The local impact note must be made available
275.18to the public upon request. If the action is among the exceptions listed in section3.988 ,
275.19a local impact note need not be requested nor prepared. The commissioner shall make
275.20a reasonable and timely estimate of the local fiscal impact on each type of political
275.21subdivision that would result from the proposed legislation. The commissioner of finance
275.22may require any political subdivision or the commissioner of an administrative agency
275.23of the state to supply in a timely manner any information determined to be necessary to
275.24determine local fiscal impact. The political subdivision, its representative association, or
275.25commissioner shall convey the requested information to the commissioner of finance with
275.26a signed statement to the effect that the information is accurate and complete to the best
275.27of its ability. The political subdivision, its representative association, or commissioner,
275.28when requested, shall update its determination of local fiscal impact based on actual
275.29cost or revenue figures, improved estimates, or both. Upon completion of the note, the
275.30commissioner must provide a copy to the authors of the proposed legislationor, for an
275.31administrative rule, to the head of the relevant executive agency or department.
275.32 Sec. 2. Minnesota Statutes 2006, section 3.988, subdivision 3, is amended to read:
276.1 Subd. 3. Miscellaneous exceptions. A local impact note or an attachment as
276.2provided in section3.987, subdivision 2 , need not be prepared for the cost of a mandated
276.3action if the law, including a rulemaking, containing the mandate:
276.4 (1) accommodates a specific local request;
276.5 (2) results in no new local government duties;
276.6 (3) leads to revenue losses from exemptions to taxes;
276.7 (4) provided only clarifying or conforming, nonsubstantive charges on local
276.8government;
276.9 (5) imposes additional net local costs that are minor (an amount less than or equal
276.10to one-half of one percent of the local revenue base as defined in section477A.011,
276.11subdivision 27 , or $50,000, whichever is less for any single local government if the
276.12mandate does not apply statewide or less than $1,000,000 if the mandate is statewide);
276.13 (6) is a law or executive order enacted before July 1, 1997, or a rule initially
276.14implementing a law enacted before July 1, 1997;
276.15 (7) implements something other than a law or executive order, such as a federal,
276.16court, or voter-approved mandate;
276.17 (8) results in savings that equal or exceed costs;
276.18 (9) requires the holding of elections;
276.19 (10) ensures due process or equal protection;
276.20 (11) provides for the notification and conduct of public meetings;
276.21 (12) establishes the procedures for administrative and judicial review of actions
276.22taken by political subdivisions;
276.23 (13) protects the public from malfeasance, misfeasance, or nonfeasance by officials
276.24of political subdivisions;
276.25 (14) relates directly to financial administration, including the levy, assessment,
276.26and collection of taxes;
276.27 (15) relates directly to the preparation and submission of financial audits necessary
276.28to the administration of state laws; or
276.29 (16) requires uniform standards to apply to public and private institutions without
276.30differentiation.
276.31 Sec. 3. Minnesota Statutes 2006, section 3.989, subdivision 2, is amended to read:
276.32 Subd. 2.Report Compilation of local impact notes. The commissioner of finance
276.33shall prepare bySeptember 1, 2000, and by September 1 of each even-numbered year
276.34thereafter, a report compilation of the costs of local mandates established after June 30,
276.351997 key impact notes requested by the legislature during the previous biennial session
277.1as provided in section 3.987. The commissioner may consult with local government
277.2representatives and legislative fiscal staff to determine which local impact notes were key.
277.3The commissioner shall include the statewide total of the statement of costs of local
277.4mandates after June 30, 1997, as a notation in the state biennial budget.
277.5 Sec. 4. Minnesota Statutes 2006, section 3.989, subdivision 3, is amended to read:
277.6 Subd. 3. Certain political subdivisions; report. The political subdivisions that
277.7have opted to administer class B state mandates shall report to the commissioner of
277.8finance by September 1, 1998, and by September 1 of each year thereafter, identifying
277.9each instance when revenue for a class B state mandate has fallen below 85 percent of
277.10the total cost of the program and the political subdivision intends to cease administration
277.11of the program.
277.12 The commissioner shall forward a copy of the report to the chairs of the appropriate
277.13funding committees of the senate and the housefor proposed inclusion of the shortfall as a
277.14line item appropriation in the state budget for the next fiscal year.
277.15 The political subdivision may exercise its option to cease administration only if the
277.16legislature has failed to include the shortfall as an appropriation in the state budget for
277.17the next fiscal year.
277.18 Sec. 5. Minnesota Statutes 2006, section 16A.103, subdivision 1a, is amended to read:
277.19 Subd. 1a. Forecast parameters. The forecast must assume the continuation of
277.20current laws and reasonable estimates of projected growth in the national and state
277.21economies and affected populations. Revenue must be estimated for all sources provided
277.22for in current law. Expenditures must be estimated for all obligations imposed by law and
277.23those projected to occur as a result of inflation and variables outside the control of the
277.24legislature.Expenditure estimates must not include an allowance for inflation. A general
277.25inflation estimate must not include inflation on debt service or on programs for which a
277.26statutory growth factor is already included in the forecast.
277.27EFFECTIVE DATE.This section is effective the day following final enactment.
277.28 Sec. 6. Minnesota Statutes 2006, section 16A.103, subdivision 1b, is amended to read:
277.29 Subd. 1b. Forecast variable. In determining the rate of inflation, the application
277.30of inflation, the amount of state bonding as it affects debt service, the calculation of
277.31investment income, and the other variables to be included in the expenditure part of the
277.32forecast, the commissioner must consult with the chairs and lead minority members of the
277.33senateState Government Finance Committee and the house Ways and Means Committee,
278.1and legislative fiscal staff. This consultation must occur at least three weeks before the
278.2forecast is to be released. No later than two weeks prior to the release of the forecast,
278.3the commissioner must inform the chairs and lead minority members of the senate
278.4State Government Finance Committee and the house Ways and Means Committee, and
278.5legislative fiscal staff of any changes in these variables from the previous forecast.
278.6EFFECTIVE DATE.This section is effective the day following final enactment.
278.7 Sec. 7. Minnesota Statutes 2006, section 16A.103, subdivision 2, is amended to read:
278.8 Subd. 2. Local revenue. In February and November of each year, the commissioner
278.9of revenue shall prepare and deliver to the governor and the legislature forecasts of
278.10revenue to be received by school districts as a group, counties as a group, and the group of
278.11cities and towns that have a population of more than 2,500. The forecasts must assume
278.12the continuation of current laws, projections of valuation changes in real property, and
278.13reasonable estimates of projected growth in the national and state economies and affected
278.14populations. Revenue must be estimated for property taxes, state and federal aids, local
278.15sales taxes, if any, and a single projection for all other revenue for each group of affected
278.16local governmental units.As part of the February forecast, the commissioner of revenue
278.17shall report to the governor and legislature on which groups of local government units
278.18exceeded the revenue targets of the governor and legislature in the most recent biennium.
278.19 Sec. 8. Minnesota Statutes 2006, section 16A.152, subdivision 1b, is amended to read:
278.20 Subd. 1b. Budget reserve increase. On July 1,2003 2007, the commissioner of
278.21finance shall transfer$300,000,000 $150,000,000 to the budget reserve account in the
278.22general fund.On July 1, 2004, the commissioner of finance shall transfer $296,000,000 to
278.23the budget reserve account in the general fund. The amounts amount necessary for this
278.24purposeare is appropriated from the general fund.
278.25 Sec. 9. Minnesota Statutes 2006, section 16A.152, subdivision 2, is amended to read:
278.26 Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general
278.27fund revenues and expenditures, the commissioner of finance determines that there will be
278.28a positive unrestricted budgetary general fund balance at the close of the biennium, the
278.29commissioner of finance must allocate money to the following accounts and purposes in
278.30priority order:
278.31 (1) the cash flow account established in subdivision 1 until that account reaches
278.32$350,000,000;
279.1 (2) the budget reserve account established in subdivision 1a until that account
279.2reaches$653,000,000 $803,000,000;
279.3 (3) the amount necessary to increase the aid payment schedule for school district
279.4aids and credits payments in section127A.45 to not more than 90 percent rounded to the
279.5nearest tenth of a percent without exceeding the amount available and with any remaining
279.6funds deposited in the budget reserve; and
279.7 (4) the amount necessary to restore all or a portion of the net aid reductions under
279.8section127A.441 and to reduce the property tax revenue recognition shift under section
279.9123B.75, subdivision 5
, paragraph (c), and Laws 2003, First Special Session chapter 9,
279.10article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section
279.1120, by the same amount.
279.12 (b) The amounts necessary to meet the requirements of this section are appropriated
279.13from the general fund within two weeks after the forecast is released or, in the case of
279.14transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations
279.15schedules otherwise established in statute.
279.16 (c)To the extent that a positive unrestricted budgetary general fund balance is
279.17projected, appropriations under this section must be made before section
16A.1522 takes
279.18effect.
279.19(d) The commissioner of finance shall certify the total dollar amount of the
279.20reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The
279.21commissioner of education shall increase the aid payment percentage and reduce the
279.22property tax shift percentage by these amounts and apply those reductions to the current
279.23fiscal year and thereafter.
279.24 Sec. 10. Minnesota Statutes 2006, section 80A.28, subdivision 1, as amended by Laws
279.252007, chapter 57, article 3, section 34, is amended to read:
279.26 Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of
279.27$100 for every application for registration or notice filing. There shall be an additional fee
279.28of one-tenth of one percent of the maximum aggregate offering price at which the securities
279.29are to be offered in this state, and the maximum combined fees shall not exceed $300.
279.30 (b) When an application for registration is withdrawn before the effective date or a
279.31preeffective stop order is entered under section80A.13, subdivision 1 , all but the $100
279.32filing fee shall be returned. If an application to register securities is denied, the total of all
279.33fees received shall be retained.
279.34 (c) Where a filing is made in connection with a federal covered security under
279.35section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing.
280.1If the filing is made in connection with redeemable securities issued by an open end
280.2management company or unit investment trust, as defined in the Investment Company Act
280.3of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate
280.4offering price at which the securities are to be offered in this state during the notice filing
280.5period. The fee must be paid at the time of the initial filing and thereafter in connection
280.6with each renewal no later than July 1 of each year and must be sufficient to cover the
280.7shares the issuer expects to sell in this state over the next 12 months. If during a current
280.8notice filing the issuer determines it is likely to sell shares in excess of the shares for
280.9which fees have been paid to the commissioner, the issuer shall submit an amended notice
280.10filing to the commissioner under section80A.122, subdivision 1 , clause (3), together with
280.11a fee of 1/20 of one percent of the maximum aggregate offering price of the additional
280.12shares. Shares for which a fee has been paid, but which have not been sold at the time
280.13of expiration of the notice filing, may not be sold unless an additional fee to cover the
280.14shares has been paid to the commissioner as provided in this section and section80A.122,
280.15subdivision 4a . If the filing is made in connection with redeemable securities issued by
280.16such a company or trust, there is no maximum fee for securities filings made according to
280.17this paragraph. If the filing is made in connection with any other federal covered security
280.18under Section 18(b)(2) of the Securities Act of 1933, there is an additional fee of one-tenth
280.19of one percent of the maximum aggregate offering price at which the securities are to be
280.20offered in this state, and the combined fees shall not exceed $300.Beginning with fiscal
280.21year 2001 and continuing each fiscal year thereafter, as of the last day of each fiscal year,
280.22the commissioner shall determine the total amount of all fees that were collected under
280.23this paragraph in connection with any filings made for that fiscal year for securities of an
280.24open-end investment company on behalf of a security that is a federal covered security
280.25pursuant to section 18(b)(2) of the Securities Act of 1933. To the extent the total fees
280.26collected by the commissioner in connection with these filings exceed $25,600,000 in a
280.27fiscal year, the commissioner shall refund, on a pro rata basis, to all persons who paid any
280.28fees for that fiscal year, the amount of fees collected by the commissioner in excess of
280.29$25,600,000. No individual refund is required of amounts of $100 or less for a fiscal year.
280.30EFFECTIVE DATE.This section is effective the day following final enactment.
280.31 Sec. 11. Minnesota Statutes 2006, section 80A.65, subdivision 1, as amended by Laws
280.322007, chapter 57, article 3, section 35, is amended to read:
280.33 Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of
280.34$100 for every application for registration or notice filing. There shall be an additional fee
281.1of one-tenth of one percent of the maximum aggregate offering price at which the securities
281.2are to be offered in this state, and the maximum combined fees shall not exceed $300.
281.3 (b) When an application for registration is withdrawn before the effective date
281.4or a preeffective stop order is entered under section80A.54 , all but the $100 filing fee
281.5shall be returned. If an application to register securities is denied, the total of all fees
281.6received shall be retained.
281.7 (c) Where a filing is made in connection with a federal covered security under
281.8section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing.
281.9If the filing is made in connection with redeemable securities issued by an open end
281.10management company or unit investment trust, as defined in the Investment Company Act
281.11of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate
281.12offering price at which the securities are to be offered in this state during the notice filing
281.13period. The fee must be paid at the time of the initial filing and thereafter in connection
281.14with each renewal no later than July 1 of each year and must be sufficient to cover the
281.15shares the issuer expects to sell in this state over the next 12 months. If during a current
281.16notice filing the issuer determines it is likely to sell shares in excess of the shares for which
281.17fees have been paid to the administrator, the issuer shall submit an amended notice filing
281.18to the administrator under section80A.50 , together with a fee of 1/20 of one percent of the
281.19maximum aggregate offering price of the additional shares. Shares for which a fee has
281.20been paid, but which have not been sold at the time of expiration of the notice filing, may
281.21not be sold unless an additional fee to cover the shares has been paid to the administrator
281.22as provided in this section and section80A.50 . If the filing is made in connection with
281.23redeemable securities issued by such a company or trust, there is no maximum fee for
281.24securities filings made according to this paragraph. If the filing is made in connection
281.25with any other federal covered security under Section 18(b)(2) of the Securities Act of
281.261933, there is an additional fee of one-tenth of one percent of the maximum aggregate
281.27offering price at which the securities are to be offered in this state, and the combined fees
281.28shall not exceed $300.Beginning with fiscal year 2001 and continuing each fiscal year
281.29thereafter, as of the last day of each fiscal year, the administrator shall determine the total
281.30amount of all fees that were collected under this paragraph in connection with any filings
281.31made for that fiscal year for securities of an open-end investment company on behalf of a
281.32security that is a federal covered security pursuant to section 18(b)(2) of the Securities
281.33Act of 1933. To the extent the total fees collected by the administrator in connection
281.34with these filings exceed $25,600,000 in a fiscal year, the administrator shall refund, on
281.35a pro rata basis, to all persons who paid any fees for that fiscal year, the amount of fees
282.1collected by the administrator in excess of $25,600,000. No individual refund is required
282.2of amounts of $100 or less for a fiscal year.
282.3EFFECTIVE DATE.This section is effective the day following final enactment.
282.4 Sec. 12. Minnesota Statutes 2006, section 270A.03, subdivision 2, is amended to read:
282.5 Subd. 2. Claimant agency. "Claimant agency" means any state agency, as defined
282.6by section14.02, subdivision 2 , the regents of the University of Minnesota, any district
282.7court of the state, any county, any statutory or home rule charter city, including a city that
282.8is presenting a claim for a municipal hospital or a public library or a municipal ambulance
282.9service, a hospital district, a private nonprofit hospital that leases its building from the
282.10county or city in which it is located, any public agency responsible for child support
282.11enforcement, any public agency responsible for the collection of court-ordered restitution,
282.12and any public agency established by general or special law that is responsible for the
282.13administration of a low-income housing program, and the Minnesota collection enterprise
282.14as defined in section16D.02, subdivision 8 , for the purpose of collecting the costs imposed
282.15under section16D.11 . A county may act as a claimant agency on behalf of an ambulance
282.16service licensed under chapter 144E if the ambulance service's primary service area is
282.17located at least in part within the county, but more than one county may not act as a
282.18claimant agency for a licensed ambulance service with respect to the same debt.
282.19 Sec. 13. Minnesota Statutes 2006, section 270A.10, is amended to read:
282.20270A.10 PRIORITY OF CLAIMS.
282.21 If two or more debts, in a total amount exceeding the debtor's refund, are submitted
282.22for setoff, the priority of payment shall be as follows:First, any
282.23 (1) delinquent tax obligations of the debtor which are owed to the departmentshall
282.24be satisfied. Secondly, the refund shall be applied to;
282.25 (2) debts for child support based on the order in time in which the commissioner
282.26received the debts. Thirdly, the refund shall be applied to;
282.27 (3) payment of restitution obligations. Fourthly, the refund shall be applied to;
282.28 (4) claims brought for a hospital or an ambulance service;
282.29 (5) the remaining debts based on the order in time in which the commissioner
282.30received the debts.
282.31 Sec. 14. Minnesota Statutes 2006, section 270C.03, subdivision 1, is amended to read:
283.1 Subdivision 1. Powers and duties. The commissioner shall have and exercise
283.2the following powers and duties:
283.3 (1) administer and enforce the assessment and collection of taxes;
283.4 (2) make determinations, corrections, and assessments with respect to taxes,
283.5including interest, additions to taxes, and assessable penalties;
283.6 (3) use statistical or other sampling techniques consistent with generally accepted
283.7auditing standards in examining returns or records and making assessments;
283.8 (4) investigate the tax laws of other states and countries, and formulate and submit
283.9to the legislature such legislation as the commissioner may deem expedient to prevent
283.10evasions of state revenue laws and to secure just and equal taxation and improvement in
283.11the system of state revenue laws;
283.12 (5) consult and confer with the governor upon the subject of taxation, the
283.13administration of the laws in regard thereto, and the progress of the work of the
283.14department, and furnish the governor, from time to time, such assistance and information
283.15as the governor may require relating to tax matters;
283.16 (6) execute and administer any agreement with the secretary of the treasury or the
283.17Bureau of Alcohol, Tobacco, Firearms, and Explosives in the Department of Justice of the
283.18United States or a representative of another state regarding the exchange of information
283.19and administration of the state revenue laws;
283.20 (7) require town, city, county, and other public officers to report information as to the
283.21collection of taxes received from licenses and other sources, and such other information
283.22as may be needful in the work of the commissioner, in such form as the commissioner
283.23may prescribe;
283.24 (8) authorize the use of unmarked motor vehicles to conduct seizures or criminal
283.25investigations pursuant to the commissioner's authority;and
283.26 (9) maintain toll-free telephone access for taxpayer assistance for calls from
283.27locations within the state; and
283.28 (10) exercise other powers and authority and perform other duties required of or
283.29imposed upon the commissioner by law.
283.30EFFECTIVE DATE.This section is effective January 1, 2008.
283.31 Sec. 15. [270C.21] TAXPAYER ASSISTANCE GRANTS.
283.32 When the commissioner awards grants to nonprofit organizations to coordinate,
283.33facilitate, encourage, and aid in the provision of taxpayer assistance services, the
283.34commissioner must provide public notice of the grants in a timely manner so that the
283.35grant process is completed and grants are awarded by October 1, in order for recipient
284.1organizations to adequately plan expenditures for the filing season. At the time the
284.2commissioner provides public notice, the commissioner must also notify nonprofit
284.3organizations that received grants in the previous biennium.
284.4EFFECTIVE DATE.This section is effective the day following final enactment.
284.5 Sec. 16. MINNESOTA FOOTBALL STADIUM TASK FORCE.
284.6 Subdivision 1. Creation; purpose. A Minnesota Football Stadium Task Force
284.7is created. The task force must evaluate the plan to redevelop the Metrodome site
284.8that includes a new multiuse stadium. The task force must analyze issues related to
284.9infrastructure, light rail transit, stadium development, and financing of the project. The
284.10task force must develop and present stadium financing options, and make a specific
284.11recommendation on a preferred finance plan.
284.12 Subd. 2. Membership. The subcommittee must consist of 15 members as follows:
284.13 (1) five members of the senate, including at least one member of the minority party,
284.14to be appointed by the Subcommittee on Committees of the senate Rules Committee;
284.15 (2) five members of the house of representatives, including at least one member of
284.16the minority party, to be appointed by the speaker of the house of representatives; and
284.17 (3) five members appointed by the governor, including the chair of the Metropolitan
284.18Sports Facilities Commission, who will be the chair of the task force.
284.19 Appointments must be made by June 15, 2007.
284.20 Subd. 3. Staff assistance. The Metropolitan Sports Facilities Commission will
284.21provide staff assistance and other resources to support the work of the task force.
284.22 Subd. 4. Initial meeting. The chair of the task force must convene the first meeting
284.23of the task force no later than June 15, 2007.
284.24 Subd. 5. Report. The task force shall provide a report to the governor and to the
284.25chairs of the committees on taxes of the senate and the house of representatives on its
284.26findings and recommendations by February 15, 2008.
284.27EFFECTIVE DATE.This section is effective the day following final enactment.
284.28 Sec. 17. DATA UPDATE.
284.29 The commissioner of revenue must continue to maintain, update, and make available
284.30the information required under Laws 1987, chapter 268, article 7, section 1, subdivision
284.316, paragraph (b). The commissioner must provide the most complete and current data
284.32available, when requested, to the chairs of the senate and house of representatives
284.33committees on taxes.
285.1 Sec. 18. FINANCIAL MANAGEMENT.
285.2 Notwithstanding the provisions of Minnesota Statutes, section 16A.1522,
285.3subdivision 4, the commissioner of finance shall designate any positive general fund
285.4budgetary balance on June 30, 2007, as an unrestricted balance. Money so designated shall
285.5remain available for general fund appropriations authorized in fiscal years 2008 and 2009.
285.6 Sec. 19. APPROPRIATIONS.
285.7 (a) $223,000 is appropriated for fiscal year 2008 from the general fund to the
285.8commissioner of revenue to administer this act.
285.9 (b) Of this amount:
285.10 (i) $150,000 in fiscal year 2008 is for the fiscal disparities study required under
285.11article 2; and
285.12 (ii) $73,000 in fiscal year 2008 is for administering 1099 reporting requirements
285.13under article 4.
285.14 (c) All of these appropriations are onetime and are not added to the agency's base
285.15budget.
285.16 Sec. 20. TAXPAYER ASSISTANCE SERVICES; APPROPRIATION.
285.17 (a) $75,000 in fiscal year 2008 and $75,000 in fiscal year 2009 are appropriated from
285.18the general fund to the commissioner of revenue to make grants to one or more nonprofit
285.19organizations, qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, to
285.20coordinate, facilitate, encourage, and aid in the provision of taxpayer assistance services.
285.21 (b) "Taxpayer assistance services" means accounting and tax preparation services
285.22provided by volunteers to low-income and disadvantaged Minnesota residents to help
285.23them file federal and state income tax returns and Minnesota property tax refund claims
285.24and may include provision of personal representation before the Department of Revenue
285.25and Internal Revenue Service.
285.26 Sec. 21. APPROPRIATION; ST. PAUL RIVER CENTRE DEBT SERVICE
285.27COSTS.
285.28 $2,000,000 is appropriated from the general fund to the commissioner of employment
285.29and economic development in fiscal year 2010 for a grant to the city of St. Paul to be used
285.30to pay, redeem, or refund debt service costs incurred for the River Centre Campus.
285.31 Sec. 22. REPEALER.
285.32(a) Minnesota Statutes 2006, section 16A.1522, is repealed.
286.1(b) If a bill styled as 2007 H.F. No. 548 is enacted and contains an appropriation
286.2that is the same as that set forth in section 20, section 20 is repealed the day following
286.3final enactment.
1.3policy, technical, administrative, enforcement, collection, refund, and other
1.4changes to income, franchise, property, sales and use, motor vehicle sales,
1.5cigarette and tobacco products, insurance premiums, aggregate removal,
1.6mortgage, deed, and production taxes, and other taxes and tax-related provisions;
1.7providing for aids to local governments; increasing maximum property tax
1.8refunds; requiring withholding; providing and modifying income tax credits;
1.9modifying taxation of certain compensation paid to nonresidents; modifying
1.10taxation of foreign operating corporations; modifying sales tax exemptions;
1.11modifying and authorizing local government taxes; prohibiting new local
1.12sales taxes; authorizing and modifying levies, property valuation procedures,
1.13homestead provisions, property tax classes, class rates, and tax bases; changing
1.14and providing property tax exemptions; changing JOBZ, border city allocation,
1.15tax increment financing, and economic development powers and incentives;
1.16changing provisions relating to fiscal disparities, budget forecasts, local impact
1.17notes, securities filing fees, state debt collection procedures, revenue recapture,
1.18sustainable forest incentives programs, and tax-forfeited lands; extending a
1.19petrofund fee exemption; imposing a surcharge on certain hockey admissions;
1.20expanding the aggregate tax and distribution of the proceeds; changing
1.21distributions of production tax proceeds; providing for purchase of forest lands;
1.22providing for higher education grants in the taconite assistance area; providing
1.23terms and conditions related to the issuance of obligations and the financing of
1.24public improvements and services; extending the time for certain publications of
1.25notices; authorizing and validating trusts to pay certain public postemployment
1.26benefits; changing and imposing powers, duties, and requirements on certain
1.27local governments and authorities and state departments or agencies; authorizing
1.28local governments to provide certain development incentives; providing rules
1.29for operation of certain tax increment financing districts; establishing a task
1.30force on metrodome site redevelopment; requiring studies; authorizing release
1.31of certain data; transferring money to the budget reserve account; appropriating
1.32money; amending Minnesota Statutes 2006, sections 3.987, subdivision 1;
1.333.988, subdivision 3; 3.989, subdivisions 2, 3; 16A.103, subdivisions 1a, 1b, 2;
1.3416A.152, subdivisions 1b, 2; 16D.04, subdivisions 1, 2; 16D.11, subdivisions
1.352, 7; 62I.06, subdivision 6; 71A.04, subdivision 1; 80A.28, subdivision 1, as
1.36amended; 80A.65, subdivision 1, as amended; 97A.061, subdivision 2; 118A.03,
1.37subdivision 3; 123B.61; 126C.41, subdivision 2; 127A.48, subdivision 2; 268.19,
1.38subdivision 1; 270.071, subdivision 7; 270.072, subdivisions 2, 3, 6; 270.074,
1.39subdivision 3; 270.076, subdivision 1; 270.41, subdivisions 1, 2, 3, 5, by adding
2.1a subdivision; 270.44; 270.45; 270.46; 270.47; 270.48; 270.50; 270A.03,
2.2subdivisions 2, 5; 270A.10; 270B.15; 270C.03, subdivision 1; 270C.306;
2.3270C.34, subdivision 1; 270C.446, subdivision 2; 270C.56, subdivision 1;
2.4270C.63, subdivision 9; 272.02, subdivision 64, by adding subdivisions; 272.115,
2.5subdivision 1; 273.05, by adding a subdivision; 273.111, subdivisions 3, 6, by
2.6adding subdivisions; 273.117; 273.121; 273.123, subdivisions 2, 3, 7; 273.124,
2.7subdivisions 13, 14, by adding a subdivision; 273.125, subdivision 8; 273.128,
2.8subdivision 1; 273.13, subdivisions 22, 23, 24, 25, 33, by adding a subdivision;
2.9273.1398, subdivision 4; 273.33, subdivision 2; 273.37, subdivision 2; 273.371,
2.10subdivision 1; 274.01, subdivision 1; 274.13, subdivision 1; 275.025, subdivision
2.113; 275.065, subdivisions 3, 5a, by adding a subdivision; 275.066; 275.067;
2.12275.61, subdivision 1; 276.04, by adding a subdivision; 276A.01, subdivision 3;
2.13276A.04; 277.01, subdivision 2; 278.05, subdivision 6; 279.01, subdivision 1;
2.14279.37, subdivision 1a; 280.39; 287.22; 287.2205; 289A.08, subdivisions 11, 13;
2.15289A.09, subdivision 2; 289A.12, subdivisions 4, 14, by adding a subdivision;
2.16289A.18, subdivision 1; 289A.40, subdivision 2; 289A.56, by adding a
2.17subdivision; 289A.60, subdivisions 8, 12, 25, 27, by adding subdivisions;
2.18290.01, subdivisions 6b, 19a, 19b, as amended, 19c, 19d; 290.06, subdivision
2.1933, by adding a subdivision; 290.067, subdivision 2b; 290.0671, subdivision
2.207; 290.0677, subdivision 1; 290.091, subdivision 3; 290.0921, subdivision 3;
2.21290.10; 290.17, subdivision 2; 290.191, subdivision 8; 290.34, by adding a
2.22subdivision; 290.92, by adding a subdivision; 290A.03, subdivision 7; 290A.04,
2.23subdivision 2; 290B.03, subdivision 2; 290C.02, subdivision 3; 290C.04;
2.24290C.05; 290C.07; 290C.11; 291.215, subdivision 1; 295.52, subdivisions 4,
2.254a; 295.54, subdivision 2; 297A.61, subdivisions 3, 4, 7, 10, 24, by adding
2.26subdivisions; 297A.63, subdivision 1; 297A.665; 297A.668, by adding a
2.27subdivision; 297A.669, subdivisions 3, 13, 14, by adding subdivisions; 297A.67,
2.28subdivisions 7, 8, 9; 297A.68, subdivisions 11, 16, 35; 297A.69, subdivision
2.292; 297A.70, subdivisions 7, 8, by adding a subdivision; 297A.71, subdivision
2.3023; 297A.72; 297A.90, subdivision 2; 297A.99, subdivision 1; 297B.03;
2.31297B.035, subdivision 1; 297F.06, subdivision 4; 297F.21, subdivision 3;
2.32297F.25, by adding a subdivision; 297I.06, subdivisions 1, 2; 297I.15, by adding
2.33a subdivision; 297I.20, subdivision 2; 297I.40, subdivision 5; 298.22, by adding
2.34a subdivision; 298.2214, subdivision 2; 298.227; 298.24, subdivision 1; 298.25;
2.35298.28, subdivisions 3, 4, 5, 6, 9a, by adding a subdivision; 298.292, subdivision
2.362; 298.296, subdivision 2; 298.2961, subdivisions 4, 5; 298.75, subdivisions 1, 3,
2.377, by adding a subdivision; 331A.05, subdivision 2; 360.031; 365A.02; 365A.04;
2.38365A.08; 365A.095; 373.01, subdivision 3; 373.40, subdivision 4; 375B.09;
2.39383A.80, subdivision 4; 383A.81, subdivisions 1, 2; 383B.117, subdivision
2.402; 383B.77, subdivisions 1, 2; 383B.80, subdivision 4; 410.32; 412.301;
2.41424A.10, subdivision 3; 435.193; 453A.02, subdivision 3; 469.169, by adding a
2.42subdivision; 469.1734, subdivision 6; 469.174, subdivisions 10, 10a; 469.175,
2.43subdivisions 1, 3; 469.176, subdivisions 1, 2, 4l, 7; 469.1761, subdivision
2.441; 469.1763, subdivision 2; 469.177, subdivision 1; 469.178, subdivision 7;
2.45469.1791, subdivision 3; 469.312, by adding a subdivision; 469.3201; 473.39,
2.46by adding subdivisions; 475.51, subdivision 4; 475.52, subdivision 6; 475.53,
2.47subdivision 1; 475.58, subdivisions 1, 3b; 477A.011, subdivision 36; 477A.0124,
2.48subdivision 5; 477A.013, subdivisions 1, 8, 9; 477A.03; 477A.12, subdivision 1;
2.49477A.14, subdivision 1; Laws 1973, chapter 393, section 1, as amended; Laws
2.501980, chapter 511, section 1, subdivision 2, as amended; Laws 1987, chapter
2.51168, section 2; Laws 1988, chapter 645, section 3, as amended; Laws 1989,
2.52chapter 211, section 8, subdivision 4, as amended; Laws 1993, chapter 375,
2.53article 9, section 45, subdivisions 2, as amended, 3, as amended, 4, as amended;
2.54Laws 1994, chapter 587, article 9, section 14, subdivisions 1, 2, 3; Laws 1995,
2.55chapter 264, article 5, sections 44, subdivision 4, as amended; 45, subdivision 1,
2.56as amended; Laws 1999, chapter 243, article 4, section 18, subdivisions 1, 3, 4;
2.57Laws 2003, chapter 128, article 1, section 172, as amended; Laws 2005, First
2.58Special Session chapter 3, article 5, section 39; article 10, section 23; Laws 2006,
3.1chapter 236, article 1, section 21; Laws 2006, chapter 259, article 11, section 3;
3.2proposing coding for new law in Minnesota Statutes, chapters 270; 270C; 273;
3.3274; 290C; 295; 297A; 360; 383C; 383D; 383E; 471; 475; repealing Minnesota
3.4Statutes 2006, sections 16A.1522; 126C.21, subdivision 4; 270.073; 270.41,
3.5subdivision 4; 270.43; 270.51; 270.52; 270.53; 295.60; 297A.61, subdivision
3.620; 297A.668, subdivision 6; 297A.67, subdivision 22; 469.174, subdivision 29;
3.7Laws 1973, chapter 393, section 2; Laws 1994, chapter 587, article 9, section 8,
3.8subdivision 1, as amended; Laws 1998, chapter 389, article 11, section 18.
3.9BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
3.12 Section 1. Minnesota Statutes 2006, section 290A.04, subdivision 2, is amended to
3.13read:
3.14 Subd. 2. Homeowners. A claimant whose property taxes payable are in excess
3.15of the percentage of the household income stated below shall pay an amount equal to
3.16the percent of income shown for the appropriate household income level along with the
3.17percent to be paid by the claimant of the remaining amount of property taxes payable.
3.18The state refund equals the amount of property taxes payable that remain, up to the state
3.19refund amount shown below.
| 3.20 3.21 |
Household Income |
Percent of Income |
Percent Paid by Claimant |
Maximum State Refund |
4.34under this subdivision. No payment is allowed if the claimant's household income is
4.35$77,520 or more.
4.36EFFECTIVE DATE.This section is effective beginning with refunds based on
4.37property taxes payable in 2008.
4.38 Sec. 2. Minnesota Statutes 2006, section 477A.011, subdivision 36, is amended to read:
4.39 Subd. 36. City aid base. (a) Except as otherwise provided in this subdivision,
4.40"city aid base" is zero.
4.41 (b) The city aid base for any city with a population less than 500 is increased by
4.42$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
5.1of total aid it may receive under section
5.2increased by $40,000 for aids payable in calendar year 1995 only, provided that:
5.3 (i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;
5.4 (ii) the city portion of the tax capacity rate exceeds 100 percent; and
5.5 (iii) its city aid base is less than $60 per capita.
5.6 (c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
5.7the maximum amount of total aid it may receive under section
5.8paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:
5.9 (i) the city has a population in 1994 of 2,500 or more;
5.10 (ii) the city is located in a county, outside of the metropolitan area, which contains a
5.11city of the first class;
5.12 (iii) the city's net tax capacity used in calculating its 1996 aid under section
5.14 (iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
5.15property located in the city is classified as railroad property.
5.16 (d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
5.17the maximum amount of total aid it may receive under section
5.18paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:
5.19 (i) the city was incorporated as a statutory city after December 1, 1993;
5.20 (ii) its city aid base does not exceed $5,600; and
5.21 (iii) the city had a population in 1996 of 5,000 or more.
5.22 (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
5.23maximum amount of total aid it may receive under section
5.24paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
5.25 (i) the city had a population in 1996 of at least 50,000;
5.26 (ii) its population had increased by at least 40 percent in the ten-year period ending
5.27in 1996; and
5.28 (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
5.29 (f) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
5.30thereafter, and the maximum amount of total aid it may receive under section
5.31subdivision 9
5.32provided that:
5.33 (1) the city has a population that is greater than 1,000 and less than 2,500;
5.34 (2) its commercial and industrial percentage for aids payable in 1999 is greater
5.35than 45 percent; and
6.1 (3) the total market value of all commercial and industrial property in the city
6.2for assessment year 1999 is at least 15 percent less than the total market value of all
6.3commercial and industrial property in the city for assessment year 1998.
6.4 (g) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
6.5the maximum amount of total aid it may receive under section
6.6paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:
6.7 (1) the city had a population in 1997 of 2,500 or more;
6.8 (2) the net tax capacity of the city used in calculating its 1999 aid under section
6.10 (3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
6.11section
6.12 (4) the 1999 local government aid of the city under section
6.1320 percent of the amount that the formula aid of the city would have been if the need
6.14increase percentage was 100 percent; and
6.15 (5) the city aid base of the city used in calculating aid under section
6.16is less than $7 per capita.
6.17 (h) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
6.18the maximum amount of total aid it may receive under section
6.19paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:
6.20 (1) the city has a population in 1997 of 2,000 or more;
6.21 (2) the net tax capacity of the city used in calculating its 1999 aid under section
6.23 (3) the net levy of the city used in calculating 1999 aid under section
6.24greater than $195 per capita; and
6.25 (4) the 1999 local government aid of the city under section
6.2638 percent of the amount that the formula aid of the city would have been if the need
6.27increase percentage was 100 percent.
6.28 (i) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
6.29the maximum amount of total aid it may receive under section
6.30paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:
6.31 (1) the city has a population in 1998 that is greater than 200 but less than 500;
6.32 (2) the city's revenue need used in calculating aids payable in 2000 was greater
6.33than $200 per capita;
6.34 (3) the city net tax capacity for the city used in calculating aids available in 2000
6.35was equal to or less than $200 per capita;
7.1 (4) the city aid base of the city used in calculating aid under section
7.2is less than $65 per capita; and
7.3 (5) the city's formula aid for aids payable in 2000 was greater than zero.
7.4 (j) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
7.5the maximum amount of total aid it may receive under section
7.6paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:
7.7 (1) the city had a population in 1998 that is greater than 200 but less than 500;
7.8 (2) the city's commercial industrial percentage used in calculating aids payable in
7.92000 was less than ten percent;
7.10 (3) more than 25 percent of the city's population was 60 years old or older according
7.11to the 1990 census;
7.12 (4) the city aid base of the city used in calculating aid under section
7.13is less than $15 per capita; and
7.14 (5) the city's formula aid for aids payable in 2000 was greater than zero.
7.15 (k) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
7.16by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
7.17total aid it may receive under section
7.18increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
7.19only, provided that:
7.20 (1) the net tax capacity of the city used in calculating its 2000 aid under section
7.22 (2) the population of the city declined more than two percent between 1988 and 1998;
7.23 (3) the net levy of the city used in calculating 2000 aid under section
7.24greater than $240 per capita; and
7.25 (4) the city received less than $36 per capita in aid under section
7.26subdivision 9
7.27 (l) The city aid base for a city with a population of 10,000 or more which is located
7.28outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
7.29maximum amount of total aid it may receive under section
7.30paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
7.31the lesser of:
7.32 (1)(i) the total population of the city, as determined by the United States Bureau of
7.33the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or
7.34 (2) $2,500,000.
8.1 (m) The city aid base is increased by $50,000 in 2002 and thereafter, and the
8.2maximum amount of total aid it may receive under section
8.3paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:
8.4 (1) the city is located in the seven-county metropolitan area;
8.5 (2) its population in 2000 is between 10,000 and 20,000; and
8.6 (3) its commercial industrial percentage, as calculated for city aid payable in 2001,
8.7was greater than 25 percent.
8.8 (n) The city aid base for a city is increased by $150,000 in calendar years 2002 to
8.92011 and by an additional $75,000 in calendar years 2008 to 2013 and the maximum
8.10amount of total aid it may receive under section
8.11also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
8.122008 only, provided that:
8.13 (1) the city had a population of at least 3,000 but no more than 4,000 in 1999;
8.14 (2) its home county is located within the seven-county metropolitan area;
8.15 (3) its pre-1940 housing percentage is less than 15 percent; and
8.16 (4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
8.17per capita.
8.18 (o) The city aid base for a city is increased by $200,000 beginning in calendar
8.19year 2003 and the maximum amount of total aid it may receive under section
8.20subdivision 9
8.21provided that the city qualified for an increase in homestead and agricultural credit aid
8.22under Laws 1995, chapter 264, article 8, section 18.
8.23 (p) The city aid base for a city is increased by $200,000 in 2004 only and the
8.24maximum amount of total aid it may receive under section
8.25also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
8.26dry cask storage facility.
8.27 (q) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
8.28maximum total aid it may receive under section
8.29by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
8.30designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
8.31more than 40 percent between 1990 and 2000.
8.32 (r) The city aid base for a city is increased by
8.332008 and thereafter and the maximum total aid it may receive under section
8.34subdivision 9
8.35had a population in 2003 of at least 1,000 and has a state park for which the city provides
9.1rescue services and which comprised at least 14 percent of the total geographic area
9.2included within the city boundaries in 2000.
9.3 (s) The city aid base for a city with a population less than 5,000 is increased in
9.42006 and thereafter and the minimum and maximum amount of total aid it may receive
9.5under this section is also increased in calendar year 2006 only by an amount equal to
9.6$6 multiplied by its population.
9.7 (t) The city aid base for a city is increased by $80,000 in 2007
9.8the minimum and maximum amount of total aid it may receive under section
9.9subdivision 9, is also increased by $80,000 in calendar year 2007 only, if:
9.10 (1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
9.11to be placed in trust status as tax-exempt Indian land;
9.12 (2) the placement of the land is being challenged administratively or in court; and
9.13 (3) due to the challenge, the land proposed to be placed in trust is still on the tax
9.14rolls as of May 1, 2006.
9.15 (u) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
9.16the minimum and maximum total amount of aid it may receive under this section is also
9.17increased in calendar year 2007 only, provided that:
9.18 (1) the city has a 2004 estimated population greater than 200 but less than 2,000;
9.19 (2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;
9.20 (3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
9.21payable in 2006 was greater than 110 percent; and
9.22 (4) it is located in a county where at least 15,000 acres of land are classified as
9.23tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.
9.24 (v) The city aid base for a city is increased by $30,000 in 2008 only, and the
9.25maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
9.26by $30,000 in calendar year 2008 only if the city had a population in 2005 of less than
9.273,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
9.28and one township in 2002.
9.29 (w) The city aid base for a city is increased by $100,000 in 2008 and thereafter, and
9.30the maximum total aid it may receive under section 477A.013, subdivision 9, is also
9.31increased by $100,000 in calendar year 2008 only if the city had a city net tax capacity for
9.32aids payable in 2007 of less than $150 per capita and the city experienced flooding on
9.33March 14, 2007, that resulted in evacuation of at least 40 homes.
9.34 (x) The city aid base for a city is increased by $200,000 in 2008 through 2012, and
9.35the maximum total aid it may receive under section 477A.013, subdivision 9, is also
9.36increased by $200,000 in calendar year 2008 only if the city:
10.1 (i) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
10.2area;
10.3 (ii) has a 2005 population greater than 7,000 but less than 8,000; and
10.4 (iii) has a 2005 net tax capacity per capita of less than $500.
10.5EFFECTIVE DATE.This section is effective for sales and purchases made after
10.6June 30, 2007.
10.7 Sec. 3. Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:
10.8 Subd. 5. County transition aid. (a) For 2005, a county is eligible for transition
10.9aid equal to the amount, if any, by which:
10.10 (1) the difference between:
10.11 (i) the aid the county received under subdivision 1 in 2004, divided by the total aid
10.12paid to all counties under subdivision 1, multiplied by $205,000,000; and
10.13 (ii) the amount of aid the county is certified to receive in 2005 under subdivisions
10.143 and 4;
10.15exceeds:
10.16 (2) three percent of the county's adjusted net tax capacity.
10.17A county's aid under this paragraph may not be less than zero.
10.18 (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received
10.19in 2005.
10.20 (c) In 2007 and subsequent years, a county is eligible to receive one-third of the
10.21transition aid it received in 2005.
10.22
10.23county with (1) a 2005 population greater than 10,000 and less than 29,000, and (2) an
10.24average Part I crimes per capita greater than 3.6 percent for aids payable in 2007 shall
10.25receive $250,000.
10.26 Sec. 4. Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read:
10.27 Subdivision 1. Towns.
10.28eligible for a distribution under this subdivision equal to 20 percent of the amount of
10.29homestead and agricultural credit aid reimbursement it received under Minnesota Statutes
10.302000, section 273.1398, in calendar year 2001.
10.31 Sec. 5. Minnesota Statutes 2006, section 477A.013, subdivision 8, is amended to read:
11.1 Subd. 8. City formula aid. In calendar year 2004 and subsequent years, the
11.2formula aid for a city is equal to the need increase percentage multiplied by the difference
11.3between (1) the city's revenue need multiplied by its population, and (2)
11.4city's net tax capacity multiplied by the tax effort rate
11.5
11.6
11.7
11.8
11.9
11.10
11.11
11.12
11.13
11.14
11.15No city may have a formula aid amount less than zero. The need increase percentage
11.16must be the same for all cities.
11.17 The applicable need increase percentage must be calculated by the Department of
11.18Revenue so that the total of the aid under subdivision 9 equals the total amount available
11.19for aid under section
11.204 and 5
11.21EFFECTIVE DATE.This section is effective beginning with aids payable in 2008.
11.22 Sec. 6. Minnesota Statutes 2006, section 477A.013, subdivision 9, is amended to read:
11.23 Subd. 9. City aid distribution. (a) In calendar year
11.24city shall receive an aid distribution equal to the sum of (1) the city formula aid under
11.25subdivision 8,
11.26aid in the previous year under this section and its city aid base in the previous year. For aids
11.27payable in 2009 and thereafter, each city shall receive an aid distribution equal to the sum
11.28of (1) the city formula aid under subdivision 8, (2) its city aid base, and (3) its formula aid
11.29under subdivision 8 in the previous year, prior to any adjustments under this subdivision.
11.30 (b) For aids payable in 2008, the total aid for any city shall not exceed the sum of (1)
11.3130 percent of its net levy for the year prior to the aid distribution plus (2) its total aid in the
11.32previous year. For aids payable in
11.33not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid
11.34distribution plus (2) its total aid in the previous year. For aids payable in
12.1thereafter, the total aid for any city with a population of 2,500 or more may not
12.2
12.3
12.4levy in the year prior to the aid distribution.
12.5 (c)
12.6
12.7
12.8
12.92008 and thereafter, the total aid for a city with a population less than 2,500 must not be
12.10less than the amount it was certified to receive in the previous year minus the lesser of (1)
12.11$15 multiplied by its population, or (2) five percent of its 2003 certified aid amount.
12.12 (d) If a city's net tax capacity used in calculating aid under this section has decreased
12.13in any year by more than 25 percent from its net tax capacity in the previous year due to
12.14property becoming tax-exempt Indian land, the city's maximum allowed aid increase
12.15under paragraph (b) shall be increased by an amount equal to (1) the city's tax rate in the
12.16year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
12.17resulting from the property becoming tax exempt.
12.18EFFECTIVE DATE.This section is effective for aids payable in 2008 and
12.19thereafter.
12.20 Sec. 7. Minnesota Statutes 2006, section 477A.03, is amended to read:
12.21477A.03 APPROPRIATION.
12.22 Subd. 2. Annual appropriation. A sum sufficient to discharge the duties imposed
12.23by sections
12.24commissioner of revenue.
12.25 Subd. 2a. Cities.
12.26
12.27
12.28aids payable in
12.29subdivision 9
12.30 Subd. 2b. Counties. (a) For aids payable in calendar year
12.31the total aids paid to counties under section
12.32
12.33commissioner of revenue to make reimbursements to the commissioner of finance
12.34for payments made under section
13.1
13.2
13.3appropriation under this paragraph. The reimbursements shall be to defray the additional
13.4costs associated with court-ordered counsel under section
13.5not used for reimbursement in a year shall be included in the next distribution of county
13.6need aid that is certified to the county auditors for the purpose of property tax reduction
13.7for the next taxes payable year.
13.8 (b)
13.9
13.10under section
13.11commissioner of finance shall bill the commissioner of revenue for the cost of preparation
13.12of local impact notes as required by section
13.132004 and thereafter. The commissioner of education shall bill the commissioner of
13.14revenue for the cost of preparation of local impact notes for school districts as required by
13.15section
13.16of revenue shall deduct the amounts billed under this paragraph from the appropriation
13.17under this paragraph. The amounts deducted are appropriated to the commissioner of
13.18finance and the commissioner of education for the preparation of local impact notes.
13.19EFFECTIVE DATE.This section is effective for aids payable in calendar year
13.202008 and thereafter.
13.21 Sec. 8. Minnesota Statutes 2006, section 477A.12, subdivision 1, is amended to read:
13.22 Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred
13.23by counties and towns in support of natural resources lands, the following amounts are
13.24annually appropriated to the commissioner of natural resources from the general fund for
13.25transfer to the commissioner of revenue. The commissioner of revenue shall pay the
13.26transferred funds to counties as required by sections
13.27are:
13.28 (1) for acquired natural resources land, $3, as adjusted for inflation under section
13.30at the county's option three-fourths of one percent of the appraised value of all acquired
13.31natural resources land in the county, whichever is greater;
13.32 (2) 75 cents, as adjusted for inflation under section
13.33number of acres of county-administered other natural resources land;
13.34 (3)
13.35the total number of acres of land utilization project land that is located entirely within a
14.1wildlife management area as described in section 86A.05, subdivision 8; and 75 cents, as
14.2adjusted for inflation under section 477A.145, multiplied by the total number of acres of
14.3land utilization project land not located within a wildlife management area; and
14.4 (4) 37.5 cents, as adjusted for inflation under section
14.5number of acres of commissioner-administered other natural resources land located in
14.6each county as of July 1 of each year prior to the payment year.
14.7 (b) The amount determined under paragraph (a), clause (1), is payable for land
14.8that is acquired from a private owner and owned by the Department of Transportation
14.9for the purpose of replacing wetland losses caused by transportation projects, but only
14.10if the county contains more than 500 acres of such land at the time the certification is
14.11made under subdivision 2.
14.12EFFECTIVE DATE.This section is effective for payments in 2008 and thereafter.
14.13 Sec. 9. Minnesota Statutes 2006, section 477A.14, subdivision 1, is amended to read:
14.14 Subdivision 1. General distribution. Except as provided in subdivision 2 or in
14.15section
14.16deposited in the county general revenue fund to be used to provide property tax levy
14.17reduction. The remainder shall be distributed by the county in the following priority:
14.18 (a) 37.5 cents, as adjusted for inflation under section
14.19of county-administered other natural resources land shall be deposited in a resource
14.20development fund to be created within the county treasury for use in resource
14.21development, forest management, game and fish habitat improvement, and recreational
14.22development and maintenance of county-administered other natural resources land. Any
14.23county receiving less than $5,000 annually for the resource development fund may elect to
14.24deposit that amount in the county general revenue fund;
14.25 (b) From the funds remaining, within 30 days of receipt of the payment to the county,
14.26the county treasurer shall pay each organized township 30 cents, as adjusted for inflation
14.27under section
14.28land utilization project land located entirely within a wildlife management area, and each
14.29acre of land described in section
14.30adjusted for inflation under section
14.31and each acre of land utilization project land not located within a wildlife management
14.32area, located within its boundaries. Payments for natural resources lands not located in
14.33an organized township shall be deposited in the county general revenue fund. Payments
14.34to counties and townships pursuant to this paragraph shall be used to provide property
14.35tax levy reduction, except that of the payments for natural resources lands not located in
15.1an organized township, the county may allocate the amount determined to be necessary
15.2for maintenance of roads in unorganized townships. Provided that, if the total payment
15.3to the county pursuant to section
15.4provided for in this clause, the amount available shall be distributed to each township and
15.5the county general revenue fund on a pro rata basis; and
15.6 (c) Any remaining funds shall be deposited in the county general revenue fund.
15.7Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
15.8excess shall be used to provide property tax levy reduction.
15.9EFFECTIVE DATE.This section is effective for payments in 2008 and thereafter.
15.10 Sec. 10. Laws 2006, chapter 259, article 11, section 3, is amended to read:
15.11 Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
15.12PROPERTY TAX REIMBURSEMENT
15.13 Subdivision 1. Aid appropriation. $600,000 is appropriated annually from the
15.14general fund to the commissioner of revenue to be used to make payments to compensate
15.15for the loss of property tax revenue due to the placement of land located in the city of
15.16Mahnomen that was put in trust status by the United Stated Department of the Interior,
15.17Bureau of Indian Affairs, during calendar year 2006. The commissioner shall pay the
15.18county of Mahnomen, $450,000; the city of Mahnomen, $80,000; and Independent School
15.19District No. 432, Mahnomen, $70,000, provided that these payments shall be reduced
15.20in 2007 and any subsequent year by the amount, if any, of payments to that political
15.21subdivision made during the previous calendar year by the owner of the land that was
15.22placed in trust. The payments shall be made on July 20
15.23 Subd. 2. School district tax base adjustments. The Department of Revenue
15.24must reduce the referendum market value and the adjusted net tax capacity
15.25
15.26subsequent years for Independent School District No. 432, Mahnomen, by the amounts of
15.27any values attributable to property that is no longer subject to property taxation because
15.28the land has been placed in trust in calendar year 2006 through action of the United States
15.29Department of Interior, Bureau of Indian Affairs. The Mahnomen County auditor must
15.30certify the reductions in value to the Department of Revenue in the form and manner
15.31specified by the Department of Revenue.
15.32 Sec. 11. MAHNOMEN COUNTY; CITY, COUNTY, AND SCHOOL DISTRICT
15.33TAX BASE ADJUSTMENTS.
16.1 (a) The commissioner of revenue must reduce the referendum market value and
16.2adjusted net tax capacity used to calculate school levies beginning with taxes payable in
16.32008 and subsequent years for Independent School District No. 432, Mahnomen, by the
16.4amounts attributable to the property that is pending placement into trust status by the
16.5United States Department of the Interior, Bureau of Indian Affairs. This adjustment shall
16.6be made for each assessment year that the property remains on the tax rolls.
16.7 (b) The commissioner of revenue must reduce the county and city net tax capacities
16.8used to calculate aids under sections 477A.011 to 477A.03, beginning with aids payable in
16.92008 for the county of Mahnomen and the city of Mahnomen, by the amounts attributable
16.10to property that is pending placement into trust status by the United States Department of
16.11the Interior, Bureau of Indian Affairs. This adjustment shall be made for each assessment
16.12year that the property remains on the tax rolls.
16.13EFFECTIVE DATE.This section is effective for aids and levies payable in 2008
16.14and thereafter.
16.15 Sec. 12. GRAND MARAIS FIRE AID.
16.16 $250,000 is appropriated in fiscal years 2008 and 2009 from the general fund to the
16.17commissioner of revenue to be paid to the city of Grand Marais for costs related to the
16.18Ham Lake fire of 2007.
16.19 Sec. 13. STATE AID TRANSITION RESERVE.
16.20 Subdivision 1. Reserve account. A state aid transition reserve account is established
16.21in the general fund to provide two additional years of transition funding for county
16.22program aid and local government aid.
16.23 Subd. 2. Transfer to account. On June 29, 2009, the commissioner of finance shall
16.24transfer $80,629,000 from the general fund to the state aid transition reserve account.
16.25 Subd. 3. Transfer to general fund. On July 1, 2009, the commissioner of finance
16.26shall transfer the balance in the state aid transition reserve account to the general fund.
16.27 Subd. 4. Expiration date. This section expires July 2, 2009.
16.30 Section 1. Minnesota Statutes 2006, section 97A.061, subdivision 2, is amended to
16.31read:
17.1 Subd. 2. Allocation. (a) Except as provided in subdivision 3, the county treasurer
17.2shall allocate the payment among the county, towns, and school districts on the same basis
17.3as if the payments were taxes on the land received in the year. Payment of a town's or a
17.4school district's allocation must be made by the county treasurer to the town or school
17.5district within 30 days of receipt of the payment to the county. The county's share of the
17.6payment shall be deposited in the county general revenue fund.
17.7 (b) The county treasurer of a county with a population over 39,000 but less than
17.842,000 in the 1950 federal census shall allocate the payment only among the towns and
17.9school districts on the same basis as if the payments were taxes on the lands received
17.10in the current year.
17.11 (c) If a town received a payment in calendar year 2006 or thereafter under this
17.12subdivision, and subsequently incorporated as a city, the city will continue to receive any
17.13future year's allocations that would have been made to the town had it not incorporated,
17.14provided that the payments will terminate if the governing body of the city passes an
17.15ordinance that prohibits hunting within the boundaries of the city.
17.16EFFECTIVE DATE.This section is effective for aid payments made in 2007
17.17and thereafter.
17.18 Sec. 2. Minnesota Statutes 2006, section 126C.41, subdivision 2, is amended to read:
17.19 Subd. 2. Retired employee health benefits. A district may levy an amount up to the
17.20amount the district is required by the collective bargaining agreement in effect on March
17.2130, 1992, to pay for health insurance or unreimbursed medical expenses for licensed
17.22and nonlicensed employees who have terminated services in the employing district and
17.23withdrawn from active teaching service or other active service, as applicable, before July 1,
17.241992, or in the case of a school district located within the taconite tax relief area defined in
17.25section 273.134, before July 1, 1998, if a sunset clause is in effect for the current collective
17.26bargaining agreement. The total amount of the levy each year may not exceed $600,000.
17.27 Sec. 3. Minnesota Statutes 2006, section 127A.48, subdivision 2, is amended to read:
17.28 Subd. 2. Methodology. In making its annual assessment/sales ratio studies, the
17.29Department of Revenue must use a methodology consistent with the most recent Standard
17.30on Assessment Ratio Studies published by the assessment standards committee of the
17.31International Association of Assessing Officers. The commissioner of revenue shall
17.32supplement this general methodology with specific procedures necessary for execution of
17.33the study in accordance with other Minnesota laws impacting the assessment/sales ratio
17.34study. The commissioner shall document these specific procedures in writing and shall
18.1publish the procedures in the State Register, but these procedures will not be considered
18.2"rules" pursuant to the Minnesota Administrative Procedure Act. When property is
18.3sold and the purchaser changes its use in a manner that would result in a change of
18.4classification of the property, the assessment sales ratio study under this subdivision must
18.5take into account that changed classification as soon as practicable. A change in status
18.6from homestead to nonhomestead or from nonhomestead to homestead is not a change
18.7under this subdivision. For purposes of this section, sections
18.8clause (8), and
18.9the assessment/sales ratio study the sale of any nonagricultural property which does not
18.10contain an improvement, if (1) the statutory basis on which the property's taxable value
18.11as most recently assessed is less than market value as defined in section
18.12the property has undergone significant physical change or a change of use since the most
18.13recent assessment.
18.14EFFECTIVE DATE.This section is effective the day following final enactment.
18.15 Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
18.16to read:
18.17 Subd. 85. Modular homes used as models by dealers. (a) A modular home
18.18is exempt if it:
18.19 (1) is owned by a modular home dealer and is located on land owned or leased
18.20by that dealer;
18.21 (2) is a single-family model home;
18.22 (3) is not available for sale and is used exclusively as a model;
18.23 (4) is not permanently connected to any utilities except electricity; and
18.24 (5) is situated on a temporary foundation.
18.25 (b) The exemption under this subdivision is allowable for up to five assessment
18.26years after the date it becomes located on the property, provided that the modular home
18.27continues to meet all of the criteria under this subdivision each year. The owner of a
18.28modular model home must notify the county assessor within 60 days that it has been
18.29constructed or located on the property and must again notify the assessor if the modular
18.30home ceases to meet any of the criteria. If more than one modular home is constructed or
18.31situated on a property, the owner must notify the assessor within 60 days for each of the
18.32models placed on the property.
18.33 (c) For purposes of this subdivision, a "modular home" means a building or
18.34structural unit that has been in whole or substantial part manufactured or constructed at an
18.35off-site location to be wholly or partially assembled on-site as a single family dwelling.
19.1Construction of the modular home must comply with applicable standards adopted in
19.2Minnesota Rules authorized under Minnesota Statutes, chapter 16B. A modular home does
19.3not include a structure subject to the requirements of the National Manufactured Home
19.4Construction and Safety Standards Act of 1974 or prefabricated buildings, as defined in
19.5Minnesota Statutes, section 327.31, subdivision 6.
19.6EFFECTIVE DATE.This section is effective for assessment year 2007 and
19.7thereafter, for taxes payable in 2008 and thereafter. The five-year assessment time period
19.8begins with the 2007 assessment for a modular model home currently situated provided
19.9it meets all of the criteria and the county assessor is notified within 90 days of the day
19.10following final enactment.
19.11 Sec. 5. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
19.12to read:
19.13 Subd. 86. Electric generation facility; personal property. (a) Notwithstanding
19.14subdivision 9, clause (a), attached machinery and other personal property which is part of
19.15a simple-cycle combustion-turbine electric generation facility that exceeds 150 megawatts
19.16of installed capacity and that meets the requirements of this subdivision is exempt. At
19.17the time of construction, the facility must:
19.18 (1) utilize natural gas as a primary fuel;
19.19 (2) be owned by an electric generation and transmission cooperative;
19.20 (3) be located within one mile of an existing 16-inch natural gas pipeline and a
19.2169-kilovolt and a 230-kilovolt high-voltage electric transmission line;
19.22 (4) be designed to provide peaking, emergency backup, or contingency services;
19.23 (5) have received a certificate of need under section 216B.243 demonstrating
19.24demand for its capacity; and
19.25 (6) have received by resolution the approval from the governing bodies of the county
19.26and the city in which the proposed facility is to be located for the exemption of personal
19.27property under this subdivision.
19.28 (b) Construction of the facility must be commenced after January 1, 2008, and
19.29before January 1, 2012. Property eligible for this exemption does not include electric
19.30transmission lines and interconnections or gas pipelines and interconnections appurtenant
19.31to the property or the facility.
19.32EFFECTIVE DATE.This section is effective for the 2007 assessment payable in
19.332008 and thereafter.
20.1 Sec. 6. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
20.2to read:
20.3 Subd. 87. Apprenticeship training facilities. All or a portion of a property is
20.4exempt if: (1) the property is used exclusively for a state-approved apprenticeship program
20.5through the Department of Labor and Industry, (2) the property is owned and operated by
20.6a nonprofit corporation, and (3) the program participants receive no compensation.
20.7EFFECTIVE DATE.This section is effective for assessment year 2007 and
20.8thereafter, for taxes payable in 2008 and thereafter.
20.9 Sec. 7. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
20.10to read:
20.11 Subd. 88. Monosloped roofs for feedlots and manure storage areas. A
20.12monosloped, single-pitched roof installed over a feedlot or manure storage area to prevent
20.13runoff is exempt.
20.14EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
20.15payable in 2008, and thereafter.
20.16 Sec. 8. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
20.17 Subdivision 1. Requirement. Except as otherwise provided in subdivision 5,
20.18whenever any real estate is sold for a consideration in excess of $1,000, whether by
20.19warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
20.20grantee or the legal agent of either shall file a certificate of value with the county
20.21auditor in the county in which the property is located when the deed or other document
20.22is presented for recording. Contract for deeds are subject to recording under section
20.24the full actual consideration thereof, paid or to be paid, including the amount of any lien
20.25or liens assumed. The items and value of personal property transferred with the real
20.26property must be listed and deducted from the sale price. The certificate of value shall
20.27include the classification to which the property belongs for the purpose of determining
20.28the fair market value of the property, and shall include any proposed change in use of the
20.29property known to the person filing the certificate that could change the classification
20.30of the property. The certificate shall include financing terms and conditions of the sale
20.31which are necessary to determine the actual, present value of the sale price for purposes
20.32of the sales ratio study. If the property is being acquired as part of a like-kind exchange
20.33under section 1031 of the Internal Revenue Code of 1986, as amended through December
21.131, 2006, that must be indicated on the certificate. The commissioner of revenue shall
21.2promulgate administrative rules specifying the financing terms and conditions which must
21.3be included on the certificate. Pursuant to the authority of the commissioner of revenue in
21.4section
21.5federal employer identification number of the grantors and grantees. The identification
21.6numbers of the grantors and grantees are private data on individuals or nonpublic data
21.7as defined in section
21.8private or nonpublic data may be disclosed to the commissioner of revenue for purposes of
21.9tax administration. The information required to be shown on the certificate of value is
21.10limited to the information required as of the date of the acknowledgment on the deed or
21.11other document to be recorded.
21.12EFFECTIVE DATE.This section is effective for certificates filed after June 30,
21.132007.
21.14 Sec. 9. Minnesota Statutes 2006, section 273.111, subdivision 6, is amended to read:
21.15 Subd. 6. Agricultural use. Real property qualifying under subdivision 3 shall be
21.16considered to be in agricultural use provided that
21.17 (1) in at least one of the three calendar years preceding the assessment year;
21.18
21.19
21.20
21.21value determined under subdivision 16 for the county where the property is located for
21.22the previous assessment year, multiplied by the number of acres in the parcel subject to
21.23this section; or
21.24 (ii) the amount of total farm expenses shown on Schedule F of the property owner's
21.25federal income tax return exceeds 25 percent of the federal adjusted gross income of the
21.26owner for federal tax purposes; and
21.27 (2) it is devoted to the production for sale of agricultural products as defined in
21.28section
21.29 In this subdivision, "total production income" means gross income as reported
21.30for federal income tax purposes on Schedule F for the calendar year ending in the year
21.31preceding the assessment year, plus rental income from the property.
21.32 Slough, wasteland, and woodland contiguous to or surrounded by land that is entitled
21.33to valuation and tax deferment under this section is considered to be in agricultural use if
21.34under the same ownership and management.
22.1EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
22.22009 and thereafter, provided that property that qualified under Minnesota Statutes 2006,
22.3section 273.111, for the 2007 assessment shall not be disqualified in any of the assessment
22.4years 2008 to 2012 because of a failure to meet the requirements of this section.
22.5 Sec. 10. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
22.6to read:
22.7 Subd. 16. Agricultural value determination. (a) In order to account for the
22.8presence of nonagricultural influences that may affect the sales of agricultural land, the
22.9commissioner of revenue shall develop a fair and uniform method of determining, for
22.10each county in the state, an agricultural value that is consistent with subdivision 4. The
22.11commissioner shall annually assign the resulting agricultural value to each county, and
22.12this value shall be used as the agricultural value for the county under this section.
22.13 (b) When property classified as agricultural is sold and the purchaser changes its use
22.14in a manner that would result in a change of classification of the property, and the sale
22.15price exceeds the agricultural value determined under paragraph (a), the assessor and
22.16the commissioner must review the sale along with other appropriate sales information
22.17to determine if there are nonagricultural influences on the value. If upon review it is
22.18determined that nonagricultural factors have affected the value, the resulting sales ratio
22.19shall be excluded from use in any study measuring agricultural value and applied to a
22.20study measuring market value.
22.21EFFECTIVE DATE.This section is effective for taxes levied in 2009, payable in
22.222010 and thereafter.
22.23 Sec. 11. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
22.24to read:
22.25 Subd. 17. Implementation of program. This section must be applied to eligible
22.26properties by all county assessors, beginning no later than assessments for taxes levied
22.27in 2008, payable in 2009, and thereafter, unless the commissioner of revenue determines
22.28that a county is unable to comply with this requirement, in which case the county must
22.29implement it for the earliest assessment year determined by the commissioner to be
22.30feasible.
22.31 Sec. 12. Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
22.32to read:
23.1 Subd. 18. Applications; denied by county. For applications filed for the 2007 and
23.22008 assessment years, all applications for deferment of taxes and assessment under this
23.3section that have been denied by the county shall be forwarded to the commissioner of
23.4revenue by the county assessor within 30 days of denial. The assessor shall also provide
23.5the commissioner with a list of any property owners that requested an application and
23.6were denied, including names and addresses, and the reason for the denial. For the
23.7purpose of monitoring compliance with this section, the commissioner shall compile a
23.8report identifying all denied applications and requests for applications that were denied,
23.9the reason for the denial, and any commissioner action or recommendation. A report must
23.10be submitted to the chairs of the house and senate tax committees on or before February
23.111, 2008, and February 1, 2009, in compliance with Minnesota Statutes, sections 3.195
23.12and 3.197.
23.13EFFECTIVE DATE.This section is effective the day following final enactment.
23.14 Sec. 13. Minnesota Statutes 2006, section 273.123, subdivision 7, is amended to read:
23.15 Subd. 7. Local option; other property. The owner of homestead property
23.16not qualifying for an adjustment in valuation pursuant to subdivisions 1 to 5 or of
23.17nonhomestead property may receive a reduction in the amount of taxes payable on the
23.18property for the year in which the destruction occurs and in the following year if:
23.19 (a) 50 percent or more of the homestead dwelling or other structure, as established
23.20by the county assessor, is:
23.21 (1) unintentionally or accidentally destroyed, or
23.22 (2) destroyed by arson or vandalism, by someone other than the owner,
23.23and the homestead is uninhabitable or the other structure is not usable;
23.24 (b) the owner of the property makes written application to the county assessor as
23.25soon as practical after the damage has occurred; and
23.26 (c) the owner of the property makes written application to the county board.
23.27 The county board may grant a reduction in the amount of property tax which the
23.28owner must pay on the qualifying property in the year of destruction and in the following
23.29year. Any reduction in the amount of tax payable which is authorized by county board
23.30action shall be calculated based upon the number of months that the home is uninhabitable
23.31or the other structure is unusable. The amount of net tax due from the taxpayer shall be
23.32multiplied by a fraction, the numerator of which is the number of months the dwelling
23.33was occupied by that taxpayer, or the number of months the other structure was used by
23.34the taxpayer, and the denominator of which is 12. For purposes of this subdivision, if a
24.1structure is occupied or used for a fraction of a month, it is considered a month. "Net tax"
24.2is defined as the amount of tax after the subtraction of all of the state paid property tax
24.3credits. If application is made following payment of all property taxes due for the year of
24.4destruction, the amount of the reduction granted by the county board shall be refunded to
24.5the taxpayer by the county treasurer as soon as practical.
24.6 Any reductions or refunds approved by the county board shall not be subject to
24.7approval by the commissioner of revenue.
24.8 The county board may levy in the following year the amount of tax dollars lost to the
24.9county government as a result of the reductions granted pursuant to this subdivision.
24.10EFFECTIVE DATE.This section is effective for destruction that occurs in calendar
24.11year 2006 and thereafter.
24.12 Sec. 14. Minnesota Statutes 2006, section 273.124, subdivision 14, is amended to read:
24.13 Subd. 14. Agricultural homesteads; special provisions. (a) Real estate of less than
24.14ten acres that is the homestead of its owner must be classified as class 2a under section
24.16 (1) the parcel on which the house is located is contiguous on at least two sides to (i)
24.17agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
24.18Service, or (iii) land administered by the Department of Natural Resources on which in
24.19lieu taxes are paid under sections
24.20 (2) its owner also owns a noncontiguous parcel of agricultural land that is at least
24.2120 acres;
24.22 (3) the noncontiguous land is located not farther than four townships or cities, or a
24.23combination of townships or cities from the homestead; and
24.24 (4) the agricultural use value of the noncontiguous land and farm buildings is equal
24.25to at least 50 percent of the market value of the house, garage, and one acre of land.
24.26 Homesteads initially classified as class 2a under the provisions of this paragraph shall
24.27remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
24.28properties, as long as the homestead remains under the same ownership, the owner owns a
24.29noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
24.30value qualifies under clause (4). Homestead classification under this paragraph is limited
24.31to property that qualified under this paragraph for the 1998 assessment.
24.32 (b)(i) Agricultural property
24.33owner's homestead, to the same extent as other agricultural homestead property, if all
24.34of the following criteria are met:
25.1 (1) the property consists of at least 40 acres including undivided government lots
25.2and correctional 40's, or at least 20 acres if used exclusively and intensively for raising
25.3or cultivating agricultural products as defined under section 273.13, subdivision 23,
25.4paragraph (e);
25.5
25.6spouse, or the grandson or granddaughter of the owner or the owner's spouse, is actively
25.7farming the agricultural property, either on the person's own behalf as an individual or
25.8on behalf of a partnership operating a family farm, family farm corporation, joint family
25.9farm venture, or limited liability company of which the person is a partner, shareholder, or
25.10member;
25.11
25.12farming the agricultural property under clause
25.13
25.14homestead in Minnesota; and
25.15
25.16than four townships or cities, or a combination of four townships or cities, from the
25.17agricultural property, except that if the owner or the owner's spouse is required to live in
25.18employer-provided housing, the owner or owner's spouse, whichever is actively farming
25.19the agricultural property, may live more than four townships or cities, or combination of
25.20four townships or cities from the agricultural property.
25.21 The relationship under this paragraph may be either by blood or marriage.
25.22 (ii) Real property held by a trustee under a trust is eligible for agricultural homestead
25.23classification under this paragraph if the qualifications in clause (i) are met, except that
25.24"owner" means the grantor of the trust.
25.25 (iii) Property containing the residence of an owner who owns qualified property
25.26under clause (i) shall be classified as part of the owner's agricultural homestead, if that
25.27property is also used for noncommercial storage or drying of agricultural crops.
25.28 (c) Noncontiguous land shall be included as part of a homestead under section
25.30and the detached land is located in the same township or city, or not farther than four
25.31townships or cities or combination thereof from the homestead. Any taxpayer of these
25.32noncontiguous lands must notify the county assessor that the noncontiguous land is part of
25.33the taxpayer's homestead, and, if the homestead is located in another county, the taxpayer
25.34must also notify the assessor of the other county.
25.35 (d) Agricultural land used for purposes of a homestead and actively farmed by a
25.36person holding a vested remainder interest in it must be classified as a homestead under
26.1section
26.2any other dwellings on the land used for purposes of a homestead by persons holding
26.3vested remainder interests who are actively engaged in farming the property, and up to
26.4one acre of the land surrounding each homestead and reasonably necessary for the use of
26.5the dwelling as a home, must also be assessed class 2a.
26.6 (e) Agricultural land and buildings that were class 2a homestead property under
26.7section
26.8classified as agricultural homesteads for subsequent assessments if:
26.9 (1) the property owner abandoned the homestead dwelling located on the agricultural
26.10homestead as a result of the April 1997 floods;
26.11 (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
26.12or Wilkin;
26.13 (3) the agricultural land and buildings remain under the same ownership for the
26.14current assessment year as existed for the 1997 assessment year and continue to be used
26.15for agricultural purposes;
26.16 (4) the dwelling occupied by the owner is located in Minnesota and is within 30
26.17miles of one of the parcels of agricultural land that is owned by the taxpayer; and
26.18 (5) the owner notifies the county assessor that the relocation was due to the 1997
26.19floods, and the owner furnishes the assessor any information deemed necessary by the
26.20assessor in verifying the change in dwelling. Further notifications to the assessor are not
26.21required if the property continues to meet all the requirements in this paragraph and any
26.22dwellings on the agricultural land remain uninhabited.
26.23 (f) Agricultural land and buildings that were class 2a homestead property under
26.24section
26.25classified agricultural homesteads for subsequent assessments if:
26.26 (1) the property owner abandoned the homestead dwelling located on the agricultural
26.27homestead as a result of damage caused by a March 29, 1998, tornado;
26.28 (2) the property is located in the county of Blue Earth, Brown, Cottonwood,
26.29LeSueur, Nicollet, Nobles, or Rice;
26.30 (3) the agricultural land and buildings remain under the same ownership for the
26.31current assessment year as existed for the 1998 assessment year;
26.32 (4) the dwelling occupied by the owner is located in this state and is within 50 miles
26.33of one of the parcels of agricultural land that is owned by the taxpayer; and
26.34 (5) the owner notifies the county assessor that the relocation was due to a March 29,
26.351998, tornado, and the owner furnishes the assessor any information deemed necessary by
26.36the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
27.1owner must notify the assessor by December 1, 1998. Further notifications to the assessor
27.2are not required if the property continues to meet all the requirements in this paragraph
27.3and any dwellings on the agricultural land remain uninhabited.
27.4 (g) Agricultural property
27.5joint family farm venture, family farm limited liability company, or partnership operating
27.6a family farm as described under subdivision 8 shall be classified homestead, to the same
27.7extent as other agricultural homestead property, if all of the following criteria are met:
27.8 (1) the property consists of at least 40 acres including undivided government lots
27.9and correctional 40's, or at least 20 acres if used exclusively and intensively for raising
27.10or cultivating agricultural products as defined under section 273.13, subdivision 23,
27.11paragraph (e);
27.12
27.13agricultural property;
27.14
27.15property is a Minnesota resident;
27.16
27.17shareholder, member, or partner claims another agricultural homestead in Minnesota; and
27.18
27.19or cities, or a combination of four townships or cities, from the agricultural property.
27.20 Homestead treatment applies under this paragraph for property leased to a family
27.21farm corporation, joint farm venture, limited liability company, or partnership operating a
27.22family farm if legal title to the property is in the name of an individual who is a member,
27.23shareholder, or partner in the entity.
27.24 (h) To be eligible for the special agricultural homestead under this subdivision, an
27.25initial full application must be submitted to the county assessor where the property is
27.26located. Owners and the persons who are actively farming the property shall be required
27.27to complete only a one-page abbreviated version of the application in each subsequent
27.28year provided that none of the following items have changed since the initial application:
27.29 (1) the day-to-day operation, administration, and financial risks remain the same;
27.30 (2) the owners and the persons actively farming the property continue to live within
27.31the four townships or city criteria and are Minnesota residents;
27.32 (3) the same operator of the agricultural property is listed with the Farm Service
27.33Agency;
27.34 (4) a Schedule F or equivalent income tax form was filed for the most recent year;
27.35 (5) the property's acreage is unchanged; and
28.1 (6) none of the property's acres have been enrolled in a federal or state farm program
28.2since the initial application.
28.3 The owners and any persons who are actively farming the property must include
28.4the appropriate Social Security numbers, and sign and date the application. If any of the
28.5specified information has changed since the full application was filed, the owner must
28.6notify the assessor, and must complete a new application to determine if the property
28.7continues to qualify for the special agricultural homestead. The commissioner of revenue
28.8shall prepare a standard reapplication form for use by the assessors.
28.9EFFECTIVE DATE.This section is effective for assessment year 2007, taxes
28.10payable in 2008 and thereafter.
28.11 Sec. 15. Minnesota Statutes 2006, section 273.124, is amended by adding a subdivision
28.12to read:
28.13 Subd. 22. Annual registration of certain relative homesteads. If the owner of
28.14property or the owner's relative who occupies property that is classified as a homestead
28.15under subdivision 1, paragraph (c), receives compensation for allowing occupancy of any
28.16part of that property for a period that exceeds 31 consecutive days during the calendar
28.17year, the recipient of the compensation must register the property with the city in which
28.18it is located no later than 60 days after the initial rental period began. This requirement
28.19applies to property located in a city that has a population over 25,000. Each city must
28.20maintain a file of these property registrations that is open to the public, and retain the
28.21registrations for one year after the date of filing.
28.22EFFECTIVE DATE.This section is effective July 1, 2007.
28.23 Sec. 16. Minnesota Statutes 2006, section 273.125, subdivision 8, is amended to read:
28.24 Subd. 8. Manufactured homes; sectional structures. (a) In this section,
28.25"manufactured home" means a structure transportable in one or more sections, which is
28.26built on a permanent chassis, and designed to be used as a dwelling with or without a
28.27permanent foundation when connected to the required utilities, and contains the plumbing,
28.28heating, air conditioning, and electrical systems in it. Manufactured home includes any
28.29accessory structure that is an addition or supplement to the manufactured home and, when
28.30installed, becomes a part of the manufactured home.
28.31 (b) Except as provided in paragraph (c), a manufactured home that meets each of the
28.32following criteria must be valued and assessed as an improvement to real property, the
29.1appropriate real property classification applies, and the valuation is subject to review and
29.2the taxes payable in the manner provided for real property:
29.3 (1) the owner of the unit holds title to the land on which it is situated;
29.4 (2) the unit is affixed to the land by a permanent foundation or is installed at its
29.5location in accordance with the Manufactured Home Building Code in sections
29.6to
29.7property in the taxing district; and
29.8 (3) the unit is connected to public utilities, has a well and septic tank system, or is
29.9serviced by water and sewer facilities comparable to other real property in the taxing
29.10district.
29.11 (c) A manufactured home that meets each of the following criteria must be assessed
29.12at the rate provided by the appropriate real property classification but must be treated as
29.13personal property, and the valuation is subject to review and the taxes payable in the
29.14manner provided in this section:
29.15 (1) the owner of the unit is a lessee of the land under the terms of a lease, or the unit
29.16is located in a manufactured home park but is not the homestead of the park owner;
29.17 (2) the unit is affixed to the land by a permanent foundation or is installed at its
29.18location in accordance with the Manufactured Home Building Code contained in sections
29.20other real property in the taxing district; and
29.21 (3) the unit is connected to public utilities, has a well and septic tank system, or is
29.22serviced by water and sewer facilities comparable to other real property in the taxing
29.23district.
29.24 (d) Sectional structures must be valued and assessed as an improvement to real
29.25property if the owner of the structure holds title to the land on which it is located or is a
29.26qualifying lessee of the land under section
29.27means a building or structural unit that has been in whole or substantial part manufactured
29.28or constructed at an off-site location to be wholly or partially assembled on-site alone or
29.29with other units and attached to a permanent foundation.
29.30 (e) The commissioner of revenue may adopt rules under the Administrative
29.31Procedure Act to establish additional criteria for the classification of manufactured homes
29.32and sectional structures under this subdivision.
29.33 (f) A storage shed, deck, or similar improvement constructed on property that is
29.34leased or rented as a site for a manufactured home, sectional structure, park trailer, or
29.35travel trailer is taxable as provided in this section. In the case of property that is leased or
29.36rented as a site for a travel trailer, a storage shed, deck, or similar improvement on the
30.1site that is considered personal property under this paragraph is taxable only if its total
30.2estimated market value is over
30.3to the lessee of the site if it is not owned by the owner of the site. The property is taxable
30.4as real estate if it is owned by the owner of the site. As a condition of permitting the owner
30.5of the manufactured home, sectional structure, park trailer, or travel trailer to construct
30.6improvements on the leased or rented site, the owner of the site must obtain the permanent
30.7home address of the lessee or user of the site. The site owner must provide the name
30.8and address to the assessor upon request.
30.9EFFECTIVE DATE.This section is effective for assessment year 2007 and
30.10thereafter, for taxes payable in 2008 and thereafter.
30.11 Sec. 17. Minnesota Statutes 2006, section 273.128, subdivision 1, is amended to read:
30.12 Subdivision 1. Requirement. Low-income rental property classified as class 4d
30.13under section
30.14least
30.15qualifications:
30.16 (1) the units are subject to a housing assistance payments contract under Section 8
30.17of the United States Housing Act of 1937, as amended;
30.18 (2) the units are rent-restricted and income-restricted units of a qualified low-income
30.19housing project receiving tax credits under section 42(g) of the Internal Revenue Code of
30.201986, as amended;
30.21 (3) the units are financed by the Rural Housing Service of the United States
30.22Department of Agriculture and receive payments under the rental assistance program
30.23pursuant to section 521(a) of the Housing Act of 1949, as amended; or
30.24 (4) the units are subject to rent and income restrictions under the terms of financial
30.25assistance provided to the rental housing property by the federal government or the
30.26state of Minnesota, or a local unit of government, as evidenced by a document recorded
30.27against the property.
30.28 The restrictions must require assisted units to be occupied by residents whose
30.29household income at the time of initial occupancy does not exceed 60 percent of the
30.30greater of area or state median income, adjusted for family size, as determined by the
30.31United States Department of Housing and Urban Development. The restriction must also
30.32require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of
30.33area or state median income, adjusted for family size, as determined by the United States
30.34Department of Housing and Urban Development.
31.1EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
31.2payable in 2008, and thereafter.
31.3 Sec. 18. Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:
31.4 Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b)
31.5and (c), real estate which is residential and used for homestead purposes is class 1a. In the
31.6case of a duplex or triplex in which one of the units is used for homestead purposes, the
31.7entire property is deemed to be used for homestead purposes. The market value of class 1a
31.8property must be determined based upon the value of the house, garage, and land.
31.9 The first $500,000 of market value of class 1a property has a net class rate of
31.10one percent of its market value; and the market value of class 1a property that exceeds
31.11$500,000 has a class rate of 1.25 percent of its market value.
31.12 (b) Class 1b property includes homestead real estate or homestead manufactured
31.13homes used for the purposes of a homestead by
31.14 (1) any person who is blind as defined in section
31.15the blind person's spouse; or
31.16 (2)
31.17
31.18
31.19
31.20
31.21
31.22
31.23
31.24
31.25
31.26
31.27
31.28 Property is classified and assessed under clause (3) only if the government agency or
31.29income-providing source certifies, upon the request of the homestead occupant, that the
31.30homestead occupant satisfies the disability requirements of this paragraph.
31.31 Property is classified and assessed pursuant to clause (1) only if the commissioner of
31.32revenue certifies to the assessor that the homestead occupant satisfies the requirements of
31.33this paragraph.
31.34 Permanently and totally disabled for the purpose of this subdivision means a
31.35condition which is permanent in nature and totally incapacitates the person from working
32.1at an occupation which brings the person an income. The first
32.2value of class 1b property has a net class rate of .45 percent of its market value. The
32.3remaining market value of class 1b property has a class rate using the rates for class 1a or
32.4class 2a property, whichever is appropriate, of similar market value.
32.5 (c) Class 1c property is commercial use real and personal property that abuts
32.6
32.7devoted to temporary and seasonal residential occupancy for recreational purposes but
32.8not devoted to commercial purposes for more than 250 days in the year preceding the
32.9year of assessment, and that includes a portion used as a homestead by the owner, which
32.10includes a dwelling occupied as a homestead by a shareholder of a corporation that owns
32.11the resort, a partner in a partnership that owns the resort, or a member of a limited liability
32.12company that owns the resort even if the title to the homestead is held by the corporation,
32.13partnership, or limited liability company. For purposes of this clause, property is devoted
32.14to a commercial purpose on a specific day if any portion of the property, excluding the
32.15portion used exclusively as a homestead, is used for residential occupancy and a fee is
32.16charged for residential occupancy. Class 1c property must contain three or more rental
32.17units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
32.18or individual camping site equipped with water and electrical hookups for recreational
32.19vehicles. Class 1c property must provide recreational activities such as the rental of ice
32.20fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment;
32.21provide marina services, launch services, or guide services; or sell bait and fishing tackle.
32.22Any unit in which the right to use the property is transferred to an individual or entity
32.23by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even
32.24though it may remain available for rent. A camping pad offered for rent by a property
32.25that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental
32.26agreement, as long as the use of the camping pad does not exceed 250 days. The portion of
32.27the property used as a homestead is class 1a property under paragraph (a). The remainder
32.28of the property is classified as follows: the first
32.29I, the next $1,700,000 of market value is tier II, and any remaining market value is tier
32.30III. The class rates for class 1c are: tier I,
32.31III, 1.25 percent.
32.32
32.33
32.34devoted to temporary and seasonal residential occupancy for recreation purposes in which
32.35all or a portion of the property was devoted to commercial purposes for not more than 250
32.36days in the year preceding the year of assessment desiring classification as class 1c, must
33.1submit a declaration to the assessor designating the cabins or units occupied for 250 days
33.2or less in the year preceding the year of assessment by January 15 of the assessment year.
33.3Those cabins or units and a proportionate share of the land on which they are located must
33.4be designated as class 1c as otherwise provided. The remainder of the cabins or units and
33.5a proportionate share of the land on which they are located must be designated as class
33.63a commercial. The owner of property desiring designation as class 1c property must
33.7provide guest registers or other records demonstrating that the units for which class 1c
33.8designation is sought were not occupied for more than 250 days in the year preceding the
33.9assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar,
33.10(3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility
33.11operated on a commercial basis not directly related to temporary and seasonal residential
33.12occupancy for recreation purposes does not qualify for class 1c.
33.13 (d) Class 1d property includes structures that meet all of the following criteria:
33.14 (1) the structure is located on property that is classified as agricultural property under
33.15section
33.16 (2) the structure is occupied exclusively by seasonal farm workers during the time
33.17when they work on that farm, and the occupants are not charged rent for the privilege of
33.18occupying the property, provided that use of the structure for storage of farm equipment
33.19and produce does not disqualify the property from classification under this paragraph;
33.20 (3) the structure meets all applicable health and safety requirements for the
33.21appropriate season; and
33.22 (4) the structure is not salable as residential property because it does not comply
33.23with local ordinances relating to location in relation to streets or roads.
33.24 The market value of class 1d property has the same class rates as class 1a property
33.25under paragraph (a).
33.26EFFECTIVE DATE.The portion of this section modifying the market value and
33.27class rate of the first tier of class 1c resorts and striking the language relating to class 1b
33.28veterans' homesteads is effective for taxes payable in 2008 and thereafter. The remaining
33.29portion of this section relating to class 1c resorts is effective for taxes payable in 2009
33.30and thereafter.
33.31 Sec. 19. Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:
33.32 Subd. 23. Class 2. (a) Class 2a property is agricultural land including any
33.33improvements that is homesteaded. The market value of the house and garage and
33.34immediately surrounding one acre of land has the same class rates as class 1a property
33.35under subdivision 22. The value of the remaining land including improvements up to the
34.1first tier valuation limit of agricultural homestead property has a net class rate of
34.2percent of market value. The remaining property over the first tier has a class rate of one
34.3percent of market value. For purposes of this subdivision, the "first tier valuation limit of
34.4agricultural homestead property" and "first tier" means the limit certified under section
34.6 (b) Class 2b property is (1) unplatted real estate, rural in character
34.7
34.8
34.9
34.10
34.11
34.12
34.13land used for growing trees for timber, lumber, and wood and wood products, but not
34.14including land used for agricultural purposes, provided that the presence of a minor,
34.15ancillary nonresidential structure does not disqualify property from classification under
34.16this clause, (2) real estate that is nonhomestead agricultural land; or
34.17or public access area of a privately owned public use airport. Class 2b property has a net
34.18class rate of one percent of market value, except that property described in clause (1)
34.19has a net class rate of .65 percent if it consists of no more than 1,920 acres and is being
34.20managed under a forest management plan that meets the requirements of chapter 290C,
34.21but is not enrolled in the sustainable forest resource management incentive program,
34.22provided that the owner of the property must apply to the assessor annually to receive the
34.23reduced class rate and provide the information required by the assessor to verify that
34.24the property qualifies for the reduced rate.
34.25 (c) Agricultural land as used in this section means contiguous acreage of ten acres or
34.26more, used during the preceding year for agricultural purposes. "Agricultural purposes" as
34.27used in this section means the raising or cultivation of agricultural products. "Agricultural
34.28purposes" also includes enrollment in the Reinvest in Minnesota program under sections
34.30Law 99-198 if the property was classified as agricultural (i) under this subdivision for
34.31the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage
34.32on the same parcel, or contiguous acreage on an immediately adjacent parcel under the
34.33same ownership, may also qualify as agricultural land, but only if it is pasture, timber,
34.34waste, unusable wild land, or land included in state or federal farm programs. Agricultural
34.35classification for property shall be determined excluding the house, garage, and
35.1immediately surrounding one acre of land, and shall not be based upon the market value of
35.2any residential structures on the parcel or contiguous parcels under the same ownership.
35.3 (d) Real estate, excluding the house, garage, and immediately surrounding one acre
35.4of land, of less than ten acres which is exclusively and intensively used for raising or
35.5cultivating agricultural products, shall be considered as agricultural land.
35.6 Land shall be classified as agricultural even if all or a portion of the agricultural use
35.7of that property is the leasing to, or use by another person for agricultural purposes.
35.8 Classification under this subdivision is not determinative for qualifying under
35.9section
35.10 The property classification under this section supersedes, for property tax purposes
35.11only, any locally administered agricultural policies or land use restrictions that define
35.12minimum or maximum farm acreage.
35.13 (e) The term "agricultural products" as used in this subdivision includes production
35.14for sale of:
35.15 (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
35.16animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
35.17bees, and apiary products by the owner;
35.18 (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
35.19for agricultural use;
35.20 (3) the commercial boarding of horses if the boarding is done in conjunction with
35.21raising or cultivating agricultural products as defined in clause (1);
35.22 (4) property which is owned and operated by nonprofit organizations used for
35.23equestrian activities, excluding racing;
35.24 (5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
35.25under section
35.26 (6) insects primarily bred to be used as food for animals;
35.27 (7) trees, grown for sale as a crop, including short rotation woody crops, and not
35.28sold for timber, lumber, wood, or wood products; and
35.29 (8) maple syrup taken from trees grown by a person licensed by the Minnesota
35.30Department of Agriculture under chapter 28A as a food processor.
35.31 (f) If a parcel used for agricultural purposes is also used for commercial or industrial
35.32purposes, including but not limited to:
35.33 (1) wholesale and retail sales;
35.34 (2) processing of raw agricultural products or other goods;
35.35 (3) warehousing or storage of processed goods; and
36.1 (4) office facilities for the support of the activities enumerated in clauses (1), (2),
36.2and (3),
36.3the assessor shall classify the part of the parcel used for agricultural purposes as class
36.41b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
36.5use. The grading, sorting, and packaging of raw agricultural products for first sale is
36.6considered an agricultural purpose. A greenhouse or other building where horticultural
36.7or nursery products are grown that is also used for the conduct of retail sales must be
36.8classified as agricultural if it is primarily used for the growing of horticultural or nursery
36.9products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
36.10those products. Use of a greenhouse or building only for the display of already grown
36.11horticultural or nursery products does not qualify as an agricultural purpose.
36.12 The assessor shall determine and list separately on the records the market value of
36.13the homestead dwelling and the one acre of land on which that dwelling is located. If any
36.14farm buildings or structures are located on this homesteaded acre of land, their market
36.15value shall not be included in this separate determination.
36.16 (g) To qualify for classification under paragraph (b), clause (4), a privately owned
36.17public use airport must be licensed as a public airport under section
36.18of paragraph (b), clause (4), "landing area" means that part of a privately owned public use
36.19airport properly cleared, regularly maintained, and made available to the public for use by
36.20aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
36.21or navigational aids. A landing area also includes land underlying both the primary surface
36.22and the approach surfaces that comply with all of the following:
36.23 (i) the land is properly cleared and regularly maintained for the primary purposes of
36.24the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
36.25facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
36.26 (ii) the land is part of the airport property; and
36.27 (iii) the land is not used for commercial or residential purposes.
36.28The land contained in a landing area under paragraph (b), clause (4), must be described
36.29and certified by the commissioner of transportation. The certification is effective until
36.30it is modified, or until the airport or landing area no longer meets the requirements of
36.31paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area"
36.32means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival
36.33and departure building in connection with the airport.
36.34EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
36.35in 2008, and thereafter.
37.1 Sec. 20. Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:
37.2 Subd. 24. Class 3. (a) Commercial and industrial property and utility real and
37.3personal property is class 3a.
37.4 (1) Except as otherwise provided, each parcel of commercial, industrial, or utility
37.5real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
37.6of the remaining market value. In the case of contiguous parcels of property owned by the
37.7same person or entity, only the value equal to the first-tier value of the contiguous parcels
37.8qualifies for the reduced class rate, except that contiguous parcels owned by the same
37.9person or entity shall be eligible for the first-tier value class rate on each separate business
37.10operated by the owner of the property, provided the business is housed in a separate
37.11structure. For the purposes of this subdivision, the first tier means the first $150,000 of
37.12market value. Real property owned in fee by a utility for transmission line right-of-way
37.13shall be classified at the class rate for the higher tier.
37.14 For purposes of this subdivision, parcels are considered to be contiguous even if
37.15they are separated from each other by a road, street, waterway, or other similar intervening
37.16type of property. Connections between parcels that consist of power lines or pipelines do
37.17not cause the parcels to be contiguous. Property owners who have contiguous parcels of
37.18property that constitute separate businesses that may qualify for the first-tier class rate shall
37.19notify the assessor by July 1, for treatment beginning in the following taxes payable year.
37.20 (2)
37.21
37.22of 2.5 percent for taxes levied in 2007, payable in 2008, and 3.0 percent for taxes levied
37.23in 2008, payable in 2009, and thereafter.
37.24 (3) Personal property that is either: (i) part of a pipeline system transporting
37.25or distributing water, gas, crude oil, or petroleum products
37.26
37.27transmission or distribution system, including tools, implements, and machinery, has a
37.28class rate of 2.15 percent for taxes levied in 2007, payable in 2008, and 2.25 percent for
37.29taxes levied in 2008, payable in 2009, and thereafter.
37.30 (4) railroad operating property has a class rate as provided under clause (1) for
37.31the first tier of market value and the remaining market value. In the case of multiple
37.32parcels in one county that are owned by one person or entity, only one first tier amount
37.33is eligible for the reduced rate.
37.34
37.35
37.36
38.1
38.2and pipes used in the distribution of steam or hot or chilled water for heating or cooling
38.3buildings, has a class rate as provided under clause (1) for the remaining market value
38.4in excess of the first tier.
38.5 (b) Employment property defined in section
38.6in section
38.7determined under paragraph (a).
38.8EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
38.9in 2008, and thereafter.
38.10 Sec. 21. Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:
38.11 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
38.12units and used or held for use by the owner or by the tenants or lessees of the owner
38.13as a residence for rental periods of 30 days or more, excluding property qualifying for
38.14class 4d. Class 4a also includes hospitals licensed under sections
38.15than hospitals exempt under section
38.16purposes, without regard to whether the property has been platted or subdivided. The
38.17market value of class 4a property has a class rate of 1.25 percent.
38.18 (b) Class 4b includes:
38.19 (1) residential real estate containing less than four units that does not qualify as class
38.204bb, other than seasonal residential recreational property;
38.21 (2) manufactured homes not classified under any other provision;
38.22 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
38.23farm classified under subdivision 23, paragraph (b) containing two or three units; and
38.24 (4) unimproved property that is classified residential as determined under subdivision
38.2533.
38.26 The market value of class 4b property has a class rate of 1.25 percent.
38.27 (c) Class 4bb includes:
38.28 (1) nonhomestead residential real estate containing one unit, other than seasonal
38.29residential recreational property; and
38.30 (2) a single family dwelling, garage, and surrounding one acre of property on a
38.31nonhomestead farm classified under subdivision 23, paragraph (b).
38.32 Class 4bb property has the same class rates as class 1a property under subdivision 22.
38.33 Property that has been classified as seasonal residential recreational property at
38.34any time during which it has been owned by the current owner or spouse of the current
38.35owner does not qualify for class 4bb.
39.1 (d) Class 4c property includes:
39.2 (1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
39.3(b), clause (1), real and personal property devoted to temporary and seasonal residential
39.4occupancy for recreation purposes, including real and personal property devoted to
39.5temporary and seasonal residential occupancy for recreation purposes and not devoted to
39.6commercial purposes for more than 250 days in the year preceding the year of assessment.
39.7For purposes of this clause, property is devoted to a commercial purpose on a specific
39.8day if any portion of the property is used for residential occupancy, and a fee is charged
39.9for residential occupancy. Class 4c property must contain three or more rental units. A
39.10"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
39.11camping site equipped with water and electrical hookups for recreational vehicles. Class
39.124c property must provide recreational activities such as renting ice fishing houses, boats
39.13and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
39.14services, launch services, or guide services; or sell bait and fishing tackle. A camping
39.15pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
39.16regardless of the term of the rental agreement, as long as the use of the camping pad
39.17does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
39.18residential recreational for commercial purposes, at least 40 percent of the annual gross
39.19lodging receipts related to the property must be from business conducted during 90
39.20consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests
39.21during the year must be for periods of at least two consecutive nights; or (ii) at least 20
39.22percent of the annual gross receipts must be from charges for rental of fish houses, boats
39.23and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
39.24services, launch services, and guide services, or the sale of bait and fishing tackle. For
39.25purposes of this determination, a paid booking of five or more nights shall be counted as
39.26two bookings. Class 4c also includes commercial use real property used exclusively
39.27for recreational purposes in conjunction with class 4c property devoted to temporary
39.28and seasonal residential occupancy for recreational purposes, up to a total of two acres,
39.29provided the property is not devoted to commercial recreational use for more than 250
39.30days in the year preceding the year of assessment and is located within two miles of the
39.31class 4c property with which it is used. Owners of real and personal property devoted to
39.32temporary and seasonal residential occupancy for recreation purposes and all or a portion
39.33of which was devoted to commercial purposes for not more than 250 days in the year
39.34preceding the year of assessment desiring classification as class
39.35declaration to the assessor designating the cabins or units occupied for 250 days or less in
39.36the year preceding the year of assessment by January 15 of the assessment year. Those
40.1cabins or units and a proportionate share of the land on which they are located
40.2designated class
40.3a proportionate share of the land on which they are located will be designated as class 3a.
40.4The owner of property desiring designation as class
40.5registers or other records demonstrating that the units for which class
40.6is sought were not occupied for more than 250 days in the year preceding the assessment if
40.7so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
40.8(4) conference center or meeting room, and
40.9on a commercial basis not directly related to temporary and seasonal residential occupancy
40.10for recreation purposes
40.11 (2) qualified property used as a golf course if:
40.12 (i) it is open to the public on a daily fee basis. It may charge membership fees or
40.13dues, but a membership fee may not be required in order to use the property for golfing,
40.14and its green fees for golfing must be comparable to green fees typically charged by
40.15municipal courses; and
40.16 (ii) it meets the requirements of section
40.17 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
40.18with the golf course is classified as class 3a property;
40.19 (3) real property up to a maximum of
40.20by a nonprofit community service oriented organization
40.21for residential purposes on either a temporary or permanent basis, qualifies for class 4c
40.22provided that it meets either of the following:
40.23 (i) the property is not used for a revenue-producing activity for more than six days
40.24in the calendar year preceding the year of assessment
40.25
40.26 (ii) the organization makes annual charitable contributions and donations at least
40.27equal to the property's previous year's property taxes and the property is allowed to be
40.28used for public and community meetings or events for no charge, as appropriate to the
40.29size of the facility.
40.30 For purposes of this clause,
40.31 (A) "charitable contributions and donations" has the same meaning as lawful
40.32gambling purposes under section 349.12, subdivision 25, excluding those purposes
40.33relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
40.34 (B) "property taxes" excludes the state general tax;
40.35 (C) a "nonprofit community service oriented organization" means any corporation,
40.36society, association, foundation, or institution organized and operated exclusively for
41.1charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
41.2federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
41.3Code of 1986, as amended through December 31, 1990
41.4 (D) "revenue-producing activities" shall include but not be limited to property or that
41.5portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
41.6liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
41.7alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
41.8insurance business, or office or other space leased or rented to a lessee who conducts a
41.9for-profit enterprise on the premises.
41.10Any portion of the property qualifying under item (i) which is used for revenue-producing
41.11activities for more than six days in the calendar year preceding the year of assessment
41.12shall be assessed as class 3a. The use of the property for social events open exclusively
41.13to members and their guests for periods of less than 24 hours, when an admission is
41.14not charged nor any revenues are received by the organization shall not be considered a
41.15revenue-producing activity
41.16 The organization shall maintain records of its charitable contributions and donations
41.17and of public meetings and events held on the property and make them available upon
41.18request any time to the assessor to ensure eligibility. An organization meeting the
41.19requirement under item (ii) must file an application by May 1 with the assessor for
41.20eligibility for the current year's assessment. The commissioner shall prescribe a uniform
41.21application form and instructions;
41.22 (4) postsecondary student housing of not more than one acre of land that is owned by
41.23a nonprofit corporation organized under chapter 317A and is used exclusively by a student
41.24cooperative, sorority, or fraternity for on-campus housing or housing located within two
41.25miles of the border of a college campus;
41.26 (5) manufactured home parks as defined in section
41.27 (6) real property that is actively and exclusively devoted to indoor fitness, health,
41.28social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
41.29and is located within the metropolitan area as defined in section
41.30 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
41.31under section
41.32 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
41.33Airports Commission, or group thereof; and
41.34 (ii) the land lease, or any ordinance or signed agreement restricting the use of the
41.35leased premise, prohibits commercial activity performed at the hangar.
42.1 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
42.2be filed by the new owner with the assessor of the county where the property is located
42.3within 60 days of the sale;
42.4 (8) a privately owned noncommercial aircraft storage hangar not exempt under
42.5section
42.6 (i) the land abuts a public airport; and
42.7 (ii) the owner of the aircraft storage hangar provides the assessor with a signed
42.8agreement restricting the use of the premises, prohibiting commercial use or activity
42.9performed at the hangar; and
42.10 (9) residential real estate, a portion of which is used by the owner for homestead
42.11purposes, and that is also a place of lodging, if all of the following criteria are met:
42.12 (i) rooms are provided for rent to transient guests that generally stay for periods
42.13of 14 or fewer days;
42.14 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
42.15in the basic room rate;
42.16 (iii) meals are not provided to the general public except for special events on fewer
42.17than seven days in the calendar year preceding the year of the assessment; and
42.18 (iv) the owner is the operator of the property.
42.19The market value subject to the 4c classification under this clause is limited to five rental
42.20units. Any rental units on the property in excess of five, must be valued and assessed as
42.21class 3a. The portion of the property used for purposes of a homestead by the owner must
42.22be classified as class 1a property under subdivision 22.
42.23 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
42.24parcel of seasonal residential recreational property not used for commercial purposes has
42.25the same class rates as class 4bb property, (ii) manufactured home parks assessed under
42.26clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
42.27residential recreational property has a class rate of one percent for the first $500,000 of
42.28market value, and 1.25 percent for the remaining market value, (iv) the market value of
42.29property described in clause (4) has a class rate of one percent, (v) the market value of
42.30property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
42.31portion of the market value of property in clause (9) qualifying for class 4c property
42.32has a class rate of 1.25 percent.
42.33 (e) Class 4d property is qualifying low-income rental housing certified to the assessor
42.34by the Housing Finance Agency under section
42.35of the units in the building qualify as low-income rental housing units as certified under
42.36section
43.1of units in the building qualify for class 4d. The remaining portion of the building shall be
43.2classified by the assessor based upon its use. Class 4d also includes the same proportion of
43.3land as the qualifying low-income rental housing units are to the total units in the building.
43.4For all properties qualifying as class 4d, the market value determined by the assessor must
43.5be based on the normal approach to value using normal unrestricted rents.
43.6 Class 4d property has a class rate of 0.75 percent.
43.7EFFECTIVE DATE.The portion of this section relating to class 4c resorts in
43.8paragraph (d), clause (1), is effective for assessment year 2008 and thereafter, for taxes
43.9payable in 2009 and thereafter. The portion of this section relating to nonprofit community
43.10service oriented organizations is effective for assessment year 2007 and thereafter, for
43.11taxes payable in 2008 and thereafter, except that the application date in paragraph (d),
43.12clause (3), item (ii), for the 2007 assessment is extended to September 1, 2007.
43.13 Sec. 22. Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:
43.14 Subd. 33. Classification of unimproved property. (a) All real property that is not
43.15improved with a structure must be classified according to its current use.
43.16 (b) Except as provided in subdivision 23, paragraph (b), clause (1), real property that
43.17is not improved with a structure and for which there is no identifiable current use must be
43.18classified according to its highest and best use permitted under the local zoning ordinance.
43.19If the ordinance permits more than one use, the land must be classified according to the
43.20highest and best use permitted under the ordinance. If no such ordinance exists, the
43.21assessor shall consider the most likely potential use of the unimproved land based upon
43.22the use made of surrounding land or land in proximity to the unimproved land.
43.23EFFECTIVE DATE.This section is effective for assessment year 2007 and
43.24thereafter, for taxes payable in 2008 and thereafter.
43.25 Sec. 23. Minnesota Statutes 2006, section 273.13, is amended by adding a subdivision
43.26to read:
43.27 Subd. 34. Homestead of disabled veteran. (a) All or a portion of the market value
43.28of property qualifying for homestead classification under subdivision 22 or 23 is excluded
43.29in determining the property's taxable market value if it serves as the homestead of a
43.30military veteran, as defined in section 197.447, who has a service-connected disability of
43.3170 percent or more. To qualify for exclusion under this subdivision, the veteran must have
43.32been honorably discharged from the United States armed forces, as indicated by United
43.33States Government Form DD214 or other official military discharge papers, and must be
44.1certified by the United States Veterans Administration as having a service-connected
44.2disability.
44.3 (b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
44.4excluded, except as provided in clause (2); and
44.5 (2) for a total (100 percent) and permanent disability, $300,000 of market value is
44.6excluded.
44.7 (c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
44.8clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
44.9spouse holds the legal or beneficial title to the homestead and permanently resides there,
44.10the exclusion shall carry over to the benefit of the veteran's spouse until such time as the
44.11spouse sells, transfers, or otherwise disposes of the property.
44.12 (d) In the case of an agricultural homestead, only the portion of the property
44.13consisting of the house and garage and immediately surrounding one acre of land qualifies
44.14for the valuation exclusion under this subdivision.
44.15 (e) A property qualifying for a valuation exclusion under this subdivision is not
44.16eligible for the credit under section 273.1384, subdivision 1.
44.17 (f) To qualify for a valuation exclusion under this subdivision a property owner must
44.18apply to the assessor by July 1 of each assessment year, except that an annual reapplication
44.19is not required once a property has been accepted for a valuation exclusion under paragraph
44.20(b), clause (2), and the property continues to qualify until there is a change in ownership.
44.21EFFECTIVE DATE.This section is effective for assessment year 2007 and
44.22thereafter, for taxes payable in 2008 and thereafter.
44.23 Sec. 24. Minnesota Statutes 2006, section 275.025, subdivision 3, is amended to read:
44.24 Subd. 3. Seasonal residential recreational tax capacity. For the purposes of this
44.25section, "seasonal residential recreational tax capacity" means the tax capacity of tier III of
44.26class 1c under section
44.27under section
44.28noncommercial class 4c(1) property has a tax capacity for this purpose equal to 40 percent
44.29of its tax capacity under section
44.30EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
44.31thereafter.
44.32 Sec. 25. Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
44.33to read:
45.1 Subd. 6c. Joint public hearing; nonmetropolitan county, cities, and school
45.2districts. (a) Notwithstanding any other provision of law, the county board may hold a
45.3joint hearing with the governing bodies of all taxing authorities located wholly or partially
45.4within the county that are required to hold a public hearing under this section, excluding
45.5special taxing districts. The primary purpose of the joint hearing is for taxpayer efficiency
45.6by allowing taxpayers to come to a single public hearing to discuss the budgets and
45.7proposed property tax levies of most taxing authorities that impact the taxes on their
45.8property.
45.9 (b) This subdivision applies only to counties located outside the metropolitan area
45.10as defined under section
45.11partially within the metropolitan area, that taxing jurisdiction may participate in its
45.12nonmetropolitan county's joint hearing, if it so chooses.
45.13 (c) Upon the adoption of a resolution by the county board to hold a joint public
45.14hearing, the county shall notify each city with a population over 500 and each school
45.15district located wholly or partially within the county of its intention to hold the joint
45.16hearing and ask each of the taxing authorities if it would like to participate. Participation
45.17is voluntary, and participation in the joint hearing is in lieu of the requirement for the
45.18governing body to hold a separate public hearing under subdivision 6. If a participating
45.19city or school district is located in more than one county, the hearing under this subdivision
45.20is in lieu of the requirement to hold a separate public hearing if 75 percent or more
45.21of that city or school district's previous year's net tax capacity is in the county where
45.22the hearing is held.
45.23 (d) The initial joint hearing must be held on the first Thursday in December. The
45.24county may hold an additional joint hearing on another date before December 20 if the
45.25majority of the participating taxing authorities want an additional hearing.
45.26 The county board shall obtain a meeting space to hold the joint hearing, preferably
45.27at a public building such as the courthouse, school, or community center. The location
45.28shall be as centrally located within the county as possible. The meeting shall generally be
45.29structured in the following general manner:
45.30 (1) 30 to 60 minutes must be devoted to discussion of the county's budget and levy;
45.31 (2) 30 to 60 minutes must be devoted to discussion of the city's budget and levy,
45.32with each city's discussion held in a separate room, preferably in the same building;
45.33 (3) 30 to 60 minutes must be devoted to discussion of the school district's levy,
45.34with each school district's discussion held in a separate room, preferably in the same
45.35building; and
46.1 (4) during the last 30 minutes the governing bodies must reassemble in a joint
46.2meeting to entertain any follow-up questions that have arisen from the separate discussions.
46.3 The county shall attempt to keep the total public hearing to within three hours.
46.4 (e) In lieu of the public advertisement requirement in subdivision 5a, the county shall
46.5have a single advertisement listing the county, each city with a population of over 500, and
46.6each school district participating in the joint public hearing listing. Any taxing authority
46.7participating under this subdivision is exempt from the separate public advertisement
46.8requirement under subdivision 5a. The cost of the joint hearing advertisement shall be
46.9apportioned in the same manner provided in subdivision 4. The notice must be published
46.10not less than two business days nor more than six business days before the hearing. The
46.11newspaper selected must be one of general interest and readership in the county, and not
46.12one of limited subject matter. The advertisement must appear in a newspaper that is
46.13published at least once per week. The advertisement must be in the following form:
46.17The property tax amounts below compare that portion of the current budget levied in
46.18property taxes in the county, cities, and school districts for (year) with the property
46.19taxes the county, cities, and school districts propose to collect in (year) for those taxing
46.20authorities participating in the joint public hearing.
46.27All residents are invited to attend the joint public hearing of the county/cities/school
46.28districts to express your opinions on the proposed amount of (year) property taxes. The
46.29hearing will be held on:
46.32If the discussion cannot be completed, and another hearing is scheduled, a time and place
46.33for that hearing will be announced at this hearing. You are also invited to send your
46.34written comments to the county auditor. If the comments relate to the city or school
46.35district's levy, please identify that on the envelope so the county auditor can direct the
46.36correspondence to the right jurisdiction."
47.1 The formal adoption of the taxing authority's levy must not be made at the joint
47.2public hearing held under this subdivision. The formal adoption must be made at one of
47.3the regularly scheduled meetings of the taxing authority's governing body. However, the
47.4property tax levy amount that is subsequently adopted cannot exceed the amount shown to
47.5taxpayers at the joint public hearing.
47.6EFFECTIVE DATE.This section is effective for hearings held in 2007 and
47.7thereafter.
47.8 Sec. 26. Minnesota Statutes 2006, section 275.066, is amended to read:
47.9275.066 SPECIAL TAXING DISTRICTS; DEFINITION.
47.10 For the purposes of property taxation and property tax state aids, the term "special
47.11taxing districts" includes the following entities:
47.12 (1) watershed districts under chapter 103D;
47.13 (2) sanitary districts under sections
47.14 (3) regional sanitary sewer districts under sections
47.15 (4) regional public library districts under section
47.16 (5) park districts under chapter 398;
47.17 (6) regional railroad authorities under chapter 398A;
47.18 (7) hospital districts under sections
47.19 (8) St. Cloud Metropolitan Transit Commission under sections
47.20 (9) Duluth Transit Authority under sections
47.21 (10) regional development commissions under sections
47.22 (11) housing and redevelopment authorities under sections
47.23 (12) port authorities under sections
47.24 (13) economic development authorities under sections
47.25 (14) Metropolitan Council under sections
47.26 (15) Metropolitan Airports Commission under sections
47.27 (16) Metropolitan Mosquito Control Commission under sections
47.28 (17) Morrison County Rural Development Financing Authority under Laws 1982,
47.29chapter 437, section 1;
47.30 (18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section
47.316;
47.32 (19) East Lake County Medical Clinic District under Laws 1989, chapter 211,
47.33sections 1 to 6;
48.1 (20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article
48.25, section 39;
48.3 (21) Middle Mississippi River Watershed Management Organization under sections
48.5 (22) emergency medical services special taxing districts under section
48.6 (23) a county levying under the authority of section
48.8 (24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home
48.9under Laws 2003, First Special Session chapter 21, article 4, section 12;
48.10 (25) an airport authority created under section 360.0426; and
48.11 (26) any other political subdivision of the state of Minnesota, excluding counties,
48.12school districts, cities, and towns, that has the power to adopt and certify a property tax
48.13levy to the county auditor, as determined by the commissioner of revenue.
48.14EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
48.15in 2008, and thereafter.
48.16 Sec. 27. Minnesota Statutes 2006, section 278.05, subdivision 6, is amended to read:
48.17 Subd. 6. Dismissal of petition; exclusion of certain evidence. (a) In cases where
48.18the petitioner contests the valuation of income-producing property, information, including
48.19income and expense figures in the form of (1) year-end financial statements for the
48.20year prior to the assessment date, (2) year-end financial statements for the year of the
48.21assessment date, and (3) rent rolls on the assessment date including tenant name, lease start
48.22and end dates, option terms, base rent, square footage leased and vacant space, verified net
48.23rentable areas in the form of net rentable square footage of the building or buildings, and
48.24anticipated income and expenses in the form of proposed budgets for the year subsequent
48.25to the year of the assessment date,
48.26the county assessor no later than 60 days after the applicable filing deadline contained
48.27in section
48.28paragraph shall result in the dismissal of the petition, unless (1) the failure to provide it was
48.29due to the unavailability of the evidence at the time that the information was due, or (2)
48.30the petitioner was not aware of or informed of the requirement to provide the information.
48.31If the petitioner proves that the requirements under clause (2) are met, the petitioner has
48.32an additional 30 days to provide the information from the time the petitioner became
48.33aware of or was informed of the requirement to provide the information, otherwise the
48.34petition shall be dismissed.
49.1 (b) Provided that the information as contained in paragraph (a) is timely submitted to
49.2the county assessor, the county assessor shall furnish the petitioner at least five days before
49.3the hearing under this chapter with the property's appraisal, if any, which will be presented
49.4to the court at the hearing. The petitioner shall furnish to the county assessor at least five
49.5days before the hearing under this chapter with the property's appraisal, if any, which
49.6will be presented to the court at the hearing. An appraisal of the petitioner's property
49.7done by or for the county shall not be admissible as evidence if the county assessor does
49.8not comply with the provisions in this paragraph. The petition shall be dismissed if the
49.9petitioner does not comply with the provisions in this paragraph.
49.10EFFECTIVE DATE.This section is effective for petitions filed on or after July
49.111, 2007.
49.12 Sec. 28. Minnesota Statutes 2006, section 279.37, subdivision 1a, is amended to read:
49.13 Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property
49.14which was classified class 3a, for the previous year's assessment and had a total market
49.15value of
49.16composed into a confession of judgment. Property qualifying under this subdivision
49.17shall be subject to the same provisions as provided in this section except as provided
49.18in paragraphs (b) to (d).
49.19 (b) Current year taxes and penalty due at the time the confession of judgment
49.20is entered must be paid.
49.21 (c) The down payment must include all special assessments due in the current tax
49.22year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties,
49.23and interest accrued against the parcel. The balance remaining is payable in four equal
49.24annual installments.
49.25 (d) The amounts entered in judgment bear interest at the rate provided in section
49.27rate is subject to change each year on the unpaid balance in the manner provided in section
49.29EFFECTIVE DATE.This section is effective for confessions of judgment entered
49.30into July 1, 2007, and thereafter.
49.31 Sec. 29. Minnesota Statutes 2006, section 280.39, is amended to read:
49.32280.39 DELINQUENT TAXES MAY BE PAID IN INVERSE ORDER.
50.1 In any case where taxes for two or more years are delinquent against a parcel of land,
50.2such taxes for one or more
50.3order to that in which the taxes were levied, with accrued penalties, interest, and costs
50.4upon the taxes so paid, without payment of the taxes for the first of such years; provided,
50.5that such payment shall not affect the lien of any unpaid taxes or tax judgment.
50.6EFFECTIVE DATE.This section is effective the day following final enactment.
50.7 Sec. 30. Minnesota Statutes 2006, section 289A.08, subdivision 13, is amended to read:
50.8 Subd. 13. Long and short forms; local use tax instructions; property tax refund
50.9information. (a) The commissioner shall provide a long form individual income tax
50.10return and may provide a short form individual income tax return. The returns shall be in
50.11a form that is consistent with the provisions of chapter 290, notwithstanding any other
50.12law to the contrary. The nongame wildlife checkoff provided in section
50.13dependent care credit provided in section
50.14 (b) The commissioner must provide information on local use taxes in the individual
50.15income tax instruction booklet. The commissioner must provide this information in the
50.16same section of the booklet that provides information on the state use tax.
50.17 (c) The commissioner must refer to the property tax refunds allowed under chapter
50.18290A on the front cover of the individual income tax instruction booklet, as well as
50.19information within the booklet on income eligibility for the homestead and renter refunds,
50.20and maximum refund amounts allowed in the current year.
50.21EFFECTIVE DATE.This section is effective the day following final enactment.
50.22 Sec. 31. Minnesota Statutes 2006, section 290C.07, is amended to read:
50.23290C.07 CALCULATION OF INCENTIVE PAYMENT.
50.24 An approved claimant under the sustainable forest incentive program is eligible to
50.25receive an annual payment. The payment shall equal the greater of:
50.26 (1) the difference between the property tax that would be paid on the land using the
50.27previous year's statewide average total township tax rate and the class rate for class 2b
50.28timberland under section
50.29at (i) the average statewide timberland market value per acre calculated under section
50.31under section
50.32 (2) two-thirds of the property tax amount determined by using the previous year's
50.33statewide average total township tax rate, the estimated market value per acre as calculated
51.1in section
51.223
51.3
51.4enrolled in the sustainable forest incentive program.
51.5EFFECTIVE DATE.This section is effective for payments made after June 30,
51.62007.
51.7 Sec. 32. Minnesota Statutes 2006, section 360.031, is amended to read:
51.8360.031 DEFINITION OF MUNICIPALITY.
51.9 For the purposes of sections
51.10
51.11 Sec. 33. [360.0425] GENERAL POWERS OF AUTHORITY.
51.12 An airport authority created under section 360.0426 has all the powers granted a
51.13municipality under sections 360.032 to 360.046.
51.14 Sec. 34. [360.0426] CREATION OF AN AIRPORT AUTHORITY,
51.15DISSOLUTION.
51.16 Subdivision 1. Members; definition. A city together with another city, county,
51.17town, or an Indian tribe may create an airport authority. For purposes of this chapter,
51.18"airport authority" means a governmental entity created pursuant to this section for the
51.19purpose of acquiring, establishing, constructing, maintaining, improving, and operating
51.20airports and other air navigation facilities.
51.21 Subd. 2. Process to establish authority. A city that owns an airport by joint
51.22resolution together with other willing governmental units may create an airport authority
51.23that is authorized to exercise its functions upon passage of a joint resolution by each of
51.24their governing bodies, including a proposed date for the first meeting of the authority.
51.25 Subd. 3. Airport authority commission. The powers of the airport authority shall
51.26be vested in the airport authority commissioners. The commission shall consist of at
51.27least five commissioners. Each governmental unit that is a member of the authority shall
51.28be represented by at least one commissioner. If fewer than five governmental units are
51.29members of the authority, there must be two commissioners appointed from each member
51.30unit of government. The terms of each commissioner are three years, provided that the
51.31length of the initial appointments must be staggered so that the terms of approximately
51.32one-third of the commissioners expire each calendar year.
52.1 Subd. 4. Appointment of commissioners. The governmental body of each member
52.2governmental unit shall appoint a resident of that governmental unit to be a commissioner
52.3of the airport authority. Upon vacancy of a commissioner prior to the end of a normal term,
52.4the appropriate governmental body shall appoint a commissioner to fill the unexpired term.
52.5 Subd. 5. Compensation; meetings; officers. Commissioners shall receive no
52.6compensation for services, but are entitled to payment for necessary expenses, including
52.7travel expenses, incurred in the discharge of the commissioners' duties.
52.8 The commission shall establish a regular meeting schedule. A majority of the
52.9commissioners of the authority constitutes a quorum for purposes of conducting business
52.10of the authority. Action may be taken by the majority vote of not less than a majority of
52.11the commissioners present, providing there is a quorum.
52.12 The commission shall elect a chair, a vice-chair, a secretary, and a treasurer at its
52.13organizational meeting. The authority may hire an executive director, a legal advisor,
52.14technical experts, and other employees, permanent and temporary, as it may require.
52.15 Subd. 6. Process to increase size of authority. An airport authority may be
52.16increased in size by adding additional governmental entities if each of the additional
52.17entities and each of the governmental entities currently included in the existing authority
52.18adopt a resolution agreeing to the size increase.
52.19 Subd. 7. Process to decrease size of authority. An airport authority may be
52.20decreased in size if each of the governmental entities that are members of the authority
52.21and the current commissioners consent to change and make provisions for the retention
52.22or disposition of its assets and liabilities.
52.23 Subd. 8. Process to dissolve authority. An airport authority may be dissolved after
52.24payment of all debts and adoption of a joint resolution of the governing bodies of all of
52.25the participating units of government. Before dissolution, the property of the airport
52.26authority must be sold, transferred, or distributed as agreed to by the participating units
52.27of government. Any remaining funds must be distributed to the general funds of the
52.28participating units of government in proportion to their relative shares of the most recent
52.29levy under section 360.0427.
52.30 Sec. 35. [360.0427] TAX LEVY MAY BE CERTIFIED BY AN AIRPORT
52.31AUTHORITY.
52.32 In any year in which it imposes a property tax levy, an airport authority must certify
52.33to the auditor of any county that contains property within the boundaries of the airport
52.34authority a uniform tax rate to be levied on all taxable property within the boundaries
52.35of the airport authority.
53.1EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
53.2in 2008, and thereafter.
53.3 Sec. 36. Minnesota Statutes 2006, section 435.193, is amended to read:
53.4435.193 HARDSHIP ASSESSMENT DEFERRAL FOR SENIORS
53.5DISABLED, OR MILITARY PERSONS.
53.6 (a) Notwithstanding the provisions of any law to the contrary, any county, statutory
53.7or home rule charter city, or town, making a special assessment may, at its discretion, defer
53.8the payment of that assessment for any homestead property:
53.9 (1) owned by a person 65 years of age or older or retired by virtue of a permanent
53.10and total disability for whom it would be a hardship to make the payments; or
53.11 (2) owned by a person who is a member of the Minnesota National Guard or other
53.12military reserves who is ordered into active military service, as defined in section 190.05,
53.13subdivision 5b or 5c, as stated in the person's military orders, for whom it would be a
53.14hardship to make the payments.
53.15 (b) Any county, statutory or home rule charter city, or town electing to defer
53.16special assessments shall adopt an ordinance or resolution establishing standards and
53.17guidelines for determining the existence of a hardship and for determining the existence of
53.18a disability, but nothing herein shall be construed to prohibit the determination of hardship
53.19on the basis of exceptional and unusual circumstances not covered by the standards and
53.20guidelines where the determination is made in a nondiscriminatory manner and does not
53.21give the applicant an unreasonable preference or advantage over other applicants.
53.22EFFECTIVE DATE.This section is effective the day following final enactment,
53.23and applies to any special assessment for which payment is due on or after that date.
53.24 Sec. 37. Laws 1973, chapter 393, section 1, as amended by Laws 1974, chapter 153,
53.25section 1, is amended to read:
53.26 Section 1. MINNEAPOLIS, CITY OF; STREET MAINTENANCE AND
53.27LIGHTING.
53.28 Notwithstanding the provisions of any statute or the charter of the city of
53.29Minneapolis to the contrary, the city council of said city may provide that all or part of the
53.30costs of construction, operation, and maintenance of streets and street lighting within the
53.31city may hereafter be paid from the general revenues of the city of Minneapolis; provided
53.32that the portion of the costs assessable against nongovernmental real property exempt from
53.33ad valorem taxation may be levied as a special assessment against the property.
54.1 Sec. 38. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
54.2article 6, section 9, and Laws 2000, chapter 490, article 6, section 15, is amended to read:
54.3 Sec. 3. TAX; PAYMENT OF EXPENSES.
54.4 (a) The tax levied by the hospital district under Minnesota Statutes, section
54.5must not be levied at a rate that exceeds
54.6authorized to be levied under that section. The proceeds of the tax may be used for all
54.7purposes of the hospital district, except as provided in paragraph (b).
54.8 (b)
54.9
54.10
54.11
54.12solely for the purpose of capital expenditures as it relates to ambulance acquisitions for
54.13the Cook ambulance service and the Orr ambulance service and not for administrative
54.14or salary expenses.
54.15 The part of the levy referred to in paragraph
54.16Cook Hospital and passed on directly to the Cook area ambulance service board and the
54.17city of Orr to be held in trust until funding for a new ambulance is needed by either the
54.18Cook ambulance service or the Orr ambulance service.
54.19EFFECTIVE DATE.This section is effective upon compliance with Minnesota
54.20Statutes, section 645.021, subdivision 3, by the governing body of the Cook-Orr Hospital
54.21District.
54.22 Sec. 39. Laws 1989, chapter 211, section 8, subdivision 4, as amended by Laws 2002,
54.23chapter 390, section 24, and Laws 2003, chapter 127, article 2, section 22, subdivision 4,
54.24is amended to read:
54.25 Subd. 4. Tax levy. The tax levied under Minnesota Statutes, section
54.26not exceed
54.27
54.28
54.29
54.30
54.31
54.32
54.33
54.34
54.35under that section.
55.1 The proceeds of the tax may be used for all purposes of the hospital district.
55.2EFFECTIVE DATE.This section is effective upon compliance with Minnesota
55.3Statutes, section 645.021, subdivision 3, by the governing body of the Cook County
55.4Hospital District.
55.5 Sec. 40. Laws 2006, chapter 236, article 1, section 21, is amended to read:
55.6 Sec. 21. EXCHANGE OF TAX-FORFEITED LAND; PRIVATE SALE;
55.7ITASCA COUNTY.
55.8 (a) For the purpose of a land exchange for use in connection with a proposed
55.9steel mill in Itasca County referenced in Laws 1999, chapter 240, article 1, section 8,
55.10subdivision 3, title examination and approval of the land described in paragraph (b)
55.11shall be undertaken as a condition of exchange of the land for class B land, and shall be
55.12governed by Minnesota Statutes, section
55.13of this section. Notwithstanding the evidence of title requirements in Minnesota Statutes,
55.14section
55.15reports or title insurance commitments prepared or underwritten by a title insurer licensed
55.16to conduct title insurance business in this state, regardless of whether abstracts were
55.17created or updated in the preparation of the title reports or commitments. The opinion of
55.18the county attorney, and approval by the attorney general, shall be based on those title
55.19reports or commitments.
55.20 (b) The land subject to this section is located in Itasca County and is described as:
55.21 (1) Sections 3, 4, 7, 10, 14, 15, 16, 17, 18, 20, 21, 22, 23, 26, 28, and 29, Township
55.2256 North, Range 22 West;
55.23 (2) Sections 3, 4, 9, 10, 13, and 14, Township 56 North, Range 23 West;
55.24 (3) Section 30, Township 57 North, Range 22 West; and
55.25 (4) Sections 25, 26, 34, 35, and 36, Township 57 North, Range 23 West.
55.26 (c) Riparian land given in exchange by Itasca County for the purpose of the steel
55.27mill referenced in paragraph (a), is exempt from the restrictions imposed by Minnesota
55.28Statutes, section
55.29 (d) Notwithstanding Minnesota Statutes, sections
55.30and the public sale provisions of Minnesota Statutes, chapter 282, Itasca County may sell,
55.31by private sale, any land received in exchange for the purpose of the steel mill referenced
55.32in paragraph (a), under the remaining provisions of Minnesota Statutes, chapter 282. The
55.33sale must be in a form approved by the attorney general.
55.34 (e) Notwithstanding Minnesota Statutes, section 284.28, subdivision 8, or any other
55.35law to the contrary, land acquired through an exchange under this section is exempt from
56.1payment of three percent of the sales price required to be collected by the county auditor
56.2at the time of sale for deposit in the state treasury.
56.3EFFECTIVE DATE.This section is effective the day following final enactment.
56.4 Sec. 41. FISCAL DISPARITIES STUDY.
56.5 The commissioner of revenue shall conduct a study of the metropolitan revenue
56.6distribution program contained in Minnesota Statutes, chapter 473F, commonly known
56.7as the fiscal disparities program. On or before February 1, 2009, the commissioner shall
56.8make a report to the chairs of the house of representatives and senate tax committees
56.9consisting of the findings of the study and any recommendations resulting from the study.
56.10 The study must consider to what extent the program is meeting the following goals,
56.11and what changes could be made to the program in the furtherance of meeting those goals:
56.12 (1) reducing the extent to which the property tax encourages development patterns
56.13that do not make cost-effective use of public infrastructure or impose other high public
56.14costs;
56.15 (2) ensuring that the benefits of economic growth of the region are shared throughout
56.16the region, especially for growth that results from state and/or regional decisions;
56.17 (3) improving the ability of each jurisdiction within the region to deliver services at
56.18a level commensurate with its tax effort;
56.19 (4) compensating jurisdictions containing properties that provide regional benefits
56.20for the costs those properties impose on their host jurisdictions in excess of their tax
56.21payments;
56.22 (5) promoting a fair distribution of property tax burdens across jurisdictions of
56.23the region; and
56.24 (6) reducing the economic losses that result from competition among communities
56.25for commercial-industrial tax base.
56.26EFFECTIVE DATE.This section is effective July 1, 2007.
56.27 Sec. 42. CITY OF BROOKLYN CENTER; PARTICIPATION IN CRIME-FREE
56.28MULTIHOUSING PROGRAM.
56.29 (a) In addition to the requirements of Minnesota Statutes, section 273.128, if
56.30property located in the city of Brooklyn Center qualifies under paragraph (b), the owners
56.31or managers must complete the three phases of the city's crime-free multihousing program
56.32and the qualifying property must be annually certified by the police as participating
56.33in the program. If a qualifying property is not certified within one year after it is first
57.1determined to be a qualifying property under paragraph (b), or does not annually maintain
57.2its certification in the program, the city shall notify the property owner that the qualifying
57.3property must comply with the requirements of this section to maintain its classification
57.4as class 4d property. If a qualifying property is not in compliance within one year after
57.5receiving the notice from the city, the city shall issue a second notice and require the
57.6owners to enter into a plan to achieve compliance within one year. If, upon expiration
57.7of the one-year time period, the qualifying property has not been certified by the police
57.8as completing the program, the city shall notify the commissioner of the Housing
57.9Finance Agency and the commissioner shall remove the property from the list of class 4d
57.10properties certified to the assessor under Minnesota Statutes, section 273.128, subdivision
57.113. Once removed from the list, the property is not eligible for class 4d classification until
57.12it complies with this section and its compliance has been certified to the Housing Finance
57.13Agency by the city. Certification to the Housing Finance Agency must be made by May
57.1415 to be effective for taxes payable in the following year.
57.15 (b) A property is a qualifying property for purposes of this section's requirements if
57.16it satisfies each of the following requirements:
57.17 (1) the city offers a crime-free multihousing program through its city police;
57.18 (2) over the preceding three-year period, the number of police calls to the property
57.19exceeded the city's average number of calls for multiunit rental properties for the period
57.20by at least 25 percent, adjusted for the number of rental units;
57.21 (3) the police department has requested, in writing, the owners or managers of the
57.22property to enroll in the crime-free multihousing program and the owners or managers
57.23refused or failed to enroll within 60 days after the request, or failed to complete phases
57.24one and three within 90 days and all three phases of the program within a one-year time
57.25period; and
57.26 (4) the governing body of the city, by resolution, determines the property is a
57.27qualifying property under clauses (1) to (3).
57.28 (c) Calls for police or emergency assistance in response to domestic abuse or
57.29medical assistance shall not be counted toward the number of calls in paragraph (b), clause
57.30(2). For purposes of this section, "domestic abuse" has the meaning given in Minnesota
57.31Statutes, section 518B.01, subdivision 2.
57.32 (d) Low-income qualifying rental housing property classified as class 4d property
57.33for taxes payable in 2007 must meet the requirements of this section by May 15, 2010.
57.34EFFECTIVE DATE; LOCAL APPROVAL.This section is effective the day after
57.35compliance by the governing body of the city of Brooklyn Center and its chief clerical
58.1officer with Minnesota Statutes, section 645.021, subdivisions 2 and 3, and applies to
58.2property taxes levied in 2007, payable in 2008, and thereafter.
58.3 Sec. 43. CLAIR A. NELSON MEMORIAL FOREST, LAKE COUNTY;
58.4TEMPORARY SUSPENSION OF APPORTIONMENT OF PROCEEDS FROM
58.5TAX-FORFEITED LANDS.
58.6 (a) Upon approval of an affected political subdivision within Lake County, the
58.7Lake County Board may suspend the apportionment of the balance of net proceeds from
58.8tax-forfeited lands within the affected political subdivision under Minnesota Statutes,
58.9section 282.08, clause (4), item (iii), and retain the net proceeds. The authority under this
58.10paragraph is available until Lake County suspends the apportionment of net proceeds
58.11subject to item (iii) in the amount of $2,200,000 plus any interest costs incurred by the
58.12county to purchase land described in this section. The money received by Lake County is
58.13to reimburse the county for the purchase in 2006 of 6,085 acres of forest land named the
58.14Clair A. Nelson Memorial Forest.
58.15 (b) Any revenue derived from acquired land that was reimbursed under paragraph
58.16(a) is subject to apportionment as provided in Minnesota Statutes, section 282.08.
58.17EFFECTIVE DATE.This section is effective retroactively from January 1, 2006.
58.18 Sec. 44. LAKEVIEW CEMETERY ASSOCIATION.
58.19 Subdivision 1. Authorized. Any two or more of the following cities and towns in
58.20Itasca County may enter into a joint powers agreement under Minnesota Statutes, section
58.21471.59, to establish the Lakeview Cemetery Association with the powers and duties of a
58.22cemetery association under Minnesota Statutes, chapter 306: the cities of Bovey, Calumet,
58.23Coleraine, Marble, and Taconite, and the towns of Greenway, Iron Range, Lawrence,
58.24and Trout Lake.
58.25 Subd. 2. Additions; withdrawals. (a) A city or town listed in subdivision 1 that
58.26does not join the association at the time of the initial agreement may join as provided in
58.27the joint powers agreement, or if the joint powers agreement does not provide for later
58.28additions, by providing the association a copy of the adopted resolution to join. If the
58.29joint powers agreement does not provide for adding members, a city or town that joins
58.30after the initial agreement is effective, may join prior to July 1 of the levy year, for taxes
58.31payable in the following year.
58.32 (b) A city or town may withdraw from the association as otherwise provided in the
58.33joint powers agreement, or providing to the association a copy of the adopted resolution of
58.34the city or town, prior to July 1 of the levy year for taxes payable in the following year.
59.1 Subd. 3. Operation; tax levy. The joint powers agreement for the association may
59.2provide for each participating city and town to levy a tax against all taxable properties
59.3located within the city or town. The maximum amount that may be levied by all
59.4participating cities and towns combined shall not exceed a total of $200,000 per year. If
59.5levied, the tax is in addition to all other taxes permitted to be levied on the property,
59.6including taxes permitted to be levied for cemetery purposes by a participating city or
59.7town. The levy under this section must be disregarded in the calculation of all other
59.8rate or per capita levy limitations imposed by law. One of the cities or towns within the
59.9association, chosen by the members of the association, shall certify a tax levy to the
59.10Itasca County auditor. When collected, the Itasca County auditor shall pay the Lakeview
59.11Cemetery Association directly.
59.12EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
59.13in 2008, and thereafter.
59.14 Sec. 45. TAX-FORFEITED LANDS LEASE; ITASCA COUNTY.
59.15 Notwithstanding Minnesota Statutes, section 282.04, or other law to the contrary,
59.16the Itasca County auditor may lease tax-forfeited land to Minnesota Steel for a period of
59.1720 years, for use as a tailings basin and buffer area. A lease entered under this section
59.18is renewable.
59.19EFFECTIVE DATE.This section is effective the day following final enactment.
59.20 Sec. 46. HAM LAKE FIRE; PROPERTY TAX REDUCTION; STATE
59.21REIMBURSEMENT.
59.22 Subdivision 1. Property tax reduction. The owner of property that was destroyed
59.23in the Ham Lake fire in 2007 may apply to the Cook County assessor to receive a reduction
59.24in the amount of taxes payable on the property for 2007 and 2008. The reduction provided
59.25under this section must be granted if 50 percent or more of the homestead dwelling or
59.26nonhomestead structure, as established by the county assessor, has been destroyed by the
59.27fire and related effects and the homestead is uninhabitable or the other structure is not
59.28useable. For property that meets the requirements of this section, the tax liabilities for the
59.29second half of property taxes due in October 2007 and for all property taxes due in 2008
59.30are reduced to zero. If application is made following payment of all property taxes due for
59.312007, the amount of the reduction shall be refunded to the taxpayer by the county treasurer
59.32as soon as practical. A reduction granted under this section is in lieu of a reduction under
59.33Minnesota Statutes, section 273.123.
60.1 Subd. 2. State reimbursement. The Cook County auditor shall calculate the tax
60.2on the property described in subdivision 1 based on the assessment made on January 2,
60.32007, paid in 2007 and 2008 after the reduction granted in subdivision 1. The difference
60.4between the tax determined on the January 2 tax capacity and the tax actually paid
60.5pursuant to this section shall be reimbursed to each taxing jurisdiction in which the
60.6damaged property is located. The amount shall be certified by the county auditor and
60.7reported to the commissioner of revenue. The commissioner shall make the payments to
60.8the taxing jurisdictions containing the property on the settlement dates in Minnesota
60.9Statutes, sections 276.11 and 276.111, for the second half of 2007 payments and for both
60.102008 payments in the same proportion that the ad valorem tax is distributed.
60.11 Subd. 3. Computation of credits. The amounts of the market value homestead
60.12credit provided in Minnesota Statutes, section 273.1384, shall be computed on the
60.13tax determined before the reduction under subdivision 1. For purposes of the property
60.14tax refund, property taxes payable, as defined in Minnesota Statutes, section 290A.03,
60.15subdivision 13, must be computed upon the tax determined under subdivision 1.
60.16 Subd. 4. Appropriation. $500,000 is appropriated from the general fund to the
60.17commissioner of revenue to make the payments required by this section. This amount
60.18does not cancel, but remains available until June 30, 2009.
60.19EFFECTIVE DATE.This section is effective the day following final enactment.
60.20 Sec. 47. REPEALER.
60.21(a) Laws 1973, chapter 393, section 2, is repealed.
60.22(b) Laws 1994, chapter 587, article 9, section 8, subdivision 1, as amended by Laws
60.232005, First Special Session chapter 3, article 1, section 36, is repealed, effective for the
60.24same levy year in which the association initially levies under section 44.
60.27 Section 1. Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read:
60.28 Subd. 6b. Foreign operating corporation. The term "foreign operating
60.29corporation," when applied to a corporation, means a domestic corporation with the
60.30following characteristics:
60.31 (1) it is part of a unitary business at least one member of which is taxable in this state;
60.32 (2) it is not a foreign sales corporation under section 922 of the Internal Revenue
60.33Code, as amended through December 31, 1999, for the taxable year;
61.1 (3) either (i)
61.2
61.3
61.4
61.5
61.6valid election under section 936 of the Internal Revenue Code; or (ii) at least 80 percent of
61.7the gross income from all sources of the corporation in the tax year is
61.8
61.9
61.10
61.11
61.12
61.13
61.14the United States, as defined in subtitle A, chapter 1, subchapter N, part 1, of the Internal
61.15Revenue Code.
61.16EFFECTIVE DATE.This section is effective for taxable years beginning after
61.17December 31, 2006.
61.18 Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
61.19 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
61.20there shall be added to federal taxable income:
61.21 (1) the amount of any deduction taken for federal income tax purposes for income,
61.22excise, or franchise taxes based on net income or related minimum taxes, including but not
61.23limited to the tax imposed under section
61.24another state, a political subdivision of another state, the District of Columbia, or any
61.25foreign country or possession of the United States;
61.26 (2) interest not subject to federal tax upon obligations of: the United States, its
61.27possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
61.28state, any of its political or governmental subdivisions, any of its municipalities, or any
61.29of its governmental agencies or instrumentalities; the District of Columbia; or Indian
61.30tribal governments;
61.31 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
61.32Revenue Code;
61.33 (4) the amount of any net operating loss deduction taken for federal income tax
61.34purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
61.35deduction under section 810 of the Internal Revenue Code;
62.1 (5) the amount of any special deductions taken for federal income tax purposes
62.2under sections 241 to 247 and 965 of the Internal Revenue Code;
62.3 (6) losses from the business of mining, as defined in section
62.4clause (a), that are not subject to Minnesota income tax;
62.5 (7) the amount of any capital losses deducted for federal income tax purposes under
62.6sections 1211 and 1212 of the Internal Revenue Code;
62.7 (8) the exempt foreign trade income of a foreign sales corporation under sections
62.8921(a) and 291 of the Internal Revenue Code;
62.9 (9) the amount of percentage depletion deducted under sections 611 through 614 and
62.10291 of the Internal Revenue Code;
62.11 (10) for certified pollution control facilities placed in service in a taxable year
62.12beginning before December 31, 1986, and for which amortization deductions were elected
62.13under section 169 of the Internal Revenue Code of 1954, as amended through December
62.1431, 1985, the amount of the amortization deduction allowed in computing federal taxable
62.15income for those facilities;
62.16 (11) the amount of any deemed dividend from a foreign operating corporation
62.17determined pursuant to section
62.18shall be reduced by the amount of the addition to income required by clauses (19), (20),
62.19(21), and (22);
62.20 (12) the amount of a partner's pro rata share of net income which does not flow
62.21through to the partner because the partnership elected to pay the tax on the income under
62.22section 6242(a)(2) of the Internal Revenue Code;
62.23 (13) the amount of net income excluded under section 114 of the Internal Revenue
62.24Code;
62.25 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
62.26Revenue Code, for the taxable year when subpart F income is calculated without regard
62.27to the provisions of section 103 of Public Law 109-222;
62.28 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
62.29and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
62.30has an activity that in the taxable year generates a deduction for depreciation under
62.31section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
62.32that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
62.33under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
62.34depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
62.35amount of the loss from the activity that is not allowed in the taxable year. In succeeding
63.1taxable years when the losses not allowed in the taxable year are allowed, the depreciation
63.2under section 168(k)(1)(A) and (k)(4)(A) is allowed;
63.3 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
63.4Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
63.5Revenue Code of 1986, as amended through December 31, 2003;
63.6 (17) to the extent deducted in computing federal taxable income, the amount of the
63.7deduction allowable under section 199 of the Internal Revenue Code;
63.8 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
63.9federal subsidies for prescription drug plans;
63.10 (19) an amount equal to the interest and intangible expenses, losses, and costs paid,
63.11accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
63.12of a corporation that is a member of the taxpayer's unitary business group that qualifies
63.13as a foreign operating corporation. For purposes of this clause, intangible expenses and
63.14costs include:
63.15 (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
63.16use, maintenance or management, ownership, sale, exchange, or any other disposition of
63.17intangible property;
63.18 (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
63.19transactions;
63.20 (iii) royalty, patent, technical, and copyright fees;
63.21 (iv) licensing fees; and
63.22 (v) other similar expenses and costs.
63.23For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
63.24applications, trade names, trademarks, service marks, copyrights, mask works, trade
63.25secrets, and similar types of intangible assets.
63.26This clause does not apply to any item of interest or intangible expenses or costs paid,
63.27accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
63.28to such item of income to the extent that the income to the foreign operating corporation
63.29is income from sources without the United States as defined in subtitle A, chapter 1,
63.30subchapter N, part 1, of the Internal Revenue Code;
63.31 (20) except as already included in the taxpayer's taxable income pursuant to clause
63.32(19), any interest income and income generated from intangible property received or
63.33accrued by a foreign operating corporation that is a member of the taxpayer's unitary
63.34group. For purposes of this clause, income generated from intangible property includes:
63.35 (i) income related to the direct or indirect acquisition, use, maintenance or
63.36management, ownership, sale, exchange, or any other disposition of intangible property;
64.1 (ii) income from factoring transactions or discounting transactions;
64.2 (iii) royalty, patent, technical, and copyright fees;
64.3 (iv) licensing fees; and
64.4 (v) other similar income.
64.5For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
64.6applications, trade names, trademarks, service marks, copyrights, mask works, trade
64.7secrets, and similar types of intangible assets.
64.8This clause does not apply to any item of interest or intangible income received or accrued
64.9by a foreign operating corporation with respect to such item of income to the extent that
64.10the income is income from sources without the United States as defined in subtitle A,
64.11chapter 1, subchapter N, part 1, of the Internal Revenue Code;
64.12 (21) the dividends attributable to the income of a foreign operating corporation that
64.13is a member of the taxpayer's unitary group in an amount that is equal to the dividends
64.14paid deduction of a real estate investment trust under section 561(a) of the Internal
64.15Revenue Code for amounts paid or accrued by the real estate investment trust to the
64.16foreign operating corporation; and
64.17 (22) the income of a foreign operating corporation that is a member of the taxpayer's
64.18unitary group in an amount that is equal to gains derived from the sale of real or personal
64.19property located in the United States.
64.20EFFECTIVE DATE.This section is effective for taxable years beginning after
64.21December 31, 2006.
64.22 Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
64.23 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
64.24corporations, there shall be subtracted from federal taxable income after the increases
64.25provided in subdivision 19c:
64.26 (1) the amount of foreign dividend gross-up added to gross income for federal
64.27income tax purposes under section 78 of the Internal Revenue Code;
64.28 (2) the amount of salary expense not allowed for federal income tax purposes due to
64.29claiming the federal jobs credit under section 51 of the Internal Revenue Code;
64.30 (3) any dividend (not including any distribution in liquidation) paid within the
64.31taxable year by a national or state bank to the United States, or to any instrumentality of
64.32the United States exempt from federal income taxes, on the preferred stock of the bank
64.33owned by the United States or the instrumentality;
65.1 (4) amounts disallowed for intangible drilling costs due to differences between
65.2this chapter and the Internal Revenue Code in taxable years beginning before January
65.31, 1987, as follows:
65.4 (i) to the extent the disallowed costs are represented by physical property, an amount
65.5equal to the allowance for depreciation under Minnesota Statutes 1986, section
65.6subdivision 7
65.7 (ii) to the extent the disallowed costs are not represented by physical property, an
65.8amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
65.10 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
65.11Internal Revenue Code, except that:
65.12 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
65.13capital loss carrybacks shall not be allowed;
65.14 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
65.15a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
65.16allowed;
65.17 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
65.18capital loss carryback to each of the three taxable years preceding the loss year, subject to
65.19the provisions of Minnesota Statutes 1986, section
65.20 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
65.21a capital loss carryover to each of the five taxable years succeeding the loss year to the
65.22extent such loss was not used in a prior taxable year and subject to the provisions of
65.23Minnesota Statutes 1986, section
65.24 (6) an amount for interest and expenses relating to income not taxable for federal
65.25income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
65.26expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
65.27291 of the Internal Revenue Code in computing federal taxable income;
65.28 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
65.29which percentage depletion was disallowed pursuant to subdivision 19c, clause (11), a
65.30reasonable allowance for depletion based on actual cost. In the case of leases the deduction
65.31must be apportioned between the lessor and lessee in accordance with rules prescribed
65.32by the commissioner. In the case of property held in trust, the allowable deduction must
65.33be apportioned between the income beneficiaries and the trustee in accordance with the
65.34pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
65.35of the trust's income allocable to each;
66.1 (8) for certified pollution control facilities placed in service in a taxable year
66.2beginning before December 31, 1986, and for which amortization deductions were elected
66.3under section 169 of the Internal Revenue Code of 1954, as amended through December
66.431, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
66.51986, section
66.6 (9) amounts included in federal taxable income that are due to refunds of income,
66.7excise, or franchise taxes based on net income or related minimum taxes paid by the
66.8corporation to Minnesota, another state, a political subdivision of another state, the
66.9District of Columbia, or a foreign country or possession of the United States to the extent
66.10that the taxes were added to federal taxable income under section
66.11clause (1), in a prior taxable year;
66.12 (10) 80 percent of royalties, fees, or other like income accrued or received from a
66.13foreign operating corporation or a foreign corporation which is part of the same unitary
66.14business as the receiving corporation, unless the income resulting from such payments or
66.15accruals is income from sources within the United States as defined in subtitle A, chapter
66.161, subchapter N, part 1, of the Internal Revenue Code;
66.17 (11) income or gains from the business of mining as defined in section
66.18subdivision 1
66.19 (12) the amount of disability access expenditures in the taxable year which are not
66.20allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
66.21 (13) the amount of qualified research expenses not allowed for federal income tax
66.22purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
66.23the amount exceeds the amount of the credit allowed under section
66.24 (14) the amount of salary expenses not allowed for federal income tax purposes due
66.25to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
66.26Code;
66.27 (15) the amount of any refund of environmental taxes paid under section 59A of the
66.28Internal Revenue Code;
66.29 (16) for taxable years beginning before January 1, 2008, the amount of the federal
66.30small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
66.31which is included in gross income under section 87 of the Internal Revenue Code;
66.32 (17) for a corporation whose foreign sales corporation, as defined in section 922
66.33of the Internal Revenue Code, constituted a foreign operating corporation during any
66.34taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
66.35claiming the deduction under section
66.36the foreign operating corporation, an amount equal to
67.1income excluded under section 114 of the Internal Revenue Code, provided the income is
67.2not income of a foreign operating company;
67.3 (18) any decrease in subpart F income, as defined in section 952(a) of the Internal
67.4Revenue Code, for the taxable year when subpart F income is calculated without regard
67.5to the provisions of section 614 of Public Law 107-147;
67.6 (19) in each of the five tax years immediately following the tax year in which an
67.7addition is required under subdivision 19c, clause (15), an amount equal to one-fifth of
67.8the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
67.9amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
67.10resulting delayed depreciation cannot be less than zero; and
67.11 (20) in each of the five tax years immediately following the tax year in which an
67.12addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of the
67.13amount of the addition.
67.14EFFECTIVE DATE.This section is effective for taxable years beginning after
67.15December 31, 2006.
67.16 Sec. 4. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
67.17 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
67.18income" is Minnesota net income as defined in section
67.19includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
67.20(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
67.21Minnesota tax return, the minimum tax must be computed on a separate company basis.
67.22If a corporation is part of a tax group filing a unitary return, the minimum tax must be
67.23computed on a unitary basis. The following adjustments must be made.
67.24 (1) For purposes of the depreciation adjustments under section 56(a)(1) and
67.2556(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
67.26service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
67.27income tax purposes, including any modification made in a taxable year under section
67.29paragraph (c).
67.30 For taxable years beginning after December 31, 2000, the amount of any remaining
67.31modification made under section
67.32section
67.33allowance in the first taxable year after December 31, 2000.
67.34 (2) The portion of the depreciation deduction allowed for federal income tax
67.35purposes under section 168(k) of the Internal Revenue Code that is required as an addition
68.1under section
68.2alternative minimum taxable income.
68.3 (3) The subtraction for depreciation allowed under section
68.4clause (19), is allowed as a depreciation deduction in determining alternative minimum
68.5taxable income.
68.6 (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
68.7of the Internal Revenue Code does not apply.
68.8 (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
68.9Revenue Code does not apply.
68.10 (6) The special rule for dividends from section 936 companies under section
68.1156(g)(4)(C)(iii) does not apply.
68.12 (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
68.13Code does not apply.
68.14 (8) The tax preference for intangible drilling costs under section 57(a)(2) of the
68.15Internal Revenue Code must be calculated without regard to subparagraph (E) and the
68.16subtraction under section
68.17 (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
68.18Revenue Code does not apply.
68.19 (10) The tax preference for charitable contributions of appreciated property under
68.20section 57(a)(6) of the Internal Revenue Code does not apply.
68.21 (11) For purposes of calculating the tax preference for accelerated depreciation or
68.22amortization on certain property placed in service before January 1, 1987, under section
68.2357(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
68.24deduction allowed under section
68.25 For taxable years beginning after December 31, 2000, the amount of any remaining
68.26modification made under section
68.27depreciation or amortization allowance in the first taxable year after December 31, 2004.
68.28 (12) For purposes of calculating the adjustment for adjusted current earnings in
68.29section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
68.30income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
68.31minimum taxable income as defined in this subdivision, determined without regard to the
68.32adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
68.33 (13) For purposes of determining the amount of adjusted current earnings under
68.34section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
68.3556(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
68.36gross-up subtracted as provided in section
69.1amount of refunds of income, excise, or franchise taxes subtracted as provided in section
69.3income subtracted as provided in section
69.4 (14) Alternative minimum taxable income excludes the income from operating in a
69.5job opportunity building zone as provided under section
69.6 (15) Alternative minimum taxable income excludes the income from operating in a
69.7biotechnology and health sciences industry zone as provided under section
69.8 (16) Alternative minimum taxable income excludes the income from operating in an
69.9international economic development zone as provided under section
69.10 Items of tax preference must not be reduced below zero as a result of the
69.11modifications in this subdivision.
69.12EFFECTIVE DATE.This section is effective for taxable years beginning after
69.13December 31, 2006.
69.14 Sec. 5. Minnesota Statutes 2006, section 290.34, is amended by adding a subdivision
69.15to read:
69.16 Subd. 3a. Transactions without economic substance. (a) When any person,
69.17directly or indirectly, engages in a transaction or series of transactions without economic
69.18substance to create a loss or to reduce taxable income or to increase credits allowed in
69.19determining Minnesota tax, the commissioner must determine the amount of a taxpayer's
69.20taxable income or tax so as to reflect what would have been the taxpayer's taxable income
69.21or tax but for the transaction or transactions without economic substance causing the
69.22reduction in taxable income or tax.
69.23 (b) A transaction has economic substance only if a taxpayer shows by clear and
69.24convincing evidence:
69.25 (1) the transaction changes in a meaningful way (apart from federal, state, local, and
69.26foreign tax effects) the taxpayer's economic position; and
69.27 (2) the taxpayer has a substantial nontax purpose for entering into a transaction and
69.28the transaction is a reasonable means of accomplishing the substantial nontax purpose.
69.29A transaction does not have a substantial nontax purpose if it does not have a potential
69.30for profit. A transaction has a substantial nontax purpose when the taxpayer reasonably
69.31expects that the pretax profit for the transaction is substantial in relation to the present
69.32value of the expected net tax benefits that would be allowed if the transaction were
69.33respected for tax purposes, and the reasonably expected pretax profit from the transaction
69.34exceeds the risk-free rate of return.
70.1 (c) It is the intent of the legislature that the provisions of this subdivision must not
70.2be construed as supplanting any existing Minnesota law.
70.3EFFECTIVE DATE.This section is effective for taxable years beginning after
70.4December 31, 2006.
70.7 Section 1. Minnesota Statutes 2006, section 289A.12, subdivision 4, is amended to
70.8read:
70.9 Subd. 4. Returns by persons, corporations, cooperatives, governmental entities,
70.10or school districts. (a) The commissioner may by notice and demand require to the
70.11extent required by section 6041 of the Internal Revenue Code, a person, corporation,
70.12or cooperative, the state of Minnesota and its political subdivisions, and a city, county,
70.13and school district in Minnesota, making payments in the regular course of a trade or
70.14business during the taxable year to any person or corporation of $600 or more on account
70.15of rents or royalties, or of $10 or more on account of interest, or $10 or more on account
70.16of dividends or patronage dividends, or $600 or more on account of either wages, salaries,
70.17commissions, fees, prizes, awards, pensions, annuities, or any other fixed or determinable
70.18gains, profits or income, not otherwise reportable under section
70.19on account of earnings of $10 or more distributed to its members by savings associations
70.20or credit unions chartered under the laws of this state or the United States, (1) to file with
70.21the commissioner a return (except in cases where a valid agreement to participate in the
70.22combined federal and state information reporting system has been entered into, and the
70.23return is filed only with the commissioner of internal revenue under the applicable filing
70.24and informational reporting requirements of the Internal Revenue Code) with respect to
70.25the payments in excess of the amounts named, giving the names and addresses of the
70.26persons to whom the payments were made, the amounts paid to each, and (2) to make
70.27a return with respect to the total number of payments and total amount of payments,
70.28for each category of income named, which were in excess of the amounts named. This
70.29subdivision does not apply to the payment of interest or dividends to a person who was a
70.30nonresident of Minnesota for the entire year.
70.31 (b) For payments for which a return is covered by paragraph (a), regardless of
70.32whether the commissioner has required filing under paragraph (a), the payor must file a
70.33copy of the return with the commissioner if:
71.1 (i) the return is for a payment made to a Minnesota resident, to a recipient with a
71.2Minnesota address, or for activity occurring in the state of Minnesota; and
71.3 (ii) the payment is for wages, salaries, or other compensation for services provided.
71.4The commissioner may require this information to be filed in electronic or another form
71.5that the commissioner determines is appropriate, notwithstanding the provisions of
71.6paragraph (c).
71.7 (c) A person, corporation, or cooperative required to file returns under this
71.8subdivision must file the returns on magnetic media if magnetic media was used to satisfy
71.9the federal reporting requirement under section 6011(e) of the Internal Revenue Code,
71.10unless the person establishes to the satisfaction of the commissioner that compliance with
71.11this requirement would be an undue hardship.
71.12EFFECTIVE DATE.This section is effective for forms required to be filed by
71.13federal law after December 31, 2007.
71.14 Sec. 2. Minnesota Statutes 2006, section 290.01, subdivision 19a, is amended to read:
71.15 Subd. 19a. Additions to federal taxable income. For individuals, estates, and
71.16trusts, there shall be added to federal taxable income:
71.17 (1)(i) interest income on obligations of any state other than Minnesota or a political
71.18or governmental subdivision, municipality, or governmental agency or instrumentality
71.19of any state other than Minnesota exempt from federal income taxes under the Internal
71.20Revenue Code or any other federal statute; and
71.21 (ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
71.22Code, except the portion of the exempt-interest dividends derived from interest income
71.23on obligations of the state of Minnesota or its political or governmental subdivisions,
71.24municipalities, governmental agencies or instrumentalities, but only if the portion of the
71.25exempt-interest dividends from such Minnesota sources paid to all shareholders represents
71.2695 percent or more of the exempt-interest dividends that are paid by the regulated
71.27investment company as defined in section 851(a) of the Internal Revenue Code, or the
71.28fund of the regulated investment company as defined in section 851(g) of the Internal
71.29Revenue Code, making the payment; and
71.30 (iii) for the purposes of items (i) and (ii), interest on obligations of an Indian tribal
71.31government described in section 7871(c) of the Internal Revenue Code shall be treated as
71.32interest income on obligations of the state in which the tribe is located;
71.33 (2) the amount of income or sales and use taxes paid or accrued within the taxable
71.34year under this chapter and the amount of taxes based on net income paid or sales and use
71.35taxes paid to any other state or to any province or territory of Canada, to the extent allowed
72.1as a deduction under section 63(d) of the Internal Revenue Code, but the addition may not
72.2be more than the amount by which the itemized deductions as allowed under section 63(d)
72.3of the Internal Revenue Code exceeds the amount of the standard deduction as defined
72.4in section 63(c) of the Internal Revenue Code. For the purpose of this paragraph, the
72.5disallowance of itemized deductions under section 68 of the Internal Revenue Code of
72.61986, income or sales and use tax is the last itemized deduction disallowed;
72.7 (3) the capital gain amount of a lump sum distribution to which the special tax under
72.8section 1122(h)(3)(B)(ii) of the Tax Reform Act of 1986, Public Law 99-514, applies;
72.9 (4) the amount of income taxes paid or accrued within the taxable year under this
72.10chapter and taxes based on net income paid to any other state or any province or territory
72.11of Canada, to the extent allowed as a deduction in determining federal adjusted gross
72.12income. For the purpose of this paragraph, income taxes do not include the taxes imposed
72.13by sections
72.14 (5) the amount of expense, interest, or taxes disallowed pursuant to section
72.15other than expenses or interest used in computing net interest income for the subtraction
72.16allowed under subdivision 19b, clause (1);
72.17 (6) the amount of a partner's pro rata share of net income which does not flow
72.18through to the partner because the partnership elected to pay the tax on the income under
72.19section 6242(a)(2) of the Internal Revenue Code;
72.20 (7) 80 percent of the depreciation deduction allowed under section 168(k) of the
72.21Internal Revenue Code. For purposes of this clause, if the taxpayer has an activity that
72.22in the taxable year generates a deduction for depreciation under section 168(k) and the
72.23activity generates a loss for the taxable year that the taxpayer is not allowed to claim for
72.24the taxable year, "the depreciation allowed under section 168(k)" for the taxable year is
72.25limited to excess of the depreciation claimed by the activity under section 168(k) over the
72.26amount of the loss from the activity that is not allowed in the taxable year. In succeeding
72.27taxable years when the losses not allowed in the taxable year are allowed, the depreciation
72.28under section 168(k) is allowed;
72.29 (8) 80 percent of the amount by which the deduction allowed by section 179 of the
72.30Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
72.31Revenue Code of 1986, as amended through December 31, 2003;
72.32 (9) to the extent deducted in computing federal taxable income, the amount of the
72.33deduction allowable under section 199 of the Internal Revenue Code;
72.34 (10) the exclusion allowed under section 139A of the Internal Revenue Code for
72.35federal subsidies for prescription drug plans; and
72.36 (11) the amount of expenses disallowed under section 290.10, subdivision 2.
73.1EFFECTIVE DATE.This section is effective for taxable years beginning after
73.2December 31, 2006.
73.3 Sec. 3. Minnesota Statutes 2006, section 290.01, subdivision 19b, is amended to read:
73.4 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
73.5and trusts, there shall be subtracted from federal taxable income:
73.6 (1) net interest income on obligations of any authority, commission, or
73.7instrumentality of the United States to the extent includable in taxable income for federal
73.8income tax purposes but exempt from state income tax under the laws of the United States;
73.9 (2) if included in federal taxable income, the amount of any overpayment of income
73.10tax to Minnesota or to any other state, for any previous taxable year, whether the amount
73.11is received as a refund or as a credit to another taxable year's income tax liability;
73.12 (3) the amount paid to others, less the amount used to claim the credit allowed under
73.13section
73.14to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
73.15transportation of each qualifying child in attending an elementary or secondary school
73.16situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
73.17resident of this state may legally fulfill the state's compulsory attendance laws, which
73.18is not operated for profit, and which adheres to the provisions of the Civil Rights Act
73.19of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
73.20tuition as defined in section
73.21"textbooks" includes books and other instructional materials and equipment purchased
73.22or leased for use in elementary and secondary schools in teaching only those subjects
73.23legally and commonly taught in public elementary and secondary schools in this state.
73.24Equipment expenses qualifying for deduction includes expenses as defined and limited in
73.25section
73.26books and materials used in the teaching of religious tenets, doctrines, or worship, the
73.27purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
73.28or materials for, or transportation to, extracurricular activities including sporting events,
73.29musical or dramatic events, speech activities, driver's education, or similar programs. For
73.30purposes of the subtraction provided by this clause, "qualifying child" has the meaning
73.31given in section 32(c)(3) of the Internal Revenue Code;
73.32 (4) income as provided under section
73.33 (5) to the extent included in federal adjusted gross income, income realized on
73.34disposition of property exempt from tax under section
74.1 (6) to the extent not deducted in determining federal taxable income by an individual
74.2who does not itemize deductions for federal income tax purposes for the taxable year, an
74.3amount equal to 50 percent of the excess of charitable contributions over $500 allowable
74.4as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
74.5under the provisions of Public Law 109-1;
74.6 (7) for taxable years beginning before January 1, 2008, the amount of the federal
74.7small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
74.8which is included in gross income under section 87 of the Internal Revenue Code;
74.9 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
74.10qualify for a credit under section
74.11of subnational foreign taxes for the taxable year, but not to exceed the total subnational
74.12foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
74.13"federal foreign tax credit" means the credit allowed under section 27 of the Internal
74.14Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
74.15under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
74.16the extent they exceed the federal foreign tax credit;
74.17 (9) in each of the five tax years immediately following the tax year in which an
74.18addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
74.19of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
74.20of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
74.21the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
74.22subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
74.23positive value of any net operating loss under section 172 of the Internal Revenue Code
74.24generated for the tax year of the addition. The resulting delayed depreciation cannot be
74.25less than zero;
74.26 (10) job opportunity building zone income as provided under section
74.27 (11) to the extent included in federal taxable income, the amount of compensation
74.28paid to members of the Minnesota National Guard or other reserve components of the
74.29United States military for active service performed in Minnesota, excluding compensation
74.30for services performed under the Active Guard Reserve (AGR) program. For purposes of
74.31this clause, "active service" means (i) state active service as defined in section
74.32subdivision 5a
74.34subdivision 5c
74.35of basic combat training, advanced individual training, annual training, and periodic
75.1inactive duty training; special training periodically made available to reserve members;
75.2and service performed in accordance with section
75.3 (12) to the extent included in federal taxable income, the amount of compensation
75.4paid to Minnesota residents who are members of the armed forces of the United States or
75.5United Nations for active duty performed outside Minnesota under United States Code,
75.6title 10, section 101(d); United States Code, title 32, section 101(12); or the authority of
75.7the United Nations;
75.8 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
75.9qualified donor's donation, while living, of one or more of the qualified donor's organs
75.10to another person for human organ transplantation. For purposes of this clause, "organ"
75.11means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
75.12"human organ transplantation" means the medical procedure by which transfer of a human
75.13organ is made from the body of one person to the body of another person; "qualified
75.14expenses" means unreimbursed expenses for both the individual and the qualified donor
75.15for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
75.16may be subtracted under this clause only once; and "qualified donor" means the individual
75.17or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
75.18individual may claim the subtraction in this clause for each instance of organ donation for
75.19transplantation during the taxable year in which the qualified expenses occur;
75.20 (14) in each of the five tax years immediately following the tax year in which an
75.21addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
75.22shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
75.23addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
75.24case of a shareholder of a corporation that is an S corporation, minus the positive value of
75.25any net operating loss under section 172 of the Internal Revenue Code generated for the
75.26tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
75.27subtraction is not allowed under this clause;
75.28 (15) to the extent included in federal taxable income, compensation paid to a
75.29nonresident who is a service member as defined in United States Code, title 10, section
75.30101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
75.31Law 108-189, section 101(2);
75.32 (16) international economic development zone income as provided under section
75.34 (17) to the extent included in federal taxable income, the amount of national service
75.35educational awards received from the National Service Trust under United States Code,
76.1title 42, sections 12601 to 12604, for service in an approved AmeriCorps national service
76.2program.
76.3EFFECTIVE DATE.This section is effective retroactively for tax years beginning
76.4after December 31, 2004, except that clause (17) is effective for tax years beginning
76.5after December 31, 2006.
76.6 Sec. 4. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
76.7 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
76.8there shall be added to federal taxable income:
76.9 (1) the amount of any deduction taken for federal income tax purposes for income,
76.10excise, or franchise taxes based on net income or related minimum taxes, including but not
76.11limited to the tax imposed under section
76.12another state, a political subdivision of another state, the District of Columbia, or any
76.13foreign country or possession of the United States;
76.14 (2) interest not subject to federal tax upon obligations of: the United States, its
76.15possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
76.16state, any of its political or governmental subdivisions, any of its municipalities, or any
76.17of its governmental agencies or instrumentalities; the District of Columbia; or Indian
76.18tribal governments;
76.19 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
76.20Revenue Code;
76.21 (4) the amount of any net operating loss deduction taken for federal income tax
76.22purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
76.23deduction under section 810 of the Internal Revenue Code;
76.24 (5) the amount of any special deductions taken for federal income tax purposes
76.25under sections 241 to 247 and 965 of the Internal Revenue Code;
76.26 (6) losses from the business of mining, as defined in section
76.27clause (a), that are not subject to Minnesota income tax;
76.28 (7) the amount of any capital losses deducted for federal income tax purposes under
76.29sections 1211 and 1212 of the Internal Revenue Code;
76.30 (8) the exempt foreign trade income of a foreign sales corporation under sections
76.31921(a) and 291 of the Internal Revenue Code;
76.32 (9) the amount of percentage depletion deducted under sections 611 through 614 and
76.33291 of the Internal Revenue Code;
76.34 (10) for certified pollution control facilities placed in service in a taxable year
76.35beginning before December 31, 1986, and for which amortization deductions were elected
77.1under section 169 of the Internal Revenue Code of 1954, as amended through December
77.231, 1985, the amount of the amortization deduction allowed in computing federal taxable
77.3income for those facilities;
77.4 (11) the amount of any deemed dividend from a foreign operating corporation
77.5determined pursuant to section
77.6 (12) the amount of a partner's pro rata share of net income which does not flow
77.7through to the partner because the partnership elected to pay the tax on the income under
77.8section 6242(a)(2) of the Internal Revenue Code;
77.9 (13) the amount of net income excluded under section 114 of the Internal Revenue
77.10Code;
77.11 (14) any increase in subpart F income, as defined in section 952(a) of the Internal
77.12Revenue Code, for the taxable year when subpart F income is calculated without regard
77.13to the provisions of section 103 of Public Law 109-222;
77.14 (15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
77.15and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
77.16has an activity that in the taxable year generates a deduction for depreciation under
77.17section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
77.18that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
77.19under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
77.20depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
77.21amount of the loss from the activity that is not allowed in the taxable year. In succeeding
77.22taxable years when the losses not allowed in the taxable year are allowed, the depreciation
77.23under section 168(k)(1)(A) and (k)(4)(A) is allowed;
77.24 (16) 80 percent of the amount by which the deduction allowed by section 179 of the
77.25Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
77.26Revenue Code of 1986, as amended through December 31, 2003;
77.27 (17) to the extent deducted in computing federal taxable income, the amount of the
77.28deduction allowable under section 199 of the Internal Revenue Code;
77.29 (18) the exclusion allowed under section 139A of the Internal Revenue Code for
77.30federal subsidies for prescription drug plans; and
77.31 (19) the amount of expenses disallowed under section 290.10, subdivision 2.
77.32EFFECTIVE DATE.This section is effective for taxable years beginning after
77.33December 31, 2006.
77.34 Sec. 5. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
77.35to read:
78.1 Subd. 34. Investment tax credit. (a) A credit is allowed against the tax imposed by
78.2this chapter for a qualified taxpayer's investment in a qualified new business venture. The
78.3credit shall equal 25 percent of the taxpayer's investment made in the business, but shall
78.4not exceed the lesser of:
78.5 (1) the liability for tax under this chapter, including the applicable alternative
78.6minimum tax;
78.7 (2) $25,000 for an individual not part of a partnership; or
78.8 (3) $300,000 for a pass-through entity.
78.9 (b) For purposes of this subdivision, a qualified taxpayer means:
78.10 (1) an accredited investor within the meaning of Regulation D of the Securities and
78.11Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether
78.12part of a pass-through entity or not; and
78.13 (2) an accredited investor who does not own, control, or hold power to vote 20
78.14percent or more of the outstanding securities of the qualified business venture in which the
78.15eligible investment is proposed.
78.16 (c) Pass-through entities and individuals may apply to the commissioner of
78.17employment and economic development for certification as a qualifying pass-through
78.18entity or individual. The application must be in the form and made under the procedures
78.19specified by the commissioner of employment and economic development. The
78.20commissioner of employment and economic development may provide certificates
78.21entitling investors to tax credit under this subdivision, but must not issue a total amount of
78.22certificates of more than $2,000,000. In awarding certificates under this paragraph, the
78.23commissioner of employment and economic development shall award them to qualified
78.24applicants in the order in which the applications are received.
78.25 (d) Each pass-through entity must provide each investor a statement indicating the
78.26investor's share of the credit amount certified to the pass-through entity under paragraph
78.27(c) based on its share of the pass-through entity's assets. The credit shall not exceed
78.28$25,000 for each individual part of a pass-through entity.
78.29 (e) If the amount of the credit under this subdivision or any taxable year exceeds the
78.30limitation under paragraph (a), clause (1), the excess shall be a credit carryover to each
78.31of the ten succeeding years but shall not exceed $25,000 for an individual not part of a
78.32partnership and $300,000 for a pass-through entity. The entire amount of the excess
78.33unused credit must be carried first to the earliest of the taxable years to which the credit
78.34may be carried, and then to each successive year to which the credit may be carried. The
78.35amount of the unused credit that may be added under this paragraph may not exceed the
78.36taxpayer's liability for tax less the credit for the taxable year.
79.1 (f) Unless otherwise provided under the rules of the Department of Employment and
79.2Economic Development, a business is a qualified business venture for purposes of this
79.3subdivision only if the business satisfies all of the following conditions:
79.4 (1) the business has its headquarters in Minnesota;
79.5 (2) at least 51 percent of the business's employees are employed in Minnesota;
79.6 (3) the business is engaged in, or is committed to engage in:
79.7 (i) manufacturing, processing, or assembling biotechnology or medical device
79.8products, including biotechnology and device products for use in agriculture;
79.9 (ii) conducting research in and development of biotechnology or medical device
79.10products or services; or
79.11 (iii) developing a new biotechnology or medical device product or business process;
79.12 (4) the business is not engaged in real estate development, insurance, banking,
79.13lending, lobbying, political consulting, wholesale or retail trade, leisure, hospitality,
79.14transportation, construction, or professional services provided by attorneys, accountants,
79.15business consultants, physicians, or health care consultants;
79.16 (5) the business has less than 25 employees;
79.17 (6) the business has not been in operation for more than ten consecutive years;
79.18 (7) the business has not received more than $1,000,000 in investments that have
79.19qualified for and received tax credits under this section;
79.20 (8) the business has less than $1,000,000 in annual gross sales receipts;
79.21 (9) the business is not a subsidiary or an affiliate of a business that employs more
79.22than 100 employees or has gross sales receipts for the previous year of more than
79.23$1,000,000, computed by aggregating all of the employees and gross sales receipts of the
79.24business entities affiliated with the business; and
79.25 (10) the business has not received private equity investments of more than
79.26$2,000,000.
79.27EFFECTIVE DATE.This section is effective for taxable years beginning after
79.28December 31, 2009.
79.29 Sec. 6. Minnesota Statutes 2006, section 290.0677, subdivision 1, is amended to read:
79.30 Subdivision 1. Credit allowed. (a) An individual is allowed a credit against the tax
79.31due under this chapter equal to $59 for each month or portion thereof that the individual
79.32was in active military service in a designated area after September 11, 2001, and before
79.33January 1, 2007, while a Minnesota domiciliary.
80.1 (b) An individual is allowed a credit against the tax due under this chapter equal to
80.2$120 for each month or portion thereof that the individual was in active military service in
80.3a designated area after December 31, 2006, while a Minnesota domiciliary.
80.4 (c) For active service performed after September 11, 2001, and before December 31,
80.52006, the individual may claim the credit in the taxable year beginning after December 31,
80.62005, and before January 1, 2007.
80.7
80.8claim the credit for the taxable year in which the active service was performed.
80.9
80.10
80.11
80.12
80.13
80.14
80.15an individual entitled to the credit died prior to January 1, 2006, the individual's estate or
80.16heirs at law, if the individual's probate estate has closed or the estate was not probated,
80.17may claim the credit.
80.18EFFECTIVE DATE.This section is effective for taxable years beginning after
80.19December 31, 2006, except that paragraph (e) is effective retroactively for tax years
80.20beginning after December 31, 2005.
80.21 Sec. 7. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
80.22 Subd. 3. Exemption amount. (a) For purposes of computing the alternative
80.23minimum tax, the exemption amount is
80.24
80.25
80.26
80.27
80.28couples filing joint returns, $30,000 for married individuals filing separate returns, estates,
80.29and trusts, and $45,000 for unmarried individuals.
80.30 (b) The exemption amount determined under this subdivision is subject to the phase
80.31out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum
80.32taxable income as determined under this section must be substituted in the computation
80.33of the phase out, and the income threshold used in the phaseout must be adjusted for
80.34inflation as provided in paragraph (c).
81.1 (c) For taxable years beginning after December 31, 2006, the exemption amount
81.2under paragraph (a),
81.3(b) must be adjusted for inflation.
81.4
81.5
81.6
81.7
81.8exemption amount and phaseout threshold by the percentage determined pursuant to the
81.9provisions of section 1(f) of the Internal Revenue Code, except that in section 1(f)(3)(B)
81.10the word "2005" shall be substituted for the word "1992." For 2007, the commissioner
81.11shall then determine the percentage change from the 12 months ending on August 31,
81.122005, to the 12 months ending on August 31, 2006, and in each subsequent year, from the
81.1312 months ending on August 31, 2005, to the 12 months ending on August 31 of the year
81.14preceding the taxable year. The exemption amount and phaseout threshold as adjusted
81.15must be rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the
81.16nearest $10 amount. The determination of the commissioner under this subdivision is not
81.17a rule under the Administrative Procedure Act.
81.18EFFECTIVE DATE.This section is effective for taxable years beginning after
81.19December 31, 2006.
81.20 Sec. 8. Minnesota Statutes 2006, section 290.10, is amended to read:
81.21290.10 NONDEDUCTIBLE ITEMS.
81.22 Subdivision 1. Expenses, interest, and taxes. Except as provided in section
81.23subdivision 4
81.24shall in any case be allowed for expenses, interest and taxes connected with or allocable
81.25against the production or receipt of all income not included in the measure of the tax
81.26imposed by this chapter, except that for corporations engaged in the business of mining
81.27or producing iron ore, the mining of which is subject to the occupation tax imposed by
81.28section
81.29items to the extent that the expenses and other items are allowable under this chapter and
81.30are not deductible, capitalizable, retainable in basis, or taken into account by allowance
81.31or otherwise in computing the occupation tax and do not exceed the amounts taken for
81.32federal income tax purposes for that year. Occupation taxes imposed under chapter 298,
81.33royalty taxes imposed under chapter 299, or depletion expenses may not be deducted
81.34under this
82.1 Subd. 2. Fines, fees, and penalties. (a) Except as provided in this subdivision, no
82.2deduction from taxable income for a trade or business expense under section 162(a) of
82.3the Internal Revenue Code shall be allowed for any amount paid or incurred, whether by
82.4suit, agreement, or otherwise, to, or at the direction of, a government or entity described in
82.5paragraph (d) in relation to the violation of any law or the investigation or inquiry by such
82.6government or entity into the potential violation of any law.
82.7 (b) Exception for amounts constituting restitution or paid to come into compliance
82.8with the law. Paragraph (a) does not apply to any amount which:
82.9 (1) the taxpayer establishes:
82.10 (i) constitutes restitution, including remediation of property for damage or harm
82.11caused by or which may be caused by the violation of any law or the potential violation
82.12of any law; or
82.13 (ii) is paid to come into compliance with any law which was violated or involved in
82.14the investigation or inquiry; and
82.15 (2) is identified as restitution or as an amount paid to come into compliance with the
82.16law, as the case may be, in the court order or settlement agreement.
82.17 This paragraph does not apply to any amount paid or incurred as reimbursement to
82.18the government or entity for the costs of any investigation or litigation.
82.19 (c) Paragraph (a) does not apply to any amount paid or incurred by order of a court
82.20in a suit in which no government or entity described in paragraph (d) is a party.
82.21 (d) An entity is described in this paragraph if it is:
82.22 (1) a nongovernmental entity which exercises self-regulatory powers, including
82.23imposing sanctions, in connection with a qualified board or exchange, as defined in section
82.241256(g)(7) of the Internal Revenue Code, or;
82.25 (2) to the extent provided in regulations, a nongovernmental entity which exercises
82.26self-regulatory powers, including imposing sanctions, as part of performing an essential
82.27governmental function.
82.28 (e) Paragraph (a) does not apply to any amount paid or incurred as taxes due.
82.29EFFECTIVE DATE.This section is effective for taxable years beginning after
82.30December 31, 2006, and for fines, fees, and penalties assessed after the date of enactment.
82.31 Sec. 9. Minnesota Statutes 2006, section 290.17, subdivision 2, is amended to read:
82.32 Subd. 2. Income not derived from conduct of a trade or business. The income of
82.33a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or
82.34business must be assigned in accordance with paragraphs (a) to (f):
83.1 (a)(1) Subject to paragraphs (a)(2)
83.2defined in section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if,
83.3and to the extent that, the work of the employee is performed within it; all other income
83.4from such sources is treated as income from sources without this state.
83.5 Severance pay shall be considered income from labor or personal or professional
83.6services.
83.7 (2) In the case of an individual who is a nonresident of Minnesota and who is an
83.8athlete or entertainer, income from compensation for labor or personal services performed
83.9within this state shall be determined in the following manner:
83.10 (i) The amount of income to be assigned to Minnesota for an individual who is a
83.11nonresident salaried athletic team employee shall be determined by using a fraction in
83.12which the denominator contains the total number of days in which the individual is under
83.13a duty to perform for the employer, and the numerator is the total number of those days
83.14spent in Minnesota. For purposes of this paragraph, off-season training activities, unless
83.15conducted at the team's facilities as part of a team imposed program, are not included in
83.16the total number of duty days. Bonuses earned as a result of play during the regular season
83.17or for participation in championship, play-off, or all-star games must be allocated under
83.18the formula. Signing bonuses are not subject to allocation under the formula if they are
83.19not conditional on playing any games for the team, are payable separately from any other
83.20compensation, and are nonrefundable; and
83.21 (ii) The amount of income to be assigned to Minnesota for an individual who is a
83.22nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's
83.23athletic or entertainment performance in Minnesota shall be determined by assigning to
83.24this state all income from performances or athletic contests in this state.
83.25 (3) For purposes of this section, amounts received by a nonresident as "retirement
83.26income" as defined in section (b)(1) of the State Income Taxation of Pension Income
83.27Act, Public Law 104-95, are not considered income derived from carrying on a trade
83.28or business or from wages or other compensation for work an employee performed in
83.29Minnesota, and are not taxable under this chapter.
83.30
83.31
83.32
83.33
83.34
83.35 (b) Income or gains from tangible property located in this state that is not employed
83.36in the business of the recipient of the income or gains must be assigned to this state.
84.1 (c) Income or gains from intangible personal property not employed in the business
84.2of the recipient of the income or gains must be assigned to this state if the recipient of the
84.3income or gains is a resident of this state or is a resident trust or estate.
84.4 Gain on the sale of a partnership interest is allocable to this state in the ratio of the
84.5original cost of partnership tangible property in this state to the original cost of partnership
84.6tangible property everywhere, determined at the time of the sale. If more than 50 percent
84.7of the value of the partnership's assets consists of intangibles, gain or loss from the sale
84.8of the partnership interest is allocated to this state in accordance with the sales factor of
84.9the partnership for its first full tax period immediately preceding the tax period of the
84.10partnership during which the partnership interest was sold.
84.11 Gain on the sale of goodwill or income from a covenant not to compete that is
84.12connected with a business operating all or partially in Minnesota is allocated to this state
84.13to the extent that the income from the business in the year preceding the year of sale was
84.14assignable to Minnesota under subdivision 3.
84.15 When an employer pays an employee for a covenant not to compete, the income
84.16allocated to this state is in the ratio of the employee's service in Minnesota in the calendar
84.17year preceding leaving the employment of the employer over the total services performed
84.18by the employee for the employer in that year.
84.19 (d) Income from winnings on a bet made by an individual while in Minnesota is
84.20assigned to this state. In this paragraph, "bet" has the meaning given in section
84.21subdivision 2
84.22 (e) All items of gross income not covered in paragraphs (a) to (d) and not part of the
84.23taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.
84.24 (f) For the purposes of this section, working as an employee shall not be considered
84.25to be conducting a trade or business.
84.26EFFECTIVE DATE.This section is effective for taxable years beginning after
84.27December 31, 2006.
84.28 Sec. 10. Minnesota Statutes 2006, section 290.92, is amended by adding a subdivision
84.29to read:
84.30 Subd. 31. Payments to persons who are not employees. (a) For purposes of this
84.31subdivision, "contractor" means a person carrying on a trade or business described in
84.32industry code numbers 23 through 238990 of the North American Industry Classification
84.33System.
84.34 (b) A contractor or a third-party bulk filer acting on behalf of a contractor, who
84.35makes payments to an individual, carrying on a trade or business described in paragraph
85.1(a) as a sole proprietorship, must deduct and withhold two percent of the payment as
85.2Minnesota withholding tax when the amount the contractor paid to that individual during
85.3the calendar year exceeds $600.
85.4 (c) A payment subject to withholding under this subdivision must be treated as if
85.5the payment were a wage paid by an employer to an employee. The requirements in the
85.6definitions of "employee" and "employer" in subdivision 1 relating to geographic location
85.7apply in determining whether withholding tax applies under this subdivision, but without
85.8regard to whether the contractor or the individual otherwise satisfy the definition of an
85.9employer or an employee. Each recipient of a payment subject to withholding under this
85.10subdivision must furnish the contractor with a statement of the recipient's name, address,
85.11and Social Security account number.
85.12EFFECTIVE DATE.This section is effective for payments made after December
85.1331, 2007.
85.14 Sec. 11. AUDIT AND REPORT TO LEGISLATURE.
85.15 The commissioner must conduct a random sample audit of withholdings under
85.16Minnesota Statutes, section 290.92, subdivision 31, and returns associated with those
85.17withholdings. The commissioner must report on the findings of the audit to the committees
85.18of the senate and house of representatives with jurisdiction over taxes, in compliance with
85.19Minnesota Statutes, sections 3.195 and 3.197, no later than February 1, 2010. The report
85.20must also include information on the number and amount of payments received, and on
85.21the types of contractors making payments, grouped by specialty skills definitions provided
85.22in the North American Industry Classification System.
85.25 Section 1. Minnesota Statutes 2006, section 297A.668, is amended by adding a
85.26subdivision to read:
85.27 Subd. 8. Manufactured and modular housing. (a) Notwithstanding other
85.28subdivisions of this section, a sale of a manufactured or modular home shall be sourced to
85.29the site where the housing is first set up or installed.
85.30 (b) For purposes of this section, "manufactured home" has the meaning given
85.31in section 327.31, subdivision 6. For purposes of this section, "modular home" means
85.32a building or structural unit that has been substantially manufactured or constructed,
85.33in whole or in part, at an off-site location, with the final assembly occurring on-site
86.1alone or with other units and attached to a permanent foundation site and occupied
86.2as a single-family dwelling. Modular home construction must comply with applicable
86.3standards adopted in Minnesota Rules authorized under chapter 16B. A modular home
86.4does not include a structure subject to the requirements of the National Manufactured
86.5Home Construction and Safety Standards Act of 1974 or a manufactured home.
86.6EFFECTIVE DATE.This section is effective for sales and purchases made after
86.7June 30, 2007.
86.8 Sec. 2. Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read:
86.9 Subd. 8. Regionwide public safety radio communication system; products and
86.10services. Products and services including, but not limited to, end user equipment used
86.11for construction, ownership, operation, maintenance, and enhancement of the backbone
86.12system of the regionwide public safety radio communication system established under
86.13sections
86.14system is defined in section
86.15purchases, sales, storage, use, or consumption for use in the first and second phases of the
86.16system, as defined in section
86.17third phase of the system that is located in the southeast district of the State Patrol and
86.18the counties of Benton, Sherburne, Stearns, and Wright, and that portion of the system
86.19that is located in Itasca County.
86.20 Sec. 3. Minnesota Statutes 2006, section 297A.71, subdivision 23, is amended to read:
86.21 Subd. 23. Construction materials for qualified low-income housing projects. (a)
86.22Purchases of materials and supplies used or consumed in and equipment incorporated into
86.23the construction, improvement, or expansion of qualified low-income housing projects are
86.24exempt from the tax imposed under this chapter if the owner of the qualified low-income
86.25housing project is:
86.26 (1) the public housing agency or housing and redevelopment authority of a political
86.27subdivision;
86.28 (2) an entity exercising the powers of a housing and redevelopment authority within
86.29a political subdivision;
86.30 (3) a limited partnership in which the sole or managing general partner is an
86.31authority under clause (1) or an entity under clause (2) or (4);
86.32 (4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
86.33under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or
87.1 (5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
87.2for a qualified low-income housing project described in paragraph (b), clause (5).
87.3 This exemption applies regardless of whether the purchases are made by the owner
87.4of the facility or a contractor.
87.5 (b) For purposes of this exemption, "qualified low-income housing project" means:
87.6 (1) a housing or mixed use project in which at least 20 percent of the residential units
87.7are qualifying low-income rental housing units as defined in section
87.8 (2) a federally assisted low-income housing project financed by a mortgage insured
87.9or held by the United States Department of Housing and Urban Development under
87.10United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
87.11States Code, title 42, section 1437f; the Native American Housing Assistance and
87.12Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
87.13successor federal low-income housing program;
87.14 (3) a qualified low-income housing project as defined in United States Code, title
87.1526, section 42(g), meeting all of the requirements for a low-income housing credit under
87.16section 42 of the Internal Revenue Code regardless of whether the project actually applies
87.17for or receives a low-income housing credit;
87.18 (4) a project that will be operated in compliance with Internal Revenue Service
87.19revenue procedure 96-32; or
87.20 (5) a housing or mixed use project in which all or a portion of the residential units
87.21are subject to the requirements of section 5 of the United States Housing Act of 1937.
87.22 (c) For a project, a portion of which is not used for low-income housing units,
87.23the amount of purchases that are exempt under this subdivision must be determined by
87.24multiplying the total purchases, as specified in paragraph (a), by the ratio of:
87.25 (1) the total gross square footage of units subject to the income limits under section
87.27procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable
87.28to the project; and
87.29 (2) the total gross square footage of all units in the project.
87.30 (d) The tax must be imposed and collected as if the rate under section
87.31subdivision 1
87.32EFFECTIVE DATE.This section is effective for sales and purchases made after
87.33June 30, 2009.
87.34 Sec. 4. Minnesota Statutes 2006, section 297A.99, subdivision 1, is amended to read:
88.1 Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
88.2impose a general sales tax if permitted by special law enacted prior to January 1, 2008, or
88.3if the political subdivision enacted and imposed the tax before the effective date of section
88.5 (b) This section governs the imposition of a general sales tax by the political
88.6subdivision. The provisions of this section preempt the provisions of any special law:
88.7 (1) enacted before June 2, 1997, or
88.8 (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
88.9provision from this section's rules by reference.
88.10 (c) This section does not apply to or preempt a sales tax on motor vehicles or a
88.11special excise tax on motor vehicles.
88.12 (d) From June 1, 2007, through December 31, 2010, a political subdivision must not
88.13advertise, promote, expend funds, or hold a referendum to support imposing a local option
88.14sales tax unless authorized by a special law enacted prior to June 1, 2007.
88.15EFFECTIVE DATE.This section is effective the day following final enactment.
88.16 Sec. 5. Minnesota Statutes 2006, section 297B.03, is amended to read:
88.17297B.03 EXEMPTIONS.
88.18 There is specifically exempted from the provisions of this chapter and from
88.19computation of the amount of tax imposed by it the following:
88.20 (1) purchase or use, including use under a lease purchase agreement or installment
88.21sales contract made pursuant to section
88.22and its agencies and instrumentalities and by any person described in and subject to the
88.23conditions provided in section
88.24 (2) purchase or use of any motor vehicle by any person who was a resident of
88.25another state or country at the time of the purchase and who subsequently becomes a
88.26resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
88.27such person began residing in the state of Minnesota and the motor vehicle was registered
88.28in the person's name in the other state or country;
88.29 (3) purchase or use of any motor vehicle by any person making a valid election to be
88.30taxed under the provisions of section
88.31 (4) purchase or use of any motor vehicle previously registered in the state of
88.32Minnesota when such transfer constitutes a transfer within the meaning of section 118,
88.33331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
88.34Revenue Code of 1986, as amended through December 31, 1999;
89.1 (5) purchase or use of any vehicle owned by a resident of another state and leased
89.2to a Minnesota-based private or for-hire carrier for regular use in the transportation of
89.3persons or property in interstate commerce provided the vehicle is titled in the state of
89.4the owner or secured party, and that state does not impose a sales tax or sales tax on
89.5motor vehicles used in interstate commerce;
89.6 (6) purchase or use of a motor vehicle by a private nonprofit or public educational
89.7institution for use as an instructional aid in automotive training programs operated by the
89.8institution. "Automotive training programs" includes motor vehicle body and mechanical
89.9repair courses but does not include driver education programs;
89.10 (7) purchase of a motor vehicle for use as an ambulance by an ambulance service
89.11licensed under section
89.12 (8) purchase of a motor vehicle by or for a public library, as defined in section
89.14 (9) purchase of a ready-mixed concrete truck;
89.15 (10) purchase or use of a motor vehicle by a town for use exclusively for road
89.16maintenance, including snowplows and dump trucks, but not including automobiles,
89.17vans, or pickup trucks;
89.18 (11) purchase or use of a motor vehicle by a corporation, society, association,
89.19foundation, or institution organized and operated exclusively for charitable, religious,
89.20or educational purposes, except a public school, university, or library, but only if the
89.21vehicle is:
89.22 (i) a truck, as defined in section
89.23passenger automobile, as defined in section
89.24used for carrying more than nine persons including the driver; and
89.25 (ii) intended to be used primarily to transport tangible personal property or
89.26individuals, other than employees, to whom the organization provides service in
89.27performing its charitable, religious, or educational purpose;
89.28 (12) purchase of a motor vehicle for use by a transit provider exclusively to provide
89.29transit service is exempt if the transit provider is either (i) receiving financial assistance or
89.30reimbursement under section
89.32 (13) purchase or use of a motor vehicle by a qualified business, as defined in section
89.34garaged in the job opportunity building zone and is primarily used as part of or in direct
89.35support of the person's operations carried on in the job opportunity building zone. The
89.36exemption under this clause applies to sales, if the purchase was made and delivery
90.1received during the duration of the job opportunity building zone. The exemption under
90.2this clause also applies to any local sales and use tax;
90.3 (14) purchase of a leased vehicle by the lessee who was a participant in a
90.4lease-to-own program from a charitable organization that is:
90.5 (i) described in section 501(c)(3) of the Internal Revenue Code; and
90.6 (ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4.
90.7EFFECTIVE DATE.This section is effective for sales and purchases made after
90.8June 30, 2007.
90.9 Sec. 6. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
90.10chapter 291, article 8, section 22, and Laws 1998, chapter 389, article 8, section 25, and
90.11Laws 2003, First Special Session chapter 21, article 8, section 11, is amended to read:
90.12 Subd. 2. Notwithstanding Minnesota Statutes, Section
90.13ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
90.14impose an additional sales tax of up to
90.15sales transactions which are described in Minnesota Statutes 2000, Section
90.16Subdivision 3, Clause (c). When the city council determines that the taxes imposed
90.17under this subdivision and under Laws 1998, chapter 389, article 8, section 26, at a rate
90.18of one-half of one percent have produced revenue sufficient to pay (1) the debt service
90.19on bonds in a principal amount of $8,000,000 issued for capital improvements to the
90.20Duluth Entertainment and Convention Center, and (2) debt service on outstanding bonds
90.21originally issued in the principal amount of $4,970,000 to finance capital improvements
90.22to the Great Lakes Aquarium since the imposition of the taxes at the rate of one and
90.23one-half percent, the rate of the tax under this subdivision is reduced
90.24one percent. The imposition of this tax shall not be subject to voter referendum under
90.25either state law or city charter provisions. When the city council determines that the taxes
90.26imposed under this subdivision at a rate of three-quarters of one percent and other sources
90.27of revenue produce revenue sufficient to pay debt service on bonds in the principal amount
90.28of $37,931,000 plus issuance and discount costs, issued for capital improvements at the
90.29Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
90.30under this subdivision must be reduced by three-quarters of one percent.
90.31EFFECTIVE DATE.This section is effective the day after the governing body of
90.32the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
90.33
91.1 Sec. 7. Laws 1987, chapter 168, section 2, is amended to read:
91.2 Sec. 2. LODGING TAX IN TOWNS.
91.3 Notwithstanding Minnesota Statutes, section
91.4county board may impose a tax of up to two percent on the gross receipts from the
91.5furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court or
91.6resort, other than the renting or leasing of it for a continuous period of 30 days or more,
91.7located in the towns of Lutsen, Tofte, and Schroeder. The tax may be imposed in one or
91.8more of the towns. The tax may be imposed in a town only with the agreement of the
91.9town expressed by its voters at an annual or special meeting. The tax shall be collected
91.10by and its proceeds paid to the county.
91.11
91.12
91.13Visitors Bureau.
91.14 Sec. 8. Laws 1993, chapter 375, article 9, section 45, subdivision 2, as amended by
91.15Laws 1997, chapter 231, article 7, section 36, is amended to read:
91.16 Subd. 2. Use of revenues. (a) Revenues received from taxes authorized by
91.17subdivision 1 shall be used by Cook county to pay the cost of collecting the tax and to pay
91.18all or a portion of the costs of expanding and improving the health care facility located
91.19in the county and known as North Shore hospital. Authorized costs include, but are not
91.20limited to, securing or paying debt service on bonds or other obligations issued to finance
91.21the expansion and improvement of North Shore hospital. The total capital expenditures
91.22payable from bond proceeds, excluding investment earnings on bond proceeds and tax
91.23revenues, shall not exceed $4,000,000.
91.24 (b) Additional revenues received from taxes authorized by subdivision 1 may be
91.25used by Cook county to pay all or a portion of the costs of betterment of North Shore
91.26care center and providing additional improvements to North Shore hospital. Authorized
91.27costs include, but are not limited to, securing or paying debt service on bonds or other
91.28obligations issued to finance the remodeling of North Shore care center and additional
91.29improvements to North Shore hospital. The total capital expenditures payable from bond
91.30proceeds, excluding investment earnings on bond proceeds and tax revenues, shall not
91.31exceed $2,200,000.
91.32 (c) If approved by the voters at a special election held before December 31, 2007,
91.33additional revenues received from taxes authorized by subdivision 1 may be used by Cook
91.34County to pay for the following projects:
92.1 (1) construction and improvements to community centers, museums, interpretive
92.2centers, associated trails, and recreation areas, including, but not limited to, improvements
92.3and additions to the skateboard park, hockey rink, ball fields, community center addition,
92.4county parking area, tennis courts, and all associated improvements;
92.5 (2) construction and improvement to the Grand Marais pool;
92.6 (3) construction and improvement to the Grand Marais Public Library; and
92.7 (4) debt service to retire bonds for improvements to the Superior National Golf
92.8Course.
92.9 Authorized expenses include, but are not limited to, paying construction expenses
92.10related to these improvements, and paying debt service on bonds or other obligations
92.11issued to finance acquisition and construction of these improvements.
92.12 Sec. 9. Laws 1993, chapter 375, article 9, section 45, subdivision 3, as amended by
92.13Laws 1997, chapter 231, article 7, section 37, is amended to read:
92.14 Subd. 3. Expiration of taxing authority and expenditure limitation. The
92.15authority granted by subdivision 1 to Cook county to impose a sales tax shall expire
92.16
92.17
92.18
92.19
92.20sufficient to pay for the principal and interest on any bonds or obligations issued to finance
92.21the projects in subdivision 2. Any funds remaining after completion of the improvements
92.22and retirement or redemption of the bonds may be placed in the general fund of the county.
92.23 Sec. 10. Laws 1993, chapter 375, article 9, section 45, subdivision 4, as amended by
92.24Laws 1997, chapter 231, article 7, section 38, is amended to read:
92.25 Subd. 4. Bonds. (a) Cook county may issue general obligation bonds in an amount
92.26not to exceed $4,000,000 for the expansion and improvement of North Shore hospital.
92.27 (b) Additionally, Cook county may issue general obligation bonds in an amount
92.28not to exceed $2,200,000 for the betterment of North Shore care center and additional
92.29improvements to North Shore hospital.
92.30 (c) The bonds may be issued without election under Minnesota Statutes, chapter
92.31475, on the question of issuance of the bonds or a property tax to pay them. The debt
92.32represented by the bonds shall not be included in computing any debt limitations applicable
92.33to Cook county, and the levy of taxes required by Minnesota Statutes, section
93.1pay principal of and interest on the bonds shall not be subject to any levy limitation or be
93.2included in computing or applying any levy limitation applicable to the county.
93.3 (d) Cook County may issue bonds under Minnesota Statutes, chapter 475, to pay
93.4capital and administrative expenses for the improvements authorized in subdivision 2,
93.5paragraph (c), in an amount that does not exceed $14,000,000. An election to approve the
93.6bonds under Minnesota Statutes, section 475.58, is not required. The issuance of bonds
93.7under this subdivision is not subject to Minnesota Statutes, sections 275.60 and 275.61.
93.8The debt represented by the bonds is not included in computing any debt limitation
93.9applicable to the county, and any levy of taxes under Minnesota Statutes, section 475.61,
93.10to pay principal and interest on the bonds is not subject to any levy limitation.
93.11 Sec. 11. Laws 1999, chapter 243, article 4, section 18, subdivision 1, is amended to
93.12read:
93.13 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
93.15charter, if approved by the city voters at the first municipal general election held after the
93.16date of final enactment of this act or at a special election held November 2, 1999, the city
93.17of Proctor may impose by ordinance a sales and use tax of up to one-half of one percent
93.18for the purposes specified in subdivision 3. The provisions of Minnesota Statutes, section
93.20the tax authorized under this subdivision.
93.21 Sec. 12. Laws 1999, chapter 243, article 4, section 18, subdivision 3, is amended to
93.22read:
93.23 Subd. 3. Use of revenues. (a) Revenues received from taxes authorized by
93.24subdivisions 1 and 2 must be used by the city to pay the cost of collecting the taxes and to
93.25pay for construction and improvement of the following city facilities:
93.26 (1) streets; and
93.27 (2) constructing and equipping the Proctor community activity center.
93.28 Authorized expenses include, but are not limited to, acquiring property, paying
93.29construction and operating expenses related to the development of an authorized facility,
93.30and paying debt service on bonds or other obligations, including lease obligations, issued
93.31to finance the construction, expansion, or improvement of an authorized facility. The
93.32capital expenses for all projects authorized under this paragraph that may be paid with
93.33these taxes is limited to $3,600,000, plus an amount equal to the costs related to issuance
93.34of the bonds.
94.1 (b) Additional revenues received from taxes authorized by subdivision 1, may be
94.2used by the city to pay for the following capital improvement projects: public utilities,
94.3including water, sanitary sewer, storm sewer, and electric; bikeways and trails; and parks
94.4and recreation.
94.5EFFECTIVE DATE.This section is effective the day following final enactment,
94.6upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
94.7subdivision 3.
94.8 Sec. 13. Laws 1999, chapter 243, article 4, section 18, subdivision 4, is amended to
94.9read:
94.10 Subd. 4. Bonding authority. (a) The city may issue bonds under Minnesota
94.11Statutes, chapter 475, to finance the capital expenditure and improvement projects
94.12described in subdivision 3. An election to approve the bonds under Minnesota Statutes,
94.13section
94.14 (b) The issuance of bonds under this subdivision is not subject to Minnesota Statutes,
94.15sections
94.16 (c) The bonds are not included in computing any debt limitation applicable to the
94.17city, and the levy of taxes under Minnesota Statutes, section
94.18and interest on the bonds is not subject to any levy limitation.
94.19 (d) For projects described in subdivision 3, paragraph (a), the aggregate principal
94.20amount of bonds, plus the aggregate of the taxes used directly to pay eligible capital
94.21expenditures and improvements, may not exceed $3,600,000, plus an amount equal to
94.22the costs related to issuance of the bonds, including interest on the bonds. For projects
94.23described in subdivision 3, paragraph (b), the aggregate principal amount of bonds may
94.24not exceed $7,200,000, plus an amount equal to the costs related to issuance of the bonds,
94.25including interest on the bonds.
94.26 (e) The sales and use and excise taxes authorized in this section may be pledged to
94.27and used for the payment of the bonds and any bonds issued to refund them only if the
94.28bonds and any refunding bonds are general obligations of the city.
94.29EFFECTIVE DATE.This section is effective the day following final enactment,
94.30upon compliance by the city of Proctor with Minnesota Statutes, section 645.021,
94.31subdivision 3.
94.32 Sec. 14. Laws 2005, First Special Session chapter 3, article 5, section 39, is amended
94.33to read:
95.1 Sec. 39. CITY OF BEMIDJI.
95.2 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
95.3section
95.4approval of the city voters at the general election held on November 5, 2002, and at the
95.5general election held November 7, 2006, the city of Bemidji may impose by ordinance
95.6a sales and use tax of one-half of one percent for the purposes specified in subdivision
95.72. The provisions of Minnesota Statutes, section
95.8administration, collection, and enforcement of the tax authorized under this subdivision.
95.9 Subd. 2. Use of revenues. Revenues received from the tax authorized by
95.10subdivision 1 must be used for the cost of collecting and administering the tax and to pay
95.11for the projects listed in this subdivision:
95.12 (1) To pay all or part of the capital or administrative costs of the acquisition,
95.13construction, and improvement of parks and trails within the city, as provided for in the
95.14city of Bemidji's parks, open space, and trail system plan, adopted by the Bemidji City
95.15Council on November 21, 2001. Authorized expenses include, but are not limited to,
95.16acquiring property, paying construction expenses related to the development of these
95.17facilities and improvements, and securing and paying debt service on bonds or other
95.18obligations issued to finance acquisition, construction, improvement, or development of
95.19parks and trails within the city of Bemidji.
95.20 (2) To pay all or part of the city's share of costs for acquisition, design, and
95.21construction of a regional event center, not to exceed $40,000,000 plus any associated
95.22bond costs. Authorized expenses include, but are not limited to, acquiring property,
95.23paying demolition and construction expenses, improving associated infrastructure, and
95.24purchasing furniture, fixtures, and equipment for the regional event center, and securing
95.25and paying debt service on bonds or other obligations issued to finance the regional event
95.26center project.
95.27 Subd. 3. Bonds. (a) Pursuant to the approval of the city voters at the general
95.28election held on November 5, 2002, the city of Bemidji may issue, without an additional
95.29election, general obligation bonds of the city in an amount not to exceed $9,826,000 to
95.30pay capital and administrative expenses for the acquisition, construction, improvement,
95.31and development of parks and trails as specified in subdivision 2. The debt represented by
95.32the bonds must not be included in computing any debt limitations applicable to the city,
95.33and the levy of taxes required by Minnesota Statutes, section
95.34of any interest on the bonds must not be subject to any levy limitations or be included in
95.35computing or applying any levy limitation applicable to the city.
96.1 (b) Pursuant to the approval of the city voters at the general election held on
96.2November 7, 2006, the city of Bemidji may issue, without an additional election, general
96.3obligation bonds of the city in an amount not to exceed $40,000,000 to pay capital and
96.4administrative expenses for the acquisition, construction, improvement, and development
96.5of the regional event center specified in subdivision 2. The debt represented by the bonds
96.6must not be included in computing any debt limitations applicable to the city, and the levy
96.7of taxes required by Minnesota Statutes, section
96.8on the bonds must not be subject to any levy limitations or be included in computing or
96.9applying any levy limitation applicable to the city.
96.10 Subd. 4. Termination of tax. The tax imposed under subdivision 1 expires
96.11when the Bemidji City Council determines that the amount described in subdivision 3,
96.12paragraph (a), has been received from the tax to finance the capital and administrative
96.13costs for acquisition, construction, improvement, and development of parks and trails and
96.14to repay or retire at maturity the principal, interest, and premium due on any bonds issued
96.15for the park and trail improvements under subdivision 3, paragraph (a), plus the earlier
96.16of (1) 30 years, or (2) when the city council first determines that the additional revenues
96.17received from the extension of the tax equals or exceeds the amount authorized to be spent
96.18for the regional event center under subdivision 2, clause (2). Any funds remaining after
96.19completion of the
96.20redemption of the bonds may be placed in the general fund of the city. The tax imposed
96.21under subdivision 1 may expire at an earlier time if the city so determines by ordinance.
96.22EFFECTIVE DATE.This section is effective the day after compliance by the
96.23governing body of the city of Bemidji and its chief clerical officer with Minnesota
96.24Statutes, section 645.021, subdivisions 2 and 3.
96.25 Sec. 15. CITY OF CLEARWATER; TAXES AUTHORIZED.
96.26 Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
96.27477A.016, or any other provision of law, ordinance, or city charter, pursuant to the
96.28approval of the voters on November 7, 2006, the city of Clearwater may impose by
96.29ordinance a sales and use tax of up to one-half of one percent for the purposes specified in
96.30subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota
96.31Statutes, section 297A.99, govern the imposition, administration, collection, and
96.32enforcement of the tax authorized under this subdivision.
96.33 Subd. 2. Excise tax authorized. Notwithstanding Minnesota Statutes, section
96.34477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater
96.35may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
97.1to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
97.2engaged within the city in the business of selling motor vehicles at retail.
97.3 Subd. 3. Use of revenues. The proceeds of the tax imposed under this section shall
97.4be used to pay for the costs of acquisition, construction, improvement, and development
97.5of a pedestrian bridge, and land and buildings for a community and recreation center.
97.6 Subd. 4. Bonding authority. The city of Clearwater may issue bonds in an amount
97.7not to exceed $12,000,000 under Minnesota Statutes, chapter 475, to finance the capital
97.8expenditures and improvements authorized by the referendum under subdivision 3. An
97.9election to approve the bonds under Minnesota Statutes, section 475.59, is not required.
97.10The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section
97.11275.60 or 275.61. The debt represented by the bonds must not be included in computing
97.12any debt limitations applicable to the city, and the levy of taxes required by Minnesota
97.13Statutes, section 475.61, to pay the principal or any interest on the bonds must not be
97.14subject to any levy limitation.
97.15 Subd. 5. Termination of tax. The tax authorized under subdivision 1 terminates at
97.16the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the
97.17city council determines that sufficient funds have been raised from the tax to finance the
97.18capital and administrative costs of the improvements described in subdivision 3, plus the
97.19additional amount needed to pay the costs related to issuance of bonds under subdivision
97.204, including interest on the bonds. Any funds remaining after completion of the projects
97.21specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may
97.22be placed in the general fund of the city. The tax imposed under subdivision 1 may expire
97.23at an earlier time if the city so determines by ordinance.
97.24EFFECTIVE DATE.This section is effective the day after compliance by the
97.25governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
97.26subdivisions 2 and 3.
97.27 Sec. 16. COOK COUNTY; LODGING AND ADMISSIONS TAXES.
97.28 Subdivision 1. Lodging tax. Notwithstanding Minnesota Statutes, section
97.29477A.016, or any other provision of law, ordinance, or city charter, the Board of
97.30Commissioners of Cook County may impose, by ordinance, a tax of up to one percent on
97.31the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190.
97.32This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and
97.33the total tax imposed under that section and this provision must not exceed four percent.
97.34 Subd. 2. Admissions and recreation tax. Notwithstanding Minnesota Statutes,
97.35section 477A.016, or any other provision of law, ordinance, or city charter, the Board of
98.1Commissioners of Cook County may impose, by ordinance, a tax of up to three percent on
98.2admissions to entertainment and recreational facilities and rental of recreation equipment.
98.3 In its ordinance, the Board of Commissioners of Cook County may provide that
98.4entities exempt from the tax imposed under Minnesota Statutes, section 297A.70, are
98.5not required to collect the taxes in subdivisions 1 and 2. The Board of Commissioners
98.6of Cook County may also create lodging districts smaller than the county in which to
98.7impose the tax.
98.8 Subd. 3. Use of taxes. The taxes imposed in subdivisions 1 and 2 must be used
98.9to fund a new Cook County Event and Visitors Bureau as established by the Board of
98.10Commissioners of Cook County. The Board of Commissioners of Cook County must
98.11annually review the budget of the Cook County Event and Visitors Bureau.
98.12 Subd. 4. Termination of taxes. The taxes authorized under subdivisions 1 and 2
98.13terminate ten years after the date of initial imposition of the taxes.
98.14 Subd. 5. Cook County Event and Visitors Bureau. (a) The Cook County Event
98.15and Visitors Bureau shall be governed by a 14-member board of directors composed of:
98.16 (1) four directors to be appointed by the Grand Marais Area Tourism Association;
98.17 (2) two directors to be appointed by the Gunflint Trail Association;
98.18 (3) seven directors to be appointed by the Lutsen-Tofte Tourism Association; and
98.19 (4) one nonvoting member appointed by Grand Portage.
98.20 (b) The Cook County Event and Visitors Bureau may adjust its membership upon a
98.21vote of approval by at least nine members.
98.22EFFECTIVE DATE.This section is effective for sales and purchases after June
98.2330, 2007.
98.24 Sec. 17. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
98.25 Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
98.26section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
98.27the approval of the voters on November 7, 2006, the city of North Mankato may impose
98.28by ordinance a sales and use tax of one-half of one percent for the purposes specified
98.29in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the
98.30imposition, administration, collection, and enforcement of the taxes authorized under
98.31this subdivision.
98.32 Subd. 2. Use of revenues. Revenues received from the tax authorized by
98.33subdivision 1 must be used to pay all or part of the capital costs of the following projects:
98.34 (1) the local share of the Trunk Highway 14/County State Aid Highway 41
98.35interchange project;
99.1 (2) development of regional parks and hiking and biking trails; and
99.2 (3) lake improvement projects.
99.3 The total amount of revenues from the tax in subdivision 1 that may be used to fund
99.4these projects is $4,500,000 plus any associated bond costs.
99.5 Subd. 3. Bonds. (a) The city of North Mankato, pursuant to the approval of the
99.6voters at the November 7, 2006, referendum authorizing the imposition of the taxes in
99.7this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
99.8administrative expenses for the projects described in subdivision 2, in an amount that
99.9does not exceed $4,500,000. A separate election to approve the bonds under Minnesota
99.10Statutes, section 475.58, is not required.
99.11 (b) The debt represented by the bonds is not included in computing any debt
99.12limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
99.13475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
99.14 Subd. 4. Termination of taxes. The tax imposed under subdivision 1 expires
99.15when the city council determines that the amount of revenues received from the taxes
99.16to pay for the projects under subdivision 2, first equals or exceeds $4,000,000 plus the
99.17additional amount needed to pay the costs related to issuance of bonds under subdivision
99.183, including interest on the bonds. Any funds remaining after completion of the projects
99.19and retirement or redemption of the bonds shall be placed in a capital facilities and
99.20equipment replacement fund of the city. The tax imposed under subdivision 1 may expire
99.21at an earlier time if the city so determines by ordinance.
99.22EFFECTIVE DATE.This section is effective the day after compliance by the
99.23governing body of the city of North Mankato with Minnesota Statutes, section 645.021,
99.24subdivision 3.
99.25 Sec. 18. MINNETONKA WATER TREATMENT FACILITY.
99.26 Capital equipment used in or incorporated into the construction of a water treatment
99.27facility owned by the city of Minnetonka is exempt from sales tax regardless of whether
99.28purchased by the owner, contractor, subcontractor, or builder. The tax must be imposed
99.29and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1,
99.30applied and then refunded to the city of Minnetonka in the manner provided in Minnesota
99.31Statutes, section 297A.75.
99.32EFFECTIVE DATE.This section is effective for sales and purchases made before
99.33December 31, 2006.
100.3 Section 1. Minnesota Statutes 2006, section 268.19, subdivision 1, is amended to read:
100.4 Subdivision 1. Use of data. (a) Except as otherwise provided by this section, data
100.5gathered from any person pursuant to the administration of the Minnesota Unemployment
100.6Insurance Law are private data on individuals or nonpublic data not on individuals as
100.7defined in section
100.8to a district court order or section
100.9court order. These data may be disseminated to and used by the following agencies
100.10without the consent of the subject of the data:
100.11 (1) state and federal agencies specifically authorized access to the data by state
100.12or federal law;
100.13 (2) any agency of any other state or any federal agency charged with the
100.14administration of an unemployment insurance program;
100.15 (3) any agency responsible for the maintenance of a system of public employment
100.16offices for the purpose of assisting individuals in obtaining employment;
100.17 (4) human rights agencies within Minnesota that have enforcement powers;
100.18 (5) the Department of Revenue only to the extent necessary for its duties under
100.19Minnesota laws;
100.20 (6) public and private agencies responsible for administering publicly financed
100.21assistance programs for the purpose of monitoring the eligibility of the program's
100.22recipients;
100.23 (7) the Department of Labor and Industry and the Division of Insurance Fraud
100.24Prevention in the Department of Commerce on an interchangeable basis with the
100.25department for uses consistent with the administration of their duties under Minnesota law;
100.26 (8) local and state welfare agencies for monitoring the eligibility of the data subject
100.27for assistance programs, or for any employment or training program administered by those
100.28agencies, whether alone, in combination with another welfare agency, or in conjunction
100.29with the department or to monitor and evaluate the statewide Minnesota family investment
100.30program by providing data on recipients and former recipients of food stamps or food
100.31support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
100.32under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;
100.33 (9) local and state welfare agencies for the purpose of identifying employment,
100.34wages, and other information to assist in the collection of an overpayment debt in an
100.35assistance program;
101.1 (10) local, state, and federal law enforcement agencies for the sole purpose of
101.2ascertaining the last known address and employment location of a person who is the
101.3subject of a criminal investigation;
101.4 (11) the federal Immigration and Naturalization Service shall have access to data on
101.5specific individuals and specific employers provided the specific individual or specific
101.6employer is the subject of an investigation by that agency;
101.7 (12) the Department of Health solely for the purposes of epidemiologic
101.8investigations
101.9 (13) the state auditor to the extent necessary to conduct audits of job opportunity
101.10building zones as required under section 469.3201.
101.11 (b) Data on individuals and employers that are collected, maintained, or used by the
101.12department in an investigation pursuant to section
101.13individuals and protected nonpublic data not on individuals as defined in section
101.14subdivisions 3 and 13
101.15court order or to a party named in a criminal proceeding, administrative or judicial, for
101.16preparation of a defense.
101.17 (c) Data gathered by the department pursuant to the administration of the Minnesota
101.18unemployment insurance program must not be made the subject or the basis for any
101.19suit in any civil proceedings, administrative or judicial, unless the action is initiated by
101.20the department.
101.21EFFECTIVE DATE.This section is effective the day following final enactment.
101.22 Sec. 2. Minnesota Statutes 2006, section 270B.15, is amended to read:
101.23270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE
101.24AUDITOR.
101.25 (a) Returns and return information must be disclosed to the legislative auditor to the
101.26extent necessary for the legislative auditor to carry out sections
101.27 (b) The commissioner must disclose return information, including the report
101.28required under section 289A.12, subdivision 15, to the state auditor to the extent necessary
101.29to conduct audits of job opportunity building zones as required under section 469.3201.
101.30EFFECTIVE DATE.This section is effective the day following final enactment.
101.31 Sec. 3. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
101.32 Subd. 64. Job opportunity building zone property. (a) Improvements to real
101.33property, and personal property, classified under section
102.1located within a job opportunity building zone, designated under section
102.2exempt from ad valorem taxes levied under chapter 275.
102.3 (b) Improvements to real property, and tangible personal property, of an agricultural
102.4production facility located within an agricultural processing facility zone, designated
102.5under section
102.6 (c) For property to qualify for exemption under paragraph (a), the occupant must be
102.7a qualified business, as defined in section
102.8 (d) The exemption applies beginning for the first assessment year after designation
102.9of the job opportunity building zone by the commissioner of employment and economic
102.10development. The exemption applies to each assessment year that begins during the
102.11duration of the job opportunity building zone. To be exempt, the property must be
102.12occupied by July 1 of the assessment year by a qualified business that has signed the
102.13business subsidy agreement and relocation agreement, if required, by July 1 of the
102.14assessment year. This exemption does not apply to:
102.15 (1) the levy under section
102.16pay general obligation bonds; or
102.17 (2) a levy under section
102.18
102.19EFFECTIVE DATE.This section is effective beginning for taxes payable in 2008.
102.20 Sec. 4. Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
102.21to read:
102.22 Subd. 85. Fergus Falls historical zone. (a) Property located in the area of the
102.23campus of the former state regional treatment center in the city of Fergus Falls, including
102.24the five buildings and associated land that were acquired by the city prior to January 1,
102.252007, is exempt from ad valorem taxes levied under chapter 275.
102.26 (b) The exemption applies for 15 calendar years on the date specified by resolution,
102.27by the governing body of the city of Fergus Falls. For the final three assessment years
102.28of the duration limit, the exemption applies to the following percentages of estimated
102.29market value of the property:
102.30 (1) for the third to the last assessment year of the duration, 75 percent;
102.31 (2) for the second to the last assessment year of the duration, 50 percent; and
102.32 (3) for the last assessment year of the duration, 25 percent.
102.33EFFECTIVE DATE.This section is effective for property taxes levied in 2007,
102.34payable in 2008, and thereafter.
103.1 Sec. 5. Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision
103.2to read:
103.3 Subd. 15. Report of job opportunity zone benefits; penalty for failure to file
103.4report. (a) By October 15 of each year, every qualified business, as defined under section
103.5469.310, subdivision 11, must file with the commissioner, on a form prescribed by the
103.6commissioner, a report listing the tax benefits under section 469.315 received by the
103.7business for the previous year.
103.8 (b) The commissioner shall send notice to each business that fails to timely submit
103.9the report required under paragraph (a). The notice shall demand that the business submit
103.10the report within 60 days. Where good cause exists, the commissioner may extend
103.11the period for submitting the report as long as a request for extension is filed by the
103.12business before the expiration of the 60-day period. The commissioner shall notify the
103.13commissioner of the Department of Employment and Economic Development and the
103.14appropriate job opportunity subzone administrator whenever notice is sent to a business
103.15under this paragraph.
103.16 (c) A business that fails to submit the report as required under paragraph (b) is no
103.17longer a qualified business under section 469.310, subdivision 11, and is subject to the
103.18repayment provisions of section 469.319.
103.19EFFECTIVE DATE.This section is effective beginning with reports required to be
103.20filed October 15, 2008.
103.21 Sec. 6. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
103.22to read:
103.23 Subd. 34. Tax-free renaissance zone; historic rehabilitation credit. (a) A
103.24taxpayer who incurs costs that are eligible for a credit under section 47 of the Internal
103.25Revenue Code for the rehabilitation of a property in the Fergus Falls historical zone, as
103.26defined under section 272.02, subdivision 85, is allowed a credit against the tax imposed
103.27under this chapter, including the taxes under sections 290.091 and 290.0922, equal to 100
103.28percent of the credit allowed for rehabilitation of a certified historic structure under section
103.2947(a)(2) of the Internal Revenue Code, but is limited to credits generated by rehabilitation
103.30of certified historic structures that are placed in service during the taxable year.
103.31 (b) If the amount of the credit under this subdivision exceeds the tax liability under
103.32this chapter for the year in which the cost is incurred, the amount that exceeds the tax
103.33liability may be carried back to any of the three preceding taxable years or carried forward
103.34to each of the ten taxable years succeeding the taxable year in which the expense was
103.35incurred. The entire amount of the credit must be carried to the earliest taxable year to
104.1which the amount may be carried. The unused portion of the credit must be carried to
104.2the following taxable year.
104.3EFFECTIVE DATE.This section is effective for taxable years beginning after
104.4December 31, 2007.
104.5 Sec. 7. Minnesota Statutes 2006, section 469.169, is amended by adding a subdivision
104.6to read:
104.7 Subd. 18. Additional border city allocations; 2007. (a) In addition to tax
104.8reductions authorized in subdivisions 7 to 17, the commissioner shall allocate $750,000
104.9for tax reductions to border city enterprise zones in cities located on the western border
104.10of the state. The commissioner shall make allocations to zones in cities on the western
104.11border on a per capita basis. Allocations made under this subdivision may be used for
104.12tax reductions as provided in section 469.171, or for other offsets of taxes imposed on
104.13or remitted by businesses located in the enterprise zone, but only if the municipality
104.14determines that the granting of the tax reduction or offset is necessary in order to retain a
104.15business within or attract a business to the zone. The city alternatively may elect to use
104.16any portion of the allocation provided in this paragraph for tax reductions under section
104.17469.1732 or 469.1734.
104.18 (b) The commissioner shall allocate $750,000 for tax reductions under section
104.19469.1732 or 469.1734 to cities with border city enterprise zones located on the western
104.20border of the state. The commissioner shall allocate this amount among the cities on a per
104.21capita basis. The city alternatively may elect to use any portion of the allocation provided
104.22in this paragraph for tax reductions as provided in section 469.171.
104.23EFFECTIVE DATE.This section is effective the day following final enactment.
104.24 Sec. 8. Minnesota Statutes 2006, section 469.174, subdivision 10, is amended to read:
104.25 Subd. 10. Redevelopment district. (a) "Redevelopment district" means a type of
104.26tax increment financing district consisting of a project, or portions of a project, within
104.27which the authority finds by resolution that one or more of the following conditions,
104.28reasonably distributed throughout the district, exists:
104.29 (1) parcels consisting of 70 percent of the area of the district are occupied by
104.30buildings, streets, utilities, paved or gravel parking lots, or other similar structures
104.31and more than 50 percent of the buildings, not including outbuildings, are structurally
104.32substandard to a degree requiring substantial renovation or clearance;
105.1 (2) the property consists of vacant, unused, underused, inappropriately used,
105.2or infrequently used railyards, rail storage facilities, or excessive or vacated railroad
105.3rights-of-way;
105.4 (3) tank facilities, or property whose immediately previous use was for tank
105.5facilities, as defined in section
105.6 (i) have or had a capacity of more than 1,000,000 gallons;
105.7 (ii) are located adjacent to rail facilities; and
105.8 (iii) have been removed or are unused, underused, inappropriately used, or
105.9infrequently used; or
105.10 (4) a qualifying disaster area, as defined in subdivision 10b.
105.11 (b) For purposes of this subdivision, "structurally substandard" shall mean
105.12containing defects in structural elements or a combination of deficiencies in essential
105.13utilities and facilities, light and ventilation, fire protection including adequate egress,
105.14layout and condition of interior partitions, or similar factors, which defects or deficiencies
105.15are of sufficient total significance to justify substantial renovation or clearance.
105.16 (c) A building is not structurally substandard if it is in compliance with the building
105.17code applicable to new buildings or could be modified to satisfy the building code at
105.18a cost of less than 15 percent of the cost of constructing a new structure of the same
105.19square footage and type on the site. The municipality may find that a building is not
105.20disqualified as structurally substandard under the preceding sentence on the basis of
105.21reasonably available evidence, such as the size, type, and age of the building, the average
105.22cost of plumbing, electrical, or structural repairs, or other similar reliable evidence. The
105.23municipality may not make such a determination without an interior inspection of the
105.24property, but need not have an independent, expert appraisal prepared of the cost of repair
105.25and rehabilitation of the building. An interior inspection of the property is not required,
105.26if the municipality finds that (1) the municipality or authority is unable to gain access to
105.27the property after using its best efforts to obtain permission from the party that owns or
105.28controls the property; and (2) the evidence otherwise supports a reasonable conclusion that
105.29the building is structurally substandard. Items of evidence that support such a conclusion
105.30include recent fire or police inspections, on-site property tax appraisals or housing
105.31inspections, exterior evidence of deterioration, or other similar reliable evidence. Written
105.32documentation of the findings and reasons why an interior inspection was not conducted
105.33must be made and retained under section
105.34building to be disqualified under the provisions of this paragraph is a necessary, but not a
105.35sufficient, condition to determining that the building is substandard.
106.1 (d) A parcel is deemed to be occupied by a structurally substandard building
106.2for purposes of the finding under paragraph (a) or by the improvements described in
106.3paragraph (e) if all of the following conditions are met:
106.4 (1) the parcel was occupied by a substandard building or met the requirements
106.5of paragraph (e), as the case may be, within three years of the filing of the request for
106.6certification of the parcel as part of the district with the county auditor;
106.7 (2) the substandard building
106.8were demolished or removed by the authority or the demolition or removal was financed
106.9by the authority or was done by a developer under a development agreement with the
106.10authority;
106.11 (3) the authority found by resolution before the demolition or removal that the
106.12parcel was occupied by a structurally substandard building or met the requirements of
106.13paragraph (e) and that after demolition and clearance the authority intended to include
106.14the parcel within a district; and
106.15 (4) upon filing the request for certification of the tax capacity of the parcel as part
106.16of a district, the authority notifies the county auditor that the original tax capacity of the
106.17parcel must be adjusted as provided by section
106.18 (e) For purposes of this subdivision, a parcel is not occupied by buildings, streets,
106.19utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the
106.20area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or
106.21other similar structures.
106.22 (f) For districts consisting of two or more noncontiguous areas, each area must
106.23qualify as a redevelopment district under paragraph (a) to be included in the district, and
106.24the entire area of the district must satisfy paragraph (a).
106.25EFFECTIVE DATE.This section is effective for requests for certification made
106.26after June 30, 2007.
106.27 Sec. 9. Minnesota Statutes 2006, section 469.174, subdivision 10a, is amended to read:
106.28 Subd. 10a. Renewal and renovation district. (a) "Renewal and renovation district"
106.29means a type of tax increment financing district consisting of a project, or portions of a
106.30project, within which the authority finds by resolution that:
106.31 (1)(i) parcels consisting of 70 percent of the area of the district are occupied by
106.32buildings, streets, utilities, paved or gravel parking lots, or other similar structures; (ii)
106.3320 percent of the buildings are structurally substandard; and (iii) 30 percent of the other
106.34buildings require substantial renovation or clearance to remove existing conditions such
106.35as: inadequate street layout, incompatible uses or land use relationships, overcrowding of
107.1buildings on the land, excessive dwelling unit density, obsolete buildings not suitable for
107.2improvement or conversion, or other identified hazards to the health, safety, and general
107.3well-being of the community; and
107.4 (2) the conditions described in clause (1) are reasonably distributed throughout the
107.5geographic area of the district.
107.6 (b) For purposes of determining whether a building is structurally substandard,
107.7whether parcels are occupied by buildings, streets, utilities, paved or gravel parking lots,
107.8or other similar structures, or whether noncontiguous areas qualify, the provisions of
107.9subdivision 10, paragraphs
107.10EFFECTIVE DATE.This section is effective for requests for certification made
107.11after June 30, 2007.
107.12 Sec. 10. Minnesota Statutes 2006, section 469.175, subdivision 1, is amended to read:
107.13 Subdivision 1. Tax increment financing plan. (a) A tax increment financing plan
107.14shall contain:
107.15 (1) a statement of objectives of an authority for the improvement of a project;
107.16 (2) a statement as to the development program for the project, including the property
107.17within the project, if any, that the authority intends to acquire, identified by parcel number,
107.18identifiable property name, block, or other appropriate means indicating the area in which
107.19the authority intends to acquire properties;
107.20 (3) a list of any development activities that the plan proposes to take place within
107.21the project, for which contracts have been entered into at the time of the preparation of
107.22the plan, including the names of the parties to the contract, the activity governed by the
107.23contract, the cost stated in the contract, and the expected date of completion of that activity;
107.24 (4) identification or description of the type of any other specific development
107.25reasonably expected to take place within the project, and the date when the development is
107.26likely to occur;
107.27 (5) estimates of the following:
107.28 (i) cost of the project, including administrative expenses, except that if part of the
107.29cost of the project is paid or financed with increment from the tax increment financing
107.30district, the tax increment financing plan for the district must contain an estimate of the
107.31amount of the cost of the project, including administrative expenses, that will be paid or
107.32financed with tax increments from the district;
107.33 (ii) amount of bonded indebtedness to be incurred;
107.34 (iii) sources of revenue to finance or otherwise pay public costs;
108.1 (iv) the most recent net tax capacity of taxable real property within the tax increment
108.2financing district and within any subdistrict;
108.3 (v) the estimated captured net tax capacity of the tax increment financing district
108.4at completion; and
108.5 (vi) the duration of the tax increment financing district's and any subdistrict's
108.6existence;
108.7 (6) statements of the authority's alternate estimates of the impact of tax increment
108.8financing on the net tax capacities of all taxing jurisdictions in which the tax increment
108.9financing district is located in whole or in part. For purposes of one statement, the
108.10authority shall assume that the estimated captured net tax capacity would be available to
108.11the taxing jurisdictions without creation of the district, and for purposes of the second
108.12statement, the authority shall assume that none of the estimated captured net tax capacity
108.13would be available to the taxing jurisdictions without creation of the district or subdistrict;
108.14 (7) identification and description of studies and analyses used to make the
108.15determination set forth in subdivision 3, clause (2); and
108.16 (8) identification of all parcels to be included in the district or any subdistrict.
108.17 (b) The authority may specify in the tax increment financing plan the first year in
108.18which it elects to receive increment, up to four years following the year of approval of the
108.19district. This paragraph does not apply to an economic development district.
108.20EFFECTIVE DATE.This section is effective for districts for which the request for
108.21certification is made after June 30, 2007.
108.22 Sec. 11. Minnesota Statutes 2006, section 469.175, subdivision 3, is amended to read:
108.23 Subd. 3. Municipality approval. (a) A county auditor shall not certify the original
108.24net tax capacity of a tax increment financing district until the tax increment financing plan
108.25proposed for that district has been approved by the municipality in which the district
108.26is located. If an authority that proposes to establish a tax increment financing district
108.27and the municipality are not the same, the authority shall apply to the municipality in
108.28which the district is proposed to be located and shall obtain the approval of its tax
108.29increment financing plan by the municipality before the authority may use tax increment
108.30financing. The municipality shall approve the tax increment financing plan only after a
108.31public hearing thereon after published notice in a newspaper of general circulation in the
108.32municipality at least once not less than ten days nor more than 30 days prior to the date
108.33of the hearing. The published notice must include a map of the area of the district from
108.34which increments may be collected and, if the project area includes additional area, a map
108.35of the project area in which the increments may be expended. The hearing may be held
109.1before or after the approval or creation of the project or it may be held in conjunction with
109.2a hearing to approve the project.
109.3 (b) Before or at the time of approval of the tax increment financing plan, the
109.4municipality shall make the following findings, and shall set forth in writing the reasons
109.5and supporting facts for each determination:
109.6 (1) that the proposed tax increment financing district is a redevelopment district, a
109.7renewal or renovation district, a housing district, a soils condition district, or an economic
109.8development district; if the proposed district is a redevelopment district or a renewal or
109.9renovation district, the reasons and supporting facts for the determination that the district
109.10meets the criteria of section
109.11subdivision 10a, must be documented in writing and retained and made available to the
109.12public by the authority until the district has been terminated;
109.13 (2) that, in the opinion of the municipality:
109.14 (i) the proposed development or redevelopment would not reasonably be expected to
109.15occur solely through private investment within the reasonably foreseeable future; and
109.16 (ii) the increased market value of the site that could reasonably be expected to
109.17occur without the use of tax increment financing would be less than the increase in the
109.18market value estimated to result from the proposed development after subtracting the
109.19present value of the projected tax increments for the maximum duration of the district
109.20permitted by the plan. The requirements of this item do not apply if the district is a
109.21
109.22 (3) that the tax increment financing plan conforms to the general plan for the
109.23development or redevelopment of the municipality as a whole;
109.24 (4) that the tax increment financing plan will afford maximum opportunity,
109.25consistent with the sound needs of the municipality as a whole, for the development or
109.26redevelopment of the project by private enterprise;
109.27 (5) that the municipality elects the method of tax increment computation set forth in
109.28section
109.29 (c) When the municipality and the authority are not the same, the municipality shall
109.30approve or disapprove the tax increment financing plan within 60 days of submission by
109.31the authority. When the municipality and the authority are not the same, the municipality
109.32may not amend or modify a tax increment financing plan except as proposed by the
109.33authority pursuant to subdivision 4. Once approved, the determination of the authority
109.34to undertake the project through the use of tax increment financing and the resolution of
109.35the governing body shall be conclusive of the findings therein and of the public need for
109.36the financing.
110.1 (d) For a district that is subject to the requirements of paragraph (b), clause (2),
110.2item (ii), the municipality's statement of reasons and supporting facts must include all of
110.3the following:
110.4 (1) an estimate of the amount by which the market value of the site will increase
110.5without the use of tax increment financing;
110.6 (2) an estimate of the increase in the market value that will result from the
110.7development or redevelopment to be assisted with tax increment financing; and
110.8 (3) the present value of the projected tax increments for the maximum duration of
110.9the district permitted by the tax increment financing plan.
110.10 (e) For purposes of this subdivision, "site" means the parcels on which the
110.11development or redevelopment to be assisted with tax increment financing will be located.
110.12EFFECTIVE DATE.This section is effective the day following final enactment
110.13and applies to all districts, regardless of when the request for certification was made.
110.14 Sec. 12. Minnesota Statutes 2006, section 469.176, subdivision 1, is amended to read:
110.15 Subdivision 1. Duration of tax increment financing districts. (a) Subject to the
110.16limitations contained in subdivisions 1a to 1f, any tax increment financing district as to
110.17which bonds are outstanding, payment for which the tax increment and other revenues
110.18have been pledged, shall remain in existence at least as long as the bonds continue to be
110.19outstanding. The municipality may, at the time of approval of the initial tax increment
110.20financing plan, provide for one or both of the following:
110.21 (1) a shorter maximum duration limit than specified in subdivisions 1a to 1f
110.22 (2) an election as provided under section 469.175, subdivision 1, paragraph (b).
110.23The specified limit applies in place of the otherwise applicable limit, unless the authority
110.24modifies the plan following the procedures under section
110.25paragraph (b).
110.26 (b) The tax increment pledged to the payment of the bonds and interest thereon may
110.27be discharged and the tax increment financing district may be terminated if sufficient funds
110.28have been irrevocably deposited in the debt service fund or other escrow account held in
110.29trust for all outstanding bonds to provide for the payment of the bonds at maturity or date
110.30of redemption and interest thereon to the maturity or redemption date.
110.31 (c) For bonds issued pursuant to section
110.32faith and credit and any taxing powers of the municipality or authority are pledged to the
110.33payment of the bonds until the principal of and interest on the bonds has been paid in full.
111.1EFFECTIVE DATE.This section is effective for districts for which the request for
111.2certification is made after June 30, 2007.
111.3 Sec. 13. Minnesota Statutes 2006, section 469.176, subdivision 2, is amended to read:
111.4 Subd. 2. Excess increments. (a) The authority shall annually determine the amount
111.5of excess increments for a district, if any. This determination must be based on the tax
111.6increment financing plan in effect on December 31 of the year and the increments and
111.7other revenues received as of December 31 of the year. The authority must spend or return
111.8the excess increments under paragraph (c) within nine months after the end of the year.
111.9 (b) For purposes of this subdivision, "excess increments" equals the excess of:
111.10 (1) total increments collected from the district since its certification, reduced by any
111.11excess increments paid under paragraph (c), clause (4), for a prior year, over
111.12 (2) the total costs authorized by the tax increment financing plan to be paid with
111.13increments from the district, reduced, but not below zero, by the sum of:
111.14 (i) the amounts of those authorized costs that have been paid from sources other than
111.15tax increments from the district;
111.16 (ii) revenues, other than tax increments from the district, that are dedicated for or
111.17otherwise required to be used to pay those authorized costs and that the authority has
111.18received and that are not included in item (i);
111.19 (iii) the amount of principal and interest obligations due on outstanding bonds after
111.20December 31 of the year and not prepaid under paragraph (c) in a prior year; and
111.21 (iv) increased by the sum of the transfers of increments made under section
111.22subdivision 6
111.23 (c) The authority shall use excess increment only to do one or more of the following:
111.24 (1) prepay any outstanding bonds;
111.25 (2) discharge the pledge of tax increment for any outstanding bonds;
111.26 (3) pay into an escrow account dedicated to the payment of any outstanding bonds; or
111.27 (4) return the excess amount to the county auditor who shall distribute the excess
111.28amount to the city or town, county, and school district in which the tax increment financing
111.29district is located in direct proportion to their respective local tax rates.
111.30 (d) For purposes of a district for which the request for certification was made prior to
111.31August 1, 1979, excess increments equal the amount of increments on hand on December
111.3231, less the principal and interest obligations due on outstanding bonds or advances,
111.33qualifying under subdivision 1c, clauses (1), (2), (4), and (5), after December 31 of the
111.34year and not prepaid under paragraph (c).
112.1 (e) The county auditor must report to the commissioner of education the amount of
112.2any excess tax increment distributed to a school district within 30 days of the distribution.
112.3 (f) For purposes of this subdivision, "outstanding bonds" means bonds which are
112.4secured by increments from the district.
112.5 (g) The state auditor may exempt an authority from reporting the amounts calculated
112.6under this subdivision for a calendar year, if the authority certifies to the auditor in
112.7its report that the total amount authorized by the tax increment plan to be paid with
112.8increments from the district exceeds the sum of the total increments collected for the
112.9district for all years by 20 percent.
112.10EFFECTIVE DATE.This section is effective the day following final enactment and
112.11applies to all districts regardless of when the request for certification was made, including
112.12districts for which the request for certification was made on or before August 1, 1979.
112.13 Sec. 14. Minnesota Statutes 2006, section 469.176, subdivision 7, is amended to read:
112.14 Subd. 7. Parcels not includable in districts. (a) The authority may request
112.15inclusion in a tax increment financing district and the county auditor may certify the
112.16original tax capacity of a parcel or a part of a parcel that qualified under the provisions of
112.17section
112.18years before the filing of the request for certification only for:
112.19 (1) a district in which 85 percent or more of the planned buildings and facilities
112.20(determined on the basis of square footage) are a qualified manufacturing facility or a
112.21qualified distribution facility or a combination of both; or
112.22 (2) a
112.23 (b)(1) A distribution facility means buildings and other improvements to real
112.24property that are used to conduct activities in at least each of the following categories:
112.25 (i) to store or warehouse tangible personal property;
112.26 (ii) to take orders for shipment, mailing, or delivery;
112.27 (iii) to prepare personal property for shipment, mailing, or delivery; and
112.28 (iv) to ship, mail, or deliver property.
112.29 (2) A manufacturing facility includes space used for manufacturing or producing
112.30tangible personal property, including processing resulting in the change in condition of the
112.31property, and space necessary for and related to the manufacturing activities.
112.32 (3) To be a qualified facility, the owner or operator of a manufacturing or distribution
112.33facility must agree to pay and pay 90 percent or more of the employees of the facility at
112.34a rate equal to or greater than 160 percent of the federal minimum wage for individuals
112.35over the age of 20.
113.1EFFECTIVE DATE.This section is effective the day following final enactment
113.2and applies to all districts regardless of when the request for certification was made.
113.3 Sec. 15. Minnesota Statutes 2006, section 469.176, subdivision 4l, is amended to read:
113.4 Subd. 4l. Prohibited facilities. (a) No tax increment from any district may be
113.5used for:
113.6 (1) a commons area used as a public park; or
113.7 (2) a facility used for social, recreational, or conference purposes.
113.8 (b) This subdivision does not apply to a privately owned facility for conference
113.9purposes or a parking structure, whether it is public or privately owned or whether it is
113.10ancillary to a use listed in paragraph (a).
113.11EFFECTIVE DATE.This section confirms the original intent of the legislature
113.12in enacting Minnesota Statutes, section 469.176, subdivision 4l, and is effective the day
113.13following final enactment and applies to any expenditure subject to Minnesota Statutes,
113.14section 469.176, subdivision 4l.
113.15 Sec. 16. Minnesota Statutes 2006, section 469.1761, subdivision 1, is amended to read:
113.16 Subdivision 1. Requirement imposed. (a) In order for a tax increment financing
113.17district to qualify as a housing district:
113.18 (1) the income limitations provided in this section must be satisfied; and
113.19 (2) no more than 20 percent of the square footage of buildings that receive assistance
113.20from tax increments may consist of commercial, retail, or other nonresidential uses.
113.21 (b) The requirements imposed by this section apply to property receiving assistance
113.22financed with tax increments, including interest reduction, land transfers at less than the
113.23authority's cost of acquisition, utility service or connections, roads, parking facilities, or
113.24other subsidies. The provisions of this section do not apply to districts located in a targeted
113.25area as defined in section
113.26 (c) For purposes of the requirements of paragraph (a), the authority may elect to treat
113.27an addition to an existing structure as a separate building if:
113.28 (1) construction of the addition begins more than three years after construction of
113.29the existing structure was completed; and
113.30 (2) for an addition that does not meet the requirements of paragraph (a), clause (2), if
113.31it is treated as a separate building, the addition was not contemplated by the tax increment
113.32financing plan which includes the existing structure.
114.1EFFECTIVE DATE.This section is effective for expenditures of tax increment
114.2authorized and made after the day following final enactment, regardless of when the
114.3request for certification of the district was made.
114.4 Sec. 17. Minnesota Statutes 2006, section 469.1763, subdivision 2, is amended to read:
114.5 Subd. 2. Expenditures outside district. (a) For each tax increment financing
114.6district, an amount equal to at least 75 percent of the total revenue derived from tax
114.7increments paid by properties in the district must be expended on activities in the district
114.8or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
114.9in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
114.10For districts, other than redevelopment districts for which the request for certification
114.11was made after June 30, 1995, the in-district percentage for purposes of the preceding
114.12sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
114.13increments paid by properties in the district may be expended, through a development fund
114.14or otherwise, on activities outside of the district but within the defined geographic area of
114.15the project except to pay, or secure payment of, debt service on credit enhanced bonds.
114.16For districts, other than redevelopment districts for which the request for certification was
114.17made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
114.1820 percent. The revenue derived from tax increments for the district that are expended on
114.19costs under section
114.20calculating the percentages that must be expended within and without the district.
114.21 (b) In the case of a housing district, a housing project, as defined in section
114.22subdivision 11
114.23 (c) All administrative expenses are for activities outside of the district, except that
114.24if the only expenses for activities outside of the district under this subdivision are for
114.25the purposes described in paragraph (d), administrative expenses will be considered as
114.26expenditures for activities in the district.
114.27 (d) The authority may elect, in the tax increment financing plan for the district,
114.28to increase by up to ten percentage points the permitted amount of expenditures for
114.29activities located outside the geographic area of the district under paragraph (a). As
114.30permitted by section
114.31expenditures under paragraph (a), need not be made within the geographic area of the
114.32project. Expenditures that meet the requirements of this paragraph are legally permitted
114.33expenditures of the district, notwithstanding section
114.34To qualify for the increase under this paragraph, the expenditures must:
115.1 (1) be used exclusively to assist housing that meets the requirement for a qualified
115.2low-income building, as that term is used in section 42 of the Internal Revenue Code;
115.3 (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
115.4the Internal Revenue Code, less the amount of any credit allowed under section 42 of
115.5the Internal Revenue Code; and
115.6 (3) be used to:
115.7 (i) acquire and prepare the site of the housing;
115.8 (ii) acquire, construct, or rehabilitate the housing; or
115.9 (iii) make public improvements directly related to the housing.
115.10 (e) For a district created within a biotechnology and health sciences industry zone
115.11as defined in section
115.12such a zone, tax increment derived from such a district may be expended outside of the
115.13district but within the zone only for expenditures required for the construction of public
115.14infrastructure necessary to support the activities of the zone, land acquisition, and other
115.15redevelopment costs as defined in section 469.176, subdivision 4j.
115.16These expenditures are considered as expenditures for activities within the district.
115.17EFFECTIVE DATE.This section is effective for all districts located in bioscience
115.18zones, regardless of when the request for certification was made.
115.19 Sec. 18. Minnesota Statutes 2006, section 469.177, subdivision 1, is amended to read:
115.20 Subdivision 1. Original net tax capacity. (a) Upon or after adoption of a tax
115.21increment financing plan, the auditor of any county in which the district is situated shall,
115.22upon request of the authority, certify the original net tax capacity of the tax increment
115.23financing district and that portion of the district overlying any subdistrict as described in
115.24the tax increment financing plan and shall certify in each year thereafter the amount by
115.25which the original net tax capacity has increased or decreased as a result of a change in tax
115.26exempt status of property within the district and any subdistrict, reduction or enlargement
115.27of the district or changes pursuant to subdivision 4. The auditor shall certify the amount
115.28within 30 days after receipt of the request and sufficient information to identify the parcels
115.29included in the district. The certification relates to the taxes payable year as provided in
115.30subdivision 6.
115.31 (b) If the classification under section
115.32to a classification that has a different assessment ratio, the original net tax capacity of that
115.33property must be redetermined at the time when its use is changed as if the property had
115.34originally been classified in the same class in which it is classified after its use is changed.
116.1 (c) The amount to be added to the original net tax capacity of the district as a result
116.2of previously tax exempt real property within the district becoming taxable equals the net
116.3tax capacity of the real property as most recently assessed pursuant to section
116.4that assessment was made more than one year prior to the date of title transfer rendering
116.5the property taxable, the net tax capacity assessed by the assessor at the time of the
116.6transfer. If improvements are made to tax exempt property after the municipality approves
116.7the district and before the parcel becomes taxable, the assessor shall, at the request of
116.8the authority, separately assess the estimated market value of the improvements. If the
116.9property becomes taxable, the county auditor shall add to original net tax capacity, the net
116.10tax capacity of the parcel, excluding the separately assessed improvements. If substantial
116.11taxable improvements were made to a parcel after certification of the district and if the
116.12property later becomes tax exempt, in whole or part, as a result of the authority acquiring
116.13the property through foreclosure or exercise of remedies under a lease or other revenue
116.14agreement or as a result of tax forfeiture, the amount to be added to the original net tax
116.15capacity of the district as a result of the property again becoming taxable is the amount
116.16of the parcel's value that was included in original net tax capacity when the parcel was
116.17first certified. The amount to be added to the original net tax capacity of the district as a
116.18result of enlargements equals the net tax capacity of the added real property as most
116.19recently certified by the commissioner of revenue as of the date of modification of the tax
116.20increment financing plan pursuant to section
116.21 (d) If the net tax capacity of a property increases because the property no longer
116.22qualifies under the Minnesota Agricultural Property Tax Law, section
116.23Minnesota Open Space Property Tax Law, section
116.24Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is
116.25improved or market value is increased after approval of the plat under section
116.26subdivision 14
116.27net tax capacity.
116.28 (e) The amount to be subtracted from the original net tax capacity of the district
116.29as a result of previously taxable real property within the district becoming tax exempt,
116.30or a reduction in the geographic area of the district, shall be the amount of original net
116.31tax capacity initially attributed to the property becoming tax exempt or being removed
116.32from the district. If the net tax capacity of property located within the tax increment
116.33financing district is reduced by reason of a court-ordered abatement, stipulation agreement,
116.34voluntary abatement made by the assessor or auditor or by order of the commissioner of
116.35revenue, the reduction shall be applied to the original net tax capacity of the district when
116.36the property upon which the abatement is made has not been improved since the date of
117.1certification of the district and to the captured net tax capacity of the district in each year
117.2thereafter when the abatement relates to improvements made after the date of certification.
117.3The county auditor may specify reasonable form and content of the request for certification
117.4of the authority and any modification thereof pursuant to section
117.5 (f) If a parcel of property contained a substandard building or improvements
117.6described in section 469.174, subdivision 10, paragraph (e), that
117.7or removed and if the authority elects to treat the parcel as occupied by a substandard
117.8building under section
117.9section 469.174, subdivision 10, paragraph (e), the auditor shall certify the original net
117.10tax capacity of the parcel using the greater of (1) the current net tax capacity of the
117.11parcel, or (2) the estimated market value of the parcel for the year in which the building
117.12
117.13for the current year.
117.14 (g) For a redevelopment district qualifying under section
117.15paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of
117.16the land as the original tax capacity for any parcel in the district that contains a building
117.17that suffered substantial damage as a result of the disaster or emergency.
117.18EFFECTIVE DATE.This section is effective for requests for certification made
117.19after June 30, 2007.
117.20 Sec. 19. Minnesota Statutes 2006, section 469.178, subdivision 7, is amended to read:
117.21 Subd. 7. Interfund loans. The authority or municipality may advance or loan
117.22money to finance expenditures under section
117.23fund or any other fund under which it has legal authority to do so. The loan or advance
117.24must be authorized, by resolution of the governing body or of the authority, whichever
117.25has jurisdiction over the fund from which the advance or loan is made, before money
117.26is transferred, advanced, or spent, whichever is earliest. The resolution may generally
117.27grant to the authority the power to make interfund loans under one or more tax increment
117.28financing plans or for one or more districts. The terms and conditions for repayment of the
117.29loan must be provided in writing and include, at a minimum, the principal amount, the
117.30interest rate, and maximum term. The maximum rate of interest permitted to be charged
117.31is limited to the greater of the rates specified under section
117.32date the loan or advance is made, unless the written agreement states that the maximum
117.33interest rate will fluctuate as the interest rates specified under section
117.34are from time to time adjusted.
118.1EFFECTIVE DATE.This section is effective the day following final enactment
118.2and applies to all districts subject to Minnesota Statutes, section 469.178, subdivision 7,
118.3regardless of when the request for certification was made.
118.4 Sec. 20. Minnesota Statutes 2006, section 469.1791, subdivision 3, is amended to read:
118.5 Subd. 3. Preconditions to establish district. (a) A city may establish a special
118.6taxing district within a tax increment financing district under this section only if the
118.7conditions under paragraphs (b) and (c) are met or if the city elects to exercise the
118.8authority under paragraph (d).
118.9 (b) The city has determined that:
118.10 (1) total tax increments from the district, including unspent increments from
118.11previous years and increments transferred under paragraph (c), will be insufficient to pay
118.12the amounts due in a year on preexisting obligations; and
118.13 (2) this insufficiency of increments resulted from the reduction in property tax class
118.14rates enacted in the 1997 and 1998 legislative sessions.
118.15 (c) The city has agreed to transfer any available increments from other tax increment
118.16financing districts in the city to pay the preexisting obligations of the district under section
118.18
118.19 (d) If a tax increment financing district does not qualify under paragraphs (b) and
118.20(c), the governing body may elect to establish a special taxing district under this section.
118.21If the city elects to exercise this authority, increments from the tax increment financing
118.22district and the proceeds of the tax imposed under this section may only be used to pay
118.23preexisting obligations and reasonable administrative expenses of the authority for the tax
118.24increment financing district. The tax increment financing district must be decertified when
118.25all preexisting obligations have been paid.
118.26EFFECTIVE DATE.This section is effective the day following final enactment
118.27and applies to districts regardless of when the request for certification was made.
118.28 Sec. 21. Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision
118.29to read:
118.30 Subd. 6. Restrictions on relocations. (a) If a business relocates or intends to
118.31relocate under a proposed project more than 25 full-time equivalent jobs from a location
118.32in Minnesota into a job opportunity building zone, the business must notify the local
118.33government unit, the commissioner of employment and economic development, and the
118.34city and the county governments from which the jobs are being or would be relocated.
119.1A city or county that objects to the relocation of jobs must file a copy of the resolution
119.2with the commissioner of employment and economic development and the local unit
119.3of government.
119.4 (b) If the governing body of the city or county from which the jobs are being
119.5relocated adopts a qualified resolution objecting to the relocation within 60 days after its
119.6receipt of the notice, the following rules apply until the requirements of paragraph (c) are
119.7satisfied:
119.8 (1) if the business has not entered into a business subsidy agreement, the local unit
119.9of government may not enter into a business subsidy agreement with the business; or
119.10 (2) if the local unit of government has entered into a business subsidy agreement
119.11with the business, the business ceases to be a qualified business, effective for the current
119.12taxable year, the current assessment year, and for taxable purchases made after the first
119.13day of the month beginning after the filing of the objecting resolution.
119.14 (c) To be a qualified resolution for purposes of this subdivision, the resolution must
119.15identify one or more sites in the city or county that could serve as an appropriate site for
119.16the facility proposed by the business. To satisfy this requirement a site must:
119.17 (1) be of adequate size;
119.18 (2) have appropriate transportation access, given the nature of the business;
119.19 (3) be served by adequate public infrastructure and public utilities or the
119.20governmental unit will provide reasonably necessary public infrastructure and public
119.21utilities for the project in a timely manner; and
119.22 (4) be under the ownership or control of either the governmental unit or the business
119.23or be available for sale.
119.24 (d) When each city and county that objected to the relocation rescinds its objection
119.25by resolution, the provisions of paragraph (b) no longer apply to the business.
119.26EFFECTIVE DATE.This section is effective the day following final enactment
119.27and applies to business subsidy agreements entered into after that date.
119.28 Sec. 22. Minnesota Statutes 2006, section 469.3201, is amended to read:
119.29469.3201
119.30AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND
119.31BUSINESS SUBSIDY AGREEMENTS.
119.32 The Tax Increment Financing, Investment and Finance Division of the Office of the
119.33State Auditor must annually audit the creation and operation of all job opportunity building
119.34zones and business subsidy agreements entered into under Minnesota Statutes, sections
120.2request from the commissioner of revenue tax return information of taxpayers who are
120.3eligible to receive tax benefits authorized under section 469.315. To the extent necessary
120.4to perform this audit, the state auditor may request from the commissioner of employment
120.5and economic development wage detail report information required under section 268.044
120.6of taxpayers eligible to receive tax benefits authorized under section 469.315.
120.7EFFECTIVE DATE.This section is effective the day following final enactment.
120.8 Sec. 23. Laws 1994, chapter 587, article 9, section 14, subdivision 1, is amended to
120.9read:
120.10 Subdivision 1. Establishment. The city of Brooklyn Center may establish
120.11a redevelopment tax increment financing district in which 15 percent of the revenues
120.12generated from tax increment in any year is deposited in the housing and environmental
120.13remediation development account of the authority and expended according to the tax
120.14increment financing plan.
120.15EFFECTIVE DATE.This section is effective the day following final enactment.
120.16 Sec. 24. Laws 1994, chapter 587, article 9, section 14, subdivision 2, is amended to
120.17read:
120.18 Subd. 2. Eligible activities. The authority must identify in the plan the housing
120.19activities that will be assisted by the housing and environmental remediation development
120.20account. Housing activities may include rehabilitation, acquisition, construction,
120.21demolition, and financing of new or existing single family or multifamily housing.
120.22Housing and environmental remediation activities listed in the plan need not be located
120.23within the district or project area but must be activities that meet the income requirements
120.24
120.25
120.26EFFECTIVE DATE.This section is effective the day following final enactment.
120.27 Sec. 25. Laws 1994, chapter 587, article 9, section 14, subdivision 3, is amended to
120.28read:
120.29 Subd. 3. Housing account. Tax increment to be expended for housing and
120.30environmental remediation activities under this section must be segregated by the
120.31authority into a special account on its official books and records. The account may also
120.32receive funds from other public and private sources.
121.1EFFECTIVE DATE.This section is effective the day following final enactment.
121.2 Sec. 26. Laws 1995, chapter 264, article 5, section 44, subdivision 4, as amended by
121.3Laws 1996, chapter 471, article 7, section 21, and Laws 1997, chapter 231, article 10,
121.4section 12, is amended to read:
121.5 Subd. 4. Authority. For housing replacement projects in the city of Crystal,
121.6"authority" means the Crystal economic development authority. For housing replacement
121.7projects in the city of Fridley, "authority" means the housing and redevelopment authority
121.8in and for the city of Fridley or a successor in interest. For housing replacement
121.9projects in the city of Minneapolis, "authority" means the Minneapolis community
121.10development agency or its successors and assigns. For housing replacement projects
121.11in the city of St. Paul, "authority" means the St. Paul housing and redevelopment
121.12authority. For housing replacement projects in the city of Duluth, "authority" means the
121.13Duluth economic development authority. For housing replacement projects in the city of
121.14Richfield, "authority" is the authority as defined in Minnesota Statutes, section
121.15subdivision 2
121.16housing replacement projects in the city of Columbia Heights, "authority" is the authority
121.17as defined in Minnesota Statutes, section
121.18governing body of the city of Columbia Heights.
121.19EFFECTIVE DATE.This section is effective the day following final enactment
121.20and upon compliance by the governing body of the city of Minneapolis with Minnesota
121.21Statutes, section 645.021, subdivision 3.
121.22 Sec. 27. Laws 1995, chapter 264, article 5, section 45, subdivision 1, as amended by
121.23Laws 1996, chapter 471, article 7, section 22, and Laws 1997, chapter 231, article 10,
121.24section 13, and Laws 2002, chapter 377, article 7, section 6, is amended to read:
121.25 Subdivision 1. Creation of projects. (a) An authority may create a housing
121.26replacement project under sections 44 to 47, as provided in this section.
121.27 (b) For the cities of Crystal, Fridley, Richfield, and Columbia Heights, the authority
121.28may designate up to 50 parcels in the city to be included in a housing replacement
121.29district. No more than ten parcels may be included in year one of the district, with up
121.30to ten additional parcels added to the district in each of the following nine years. For
121.31the cities of
121.32than 200 parcels in the city to be included in a housing replacement district over the life
121.33of the district. For the city of Minneapolis, the authority may designate not more than
121.34400 parcels in the city to be included in a housing replacement district over the life of
122.1the district. The only parcels that may be included in a district are (1) vacant sites, (2)
122.2parcels containing vacant houses, or (3) parcels containing houses that are structurally
122.3substandard, as defined in Minnesota Statutes, section
122.4 (c) The city in which the authority is located must pay at least 25 percent of the
122.5housing replacement project costs from its general fund, a property tax levy, or other
122.6unrestricted money, not including tax increments.
122.7 (d) The housing replacement district plan must have as its sole object the acquisition
122.8of parcels for the purpose of preparing the site to be sold for market rate housing. As
122.9used in this section, "market rate housing" means housing that has a market value that
122.10does not exceed 150 percent of the average market value of single-family housing in that
122.11municipality.
122.12EFFECTIVE DATE.This section is effective the day following final enactment
122.13and upon compliance by the governing body of the city of Minneapolis with Minnesota
122.14Statutes, section 645.021, subdivision 3.
122.15 Sec. 28. Laws 2005, First Special Session chapter 3, article 10, section 23, is amended
122.16to read:
122.17 Sec. 23. GRANTS TO QUALIFYING BUSINESSES.
122.18 $750,000 is appropriated in fiscal year 2006 from the general fund to the
122.19commissioner of employment and economic development to be distributed to the
122.20foreign trade zone authority to provide grants to qualified businesses as determined
122.21by the authority, subject to Minnesota Statutes, sections
122.22provide incentives for the businesses to locate their operations in an international
122.23economic development zone. Of this appropriation, up to $250,000 may be used by the
122.24commissioner for a study to determine the economic viability of business plans for
122.25international economic development zones. If the money is not distributed during fiscal
122.26year 2006, it remains available for distribution under this section during fiscal year 2007.
122.27EFFECTIVE DATE.This section is effective the day following final enactment.
122.28 Sec. 29. BURNSVILLE; NORTHWEST QUADRANT TAX INCREMENT
122.29FINANCING.
122.30 Subdivision 1. Definitions. (a) For the purposes of this section, the words and
122.31phrases defined have the meanings given them in this subdivision.
122.32 (b) "City" means the city of Burnsville.
123.1 (c) "Project area" means the area in the city bounded on the south, southeast, and
123.2southwest by the southerly right-of-way line of Minnesota Trunk Highway 13; on the east
123.3by the easterly right-of-way line of Interstate Highway I-35W; on the north and northwest
123.4by the Minnesota River; and on the west by the westerly corporate limits of the city,
123.5together with a single parcel to the east of said Interstate Highway I-35W described as
123.6the North 1370 feet of the West 1075 feet of the NW Quarter of Section 34 Township 27
123.7Range 24 in the city of Burnsville, Dakota County, except the North 50 feet thereof;
123.8provided that the project area includes the rights-of-way for all present and future highway
123.9interchanges abutting the area described in this paragraph.
123.10 (d) "Soil deficiency district" means a type of tax increment financing district
123.11consisting of a portion of the project area in which the city finds by resolution that the
123.12following conditions exist:
123.13 (1) unusual terrain or soil deficiencies for 80 percent of the acreage in the district
123.14require substantial filling, grading, or other physical preparation for use; and
123.15 (2) the estimated cost of the physical preparation under clause (1), but excluding
123.16costs directly related to roads as defined in Minnesota Statutes, section 160.01, and
123.17local improvements as described in Minnesota Statutes, sections 429.021, subdivision 1,
123.18clauses (1) to (7), (11), and (12), and 430.01, exceeds the fair market value of the land
123.19before completion of the preparation.
123.20 Subd. 2. Special rules. (a) If the city elects, upon the adoption of the tax increment
123.21financing plan for a district, the rules under this section apply to a redevelopment district,
123.22renewal and renovation district, soil condition district, or a soil deficiency district
123.23established by the city or a development authority of the city in the project area.
123.24 (b) Prior to or upon the adoption of the first tax increment plan subject to the special
123.25rules under this subdivision, the city must find by resolution that parcels consisting of at
123.26least 80 percent of the acreage of the project area (excluding street and railroad right of
123.27way) are characterized by one or more of the following conditions:
123.28 (1) peat or other soils with geotechnical deficiencies that impair development of
123.29residential or commercial buildings or infrastructure;
123.30 (2) soils or terrain that requires substantial filling in order to permit the development
123.31of commercial or residential buildings or infrastructure;
123.32 (3) landfills, dumps, or similar deposits of municipal or private waste;
123.33 (4) quarries or similar resource extraction sites;
123.34 (5) floodway; and
123.35 (6) substandard buildings within the meaning of Minnesota Statutes, section
123.36469.174, subdivision 10.
124.1 (c) For the purposes of paragraph (b), clauses (1) through (5), a parcel is deemed to
124.2be characterized by the relevant condition if at least 70 percent of the area of the parcel
124.3contains the relevant condition. For the purposes of paragraph (b), clause (6), a parcel is
124.4deemed to be characterized by substandard buildings if the buildings occupy at least 30
124.5percent of the area of the parcel.
124.6 (d) The five-year rule under Minnesota Statutes, section 469.1763, subdivision
124.73, is extended to ten years for any district, and section 469.1763, subdivision 4, does
124.8not apply to any district.
124.9 (e) Notwithstanding anything to the contrary in section 469.1763, subdivision 2,
124.10paragraph (a), not more than 80 percent of the total revenue derived from tax increments
124.11paid by properties in any district (measured over the life of the district) may be expended
124.12on activities outside the district but within the project area.
124.13 (f) For a soil deficiency district:
124.14 (1) increments may be collected through 20 years after the receipt by the authority of
124.15the first increment from the district; and
124.16 (2) except as otherwise provided in this subdivision, increments may be used only to:
124.17 (i) acquire parcels on which the improvements described in item (ii) will occur;
124.18 (ii) pay for the cost of correcting the unusual terrain or soil deficiencies and the
124.19additional cost of installing public improvements directly caused by the deficiencies; and
124.20 (iii) pay for the administrative expenses of the authority allocable to the district.
124.21 (g) Increments spent for any infrastructure costs, whether inside a district or outside
124.22a district but within the project area, are deemed to satisfy the requirements of paragraph
124.23(f) and Minnesota Statutes, section 469.176, subdivisions 4b and 4j.
124.24 (h) Increments from any district may not be used to pay the costs of landfill closure or
124.25public infrastructure located on the following parcels within the plat known as Burnsville
124.26Amphitheater: Lot 1, Block 1; Lots 1 and 2, Block 2; and Outlots A, B, C and D.
124.27 (i) The authority to approve tax increment financing plans to establish tax increment
124.28financing districts under this section expires on December 31, 2017.
124.29EFFECTIVE DATE.This section is effective upon compliance with Minnesota
124.30Statutes, section 645.021, subdivision 3.
124.31 Sec. 30. CITY OF EAGAN; TAX INCREMENT FINANCING DISTRICT.
124.32 Subdivision 1. Authorization; location. The city of Eagan may establish within
124.33the corporate boundaries of the city one or more economic development tax increment
124.34financing districts subject to the special rules under subdivision 2. The districts must be
125.1located within the "area" defined for purposes of this section as Section 13, Township
125.227, Range 23, Dakota County, Minnesota.
125.3 Subd. 2. Special rules. (a) If the city elects upon adoption of the tax increment
125.4financing plan for the district, the rules under this subdivision apply to the district.
125.5 (b) The limitations in Minnesota Statutes, section 469.176, subdivision 4c, on
125.6spending increment for developments more than 15 percent of the square footage of which
125.7is used for purposes other than those listed in that subdivision, do not apply.
125.8 (c) Increments may be expended on surface parking, sanitary sewer, storm sewer,
125.9water, and street improvements inside and outside the area whether or not included in a tax
125.10increment financing district, and without regard to any limitations in Minnesota Statutes,
125.11section 469.1763, subdivision 2, if the improvements are related to development within
125.12the area and on administrative expenses.
125.13 Subd. 3. Business subsidy agreement required. Prior to approval of a tax
125.14increment financing plan for a district authorized by this section, the city must enter
125.15a business subsidy agreement with the recipient or beneficiary of expenditures of the
125.16increments. The agreement must set minimum full-time employment goals, minimum
125.17compensation amounts of the employment positions, and minimum investment amounts
125.18for the project and must provide for repayment of all or part of the assistance, if the
125.19established goals are not met by the recipient or beneficiaries.
125.20 Subd. 4. Expiration of authority. The authority to approve tax increment financing
125.21plans to establish tax increment financing districts under this section expires on December
125.2231, 2008.
125.23EFFECTIVE DATE.This section is effective upon compliance by the city of
125.24Eagan with Minnesota Statutes, section 645.021.
125.25 Sec. 31. CITY OF EYOTA; TAX INCREMENT FINANCING DISTRICT.
125.26 Subdivision 1. Authorization. Notwithstanding the mileage limitation in Minnesota
125.27Statutes, section 469.174, subdivision 27, the city of Eyota is deemed to be a small city for
125.28the purposes of Minnesota Statutes, section 469.174 to 469.1799, as long as its population
125.29does not exceed the population limit in that section.
125.30 Subd. 2. Local approval. This section is effective for the city of Eyota upon
125.31approval of Eyota's governing body and compliance with Minnesota Statutes, section
125.32645.021, subdivisions 2 and 3.
125.33 Sec. 32. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT;
125.34SPECIAL RULES.
126.1 (a) If the city elects upon the adoption of a tax increment financing plan for a district,
126.2the rules under this section apply to a redevelopment tax increment financing district
126.3established by the city of Fridley or the housing and redevelopment authority of the city.
126.4The redevelopment tax increment district includes the following parcels and adjacent
126.5railroad property and shall be referred to as the Northstar Transit Station District: parcel
126.6numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018,
126.7223024120012, 223024120011, 223024120005, 223024120004, 223024120003,
126.8223024120013, 223024120008, 223024120007, 223024120006, 223024130005,
126.9223024130010, 223024130011, 223024130003, 153024440039, 153024440037,
126.10153024440041, 153024440042, 223024110013, 223024110016, 223024110017,
126.11223024140008, 223024130002, 223024420004, 223024410002, 223024410003,
126.12223024110008, 223024110007, 223024110019, 223024110018, 223024110003,
126.13223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.
126.14 (b) The requirements for qualifying a redevelopment tax increment district under
126.15Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located
126.16within the Northstar Transit Station District, which are deemed eligible for inclusion
126.17in a redevelopment tax increment district.
126.18 (c) In addition to the costs permitted by Minnesota Statutes, section 469.176,
126.19subdivision 4j, eligible expenditures within the Northstar Transit Station District include
126.20those costs necessary to provide for the construction and land acquisition for a tunnel
126.21under the Burlington Northern Santa Fe railroad tracks.
126.22 (d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763,
126.23subdivision 2, the city of Fridley may expend increments generated from its tax increment
126.24financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota
126.25Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing
126.26districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District.
126.27 (e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3,
126.28does not apply to the Northstar Transit Station District or to tax increment financing
126.29districts Nos. 11, 12, and 13.
126.30 (f) The use of revenues for decertification under Minnesota Statutes, section
126.31469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11,
126.3212, and 13.
126.33EFFECTIVE DATE.This section is effective upon approval by the governing body
126.34of the city of Fridley and upon compliance by the city with Minnesota Statutes, section
126.35645.021, subdivision 3.
127.1 Sec. 33. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING;
127.2EXPENDITURES OUTSIDE DISTRICT.
127.3 Notwithstanding the provisions of Minnesota Statutes, section 469.1763, subdivision
127.42, the city of New Brighton may expend increments generated from its tax increment
127.5financing district No. 26 to facilitate eligible activities as permitted by Minnesota Statutes,
127.6section 469.176, subdivision 4e, outside the boundaries of tax increment financing district
127.7No. 26, but only within the area described in Laws 1998, chapter 389, article 11, section
127.824, subdivision 1, and commonly referred to as the Northwest Quadrant. Minnesota
127.9Statutes, section 469.1763, subdivisions 3 and 4, do not apply to expenditures permitted
127.10by this section.
127.11EFFECTIVE DATE.This section is effective upon approval by the governing
127.12body of the city of New Brighton and compliance by the city with Minnesota Statutes,
127.13section 645.021, subdivision 3.
127.14 Sec. 34. APPROPRIATION.
127.15 $200,000 in fiscal year 2008 and $200,000 in fiscal year 2009 are appropriated
127.16from the general fund to the commissioner of employment and economic development to
127.17provide a grant to the city of Fergus Falls to market and promote economic development
127.18of the site formerly used as a regional treatment facility.
127.19 Sec. 35. REPEALER.
127.20(a) Minnesota Statutes 2006, section 469.174, subdivision 29, is repealed.
127.21(b) Laws 1998, chapter 389, article 11, section 18, is repealed.
127.22EFFECTIVE DATE.Paragraph (a) is effective the day following final enactment.
127.23For purposes of any special law authorizing or limiting the use of increments to projects
127.24meeting the requirements of a qualified housing district, expenditures for housing districts
127.25satisfying the requirements of Minnesota Statutes, sections 469.174, subdivision 11;
127.26469.176, subdivision 4d; and 469.1761, as amended, also satisfy the requirements of
127.27the special law.
127.28 Paragraph (b) is effective upon compliance with Minnesota Statutes, section
127.29645.021, subdivision 3, by the governing body of the city of Burnsville. The balance of
127.30tax increments derived from tax increment financing district No. 2-1 as of the effective
127.31date of this section must be returned to the county for distribution in accordance with
127.32Minnesota Statutes, section 469.176, subdivision 2.
128.3 Section 1. Minnesota Statutes 2006, section 118A.03, subdivision 3, is amended to read:
128.4 Subd. 3. Amount. The total amount of the collateral computed at its market value
128.5shall be at least ten percent more than the amount on deposit
128.6the close of the financial institution's banking day, except that where the collateral is
128.7irrevocable standby letters of credit issued by Federal Home Loan Banks, the amount of
128.8collateral shall be at least equal to the amount on deposit
128.9of the financial institution's banking day. The financial institution may furnish both a
128.10surety bond and collateral aggregating the required amount.
128.11 Sec. 2. Minnesota Statutes 2006, section 123B.61, is amended to read:
128.12123B.61 PURCHASE OF CERTAIN EQUIPMENT.
128.13 The board of a district may issue general obligation certificates of indebtedness
128.14or capital notes subject to the district debt limits to: (a) purchase vehicles, computers,
128.15telephone systems, cable equipment, photocopy and office equipment, technological
128.16equipment for instruction, and other capital equipment having an expected useful life at
128.17least as long as the terms of the certificates or notes; (b) purchase computer hardware and
128.18software, without regard to its expected useful life, whether bundled with machinery or
128.19equipment or unbundled, together with application development services and training
128.20related to the use of the computer; and (c) prepay special assessments. The certificates or
128.21notes must be payable in not more than
128.22and in the manner determined by the board, except that certificates or notes issued to
128.23prepay special assessments must be payable in not more than 20 years. The certificates
128.24or notes may be issued by resolution and without the requirement for an election. The
128.25certificates or notes are general obligation bonds for purposes of section
128.26levy must be made for the payment of the principal and interest on the certificates or
128.27notes, in accordance with section
128.28levies under this section and section
128.29of the amount of the district's total operating capital revenue or the sum of the district's
128.30levy in the general and community service funds excluding the adjustments under this
128.31section for the year preceding the year the initial debt service levies are certified. The
128.32district's general fund levy for each year must be reduced by the sum of (1) the amount
128.33of the tax levies for debt service certified for each year for payment of the principal and
128.34interest on the certificates or notes issued under this section as required by section
129.1(2) the amount of the tax levies for debt service certified for each year for payment of the
129.2principal and interest on bonds issued under section
129.3in the debt redemption fund used to retire bonds, certificates, or notes issued under this
129.4section or section
129.5interest. If the district's general fund levy is less than the amount of the reduction, the
129.6balance shall be deducted first from the district's community service fund levy, and next
129.7from the district's general fund or community service fund levies for the following year. A
129.8district using an excess amount in the debt redemption fund to retire the certificates or
129.9notes shall report the amount used for this purpose to the commissioner by July 15 of the
129.10following fiscal year. A district having an outstanding capital loan under section
129.11or an outstanding debt service loan under section
129.12in the debt redemption fund to retire the certificates or notes.
129.13 Sec. 3. Minnesota Statutes 2006, section 275.61, subdivision 1, is amended to read:
129.14 Subdivision 1. Market value. (a) For local governmental subdivisions other than
129.15school districts, any levy
129.16
129.17or special election for taxes payable in 1993 and thereafter, shall be levied against the
129.18referendum market value of all taxable property within the governmental subdivision, as
129.19defined in section
129.20this section shall be certified separately to the county auditor under section
129.21 (b) The ballot shall state the maximum amount of the increased levy as a percentage
129.22of market value and the amount that will be raised by the new referendum tax rate in the
129.23first year it is to be levied.
129.24 (c) This subdivision does not apply to tax levies for the payment of debt obligations
129.25that are approved by the voters after June 30, 2007.
129.26EFFECTIVE DATE.This section is effective the day following final enactment.
129.27 Sec. 4. Minnesota Statutes 2006, section 331A.05, subdivision 2, is amended to read:
129.28 Subd. 2. Time of notice. Unless otherwise specified by
129.29by order of a court, publication of a public notice shall be as follows:
129.30 (a) the notice shall be published once;
129.31 (b) if the notice is intended to inform the public about a future event, the last
129.32publication shall occur not more than
129.33the event;
130.1 (c) if the notice is intended to inform the public about a past action or event, the last
130.2publication shall occur not more than 45 days after occurrence of the action or event.
130.3 Sec. 5. Minnesota Statutes 2006, section 365A.02, is amended to read:
130.4365A.02
130.5 Subdivision 1. Subordinate service district. "Subordinate service district" means a
130.6defined area within the town in which
130.7
130.8
130.9may not embrace an entire town.
130.10 Subd. 2. Special services. "Special services" means one or more governmental
130.11services or additions to townwide services provided by the town specially for the area
130.12and financed from revenues from the area.
130.13 Sec. 6. Minnesota Statutes 2006, section 365A.04, is amended to read:
130.14365A.04 CREATION
130.15 Subdivision 1. Petition. A petition signed by at least 50 percent of the property
130.16owners in the part of the town proposed for the subordinate service district may be
130.17submitted to the town board requesting the establishment of a subordinate service district
130.18to provide a service that the town is otherwise authorized by law to provide. The petition
130.19must include the territorial boundaries of the proposed district and specify the kinds of
130.20services to be provided within the district.
130.21 Subd. 1a. Creation by town board. The town board may establish a subordinate
130.22service district in a portion of the town by adoption of a resolution, subject to the
130.23requirements of subdivision 2.
130.24 Subd. 2. Public hearing. Upon receipt of the petition, and the verification of the
130.25signatures by the town clerk or prior to adoption of the resolution specified in subdivision
130.261a, the town board shall, within 30 days following verification or prior to adoption of the
130.27resolution specified in subdivision 1a, hold a public hearing on the question of whether or
130.28not the requested district shall be established. The notice of public hearing must specify
130.29the special services to be provided within the subordinate service district and must specify
130.30the territorial boundaries of the requested district. The notice of public hearing must be
130.31published once in a newspaper of general circulation in the town at least 14 days prior
130.32to the date of the public hearing.
130.33 Subd. 3. Approval; disapproval. Within 30 days after the public hearing, the
130.34town board by resolution shall approve or disapprove the establishment of the requested
131.1district. An approving resolution must specify the special services to be provided within
131.2the subordinate service district and must specify the territorial boundaries of the district.
131.3A resolution approving the establishment of the district may contain amendments or
131.4modifications of the district's boundaries or functions as set forth in the petition or the
131.5resolution specified in subdivision 1a.
131.6 Sec. 7. Minnesota Statutes 2006, section 365A.08, is amended to read:
131.7365A.08 FINANCING.
131.8 Subdivision 1. Budget. (a) Upon adoption of the next annual budget following
131.9the creation of a subordinate service district the town board shall include in the budget
131.10appropriate provisions for the operation of the district including either a property tax
131.11levied only on property of the users of the service within the boundaries of the district
131.12or a levy of a service charge against the users of the service within the district, or a
131.13combination of a property tax and a service charge on the users of the service.
131.14 (b) A tax or service charge or a combination of them may be imposed to finance a
131.15function or service in the district that the town ordinarily provides throughout the town
131.16only to the extent that there is an increase in the level of the function or service provided
131.17in the service district over that provided throughout the town. In that case, in addition
131.18to the townwide tax levy, an amount necessary to pay for the increase in the level of the
131.19function or service may be imposed in the district.
131.20 Subd. 2. Bonds. At any time after the requirements of section 356A.06 have been
131.21met and the subordinate service district created, the town board may issue obligations
131.22in an amount it deems necessary to defray in whole or in part the expense incurred
131.23and estimated to be incurred in making capital improvements necessary to operate the
131.24subordinate service district and provide the special services in the district, including every
131.25item of cost from inception to completion and all fees and expenses incurred in connection
131.26with the capital improvements or the financing. The obligations are payable primarily
131.27out of the proceeds of the taxes and service charges imposed under subdivision 1, net
131.28revenues as described in section 444.075, and special assessments under chapter 429. The
131.29town board may by resolution pledge the full faith credit and taxing power of the town
131.30to ensure payment of the principal and interest on the obligations if the proceeds of the
131.31taxes and service charges are insufficient to pay the principal and interest. Obligations
131.32must be issued in accordance with chapter 475, except that an election is not required, and
131.33the amount of the obligations is not included in determining the net indebtedness of the
131.34town under the provisions of any law limiting indebtedness.
132.1 Subd. 3. Covenants to secure obligations. In resolutions authorizing the issuance
132.2of general or special obligations and pledging taxes and service charges imposed under
132.3subdivision 1, net revenues, or special assessments to their payment, the town board
132.4may make covenants for the protection of holders of the obligations and taxpayers of the
132.5town as it deems necessary, including a covenant that the town will impose and collect
132.6charges of the nature authorized by this chapter at the time and in the amounts required to
132.7produce, together with any taxes or special assessments designated as a primary source
132.8of payment of the obligations, funds adequate to pay all principal and interest when due
132.9on the obligations, and to create and maintain reserves securing the payments as may be
132.10provided in the resolutions.
132.11 Sec. 8. Minnesota Statutes 2006, section 365A.095, is amended to read:
132.12365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE.
132.13 Subdivision 1. Petition. A petition signed by at least 75 percent of the property
132.14owners in the territory of the subordinate service district requesting the removal of the
132.15district may be presented to the town board. Within 30 days after the town board receives
132.16the petition, the town clerk shall determine the validity of the signatures on the petition. If
132.17the requisite number of signatures are certified as valid, the town board must hold a public
132.18hearing on the petitioned matter. Within 30 days after the end of the hearing, the town
132.19board must decide whether to discontinue the subordinate service district, continue as it is,
132.20or take some other action with respect to it.
132.21 Subd. 2. Bonds. If obligations have been issued for the benefit of the subordinate
132.22service district, the rates, charges, and tax levies, if any, continue until the obligations and
132.23any obligations issued to refund them have been paid in full.
132.24 Sec. 9. Minnesota Statutes 2006, section 373.01, subdivision 3, is amended to read:
132.25 Subd. 3. Capital notes. (a) A county board may, by resolution and without
132.26referendum, issue capital notes subject to the county debt limit to purchase capital
132.27equipment useful for county purposes that has an expected useful life at least equal to the
132.28term of the notes. The notes shall be payable in not more than ten years and shall be
132.29issued on terms and in a manner the board determines. A tax levy shall be made for
132.30payment of the principal and interest on the notes, in accordance with section
132.31as in the case of bonds.
132.32 (b) For purposes of this subdivision, "capital equipment" means:
132.33 (1) public safety, ambulance, road construction or maintenance, and medical
132.34equipment; and
133.1 (2) computer hardware and software, whether bundled with machinery or equipment
133.2or unbundled.
133.3 Sec. 10. Minnesota Statutes 2006, section 373.40, subdivision 4, is amended to read:
133.4 Subd. 4. Limitations on amount. A county
133.5bonds under this section if the maximum amount of principal and interest to become due in
133.6any year on all the outstanding bonds issued pursuant to this section (including the bonds
133.7to be issued) will equal or exceed
133.8in the county.
133.9
133.10
133.11
133.12limit must be made using the taxable market value for the taxes payable year in which
133.13the obligations are issued and sold. This section does not limit the authority to issue
133.14bonds under any other special or general law.
133.15EFFECTIVE DATE.This section is effective for bonds issued after June 30, 2007.
133.16 Sec. 11. Minnesota Statutes 2006, section 375B.09, is amended to read:
133.17375B.09 FINANCING.
133.18 Subdivision 1. Budget. (a) Upon adoption of the next annual budget following the
133.19creation of a subordinate service district the county board shall include in the budget
133.20appropriate provisions for the operation of the district including, as appropriate, either a
133.21property tax levied only on property within the boundaries of the district or a levy of a
133.22service charge against the users of the service within the district, or any combination of a
133.23property tax and a service charge.
133.24 (b) A tax or service charge or a combination thereof shall not be imposed to finance a
133.25function or service in the subordinate service district which the county generally provides
133.26throughout the county unless an increase in the level of the service is to be supplied in the
133.27subordinate service district in which case, in addition to the countywide tax levy, only an
133.28amount necessary to pay for the increased level of service may be imposed.
133.29 Subd. 2. Bonds. At any time after the requirements of section 375B.07 have been
133.30met and the subordinate service district created, the county board may issue obligations
133.31in an amount it deems necessary to defray in whole or in part the expense incurred
133.32and estimated to be incurred in making capital improvements necessary to operate the
133.33subordinate service district and provide the special services in the district, including every
134.1item of cost from inception to completion and all fees and expenses incurred in connection
134.2with the capital improvements or the financing. The obligations shall be payable primarily
134.3out of the proceeds of the taxes and service charges imposed pursuant to subdivision 1, net
134.4revenues as described in section 444.075, and special assessments under chapter 429. The
134.5county board may by resolution pledge the full faith credit and taxing power of the county
134.6to ensure payment of the principal and interest on the obligations if the proceeds of the
134.7taxes and service charges are insufficient to pay the principal and interest. Obligations
134.8must be issued in accordance with chapter 475, except that an election is not required, and
134.9the amount of the obligations is not included in determining the net indebtedness of the
134.10county under the provisions of any law limiting indebtedness.
134.11 Subd. 3. Covenants to secure obligations. In resolutions authorizing the issuance
134.12of general or special obligations and pledging taxes and service charges imposed under
134.13subdivision 1, net revenues, or special assessments to their payment, the county board
134.14may make covenants for the protection of holders of the obligations and taxpayers of the
134.15county as it deems necessary, including a covenant that the county will impose and collect
134.16charges of the nature authorized by this chapter at the time and in the amounts required to
134.17produce, together with any taxes or special assessments designated as a primary source
134.18of payment of the obligations, funds adequate to pay all principal and interest when due
134.19on the obligations and to create and maintain reserves securing the payments as may be
134.20provided in the resolutions.
134.21 Subd. 4. Continuance in the event of withdrawal. If obligations have been issued
134.22for the benefit of the subordinate service district, and the district is withdrawn or removed
134.23pursuant to either section 375B.10 or 375B.11, the rates, charges, and tax levies, if any, in
134.24the withdrawn or removed district must continue until the obligations and any obligations
134.25issued to refund them have been paid in full.
134.26 Sec. 12. Minnesota Statutes 2006, section 383B.117, subdivision 2, is amended to read:
134.27 Subd. 2. Equipment acquisition; capital notes. The board may, by resolution and
134.28without public referendum, issue capital notes within existing debt limits for the purpose
134.29of purchasing ambulance and other medical equipment, road construction or maintenance
134.30equipment, public safety equipment and other capital equipment having an expected
134.31useful life at least equal to the term of the notes issued. The notes shall be payable in
134.32not more than
134.33determines. The total principal amount of the notes issued for any fiscal year shall not
134.34exceed one percent of the total annual budget for that year and shall be issued solely for
134.35the purchases authorized in this subdivision. A tax levy shall be made for the payment
135.1of the principal and interest on such notes as in the case of bonds. For purposes of this
135.2subdivision, "equipment" includes computer hardware and software, whether bundled with
135.3machinery or equipment or unbundled. For purposes of this subdivision, the term "medical
135.4equipment" includes computer hardware and software and other intellectual property for
135.5use in medical diagnosis, medical procedures, research, record keeping, billing, and other
135.6hospital applications, together with application development services and training related
135.7to the use of the computer hardware and software and other intellectual property, all
135.8without regard to their useful life. For purposes of determining the amount of capital notes
135.9which the county may issue in any year, the budget of the county and Hennepin Healthcare
135.10System, Inc. shall be combined and the notes issuable under this subdivision shall be in
135.11addition to obligations issuable under section
135.12 Sec. 13. Minnesota Statutes 2006, section 383B.77, subdivision 1, is amended to read:
135.13 Subdivision 1. Creation. The Hennepin County Housing and Redevelopment
135.14Authority is created in the county of Hennepin. It shall have all of the powers and duties
135.15of a housing and redevelopment authority under sections
135.16purposes of applying the municipal housing and redevelopment act to Hennepin County,
135.17the county has all of the powers and duties of a city, the county board has all the powers
135.18and duties of a governing body, the chair of the county board has all of the powers and
135.19duties of a mayor, and, notwithstanding section 469.008, the area of operation includes the
135.20area within the territorial boundaries of the county.
135.21EFFECTIVE DATE.Because the population of Hennepin County is more than
135.221,000,000, under Minnesota Statutes, section 645.023, this section is effective without
135.23local approval.
135.24 Sec. 14. Minnesota Statutes 2006, section 383B.77, subdivision 2, is amended to read:
135.25 Subd. 2. Limitation. This section does not limit or restrict any existing housing
135.26and redevelopment authority or prevent a municipality from creating an authority. For
135.27purposes of this subdivision, "housing and redevelopment authority" includes any
135.28municipal department, agency, or authority of the city of Minneapolis which exercises the
135.29powers of a housing and redevelopment authority pursuant to section
135.30law. The county authority shall notify a municipal authority by January 31 of each year
135.31as to the activities the county authority plans to participate in within the municipality.
135.32The municipal authority shall notify the county authority within 45 days of the date of
135.33the notice from the county authority, if the municipal authority does not consent to the
135.34activities of the county authority.
136.1
136.2
136.3city housing and redevelopment authority requests the county housing and redevelopment
136.4authority to exercise any power or perform any function of the municipal authority, the
136.5county authority may do so.
136.6EFFECTIVE DATE.Because the population of Hennepin County is more than
136.71,000,000, under Minnesota Statutes, section 645.023, this section is effective without
136.8local approval.
136.9 Sec. 15. Minnesota Statutes 2006, section 410.32, is amended to read:
136.10410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
136.11 (a) Notwithstanding any contrary provision of other law or charter, a home rule
136.12charter city may, by resolution and without public referendum, issue capital notes subject
136.13to the city debt limit to purchase capital equipment.
136.14 (b) For purposes of this section, "capital equipment" means:
136.15 (1) public safety equipment, ambulance and other medical equipment, road
136.16construction and maintenance equipment, and other capital equipment; and
136.17 (2) computer hardware and software, whether bundled with machinery or equipment
136.18or unbundled.
136.19 (c) The equipment or software must have an expected useful life at least as long as the
136.20term of the notes.
136.21 (d) The notes shall be payable in not more than ten years and be issued on terms and
136.22in the manner the city determines. The total principal amount of the capital notes issued
136.23in a fiscal year shall not exceed 0.03 percent of the market value of taxable property
136.24in the city for that year.
136.25 (e) A tax levy shall be made for the payment of the principal and interest on the
136.26notes, in accordance with section
136.27 (f) Notes issued under this section shall require an affirmative vote of two-thirds of
136.28the governing body of the city.
136.29 (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
136.30city may also issue capital notes subject to its debt limit in the manner and subject to the
136.31limitations applicable to statutory cities pursuant to section
136.32 Sec. 16. Minnesota Statutes 2006, section 412.301, is amended to read:
136.33412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
137.1 (a) The council may issue certificates of indebtedness or capital notes subject to the
137.2city debt limits to purchase capital equipment.
137.3 (b) For purposes of this section, "capital equipment" means:
137.4 (1) public safety equipment, ambulance and other medical equipment, road
137.5construction and maintenance equipment, and other capital equipment; and
137.6 (2) computer hardware and software, whether bundled with machinery or equipment
137.7or unbundled.
137.8 (c) The equipment or software must have an expected useful life at least as long as
137.9the terms of the certificates or notes.
137.10
137.11 (d) Such certificates or notes shall be payable in not more than ten years and shall be
137.12issued on such terms and in such manner as the council may determine.
137.13 (e) If the amount of the certificates or notes to be issued to finance any such purchase
137.14exceeds 0.25 percent of the market value of taxable property in the city, they shall not
137.15be issued for at least ten days after publication in the official newspaper of a council
137.16resolution determining to issue them; and if before the end of that time, a petition asking
137.17for an election on the proposition signed by voters equal to ten percent of the number of
137.18voters at the last regular municipal election is filed with the clerk, such certificates or notes
137.19shall not be issued until the proposition of their issuance has been approved by a majority
137.20of the votes cast on the question at a regular or special election.
137.21 (f) A tax levy shall be made for the payment of the principal and interest on such
137.22certificates or notes, in accordance with section
137.23 Sec. 17. Minnesota Statutes 2006, section 453A.02, subdivision 3, is amended to read:
137.24 Subd. 3. City. "City" means a city organized and existing under the laws of
137.25Minnesota or a city charter adopted pursuant thereto, and authorized by such laws or
137.26charter to engage in the local distribution and sale of gas, provided that any city so
137.27engaged on January 1, 1979 is authorized to continue such distribution and sale, and every
137.28city now or hereafter so authorized may exercise, either individually or as a member of a
137.29municipal gas agency, all of the powers granted in sections
137.30 City also includes a city organized and existing under the laws of another state or
137.31a city charter adopted pursuant thereto which participates in a municipal gas agency
137.32with Minnesota cities.
137.33 Sec. 18. [471.6175] TRUST FOR POSTEMPLOYMENT BENEFITS.
138.1 Subdivision 1. Authorization; establishment. A political subdivision or other
138.2public entity that creates or has created an actuarial liability to pay postemployment
138.3benefits to employees or officers after their termination of service may establish a trust to
138.4pay those benefits. For purposes of this section, the term "postemployment benefits" means
138.5benefits giving rise to a liability under Statement No. 45 of the Governmental Accounting
138.6Standards Board and the term "trust" means a trust, a trust account, or a custodial account
138.7or contract authorized under section 401(f) of the Internal Revenue Code.
138.8 Subd. 2. Purpose of trust. The trust established under this section may only be
138.9used to pay postemployment benefits and may be either revocable or irrevocable.
138.10 Subd. 3. Trust administrator. The trust administrator of a trust established under
138.11this section shall be either:
138.12 (1) the Public Employees Retirement Association;
138.13 (2) a bank or banking association incorporated under the laws of the United States or
138.14of any state and authorized by the laws under which it is organized to exercise corporate
138.15trust powers; or
138.16 (3) an insurance company or agency qualified to do business in Minnesota which has
138.17at least five years' experience in investment products and services for group retirement
138.18benefits and which has a specialized department dedicated to services for retirement
138.19investment products.
138.20 A political subdivision or public entity may, in its discretion and in compliance
138.21with any applicable trust document, change trust administrators and transfer trust assets
138.22accordingly.
138.23 Subd. 4. Account maintenance. (a) A political subdivision or other public entity
138.24may establish a trust account to be held under the supervision of the trust administrator for
138.25the purposes of this section. A trust administrator shall establish a separate account for
138.26each participating political subdivision or public entity. The trust administrator may charge
138.27participating political subdivisions and public entities fees for reasonable administrative
138.28costs. The amount of any fees charged by the Public Employees Retirement Association is
138.29appropriated to the association from the account. A trust administrator may establish other
138.30reasonable terms and conditions for creation and maintenance of these accounts.
138.31 (b) The trust administrator must report to the political subdivision or other public
138.32entity on the investment returns of invested trust assets and on all investment fees or costs
138.33incurred by the trust. The annual rates of return, along with investment and administrative
138.34fees and costs for the trust, must be disclosed in the political subdivision's or public entity's
138.35annual financial audit in a manner prescribed by the state auditor.
139.1 (c) Effective for fiscal years beginning after December 31, 2009, the trust
139.2administrator must report electronically to the state auditor the portfolio and performance
139.3information specified in section 356.219, subdivision 3, in the manner prescribed by
139.4the state auditor.
139.5 Subd. 5. Investment. (a) The assets of a trust or trust account shall be invested and
139.6held as stipulated in paragraphs (b) to (e).
139.7 (b) The Public Employees Retirement Association must certify all money in the trust
139.8accounts for which it is trust administrator to the State Board of Investment for investment
139.9under section 11A.14, subject to the policies and procedures established by the State
139.10Board of Investment. Investment earnings must be credited to the trust account of the
139.11individual political subdivision or public entity.
139.12 (c) A trust administrator, other than the Public Employees Retirement Association,
139.13must ensure that all money in the trust accounts for which it is trust administrator is
139.14invested by a registered investment adviser, a bank investment trust department, or an
139.15insurance company or agency retirement investment department. Investment earnings
139.16must be credited to the trust account of the individual political subdivision or public entity.
139.17 (d) For trust assets invested by the State Board of Investment, the investment
139.18restrictions shall be the same as those generally applicable to the State Board of
139.19Investment. For trust assets invested by a trust administrator other than the Public
139.20Employees Retirement Association, the assets may only be invested in investments
139.21authorized under chapter 118A or section 356A.06, subdivision 7, in the manner specified
139.22in the applicable trust document.
139.23 (e) A political subdivision or public entity may provide investment direction to a
139.24trust administrator in compliance with any applicable trust document.
139.25 Subd. 6. Limit on deposit. A political subdivision or public entity may not
139.26deposit money in a trust or trust account created pursuant to this section if the total
139.27amount invested by that political subdivision or public entity would exceed the political
139.28subdivision's or public entity's actuarially determined liabilities for postemployment
139.29benefits due to officers and employees, as determined under the applicable standards of the
139.30Governmental Accounting Standards Board.
139.31 Subd. 7. Withdrawal of funds and termination of account. (a) For a revocable
139.32account, a political subdivision or public entity may withdraw some or all of its money
139.33or terminate the trust account. Money and accrued investment earnings withdrawn
139.34from a revocable account must be deposited in a fund separate and distinct from any
139.35other funds of the political subdivision or public entity. This money, with accrued
139.36investment earnings, must be used to pay legally enforceable postemployment benefits
140.1to former officers and employees, unless (i) there has been a change in state or federal
140.2law affecting that political subdivision's or public entity's liabilities for postemployment
140.3benefits, or (ii) there has been a change in the demographic composition of that political
140.4subdivision's or public entity's employees eligible for postemployment benefits, or (iii)
140.5there has been a change in the provisions or terms of the postemployment benefits in that
140.6political subdivision or public entity including, but not limited to, the portion of the costs
140.7eligible employees must pay to receive the benefits, or (iv) other factors exist that have
140.8a material effect on that political subdivision's or public entity's actuarially determined
140.9liabilities for postemployment benefits, in which event any amount in excess of 100
140.10percent of that political subdivision's or public entity's actuarially determined liabilities for
140.11postemployment benefits, as determined under standards of the Government Accounting
140.12Standards Board, may be withdrawn and used for any purpose.
140.13 (b) For an irrevocable account, a political subdivision or public entity may withdraw
140.14money only:
140.15 (1) as needed to pay postemployment benefits owed to former officers and employees
140.16of the political subdivision or public entity; or
140.17 (2) when all postemployment benefit liability owed to former officers or employees
140.18of the political subdivision or public entity has been satisfied or otherwise defeased.
140.19 (c) A political subdivision or public entity requesting withdrawal of money from
140.20an account created under this section must do so at a time and in the manner required by
140.21the executive director of the Public Employees Retirement Association or specified in an
140.22applicable trust document. The political subdivision or public entity that created the trust
140.23must ensure that withdrawals comply with the requirements of this section.
140.24 (d) The legislature may not divert funds in these trusts or trust accounts for use
140.25for another purpose.
140.26 Subd. 8. Status of irrevocable trust. (a) All money in an irrevocable trust or trust
140.27account created in this section is held in trust for the exclusive benefit of former officers
140.28and employees of the participating political subdivision or public entity, and is not subject
140.29to claims by creditors of the state, the participating political subdivision or public entity,
140.30the current or former officers and employees of the political subdivision or public entity,
140.31or the trust administrator.
140.32 (b) An irrevocable trust fund or trust account created in this section shall be deemed
140.33an arrangement equivalent to a trust for all legal purposes.
140.34EFFECTIVE DATE.This section is effective the day following final enactment,
140.35and is applicable immediately to all political subdivisions or public entities subject to
140.36Statement No. 45 of the Governmental Accounting Standards Board in 2007, to those
141.1political subdivisions or public entities whose trusts or trust accounts are validated
141.2by section 27, and to those political subdivisions or public entities that have begun
141.3consideration of measures to implement Statement No. 45 in 2007. This section is
141.4applicable on July 1, 2008, for all other political subdivisions or public entities.
141.5 Sec. 19. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
141.6to read:
141.7 Subd. 1m. Obligations. After July 1, 2007, in addition to other authority in this
141.8section, the council may issue certificates of indebtedness, bonds, or other obligations
141.9under this section in an amount not exceeding $33,600,000 for capital expenditures as
141.10prescribed in the council's regional transit master plan and transit capital improvement
141.11program and for related costs, including the costs of issuance and sale of the obligations.
141.12APPLICATION AND EFFECTIVE DATE.This section applies in the counties of
141.13Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the
141.14day following final enactment.
141.15 Sec. 20. Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
141.16to read:
141.17 Subd. 5. Anticipation of grants. In addition to other authority granted in this
141.18section, the council may exercise the authority granted to an issuing political subdivision
141.19by section 475.522.
141.20APPLICATION AND EFFECTIVE DATE.This section applies in the counties of
141.21Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington, and is effective the
141.22day following final enactment.
141.23 Sec. 21. Minnesota Statutes 2006, section 475.51, subdivision 4, is amended to read:
141.24 Subd. 4. Net debt. "Net debt" means the amount remaining after deducting from its
141.25gross debt the amount of current revenues which are applicable within the current fiscal
141.26year to the payment of any debt and the aggregate of the principal of the following:
141.27 (1) Obligations issued for improvements which are payable wholly or partly from the
141.28proceeds of special assessments levied upon property specially benefited thereby, including
141.29those which are general obligations of the municipality issuing them, if the municipality is
141.30entitled to reimbursement in whole or in part from the proceeds of the special assessments.
141.31 (2) Warrants or orders having no definite or fixed maturity.
142.1 (3) Obligations payable wholly from the income from revenue producing
142.2conveniences.
142.3 (4) Obligations issued to create or maintain a permanent improvement revolving
142.4fund.
142.5 (5) Obligations issued for the acquisition, and betterment of public waterworks
142.6systems, and public lighting, heating or power systems, and of any combination thereof or
142.7for any other public convenience from which a revenue is or may be derived.
142.8 (6) Debt service loans and capital loans made to a school district under the provisions
142.9of sections
142.10 (7) Amount of all money and the face value of all securities held as a debt service
142.11fund for the extinguishment of obligations other than those deductible under this
142.12subdivision.
142.13 (8) Obligations to repay loans made under section
142.14 (9) Obligations to repay loans made from money received from litigation or
142.15settlement of alleged violations of federal petroleum pricing regulations.
142.16 (10) Obligations issued to pay pension fund or other postemployment benefit
142.17liabilities under section
142.18 (11) Obligations issued to pay judgments against the municipality under section
142.20 (12) All other obligations which under the provisions of law authorizing their
142.21issuance are not to be included in computing the net debt of the municipality.
142.22EFFECTIVE DATE.This section is effective for obligations issued after June
142.2330, 2007.
142.24 Sec. 22. Minnesota Statutes 2006, section 475.52, subdivision 6, is amended to read:
142.25 Subd. 6. Certain purposes. Any municipality may issue bonds for paying
142.26judgments against it; for refunding outstanding bonds; for funding floating indebtedness;
142.27for funding actuarial liabilities to pay postemployment benefits to employees or officers
142.28after their termination of service; or for funding all or part of the municipality's current
142.29and future unfunded liability for a pension or retirement fund or plan referred to in
142.30section
142.31to sections
142.32relief association referred to in section
142.33be a party to any contract made under this section with respect to the fund held by it
142.34for the benefit of and in trust for its members. For purposes of this section, the term
143.1"postemployment benefits" means benefits giving rise to a liability under Statement No.
143.245 of the Governmental Accounting Standards Board.
143.3 Sec. 23. [475.522] GRANT ANTICIPATION FINANCING OF
143.4TRANSPORTATION OR TRANSIT PROJECTS.
143.5 Subdivision 1. Definitions. For purposes of this section, the term "political
143.6subdivision" means a county or a statutory or home rule charter city, and the term
143.7"issuing political subdivision" means a political subdivision that issues obligations under
143.8subdivision 2.
143.9 Subd. 2. Authorization. An issuing political subdivision may enter into agreements
143.10with any other political subdivision of the state, within or without its jurisdiction, and any
143.11state agency, with respect to federal grants for transportation or transit projects to be
143.12received directly or indirectly by or on behalf of the political subdivision or agency,
143.13under an executed grant agreement with the relevant federal agency. The agreements
143.14may provide that the political subdivision or agency will pledge to the issuing political
143.15subdivision all or a specified portion of the federal grants received by or on behalf of the
143.16political subdivision or agency for a specified period of years, or until all obligations issued
143.17by the issuing political subdivision under subdivision 3 with respect to those federal grants
143.18have been paid or legally defeased. If the issuing political subdivision issues obligations
143.19under subdivision 3, the agreements must provide the method by which the proceeds of
143.20the obligations will be used to pay or reimburse the costs of the transportation or transit
143.21projects relating to the federal grants described in the executed federal grant agreement.
143.22 Subd. 3. Issuance of obligations. In anticipation of any federal grants for
143.23transportation or transit projects to be received directly or indirectly by any political
143.24subdivision or agency as specified in subdivision 1, or by an issuing political subdivision
143.25with respect to any transportation or transit projects within its jurisdiction, an issuing
143.26political subdivision may issue its obligations payable from the collections of those
143.27federal grants. The obligations may be issued in the principal amount the issuing political
143.28subdivision determines provided that the estimated collections of the federal grants under
143.29the relevant executed federal grant agreement in each year in which the obligations will
143.30be outstanding must be at least equal to:
143.31 (1) if the obligations are to be issued as revenue obligations, 150 percent of the
143.32maximum annual debt service on the obligations; or
143.33 (2) if the obligations are to be issued as general obligations, 110 percent of the
143.34maximum annual debt service on the obligations.
144.1 Except as otherwise provided in this section, the issuing political subdivision shall
144.2provide for the issuance, sale, and security of the obligations as provided in chapter 475,
144.3and has the same powers and duties as a municipality issuing bonds under that law, except
144.4that no election is required and the net debt limitations in chapter 475 do not apply to the
144.5obligations. The issuing political subdivision may determine to issue the obligations as
144.6revenue obligations, payable solely from the collections of the federal grants anticipated,
144.7or may pledge its full faith and credit to the payment of the obligations.
144.8 Subd. 4. Use of proceeds. The proceeds of the obligations must be used:
144.9 (1) to pay or reimburse the costs of the transportation or transit projects relating to
144.10the federal grants being anticipated;
144.11 (2) to pay the costs of issuance of the obligations, including credit enhancement;
144.12 (3) to pay interest on the obligations for a period not exceeding three years from
144.13their date of issue; and
144.14 (4) if the full faith and credit of the issuing political subdivision is not pledged to the
144.15payment of the obligations, to fund a debt service reserve fund for the obligations.
144.16 Sec. 24. Minnesota Statutes 2006, section 475.53, subdivision 1, is amended to read:
144.17 Subdivision 1. Generally. Except as otherwise provided in sections
144.19be subject to a net debt in excess of
144.20property in the municipality.
144.21EFFECTIVE DATE.This section is effective for obligations issued after June
144.2230, 2007.
144.23 Sec. 25. Minnesota Statutes 2006, section 475.58, subdivision 1, is amended to read:
144.24 Subdivision 1. Approval by electors; exceptions. Obligations authorized by law or
144.25charter may be issued by any municipality upon obtaining the approval of a majority of
144.26the electors voting on the question of issuing the obligations, but an election shall not be
144.27required to authorize obligations issued:
144.28 (1) to pay any unpaid judgment against the municipality;
144.29 (2) for refunding obligations;
144.30 (3) for an improvement or improvement program, which obligation is payable wholly
144.31or partly from the proceeds of special assessments levied upon property specially benefited
144.32by the improvement or by an improvement within the improvement program, or from tax
144.33increments, as defined in section
144.34the general obligations of the municipality, if the municipality is entitled to reimbursement
145.1in whole or in part from the proceeds of such special assessments or tax increments and
145.2not less than 20 percent of the cost of the improvement or the improvement program is to
145.3be assessed against benefited property or is to be paid from the proceeds of federal grant
145.4funds or a combination thereof, or is estimated to be received from tax increments;
145.5 (4) payable wholly from the income of revenue producing conveniences;
145.6 (5) under the provisions of a home rule charter which permits the issuance of
145.7obligations of the municipality without election;
145.8 (6) under the provisions of a law which permits the issuance of obligations of a
145.9municipality without an election;
145.10 (7) to fund pension or retirement fund or postemployment benefit liabilities pursuant
145.11to section
145.12 (8) under a capital improvement plan under section
145.13 (9) under sections
145.14the proceeds of the bonds are not used for a purpose prohibited under section
145.15subdivision 4g
145.16 Sec. 26. Minnesota Statutes 2006, section 475.58, subdivision 3b, is amended to read:
145.17 Subd. 3b. Street reconstruction. (a) A municipality may, without regard to
145.18the election requirement under subdivision 1, issue and sell obligations for street
145.19reconstruction, if the following conditions are met:
145.20 (1) the streets are reconstructed under a street reconstruction plan that describes the
145.21
145.22any planned reconstruction of other streets in the municipality over the next five years,
145.23and the plan and issuance of the obligations has been approved by a vote of all of the
145.24members of the governing body present at the meeting following a public hearing for
145.25which notice has been published in the official newspaper at least ten days but not more
145.26than 28 days prior to the hearing; and
145.27 (2) if a petition requesting a vote on the issuance is signed by voters equal to
145.28five percent of the votes cast in the last municipal general election and is filed with the
145.29municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
145.30only after obtaining the approval of a majority of the voters voting on the question of
145.31the issuance of the obligations.
145.32 (b) Obligations issued under this subdivision are subject to the debt limit of the
145.33municipality and are not excluded from net debt under section
145.34 (c) For purposes of this subdivision, street reconstruction includes utility
145.35replacement and relocation and other activities incidental to the street reconstruction, turn
146.1lanes and other improvements having a substantial public safety function, realignments,
146.2other modifications to intersect with state and county roads, and the local share of state
146.3and county road projects.
146.4 (d) Except in the case of turn lanes, safety improvements, realignments, intersection
146.5modifications, and the local share of state and county road projects, street reconstruction
146.6does not include the portion of project cost allocable to widening a street or adding curbs
146.7and gutters where none previously existed.
146.8 Sec. 27. VALIDATION.
146.9 Any trust or trust account or other custodial account or contract authorized under
146.10section 401(f) of the Internal Revenue Code, created prior to June 6, 2006, to pay
146.11postemployment benefits to employees or officers after termination of service, is hereby
146.12validated, may continue in full force and effect, and shall have continuing authority
146.13to accept new funds; however, this section does not validate or correct defects in any
146.14previously created trust document. Any funds held by a validated trust or account
146.15under this section may be invested as provided in Minnesota Statutes, section 471.6175,
146.16subdivision 5. A validated trust or account shall have until January 1, 2008, to bring
146.17its trust documents and procedures into compliance with Minnesota Statutes, section
146.18471.6175.
146.19EFFECTIVE DATE.This section is effective the day following final enactment.
146.20 Sec. 28. TOWN OF CRANE LAKE, CERTIFICATES OF INDEBTEDNESS.
146.21 Notwithstanding Minnesota Statutes, section 366.095, or any other law to the
146.22contrary, the town board of the town of Crane Lake in St. Louis County may issue one
146.23or more certificates of indebtedness in a total amount not to exceed $225,000, which
146.24are not subject to the debt limits of the town. The proceeds of the certificates must be
146.25used to acquire property and pay other costs related to a land exchange with the United
146.26States Forest Service. The certificates shall be payable in not more than 30 years and be
146.27issued on the terms and in the manner as the board may determine. Minnesota Statutes,
146.28sections 475.54, subdivision 1, and 475.56, paragraph (c), do not apply to the certificates
146.29issued under this section. A tax levy shall be made to pay the principal and interest on the
146.30certificates as in the case of bonds.
146.31EFFECTIVE DATE.This section is effective the day after the governing body of
146.32the town of Crane Lake and its chief clerical officer timely complete their compliance with
146.33Minnesota Statutes, section 645.021, subdivisions 2 and 3.
147.1 Sec. 29. CITY OF WINSTED; BONDING AUTHORITY.
147.2 (a) The city of Winsted may issue general obligation bonds under Minnesota
147.3Statutes, chapter 475, to finance the acquisition and betterment of a facility consisting of
147.4a city hall, community center, and police station; park improvements, including trails
147.5and an amphitheater; related public improvements; and substantial landscaping for the
147.6improvements.
147.7 (b) The bonds may be issued as general obligations of the city without an election to
147.8approve the bonds under Minnesota Statutes, section 475.58.
147.9 (c) The bonds are not included in computing any debt limitation applicable to the
147.10city, including, but not limited to, the net debt limits under Minnesota Statutes, section
147.11475.53, and the levy of taxes under Minnesota Statutes, section 475.61, to pay principal of
147.12and interest on the bonds is not subject to any levy limitation.
147.13 (d) The aggregate principal amount of bonds used to pay costs of the acquisition and
147.14betterment of the facility consisting of a city hall, community center, and police station;
147.15park improvements, including trails and an amphitheater; related public improvements;
147.16and substantial landscaping for the improvements may not exceed $4,900,000, plus an
147.17amount equal to the costs related to issuance of the bonds and capitalized interest.
147.18EFFECTIVE DATE.This section is effective upon compliance by the governing
147.19body of the city of Winsted with Minnesota Statutes, section 645.021, subdivision 3.
147.22 Section 1. Minnesota Statutes 2006, section 276A.01, subdivision 3, is amended to
147.23read:
147.24 Subd. 3. Commercial-industrial property. "Commercial-industrial property"
147.25means the following categories of property, as defined in section
147.26portion of the property (i) that may, by law, constitute the tax base for a tax increment
147.27pledged pursuant to section
147.28certification of which was requested prior to May 1, 1996, to the extent and while the tax
147.29increment is so pledged; or (ii) that is exempt from taxation under section
147.30 (1) that portion of class 5 property consisting of unmined iron ore and low-grade
147.31iron-bearing formations as defined in section
147.32except the portion of high voltage transmission lines, the value of which is deducted from
147.33net tax capacity under section
148.1 (2) that portion of class 3 and class 5 property which is either used or zoned for use
148.2for any commercial or industrial purpose, including property that becomes taxable under
148.3section 7, except for such property which is, or, in the case of property under construction,
148.4will when completed be used exclusively for residential occupancy and the provision of
148.5services to residential occupants thereof. Property must be considered as used exclusively
148.6for residential occupancy only if each of not less than 80 percent of its occupied residential
148.7units is, or, in the case of property under construction, will when completed be occupied
148.8under an oral or written agreement for occupancy over a continuous period of not less
148.9than 30 days.
148.10 If the classification of property prescribed by section
148.11legislative amendment, the references in this subdivision are to the successor class or
148.12classes of property, or portions thereof, that include the kinds of property designated
148.13in this subdivision.
148.14 Sec. 2. Minnesota Statutes 2006, section 276A.04, is amended to read:
148.15276A.04 INCREASE IN NET TAX CAPACITY.
148.16 By July 15 of 1997 and each subsequent year, the auditor of each county in the
148.17area shall determine the amount, if any, by which the net tax capacity determined in the
148.18preceding year pursuant to section
148.19taxation within each municipality in the county exceeds the net tax capacity in 1995 of
148.20commercial-industrial property subject to taxation within that municipality, including the
148.21total net tax capacity of property that becomes taxable under section 7. If a municipality is
148.22located in two or more counties within the area, the auditors of those counties shall certify
148.23the data required by section
148.24the levies of that municipality between or among the affected counties. That county
148.25auditor shall determine the amount of the net excess, if any, for the municipality under
148.26this section, and certify that amount under section
148.27capacity determined by this section must be reduced by the amount of any decreases in
148.28the net tax capacity of commercial-industrial property resulting from any court decisions,
148.29court-related stipulation agreements, or abatements for a prior year, and only in the
148.30amount of such decreases made during the 12-month period ending on May 1 of the
148.31current assessment year, where the decreases, if originally reflected in the determination of
148.32a prior year's net tax capacity under section
148.33contribution from the municipality in that year. An adjustment for the decreases shall be
148.34made only if the municipality made a contribution in a prior year based on the higher net
148.35tax capacity of the commercial-industrial property.
149.1 Sec. 3. Minnesota Statutes 2006, section 298.22, is amended by adding a subdivision
149.2to read:
149.3 Subd. 5a. Forest trust. The commissioner, upon the affirmative vote of a majority
149.4of the members of the board, may purchase forest lands in the taconite assistance area
149.5defined in under section 273.1341 with funds specifically authorized for the purchase. The
149.6acquired forest lands must be held in trust for the benefit of the citizens of the taconite
149.7assistance area as the Iron Range Miners' Memorial Forest. The forest trust lands shall be
149.8managed and developed for recreation and economic development purposes. Proceeds
149.9derived from the management of the lands and from the sale of timber or removal of
149.10gravel or other minerals from these forest lands shall be deposited into an Iron Range
149.11Miners' Memorial Forest account that is established within the state financial accounts.
149.12Funds may be expended from the account upon approval of a majority of the members of
149.13the board to purchase, manage, administer, convey interests in, and improve the forest
149.14lands. By majority vote of the members of the board, money in the Iron Range Miners'
149.15Memorial Forest account may be transferred into the corpus of the Douglas J. Johnson
149.16economic protection trust fund established under sections 298.291 to 298.294. The
149.17property acquired under the authority granted by this subdivision and income derived from
149.18the property or the operation or management of the property are exempt from taxation
149.19by the state or its political subdivisions.
149.20 Sec. 4. Minnesota Statutes 2006, section 298.2214, subdivision 2, is amended to read:
149.21 Subd. 2. Iron Range Higher Education Committee; membership. The members
149.22of the committee shall consist of:
149.23 (1) one member appointed by the governor;
149.24 (2) one member appointed by the president of the University of Minnesota;
149.25 (3) two members
149.26rehabilitation appointed by the chair;
149.27 (4) the commissioner of Iron Range resources and rehabilitation; and
149.28 (5) the President of the Northeast Higher Education District.
149.29 Sec. 5. Minnesota Statutes 2006, section 298.227, is amended to read:
149.30298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
149.31 Subdivision 1. Fund for producers. An amount equal to that distributed pursuant
149.32to each taconite producer's taxable production and qualifying sales under section
149.33subdivision 9a
150.1a separate taconite economic development fund for each taconite and direct reduced
150.2ore producer.
150.3 Subd. 2. Committee review. Money from the fund for each producer shall be
150.4released by the commissioner after review by a joint committee consisting of an equal
150.5number of representatives of the salaried employees and the nonsalaried production and
150.6maintenance employees of that producer. The District 11 director of the United States
150.7Steelworkers of America, on advice of each local employee president, shall select
150.8the employee members. In nonorganized operations, the employee committee shall be
150.9elected by the nonsalaried production and maintenance employees. The review must be
150.10completed no later than six months after the producer presents a proposal for expenditure
150.11of the funds to the committee.
150.12 Subd. 3. Release of funds. The funds held pursuant to this section may be
150.13released only for acquisition of equipment and facilities for the producer or for research
150.14and development in Minnesota on new mining, or taconite, iron, or steel production
150.15technology, but only if the producer provides a matching expenditure to be used for
150.16the same purpose of at least 50 percent of the distribution based on
150.17
150.18distributions in 2008, 8.7 cents per ton for distributions in 2009, 5.7 cents per ton for
150.19distributions in 2010, 2.7 cents per ton for distributions in 2011, and 1 cent per ton for
150.20distributions in 2012.
150.21 Subd. 4. Repayment required. If a producer uses money from the fund to procure
150.22haulage trucks, mobile equipment, or mining shovels, and the producer removes the piece
150.23of equipment from the taconite tax relief area defined in section
150.24from the date of receipt of the money from the fund, a portion of the money granted
150.25from the fund must be repaid to the taconite economic development fund. The portion
150.26of the money to be repaid is 100 percent of the grant if the equipment is removed from
150.27the taconite tax relief area within 12 months after receipt of the money from the fund,
150.28declining by ten percent for each of the subsequent nine years during which the equipment
150.29remains within the taconite tax relief area.
150.30 Subd. 5. Sale of facility. If a taconite production facility is sold after operations at
150.31the facility had ceased, any money remaining in the fund for the former producer may be
150.32released to the purchaser of the facility on the terms otherwise applicable to the former
150.33producer under this section.
150.34 Subd. 6. Other distributions. If a producer fails to provide matching funds for
150.35a proposed expenditure within six months after the commissioner approves release of
150.36the funds, the funds are available for release to another producer in proportion to the
151.1distribution provided and under the conditions of this section. Any portion of the fund
151.2which is not released by the commissioner within two years of its deposit in the fund shall
151.3be divided between the taconite environmental protection fund created in section
151.4and the Douglas J. Johnson economic protection trust fund created in section
151.5placement in their respective special accounts. Two-thirds of the unreleased funds shall be
151.6distributed to the taconite environmental protection fund and one-third to the Douglas J.
151.7Johnson economic protection trust fund.
151.8EFFECTIVE DATE.This section is effective for distributions in 2008 and
151.9thereafter.
151.10 Sec. 6. Minnesota Statutes 2006, section 298.24, subdivision 1, is amended to read:
151.11 Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2001, 2002,
151.12and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and
151.13quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon
151.14the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore
151.15concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the
151.16same rate imposed for concentrates produced in 2004.
151.17 (b) For concentrates produced in 2006 and subsequent years, the tax rate shall be
151.18equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate
151.19multiplied by the percentage increase in the implicit price deflator from the fourth quarter
151.20of the second preceding year to the fourth quarter of the preceding year. "Implicit price
151.21deflator" means the implicit price deflator for the gross domestic product prepared by the
151.22Bureau of Economic Analysis of the United States Department of Commerce.
151.23 (c) On concentrates produced in 1997 and thereafter, an additional tax is imposed
151.24equal to three cents per gross ton of merchantable iron ore concentrate for each one
151.25percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees
151.26Fahrenheit.
151.27 (d) The tax shall be imposed on the average of the production for the current year
151.28and the previous two years. The rate of the tax imposed will be the current year's tax rate.
151.29This clause shall not apply in the case of the closing of a taconite facility if the property
151.30taxes on the facility would be higher if this clause and section
151.31 (e) If the tax or any part of the tax imposed by this subdivision is held to be
151.32unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate
151.33produced shall be imposed.
151.34 (f) Consistent with the intent of this subdivision to impose a tax based upon the
151.35weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
152.1determine the weight of merchantable iron ore concentrate included in fluxed pellets by
152.2subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
152.3flux additives included in the pellets from the weight of the pellets. For purposes of this
152.4paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
152.5olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
152.6No subtraction from the weight of the pellets shall be allowed for binders, mineral and
152.7chemical additives other than basic flux additives, or moisture.
152.8 (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
152.9of a plant's commercial production of direct reduced ore, no tax is imposed under this
152.10section. As used in this paragraph, "commercial production" is production of more than
152.1150,000 tons of direct reduced ore in the current year or in any prior year, "noncommercial
152.12production" is production of 50,000 tons or less of direct reduced ore in any year, and
152.13"direct reduced ore" is ore that results in a product that has an iron content of at least 75
152.14percent. For the third year of a plant's commercial production of direct reduced ore, the
152.15rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined
152.16under this subdivision. For the fourth commercial production year, the rate is 50 percent of
152.17the rate otherwise determined under this subdivision; for the fifth commercial production
152.18year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for
152.19all subsequent commercial production years, the full rate is imposed.
152.20 (2) Subject to clause (1), production of direct reduced ore in this state is subject to
152.21the tax imposed by this section, but if that production is not produced by a producer
152.22of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the
152.23production of direct reduced iron in this state is not subject to the tax imposed by this
152.24section on taconite or iron sulfides.
152.25 (3) Notwithstanding any other provision of this subdivision, no tax is imposed
152.26on direct reduced ore under this section during the facility's noncommercial production
152.27of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
152.28production of direct reduced ore is subject to the tax imposed by this section on taconite
152.29and iron sulphides. Three-year average production of direct reduced ore does not
152.30include production of direct reduced ore in any noncommercial year. Three-year average
152.31production for a direct reduced ore facility that has noncommercial production is the
152.32average of the commercial production of direct reduced ore for the current year and the
152.33previous two commercial years.
152.34 (4) This paragraph applies only to plants for which all environmental permits have
152.35been obtained and construction has begun before July 1, 2008.
153.1 Sec. 7. Minnesota Statutes 2006, section 298.25, is amended to read:
153.2298.25 TAXES ADDITIONAL TO OCCUPATION TAX; IN LIEU OF OTHER
153.3TAXES.
153.4 The taxes imposed under section
153.5imposed upon the business of mining and producing iron ore. Except as herein otherwise
153.6provided, such taxes shall be in lieu of all other taxes upon such taconite, iron sulphides,
153.7and direct reduced ore or the lands in which they are contained, or upon the mining or
153.8quarrying thereof, or the production of concentrate or direct reduced ore therefrom, or
153.9upon the concentrate or direct reduced ore produced, or upon the machinery, equipment,
153.10tools, supplies and buildings used in such mining, quarrying or production, or upon the
153.11lands occupied by, or used in connection with, such mining, quarrying or production
153.12facilities. If electric or steam power for the mining, transportation or concentration of
153.13such taconite, concentrates or direct reduced ore produced therefrom is generated in
153.14plants principally devoted to the generation of power for such purposes, the plants in
153.15which such power is generated and all machinery, equipment, tools, supplies, transmission
153.16and distribution lines used in the generation and distribution of such power, shall not be
153.17considered to be machinery, equipment, tools, supplies and buildings used in the mining,
153.18quarrying, or production of taconite, taconite concentrates or direct reduced ore within
153.19the meaning of this section, and shall be subject to general property taxation.
153.20
153.21
153.22
153.23
153.24
153.25
153.26
153.27
153.28
153.29herein shall prevent the assessment and taxation of the surface of reserve land containing
153.30taconite and not occupied by such facilities or used in connection therewith at the value
153.31thereof without regard to the taconite or iron sulphides therein, nor the assessment and
153.32taxation of merchantable iron ore or other minerals, or iron-bearing materials other than
153.33taconite or iron sulphides in such lands in the manner provided by law, nor the assessment
153.34and taxation of facilities used in producing sulphur or sulphur products from iron sulphide
153.35concentrates, or in refining such sulphur products, under the general property tax laws.
153.36Nothing herein shall except from general taxation or from taxation as provided by other
154.1laws any property used for residential or townsite purposes, including utility services
154.2thereto. This section does not provide an exemption from general property taxation for ore
154.3docks even if located at the site of a taconite production facility.
154.4EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
154.5in 2008, and thereafter.
154.6 Sec. 8. Minnesota Statutes 2006, section 298.28, subdivision 3, is amended to read:
154.7 Subd. 3. Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed
154.8under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid
154.9account to be distributed as provided in section
154.10 (b) An amount must be allocated to towns or cities that is annually certified by
154.11the county auditor of a county containing a taconite tax relief area as defined in section
154.132, 1982, more than 75 percent of the assessed valuation of the township consists of iron
154.14ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation
154.15of the city consists of iron ore.
154.16 (c) The amount allocated under paragraph (b) will be the portion of a township's or
154.17city's certified levy equal to the proportion of (1) the difference between 50 percent of
154.18January 2, 1982, assessed value in the case of a township and 50 percent of the January 2,
154.191980, assessed value in the case of a city and its current assessed value to (2) the sum of
154.20its current assessed value plus the difference determined in (1), provided that the amount
154.21distributed shall not exceed $55 per capita in the case of a township or $75 per capita in
154.22the case of a city. For purposes of this limitation, population will be determined according
154.23to the 1980 decennial census conducted by the United States Bureau of the Census. If the
154.24current assessed value of the township exceeds 50 percent of the township's January 2,
154.251982, assessed value, or if the current assessed value of the city exceeds 50 percent of the
154.26city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this
154.27paragraph, "assessed value," when used in reference to years other than 1980 or 1982,
154.28means the appropriate net tax capacities multiplied by 10.2.
154.29 (d) In addition to other distributions under this subdivision, 3 cents per taxable ton
154.30must be allocated for distribution to towns that are entirely located within the taconite tax
154.31relief area defined in section 273.134, paragraph (b). The amount available under this
154.32paragraph will be distributed to eligible towns on a per capita basis.
154.33EFFECTIVE DATE.This section is effective for distributions in 2008 and
154.34thereafter.
155.1 Sec. 9. Minnesota Statutes 2006, section 298.28, subdivision 4, is amended to read:
155.2 Subd. 4. School districts. (a)
155.3provided in paragraph (d) must be allocated to qualifying school districts to be distributed,
155.4based upon the certification of the commissioner of revenue, under paragraphs (b) and (c),
155.5except as otherwise provided in paragraph (f).
155.6 (b)
155.7the lands from which taconite was mined or quarried were located or within which the
155.8concentrate was produced. The distribution must be based on the apportionment formula
155.9prescribed in subdivision 2.
155.10 (ii) Three cents per taxable ton from each taconite facility must be distributed to
155.11each affected school district for deposit in a fund dedicated to building maintenance
155.12and repairs, as follows:
155.13 (1) proceeds from Keewatin Taconite or its successor are distributed to Independent
155.14School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor
155.15districts;
155.16 (2) proceeds from the Hibbing Taconite Company or its successor are distributed to
155.17Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor
155.18districts;
155.19 (3) proceeds from the Mittal Steel Company and Minntac or their successors are
155.20distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, 706, Virginia,
155.212711, Mesabi East, and 2154, Eveleth-Gilbert, or their successor districts;
155.22 (4) proceeds from the Northshore Mining Company or its successor are distributed
155.23to Independent School Districts Nos. 2142, St. Louis County, and 318, Lake Superior,
155.24or their successor districts; and
155.25 (5) proceeds from United Taconite or its successor are distributed to Independent
155.26School Districts Nos. 2142, St. Louis County, and 2154, Eveleth-Gilbert, or their
155.27successor districts.
155.28 (c)(i)
155.29(e), shall be distributed to a group of school districts comprised of those school districts
155.30which qualify as a tax relief area under section
155.31a qualifying municipality as defined by section
155.32to school district indexes as follows: for each school district, its pupil units determined
155.33under section
155.34average adjusted net tax capacity per pupil unit for school districts receiving aid under
155.35this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year
155.36ending prior to distribution to the adjusted net tax capacity per pupil unit of the district.
156.1Each district shall receive that portion of the distribution which its index bears to the sum
156.2of the indices for all school districts that receive the distributions.
156.3 (ii) Notwithstanding clause (i), each school district that receives a distribution
156.4under sections
156.5clause;
156.6severed mineral values after reduction for any portion distributed to cities and towns under
156.7section
156.8reduction under section
156.9distribution shall receive a distribution equal to the difference; the amount necessary to
156.10make this payment shall be derived from proportionate reductions in the initial distribution
156.11to other school districts under clause (i).
156.12 (d) Any school district described in paragraph (c) where a levy increase pursuant to
156.13section
156.14shall receive a distribution of 21.3 cents per ton. Each district shall receive $175 times the
156.15pupil units identified in section
156.16year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent
156.17times the district's taxable net tax capacity in the second previous year.
156.18 If the total amount provided by paragraph (d) is insufficient to make the payments
156.19herein required then the entitlement of $175 per pupil unit shall be reduced uniformly
156.20so as not to exceed the funds available. Any amounts received by a qualifying school
156.21district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general
156.22education aid which the district receives pursuant to section
156.23levies of the district. Any amount remaining after the payments provided in this paragraph
156.24shall be paid to the commissioner of Iron Range resources and rehabilitation who shall
156.25deposit the same in the taconite environmental protection fund and the Douglas J. Johnson
156.26economic protection trust fund as provided in subdivision 11.
156.27 Each district receiving money according to this paragraph shall reserve the lesser of
156.28the amount received under this paragraph or $25 times the number of pupil units served
156.29in the district. It may use the money for early childhood programs or for outcome-based
156.30learning programs that enhance the academic quality of the district's curriculum. The
156.31outcome-based learning programs must be approved by the commissioner of education.
156.32 (e) There shall be distributed to any school district the amount which the school
156.33district was entitled to receive under section
156.34 (f) Effective for the distribution in 2003 only, five percent of the distributions to
156.35school districts under paragraphs (b), (c), and (e); subdivision 6, paragraph (c); subdivision
156.3611; and section
157.1portion distributed to cities and towns under section
157.2(5), shall be distributed to the Douglas J. Johnson economic protection trust fund created
157.3in section
157.4economic protection trust fund shall be made available for expenditure under section
157.6distributions to school districts under section
157.7cities and towns under section
157.8to the general fund.
157.9EFFECTIVE DATE.This section is effective for distributions in 2008 and
157.10thereafter.
157.11 Sec. 10. Minnesota Statutes 2006, section 298.28, subdivision 5, is amended to read:
157.12 Subd. 5. Counties. (a)
157.13distributed, based upon certification by the commissioner of revenue, under paragraphs
157.14(b) to
157.15 (b)
157.16the taconite is mined or quarried or in which the concentrate is produced
157.17
157.18prescribed in subdivision 2 is the basis for the distribution.
157.19 (c) If an electric power plant owned by and providing the primary source of power
157.20for a taxpayer mining and concentrating taconite is located in a county other than the
157.21county in which the mining and the concentrating processes are conducted, one cent per
157.22taxable ton of the tax distributed to the counties pursuant to paragraph (b) and imposed
157.23on and collected from such taxpayer shall be paid to the county in which the power plant
157.24is located.
157.25 (d)
157.26taconite was mined, quarried or concentrated to be deposited in the county road and
157.27bridge fund. If the mining, quarrying and concentrating, or separate steps in any of those
157.28processes are carried on in more than one county, the commissioner shall follow the
157.29apportionment formula prescribed in subdivision 2.
157.30EFFECTIVE DATE.This section is effective for distributions in 2008 and
157.31thereafter.
157.32 Sec. 11. Minnesota Statutes 2006, section 298.28, subdivision 6, is amended to read:
158.1 Subd. 6. Property tax relief. (a) In
158.2taxable ton, less any amount required to be distributed under paragraphs (b) and (c), or
158.3section
158.4counties' fiscal agent, to be distributed as provided in sections
158.5 (b) If an electric power plant owned by and providing the primary source of power
158.6for a taxpayer mining and concentrating taconite is located in a county other than the
158.7county in which the mining and the concentrating processes are conducted, .1875 cent per
158.8taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.
158.9 (c) If an electric power plant owned by and providing the primary source of power
158.10for a taxpayer mining and concentrating taconite is located in a school district other than
158.11a school district in which the mining and concentrating processes are conducted, .4541
158.12cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
158.13the school district.
158.14 Sec. 12. Minnesota Statutes 2006, section 298.28, subdivision 9a, is amended to read:
158.15 Subd. 9a. Taconite economic development fund. (a)
158.16
158.17in this subdivision must be paid to the taconite economic development fund. The amount
158.18of the distributions is at the following amounts per ton:
158.19 (1) for distribution in 2007, 30.1 cents;
158.20 (2) for distribution in 2008, 25.1 cents;
158.21 (3) for distribution in 2009, 20.1 cents;
158.22 (4) for distribution in 2010, 15.1 cents;
158.23 (5) for distribution in 2011, 10.1 cents; and
158.24 (6) for distribution in 2012, 5.1 cents.
158.25 No distribution shall be made under this paragraph in
158.26in which total industry production falls below 30 million tons. Distribution shall only be
158.27made to a taconite producer's fund under section
158.28tax under section
158.29due dates provided by an administrative agreement with the commissioner.
158.30 (b) An amount equal to 50 percent of the tax under section
158.31sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including
158.32crushed pellets shall be paid to the taconite economic development fund. The amount
158.33paid shall not exceed $700,000 annually for all companies. If the initial amount to be
158.34paid to the fund exceeds this amount, each company's payment shall be prorated so the
158.35total does not exceed $700,000.
159.1 (c) No distributions will be made under this subdivision after 2012. Any amount
159.2remaining in this fund on January 1, 2013, shall be distributed, two-thirds to the
159.3environmental protection fund and one-third to the Douglas J. Johnson economic
159.4protection trust fund.
159.5 Sec. 13. Minnesota Statutes 2006, section 298.28, is amended by adding a subdivision
159.6to read:
159.7 Subd. 9d. Iron Range higher education account. Two cents per taxable ton must
159.8be allocated to the Iron Range Resources and Rehabilitation Board to be deposited in
159.9an Iron Range higher education account that is hereby created, to be used for higher
159.10education programs, including apprenticeship and training programs certified by the
159.11Minnesota Department of Labor and Industry, conducted at educational institutions and
159.12apprenticeship and training facilities located in the taconite assistance area defined in
159.13section 273.1341. The Iron Range Higher Education committee under section 298.2214
159.14and the Iron Range Resources and Rehabilitation Board must approve all expenditures
159.15from the account.
159.16EFFECTIVE DATE.This section is effective for production in 2008, distributions
159.17in 2009, and thereafter.
159.18 Sec. 14. Minnesota Statutes 2006, section 298.292, subdivision 2, is amended to read:
159.19 Subd. 2. Use of money. Money in the Douglas J. Johnson economic protection trust
159.20fund may be used for the following purposes:
159.21 (1) to provide loans, loan guarantees, interest buy-downs and other forms of
159.22participation with private sources of financing, but a loan to a private enterprise shall be
159.23for a principal amount not to exceed one-half of the cost of the project for which financing
159.24is sought, and the rate of interest on a loan to a private enterprise shall be no less than the
159.25lesser of eight percent or an interest rate three percentage points less than a full faith
159.26and credit obligation of the United States government of comparable maturity, at the
159.27time that the loan is approved;
159.28 (2) to fund reserve accounts established to secure the payment when due of the
159.29principal of and interest on bonds issued pursuant to section
159.30 (3) to pay in periodic payments or in a lump sum payment any or all of the interest
159.31on bonds issued pursuant to chapter 474 for the purpose of constructing, converting,
159.32or retrofitting heating facilities in connection with district heating systems or systems
159.33utilizing alternative energy sources;
160.1 (4) to invest in a venture capital fund or enterprise that will provide capital to other
160.2entities that are engaging in, or that will engage in, projects or programs that have the
160.3purposes set forth in subdivision 1. No investments may be made in a venture capital fund
160.4or enterprise unless at least two other unrelated investors make investments of at least
160.5$500,000 in the venture capital fund or enterprise, and the investment by the Douglas
160.6J. Johnson economic protection trust fund may not exceed the amount of the largest
160.7investment by an unrelated investor in the venture capital fund or enterprise. For purposes
160.8of this subdivision, an "unrelated investor" is a person or entity that is not related to
160.9the entity in which the investment is made or to any individual who owns more than 40
160.10percent of the value of the entity, in any of the following relationships: spouse, parent,
160.11child, sibling, employee, or owner of an interest in the entity that exceeds ten percent of
160.12the value of all interests in it. For purposes of determining the limitations under this
160.13clause, the amount of investments made by an investor other than the Douglas J. Johnson
160.14economic protection trust fund is the sum of all investments made in the venture capital
160.15fund or enterprise during the period beginning one year before the date of the investment
160.16by the Douglas J. Johnson economic protection trust fund; and
160.17 (5) to purchase forest land in the taconite assistance area defined in section 273.1341
160.18to be held and managed as a public trust for the benefit of the area for the purposes
160.19authorized in section 298.22, subdivision 5a.
160.20 Money from the trust fund shall be expended only in or for the benefit of the taconite
160.21assistance area defined in section
160.22 Sec. 15. Minnesota Statutes 2006, section 298.296, subdivision 2, is amended to read:
160.23 Subd. 2. Expenditure of funds. (a) Before January 1, 2028, funds may be expended
160.24on projects and for administration of the trust fund only from the net interest, earnings,
160.25and dividends arising from the investment of the trust at any time, including net interest,
160.26earnings, and dividends that have arisen prior to July 13, 1982, plus $10,000,000 made
160.27available for use in fiscal year 1983, except that any amount required to be paid out of the
160.28trust fund to provide the property tax relief specified in Laws 1977, chapter 423, article
160.29X, section 4, and to make school bond payments and payments to recipients of taconite
160.30production tax proceeds pursuant to section
160.31the trust.
160.32 (b) Additionally, upon recommendation by the board, up to $13,000,000 from the
160.33corpus of the trust may be made available for use as provided in subdivision 4, and up to
160.34$10,000,000 from the corpus of the trust may be made available for use as provided in
160.35section
161.1 (c) Additionally, an amount equal to 20 percent of the value of the corpus of the trust
161.2on May 18, 2002, not including the funds authorized in paragraph (b), plus the amounts
161.3made available under section
161.48, section 17, may be expended on projects. Funds may be expended for projects under
161.5this paragraph only if the project:
161.6 (1) is for the purposes established under section
161.7(1) or (2); and
161.8 (2) is approved by the board upon an affirmative vote of at least ten of its members.
161.9No money made available under this paragraph or paragraph (d) can be used for
161.10administrative or operating expenses of the Iron Range Resources and Rehabilitation
161.11Board or expenses relating to any facilities owned or operated by the board on May 18,
161.122002.
161.13 (d) Upon recommendation by a unanimous vote of all members of the board,
161.14amounts in addition to those authorized under paragraphs (a), (b), and (c) may be
161.15expended on projects described in section
161.16 (e) Annual administrative costs, not including detailed engineering expenses for the
161.17projects, shall not exceed five percent of the net interest, dividends, and earnings arising
161.18from the trust in the preceding fiscal year.
161.19 (f) Principal and interest received in repayment of loans made pursuant to this
161.20section, and earnings on other investments made under section
161.21clause (4), shall be deposited in the state treasury and credited to the trust. These receipts
161.22are appropriated to the board for the purposes of sections
161.23 (g) Additionally, notwithstanding section 298.293, upon affirmative vote of a
161.24majority of the members of the board, money from the corpus of the trust may be expanded
161.25to purchase forest lands within the taconite assistance area as provided in sections 298.22,
161.26subdivision 5a, and 298.292, subdivision 2, clause (5).
161.27 Sec. 16. Minnesota Statutes 2006, section 298.2961, subdivision 4, is amended to read:
161.28 Subd. 4. Grant and loan fund. (a) A fund is established to receive distributions
161.29under section
161.30subdivision. Any grant or loan made under this subdivision must be approved by
161.31a majority of the members of the Iron Range Resources and Rehabilitation Board,
161.32established under section
161.33 (b) Distributions received in calendar year 2005 are allocated to the city of Virginia
161.34for improvements and repairs to the city's steam heating system.
162.1 (c) Distributions received in calendar year 2006 are allocated to a project of the
162.2public utilities commissions of the cities of Hibbing and Virginia to convert their electrical
162.3generating plants to the use of biomass products, such as wood.
162.4 (d) Distributions received in calendar year 2007 must be paid to the city of Tower to
162.5be used for the East Two Rivers project in or near the city of Tower.
162.6 (e) For distributions received in 2008, the first $2,000,000 of the 2008 distribution
162.7must be paid to St. Louis County for deposit in its county road and bridge fund to be used
162.8for relocation of St. Louis County Road 715, commonly referred to as Pike River Road.
162.9The remainder of the 2008 distribution
162.10grant to the City of Virginia for connecting sewer and water lines to the St. Louis County
162.11maintenance garage on Highway 135, further extending the lines to interconnect with the
162.12city of Gilbert's sewer and water lines. The total amount of the distributions in 2009 and
162.13subsequent years is allocated for projects under section
162.14EFFECTIVE DATE.This section is effective the day following final enactment.
162.15 Sec. 17. Minnesota Statutes 2006, section 298.2961, subdivision 5, is amended to read:
162.16 Subd. 5. Public works and local economic development fund. For distributions in
162.172007 only, a special fund is established to receive
162.18be allocated under section
162.19St. Louis County acting as the fiscal agent for the recipients for the specific purposes:
162.20 (1)
162.21construction of a combined wastewater facility and notwithstanding section 298.28,
162.22subdivision 11, paragraph (a), or any other law, interest accrued on this money while held
162.23by St. Louis County shall also be distributed to the recipient;
162.24 (2) six cents per ton to the city of Eveleth to redesign and design and construct
162.25improvements to renovate its water treatment facility;
162.26 (3) one cent per ton for the East Range Joint Powers Board to acquire land for and to
162.27design a central wastewater collection and treatment system;
162.28 (4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;
162.29 (5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;
162.30 (6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;
162.31 (7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and
162.32Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment
162.33and Economic Development;
162.34 (8) 0.4 cents per ton to the city of Keewatin for a new city well;
163.1 (9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous
163.2materials center;
163.3 (10) 0.9 cents per ton to Aitkin County Growth for an economic development
163.4project for peat harvesting;
163.5 (11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;
163.6 (12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive
163.7plan;
163.8 (13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;
163.9 (14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake
163.10Environmental Learning Center;
163.11 (15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;
163.12 (16) 0.5 cents per ton to the Economic Development Authority of the city of Grand
163.13Rapids for planning for the North Central Research and Technology Laboratory;
163.14 (17) 0.6 cents per ton to the city of Bovey for sewer and water extension;
163.15 (18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and
163.16 (19) ten cents per ton to
163.17
163.18
163.19in a Highway 1 Corridor Account established by the commissioner, to be distributed by
163.20the commissioner to any of the cities of Babbitt, Cook, Ely, or Tower, for
163.21development
163.22Board; notwithstanding section 298.28, subdivision 11, paragraph (a), or any other law,
163.23interest accrued on this money while held by St. Louis County or the commissioner
163.24shall also be distributed to the recipient.
163.25 Sec. 18. Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:
163.26 Subdivision 1. Definitions. Except as may otherwise be provided, the following
163.27words, when used in this section, shall have the meanings herein ascribed to them.
163.28
163.29 (1) nonmetallic natural mineral aggregate including, but not limited to sand, silica
163.30sand, gravel, crushed rock, limestone, granite, and borrow, but only if the borrow is
163.31transported on a public road, street, or highway
163.32material
163.33 (2) taconite tailings, crushed rock, and architectural or dimension stone and
163.34dimension granite removed from a taconite mine or the site of a previously operated
163.35taconite mine.
164.1 Aggregate material must be measured or weighed after it has been extracted from
164.2the pit, quarry, or deposit.
164.3
164.4organization, trustee, association, or other entity.
164.5
164.6aggregate material from the surface or subsurface of the soil, for the purpose of sale,
164.7either directly or indirectly, through the use of the aggregate material in a marketable
164.8product or service.
164.9
164.10aggregate material and any contiguous property to the pit, quarry, or deposit which is used
164.11by the operator for stockpiling the aggregate material.
164.12
164.13produced from a county not listed in paragraph
164.14aggregate material to be imported into a county in this state which imposes a tax on
164.15aggregate material.
164.16
164.17Carver, Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman,
164.18Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley,
164.19Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose
164.20board has voted after a public hearing to impose the tax under this section and has notified
164.21the commissioner of revenue of the imposition of the tax.
164.22
164.23of gravel and sand, crushed quarry or mine rock, crushed gravel or stone, or any
164.24combination thereof, the ratio of the portion passing the (#200) sieve divided by the
164.25portion passing the (1 inch) sieve may not exceed 20 percent by mass.
164.26 Sec. 19. Minnesota Statutes 2006, section 298.75, subdivision 3, is amended to read:
164.27 Subd. 3. Report and remittance. (a) By the 14th day following the last day of each
164.28calendar quarter, every operator or importer shall make and file with the county auditor of
164.29the county in which the aggregate material is removed or imported, a correct report under
164.30oath, in such form and containing such information as the auditor shall require relative to
164.31the quantity of aggregate material removed or imported during the preceding calendar
164.32quarter. The report shall be accompanied by a remittance of the amount of tax due.
164.33 (b) If any of the proceeds of the tax is to be apportioned as provided in subdivision
164.342, the operator or importer shall also include on the report any relevant information
164.35concerning the amount of aggregate material transported, the tax and the county of
165.1destination. The county auditor shall notify the county treasurer of the amount of such
165.2tax and the county to which it is due. The county treasurer shall remit the tax to the
165.3appropriate county within 30 days, except as provided in paragraph (c).
165.4 (c) The proceeds of the tax on aggregate material as defined in subdivision 1,
165.5paragraph (a), clause (2), must be remitted to the commissioner of iron range resources
165.6and rehabilitation to be deposited in the taconite area environmental protection fund under
165.7section 298.223, and used for the purposes of that fund.
165.8 Sec. 20. Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:
165.9 Subd. 7. Proceeds of taxes. All money collected as taxes under this section on
165.10aggregate material as defined in subdivision 1, paragraph (a), clause (1), shall be deposited
165.11in the county treasury and credited as follows, for expenditure by the county board:
165.12 (a) Sixty percent to the county road and bridge fund for expenditure for the
165.13maintenance, construction and reconstruction of roads, highways and bridges;
165.14 (b) Thirty percent to the road and bridge fund of those towns as determined by the
165.15county board and to the general fund or other designated fund of those cities as determined
165.16by the county board, to be expended for maintenance, construction and reconstruction of
165.17roads, highways and bridges; and
165.18 (c) Ten percent to a special reserve fund which is hereby established, for expenditure
165.19for the restoration of abandoned pits, quarries, or deposits located upon public and tax
165.20forfeited lands within the county.
165.21 If there are no abandoned pits, quarries or deposits located upon public or tax
165.22forfeited lands within the county, this portion of the tax shall be deposited in the county
165.23road and bridge fund for expenditure for the maintenance, construction and reconstruction
165.24of roads, highways and bridges.
165.25 Sec. 21. Minnesota Statutes 2006, section 298.75, is amended by adding a subdivision
165.26to read:
165.27 Subd. 11. Tax may be imposed; Otter Tail County. (a) If Otter Tail County
165.28does not impose a tax under this section and approves imposition of the tax under this
165.29subdivision, the town of Scambler in Otter Tail County may impose the aggregate
165.30materials tax under this section.
165.31 (b) For purposes of exercising the powers contained in this section, the "town" is
165.32deemed to be the "county."
166.1 (c) All provisions in this section apply to the town of Scambler, except that all
166.2proceeds of the tax must be retained by the town and used for the purposes described in
166.3subdivision 7.
166.4 (d) If Otter Tail County imposes an aggregate materials tax under this section, the
166.5tax imposed by the town of Scambler under this subdivision is repealed on the effective
166.6date of the Otter Tail County tax.
166.7EFFECTIVE DATE.This section is effective the day after the governing body
166.8of the town of Scambler and its chief clerical officer comply with section 645.021,
166.9subdivisions 2 and 3.
166.10 Sec. 22. IRON RANGE RESOURCES AND REHABILITATION BOARD;
166.11APPROPRIATION; RETIRE BONDS.
166.12 Commencing with taxes payable in 2008 there is annually appropriated from
166.13the distribution of the taconite production tax revenues to the taconite environmental
166.14protection fund under Minnesota Statutes, section 298.28, subdivision 11, and to the
166.15Douglas J. Johnson economic protection trust fund under Minnesota Statutes, section
166.16298.28, subdivisions 9 and 11, in equal shares, an amount of $500,000 per year.
166.17 The revenue received under this section shall be used only to retire Mesabi East
166.18School District No. 2711 bonds in the amount of $9,000,000 issued September 1, 2006,
166.19and in the amount of $6,250,000 issued March 1, 2007. The payments shall continue for a
166.20period of ten years ending with taxes payable in 2017. Payments to the school district
166.21shall be made on March 1.
166.22EFFECTIVE DATE.This section is effective the day following final enactment.
166.23 Sec. 23. APPROPRIATIONS; DEPARTMENT OF EDUCATION.
166.24 Subdivision 1. Department of Education The sums indicated in this section are
166.25appropriated from the general fund to the Department of Education. These appropriations
166.26are added to any appropriations for the same purpose in 2007 H.F. No. 6, if enacted, for
166.27the fiscal years indicated.
166.28 Subd. 2. General education aid. For general education aid under Minnesota
166.29Statutes, section 126C.13, subdivision 4:
| 166.30 |
$ |
1,041,000 |
..... |
2009 |
166.32year 2009.
167.1 Sec. 24. REPEALER.
167.2Minnesota Statutes 2006, section 126C.21, subdivision 4, is repealed.
167.5 Section 1. [295.90] HOCKEY HERITAGE SURCHARGE.
167.6 Subdivision 1. Imposition. A surcharge of ten cents is imposed on each ticket or
167.7admission to a professional men's hockey game held in the state.
167.8 Subd. 2. Collection, remittance. The surcharge imposed under this subdivision
167.9shall be collected by the professional men's hockey team or association sponsoring or
167.10holding the hockey game. The team or association shall annually report the surcharge on a
167.11form prescribed by the commissioner of revenue and remit the surcharge with the return to
167.12the commissioner of revenue by March 15 of the following calendar year.
167.13 Subd. 3. Administration. The commissioner of revenue shall have authority to
167.14administer, collect, enforce, refund, and audit the surcharge under this section. Interest
167.15on late payments or refunds of the surcharge shall be at the rates specified under section
167.16289A.55, and penalties for failure to file, pay, or underpay the surcharge shall be at the
167.17rates provided under section 289A.60, subdivision 1, paragraph (e), and subdivision 2.
167.18 Subd. 4. Deposit of revenues. The commissioner of revenue shall deposit all
167.19revenues, including penalty and interest, derived from the surcharge imposed in this
167.20section in the hockey surcharge account in the special revenue fund. The amount deposited
167.21under this section is appropriated to the Iron Range Resources and Rehabilitation Board
167.22for payment to the city of Eveleth to be used for the support of the Hockey Hall of Fame
167.23Museum provided that it continues to operate in the city. Payments under this section for
167.24the Hockey Hall of Fame Museum are in addition to and must not be used to supplant
167.25funding under section 298.28, subdivision 9c.
167.26 Sec. 2. Minnesota Statutes 2006, section 297F.21, subdivision 3, is amended to read:
167.27 Subd. 3. Inventory; judicial determination; appeal; disposition of seized
167.28property. (a) Within ten days after the seizure of any alleged contraband, the person
167.29making the seizure shall serve by certified mail an inventory of the property seized on the
167.30person from whom the seizure was made, if known, and on any person known or believed
167.31to have any right, title, interest, or lien in the property, at the last known address, and file
167.32a copy with the commissioner. The notice must include an explanation of the right to
167.33demand a judicial forfeiture determination.
168.1 (b) Within 60 days after the date of service of the inventory, which is the date of
168.2mailing, the person from whom the property was seized or any person claiming an interest
168.3in the property may file a demand for a judicial determination of the question as to whether
168.4the property was lawfully subject to seizure and forfeiture. The demand must be in the
168.5form of a civil complaint and must be filed with the court administrator in the county in
168.6which the seizure occurred, together with proof of service of a copy of the complaint
168.7on the commissioner of revenue, and the standard filing fee for civil actions unless the
168.8petitioner has the right to sue in forma pauperis under section
168.9seized property is $7,500 or less, the claimant may file an action in conciliation court for
168.10recovery of the property. If the value of the seized property is less than $500, the claimant
168.11does not have to pay the conciliation court filing fee.
168.12 (c) The complaint must be captioned in the name of the claimant as plaintiff and
168.13the seized property as defendant, and must state with specificity the grounds on which
168.14the claimant alleges the property was improperly seized and the plaintiff's interest in the
168.15property seized. No responsive pleading is required of the commissioner, and no court
168.16fees may be charged for the commissioner's appearance in the matter. The proceedings
168.17are governed by the Rules of Civil Procedure. Notwithstanding any law to the contrary,
168.18an action for the return of property seized under this section may not be maintained by
168.19or on behalf of any person who has been served with an inventory unless the person has
168.20complied with this subdivision. The court shall decide whether the alleged contraband is
168.21contraband, as defined in subdivision 1. The court shall hear the action without a jury and
168.22shall try and determine the issues of fact and law involved.
168.23 (d) When a judgment of forfeiture is entered,
168.24judgment is stayed pending an appeal,
168.25 (1)
168.26
168.27property to be used for the purpose of enforcing a criminal provision of state or federal law;
168.28 (2) shall cause
168.29products not used under clause (1) to be destroyed
168.30to be destroyed upon the completion of use; and
168.31 (3) may cause the forfeited property, other than forfeited cigarette packages or
168.32tobacco products, to be sold at public auction as provided by law.
168.33The person making a sale, after deducting the expense of keeping the property, the fee
168.34for seizure, and the costs of the sale, shall pay all liens according to their priority, which
168.35are established as being bona fide and as existing without the lienor having any notice
168.36or knowledge that the property was being used or was intended to be used for or in
169.1connection with the violation. The balance of the proceeds must be paid 75 percent to the
169.2Department of Revenue for deposit as a supplement to its operating fund or similar fund
169.3for official use, and 25 percent to the county attorney or other prosecuting agency that
169.4handled the court proceeding, if there is one, for deposit as a supplement to its operating
169.5fund or similar fund for prosecutorial purposes. If there is no prosecuting authority
169.6involved in the forfeiture, the 25 percent of the proceeds otherwise designated for the
169.7prosecuting authority must be deposited into the general fund.
169.8 (e) If no demand for judicial determination is made, the property seized is considered
169.9forfeited to the state by operation of law and may be disposed of by the commissioner as
169.10provided in the case of a judgment of forfeiture.
169.11EFFECTIVE DATE.This section is effective for forfeitures after June 30, 2007.
169.12 Sec. 3. Minnesota Statutes 2006, section 297I.15, is amended by adding a subdivision
169.13to read:
169.14 Subd. 11. Premiums paid to certain foreign insurance companies. With respect
169.15to the state employees group insurance program established under sections 43A.23 to
169.1643A.31, premiums paid for life insurance and accidental death and dismemberment
169.17insurance for eligible employees and dependents, including premiums paid by employees
169.18or dependents for optional coverage, are exempt from the taxes imposed under this chapter
169.19to the extent the premiums are paid to a foreign insurance company domiciled in a state
169.20that exempts its state employee group life insurance program from premium taxes.
169.21EFFECTIVE DATE.This section is effective for premiums paid after December
169.2231, 2006.
169.23 Sec. 4. Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read:
169.24 Subd. 4. Expiration. The authority to impose the tax under this section expires
169.25January 1,
169.26 Sec. 5. Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read:
169.27 Subdivision 1. Creation. An environmental response fund is created for the
169.28purposes specified in this section. The taxes imposed by section
169.29deposited in the fund. The board of county commissioners shall administer the fund either
169.30as a county board
169.31 Sec. 6. Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read:
170.1 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
170.2following purposes:
170.3 (1) acquisition through purchase or condemnation of lands or property which are
170.4polluted or contaminated with hazardous substances;
170.5 (2) paying the costs associated with indemnifying or holding harmless the
170.6entity taking title to lands or property from any liability arising out of the ownership,
170.7remediation, or use of the land or property;
170.8 (3) paying for the costs of remediating the acquired land or property; or
170.9 (4) paying the costs associated with remediating lands or property which are polluted
170.10or contaminated with hazardous substances
170.11
170.12
170.13 Sec. 7. Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read:
170.14 Subd. 4. Expiration. The authority to impose the tax under this section expires
170.15January 1,
170.16 Sec. 8. [383C.798] COUNTY DEED AND MORTGAGE TAX.
170.17 Subdivision 1. Authority to impose; rate. (a) The governing body of St. Louis
170.18County may impose a mortgage registry and deed tax.
170.19 (b) The rate of the mortgage registry tax equals .0001 of the principal.
170.20 (c) The rate of the deed tax equals .0001 of the amount.
170.21 Subd. 2. General law provisions apply. The taxes under this section apply to
170.22the same base and must be imposed, collected, administered, and enforced in the same
170.23manner as provided under chapter 287 for the state mortgage registry and deed taxes.
170.24All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
170.25subdivision 1, the term "St. Louis County" must be substituted for "the state," and the
170.26revenue must be deposited as provided in subdivision 3.
170.27 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of the
170.28St. Louis County Board of Commissioners and must be deposited in the county's
170.29environmental response fund under section 383C.799.
170.30 Subd. 4. Expiration. The authority to impose the tax under this section expires
170.31January 1, 2013.
170.32 Sec. 9. [383C.799] ENVIRONMENTAL RESPONSE FUND.
171.1 Subdivision 1. Creation. An environmental response fund is created for the
171.2purposes specified in this section. The taxes imposed under section 383C.798 must be
171.3deposited in the fund. The Board of County Commissioners shall administer the fund
171.4either as a county board or a housing and redevelopment authority.
171.5 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
171.6following purposes:
171.7 (1) acquisition through purchase or condemnation of lands or property which are
171.8polluted or contaminated with hazardous substances;
171.9 (2) paying the costs associated with indemnifying or holding harmless the
171.10entity taking title to lands or property from any liability arising out of the ownership,
171.11remediation, or use of the land or property;
171.12 (3) paying for the costs of remediating the acquired land or property; or
171.13 (4) paying the costs associated with remediating lands or property which are polluted
171.14or contaminated with hazardous substances.
171.15 Subd. 3. Matching funds. In expending funds under this section, the county shall
171.16seek matching funds from contamination cleanup funds administered by the commissioner
171.17of the Department of Employment and Economic Development, the federal government,
171.18the private sector, and any other source.
171.19 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
171.20section 383C.798 to bonds issued under this section and chapters 462, 469, and 475.
171.21 Subd. 5. Land sales. Land or property acquired under this section may be resold
171.22at fair market value. Proceeds from the sale of the land must be deposited in the
171.23environmental response fund.
171.24 Sec. 10. [383D.75] COUNTY DEED AND MORTGAGE TAX.
171.25 Subdivision 1. Authority to impose; rate. (a) The governing body of Dakota
171.26County may impose a mortgage registry and deed tax.
171.27 (b) The rate of the mortgage registry tax equals .0001 of the principal.
171.28 (c) The rate of the deed tax equals .0001 of the amount.
171.29 Subd. 2. General law provisions apply. The taxes under this section apply to
171.30the same base and must be imposed, collected, administered, and enforced in the same
171.31manner as provided under chapter 287 for the state mortgage registry and deed taxes.
171.32All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
171.33subdivision 1, the term "Dakota County" must be substituted for "the state," and the
171.34revenue must be deposited as provided in subdivision 3.
172.1 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of
172.2the Dakota County Board of Commissioners and must be deposited in the county's
172.3environmental response fund under section
172.5January 1, 2013.
172.6 Sec. 11. [383D.76] ENVIRONMENTAL RESPONSE FUND.
172.7 Subdivision 1. Creation. An environmental response fund is created for the
172.8purposes specified in this section. The taxes imposed under section 383D.75 must be
172.9deposited in the fund. The Board of County Commissioners shall administer the fund
172.10either as a county board or a housing and redevelopment authority.
172.11 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
172.12following purposes:
172.13 (1) acquisition through purchase or condemnation of lands or property which are
172.14polluted or contaminated with hazardous substances;
172.15 (2) paying the costs associated with indemnifying or holding harmless the
172.16entity taking title to lands or property from any liability arising out of the ownership,
172.17remediation, or use of the land or property;
172.18 (3) paying for the costs of remediating the acquired land or property; or
172.19 (4) paying the costs associated with remediating lands or property which are polluted
172.20or contaminated with hazardous substances.
172.21 Subd. 3. Matching funds. In expending funds under this section, the county shall
172.22seek matching funds from contamination cleanup funds administered by the commissioner
172.23of the Department of Employment and Economic Development, the Metropolitan Council,
172.24the federal government, the private sector, and any other source.
172.25 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
172.26section
172.27 Subd. 5. Land sales. Land or property acquired under this section may be resold
172.28at fair market value. Proceeds from the sale of the land must be deposited in the
172.29environmental response fund.
172.30 Sec. 12. [383E.235] COUNTY DEED AND MORTGAGE TAX.
172.31 Subdivision 1. Authority to impose; rate. (a) The governing body of Anoka
172.32County may impose a mortgage registry and deed tax.
172.33 (b) The rate of the mortgage registry tax equals .0001 of the principal.
172.34 (c) The rate of the deed tax equals .0001 of the amount.
173.1 Subd. 2. General law provisions apply. The taxes under this section apply to
173.2the same base and must be imposed, collected, administered, and enforced in the same
173.3manner as provided under chapter 287 for the state mortgage registry and deed taxes.
173.4All the provisions of chapter 287 apply to these taxes, except the rate is as specified
173.5in subdivision 1, the term "Anoka County" must be substituted for "the state," and the
173.6revenue must be deposited as provided in subdivision 3.
173.7 Subd. 3. Deposit of revenues. All revenues from the tax are for the use of the Anoka
173.8County Board of Commissioners and must be deposited in the county's environmental
173.9response fund under section 383E.236.
173.10 Subd. 4. Expiration. The authority to impose the tax under this section expires
173.11January 1, 2013.
173.12 Sec. 13. [383E.236] ENVIRONMENTAL RESPONSE FUND.
173.13 Subdivision 1. Creation. An environmental response fund is created for the
173.14purposes specified in this section. The taxes imposed under section 383E.235 must be
173.15deposited in the fund. The Board of County Commissioners shall administer the fund
173.16either as a county board or a housing and redevelopment authority.
173.17 Subd. 2. Uses of fund. The fund created in subdivision 1 must be used for the
173.18following purposes:
173.19 (1) acquisition through purchase or condemnation of lands or property which are
173.20polluted or contaminated with hazardous substances;
173.21 (2) paying the costs associated with indemnifying or holding harmless the
173.22entity taking title to lands or property from any liability arising out of the ownership,
173.23remediation, or use of the land or property;
173.24 (3) paying for the costs of remediating the acquired land or property; or
173.25 (4) paying the costs associated with remediating lands or property which are polluted
173.26or contaminated with hazardous substances.
173.27 Subd. 3. Matching funds. In expending funds under this section, the county shall
173.28seek matching funds from contamination cleanup funds administered by the commissioner
173.29of the Department of Employment and Economic Development, the Metropolitan Council,
173.30the federal government, the private sector, and any other source.
173.31 Subd. 4. Bonds. The county may pledge the proceeds from the taxes imposed by
173.32section 383E.235 to bonds issued under this section and chapters 462, 469, and 475.
173.33 Subd. 5. Land sales. Land or property acquired under this section may be resold
173.34at fair market value. Proceeds from the sale of the land must be deposited in the
173.35environmental response fund.
174.1 Subd. 6. DOT assistance. The commissioner of transportation shall collaborate with
174.2the county and any affected municipality by providing technical assistance and support in
174.3cleaning up a contaminated site related to a trunk highway or railroad improvement.
174.4 Sec. 14. Laws 2003, chapter 128, article 1, section 172, as amended by Laws 2005,
174.5First Special Session chapter 1, article 4, section 118, is amended to read:
174.6 Sec. 172. TEMPORARY PETROFUND FEE EXEMPTION FOR
174.7MINNESOTA COMMERCIAL AIRLINES.
174.8 (a) A commercial airline providing regularly scheduled jet service and with its
174.9corporate headquarters in Minnesota is exempt from the fee established in Minnesota
174.10Statutes, section
174.11develops a plan approved by the commissioner of commerce demonstrating that the
174.12savings from this exemption will go towards minimizing job losses in Minnesota, and to
174.13support the airline's efforts to
174.14proceedings.
174.15 (b) A commercial airline exempted from the fee is ineligible to receive
174.16reimbursement under Minnesota Statutes, chapter 115C, until July 1,
174.17commercial airline that has a release during the fee exemption period is ineligible to
174.18receive reimbursement under Minnesota Statutes, chapter 115C, for the costs incurred in
174.19response to that release.
174.22 Section 1. Minnesota Statutes 2006, section 270A.03, subdivision 5, is amended to
174.23read:
174.24 Subd. 5. Debt. (a) "Debt" means a legal obligation of a natural person to pay a fixed
174.25and certain amount of money, which equals or exceeds $25 and which is due and payable
174.26to a claimant agency. The term includes criminal fines imposed under section
174.284a
174.29public defender imposed under section
174.30contractual or statutory obligation, a court order, or other legal obligation, but need not
174.31have been reduced to judgment.
174.32 A debt includes any legal obligation of a current recipient of assistance which is
174.33based on overpayment of an assistance grant where that payment is based on a client
174.34waiver or an administrative or judicial finding of an intentional program violation;
175.1or where the debt is owed to a program wherein the debtor is not a client at the time
175.2notification is provided to initiate recovery under this chapter and the debtor is not a
175.3current recipient of food support, transitional child care, or transitional medical assistance.
175.4 (b) A debt does not include any legal obligation to pay a claimant agency for medical
175.5care, including hospitalization if the income of the debtor at the time when the medical
175.6care was rendered does not exceed the following amount:
175.7 (1) for an unmarried debtor, an income of $8,800 or less;
175.8 (2) for a debtor with one dependent, an income of $11,270 or less;
175.9 (3) for a debtor with two dependents, an income of $13,330 or less;
175.10 (4) for a debtor with three dependents, an income of $15,120 or less;
175.11 (5) for a debtor with four dependents, an income of $15,950 or less; and
175.12 (6) for a debtor with five or more dependents, an income of $16,630 or less.
175.13
175.14
175.15
175.16
175.17
175.18
175.19
175.20
175.21percentage determined pursuant to the provisions of section 1(f) of the Internal Revenue
175.22Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for the word
175.23"1992." For 2001, the commissioner shall then determine the percent change from the 12
175.24months ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in
175.25each subsequent year, from the 12 months ending on August 31, 1999, to the 12 months
175.26ending on August 31 of the year preceding the taxable year. The determination of the
175.27commissioner pursuant to this subdivision shall not be considered a "rule" and shall not
175.28be subject to the Administrative Procedure Act contained in chapter 14. The income
175.29amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
175.30$5, the amount is rounded up to the nearest $10 amount.
175.31 (d) Debt also includes an agreement to pay a MinnesotaCare premium, regardless of
175.32the dollar amount of the premium authorized under section
175.33EFFECTIVE DATE.This section is effective for debts incurred after December
175.3431, 2006.
175.35 Sec. 2. Minnesota Statutes 2006, section 289A.08, subdivision 11, is amended to read:
176.1 Subd. 11. Information included in income tax return. (a) The return must state:
176.2 (1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the
176.3address of the taxpayer in the same name or names and same address as the taxpayer has
176.4used in making the taxpayer's income tax return to the United States
176.5 (2) the date or dates of birth of the taxpayer or taxpayers;
176.6 (3) the Social Security number of the taxpayer, or taxpayers, if a Social Security
176.7number has been issued by the United States with respect to the taxpayers
176.8
176.9 (4) the amount of the taxable income of the taxpayer as it appears on the federal
176.10return for the taxable year to which the Minnesota state return applies.
176.11 (b) The taxpayer must attach to the taxpayer's Minnesota state income tax return
176.12a copy of the federal income tax return that the taxpayer has filed or is about to file for
176.13the period, unless the taxpayer is eligible to telefile the federal return and does file the
176.14Minnesota return by telefiling.
176.15EFFECTIVE DATE.This section is effective for tax years beginning after
176.16December 31, 2006.
176.17 Sec. 3. Minnesota Statutes 2006, section 289A.09, subdivision 2, is amended to read:
176.18 Subd. 2. Withholding statement to employee or payee and to commissioner. (a)
176.19A person required to deduct and withhold from an employee a tax under section
176.20subdivision 2a
176.21deduct and withhold a tax under section
176.22to withhold tax under section
176.23section
176.24withholding exemption, or who paid wages or made payments not subject to withholding
176.25under section
176.26person receiving royalty payments in excess of $600, or who has entered into a voluntary
176.27withholding agreement with a payee under section
176.28every employee or person receiving royalty payments in respect to the remuneration paid
176.29by the person to the employee or person receiving royalty payments during the calendar
176.30year, on or before January 31 of the succeeding year, or, if employment is terminated
176.31before the close of the calendar year, within 30 days after the date of receipt of a written
176.32request from the employee if the 30-day period ends before January 31, a written statement
176.33showing the following:
176.34 (1) name of the person;
177.1 (2) the name of the employee or payee and the employee's or payee's Social Security
177.2account number;
177.3 (3) the total amount of wages as that term is defined in section
177.41
177.6Internal Revenue Code; and the amount of royalties subject to withholding under section
177.8 (4) the total amount deducted and withheld as tax under section
177.92a
177.10 (b) The statement required to be furnished by
177.11remuneration must be furnished at those times, must contain the information required, and
177.12must be in the form the commissioner prescribes.
177.13 (c) The commissioner may prescribe rules providing for reasonable extensions of
177.14time, not in excess of 30 days, to employers or payers required to give the statements to
177.15their employees or payees under this subdivision.
177.16 (d) A duplicate of any statement made under this subdivision and in accordance
177.17with rules prescribed by the commissioner, along with a reconciliation in the form the
177.18commissioner prescribes of the statements for the calendar year, including a reconciliation
177.19of the quarterly returns required to be filed under subdivision 1, must be filed with the
177.20commissioner on or before February 28 of the year after the payments were made.
177.21 (e) If an employer cancels the employer's Minnesota withholding account number
177.22required by section
177.23must be filed with the commissioner within 30 days of the end of the quarter in which
177.24the employer cancels its account number.
177.25 (f) The employer must submit the statements required to be sent to the commissioner
177.26
177.27federal reporting requirements of section 6011(e) of the Internal Revenue Code and the
177.28regulations issued under it. For wages paid in calendar year 2007, an employer must
177.29submit statements to the commissioner required by this section by electronic means if the
177.30employer is required to send more than 100 statements to the commissioner, even though
177.31the employer is not required to submit the returns federally by electronic means. For
177.32calendar year 2008, the 100 statements threshold is reduced to 50, and for calendar year
177.332009, the threshold is reduced to 25, and for 2010 and after, the threshold is reduced to ten.
177.34 (g) A "third-party bulk filer" as defined in section
177.35(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
177.36paragraph (a), with the commissioner by electronic means.
178.1EFFECTIVE DATE.This section is effective for wages paid after December 31,
178.22006.
178.3 Sec. 4. Minnesota Statutes 2006, section 289A.12, subdivision 14, is amended to read:
178.4 Subd. 14. Regulated investment companies; reporting exempt-interest
178.5dividends. (a) A regulated investment company paying $10 or more in exempt-interest
178.6dividends to an individual who is a resident of Minnesota must make a return indicating
178.7the amount of the exempt-interest dividends, the name, address, and Social Security
178.8number of the recipient, and any other information that the commissioner specifies. The
178.9return must be provided to the shareholder no later than 30 days after the close of the
178.10taxable year. The return provided to the shareholder must include a clear statement, in the
178.11form prescribed by the commissioner, that the exempt-interest dividends must be included
178.12in the computation of Minnesota taxable income. The
178.13
178.14the commissioner to file a copy of the return with the commissioner.
178.15 (b) This subdivision applies to regulated investment companies required to register
178.16under chapter 80A.
178.17 (c) For purposes of this subdivision, the following definitions apply.
178.18 (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
178.19section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
178.20exempt-interest dividends that are not required to be added to federal taxable income
178.21under section
178.22 (2) "Regulated investment company" means regulated investment company as
178.23defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
178.24investment company as defined in section 851(g) of the Internal Revenue Code.
178.25EFFECTIVE DATE.This section is effective for tax years beginning after
178.26December 31, 2006.
178.27 Sec. 5. Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to read:
178.28 Subdivision 1. Individual income, fiduciary income, corporate franchise, and
178.29entertainment taxes; partnership and S corporation returns; information returns;
178.30mining company returns. The returns required to be made under sections
178.32 (1) returns made on the basis of the calendar year must be filed on April 15 following
178.33the close of the calendar year, except that returns of corporations must be filed on March
178.3415 following the close of the calendar year;
179.1 (2) returns made on the basis of the fiscal year must be filed on the 15th day of the
179.2fourth month following the close of the fiscal year, except that returns of corporations
179.3must be filed on the 15th day of the third month following the close of the fiscal year;
179.4 (3) returns for a fractional part of a year must be filed on the 15th day of the fourth
179.5month following the end of the month in which falls the last day of the period for which
179.6the return is made, except that the returns of corporations must be filed on the 15th day of
179.7the third month following the end of the tax year of the unitary group in which falls the
179.8last day of the period for which the return is made;
179.9 (4) in the case of a final return of a decedent for a fractional part of a year, the return
179.10must be filed on the 15th day of the fourth month following the close of the 12-month
179.11period that began with the first day of that fractional part of a year;
179.12 (5) in the case of the return of a cooperative association, returns must be filed on or
179.13before the 15th day of the ninth month following the close of the taxable year;
179.14 (6) if a corporation has been divested from a unitary group and files a return for
179.15a fractional part of a year in which it was a member of a unitary business that files a
179.16combined report under section
179.17must be filed on the 15th day of the third month following the close of the common
179.18accounting period that includes the fractional year;
179.19 (7) returns of entertainment entities must be filed on April 15 following the close of
179.20the calendar year;
179.21 (8) returns required to be filed under section
179.22on the 15th day of the fifth month following the close of the taxable year;
179.23 (9) returns of mining companies must be filed on May 1 following the close of the
179.24calendar year; and
179.25 (10) returns required to be filed with the commissioner under section
179.26subdivision 2
179.27the commissioner.
179.28EFFECTIVE DATE.This section is effective for tax years beginning after
179.29December 31, 2006.
179.30 Sec. 6. Minnesota Statutes 2006, section 289A.60, subdivision 8, is amended to read:
179.31 Subd. 8.
179.32taxpayer identification number. (a) In the case of a failure to file an informational return
179.33required by section
179.34with regard to any extension of time for filing), the person failing to file the return shall pay
179.35a penalty of $50 for each failure or in the case of a partnership, S corporation, or fiduciary
180.1return, $50 for each partner, shareholder, or beneficiary; but the total amount imposed on
180.2the delinquent person for all failures during any calendar year must not exceed $25,000. If
180.3a failure to file a return is due to intentional disregard of the filing requirement, then the
180.4penalty imposed under the preceding sentence must not be less than an amount equal to:
180.5 (1) in the case of a return not described in clause (2) or (3), ten percent of the
180.6aggregate amount of the items required to be reported;
180.7 (2) in the case of a return required to be filed under section
180.8five percent of the gross proceeds required to be reported; and
180.9 (3) in the case of a return required to be filed under section
180.10relating to direct sales, $100 for each failure; however, the total amount imposed on the
180.11delinquent person for intentional failures during a calendar year must not exceed $50,000.
180.12The penalty must be collected in the same manner as a delinquent income tax.
180.13 (b) If a partnership or S corporation files a partnership or S corporation return with
180.14an incorrect tax identification number used for a partner or shareholder after being notified
180.15by the commissioner that the identification number is incorrect, the partnership or S
180.16corporation must pay a penalty of $50 for each such incorrect number.
180.17EFFECTIVE DATE.This section is effective for returns filed after December
180.1831, 2007.
180.19 Sec. 7. Minnesota Statutes 2006, section 289A.60, subdivision 12, is amended to read:
180.20 Subd. 12. Penalties relating to property tax refunds. (a) If it is determined that a
180.21property tax refund claim is excessive and was negligently prepared, a claimant is liable
180.22for a penalty of ten percent of the
180.23has been paid, the amount disallowed must be recovered by assessment and collection.
180.24 (b) An owner who without reasonable cause fails to give a certificate of rent
180.25constituting property tax to a renter, as required by section
180.26liable to the commissioner for a penalty of $100 for each failure.
180.27 (c) If the owner or managing agent knowingly gives rent certificates that report total
180.28rent constituting property taxes in excess of the amount of actual rent constituting property
180.29taxes paid on the rented part of a property, the owner or managing agent is liable for a
180.30penalty equal to the greater of (1) $100 or (2) 50 percent of the excess that is reported. An
180.31overstatement of rent constituting property taxes is presumed to be knowingly made if it
180.32exceeds by ten percent or more the actual rent constituting property taxes.
180.33EFFECTIVE DATE.This section is effective for property tax refund claims filed
180.34on or after July 1, 2007.
181.1 Sec. 8. Minnesota Statutes 2006, section 289A.60, subdivision 27, is amended to read:
181.2 Subd. 27. Reportable transaction understatement. (a) If a taxpayer has a
181.3reportable transaction understatement for any taxable year, an amount equal to 20 percent
181.4of the amount of the reportable transaction understatement must be added to the tax.
181.5 (b)(1) For purposes of this subdivision, "reportable transaction understatement"
181.6means the product of:
181.7 (i) the amount of the increase, if any, in taxable income that results from a difference
181.8between the proper tax treatment of an item to which this section applies and the taxpayer's
181.9treatment of that item as shown on the taxpayer's tax return; and
181.10 (ii) the highest rate of tax imposed on the taxpayer under section
181.11without regard to the understatement.
181.12 (2) For purposes of clause (1)(i), any reduction of the excess of deductions allowed
181.13for the taxable year over gross income for that year, and any reduction in the amount of
181.14capital losses which would, without regard to section 1211 of the Internal Revenue Code,
181.15be allowed for that year, must be treated as an increase in taxable income.
181.16 (c) This subdivision applies to any item that is attributable to:
181.17 (1) any listed transaction under section
181.18 (2) any reportable transaction, other than a listed transaction, if a significant purpose
181.19of that transaction is the avoidance or evasion of federal income tax liability.
181.20 (d) Paragraph (a) applies by substituting "30 percent" for "20 percent" with respect
181.21to the portion of any reportable transaction understatement with respect to which the
181.22disclosure requirements of section
181.23of the Internal Revenue Code are not met.
181.24 (e)(1) No penalty applies under this subdivision with respect to any portion of a
181.25reportable transaction understatement if the taxpayer shows that there was reasonable
181.26cause for the portion and that the taxpayer acted in good faith with respect to the portion.
181.27This paragraph applies only if:
181.28 (i) the relevant facts affecting the tax treatment of the item are adequately disclosed
181.29as required under section
181.30 (ii) there is or was substantial authority for the treatment; and
181.31 (iii) the taxpayer reasonably believed that the treatment was more likely than not
181.32the proper treatment.
181.33 (2) A taxpayer who did not adequately disclose under section
181.34the requirements of clause (1)(i), if the commissioner abates the penalty imposed by
181.35subdivision 26, paragraph (d), under
182.1 (3) For purposes of clause (1)(iii), a taxpayer is treated as having a reasonable belief
182.2with respect to the tax treatment of an item only if the belief:
182.3 (i) is based on the facts and law that exist when the return of tax which includes the
182.4tax treatment is filed; and
182.5 (ii) relates solely to the taxpayer's chances of success on the merits of the treatment
182.6and does not take into account the possibility that a return will not be audited, the
182.7treatment will not be raised on audit, or the treatment will be resolved through settlement
182.8if it is raised.
182.9 (4) An opinion of a tax advisor may not be relied upon to establish the reasonable
182.10belief of a taxpayer if:
182.11 (i) the tax advisor:
182.12 (A) is a material advisor, as defined in section
182.13organization, management, promotion, or sale of the transaction or is related (within the
182.14meaning of section 267(b) or 707(b)(1) of the Internal Revenue Code) to any person
182.15who so participates;
182.16 (B) is compensated directly or indirectly by a material advisor with respect to the
182.17transaction;
182.18 (C) has a fee arrangement with respect to the transaction which is contingent on all
182.19or part of the intended tax benefits from the transaction being sustained; or
182.20 (D) has a disqualifying financial interest with respect to the transaction, as
182.21determined under United States Treasury regulations prescribed to implement the
182.22provisions of section 6664(d)(3)(B)(ii)(IV) of the Internal Revenue Code; or
182.23 (ii) the opinion:
182.24 (A) is based on unreasonable factual or legal assumptions, including assumptions
182.25as to future events;
182.26 (B) unreasonably relies on representations, statements, findings, or agreements of
182.27the taxpayer or any other person;
182.28 (C) does not identify and consider all relevant facts; or
182.29 (D) fails to meet any other requirement as the Secretary of the Treasury may
182.30prescribe under federal law.
182.31 (f) The penalty imposed by this subdivision applies in lieu of the penalty imposed
182.32under subdivision 4.
182.33EFFECTIVE DATE.This section is effective the day following final enactment.
182.34 Sec. 9. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision
182.35to read:
183.1 Subd. 28. Preparer identification number. Any Minnesota individual income tax
183.2return or claim for refund prepared by a "tax refund or return preparer" as defined in
183.3subdivision 13, paragraph (f), shall bear the identification number the preparer is required
183.4to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund
183.5or return preparer who prepares a Minnesota individual income tax return or claim for
183.6refund and fails to include the required number on the return or claim is subject to a
183.7penalty of $50 for each failure.
183.8EFFECTIVE DATE.This section is effective for returns prepared for tax years
183.9beginning after December 31, 2006.
183.10 Sec. 10. Minnesota Statutes 2006, section 290.01, subdivision 19b, as amended by
183.11Laws 2007, chapter 1, section 2, is amended to read:
183.12 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
183.13and trusts, there shall be subtracted from federal taxable income:
183.14 (1) net interest income on obligations of any authority, commission, or
183.15instrumentality of the United States to the extent includable in taxable income for federal
183.16income tax purposes but exempt from state income tax under the laws of the United States;
183.17 (2) if included in federal taxable income, the amount of any overpayment of income
183.18tax to Minnesota or to any other state, for any previous taxable year, whether the amount
183.19is received as a refund or as a credit to another taxable year's income tax liability;
183.20 (3) the amount paid to others, less the amount used to claim the credit allowed under
183.21section
183.22to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
183.23transportation of each qualifying child in attending an elementary or secondary school
183.24situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
183.25resident of this state may legally fulfill the state's compulsory attendance laws, which
183.26is not operated for profit, and which adheres to the provisions of the Civil Rights Act
183.27of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
183.28tuition as defined in section
183.29"textbooks" includes books and other instructional materials and equipment purchased
183.30or leased for use in elementary and secondary schools in teaching only those subjects
183.31legally and commonly taught in public elementary and secondary schools in this state.
183.32Equipment expenses qualifying for deduction includes expenses as defined and limited in
183.33section
183.34books and materials used in the teaching of religious tenets, doctrines, or worship, the
183.35purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
184.1or materials for, or transportation to, extracurricular activities including sporting events,
184.2musical or dramatic events, speech activities, driver's education, or similar programs. For
184.3purposes of the subtraction provided by this clause, "qualifying child" has the meaning
184.4given in section 32(c)(3) of the Internal Revenue Code;
184.5 (4) income as provided under section
184.6 (5) to the extent included in federal adjusted gross income, income realized on
184.7disposition of property exempt from tax under section
184.8 (6) to the extent not deducted in determining federal taxable income by an individual
184.9who does not itemize deductions for federal income tax purposes for the taxable year, an
184.10amount equal to 50 percent of the excess of charitable contributions over $500 allowable
184.11as a deduction for the taxable year under section 170(a) of the Internal Revenue Code and
184.12under the provisions of Public Law 109-1;
184.13 (7) for taxable years beginning before January 1, 2008, the amount of the federal
184.14small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
184.15which is included in gross income under section 87 of the Internal Revenue Code;
184.16 (8) for individuals who are allowed a federal foreign tax credit for taxes that do not
184.17qualify for a credit under section
184.18of subnational foreign taxes for the taxable year, but not to exceed the total subnational
184.19foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
184.20"federal foreign tax credit" means the credit allowed under section 27 of the Internal
184.21Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
184.22under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
184.23the extent they exceed the federal foreign tax credit;
184.24 (9) in each of the five tax years immediately following the tax year in which an
184.25addition is required under subdivision 19a, clause (7), or 19c, clause
184.26of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
184.27of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
184.28the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
184.29subdivision 19c, clause
184.30the positive value of any net operating loss under section 172 of the Internal Revenue
184.31Code generated for the tax year of the addition. The resulting delayed depreciation
184.32cannot be less than zero;
184.33 (10) job opportunity building zone income as provided under section
184.34 (11) to the extent included in federal taxable income, the amount of compensation
184.35paid to members of the Minnesota National Guard or other reserve components of the
184.36United States military for active service performed in Minnesota, excluding compensation
185.1for services performed under the Active Guard Reserve (AGR) program. For purposes of
185.2this clause, "active service" means (i) state active service as defined in section
185.3subdivision 5a
185.5subdivision 5c
185.6of basic combat training, advanced individual training, annual training, and periodic
185.7inactive duty training; special training periodically made available to reserve members;
185.8and service performed in accordance with section
185.9 (12) to the extent included in federal taxable income, the amount of compensation
185.10paid to Minnesota residents who are members of the armed forces of the United States or
185.11United Nations for active duty performed outside Minnesota;
185.12 (13) an amount, not to exceed $10,000, equal to qualified expenses related to a
185.13qualified donor's donation, while living, of one or more of the qualified donor's organs
185.14to another person for human organ transplantation. For purposes of this clause, "organ"
185.15means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
185.16"human organ transplantation" means the medical procedure by which transfer of a human
185.17organ is made from the body of one person to the body of another person; "qualified
185.18expenses" means unreimbursed expenses for both the individual and the qualified donor
185.19for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
185.20may be subtracted under this clause only once; and "qualified donor" means the individual
185.21or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
185.22individual may claim the subtraction in this clause for each instance of organ donation for
185.23transplantation during the taxable year in which the qualified expenses occur;
185.24 (14) in each of the five tax years immediately following the tax year in which an
185.25addition is required under subdivision 19a, clause (8), or 19c, clause
185.26of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
185.27of the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause
185.28
185.29positive value of any net operating loss under section 172 of the Internal Revenue Code
185.30generated for the tax year of the addition. If the net operating loss exceeds the addition for
185.31the tax year, a subtraction is not allowed under this clause;
185.32 (15) to the extent included in federal taxable income, compensation paid to a
185.33nonresident who is a service member as defined in United States Code, title 10, section
185.34101(a)(5), for military service as defined in the Service Member Civil Relief Act, Public
185.35Law 108-189, section 101(2); and
186.1 (16) international economic development zone income as provided under section
186.3EFFECTIVE DATE.Clauses (11) and (12) are effective retroactively for taxable
186.4years beginning after December 31, 2004.
186.5 Sec. 11. Minnesota Statutes 2006, section 290.01, subdivision 19c, is amended to read:
186.6 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
186.7there shall be added to federal taxable income:
186.8 (1) the amount of any deduction taken for federal income tax purposes for income,
186.9excise, or franchise taxes based on net income or related minimum taxes, including but not
186.10limited to the tax imposed under section
186.11another state, a political subdivision of another state, the District of Columbia, or any
186.12foreign country or possession of the United States;
186.13 (2) interest not subject to federal tax upon obligations of: the United States, its
186.14possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
186.15state, any of its political or governmental subdivisions, any of its municipalities, or any
186.16of its governmental agencies or instrumentalities; the District of Columbia; or Indian
186.17tribal governments;
186.18 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
186.19Revenue Code;
186.20 (4) the amount of any net operating loss deduction taken for federal income tax
186.21purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
186.22deduction under section 810 of the Internal Revenue Code;
186.23 (5) the amount of any special deductions taken for federal income tax purposes
186.24under sections 241 to 247 and 965 of the Internal Revenue Code;
186.25 (6) losses from the business of mining, as defined in section
186.26clause (a), that are not subject to Minnesota income tax;
186.27 (7) the amount of any capital losses deducted for federal income tax purposes under
186.28sections 1211 and 1212 of the Internal Revenue Code;
186.29 (8) the exempt foreign trade income of a foreign sales corporation under sections
186.30921(a) and 291 of the Internal Revenue Code;
186.31 (9) the amount of percentage depletion deducted under sections 611 through 614 and
186.32291 of the Internal Revenue Code;
186.33 (10)
186.34
186.35
187.1
187.2
187.3
187.4determined pursuant to section
187.5
187.6through to the partner because the partnership elected to pay the tax on the income under
187.7section 6242(a)(2) of the Internal Revenue Code;
187.8
187.9Revenue Code;
187.10
187.11Internal Revenue Code, for the taxable year when subpart F income is calculated without
187.12regard to the provisions of section 103 of Public Law 109-222;
187.13
187.14168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
187.15the taxpayer has an activity that in the taxable year generates a deduction for depreciation
187.16under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
187.17year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
187.18allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
187.19of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
187.20over the amount of the loss from the activity that is not allowed in the taxable year. In
187.21succeeding taxable years when the losses not allowed in the taxable year are allowed, the
187.22depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
187.23
187.24the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
187.25Revenue Code of 1986, as amended through December 31, 2003;
187.26
187.27the deduction allowable under section 199 of the Internal Revenue Code; and
187.28
187.29for federal subsidies for prescription drug plans.
187.30EFFECTIVE DATE.This section is effective for tax years beginning after
187.31December 31, 2006.
187.32 Sec. 12. Minnesota Statutes 2006, section 290.01, subdivision 19d, is amended to read:
187.33 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
187.34corporations, there shall be subtracted from federal taxable income after the increases
187.35provided in subdivision 19c:
188.1 (1) the amount of foreign dividend gross-up added to gross income for federal
188.2income tax purposes under section 78 of the Internal Revenue Code;
188.3 (2) the amount of salary expense not allowed for federal income tax purposes due
188.4to claiming the
188.5Revenue Code;
188.6 (3) any dividend (not including any distribution in liquidation) paid within the
188.7taxable year by a national or state bank to the United States, or to any instrumentality of
188.8the United States exempt from federal income taxes, on the preferred stock of the bank
188.9owned by the United States or the instrumentality;
188.10 (4) amounts disallowed for intangible drilling costs due to differences between
188.11this chapter and the Internal Revenue Code in taxable years beginning before January
188.121, 1987, as follows:
188.13 (i) to the extent the disallowed costs are represented by physical property, an amount
188.14equal to the allowance for depreciation under Minnesota Statutes 1986, section
188.15subdivision 7
188.16 (ii) to the extent the disallowed costs are not represented by physical property, an
188.17amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
188.19 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
188.20Internal Revenue Code, except that:
188.21 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
188.22capital loss carrybacks shall not be allowed;
188.23 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
188.24a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
188.25allowed;
188.26 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
188.27capital loss carryback to each of the three taxable years preceding the loss year, subject to
188.28the provisions of Minnesota Statutes 1986, section
188.29 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
188.30a capital loss carryover to each of the five taxable years succeeding the loss year to the
188.31extent such loss was not used in a prior taxable year and subject to the provisions of
188.32Minnesota Statutes 1986, section
188.33 (6) an amount for interest and expenses relating to income not taxable for federal
188.34income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
188.35expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
188.36291 of the Internal Revenue Code in computing federal taxable income;
189.1 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
189.2which percentage depletion was disallowed pursuant to subdivision 19c, clause
189.3reasonable allowance for depletion based on actual cost. In the case of leases the deduction
189.4must be apportioned between the lessor and lessee in accordance with rules prescribed
189.5by the commissioner. In the case of property held in trust, the allowable deduction must
189.6be apportioned between the income beneficiaries and the trustee in accordance with the
189.7pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
189.8of the trust's income allocable to each;
189.9 (8)
189.10
189.11
189.12
189.13
189.14
189.15excise, or franchise taxes based on net income or related minimum taxes paid by the
189.16corporation to Minnesota, another state, a political subdivision of another state, the
189.17District of Columbia, or a foreign country or possession of the United States to the extent
189.18that the taxes were added to federal taxable income under section
189.19clause (1), in a prior taxable year;
189.20
189.21foreign operating corporation or a foreign corporation which is part of the same unitary
189.22business as the receiving corporation;
189.23
189.24subdivision 1
189.25
189.26not allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue
189.27Code;
189.28
189.29tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
189.30that the amount exceeds the amount of the credit allowed under section
189.31
189.32due to claiming the Indian employment credit under section 45A(a) of the Internal
189.33Revenue Code;
189.34
189.35
190.1
190.2federal small ethanol producer credit allowed under section 40(a)(3) of the Internal
190.3Revenue Code which is included in gross income under section 87 of the Internal Revenue
190.4Code;
190.5
190.6922 of the Internal Revenue Code, constituted a foreign operating corporation during any
190.7taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
190.8claiming the deduction under section
190.9the foreign operating corporation, an amount equal to
190.10income excluded under section 114 of the Internal Revenue Code, provided the income is
190.11not income of a foreign operating company;
190.12
190.13Internal Revenue Code, for the taxable year when subpart F income is calculated without
190.14regard to the provisions of section
190.15
190.16addition is required under subdivision 19c, clause
190.17of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
190.18amount of the addition made by the taxpayer under subdivision 19c, clause
190.19resulting delayed depreciation cannot be less than zero; and
190.20
190.21addition is required under subdivision 19c, clause
190.22of the amount of the addition.
190.23EFFECTIVE DATE.The amendment to clause (2) is effective the day following
190.24final enactment. The rest of this section is effective for taxable years beginning after
190.25December 31, 2006.
190.26 Sec. 13. Minnesota Statutes 2006, section 290.06, subdivision 33, is amended to read:
190.27 Subd. 33. Bovine testing credit. (a) An owner of cattle in Minnesota may take a
190.28credit against the tax due under this chapter for an amount equal to one-half the expenses
190.29incurred during the taxable year to conduct tuberculosis testing on those cattle.
190.30 (b) If the amount of credit which the taxpayer is eligible to receive under this
190.31subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
190.32revenue shall refund the excess to the taxpayer.
190.33 (c) The amount necessary to pay claims for the refund provided in this subdivision is
190.34appropriated from the general fund to the commissioner of revenue.
191.1 (d) Expenses incurred in a calendar year in which tuberculosis testing of cattle in
191.2Minnesota is not federally required are not allowed in claiming the credit under paragraph
191.3(a).
191.4EFFECTIVE DATE.This section is effective for tax years beginning after
191.5December 31, 2007.
191.6 Sec. 14. Minnesota Statutes 2006, section 290.067, subdivision 2b, is amended to read:
191.7 Subd. 2b. Inflation adjustment. The commissioner shall adjust the dollar amount
191.8of the income threshold at which the maximum credit begins to be reduced under
191.9subdivision 2
191.10
191.11
191.12
191.13
191.14
191.15
191.16Revenue Code, except that in section 1(f)(3)(B) the word "1999" shall be substituted for
191.17the word "1992." For 2001, the commissioner shall then determine the percent change
191.18from the 12 months ending on August 31, 1999, to the 12 months ending on August 31,
191.192000, and in each subsequent year, from the 12 months ending on August 31, 1999, to the
191.2012 months ending on August 31 of the year preceding the taxable year. The determination
191.21of the commissioner pursuant to this subdivision must not be considered a "rule" and is
191.22not subject to the Administrative Procedure Act contained in chapter 14. The threshold
191.23amount as adjusted must be rounded to the nearest $10 amount. If the amount ends in
191.24$5, the amount is rounded up to the nearest $10 amount.
191.25EFFECTIVE DATE.This section is effective for tax years beginning after
191.26December 31, 2006.
191.27 Sec. 15. Minnesota Statutes 2006, section 290.0671, subdivision 7, is amended to read:
191.28 Subd. 7. Inflation adjustment. The earned income amounts used to calculate the
191.29credit and the income thresholds at which the maximum credit begins to be reduced in
191.30subdivision 1 must be adjusted for inflation. The commissioner shall
191.31
191.32
191.33
192.1
192.2determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
192.3that in section 1(f)(3)(B) the word "1999" shall be substituted for the word "1992." For
192.42001, the commissioner shall then determine the percent change from the 12 months
192.5ending on August 31, 1999, to the 12 months ending on August 31, 2000, and in each
192.6subsequent year, from the 12 months ending on August 31, 1999, to the 12 months ending
192.7on August 31 of the year preceding the taxable year. The earned income thresholds as
192.8adjusted for inflation must be rounded to the nearest $10 amount. If the amount ends
192.9in $5, the amount is rounded up to the nearest $10 amount. The determination of the
192.10commissioner under this subdivision is not a rule under the Administrative Procedure Act.
192.11EFFECTIVE DATE.This section is effective for tax years beginning after
192.12December 31, 2006.
192.13 Sec. 16. Minnesota Statutes 2006, section 290.091, subdivision 3, is amended to read:
192.14 Subd. 3. Exemption amount. (a) For purposes of computing the alternative
192.15minimum tax, the exemption amount is
192.16
192.17
192.18
192.19
192.20couples filing joint returns, $30,000 for married individuals filing separate returns, estates,
192.21and trusts, and $45,000 for unmarried individuals.
192.22 (b) The exemption amount determined under this subdivision is subject to the phase
192.23out under section 55(d)(3) of the Internal Revenue Code, except that alternative minimum
192.24taxable income as determined under this section must be substituted in the computation of
192.25the phase out.
192.26 (c) For taxable years beginning after December 31, 2006, the exemption amount
192.27under paragraph (a), clause (2), must be adjusted for inflation.
192.28
192.29
192.30
192.31
192.32The commissioner shall adjust the exemption amount by the percentage determined
192.33pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
192.34section 1(f)(3)(B) the word "2005" shall be substituted for the word "1992." For 2007,
192.35the commissioner shall then determine the percent change from the 12 months ending on
193.1August 31, 2005, to the 12 months ending on August 31, 2006, and in each subsequent
193.2year, from the 12 months ending on August 31, 2005, to the 12 months ending on August
193.331 of the year preceding the taxable year. The exemption amount as adjusted must be
193.4rounded to the nearest $10. If the amount ends in $5, it must be rounded up to the nearest
193.5$10 amount. The determination of the commissioner under this subdivision is not a rule
193.6under the Administrative Procedure Act.
193.7EFFECTIVE DATE.This section is effective for tax years beginning after
193.8December 31, 2006.
193.9 Sec. 17. Minnesota Statutes 2006, section 290.0921, subdivision 3, is amended to read:
193.10 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
193.11income" is Minnesota net income as defined in section
193.12includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
193.13(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
193.14Minnesota tax return, the minimum tax must be computed on a separate company basis.
193.15If a corporation is part of a tax group filing a unitary return, the minimum tax must be
193.16computed on a unitary basis. The following adjustments must be made.
193.17 (1) For purposes of the depreciation adjustments under section 56(a)(1) and
193.1856(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
193.19service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
193.20income tax purposes, including any modification made in a taxable year under section
193.22paragraph (c).
193.23 For taxable years beginning after December 31, 2000, the amount of any remaining
193.24modification made under section
193.25section
193.26allowance in the first taxable year after December 31, 2000.
193.27 (2) The portion of the depreciation deduction allowed for federal income tax
193.28purposes under section 168(k) of the Internal Revenue Code that is required as an addition
193.29under section
193.30alternative minimum taxable income.
193.31 (3) The subtraction for depreciation allowed under section
193.3219d
193.33minimum taxable income.
193.34 (4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
193.35of the Internal Revenue Code does not apply.
194.1 (5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
194.2Revenue Code does not apply.
194.3 (6) The special rule for dividends from section 936 companies under section
194.456(g)(4)(C)(iii) does not apply.
194.5 (7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
194.6Code does not apply.
194.7 (8) The tax preference for intangible drilling costs under section 57(a)(2) of the
194.8Internal Revenue Code must be calculated without regard to subparagraph (E) and the
194.9subtraction under section
194.10 (9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
194.11Revenue Code does not apply.
194.12 (10) The tax preference for charitable contributions of appreciated property under
194.13section 57(a)(6) of the Internal Revenue Code does not apply.
194.14 (11) For purposes of calculating the tax preference for accelerated depreciation or
194.15amortization on certain property placed in service before January 1, 1987, under section
194.1657(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
194.17deduction allowed under section
194.18 For taxable years beginning after December 31, 2000, the amount of any remaining
194.19modification made under section
194.20depreciation or amortization allowance in the first taxable year after December 31, 2004.
194.21 (12) For purposes of calculating the adjustment for adjusted current earnings in
194.22section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
194.23income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
194.24minimum taxable income as defined in this subdivision, determined without regard to the
194.25adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
194.26 (13) For purposes of determining the amount of adjusted current earnings under
194.27section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
194.2856(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
194.29gross-up subtracted as provided in section
194.30amount of refunds of income, excise, or franchise taxes subtracted as provided in section
194.32income subtracted as provided in section
194.33 (14) Alternative minimum taxable income excludes the income from operating in a
194.34job opportunity building zone as provided under section
194.35 (15) Alternative minimum taxable income excludes the income from operating in a
194.36biotechnology and health sciences industry zone as provided under section
195.1 (16) Alternative minimum taxable income excludes the income from operating in an
195.2international economic development zone as provided under section
195.3 Items of tax preference must not be reduced below zero as a result of the
195.4modifications in this subdivision.
195.5EFFECTIVE DATE.This section is effective for taxable years beginning after
195.6December 31, 2006.
195.7 Sec. 18. Minnesota Statutes 2006, section 290.191, subdivision 8, is amended to read:
195.8 Subd. 8. Deposit; definition. (a) "Deposit," as used in subdivision
195.9(n), has the meanings in this subdivision.
195.10 (b) "Deposit" means the unpaid balance of money or its equivalent received or
195.11held by a financial institution in the usual course of business and for which it has given
195.12or is obligated to give credit, either conditionally or unconditionally, to a commercial,
195.13checking, savings, time, or thrift account whether or not advance notice is required to
195.14withdraw the credited funds, or which is evidenced by its certificate of deposit, thrift
195.15certificate, investment certificate, or certificate of indebtedness, or other similar name, or a
195.16check or draft drawn against a deposit account and certified by the financial institution,
195.17or a letter of credit or a traveler's check on which the financial institution is primarily
195.18liable. However, without limiting the generality of the term "money or its equivalent," any
195.19such account or instrument must be regarded as evidencing the receipt of the equivalent
195.20of money when credited or issued in exchange for checks or drafts or for a promissory
195.21note upon which the person obtaining the credit or instrument is primarily or secondarily
195.22liable, or for a charge against a deposit account, or in settlement of checks, drafts, or other
195.23instruments forwarded to the bank for collection.
195.24 (c) "Deposit" means trust funds received or held by the financial institution, whether
195.25held in the trust department or held or deposited in any other department of the financial
195.26institution.
195.27 (d) "Deposit" means money received or held by a financial institution, or the credit
195.28given for money or its equivalent received or held by a financial institution, in the usual
195.29course of business for a special or specific purpose, regardless of the legal relationship so
195.30established. Under this paragraph, "deposit" includes, but is not limited to, escrow funds,
195.31funds held as security for an obligation due to the financial institution or others, including
195.32funds held as dealers reserves, or for securities loaned by the financial institution, funds
195.33deposited by a debtor to meet maturing obligations, funds deposited as advance payment
195.34on subscriptions to United States government securities, funds held for distribution or
195.35purchase of securities, funds held to meet its acceptances or letters of credit, and withheld
196.1taxes. It does not include funds received by the financial institution for immediate
196.2application to the reduction of an indebtedness to the receiving financial institution, or
196.3under condition that the receipt of the funds immediately reduces or extinguishes the
196.4indebtedness.
196.5 (e) "Deposit" means outstanding drafts, including advice or another such institution,
196.6cashier's checks, money orders, or other officer's checks issued in the usual course
196.7of business for any purpose, but not including those issued in payment for services,
196.8dividends, or purchases or other costs or expenses of the financial institution itself.
196.9 (f) "Deposit" means money or its equivalent held as a credit balance by a financial
196.10institution on behalf of its customer if the entity is engaged in soliciting and holding such
196.11balances in the regular course of its business.
196.12 (g) Interinstitution fund transfers are not deposits.
196.13EFFECTIVE DATE.This section is effective the day following final enactment.
196.14 Sec. 19. Minnesota Statutes 2006, section 290A.03, subdivision 7, is amended to read:
196.15 Subd. 7. Dependent. "Dependent" means any person who is considered a
196.16dependent under sections 151 and 152 of the Internal Revenue Code.
196.17
196.18
196.19
196.20
196.21
196.22EFFECTIVE DATE.This section is effective for property tax refunds based on
196.23rents paid after December 31, 2006, and property taxes payable after December 31, 2007.
196.24 Sec. 20. Minnesota Statutes 2006, section 291.215, subdivision 1, is amended to read:
196.25 Subdivision 1. Determination. All property includable in the Minnesota gross
196.26estate of a decedent shall be valued in accordance with the provisions of sections 2031 or
196.272032 and, if applicable, 2032A, of the Internal Revenue Code and any elections made in
196.28valuing the federal gross estate shall be applicable in valuing the Minnesota gross estate.
196.29
196.30
196.31
196.32includable in the Minnesota gross estate of a decedent may be independently determined
196.33under those sections for Minnesota estate tax purposes.
197.1EFFECTIVE DATE.This section is effective retroactively for estates of decedents
197.2dying after December 31, 2005.
197.3 Sec. 21. TRANSITION; POLLUTION CONTROL FACILITIES
197.4AMORTIZATION.
197.5 The amount of additions to federal taxable income pursuant to Minnesota Statutes,
197.6section 290.01, subdivision 19c, clause (10), that are properly subtractable pursuant
197.7to Minnesota Statutes, section 290.01, subdivision 19d, clause (8), for taxable years
197.8beginning after December 31, 2006, and have not been subtracted pursuant to Minnesota
197.9Statutes, section 290.01, subdivision 19d, clause (8), are subtractable in the taxpayer's first
197.10taxable year beginning after December 31, 2006.
197.13 Section 1. Minnesota Statutes 2006, section 289A.40, subdivision 2, is amended to
197.14read:
197.15 Subd. 2. Bad debt loss. If a claim relates to an overpayment because of a failure to
197.16deduct a loss due to a bad debt or to a security becoming worthless, the claim is considered
197.17timely if filed within seven years from the date prescribed for the filing of the return. A
197.18claim relating to an overpayment of taxes under chapter 297A must be filed within 3-1/2
197.19years from the date
197.20
197.21as uncollectible in the taxpayer's books and records, and (2) either eligible to be deducted
197.22for federal income tax purposes or would have been eligible for a bad debt deduction for
197.23federal income tax purposes if the taxpayer were required to file a federal income tax
197.24return, or within one year from the date the taxpayer's federal income tax return is timely
197.25filed claiming the bad debt deduction, whichever period is later. The refund or credit is
197.26limited to the amount of overpayment attributable to the loss. "Bad debt" for purposes
197.27of this subdivision, has the same meaning as that term is used in United States Code,
197.28title 26, section 166, except that for a claim relating to an overpayment of taxes under
197.29chapter 297A the following are excluded from the calculation of bad debt: financing
197.30charges or interest; sales or use taxes charged on the purchase price; uncollectible amounts
197.31on property that remain in the possession of the seller until the full purchase price is
197.32paid; expenses incurred in attempting to collect any debt; and repossessed property. For
197.33purposes of reporting a payment received on previously claimed bad debt under chapter
197.34297A, any payments made on a debt or account are applied first proportionally to the
198.1taxable price of the property or service and the sales tax on it, and secondly to interest,
198.2service charges, and any other charges.
198.3EFFECTIVE DATE.This section is effective the day following final enactment.
198.4 Sec. 2. Minnesota Statutes 2006, section 289A.56, is amended by adding a subdivision
198.5to read:
198.6 Subd. 8. Border city zone refunds. Notwithstanding subdivision 3, for refunds
198.7payable under section 469.1734, subdivision 6, interest is computed from 90 days after the
198.8refund claim is filed with the commissioner.
198.9EFFECTIVE DATE.This section is effective for refund claims filed on or after
198.10July 1, 2007.
198.11 Sec. 3. Minnesota Statutes 2006, section 289A.60, subdivision 25, is amended to read:
198.12 Subd. 25. Penalty for failure to properly complete sales and use tax return. A
198.13person who fails to report local
198.14tax return or who fails to report local
198.15and use tax return is subject to a penalty of five percent of the amount of tax not properly
198.16reported on the return. A person who files a consolidated tax return but fails to report
198.17location information is subject to a $500 penalty for each return not containing location
198.18information. In addition, the commissioner may revoke the privilege for a taxpayer to
198.19file consolidated returns and may require the taxpayer to separately register each location
198.20and to file a tax return for each location.
198.21EFFECTIVE DATE.This section is effective for returns filed after June 30, 2007.
198.22 Sec. 4. Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision
198.23to read:
198.24 Subd. 29. Penalty for failure to report liquor sales. In the case of a failure to file
198.25an informational return required by section 297A.8155 with the commissioner on or before
198.26the date prescribed, the person failing to file the report shall pay a penalty of $500 each
198.27failure. If a failure to file a report is intentional, the penalty shall be $1,000 each failure.
198.28EFFECTIVE DATE.This section is effective the day following final enactment.
198.29 Sec. 5. Minnesota Statutes 2006, section 297A.61, subdivision 3, is amended to read:
199.1 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
199.2to, each of the transactions listed in this subdivision.
199.3 (b) Sale and purchase include:
199.4 (1) any transfer of title or possession, or both, of tangible personal property, whether
199.5absolutely or conditionally, for a consideration in money or by exchange or barter; and
199.6 (2) the leasing of or the granting of a license to use or consume, for a consideration
199.7in money or by exchange or barter, tangible personal property, other than a manufactured
199.8home used for residential purposes for a continuous period of 30 days or more.
199.9 (c) Sale and purchase include the production, fabrication, printing, or processing of
199.10tangible personal property for a consideration for consumers who furnish either directly or
199.11indirectly the materials used in the production, fabrication, printing, or processing.
199.12 (d) Sale and purchase include the preparing for a consideration of food.
199.13Notwithstanding section
199.14to, the following:
199.15 (1) prepared food sold by the retailer;
199.16 (2) soft drinks;
199.17 (3) candy;
199.18 (4) dietary supplements; and
199.19 (5) all food sold through vending machines.
199.20 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
199.21gas, water, or steam for use or consumption within this state.
199.22 (f) A sale and a purchase includes the transfer for a consideration of prewritten
199.23computer software whether delivered electronically, by load and leave, or otherwise.
199.24 (g) A sale and a purchase includes the furnishing for a consideration of the following
199.25services:
199.26 (1) the privilege of admission to places of amusement, recreational areas, or athletic
199.27events, and the making available of amusement devices, tanning facilities, reducing
199.28salons, steam baths, turkish baths, health clubs, and spas or athletic facilities;
199.29 (2) lodging and related services by a hotel, rooming house, resort, campground,
199.30motel, or trailer camp, including furnishing the guest of the facility with access to
199.31telecommunication services, and the granting of any similar license to use real property
199.32in a specific facility, other than the renting or leasing of it for a continuous period of
199.3330 days or more under an enforceable written agreement that may not be terminated
199.34without prior notice;
199.35 (3) nonresidential parking services, whether on a contractual, hourly, or other
199.36periodic basis, except for parking at a meter;
200.1 (4) the granting of membership in a club, association, or other organization if:
200.2 (i) the club, association, or other organization makes available for the use of its
200.3members sports and athletic facilities, without regard to whether a separate charge is
200.4assessed for use of the facilities; and
200.5 (ii) use of the sports and athletic facility is not made available to the general public
200.6on the same basis as it is made available to members.
200.7Granting of membership means both onetime initiation fees and periodic membership
200.8dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
200.9squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
200.10swimming pools; and other similar athletic or sports facilities;
200.11 (5) delivery of aggregate materials
200.12delivery of aggregate material used in road construction, and delivery of concrete block by
200.13a third party if the delivery would be subject to the sales tax if provided by the seller of the
200.14
200.15 (6) services as provided in this clause:
200.16 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
200.17and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
200.18drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
200.19include services provided by coin operated facilities operated by the customer;
200.20 (ii) motor vehicle washing, waxing, and cleaning services, including services
200.21provided by coin operated facilities operated by the customer, and rustproofing,
200.22undercoating, and towing of motor vehicles;
200.23 (iii) building and residential cleaning, maintenance, and disinfecting services and
200.24pest control and exterminating services;
200.25 (iv) detective, security, burglar, fire alarm, and armored car services; but not
200.26including services performed within the jurisdiction they serve by off-duty licensed peace
200.27officers as defined in section
200.28organization for monitoring and electronic surveillance of persons placed on in-home
200.29detention pursuant to court order or under the direction of the Minnesota Department
200.30of Corrections;
200.31 (v) pet grooming services;
200.32 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
200.33and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
200.34plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
200.35clearing contract as defined in section
201.1public utility lines. Services performed under a construction contract for the installation of
201.2shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
201.3 (vii) massages, except when provided by a licensed health care facility or
201.4professional or upon written referral from a licensed health care facility or professional for
201.5treatment of illness, injury, or disease; and
201.6 (viii) the furnishing of lodging, board, and care services for animals in kennels and
201.7other similar arrangements, but excluding veterinary and horse boarding services.
201.8 In applying the provisions of this chapter, the terms "tangible personal property"
201.9and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
201.10and the provision of these taxable services, unless specifically provided otherwise.
201.11Services performed by an employee for an employer are not taxable. Services performed
201.12by a partnership or association for another partnership or association are not taxable if
201.13one of the entities owns or controls more than 80 percent of the voting power of the
201.14equity interest in the other entity. Services performed between members of an affiliated
201.15group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
201.16group of corporations" means those entities that would be classified as members of an
201.17affiliated group as defined under United States Code, title 26, section 1504, disregarding
201.18the exclusions in section 1504(b).
201.19 For purposes of clause (5), "road construction" means construction of (1) public
201.20roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
201.21metropolitan area up to the point of the emergency response location sign.
201.22 (h) A sale and a purchase includes the furnishing for a consideration of tangible
201.23personal property or taxable services by the United States or any of its agencies or
201.24instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
201.25subdivisions.
201.26 (i) A sale and a purchase includes the furnishing for a consideration
201.27of telecommunications services,
201.28telecommunication services, cable television services
201.29ring tones.
201.30to, the following services, as defined in section 297A.669: air-to-ground radiotelephone
201.31service, mobile telecommunication service, postpaid calling service, prepaid calling
201.32service, prepaid wireless calling service, and private communication services. The
201.33services in this paragraph are taxed to the extent allowed under federal law.
201.34 (j) A sale and a purchase includes the furnishing for a consideration of installation if
201.35the installation charges would be subject to the sales tax if the installation were provided
201.36by the seller of the item being installed.
202.1 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
202.2to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
202.3the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
202.5EFFECTIVE DATE.This section is effective for sales and purchases made after
202.6June 30, 2007, except that the amendments to paragraphs (g), clause (2), and (i), are
202.7effective for sales and purchases made on or after January 1, 2008.
202.8 Sec. 6. Minnesota Statutes 2006, section 297A.61, subdivision 4, is amended to read:
202.9 Subd. 4. Retail sale. (a) A "retail sale" means any sale, lease, or rental for any
202.10purpose, other than resale, sublease, or subrent of items by the purchaser in the normal
202.11course of business as defined in subdivision 21.
202.12 (b) A sale of property used by the owner only by leasing it to others or by holding it
202.13in an effort to lease it, and put to no use by the owner other than resale after the lease or
202.14effort to lease, is a sale of property for resale.
202.15 (c) A sale of master computer software that is purchased and used to make copies for
202.16sale or lease is a sale of property for resale.
202.17 (d) A sale of building materials, supplies, and equipment to owners, contractors,
202.18subcontractors, or builders for the erection of buildings or the alteration, repair, or
202.19improvement of real property is a retail sale in whatever quantity sold, whether the sale is
202.20for purposes of resale in the form of real property or otherwise.
202.21 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
202.22for installation of the floor covering is a retail sale and not a sale for resale since a sale
202.23of floor covering which includes installation is a contract for the improvement of real
202.24property.
202.25 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
202.26for installation of the items is a retail sale and not a sale for resale since a sale of
202.27shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
202.28the improvement of real property.
202.29 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
202.30is not considered a sale of property for resale.
202.31 (h) A sale of tangible personal property utilized or employed in the furnishing or
202.32providing of services under subdivision 3, paragraph (g), clause (1), including, but not
202.33limited to, property given as promotional items, is a retail sale and is not considered a
202.34sale of property for resale.
203.1 (i) A sale of tangible personal property used in conducting lawful gambling under
203.2chapter 349 or the State Lottery under chapter 349A, including, but not limited to,
203.3property given as promotional items, is a retail sale and is not considered a sale of
203.4property for resale.
203.5 (j) A sale of machines, equipment, or devices that are used to furnish, provide, or
203.6dispense goods or services, including, but not limited to, coin-operated devices, is a retail
203.7sale and is not considered a sale of property for resale.
203.8 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
203.9payment becomes due under the terms of the agreement or the trade practices of the
203.10lessor or (2) in the case of a lease of a motor vehicle, as defined in section
203.11subdivision 5
203.12greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
203.13the lease is executed.
203.14 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
203.15title or possession of the tangible personal property.
203.16 (m) A sale of a bundled transaction in which one or more of the products included
203.17in the bundle is a taxable product is a retail sale, except that if one of the products
203.18is a telecommunication service, ancillary service, Internet access, or audio or video
203.19programming service, and the seller has maintained books and records identifying through
203.20reasonable and verifiable standards the portions of the price that are attributable to the
203.21distinct and separately identifiable products, then the products are not considered part of a
203.22bundled transaction. For purposes of this paragraph:
203.23 (1) the books and records maintained by the seller must be maintained in the regular
203.24course of business, and do not include books and records created and maintained by the
203.25seller primarily for tax purposes;
203.26 (2) books and records maintained in the regular course of business include, but are
203.27not limited to, financial statements, general ledgers, invoicing and billing systems and
203.28reports, and reports for regulatory tariffs and other regulatory matters; and
203.29 (3) books and records are maintained primarily for tax purposes when the books
203.30and records identify taxable and nontaxable portions of the price, but the seller maintains
203.31other books and records that identify different prices attributable to the distinct products
203.32included in the same bundled transaction.
203.33EFFECTIVE DATE.This section is effective for sales and purchases made on
203.34or after January 1, 2008.
203.35 Sec. 7. Minnesota Statutes 2006, section 297A.61, subdivision 7, is amended to read:
204.1 Subd. 7. Sales price. (a) "Sales price" means the measure subject to sales tax, and
204.2means the total amount of consideration, including cash, credit, personal property, and
204.3services, for which personal property or services are sold, leased, or rented, valued in
204.4money, whether received in money or otherwise, without any deduction for the following:
204.5 (1) the seller's cost of the property sold;
204.6 (2) the cost of materials used, labor or service cost, interest, losses, all costs of
204.7transportation to the seller, all taxes imposed on the seller, and any other expenses of
204.8the seller;
204.9 (3) charges by the seller for any services necessary to complete the sale, other than
204.10delivery and installation charges;
204.11 (4) delivery charges, except the percentage of the delivery charge allocated to
204.12delivery of tax exempt property, when the delivery charge is allocated by using either (i) a
204.13percentage based on the total sales price of the taxable property compared to the total sales
204.14price of all property in the shipment, or (ii) a percentage based on the total weight of the
204.15taxable property compared to the total weight of all property in the shipment; and
204.16 (5) installation charges
204.17
204.18
204.19
204.20 (b) Sales price does not include:
204.21 (1) discounts, including cash, terms, or coupons, that are not reimbursed by a third
204.22party and that are allowed by the seller and taken by a purchaser on a sale;
204.23 (2) interest, financing, and carrying charges from credit extended on the sale of
204.24personal property or services, if the amount is separately stated on the invoice, bill of sale,
204.25or similar document given to the purchaser; and
204.26 (3) any taxes legally imposed directly on the consumer that are separately stated on
204.27the invoice, bill of sale, or similar document given to the purchaser.
204.28 (c) Sales price includes consideration received by the seller from third parties if:
204.29 (1) the seller actually receives consideration from a party other than the purchaser
204.30and the consideration is directly related to a price reduction or discount on the sale;
204.31 (2) the seller has an obligation to pass the price reduction or discount through to
204.32the purchaser;
204.33 (3) the amount of the consideration attributable to the sale is fixed and determinable
204.34by the seller at the time of the sale of the item to the purchaser; and
204.35 (4) one of the following criteria is met:
205.1 (i) the purchaser presents a coupon, certificate, or other documentation to the seller
205.2to claim a price reduction or discount when the coupon, certificate, or documentation is
205.3authorized, distributed, or granted by a third party with the understanding that the third
205.4party will reimburse any seller to whom the coupon, certificate, or documentation is
205.5presented;
205.6 (ii) the purchaser identifies himself or herself to the seller as a member of a group or
205.7organization entitled to a price reduction or discount. A "preferred customer" card that is
205.8available to any customer does not constitute membership in such a group; or
205.9 (iii) the price reduction or discount is identified as a third-party price reduction or
205.10discount on the invoice received by the purchaser or on a coupon, certificate, or other
205.11documentation presented by the purchaser.
205.12EFFECTIVE DATE.This section is effective for sales and purchases made on or
205.13after January 1, 2008, except that the amendment to paragraph (a), clause (4), is effective
205.14the day following final enactment.
205.15 Sec. 8. Minnesota Statutes 2006, section 297A.61, subdivision 10, is amended to read:
205.16 Subd. 10. Tangible personal property. (a) "Tangible personal property" means
205.17personal property that can be seen, weighed, measured, felt, or touched, or that is in any
205.18other manner perceptible to the senses. "Tangible personal property" includes, but is not
205.19limited to, electricity, water, gas, steam, and prewritten computer software
205.20
205.21 (b) Tangible personal property does not include:
205.22 (1) large ponderous machinery and equipment used in a business or production
205.23activity which at common law would be considered to be real property;
205.24 (2) property which is subject to an ad valorem property tax;
205.25 (3) property described in section
205.26 (4) property described in section
205.27EFFECTIVE DATE.This section is effective for sales and purchases made on
205.28or after January 1, 2008.
205.29 Sec. 9. Minnesota Statutes 2006, section 297A.61, subdivision 24, is amended to read:
205.30 Subd. 24. Telecommunications services. (a) "Telecommunications services" means
205.31the electronic transmission, conveyance, or routing of voice, data, audio, video, or any
205.32other information or signals to a point, or between or among points
205.33
206.1
206.2
206.3 (b) Telecommunications services
206.4
206.5in which computer processing applications are used to act on the form, code, or protocol
206.6of the content for purposes of transmission, conveyance, or routing, without regard to
206.7whether the service is referred to as voice over Internet protocol services or is classified by
206.8the Federal Communications Commission as enhanced or value added.
206.9 (c) Telecommunications services do not include:
206.10
206.11
206.12
206.13
206.14
206.15
206.16
206.17
206.18
206.19
206.20 (1) data processing and information services that allow data to be generated,
206.21acquired, stored, processed, or retrieved and delivered by an electronic transmission to
206.22a purchaser when the purchaser's primary purpose for the underlying transaction is the
206.23processed data or information;
206.24 (2) installation or maintenance of wiring or equipment on a customer's premises;
206.25 (3) tangible personal property;
206.26 (4) advertising, including, but not limited to, directory advertising;
206.27 (5) billing and collection services provided to third parties;
206.28 (6) Internet access service;
206.29 (7) radio and television audio and video programming services, regardless of the
206.30medium, including the furnishing of transmission, conveyance, and routing of such
206.31services by the programming service provider. Radio and television audio and video
206.32programming services includes, but is not limited to, cable service as defined in United
206.33States Code, title 47, section 522(6), and audio and video programming services delivered
206.34by commercial mobile radio service providers, as defined in Code of Federal Regulations,
206.35title 47, section 20.3;
206.36 (8) ancillary services; or
207.1 (9) digital products delivered electronically, including, but not limited to, software,
207.2music, video, reading materials, or ring tones.
207.3EFFECTIVE DATE.This section is effective for sales and purchases made on
207.4or after January 1, 2008.
207.5 Sec. 10. Minnesota Statutes 2006, section 297A.61, is amended by adding a
207.6subdivision to read:
207.7 Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale
207.8of two or more products when the products are otherwise distinct and identifiable, and
207.9the products are sold for one nonitemized price. As used in this subdivision, "product"
207.10includes tangible personal property, services, intangibles, and digital goods, but does not
207.11include real property or services to real property. A bundled transaction does not include
207.12the sale of any products in which the sales price varies, or is negotiable, based on the
207.13selection by the purchaser of the products included in the transaction.
207.14 (b) For purposes of this subdivision, "distinct and identifiable" products does not
207.15include:
207.16 (1) packaging and other materials, such as containers, boxes, sacks, bags, and
207.17bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
207.18products and are incidental or immaterial to the retail sale. Examples of packaging that are
207.19incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
207.20and express delivery envelopes and boxes;
207.21 (2) a promotional product provided free of charge with the required purchase of
207.22another product. A promotional product is provided free of charge if the sales price of
207.23another product, which is required to be purchased in order to receive the promotional
207.24product, does not vary depending on the inclusion of the promotional product; and
207.25 (3) items included in the definition of sales price.
207.26 (c) For purposes of this subdivision, the term "one nonitemized price" does not
207.27include a price that is separately identified by product on binding sales or other supporting
207.28sales-related documentation made available to the customer in paper or electronic form
207.29including, but not limited to an invoice, bill of sale, receipt, contract, service agreement,
207.30lease agreement, periodic notice of rates and services, rate card, or price list.
207.31 (d) A transaction that otherwise meets the definition of a bundled transaction is
207.32not a bundled transaction if it is:
207.33 (1) the retail sale of tangible personal property and a service and the tangible
207.34personal property is essential to the use of the service, and is provided exclusively in
207.35connection with the service, and the true object of the transaction is the service;
208.1 (2) the retail sale of services if one service is provided that is essential to the use or
208.2receipt of a second service and the first service is provided exclusively in connection with
208.3the second service and the true object of the transaction is the second service;
208.4 (3) a transaction that includes taxable products and nontaxable products and the
208.5purchase price or sales price of the taxable products is de minimis; or
208.6 (4) the retail sale of exempt tangible personal property and taxable tangible personal
208.7property if:
208.8 (i) the transaction includes food and food ingredients, drugs, durable medical
208.9equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
208.10or medical supplies; and
208.11 (ii) the seller's purchase price or sales price of the taxable tangible personal property
208.12is 50 percent or less of the total purchase price or sales price of the bundled tangible
208.13personal property. Sellers must not use a combination of the purchase price and sales
208.14price of the tangible personal property when making the 50 percent determination for
208.15a transaction.
208.16 (e) For purposes of this subdivision, "purchase price" means the measure subject to
208.17use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
208.18price or sales price of the taxable products is ten percent or less of the total purchase
208.19price or sales price of the bundled products. Sellers shall use either the purchase price
208.20or the sales price of the products to determine if the taxable products are de minimis.
208.21Sellers must not use a combination of the purchase price and sales price of the products
208.22to determine if the taxable products are de minimis. Sellers shall use the full term of a
208.23service contract to determine if the taxable products are de minimis.
208.24EFFECTIVE DATE.This section is effective for sales and purchases made on
208.25or after January 1, 2008.
208.26 Sec. 11. Minnesota Statutes 2006, section 297A.61, is amended by adding a
208.27subdivision to read:
208.28 Subd. 39. Ancillary services. "Ancillary services" means services that are
208.29associated with or incidental to the provision of telecommunications services, including,
208.30but not limited to, conference bridging service, detailed telecommunications billing,
208.31directory assistance, vertical service, and voice mail services.
208.32EFFECTIVE DATE.This section is effective for sales and purchases made on
208.33or after January 1, 2008.
209.1 Sec. 12. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.2subdivision to read:
209.3 Subd. 40. Conference bridging service. "Conference bridging service" means an
209.4ancillary service that links two or more participants of an audio or video conference call
209.5and may include the provision of a telephone number. Conference bridging service does
209.6not include the telecommunications services used to reach the conference bridge.
209.7EFFECTIVE DATE.This section is effective for sales and purchases made on
209.8or after January 1, 2008.
209.9 Sec. 13. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.10subdivision to read:
209.11 Subd. 41. Detailed telecommunications billing service. "Detailed
209.12telecommunications billing service" means an ancillary service of separately stating
209.13information pertaining to individual calls on a customer's billing statement.
209.14EFFECTIVE DATE.This section is effective for sales and purchases made on
209.15or after January 1, 2008.
209.16 Sec. 14. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.17subdivision to read:
209.18 Subd. 42. Directory assistance. "Directory assistance" means an ancillary service
209.19of providing telephone number information or address information, or both.
209.20EFFECTIVE DATE.This section is effective for sales and purchases made on
209.21or after January 1, 2008.
209.22 Sec. 15. Minnesota Statutes 2006, section 297A.61, is amended by adding a
209.23subdivision to read:
209.24 Subd. 43. Vertical service. "Vertical service" means an ancillary service that is
209.25offered in connection with one or more telecommunications services and which offers
209.26advanced calling features that allow customers to identify callers and to manage multiple
209.27calls and call connections, including conference bridging services.
209.28EFFECTIVE DATE.This section is effective for sales and purchases made on
209.29or after January 1, 2008.
210.1 Sec. 16. Minnesota Statutes 2006, section 297A.61, is amended by adding a
210.2subdivision to read:
210.3 Subd. 44. Voice mail service. "Voice mail service" means an ancillary service that
210.4enables the customer to store, send, or receive recorded messages. Voice mail service
210.5does not include any vertical services that the customer may be required to have in order
210.6to utilize the voice mail service.
210.7EFFECTIVE DATE.This section is effective for sales and purchases made on
210.8or after January 1, 2008.
210.9 Sec. 17. Minnesota Statutes 2006, section 297A.61, is amended by adding a
210.10subdivision to read:
210.11 Subd. 45. Ring tone. "Ring tone" means a digitized sound file that is downloaded
210.12onto a device and that may be used to alert the customer of a telecommunication service
210.13with respect to a communication.
210.14EFFECTIVE DATE.This section is effective the day following final enactment.
210.15 Sec. 18. Minnesota Statutes 2006, section 297A.61, is amended by adding a
210.16subdivision to read:
210.17 Subd. 46. Fur clothing. "Fur clothing" means human wearing apparel that is
210.18required by the Federal Fur Products Labeling Act, United States Code, title 15, section
210.1969, to be labeled as a fur product, and the value of the fur components in the product
210.20is more than three times the value of the next most valuable tangible component. For
210.21purposes of this subdivision, "fur" means any animal skin or part of an animal skin with
210.22hair, fleece, or fur fibers attached to it, either in its raw or processed state, but does not
210.23include animal skins that have been converted into leather or suede, or from which the
210.24hair, fleece, or fur fiber has been completely removed in processing the skins.
210.25EFFECTIVE DATE.This section is effective for sales and purchases made on or
210.26after July 1, 2007.
210.27 Sec. 19. Minnesota Statutes 2006, section 297A.63, subdivision 1, is amended to read:
210.28 Subdivision 1. Use of tangible personal property or taxable services. (a) For the
210.29privilege of using, storing, distributing, or consuming in Minnesota tangible personal
210.30property or taxable services purchased for use, storage, distribution, or consumption in
210.31this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the
210.32purchase price of retail sales of the tangible personal property or taxable services at the
211.1rate of tax imposed under section
211.2Minnesota retailer and returns the tangible personal property to a point within Minnesota,
211.3except in the course of interstate commerce, after it was delivered outside of Minnesota,
211.4is subject to the use tax.
211.5 (b) No tax is imposed under paragraph (a) if the tax imposed by section
211.6was paid on the sales price of the tangible personal property or taxable services.
211.7 (c) No tax is imposed under paragraph (a) if the purchase meets the requirements for
211.8exemption under section
211.9 (d) When a transaction otherwise meets the definition of a bundled transaction, but
211.10is not a bundled transaction under section 297A.61, subdivision 38, paragraph (d), and
211.11the seller's purchase price of the taxable product or taxable tangible personal property is
211.12equal to or greater than $100, then use tax is imposed on the purchase price of the taxable
211.13product or taxable personal property. For purposes of this paragraph, "purchase price"
211.14means the measure subject to use tax on purchases made by the seller.
211.15EFFECTIVE DATE.This section is effective for sales and purchases made on
211.16or after January 1, 2008.
211.17 Sec. 20. Minnesota Statutes 2006, section 297A.665, is amended to read:
211.18297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
211.19 (a) For the purpose of the proper administration of this chapter and to prevent
211.20evasion of the tax, until the contrary is established, it is presumed that:
211.21 (1) all gross receipts are subject to the tax; and
211.22 (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
211.23in Minnesota.
211.24 (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
211.25
211.26
211.27
211.28 (1) the seller obtains a fully completed exemption certificate or all the relevant
211.29information required by section 297A.72, subdivision 2, at the time of the sale or within
211.3090 days after the date of the sale; or
211.31 (2) if the seller has not obtained a fully completed exemption certificate or all the
211.32relevant information required by section 297A.72, subdivision 2, within the time provided
211.33in clause (1), within 120 days after a request for substantiation by the commissioner,
211.34the seller either:
212.1 (i) obtains in good faith a fully completed exemption certificate or all the relevant
212.2information required by section 297A.72, subdivision 2, from the purchaser; or
212.3 (ii) proves by other means that the transaction was not subject to tax.
212.4 (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
212.5 (1) fraudulently fails to collect the tax; or
212.6 (2) solicits purchasers to participate in the unlawful claim of an exemption.
212.7
212.8
212.9
212.10
212.11
212.12
212.13
212.14
212.16of proving that the property was not purchased from a retailer for storage, use, or
212.17consumption in Minnesota.
212.18EFFECTIVE DATE.This section is effective for sales and purchases made on
212.19or after January 1, 2008.
212.20 Sec. 21. Minnesota Statutes 2006, section 297A.669, subdivision 3, is amended to read:
212.21 Subd. 3. Defined telecommunications services sourcing. The sale of the following
212.22telecommunication services shall be sourced to each level of taxing jurisdiction in
212.23paragraphs (a) to (d).
212.24 (a) A sale of mobile telecommunications services, other than air-to-ground
212.25radiotelephone service and prepaid calling service, is sourced to the customer's place of
212.26primary use as required by the Mobile Telecommunications Sourcing Act.
212.27 (b) A sale of postpaid calling service is sourced to the origination point of the
212.28telecommunications signal as first identified by either:
212.29 (1) the seller's telecommunications system; or
212.30 (2) information received by the seller from its service provider, where the system
212.31used to transport such signals is not that of the seller.
212.32 (c) A sale of prepaid calling service or prepaid wireless calling service is sourced in
212.33accordance with section
212.34
213.1the rule provided in section
213.2option the location associated with the mobile telephone number.
213.3 (d) A sale of a private communication service is sourced as follows:
213.4 (1) service for a separate charge related to a customer channel termination point is
213.5sourced to each level of jurisdiction in which the customer channel termination point
213.6is located;
213.7 (2) service where all customer termination points are located entirely within one
213.8jurisdiction or levels of jurisdiction is sourced in such jurisdiction in which the customer
213.9channel termination points are located;
213.10 (3) service for segments of a channel between two customer channel termination
213.11points located in different jurisdictions and which segment of channel are separately
213.12charged is sourced 50 percent in each level of jurisdiction in which the customer channel
213.13termination points are located; and
213.14 (4) service for segments of a channel located in more than one jurisdiction or
213.15levels of jurisdiction and which segments are not separately billed is sourced in each
213.16jurisdiction based on the percentage determined by dividing the number of customer
213.17channel termination points in the jurisdiction by the total number of customer channel
213.18termination points.
213.19EFFECTIVE DATE.This section is effective for sales and purchases made on
213.20or after January 1, 2008.
213.21 Sec. 22. Minnesota Statutes 2006, section 297A.669, subdivision 13, is amended to
213.22read:
213.23 Subd. 13. Postpaid calling service. "Postpaid calling service," for purposes of
213.24this section, means the telecommunications service obtained by making a payment
213.25on a call-by-call basis either through the use of a credit card or payment mechanism
213.26such as a bank card, travel card, credit card, or debit card, or by a charge made to
213.27a telephone number that is not associated with the origination or termination of the
213.28telecommunications service. A postpaid calling service includes a telecommunications
213.29service, except a prepaid wireless calling service, that would be a prepaid calling service
213.30except it is not exclusively a telecommunication service.
213.31EFFECTIVE DATE.This section is effective for sales and purchases made on
213.32or after January 1, 2008.
214.1 Sec. 23. Minnesota Statutes 2006, section 297A.669, subdivision 14, is amended to
214.2read:
214.3 Subd. 14. Prepaid calling service. "Prepaid calling service," for purposes of this
214.4section, means a telecommunications service that:
214.5 (1) provides the right to access exclusively telecommunications services
214.6 (2) must be paid for in advance
214.7 (3) enables the origination of calls using an access number or authorization code,
214.8whether manually or electronically dialed
214.9 (4) is sold in predetermined units or dollars of which the number declines with
214.10use in a known amount.
214.11EFFECTIVE DATE.This section is effective the day following final enactment.
214.12 Sec. 24. Minnesota Statutes 2006, section 297A.669, is amended by adding a
214.13subdivision to read:
214.14 Subd. 14a. Prepaid wireless calling service. "Prepaid wireless calling service," for
214.15purposes of this section, means a telecommunications service that:
214.16 (1) provides the right to utilize mobile wireless service as well as other
214.17nontelecommunications services, including the download of digital products delivered
214.18electronically, content, and ancillary services;
214.19 (2) must be paid for in advance; and
214.20 (3) is sold in predetermined units or dollars of which the number declines with
214.21use in a known amount.
214.22EFFECTIVE DATE.This section is effective for sales and purchases made on
214.23or after January 1, 2008.
214.24 Sec. 25. Minnesota Statutes 2006, section 297A.669, is amended by adding a
214.25subdivision to read:
214.26 Subd. 17. Ancillary service. The sale of an ancillary service is sourced to the
214.27customer's place of primary use.
214.28EFFECTIVE DATE.This section is effective for sales and purchases made on
214.29or after January 1, 2008.
214.30 Sec. 26. Minnesota Statutes 2006, section 297A.67, subdivision 7, is amended to read:
214.31 Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
214.32devices are exempt:
215.1 (1) drugs for human use, including over-the-counter drugs;
215.2 (2) single-use finger-pricking devices for the extraction of blood and other single-use
215.3devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
215.4diabetes;
215.5 (3) insulin and medical oxygen for human use, regardless of whether prescribed
215.6or sold over the counter;
215.7 (4) prosthetic devices;
215.8 (5) durable medical equipment for home use only;
215.9 (6) mobility enhancing equipment;
215.10 (7) prescription corrective eyeglasses
215.11 (8) kidney dialysis equipment, including repair and replacement parts.
215.12 (b) For purposes of this subdivision:
215.13 (1) "Drug" means a compound, substance, or preparation, and any component of
215.14a compound, substance, or preparation, other than food and food ingredients, dietary
215.15supplements, or alcoholic beverages that is:
215.16 (i) recognized in the official United States Pharmacopoeia, official Homeopathic
215.17Pharmacopoeia of the United States, or official National Formulary, and supplement
215.18to any of them;
215.19 (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
215.20of disease; or
215.21 (iii) intended to affect the structure or any function of the body.
215.22 (2) "Durable medical equipment" means equipment, including repair and
215.23replacement parts, but not including mobility enhancing equipment, that:
215.24 (i) can withstand repeated use;
215.25 (ii) is primarily and customarily used to serve a medical purpose;
215.26 (iii) generally is not useful to a person in the absence of illness or injury; and
215.27 (iv) is not worn in or on the body.
215.28 (3) "Mobility enhancing equipment" means equipment, including repair and
215.29replacement parts, but not including durable medical equipment, that:
215.30 (i) is primarily and customarily used to provide or increase the ability to move from
215.31one place to another and that is appropriate for use either in a home or a motor vehicle;
215.32 (ii) is not generally used by persons with normal mobility; and
215.33 (iii) does not include any motor vehicle or equipment on a motor vehicle normally
215.34provided by a motor vehicle manufacturer.
215.35 (4) "Over-the-counter drug" means a drug that contains a label that identifies the
215.36product as a drug as required by Code of Federal Regulations, title 21, section
216.1label must include a "drug facts" panel or a statement of the active ingredients with a list of
216.2those ingredients contained in the compound, substance, or preparation. Over-the-counter
216.3drugs do not include grooming and hygiene products, regardless of whether they otherwise
216.4meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
216.5shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
216.6 (5) "Prescribed" and "prescription" means a direction in the form of an order,
216.7formula, or recipe issued in any form of oral, written, electronic, or other means of
216.8transmission by a duly licensed health care professional.
216.9 (6) "Prosthetic device" means a replacement, corrective, or supportive device,
216.10including repair and replacement parts, worn on or in the body to:
216.11 (i) artificially replace a missing portion of the body;
216.12 (ii) prevent or correct physical deformity or malfunction; or
216.13 (iii) support a weak or deformed portion of the body.
216.14Prosthetic device does not include corrective eyeglasses.
216.15 (7) "Kidney dialysis equipment" means equipment that:
216.16 (i) is used to remove waste products that build up in the blood when the kidneys are
216.17not able to do so on their own; and
216.18 (ii) can withstand repeated use, including multiple use by a single patient.
216.19EFFECTIVE DATE.This section is effective the day following final enactment.
216.20 Sec. 27. Minnesota Statutes 2006, section 297A.67, subdivision 8, is amended to read:
216.21 Subd. 8. Clothing. (a) Clothing is exempt. For purposes of this subdivision,
216.22"clothing" means all human wearing apparel suitable for general use.
216.23 (b) Clothing includes, but is not limited to, aprons, household and shop; athletic
216.24supporters; baby receiving blankets; bathing suits and caps; beach capes and coats; belts
216.25and suspenders; boots; coats and jackets; costumes; children and adult diapers, including
216.26disposable; ear muffs; footlets; formal wear; garters and garter belts; girdles; gloves and
216.27mittens for general use; hats and caps; hosiery; insoles for shoes; lab coats; neckties;
216.28overshoes; pantyhose; rainwear; rubber pants; sandals; scarves; shoes and shoe laces;
216.29slippers; sneakers; socks and stockings; steel-toed boots; underwear; uniforms, athletic
216.30and nonathletic; and wedding apparel.
216.31 (c) Clothing does not include the following:
216.32 (1) belt buckles sold separately;
216.33 (2) costume masks sold separately;
216.34 (3) patches and emblems sold separately;
217.1 (4) sewing equipment and supplies, including but not limited to, knitting needles,
217.2patterns, pins, scissors, sewing machines, sewing needles, tape measures, and thimbles;
217.3 (5) sewing materials that become part of clothing, including but not limited to,
217.4buttons, fabric, lace, thread, yarn, and zippers;
217.5 (6) clothing accessories or equipment;
217.6 (7) sports or recreational equipment; and
217.7 (8) protective equipment.
217.8Clothing also does not include
217.9
217.10
217.11 For purposes of this subdivision, "clothing accessories or equipment" means
217.12incidental items worn on the person or in conjunction with clothing. Clothing accessories
217.13and equipment include, but are not limited to, briefcases; cosmetics; hair notions, including
217.14barrettes, hair bows, and hairnets; handbags; handkerchiefs; jewelry; nonprescription
217.15sunglasses; umbrellas; wallets; watches; and wigs and hairpieces. "Sports or recreational
217.16equipment" means items designed for human use and worn in conjunction with an athletic
217.17or recreational activity that are not suitable for general use. Sports and recreational
217.18equipment includes, but is not limited to, ballet and tap shoes; cleated or spiked athletic
217.19shoes; gloves, including, but not limited to, baseball, bowling, boxing, hockey, and golf
217.20gloves; goggles; hand and elbow guards; life preservers and vests; mouth guards; roller
217.21and ice skates; shin guards; shoulder pads; ski boots; waders; and wetsuits and fins.
217.22"Protective equipment" means items for human wear and designed as protection of the
217.23wearer against injury or disease or as protection against damage or injury of other persons
217.24or property but not suitable for general use. Protective equipment includes, but is not
217.25limited to, breathing masks; clean room apparel and equipment; ear and hearing protectors;
217.26face shields; finger guards; hard hats; helmets; paint or dust respirators; protective gloves;
217.27safety glasses and goggles; safety belts; tool belts; and welders gloves and masks.
217.28EFFECTIVE DATE.This section is effective for sales and purchases made on or
217.29after July 1, 2007.
217.30 Sec. 28. Minnesota Statutes 2006, section 297A.67, subdivision 9, is amended to read:
217.31 Subd. 9. Baby products. Breast pumps, baby bottles and nipples, pacifiers, teething
217.32rings, and infant syringes are exempt.
217.33EFFECTIVE DATE.This section is effective for sales and purchases made on or
217.34after the day following final enactment.
218.1 Sec. 29. Minnesota Statutes 2006, section 297A.68, subdivision 11, is amended to read:
218.2 Subd. 11. Advertising materials. Materials designed to advertise and promote the
218.3sale of merchandise or services are exempt if these materials are mailed or transferred to a
218.4person outside the state for use solely outside the state. Mailing and reply envelopes and
218.5cards and other shipping materials including, but not limited to, boxes, labels, containers,
218.6and banding, used exclusively in connection with these advertising and promotional
218.7materials are included in this exemption. The exemption applies regardless of where the
218.8mailing occurs. The storage of these materials in the state for the purpose of subsequently
218.9shipping or otherwise transferring the material out of state is also exempt if the other
218.10conditions in this subdivision are met. For purposes of this subdivision, materials that have
218.11a primary purpose other than advertising, such as fulfilling a legal obligation or furnishing
218.12nonadvertising information, are not materials designed to advertise and promote the sale
218.13of merchandise or services even if they do include advertising content.
218.14EFFECTIVE DATE.This section is effective the day following final enactment.
218.15 Sec. 30. Minnesota Statutes 2006, section 297A.68, subdivision 16, is amended to read:
218.16 Subd. 16. Packing materials. Packing materials used to pack and ship household
218.17goods and that are provided to and remain with the customer of a for-hire carrier are
218.18exempt if the ultimate destination of the goods is outside Minnesota and if the
218.19packing materials are not later returned to a point within Minnesota, except in the course
218.20of interstate commerce. This exemption does not apply to tools, equipment, pads, or
218.21accessories owned or leased by the for-hire carrier.
218.22EFFECTIVE DATE.This section is effective for sales and purchases made after
218.23June 30, 2007.
218.24 Sec. 31. Minnesota Statutes 2006, section 297A.68, subdivision 35, is amended to read:
218.25 Subd. 35. Telecommunications, cable television, and direct satellite equipment.
218.26 (a) Telecommunications, cable television, or direct satellite machinery and equipment
218.27purchased or leased for use directly by a telecommunications, cable television, or
218.28direct satellite service provider primarily in the provision of telecommunications, cable
218.29television, or direct satellite services that are ultimately to be sold at retail are exempt,
218.30regardless of whether purchased by the owner, a contractor, or a subcontractor.
218.31 (b) For purposes of this subdivision, "telecommunications, cable television, or direct
218.32satellite machinery and equipment" includes, but is not limited to:
219.1 (1) machinery, equipment, and fixtures utilized in receiving, initiating,
219.2amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring
219.3telecommunications, cable television, or direct satellite services, such as computers,
219.4transformers, amplifiers, routers, bridges, repeaters, multiplexers, and other items
219.5performing comparable functions;
219.6 (2) machinery, equipment, and fixtures used in the transportation of
219.7telecommunications, cable television, or direct satellite services, radio transmitters and
219.8receivers, satellite equipment, microwave equipment, and other transporting media, but
219.9not wire, cable, fiber, poles, or conduit;
219.10 (3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or
219.11enable the machinery in clauses (1) and (2) to accomplish its intended function, such as
219.12auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning
219.13equipment necessary to the operation of the telecommunications, cable television, or direct
219.14satellite equipment; and software necessary to the operation of the telecommunications,
219.15cable television, or direct satellite equipment; and
219.16 (4) repair and replacement parts, including accessories, whether purchased as spare
219.17parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
219.18
219.19
219.20
219.21EFFECTIVE DATE.This section is effective for sales and purchases made on
219.22or after January 1, 2008.
219.23 Sec. 32. Minnesota Statutes 2006, section 297A.69, subdivision 2, is amended to read:
219.24 Subd. 2. Materials consumed in agricultural production. Materials stored, used,
219.25or consumed in agricultural production of personal property intended to be sold ultimately
219.26at retail are exempt, whether or not the item becomes an ingredient or constituent part
219.27of the property produced. Materials that qualify for this exemption include, but are not
219.28limited to, the following:
219.29 (1) feeds, seeds, trees, fertilizers, and herbicides, including when purchased for use
219.30by farmers in a federal or state farm or conservation program;
219.31 (2) materials sold to a veterinarian to be used or consumed in the care, medication,
219.32and treatment of agricultural production animals and horses;
219.33 (3) chemicals, including chemicals used for cleaning food processing machinery
219.34and equipment;
220.1 (4) materials, including chemicals, fuels, and electricity purchased by persons
220.2engaged in agricultural production to treat waste generated as a result of the production
220.3process;
220.4 (5) fuels, electricity, gas, and steam used or consumed in the production process,
220.5
220.6
220.7
220.8agricultural animals;
220.9 (6) petroleum products and lubricants;
220.10 (7) packaging materials, including returnable containers used in packaging food and
220.11beverage products; and
220.12 (8) accessory tools and equipment that are separate detachable units with an ordinary
220.13useful life of less than 12 months used in producing a direct effect upon the product.
220.14Machinery, equipment, implements, tools, accessories, appliances, contrivances, and
220.15furniture and fixtures, except those listed in this clause are not included within this
220.16exemption.
220.17EFFECTIVE DATE.This section is effective the day following final enactment.
220.18 Sec. 33. Minnesota Statutes 2006, section 297A.70, subdivision 7, is amended to read:
220.19 Subd. 7. Hospitals and outpatient surgical centers. (a) Sales, except for those
220.20listed in paragraph (c), to a hospital are exempt, if the items purchased are used in
220.21providing hospital services. For purposes of this subdivision, "hospital" means a hospital
220.22organized and operated for charitable purposes within the meaning of section 501(c)(3) of
220.23the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction,
220.24and "hospital services" are services authorized or required to be performed by a "hospital"
220.25under chapter 144.
220.26 (b) Sales, except for those listed in paragraph (c), to an outpatient surgical center
220.27are exempt, if the items purchased are used in providing outpatient surgical services. For
220.28purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
220.29center organized and operated for charitable purposes within the meaning of section
220.30501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
220.31jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
220.32(1) services authorized or required to be performed by an outpatient surgical center under
220.33chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
220.34health services furnished to a person whose medical condition is sufficiently acute to
221.1require treatment unavailable through, or inappropriate to be provided by, a clinic or
221.2physician's office, but not so acute as to require treatment in a hospital emergency room.
221.3 (c) This exemption does not apply to the following products and services:
221.4 (1) purchases made by a clinic, physician's office, or any other medical facility not
221.5operating as a hospital or outpatient surgical center, even though the clinic, office, or
221.6facility may be owned and operated by a hospital or outpatient surgical center;
221.7 (2) sales under section
221.8prepared food, candy, and soft drinks;
221.9 (3) building and construction materials used in constructing buildings or facilities
221.10that will not be used principally by the hospital or outpatient surgical center;
221.11 (4) building, construction, or reconstruction materials purchased by a contractor
221.12or a subcontractor as a part of a lump-sum contract or similar type of contract with a
221.13guaranteed maximum price covering both labor and materials for use in the construction,
221.14alteration, or repair of a hospital or outpatient surgical center; or
221.15 (5) the leasing of a motor vehicle as defined in section
221.16 (d) A limited liability company also qualifies for exemption under this subdivision if
221.17(1) it consists of a sole member that would qualify for the exemption, and (2) the items
221.18purchased qualify for the exemption.
221.19 (e) An entity that contains both a hospital and a nonprofit unit may claim this
221.20exemption on purchases made for both the hospital and nonprofit unit provided that:
221.21 (1) the nonprofit unit would have qualified for exemption under subdivision 4; and
221.22 (2) the items purchased would have qualified for the exemption.
221.23EFFECTIVE DATE.This section is effective the day following final enactment.
221.24 Sec. 34. Minnesota Statutes 2006, section 297A.70, is amended by adding a
221.25subdivision to read:
221.26 Subd. 18. Private communication service for State Lottery. Private
221.27communication service, as defined in section 297A.61, subdivision 26, is exempt if the
221.28service is purchased by an agent acting on behalf of the State Lottery.
221.29EFFECTIVE DATE.This section is effective for sales and purchases made on
221.30or after January 1, 2008.
221.31 Sec. 35. Minnesota Statutes 2006, section 297A.72, is amended to read:
221.32297A.72 EXEMPTION CERTIFICATES.
222.1 Subd. 2. Content and form of exemption certificate. An exemption certificate
222.2must be substantially in the form prescribed by the commissioner
222.3completed, the exemption certificate must:
222.4 (1) either be signed by the purchaser if it is a paper form, or meet the requirements
222.5of section
222.6 (2) bear the name and address of the purchaser;
222.7 (3) indicate the
222.8purchaser
222.9 (i) the purchaser's Minnesota tax identification number;
222.10 (ii) if the purchaser does not have a Minnesota tax identification number, then the
222.11purchaser's state tax identification number that is issued by a state other than Minnesota,
222.12and the name of that state;
222.13 (iii) if the purchaser does not have an identification number described in either item
222.14(i) or (ii), then the purchaser's federal Employer Identification Number; or
222.15 (iv) if the purchaser does not have an identification number described in item (i), (ii),
222.16or (iii), then either the number of the purchaser's state-issued driver's license, if valid in
222.17the state of issue, or if the purchaser does not have a driver's license, a valid state-issued
222.18identification number, and the name of the state of issue;
222.19 (4) indicate the purchaser's type of business, using a business-type coding system
222.20prescribed by the commissioner; and
222.21 (5) indicate the reason for the exemption, using an exemption reason coding system
222.22prescribed by the commissioner.
222.23 Subd. 3. Purchaser requirement. A blanket exemption certificate is an exemption
222.24certificate used for continuing future purchases. A purchaser using a blanket exemption
222.25certificate must update it as needed to accurately reflect the information that is required
222.26under subdivision 2.
222.27EFFECTIVE DATE.This section is effective the day following final enactment.
222.28 Sec. 36. [297A.8155] LIQUOR REPORTING REQUIREMENTS; PENALTY.
222.29 A person who sells liquor, as defined in section 295.75, subdivision 1, in Minnesota
222.30to a retailer that sells liquor, shall file with the commissioner an annual informational
222.31report, in the form and manner prescribed by the commissioner, indicating the volume of
222.32liquor sold to each retailer in the previous calendar year. The report must be filed on or
222.33before February 28 of each calendar year beginning in 2008. A person failing to file this
222.34report is subject to the penalty imposed under Minnesota Statutes, section 289A.60.
223.1EFFECTIVE DATE.This section is effective the day following final enactment.
223.2 Sec. 37. Minnesota Statutes 2006, section 297A.90, subdivision 2, is amended to read:
223.3 Subd. 2. Payment of tax. (a) Persons who are registered as retailers may make
223.4purchases in this state or import property into this state without payment of the sales or use
223.5taxes imposed by this chapter at the time of purchase or importation, if the purchases or
223.6importations come within the provisions of this section and are made in strict compliance
223.7with the rules of the commissioner.
223.8 (b) A person described in subdivision 1 may elect to pay directly to the commissioner
223.9any sales or use tax that may be due under this chapter for the acquisition of mobile
223.10transportation equipment and parts and accessories attached or to be attached to such
223.11equipment registered under section
223.12 (c) The total cost of such equipment and parts and accessories attached or to be
223.13attached to such equipment must be multiplied by a fraction. The numerator of the fraction
223.14is the Minnesota mileage as reported on the current pro rata application provided for in
223.15section
223.16current pro rata registration application. The amount so determined must be multiplied by
223.17the tax rate to obtain the tax due.
223.18In computing the tax under this section "sales price" does not include the amount of any
223.19
223.20
223.21consumer that are separately stated on the invoice, bill of sale, or similar document given
223.22to the purchaser.
223.23 (d) A retailer covered by this section shall make a return and remit to the
223.24commissioner the tax due for the preceding calendar month in accordance with sections
223.26EFFECTIVE DATE.This section is effective the day following final enactment.
223.27 Sec. 38. Minnesota Statutes 2006, section 297B.035, subdivision 1, is amended to read:
223.28 Subdivision 1. Ordinary course of business. Except as provided in this section,
223.29motor vehicles purchased solely for resale in the ordinary course of business by any motor
223.30vehicle dealer, as defined in section
223.32section
223.33EFFECTIVE DATE.This section is effective the day following final enactment.
224.1 Sec. 39. Minnesota Statutes 2006, section 469.1734, subdivision 6, is amended to read:
224.2 Subd. 6. Sales tax exemption; equipment; construction materials. (a) The gross
224.3receipts from the sale of machinery and equipment and repair parts are exempt from
224.4taxation under chapter 297A, if the machinery and equipment:
224.5 (1) are used in connection with a trade or business;
224.6 (2) are placed in service in a city that is authorized to designate a zone under section
224.8 (3) have a useful life of 12 months or more.
224.9 (b) The gross receipts from the sale of construction materials are exempt, if they are
224.10used to construct:
224.11 (1) a facility for use in a trade or business located in a city that is authorized to
224.12designate a zone under section
224.13zone; or
224.14 (2) housing that is located in a zone.
224.15The exemptions under this paragraph apply regardless of whether the purchase is made by
224.16the owner, the user, or a contractor.
224.17 (c) A purchaser may claim an exemption under this subdivision for tax on the
224.18purchases up to, but not exceeding:
224.19 (1) the amount of the tax credit certificates received from the city, less
224.20 (2) any tax credit certificates used under the provisions of subdivisions 4 and 5, and
224.21section
224.22 (d) The tax on sales of items exempted under this subdivision shall be imposed and
224.23collected as if the applicable rate under section
224.24purchaser, on forms prescribed by the commissioner, a refund equal to the tax paid shall
224.25be paid to the purchaser. The application must include sufficient information to permit
224.26the commissioner to verify the sales tax paid and the eligibility of the claimant to receive
224.27the credit. No more than two applications for refunds may be filed under this subdivision
224.28in a calendar year. The provisions of section
224.29under this subdivision. There is annually appropriated to the commissioner of revenue
224.30the amount required to make the refunds, which must be deducted from the amount of
224.31the city's allocation under section
224.32limitation under section
224.33 (e) The amount to be refunded shall bear interest at the rate in section
224.34from
225.1EFFECTIVE DATE.This section is effective for refund claims filed on or after
225.2July 1, 2007.
225.3 Sec. 40. FUR TAX PAYMENTS.
225.4 (a) Furriers must file the annual return, required by Minnesota Statutes, section
225.5295.60, subdivision 5, which otherwise would be due March 15, 2008, by September
225.615, 2007.
225.7 (b) If a furrier is required by Minnesota Statutes, section 295.60, subdivision 3, to
225.8make installments of quarterly estimates, then the furrier shall make the last installment by
225.9July 15, 2007.
225.10EFFECTIVE DATE.Effective July 1, 2007, for sales and purchases made prior to
225.11July 1, 2007.
225.12 Sec. 41. REPEALER.
225.13(a) Minnesota Statutes 2006, section 295.60, is repealed.
225.14(b) Minnesota Statutes 2006, section 297A.61, subdivision 20, is repealed.
225.15(c) Minnesota Statutes 2006, section 297A.668, subdivision 6, is repealed.
225.16(d) Minnesota Statutes 2006, section 297A.67, subdivision 22, is repealed.
225.17EFFECTIVE DATE.Paragraph (a) is effective for sales and purchases made on
225.18or after July 1, 2007; paragraph (b) is effective for sales and purchases made on or after
225.19January 1, 2008; and paragraphs (c) and (d) are effective the day following final enactment.
225.22 Section 1. Minnesota Statutes 2006, section 270.071, subdivision 7, is amended to read:
225.23 Subd. 7. Flight property. "Flight property" means all aircraft and flight equipment
225.24used in connection therewith, including spare flight equipment. Flight property also
225.25includes computers and computer software used in operating, controlling, or regulating
225.26aircraft and flight equipment.
225.27EFFECTIVE DATE.This section is effective the day following final enactment.
225.28 Sec. 2. Minnesota Statutes 2006, section 270.072, subdivision 2, is amended to read:
225.29 Subd. 2. Assessment of flight property.
225.30by, or is leased, loaned, or otherwise made available to an airline
226.1operating in Minnesota shall be assessed and appraised annually by the commissioner
226.2with reference to its value on January 2 of the assessment year in the manner prescribed
226.3by sections
226.4and used on intermittent or irregularly timed flights shall be excluded from the provisions
226.5of sections
226.6EFFECTIVE DATE.This section is effective the day following final enactment.
226.7 Sec. 3. Minnesota Statutes 2006, section 270.072, subdivision 3, is amended to read:
226.8 Subd. 3. Report by airline company. Each year, on or before July 1, every airline
226.9company engaged in air commerce in this state shall file with the commissioner
226.10
226.11the information prescribed by the commissioner to enable the commissioner to make the
226.12assessment required in sections
226.13that the airline company or person should be excluded from filing because its activities do
226.14not constitute air commerce as defined herein.
226.15
226.16
226.17
226.18
226.19EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
226.20payable in 2008 and thereafter.
226.21 Sec. 4. Minnesota Statutes 2006, section 270.072, subdivision 6, is amended to read:
226.22 Subd. 6. Airflight property tax lien. The tax imposed under sections
226.24in whose name the property is assessed.
226.25
226.26attaches on January 2 of each year for the taxes payable in the following year.
226.27EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
226.28payable in 2008 and thereafter.
226.29 Sec. 5. [270.0725] PENALTIES.
226.30 Subdivision 1. Penalty for late filing. If an airline company does not file its annual
226.31report by the date designated in section 270.072, subdivision 3, a penalty of five percent
226.32of the tax being assessed is imposed on that company. On August 1, and on the first day
227.1of each succeeding calendar month, an additional five percent penalty is imposed if the
227.2report has not yet been filed. For each airline company, the penalties imposed under
227.3this subdivision for any one year are limited to the lesser of $25,000 or 25 percent of
227.4the assessed tax.
227.5 Subd. 2. Penalty for repeated instances of late filing. If there is a pattern of
227.6repeated failures by an airline company to timely file the report required by this section, a
227.7penalty of ten percent of the tax being assessed is imposed on that company.
227.8 Subd. 3. Penalty for frivolous report. If an airline company files a frivolous annual
227.9report, a penalty of 25 percent of the tax being assessed is imposed on that company. A
227.10frivolous report under this section is a report that would fulfill the criteria for a frivolous
227.11return under section 289A.60, subdivision 7, notwithstanding the restriction in section
227.12289A.01. In a proceeding involving the issue of whether or not an airline company is
227.13liable for this penalty, the burden of proof is on the commissioner.
227.14 Subd. 4. Penalty for fraudulent report. If an airline company files a false or
227.15fraudulent annual report with intent to evade or defeat the tax, a penalty equal to 50
227.16percent of the tax being assessed is imposed on that company.
227.17 Subd. 5. Penalties added to tax. Penalties imposed under this section are added to
227.18the tax and collected as a part of it.
227.19EFFECTIVE DATE.This section is effective for annual reports due on or after
227.20July 1, 2007.
227.21 Sec. 6. [270.0735] EXAMINATION; INVESTIGATIONS; SUBPOENAS.
227.22 In addition to the powers granted to the commissioner in this chapter, and in order to
227.23determine net tax capacities and issue notices of net tax capacity and tax under sections
227.24270.071 to 270.079, the commissioner has the powers contained in sections 270C.31 and
227.25270C.32, for which purpose the word "taxpayer" as defined in section 270C.01 includes
227.26an airline company.
227.27EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
227.28payable in 2008 and thereafter.
227.29 Sec. 7. Minnesota Statutes 2006, section 270.074, subdivision 3, is amended to read:
227.30 Subd. 3. Tax capacity. (a) The net tax capacity of the flight property of every airline
227.31company
227.32state under subdivision 1, except that the net tax capacity of quiet aircraft
227.33
228.1
228.2the Federal Aeronautics Administration. If, in the opinion of the commissioner, other
228.3aircraft may be qualified as quiet aircraft, the commissioner may adopt rules providing
228.4additional qualifications.
228.5 (b) The flight property of an airline company that owns or leases aircraft the majority
228.6of which are turboprops, and which provides, during six months or more of the year that
228.7taxes are levied, scheduled passenger service to three or more airports inside or outside of
228.8this state that serve small or medium sized communities, shall be assessed at 50 percent of
228.9the assessment percentage otherwise set by paragraph (a).
228.10EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
228.11payable in 2008 and thereafter.
228.12 Sec. 8. Minnesota Statutes 2006, section 270.076, subdivision 1, is amended to read:
228.13 Subdivision 1. Appeal.
228.14
228.15
228.16under section 270.075, subdivision 2, are orders of the commissioner. These orders must
228.17be issued in conformance with section 270C.33, subdivisions 1 and 2, but are not subject
228.18to administrative review under section 270C.35. These orders may be appealed to the Tax
228.19Court in the manner provided
228.20the commissioner that do not deal with valuation, assessment, or taxation for property
228.21tax purposes, and the provisions of section 273.125, subdivisions 4 and 5, and chapter
228.22278 do not apply.
228.23EFFECTIVE DATE.This section is effective beginning January 2, 2007, for taxes
228.24payable in 2008 and thereafter.
228.25 Sec. 9. Minnesota Statutes 2006, section 270.41, subdivision 1, is amended to read:
228.26 Subdivision 1. Creation; purpose; powers. A Board of Assessors is created.
228.27The board shall
228.28in assessment practices, and establish criteria for determining assessor's qualifications.
228.29The board shall also consider other matters relating to assessment administration brought
228.30before it by the commissioner of revenue. The board may grant, renew, suspend, or revoke
228.31an assessor's license.
228.32EFFECTIVE DATE.This section is effective the day following final enactment.
229.1 Sec. 10. Minnesota Statutes 2006, section 270.41, is amended by adding a subdivision
229.2to read:
229.3 Subd. 1a. Definition. For purposes of sections 270.41 to 270.50, "board" means
229.4the Board of Assessors.
229.5EFFECTIVE DATE.This section is effective the day following final enactment.
229.6 Sec. 11. Minnesota Statutes 2006, section 270.41, subdivision 2, is amended to read:
229.7 Subd. 2. Members. The board shall consist of nine members, who shall be
229.8appointed by the commissioner of revenue, in the manner provided herein. The members
229.9shall include:
229.10 (1) two from the Department of Revenue;
229.11 (2) two county assessors;
229.12 (3) two assessors who are not county assessors, one of whom shall be a township
229.13assessor;
229.14 (4) one from the private appraisal field holding a professional appraisal designation;
229.15and
229.16 (5) two public members as defined by section
229.17 The appointment provided in clauses (2) and (3) may be made from
229.18of not less than three names
229.19Minnesota Association of Assessing Officers or its successor organization containing
229.20recommendations for the appointment of appointees described in
229.21
229.22
229.23list must be submitted 30 days before the commencement of the term. In the case of a
229.24vacancy, a new list shall be furnished to the commissioner
229.25immediately. A member of the board who is no longer engaged in the capacity
229.26
229.27 The board shall annually elect a chair and a
229.28EFFECTIVE DATE.This section is effective the day following final enactment.
229.29 Sec. 12. Minnesota Statutes 2006, section 270.41, subdivision 3, is amended to read:
229.30 Subd. 3. Licenses; refusal or revocation. The board may refuse to grant or renew,
229.31or may suspend or revoke, a license of an applicant or licensee for any of the following
229.32causes or acts:
229.33 (1) failure to complete required training;
230.1 (2) inefficiency or neglect of duty;
230.2 (3)
230.3
230.4
230.5
230.6
230.7
230.8Minnesota Assessors adopted by the board pursuant to Laws 2005, First Special Session
230.9chapter 3, article 1, section 38;
230.10 (4) conviction of a crime involving moral turpitude; or
230.11 (5) any other cause or act that in the board's opinion warrants a refusal to issue
230.12or suspension or revocation of a license.
230.13EFFECTIVE DATE.This section is effective the day following final enactment.
230.14 Sec. 13. Minnesota Statutes 2006, section 270.41, subdivision 5, is amended to read:
230.15 Subd. 5. Prohibited activity.
230.16
230.17or contracting with an assessment jurisdiction for the purpose of valuing or classifying
230.18property for property tax purposes is prohibited from making appraisals or analyses,
230.19accepting an appraisal assignment, or preparing an appraisal report as defined in section
230.21individual is employed or performing the duties of the assessor under contract. Violation
230.22of this prohibition shall result in immediate revocation of the individual's license to assess
230.23property for property tax purposes. This prohibition must not be construed to prohibit an
230.24individual from carrying out any duties required for the proper assessment of property
230.25for property tax purposes. If a formal resolution has been adopted by the governing body
230.26of a governmental unit, which specifies the purposes for which such work will be done,
230.27this prohibition does not apply to appraisal activities undertaken on behalf of and at the
230.28request of the governmental unit that has employed or contracted with the individual.
230.29The resolution may only allow appraisal activities which are related to condemnations,
230.30right-of-way acquisitions, or special assessments.
230.31EFFECTIVE DATE.This section is effective the day following final enactment.
230.32 Sec. 14. Minnesota Statutes 2006, section 270.44, is amended to read:
230.33270.44 CHARGES FOR COURSES, EXAMINATIONS OR MATERIALS.
231.1 The board shall charge the following fees:
231.2 (1) $105 for a senior accredited Minnesota assessor license;
231.3 (2) $80 for an accredited Minnesota assessor license;
231.4 (3) $65 for a certified Minnesota assessor specialist license;
231.5 (4) $55 for a certified Minnesota assessor license;
231.6
231.7
231.8
231.9
231.10
231.11
231.12
231.13EFFECTIVE DATE.This section is effective the day following final enactment.
231.14 Sec. 15. Minnesota Statutes 2006, section 270.45, is amended to read:
231.15270.45 DISPOSITION OF FEES.
231.16 All fees so established and collected shall be paid to the commissioner of finance for
231.17deposit in the general fund. The expenses of carrying out the provisions of sections
231.18to
231.19EFFECTIVE DATE.This section is effective the day following final enactment.
231.20 Sec. 16. Minnesota Statutes 2006, section 270.46, is amended to read:
231.21270.46 TRAINING COURSES,
231.22REGULATION.
231.23 The board shall
231.24practices
231.25assessment, and ethics offered by schools, colleges
231.26
231.27
231.28of government, and other entities.
231.29EFFECTIVE DATE.This section is effective the day following final enactment.
231.30 Sec. 17. Minnesota Statutes 2006, section 270.47, is amended to read:
231.31270.47 RULES.
232.1 The board shall
232.2
232.3in the state. Separate criteria may be established depending upon the responsibilities of the
232.4assessor.
232.5
232.6
232.7
232.8
232.9suspending or revoking a license is subject to review in accordance with chapter 14.
232.10EFFECTIVE DATE.This section is effective the day following final enactment.
232.11 Sec. 18. Minnesota Statutes 2006, section 270.48, is amended to read:
232.12270.48 LICENSURE OF QUALIFIED PERSONS.
232.13 The board
232.14assessing official. Different levels of licensure may be established as to classes of property
232.15which assessors may be certified to assess at the discretion of the board. Every person,
232.16except a local or county assessor, regularly employed by the assessor to assist in making
232.17decisions regarding valuing and classifying property for assessment purposes
232.18
232.19shall be required for local and county assessors as
232.20
232.21EFFECTIVE DATE.This section is effective the day following final enactment.
232.22 Sec. 19. Minnesota Statutes 2006, section 270.50, is amended to read:
232.23270.50 EMPLOYMENT OF LICENSED ASSESSORS.
232.24 No assessor shall be employed who has not been licensed as qualified by the board,
232.25provided the time to comply may be extended after application to the board upon a
232.26showing that licensed assessors are not available for employment. The board may license
232.27
232.28necessary qualifications for performing the functions of the office by the passage of an
232.29approved examination or may waive the examination if such person has demonstrated
232.30competence in performing the functions of the office for a period of time the board deems
232.31reasonable.
232.32
232.33
233.1
233.2
233.3
233.4
233.5
233.6
233.7
233.8EFFECTIVE DATE.This section is effective the day following final enactment.
233.9 Sec. 20. Minnesota Statutes 2006, section 270C.306, is amended to read:
233.10270C.306 COMMISSIONER MAY REQUIRE SOCIAL SECURITY OR
233.11IDENTIFYING NUMBERS ON FORMS.
233.12 Notwithstanding the provisions of any other law except section 272.115, the
233.13commissioner may require that a form required to be filed with the commissioner include
233.14the Social Security number, federal employer identification number, or Minnesota
233.15taxpayer identification number of the taxpayer or applicant.
233.16EFFECTIVE DATE.This section is effective July 1, 2007.
233.17 Sec. 21. Minnesota Statutes 2006, section 270C.34, subdivision 1, is amended to read:
233.18 Subdivision 1. Authority. (a) The commissioner may abate, reduce, or refund any
233.19penalty or interest that is imposed by a law administered by the commissioner as a result
233.20of the late payment of tax or late filing of a return, if the failure to timely pay the tax or
233.21failure to timely file the return is due to reasonable cause, or if the taxpayer is located
233.22in a presidentially declared disaster area.
233.23 (b) The commissioner shall abate any part of a penalty or additional tax charge
233.24under section
233.25advice given to the taxpayer in writing by an employee of the department acting in
233.26an official capacity, if the advice:
233.27 (1) was reasonably relied on and was in response to a specific written request of the
233.28taxpayer; and
233.29 (2) was not the result of failure by the taxpayer to provide adequate or accurate
233.30information.
233.31 (c) The commissioner may abate a penalty imposed under section 270.0725,
233.32subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline
233.33company is located in a presidentially declared disaster area.
234.1EFFECTIVE DATE.This section is effective July 1, 2007.
234.2 Sec. 22. Minnesota Statutes 2006, section 272.02, subdivision 64, is amended to read:
234.3 Subd. 64. Job opportunity building zone property. (a) Improvements to real
234.4property, and personal property, classified under section
234.5located within a job opportunity building zone, designated under section
234.6exempt from ad valorem taxes levied under chapter 275.
234.7 (b) Improvements to real property, and tangible personal property, of an agricultural
234.8production facility located within an agricultural processing facility zone, designated
234.9under section
234.10 (c) For property to qualify for exemption under paragraph (a), the occupant must be
234.11a qualified business, as defined in section
234.12 (d) The exemption applies beginning for the first assessment year after designation
234.13of the job opportunity building zone by the commissioner of employment and economic
234.14development. The exemption applies to each assessment year that begins during the
234.15duration of the job opportunity building zone. To be exempt, the property must be
234.16occupied by July 1 of the assessment year by a qualified business that has signed the
234.17business subsidy agreement and relocation agreement, if required, by July 1 of the
234.18assessment year. This exemption does not apply to:
234.19 (1) the levy under section
234.20pay general obligation bonds; or
234.21 (2) a levy under section
234.22designation of the job opportunity building zone.
234.23 (e) Except for property of a business that was exempt under this subdivision for
234.24taxes payable in 2007, a business must notify the county assessor in writing of eligibility
234.25under this subdivision by July 1 in order to begin receiving the exemption under this
234.26subdivision for taxes payable in the following year. The business need not annually notify
234.27the county assessor of its continued exemption under this subdivision, but must notify the
234.28county assessor immediately if the exemption no longer applies.
234.29EFFECTIVE DATE.This section is effective the day following final enactment.
234.30 Sec. 23. Minnesota Statutes 2006, section 272.115, subdivision 1, is amended to read:
234.31 Subdivision 1. Requirement. Except as otherwise provided in subdivision 5,
234.32whenever any real estate is sold for a consideration in excess of $1,000, whether by
234.33warranty deed, quitclaim deed, contract for deed or any other method of sale, the grantor,
234.34grantee or the legal agent of either shall file a certificate of value with the county auditor
235.1in the county in which the property is located when the deed or other document is
235.2presented for recording. Contract for deeds are subject to recording under section
235.3subdivision 1
235.4actual consideration thereof, paid or to be paid, including the amount of any lien or liens
235.5assumed. The items and value of personal property transferred with the real property
235.6must be listed and deducted from the sale price. The certificate of value shall include
235.7the classification to which the property belongs for the purpose of determining the fair
235.8market value of the property. The certificate shall include financing terms and conditions
235.9of the sale which are necessary to determine the actual, present value of the sale price
235.10for purposes of the sales ratio study. The commissioner of revenue shall promulgate
235.11administrative rules specifying the financing terms and conditions which must be included
235.12on the certificate.
235.13
235.14employer identification number of the grantors and grantees. However, a married person
235.15who is not an owner of record and who is signing a conveyance instrument along with
235.16the person's spouse solely to release and convey their marital interest, if any, in the real
235.17property being conveyed is not a grantor for the purpose of the preceding sentence. A
235.18statement in the deed that is substantially in the following form is sufficient to allow the
235.19county auditor to accept a certificate for filing without the Social Security number of the
235.20named spouse: " (Name) claims no ownership interest in the real property being conveyed
235.21and is executing this instrument solely to release and convey a marital interest, if any, in
235.22that real property." The identification numbers of the grantors and grantees are private
235.23data on individuals or nonpublic data as defined in section
235.24but, notwithstanding that section, the private or nonpublic data may be disclosed to the
235.25commissioner of revenue for purposes of tax administration. The information required to
235.26be shown on the certificate of value is limited to the information required as of the date of
235.27the acknowledgment on the deed or other document to be recorded.
235.28EFFECTIVE DATE.This section is effective for certificates of value filed on or
235.29after July 1, 2007.
235.30 Sec. 24. Minnesota Statutes 2006, section 273.05, is amended by adding a subdivision
235.31to read:
235.32 Subd. 3. Cities and townships; employment of licensed assessor. In the case
235.33of cities or townships, except cities or towns located in Ramsey County or which have
235.34elected a county assessor system in accordance with section 273.055, the commissioner
236.1shall allow the city or town 90 days from the date of incorporation or organization to
236.2employ a licensed assessor.
236.3EFFECTIVE DATE.This section is effective the day following final enactment.
236.4 Sec. 25. [273.0535] COUNTY OR LOCAL ASSESSING DISTRICT TO ASSUME
236.5COST OF TRAINING.
236.6 The county or local assessing district must assume the cost of training its assessors
236.7in courses approved by the board for the purpose of obtaining the assessor's license to
236.8the extent of course fees, mileage, meals, and lodging, and recognized travel expenses
236.9not paid by the state.
236.10EFFECTIVE DATE.This section is effective the day following final enactment.
236.11 Sec. 26. Minnesota Statutes 2006, section 273.111, subdivision 3, is amended to read:
236.12 Subd. 3. Requirements. (a) Real estate consisting of ten acres or more or a nursery
236.13or greenhouse, and qualifying for classification as class 1b, 2a, or 2b under section
236.15devoted to agricultural use, and meets the qualifications in subdivision 6, and either:
236.16 (1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
236.17owner or is real estate which is farmed with the real estate which contains the homestead
236.18property; or
236.19 (2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
236.20or any combination thereof, for a period of at least seven years prior to application for
236.21benefits under the provisions of this section, or is real estate which is farmed with the
236.22real estate which qualifies under this clause and is within four townships or cities or
236.23combination thereof from the qualifying real estate; or
236.24 (3) is the homestead of a shareholder in a family farm corporation as defined in
236.25section
236.26name of the family farm corporation; or
236.27 (4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
236.28partnership, or corporation which also owns the nursery or greenhouse operations on
236.29the parcel or parcels.
236.30 (b) Valuation of real estate under this section is limited to parcels the ownership of
236.31which is in noncorporate entities except for:
236.32 (1) family farm corporations organized pursuant to section
237.1 (2) corporations that derive 80 percent or more of their gross receipts from the
237.2wholesale or retail sale of horticultural or nursery stock.
237.3
237.4
237.5
237.6
237.7
237.8
237.9 (c) Land that previously qualified for tax deferment under this section and no longer
237.10qualifies because it is not primarily used for agricultural purposes but would otherwise
237.11qualify under subdivisions 3 and 6 for a period of at least three years will not be required
237.12to make payment of the previously deferred taxes, notwithstanding the provisions of
237.13subdivision 9. Sale of the land prior to the expiration of the three-year period requires
237.14payment of deferred taxes as follows: sale in the year the land no longer qualifies requires
237.15payment of the current year's deferred taxes plus payment of deferred taxes for the two
237.16prior years; sale during the second year the land no longer qualifies requires payment of
237.17the current year's deferred taxes plus payment of the deferred taxes for the prior year; and
237.18sale during the third year the land no longer qualifies requires payment of the current
237.19year's deferred taxes. Deferred taxes shall be paid even if the land qualifies pursuant to
237.20subdivision 11a. When such property is sold or no longer qualifies under this paragraph, or
237.21at the end of the three-year period, whichever comes first, all deferred special assessments
237.22plus interest are payable in equal installments spread over the time remaining until the last
237.23maturity date of the bonds issued to finance the improvement for which the assessments
237.24were levied. If the bonds have matured, the deferred special assessments plus interest
237.25are payable within 90 days. The provisions of section
237.26to the collection of these installments. Penalties are not imposed on any such special
237.27assessments if timely paid.
237.28EFFECTIVE DATE.This section is effective the day following final enactment.
237.29 Sec. 27. Minnesota Statutes 2006, section 273.117, is amended to read:
237.30273.117 CONSERVATION PROPERTY TAX VALUATION.
237.31 The value of real property which is subject to a conservation restriction or easement
237.32
237.33 (a) The restriction or easement is for a conservation purpose as defined in section
238.1 (b) The property is being used in accordance with the terms of the conservation
238.2restriction or easement.
238.3EFFECTIVE DATE.This section is effective for taxes levied in 2007, payable
238.4in 2008, and thereafter.
238.5 Sec. 28. Minnesota Statutes 2006, section 273.121, is amended to read:
238.6273.121 VALUATION OF REAL PROPERTY, NOTICE.
238.7 Any county assessor or city assessor having the powers of a county assessor, valuing
238.8or classifying taxable real property shall in each year notify those persons whose property
238.9is to be included on the assessment roll that year if the person's address is known to the
238.10assessor, otherwise the occupant of the property. The notice shall be in writing and shall be
238.11sent by ordinary mail at least ten days before the meeting of the local board of appeal and
238.12equalization under section
238.13subdivision 1c
238.14the notice in electronic form or by electronic mail instead of on paper or by ordinary mail.
238.15It shall contain: (1) the market value for the current and prior assessment, (2) the limited
238.16market value under section
238.17(3) the qualifying amount of any improvements under section
238.18for the current assessment, (4) the market value subject to taxation after subtracting the
238.19amount of any qualifying improvements for the current assessment, (5) the classification
238.20of the property for the current and prior assessment, (6) a note that if the property is
238.21homestead and at least 45 years old, improvements made to the property may be eligible
238.22for a valuation exclusion under section
238.23address, and (8) the dates, places, and times set for the meetings of the local board of
238.24appeal and equalization, the review process established under section
238.251c
238.26specify the form of the notice. The assessor shall attach to the assessment roll a statement
238.27that the notices required by this section have been mailed. Any assessor who is not
238.28provided sufficient funds from the assessor's governing body to provide such notices,
238.29may make application to the commissioner of revenue to finance such notices. The
238.30commissioner of revenue shall conduct an investigation and, if satisfied that the assessor
238.31does not have the necessary funds, issue a certification to the commissioner of finance
238.32of the amount necessary to provide such notices. The commissioner of finance shall
238.33issue a warrant for such amount and shall deduct such amount from any state payment
238.34to such county or municipality. The necessary funds to make such payments are hereby
239.1appropriated. Failure to receive the notice shall in no way affect the validity of the
239.2assessment, the resulting tax, the procedures of any board of review or equalization, or
239.3the enforcement of delinquent taxes by statutory means.
239.4EFFECTIVE DATE.This section is effective for notices required in 2008 and
239.5thereafter.
239.6 Sec. 29. Minnesota Statutes 2006, section 273.123, subdivision 2, is amended to read:
239.7 Subd. 2. Reassessment of homestead property. The county assessor shall reassess
239.8all homestead property located within a disaster or emergency area which is physically
239.9damaged by the disaster or emergency and shall adjust the valuation for taxes payable the
239.10following year to reflect the loss in market value caused by the damage as follows: Subtract
239.11the market value of the property as reassessed from the market value of the property as
239.12assessed under section 273.01 for
239.13occurred; multiply the remainder by a fraction, the numerator of which is the number of
239.14full months remaining in the year on the date the disaster or emergency occurred, and the
239.15denominator of which is 12; subtract the product of the calculation from the market value
239.16of the property as assessed for
239.17occurred; the remainder is the estimated market value to be used for taxes payable the
239.18following year. The assessor shall report to the county auditor the net tax capacity based
239.19on the assessment
239.20and the net tax capacity based on the reassessment made pursuant to this subdivision.
239.21EFFECTIVE DATE.This section is effective the day following final enactment.
239.22 Sec. 30. Minnesota Statutes 2006, section 273.123, subdivision 3, is amended to read:
239.23 Subd. 3. Computation of local tax rates.
239.24be computed by the county auditor
239.25reported by the assessor for the assessment
239.26disaster or emergency occurred, and as returned by the local, county, and state boards of
239.27review and equalization and the commissioner of revenue.
239.28EFFECTIVE DATE.This section is effective the day following final enactment.
239.29 Sec. 31. Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:
239.30 Subd. 13. Homestead application. (a) A person who meets the homestead
239.31requirements under subdivision 1 must file a homestead application with the county
239.32assessor to initially obtain homestead classification.
240.1 (b)
240.2
240.3
240.4uniform homestead application shall be prescribed by the commissioner of revenue.
240.5
240.6
240.7taxpayer that this application must be signed by all owners who occupy the property or
240.8by the qualifying relative and returned to the county assessor in order for the property to
240.9
240.10
240.11
240.12 (c) Every property owner applying for homestead classification must furnish to the
240.13county assessor the Social Security number of each occupant who is listed as an owner
240.14of the property on the deed of record, the name and address of each owner who does not
240.15occupy the property, and the name and Social Security number of each owner's spouse who
240.16occupies the property. The application must be signed by each owner who occupies the
240.17property and by each owner's spouse who occupies the property, or, in the case of property
240.18that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.
240.19 If a property owner occupies a homestead, the property owner's spouse may not
240.20claim another property as a homestead unless the property owner and the property owner's
240.21spouse file with the assessor an affidavit or other proof required by the assessor stating that
240.22the property qualifies as a homestead under subdivision 1, paragraph (e).
240.23 Owners or spouses occupying residences owned by their spouses and previously
240.24occupied with the other spouse, either of whom fail to include the other spouse's name
240.25and Social Security number on the homestead application or provide the affidavits or
240.26other proof requested, will be deemed to have elected to receive only partial homestead
240.27treatment of their residence. The remainder of the residence will be classified as
240.28nonhomestead residential. When an owner or spouse's name and Social Security number
240.29appear on homestead applications for two separate residences and only one application is
240.30signed, the owner or spouse will be deemed to have elected to homestead the residence for
240.31which the application was signed.
240.32 The Social Security numbers or affidavits or other proofs of the property owners
240.33and spouses are private data on individuals as defined by section
240.34but, notwithstanding that section, the private data may be disclosed to the commissioner
240.35of revenue, or, for purposes of proceeding under the Revenue Recapture Act to recover
240.36personal property taxes owing, to the county treasurer.
241.1 (d) If residential real estate is occupied and used for purposes of a homestead by a
241.2relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
241.3order for the property to receive homestead status, a homestead application must be filed
241.4with the assessor. The Social Security number of each relative and spouse of a relative
241.5occupying the property
241.6
241.7subdivision. If a different relative of the owner subsequently occupies the property, the
241.8owner of the property must notify the assessor within 30 days of the change in occupancy.
241.9The Social Security number of a relative or relative's spouse occupying the property
241.10is private data on individuals as defined by section
241.11disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
241.12Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.
241.13 (e) The homestead application shall also notify the property owners that the
241.14application filed under this section will not be mailed annually and that if the property
241.15is granted homestead status for
241.16that same property shall remain classified as homestead until the property is sold or
241.17transferred to another person, or the owners, the spouse of the owner, or the relatives no
241.18longer use the property as their homestead. Upon the sale or transfer of the homestead
241.19property, a certificate of value must be timely filed with the county auditor as provided
241.20under section
241.21been sold, transferred, or that the owner, the spouse of the owner, or the relative is no
241.22longer occupying the property as a homestead, shall result in the penalty provided under
241.23this subdivision and the property will lose its current homestead status.
241.24 (f) If the homestead application is not returned within 30 days, the county will send a
241.25second application to the present owners of record. The notice of proposed property taxes
241.26prepared under section
241.27
241.28not been filed with the county by December 15, the assessor shall classify the property
241.29as nonhomestead for the current assessment year for taxes payable in the following year,
241.30provided that the owner may be entitled to receive the homestead classification by proper
241.31application under section
241.32 (g) At the request of the commissioner, each county must give the commissioner a
241.33list that includes the name and Social Security number of each occupant of homestead
241.34property who is the property owner
241.35
241.36
242.1information provided on the lists as appropriate under the law, including for the detection
242.2of improper claims by owners, or relatives of owners, under chapter 290A.
242.3 (h) If the commissioner finds that a property owner may be claiming a fraudulent
242.4homestead, the commissioner shall notify the appropriate counties. Within 90 days of
242.5the notification, the county assessor shall investigate to determine if the homestead
242.6classification was properly claimed. If the property owner does not qualify, the county
242.7assessor shall notify the county auditor who will determine the amount of homestead
242.8benefits that had been improperly allowed. For the purpose of this section, "homestead
242.9benefits" means the tax reduction resulting from the classification as a homestead under
242.10section
242.11homestead and agricultural homestead credits under section
242.12supplemental homestead credit under section
242.13 The county auditor shall send a notice to the person who owned the affected property
242.14at the time the homestead application related to the improper homestead was filed,
242.15demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
242.16of the homestead benefits. The person notified may appeal the county's determination
242.17by serving copies of a petition for review with county officials as provided in section
242.19Court within 60 days of the date of the notice from the county. Procedurally, the appeal
242.20is governed by the provisions in chapter 271 which apply to the appeal of a property tax
242.21assessment or levy, but without requiring any prepayment of the amount in controversy. If
242.22the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
242.23has been filed, the county auditor shall certify the amount of taxes and penalty to the county
242.24treasurer. The county treasurer will add interest to the unpaid homestead benefits and
242.25penalty amounts at the rate provided in section
242.26delinquent in the calendar year during which the amount remains unpaid. Interest may be
242.27assessed for the period beginning 60 days after demand for payment was made.
242.28 If the person notified is the current owner of the property, the treasurer may add the
242.29total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
242.30otherwise payable on the property by including the amounts on the property tax statements
242.31under section
242.32valorem taxes shall include interest accrued through December 31 of the year preceding
242.33the taxes payable year for which the amounts are first added. These amounts, when added
242.34to the property tax statement, become subject to all the laws for the enforcement of real or
242.35personal property taxes for that year, and for any subsequent year.
243.1 If the person notified is not the current owner of the property, the treasurer may
243.2collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
243.3the powers granted in sections
243.4of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
243.5tax obligations of the person who owned the property at the time the application related
243.6to the improperly allowed homestead was filed. The treasurer may relieve a prior owner
243.7of personal liability for the homestead benefits, penalty, interest, and costs, and instead
243.8extend those amounts on the tax lists against the property as provided in this paragraph
243.9to the extent that the current owner agrees in writing. On all demands, billings, property
243.10tax statements, and related correspondence, the county must list and state separately the
243.11amounts of homestead benefits, penalty, interest and costs being demanded, billed or
243.12assessed.
243.13 (i) Any amount of homestead benefits recovered by the county from the property
243.14owner shall be distributed to the county, city or town, and school district where the
243.15property is located in the same proportion that each taxing district's levy was to the total
243.16of the three taxing districts' levy for the current year. Any amount recovered attributable
243.17to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
243.18deposited in the taconite property tax relief account. Any amount recovered that is
243.19attributable to supplemental homestead credit is to be transmitted to the commissioner of
243.20revenue for deposit in the general fund of the state treasury. The total amount of penalty
243.21collected must be deposited in the county general fund.
243.22 (j) If a property owner has applied for more than one homestead and the county
243.23assessors cannot determine which property should be classified as homestead, the county
243.24assessors will refer the information to the commissioner. The commissioner shall make
243.25the determination and notify the counties within 60 days.
243.26 (k) In addition to lists of homestead properties, the commissioner may ask the
243.27counties to furnish lists of all properties and the record owners. The Social Security
243.28numbers and federal identification numbers that are maintained by a county or city
243.29assessor for property tax administration purposes, and that may appear on the lists retain
243.30their classification as private or nonpublic data; but may be viewed, accessed, and used by
243.31the county auditor or treasurer of the same county for the limited purpose of assisting the
243.32commissioner in the preparation of microdata samples under section
243.33 (l) On or before April 30 each year beginning in 2007, each county must provide the
243.34commissioner with the following data for each parcel of homestead property by electronic
243.35means as defined in section
244.1 (i) the property identification number assigned to the parcel for purposes of taxes
244.2payable in the current year;
244.3 (ii) the name and Social Security number of each occupant of homestead property
244.4who is the property owner
244.5
244.6of a qualifying relative;
244.7 (iii) the classification of the property under section
244.8current year and in the prior year;
244.9 (iv) an indication of whether the property was classified as a homestead for taxes
244.10payable in the current year
244.11a relative of the owner or by a spouse of a relative;
244.12 (v) the property taxes payable as defined in section
244.13current year and the prior year;
244.14 (vi) the market value of improvements to the property first assessed for tax purposes
244.15for taxes payable in the current year;
244.16 (vii) the assessor's estimated market value assigned to the property for taxes payable
244.17in the current year and the prior year;
244.18 (viii) the taxable market value assigned to the property for taxes payable in the
244.19current year and the prior year;
244.20 (ix) whether there are delinquent property taxes owing on the homestead;
244.21 (x) the unique taxing district in which the property is located; and
244.22 (xi) such other information as the commissioner decides is necessary.
244.23 The commissioner shall use the information provided on the lists as appropriate
244.24under the law, including for the detection of improper claims by owners, or relatives
244.25of owners, under chapter 290A.
244.26EFFECTIVE DATE.This section is effective the day following final enactment.
244.27 Sec. 32. Minnesota Statutes 2006, section 273.1398, subdivision 4, is amended to read:
244.28 Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
244.29class 4a, class 3a, and class 3b property qualifies for a disparity reduction credit if: (1)
244.30the property is located in a border city that has an enterprise zone designated pursuant
244.31to section
244.32greater than 2,500 and less than 35,000 according to the 1980 decennial census; (3) the
244.33city is adjacent to a city in another state or immediately adjacent to a city adjacent to a city
244.34in another state; and (4) the adjacent city in the other state has a population of greater than
244.355,000 and less than 75,000 according to the 1980 decennial census.
245.1 (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
245.2property to 2.3 percent of the property's market value and (ii) the tax on class 3a and class
245.33b property to 2.3 percent of market value.
245.4 (c) The county auditor shall annually certify the costs of the credits to the
245.5Department of Revenue. The department shall reimburse local governments for the
245.6property taxes foregone as the result of the credits in proportion to their total levies.
245.7EFFECTIVE DATE.This section is effective retroactively for taxes payable in
245.82001 and thereafter.
245.9 Sec. 33. Minnesota Statutes 2006, section 273.33, subdivision 2, is amended to read:
245.10 Subd. 2. Listing and assessment by commissioner. The personal property,
245.11consisting of the pipeline system of mains, pipes, and equipment attached thereto, of
245.12pipeline companies and others engaged in the operations or business of transporting
245.13natural gas, gasoline, crude oil, or other petroleum products by pipelines, shall be listed
245.14with and assessed by the commissioner of revenue and the values provided to the city
245.15or county assessor by order. This subdivision shall not apply to the assessment of
245.16the products transported through the pipelines nor to the lines of local commercial gas
245.17companies engaged primarily in the business of distributing gas to consumers at retail nor
245.18to pipelines used by the owner thereof to supply natural gas or other petroleum products
245.19exclusively for such owner's own consumption and not for resale to others. If more than
245.2085 percent of the natural gas or other petroleum products actually transported over the
245.21pipeline is used for the owner's own consumption and not for resale to others, then this
245.22subdivision shall not apply; provided, however, that in that event, the pipeline shall be
245.23assessed in proportion to the percentage of gas actually transported over such pipeline that
245.24is not used for the owner's own consumption. On or before June 30, the commissioner
245.25shall certify to the auditor of each county, the amount of such personal property assessment
245.26against each company in each district in which such property is located.
245.27EFFECTIVE DATE.This section is effective the day following final enactment.
245.28 Sec. 34. Minnesota Statutes 2006, section 273.37, subdivision 2, is amended to read:
245.29 Subd. 2. Listing and assessment by commissioner. Transmission lines of less
245.30than 69 kv, transmission lines of 69 kv and above located in an unorganized township,
245.31and distribution lines, and equipment attached thereto, having a fixed situs outside the
245.32corporate limits of cities except distribution lines taxed as provided in sections
245.33and
246.1county where situated and the values provided to the city or county assessor by order.
246.2The commissioner shall assess such property at the percentage of market value fixed by
246.3law; and, on or before June 30, shall certify to the auditor of each county in which such
246.4property is located the amount of the assessment made against each company and person
246.5owning such property.
246.6EFFECTIVE DATE.This section is effective the day following final enactment.
246.7 Sec. 35. Minnesota Statutes 2006, section 273.371, subdivision 1, is amended to read:
246.8 Subdivision 1. Report required. Every electric light, power, gas, water, express,
246.9stage, and transportation company and pipeline doing business in Minnesota shall
246.10annually file with the commissioner on or before March 31 a report under oath setting
246.11forth the information prescribed by the commissioner to enable the commissioner to make
246.12valuations, recommended valuations, and equalization required under sections
246.14on March 31, the company or pipeline shall file the information that is available on or
246.15before March 31, and the balance of the information as soon as it becomes available.
246.16EFFECTIVE DATE.This section is effective the day following final enactment.
246.17 Sec. 36. [273.3711] RECOMMENDED AND ORDERED VALUES.
246.18 For purposes of sections 273.33, 273.35, 273.36, 273.37, 273.371, and 273.372,
246.19all values not required to be listed and assessed by the commissioner of revenue are
246.20recommended values.
246.21EFFECTIVE DATE.This section is effective the day following final enactment.
246.22 Sec. 37. Minnesota Statutes 2006, section 274.01, subdivision 1, is amended to read:
246.23 Subdivision 1. Ordinary board; meetings, deadlines, grievances. (a) The town
246.24board of a town, or the council or other governing body of a city, is the board of appeal
246.25and equalization except (1) in cities whose charters provide for a board of equalization or
246.26(2) in any city or town that has transferred its local board of review power and duties to
246.27the county board as provided in subdivision 3. The county assessor shall fix a day and
246.28time when the board or the board of equalization shall meet in the assessment districts
246.29of the county. Notwithstanding any law or city charter to the contrary, a city board of
246.30equalization shall be referred to as a board of appeal and equalization. On or before
246.31February 15 of each year the assessor shall give written notice of the time to the city or
246.32town clerk. Notwithstanding the provisions of any charter to the contrary, the meetings
247.1must be held between April 1 and May 31 each year. The clerk shall give published and
247.2posted notice of the meeting at least ten days before the date of the meeting.
247.3 The board shall meet at the office of the clerk to review the assessment and
247.4classification of property in the town or city. No changes in valuation or classification
247.5which are intended to correct errors in judgment by the county assessor may be made by
247.6the county assessor after the board has adjourned in those cities or towns that hold a
247.7local board of review; however, corrections of errors that are merely clerical in nature or
247.8changes that extend homestead treatment to property are permitted after adjournment until
247.9the tax extension date for that assessment year. The changes must be fully documented and
247.10maintained in the assessor's office and must be available for review by any person. A copy
247.11of the changes made during this period in those cities or towns that hold a local board of
247.12review must be sent to the county board no later than December 31 of the assessment year.
247.13 (b) The board shall determine whether the taxable property in the town or city has
247.14been properly placed on the list and properly valued by the assessor. If real or personal
247.15property has been omitted, the board shall place it on the list with its market value, and
247.16correct the assessment so that each tract or lot of real property, and each article, parcel,
247.17or class of personal property, is entered on the assessment list at its market value. No
247.18assessment of the property of any person may be raised unless the person has been
247.19duly notified of the intent of the board to do so. On application of any person feeling
247.20aggrieved, the board shall review the assessment or classification, or both, and correct
247.21it as appears just. The board may not make an individual market value adjustment or
247.22classification change that would benefit the property if the owner or other person having
247.23control over the property has refused the assessor access to inspect the property and the
247.24interior of any buildings or structures as provided in section
247.25shall not participate in any actions of the board which result in market value adjustments
247.26or classification changes to property owned by the board member, the spouse, parent,
247.27stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew,
247.28or niece of a board member, or property in which a board member has a financial interest.
247.29The relationship may be by blood or marriage.
247.30 (c) A local board may reduce assessments upon petition of the taxpayer but the total
247.31reductions must not reduce the aggregate assessment made by the county assessor by more
247.32than one percent. If the total reductions would lower the aggregate assessments made by
247.33the county assessor by more than one percent, none of the adjustments may be made. The
247.34assessor shall correct any clerical errors or double assessments discovered by the board
247.35without regard to the one percent limitation.
248.1 (d) A local board does not have authority to grant an exemption or to order property
248.2removed from the tax rolls.
248.3 (e) A majority of the members may act at the meeting, and adjourn from day to day
248.4until they finish hearing the cases presented. The assessor shall attend, with the assessment
248.5books and papers, and take part in the proceedings, but must not vote. The county assessor,
248.6or an assistant delegated by the county assessor shall attend the meetings. The board shall
248.7list separately, on a form appended to the assessment book, all omitted property added
248.8to the list by the board and all items of property increased or decreased, with the market
248.9value of each item of property, added or changed by the board, placed opposite the item.
248.10The county assessor shall enter all changes made by the board in the assessment book.
248.11 (f) Except as provided in subdivision 3, if a person fails to appear in person, by
248.12counsel, or by written communication before the board after being duly notified of the
248.13board's intent to raise the assessment of the property, or if a person feeling aggrieved by an
248.14assessment or classification fails to apply for a review of the assessment or classification,
248.15the person may not appear before the county board of appeal and equalization for a review
248.16of the assessment or classification. This paragraph does not apply if an assessment was
248.17made after the local board meeting, as provided in section
248.18establish not having received notice of market value at least five days before the local
248.19board meeting.
248.20 (g) The local board must complete its work and adjourn within 20 days from the
248.21time of convening stated in the notice of the clerk, unless a longer period is approved by
248.22the commissioner of revenue. No action taken after that date is valid. All complaints
248.23about an assessment or classification made after the meeting of the board must be heard
248.24and determined by the county board of equalization. A nonresident may, at any time,
248.25before the meeting of the board file written objections to an assessment or classification
248.26with the county assessor. The objections must be presented to the board at its meeting by
248.27the county assessor for its consideration.
248.28EFFECTIVE DATE.This section is effective the day following final enactment.
248.29 Sec. 38. Minnesota Statutes 2006, section 274.13, subdivision 1, is amended to read:
248.30 Subdivision 1. Members; meetings; rules for equalizing assessments. The county
248.31commissioners, or a majority of them, with the county auditor, or, if the auditor cannot be
248.32present, the deputy county auditor, or, if there is no deputy, the court administrator of the
248.33district court, shall form a board for the equalization of the assessment of the property
248.34of the county, including the property of all cities whose charters provide for a board of
248.35equalization. This board shall be referred to as the county board of appeal and equalization.
249.1The board shall meet annually, on the date specified in section
249.2auditor. Each member shall take an oath to fairly and impartially perform duties as a
249.3member. Members shall not participate in any actions of the board which result in market
249.4value adjustments or classification changes to property owned by the board member, the
249.5spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle,
249.6aunt, nephew, or niece of a board member, or property in which a board member has a
249.7financial interest. The relationship may be by blood or marriage. The board shall examine
249.8and compare the returns of the assessment of property of the towns or districts, and
249.9equalize them so that each tract or lot of real property and each article or class of personal
249.10property is entered on the assessment list at its market value, subject to the following rules:
249.11 (1) The board shall raise the valuation of each tract or lot of real property which
249.12in its opinion is returned below its market value to the sum believed to be its market
249.13value. The board must first give notice of intention to raise the valuation to the person in
249.14whose name it is assessed, if the person is a resident of the county. The notice must fix
249.15a time and place for a hearing.
249.16 (2) The board shall reduce the valuation of each tract or lot which in its opinion is
249.17returned above its market value to the sum believed to be its market value.
249.18 (3) The board shall raise the valuation of each class of personal property which
249.19in its opinion is returned below its market value to the sum believed to be its market
249.20value. It shall raise the aggregate value of the personal property of individuals, firms, or
249.21corporations, when it believes that the aggregate valuation, as returned, is less than the
249.22market value of the taxable personal property possessed by the individuals, firms, or
249.23corporations, to the sum it believes to be the market value. The board must first give notice
249.24to the persons of intention to do so. The notice must set a time and place for a hearing.
249.25 (4) The board shall reduce the valuation of each class of personal property that
249.26is returned above its market value to the sum it believes to be its market value. Upon
249.27complaint of a party aggrieved, the board shall reduce the aggregate valuation of the
249.28individual's personal property, or of any class of personal property for which the individual
249.29is assessed, which in its opinion has been assessed at too large a sum, to the sum it believes
249.30was the market value of the individual's personal property of that class.
249.31 (5) The board must not reduce the aggregate value of all the property of its county, as
249.32submitted to the county board of equalization, with the additions made by the auditor under
249.33this chapter, by more than one percent of its whole valuation. The board may raise the
249.34aggregate valuation of real property, and of each class of personal property, of the county,
249.35or of any town or district of the county, when it believes it is below the market value of the
249.36property, or class of property, to the aggregate amount it believes to be its market value.
250.1 (6) The board shall change the classification of any property which in its opinion
250.2is not properly classified.
250.3 (7) The board does not have the authority to grant an exemption or to order property
250.4removed from the tax rolls.
250.5EFFECTIVE DATE.This section is effective the day following final enactment.
250.6 Sec. 39. [274.135] COUNTY BOARDS; APPEALS AND EQUALIZATION
250.7COURSE AND MEETING REQUIREMENTS.
250.8 Subdivision 1. Handbook for county boards. By no later than January 1, 2009, the
250.9commissioner of revenue must develop a handbook detailing procedures, responsibilities,
250.10and requirements for county boards of appeal and equalization. The handbook must
250.11include, but need not be limited to, the role of the county board in the assessment process,
250.12the legal and policy reasons for fair and impartial appeal and equalization hearings, county
250.13board meeting procedures that foster fair and impartial assessment reviews and other best
250.14practices recommendations, quorum requirements for county boards, and explanations
250.15of alternate methods of appeal.
250.16 Subd. 2. Appeals and equalization course. Beginning in 2009, and each year
250.17thereafter, there must be at least one member at each meeting of a county board of appeal
250.18and equalization who has attended an appeals and equalization course developed or
250.19approved by the commissioner within the last four years, as certified by the commissioner.
250.20The course may be offered in conjunction with a meeting of the Minnesota Association
250.21of Assessment Officers. The course content must include, but need not be limited to, a
250.22review of the handbook developed by the commissioner under subdivision 1.
250.23 Subd. 3. Proof of compliance; transfer of duties. (a) Any county that
250.24conducts county boards of appeal and equalization meetings must provide proof to the
250.25commissioner by December 1, 2009, and each year thereafter, that it is in compliance
250.26with the requirements of subdivision 2. Beginning in 2009, this notice must also verify
250.27that there was a quorum of voting members at each meeting of the board of appeal and
250.28equalization in the current year. A county that does not comply with these requirements
250.29is deemed to have transferred its board of appeal and equalization powers to the special
250.30board of equalization appointed pursuant to section 274.13, subdivision 2, beginning
250.31with the following year's assessment and continuing unless the powers are reinstated
250.32under paragraph (c). A county that does not comply with the requirements of subdivision
250.332 and has not appointed a special board of equalization shall appoint a special board of
250.34equalization before the following year's assessment.
251.1 (b) The county shall notify the taxpayers when the board of appeal and equalization
251.2for a county has been transferred to the special board of equalization under this subdivision
251.3and, prior to the meeting time of the special board of equalization, the county shall make
251.4available to those taxpayers a procedure for a review of the assessments, including, but
251.5not limited to, open book meetings. This alternate review process must take place in
251.6April and May.
251.7 (c) A county board whose powers are transferred to the special board of equalization
251.8under this subdivision may be reinstated by resolution of the county board and upon proof
251.9of compliance with the requirements of subdivision 2. The resolution and proofs must be
251.10provided to the commissioner by December 1 in order to be effective for the following
251.11year's assessment.
251.12EFFECTIVE DATE.This section is effective the day following final enactment.
251.13 Sec. 40. Minnesota Statutes 2006, section 275.065, subdivision 3, is amended to read:
251.14 Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
251.15and the county treasurer shall deliver after November 10 and on or before November 24
251.16each year, by first class mail to each taxpayer at the address listed on the county's current
251.17year's assessment roll, a notice of proposed property taxes. Upon written request by
251.18the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
251.19instead of on paper or by ordinary mail.
251.20 (b) The commissioner of revenue shall prescribe the form of the notice.
251.21 (c) The notice must inform taxpayers that it contains the amount of property taxes
251.22each taxing authority proposes to collect for taxes payable the following year. In the case
251.23of a town, or in the case of the state general tax, the final tax amount will be its proposed
251.24tax. In the case of taxing authorities required to hold a public meeting under subdivision 6,
251.25the notice must clearly state that each taxing authority, including regional library districts
251.26established under section
251.27defined in paragraph (i), but excluding all other special taxing districts and towns, will
251.28hold a public meeting to receive public testimony on the proposed budget and proposed or
251.29final property tax levy, or, in case of a school district, on the current budget and proposed
251.30property tax levy. It must clearly state the time and place of each taxing authority's
251.31meeting, a telephone number for the taxing authority that taxpayers may call if they have
251.32questions related to the notice, and an address where comments will be received by mail.
251.33 (d) The notice must state for each parcel:
251.34 (1) the market value of the property as determined under section
251.35for computing property taxes payable in the following year and for taxes payable in the
252.1current year as each appears in the records of the county assessor on November 1 of the
252.2current year; and, in the case of residential property, whether the property is classified as
252.3homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
252.4which the market values apply and that the values are final values;
252.5 (2) the items listed below, shown separately by county, city or town, and state general
252.6tax, net of the residential and agricultural homestead credit under section
252.7approved school levy, other local school levy, and the sum of the special taxing districts,
252.8and as a total of all taxing authorities:
252.9 (i) the actual tax for taxes payable in the current year; and
252.10 (ii) the proposed tax amount.
252.11 If the county levy under clause (2) includes an amount for a lake improvement
252.12district as defined under sections
252.13purpose must be separately stated from the remaining county levy amount.
252.14 In the case of a town or the state general tax, the final tax shall also be its proposed
252.15tax unless the town changes its levy at a special town meeting under section
252.16school district has certified under section
252.17be held in the school district at the November general election, the county auditor must
252.18note next to the school district's proposed amount that a referendum is pending and that,
252.19if approved by the voters, the tax amount may be higher than shown on the notice. In
252.20the case of the city of Minneapolis, the levy for the Minneapolis Library Board and the
252.21levy for Minneapolis Park and Recreation shall be listed separately from the remaining
252.22amount of the city's levy. In the case of the city of St. Paul, the levy for the St. Paul
252.23Library Agency must be listed separately from the remaining amount of the city's levy.
252.24In the case of Ramsey County, any amount levied under section
252.25separately from the remaining amount of the county's levy. In the case of a parcel where
252.26tax increment or the fiscal disparities areawide tax under chapter 276A or 473F applies,
252.27the proposed tax levy on the captured value or the proposed tax levy on the tax capacity
252.28subject to the areawide tax must each be stated separately and not included in the sum of
252.29the special taxing districts; and
252.30 (3) the increase or decrease between the total taxes payable in the current year and
252.31the total proposed taxes, expressed as a percentage.
252.32 For purposes of this section, the amount of the tax on homesteads qualifying under
252.33the senior citizens' property tax deferral program under chapter 290B is the total amount
252.34of property tax before subtraction of the deferred property tax amount.
252.35 (e) The notice must clearly state that the proposed or final taxes do not include
252.36the following:
253.1 (1) special assessments;
253.2 (2) levies approved by the voters after the date the proposed taxes are certified,
253.3including bond referenda and school district levy referenda;
253.4 (3) a levy limit increase approved by the voters by the first Tuesday after the first
253.5Monday in November of the levy year as provided under section
253.6 (4) amounts necessary to pay cleanup or other costs due to a natural disaster
253.7occurring after the date the proposed taxes are certified;
253.8 (5) amounts necessary to pay tort judgments against the taxing authority that become
253.9final after the date the proposed taxes are certified; and
253.10 (6) the contamination tax imposed on properties which received market value
253.11reductions for contamination.
253.12 (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
253.13the county treasurer to deliver the notice as required in this section does not invalidate the
253.14proposed or final tax levy or the taxes payable pursuant to the tax levy.
253.15 (g) If the notice the taxpayer receives under this section lists the property as
253.16nonhomestead, and satisfactory documentation is provided to the county assessor by the
253.17applicable deadline, and the property qualifies for the homestead classification in that
253.18assessment year, the assessor shall reclassify the property to homestead for taxes payable
253.19in the following year.
253.20 (h) In the case of class 4 residential property used as a residence for lease or rental
253.21periods of 30 days or more, the taxpayer must either:
253.22 (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
253.23renter, or lessee; or
253.24 (2) post a copy of the notice in a conspicuous place on the premises of the property.
253.25 The notice must be mailed or posted by the taxpayer by November 27 or within
253.26three days of receipt of the notice, whichever is later. A taxpayer may notify the county
253.27treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
253.28which the notice must be mailed in order to fulfill the requirements of this paragraph.
253.29 (i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
253.30taxing districts" means the following taxing districts in the seven-county metropolitan area
253.31that levy a property tax for any of the specified purposes listed below:
253.32 (1) Metropolitan Council under section
253.34 (2) Metropolitan Airports Commission under section
253.35and
253.36 (3) Metropolitan Mosquito Control Commission under section
254.1 For purposes of this section, any levies made by the regional rail authorities in the
254.2county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
254.3398A shall be included with the appropriate county's levy and shall be discussed at that
254.4county's public hearing.
254.5 (j) The governing body of a county, city, or school district may, with the consent
254.6of the county board, include supplemental information with the statement of proposed
254.7property taxes about the impact of state aid increases or decreases on property tax
254.8increases or decreases and on the level of services provided in the affected jurisdiction.
254.9This supplemental information may include information for the following year, the current
254.10year, and for as many consecutive preceding years as deemed appropriate by the governing
254.11body of the county, city, or school district. It may include only information regarding:
254.12 (1) the impact of inflation as measured by the implicit price deflator for state and
254.13local government purchases;
254.14 (2) population growth and decline;
254.15 (3) state or federal government action; and
254.16 (4) other financial factors that affect the level of property taxation and local services
254.17that the governing body of the county, city, or school district may deem appropriate to
254.18include.
254.19 The information may be presented using tables, written narrative, and graphic
254.20representations and may contain instruction toward further sources of information or
254.21opportunity for comment.
254.22EFFECTIVE DATE.This section is effective for notices required in 2007 and
254.23thereafter, for taxes payable in 2008 and thereafter.
254.24 Sec. 41. Minnesota Statutes 2006, section 275.065, subdivision 5a, is amended to read:
254.25 Subd. 5a. Public advertisement. (a) A city that has a population of more than
254.262,500, county, a metropolitan special taxing district as defined in subdivision 3, paragraph
254.27(i), a regional library district established under section
254.28advertise in a newspaper a notice of its intent to adopt a budget and property tax levy or,
254.29in the case of a school district, to review its current budget and proposed property taxes
254.30payable in the following year, at a public hearing, if a public hearing is required under
254.31subdivision 6. The notice must be published not less than two business days nor more
254.32than six business days before the hearing.
254.33 The advertisement must be at least one-eighth page in size of a standard-size or a
254.34tabloid-size newspaper. The advertisement must not be placed in the part of the newspaper
254.35where legal notices and classified advertisements appear. The advertisement must be
255.1published in an official newspaper of general circulation in the taxing authority. The
255.2newspaper selected must be one of general interest and readership in the community, and
255.3not one of limited subject matter. The advertisement must appear in a newspaper that is
255.4published at least once per week.
255.5 For purposes of this section, the metropolitan special taxing district's advertisement
255.6must only be published in the Minneapolis Star and Tribune and the Saint Paul Pioneer
255.7Press.
255.8 In addition to other requirements, a county and a city having a population of
255.9more than 2,500 must show in the public advertisement required under this subdivision
255.10the current local tax rate, the proposed local tax rate if no property tax levy increase
255.11is adopted, and the proposed rate if the proposed levy is adopted. For purposes of this
255.12subdivision, "local tax rate" means the city's or county's net tax capacity levy divided by
255.13the city's or county's taxable net tax capacity.
255.14 (b) Subject to the provisions of paragraph (g), the advertisement for school districts,
255.15metropolitan special taxing districts, and regional library districts must be in the following
255.16form, except that the notice for a school district may include references to the current
255.17budget in regard to proposed property taxes.
255.19PROPOSED PROPERTY TAXES
255.21Special Taxing District/Regional
255.22Library District) of .........
255.23The governing body of ........ will soon hold budget hearings and vote on the property
255.24taxes for (metropolitan special taxing district/regional library district services that will be
255.25provided in (year)/school district services that will be provided in (year) and (year)).
255.27All concerned citizens are invited to attend a public hearing and express their opinions
255.28on the proposed (school district/metropolitan special taxing district/regional library
255.29district) budget and property taxes, or in the case of a school district, its current budget
255.30and proposed property taxes, payable in the following year. The hearing will be held on
255.31(Month/Day/Year) at (Time) at (Location, Address)."
255.32 (c) Subject to the provisions of paragraph (g), the advertisement for cities and
255.33counties must be in the following form.
255.35TOTAL BUDGET AND PROPERTY TAXES
256.1The (city/county) governing body or board of commissioners will hold a public hearing to
256.2discuss the budget and to vote on the amount of property taxes to collect for services the
256.3(city/county) will provide in (year).
256.4SPENDING: The total budget amounts below compare (city's/county's) (year) total actual
256.5budget with the amount the (city/county) proposes to spend in (year).
| 256.6 256.7 |
(Year) Total Actual Budget |
Proposed (Year) Budget |
Change from (Year)-(Year) |
||
| 256.8 |
$........... |
$........... |
.....% |
256.10levied in property taxes in (city/county) for (year) with the property taxes the (city/county)
256.11proposes to collect in (year).
| 256.12 256.13 |
(Year) Property Taxes |
Proposed (Year) Property Taxes |
Change from (Year)-(Year) |
||
| 256.14 |
$........... |
$........... |
.....% |
256.16levy increase is adopted, and the proposed local tax rate if the proposed levy is adopted.
| 256.17 256.18 |
(Year) Tax Rate |
(Year) Tax Rate if NO Levy Increase |
(Year) Proposed Tax Rate |
||
| 256.19 |
........... |
........... |
..... |
256.22express your opinions on the budget and the proposed amount of (year) property taxes.
256.23The hearing will be held on:
256.25(Location/Address)
256.26If the discussion of the budget cannot be completed, a time and place for continuing the
256.27discussion will be announced at the hearing. You are also invited to send your written
256.28comments to:
256.30(Location/Address)"
256.31 (d) For purposes of this subdivision, the budget amounts listed on the advertisement
256.32mean:
256.33 (1) for cities, the total government fund expenditures, as defined by the state auditor
256.34under section
257.1specially assessed or charged under chapter 429, 430, 435, or the provisions of any other
257.2law or charter; and
257.3 (2) for counties, the total government fund expenditures, as defined by the state
257.4auditor under section
257.5providers for the human service aids listed below:
257.6 (i) Minnesota family investment program under chapters 256J and 256K;
257.7 (ii) medical assistance under sections
257.8subdivision 1
257.9 (iii) general assistance medical care under section
257.10 (iv) general assistance under section
257.11 (v) emergency assistance under section
257.12 (vi) Minnesota supplemental aid under section
257.13 (vii) preadmission screening under section
257.14under section
257.15 (viii) general assistance medical care claims processing, medical transportation and
257.16related costs under section
257.17 (ix) medical transportation and related costs under section
257.1817 to 18a
257.19 (x) group residential housing under section
257.20programs in clauses (iv) and (vi); or
257.21 (xi) any successor programs to those listed in clauses (i) to (x).
257.22 (e) A city with a population of over 500 but not more than 2,500 that is required to
257.23hold a public hearing under subdivision 6 must advertise by posted notice as defined in
257.24section
257.25paragraph (a). It must be in the form required in paragraph (b).
257.26 (f) For purposes of this subdivision, the population of a city is the most recent
257.27population as determined by the state demographer under section
257.28 (g) The commissioner of revenue
257.29
257.30advertisements required under this subdivision, including such details as font size and
257.31style, and spacing for the required items. The commissioner may prescribe alternate and
257.32additional language for the advertisement for a taxing authority or for groups of taxing
257.33authorities. At least two weeks before November 29 each year, the commissioner shall
257.34provide a copy of the prescribed advertisements to the chairs of the committees of the
257.35house of representatives and the senate with jurisdiction over taxes.
258.1EFFECTIVE DATE.This section is effective for advertisements in 2007 and
258.2thereafter, for proposed taxes payable in 2008 and thereafter.
258.3 Sec. 42. Minnesota Statutes 2006, section 275.067, is amended to read:
258.4275.067 SPECIAL TAXING DISTRICTS; ORGANIZATION DATE;
258.5CERTIFICATION OF LEVY OR SPECIAL ASSESSMENTS.
258.6 Special taxing districts as defined in section
258.7
258.8have not previously certified a levy to the county auditor, are allowed to certify a levy to
258.9the county auditor in
258.10to be payable in the following calendar year to the extent that the special taxing district is
258.11authorized by statute or special act to levy taxes or special assessments, but only if the
258.12county auditor receives written notice from the district on or before July 1 of the current
258.13year that the district may be certifying a levy in the current year, and the notice includes a
258.14complete list or other description of the tax parcels in the district and a map showing the
258.15boundaries of the district. Special taxing districts organized after July 1 in a calendar year
258.16may not certify a levy of property taxes or special assessments to the county auditor under
258.17the powers granted to them by statute or special act and subject to the requirements of
258.18this section until the following calendar year. All special taxing districts must notify the
258.19county auditor by July 1 in order for its boundaries for the levy to be certified that year
258.20to be different than its boundaries for levies certified in prior years, and the notice must
258.21include a complete list or other description of the tax parcels within the new boundaries
258.22and a map showing the new boundaries of the district.
258.23EFFECTIVE DATE.This section is effective for taxes payable in 2008 and
258.24thereafter.
258.25 Sec. 43. Minnesota Statutes 2006, section 276.04, is amended by adding a subdivision
258.26to read:
258.27 Subd. 5. Electronic tax statements. Upon written request by the owner of real
258.28property located in the county, or by the owner's agent, a county may send tax statements
258.29by electronic means instead of by mailing. For the purposes of the payment deadlines
258.30specified in section 279.01, the postmark date on the envelope containing these property
258.31tax statements is the date the statements were sent by electronic means.
258.32EFFECTIVE DATE.This section is effective for tax statements for taxes payable
258.33in 2008 and thereafter.
259.1 Sec. 44. Minnesota Statutes 2006, section 277.01, subdivision 2, is amended to read:
259.2 Subd. 2. Partial payments. The county treasurer may accept payments of more or
259.3less than the exact amount of a tax installment due. Payments must be applied first to the
259.4oldest installment that is due but which has not been fully paid. If the accepted payment is
259.5less than the amount due,
259.6accrued for the year
259.7partial payment of tax does not constitute a waiver of the minimum payment required as a
259.8condition for filing an appeal under section
259.9order of payment of delinquent taxes under section
259.10EFFECTIVE DATE.This section is effective for payments made on or after the
259.11day following final enactment.
259.12 Sec. 45. Minnesota Statutes 2006, section 279.01, subdivision 1, is amended to read:
259.13 Subdivision 1. Due dates; penalties. Except as provided in subdivision 3 or 4, on
259.14May 16 or 21 days after the postmark date on the envelope containing the property tax
259.15statement, whichever is later, a penalty
259.16upon all unpaid taxes on real estate on the current lists in the hands of the county treasurer.
259.17The penalty
259.18four percent on June 1. The penalty on nonhomestead property
259.19percent until May 31 and eight percent on June 1. This penalty
259.20June 1 of each year, or 21 days after the postmark date on the envelope containing the
259.21property tax statements, whichever is later, on commercial use real property used for
259.22seasonal residential recreational purposes and classified as class 1c or 4c, and on other
259.23commercial use real property classified as class 3a, provided that over 60 percent of the
259.24gross income earned by the enterprise on the class 3a property is earned during the months
259.25of May, June, July, and August.
259.26In order for the first half of the tax due on
259.27and before June 1, or 21 days after the postmark date on the envelope containing the
259.28property tax statement, whichever is later,
259.29must attach an affidavit to the payment attesting to compliance with the income provision
259.30of this subdivision. Thereafter, for both homestead and nonhomestead property, on the
259.31first day of each month beginning July 1, up to and including October 1 following, an
259.32additional penalty of one percent for each month
259.33all such unpaid taxes provided that if the due date was extended beyond May 15 as the
259.34result of any delay in mailing property tax statements no additional penalty shall accrue
259.35if the tax is paid by the extended due date. If the tax is not paid by the extended due
260.1date, then all penalties that would have accrued if the due date had been May 15 shall be
260.2charged. When the taxes against any tract or lot exceed $50, one-half thereof may be paid
260.3prior to May 16 or 21 days after the postmark date on the envelope containing the property
260.4tax statement, whichever is later; and, if so paid, no penalty
260.5remaining one-half
260.6penalty; but, if not so paid, then a penalty of two percent
260.7homestead property and a penalty of four percent on nonhomestead property. Thereafter,
260.8for homestead property, on the first day of November an additional penalty of four percent
260.9
260.10two percent
260.11for nonhomestead property, on the first day of November and December following, an
260.12additional penalty of four percent for each month
260.13on all such unpaid taxes. If one-half of such taxes
260.1421 days after the postmark date on the envelope containing the property tax statement,
260.15whichever is later, the same may be paid at any time prior to October 16, with accrued
260.16penalties to the date of payment added, and thereupon no penalty
260.17the remaining one-half until October 16 following.
260.18 This section applies to payment of personal property taxes assessed against
260.19improvements to leased property, except as provided by section
260.20 A county may provide by resolution that in the case of a property owner that has
260.21multiple tracts or parcels with aggregate taxes exceeding $50, payments may be made in
260.22installments as provided in this subdivision.
260.23 The county treasurer may accept payments of more or less than the exact amount of
260.24a tax installment due. Payments must be applied first to the oldest installment that is due
260.25but which has not been fully paid. If the accepted payment is less than the amount due,
260.26payments must be applied first to the penalty accrued for the year
260.27or the installment being paid. Acceptance of partial payment of tax does not constitute
260.28a waiver of the minimum payment required as a condition for filing an appeal under
260.29section
260.30taxes under section
260.31EFFECTIVE DATE.This section is effective for payments made on or after the
260.32day following final enactment.
260.33 Sec. 46. Minnesota Statutes 2006, section 290B.03, subdivision 2, is amended to read:
260.34 Subd. 2. Qualifying homestead; defined. Qualifying homestead property is defined
260.35as the dwelling occupied as the homeowner's principal residence and so much of the land
261.1surrounding it as is reasonably necessary for use of the dwelling as a home and any other
261.2property used for purposes of a homestead as defined in section
261.322 and 23
261.4building and the land on which it is built. Property is not qualifying homestead property if
261.5a person or entity other than the applicant or the applicant's spouse holds an interest in the
261.6property as the vendor under a contract for deed or as a remainderperson.
261.7EFFECTIVE DATE.This section is effective for applications submitted on or
261.8after January 1, 2007.
261.9 Sec. 47. Minnesota Statutes 2006, section 290C.02, subdivision 3, is amended to read:
261.10 Subd. 3. Claimant. (a) "Claimant" means:
261.11 (1) a person, as that term is defined in section
261.12forest land in Minnesota and files an application authorized by the Sustainable Forest
261.13Incentive Act
261.14 (2) a purchaser or grantee if property enrolled in the program was sold or transferred
261.15after the original application was filed and prior to the annual incentive payment being
261.16made
261.17 (3) an owner of land previously covered by an auxiliary forest contract that
261.18automatically qualifies for inclusion in the Sustainable Forest Incentive Act program
261.19pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
261.20 The purchaser or grantee must notify the commissioner in writing of the sale or
261.21transfer of the property. Owners of land that qualifies for inclusion pursuant to section
261.2288.49, subdivision 9a, or 88.491, subdivision 2, must notify the commissioner in writing
261.23of the expiration of the auxiliary forest contract or land trade with a governmental unit and
261.24submit an application to the commissioner by August 15 in order to be eligible to receive a
261.25payment by October 1 of that same year. For purposes of section
261.26includes any person bound by the covenant required in section
261.27 (b) No more than one claimant is entitled to a payment under this chapter with
261.28respect to any tract, parcel, or piece of land enrolled under this chapter that has been
261.29assigned the same parcel identification number. When enrolled forest land is owned by
261.30two or more persons, the owners must determine between them which person is eligible to
261.31claim the payments provided under sections
261.32sold or transferred, the former owner and the purchaser or grantee must determine between
261.33them which person is eligible to claim the payments provided under sections
261.35which person is eligible to claim the payments.
262.1EFFECTIVE DATE.This section is effective the day following final enactment.
262.2 Sec. 48. Minnesota Statutes 2006, section 290C.04, is amended to read:
262.3290C.04 APPLICATIONS.
262.4 (a) A landowner may apply to enroll forest land for the sustainable forest incentive
262.5program under this chapter. The claimant must complete, sign, and submit an application
262.6to the commissioner by September 30 in order for the land to become eligible beginning
262.7in the next year. The application shall be on a form prescribed by the commissioner and
262.8must include the information the commissioner deems necessary. At a minimum, the
262.9application must show the following information for the land and the claimant: (i) the
262.10claimant's Social Security number or state or federal business tax registration number and
262.11date of birth, (ii) the claimant's address, (iii) the claimant's signature, (iv) the county's
262.12parcel identification numbers for the tax parcels that completely contain the claimant's
262.13forest land that is sought to be enrolled, (v) the number of acres eligible for enrollment
262.14in the program, (vi) the approved plan writer's signature and identification number, and
262.15(vii) proof, in a form specified by the commissioner, that the claimant has executed and
262.16acknowledged in the manner required by law for a deed, and recorded, a covenant that the
262.17land is not and shall not be developed in a manner inconsistent with the requirements and
262.18conditions of this chapter. The covenant shall state in writing that the covenant is binding
262.19on the claimant and the claimant's successor or assignee, and that it runs with the land
262.20for a period of not less than eight years. The commissioner shall specify the form of the
262.21covenant and provide copies upon request. The covenant must include a legal description
262.22that encompasses all the forest land that the claimant wishes to enroll under this section or
262.23the certificate of title number for that land if it is registered land.
262.24 (b) In all cases, the commissioner shall notify the claimant within 90 days after
262.25receipt of a completed application that either the land has or has not been approved for
262.26enrollment. A claimant whose application is denied may appeal the denial as provided in
262.27section
262.28 (c) Within 90 days after the denial of an application, or within 90 days after the
262.29final resolution of any appeal related to the denial, the commissioner shall execute and
262.30acknowledge a document releasing the land from the covenant required under this chapter.
262.31The document must be mailed to the claimant and is entitled to be recorded.
262.32 (d) The Social Security numbers collected from individuals under this section are
262.33private data as provided in section
262.34and date of birth data collected under this section are also private data on individuals or
262.35nonpublic data, as defined in section
263.1with county assessors for purposes of tax administration and with county treasurers for
263.2purposes of the revenue recapture under chapter 270A.
263.3EFFECTIVE DATE.This section is effective the day following final enactment.
263.4 Sec. 49. Minnesota Statutes 2006, section 290C.05, is amended to read:
263.5290C.05 ANNUAL CERTIFICATION.
263.6 On or before July 1 of each year, beginning with the year after the original claimant
263.7has received an approved application, the commissioner shall send each claimant enrolled
263.8under the sustainable forest incentive program a certification form. For purposes of this
263.9section, the original claimant is the person that filed the first application under section
263.10290C.04 to enroll the land in the program. The claimant must sign the certification,
263.11attesting that the requirements and conditions for continued enrollment in the program are
263.12currently being met, and must return the signed certification form to the commissioner by
263.13August 15 of that same year. If the claimant does not return an annual certification form
263.14by the due date, the provisions in section
263.15EFFECTIVE DATE.This section is effective the day following final enactment.
263.16 Sec. 50. Minnesota Statutes 2006, section 290C.11, is amended to read:
263.17290C.11 PENALTIES FOR REMOVAL.
263.18 (a) If the commissioner determines that land enrolled in the sustainable forest
263.19incentive program is in violation of the conditions for enrollment as specified in section
263.21land from the sustainable forest incentive program. The claimant has 60 days to appeal
263.22this determination under the provisions of section 290C.13.
263.23
263.24
263.25
263.26
263.27
263.28 (b) If the commissioner determines the land is to be removed from the sustainable
263.29forest incentive program, the claimant is liable for payment to the commissioner in the
263.30amount equal to the payments received under this chapter for the previous four-year
263.31period, plus interest. The claimant has 90 days to satisfy the payment for removal of land
263.32from the sustainable forest incentive program under this section. If the penalty is not paid
263.33within the 90-day period under this paragraph, the commissioner shall certify the amount
264.1to the county auditor for collection as a part of the general ad valorem real property taxes
264.2on the land in the following taxes payable year.
264.3EFFECTIVE DATE.This section is effective the day following final enactment.
264.4 Sec. 51. [290C.13] APPEALS.
264.5 Subdivision 1. Claimant right to reconsideration. A claimant may obtain
264.6reconsideration by the commissioner of a determination removing enrolled land from the
264.7sustainable forest incentive program, a determination denying an application to enroll land
264.8in the program, or a denial of part or all of an incentive payment by filing an administrative
264.9appeal under subdivision 4. A claimant cannot obtain reconsideration under this section if
264.10the action taken by the commissioner is the outcome of an administrative appeal.
264.11 Subd. 2. Appeal by claimant. A claimant who wishes to seek administrative review
264.12must follow the procedures in subdivision 4.
264.13 Subd. 3. Notice date. For purposes of this section, the term "notice date" means
264.14the date of the determination removing enrolled land or the date of the notice denying an
264.15application to enroll land or denying part or all of an incentive payment.
264.16 Subd. 4. Time and content for administrative appeal. Within 60 days after the
264.17notice date, the claimant must file a written appeal with the commissioner. The appeal
264.18need not be in any particular form but must contain the following information:
264.19 (1) name and address of the claimant;
264.20 (2) if a corporation, the state of incorporation of the claimant, and the principal
264.21place of business of the corporation;
264.22 (3) the Minnesota or federal business identification number or Social Security
264.23number of the claimant;
264.24 (4) the date;
264.25 (5) the periods involved and the amount of payment involved for each year or period;
264.26 (6) the findings in the notice that the claimant disputes;
264.27 (7) a summary statement that the claimant relies on for each exception; and
264.28 (8) the claimant's signature or signature of the claimant's duly authorized agent.
264.29 Subd. 5. Extensions. When requested in writing and within the time allowed for
264.30filing an administrative appeal, the commissioner may extend the time for filing an appeal
264.31for a period not more than 30 days from the expiration of the 60 days from the notice date.
264.32 Subd. 6. Determination of appeal. On the basis of applicable law and available
264.33information, the commissioner shall determine the validity, if any, in whole or in part,
264.34of the appeal and notify the claimant of the decision. This notice must be in writing
264.35and contain the basis for the determination.
265.1 Subd. 7. Agreement determining issues under appeal. When it appears to be in
265.2the best interests of the state, the commissioner may settle the amount of any incentive
265.3payments, payments owed by the claimant under section 290C.11, paragraph (b), penalties,
265.4or interest that the commissioner has under consideration by virtue of an appeal filed
265.5under this section. An agreement must be in writing and signed by the commissioner and
265.6the claimant, or the claimant's representative authorized by the claimant to enter into an
265.7agreement. The agreement is final and conclusive and, except upon a showing of fraud or
265.8malfeasance, or misrepresentation of a material fact, the case must not be reopened as to
265.9the matters agreed upon.
265.10 Subd. 8. Appeal to Tax Court. Within 60 days after the commissioner denies
265.11an appeal, or within 120 days after the commissioner received a written appeal if the
265.12commissioner has not made a determination in that time, the claimant may appeal to Tax
265.13Court under chapter 271 as if the appeal is from an order of the commissioner.
265.14 Subd. 9. Exemption from Administrative Procedure Act. This section is not
265.15subject to chapter 14.
265.16EFFECTIVE DATE.This section is effective the day following final enactment.
265.17 Sec. 52. REPEALER.
265.18(a) Minnesota Statutes 2006, section 270.073, is repealed.
265.19(b) Minnesota Statutes 2006, sections 270.41, subdivision 4; 270.43; 270.51; 270.52;
265.20and 270.53, are repealed.
265.21EFFECTIVE DATE.Paragraph (a) of this section is effective beginning January 2,
265.222007, for taxes payable in 2008 and thereafter. Paragraph (b) of this section is effective
265.23the day following final enactment.
265.26 Section 1. Minnesota Statutes 2006, section 62I.06, subdivision 6, is amended to read:
265.27 Subd. 6.
265.28commissioner the estimated amount of any deficit remaining after the stabilization reserve
265.29fund has been exhausted and payment of the maximum final premium for all policyholders
265.30of the association. Within 60 days after the certification, the commissioner shall authorize
265.31the association to recover the members' respective shares of the deficit by assessing
265.32all members an amount sufficient to fully fund the obligations of the association. The
265.33assessment of each member shall be determined in the manner provided in section
266.1An assessment made pursuant to this section shall be deductible by the member from
266.2
266.3EFFECTIVE DATE.This section is effective for tax returns due on or after January
266.41, 2008.
266.5 Sec. 2. Minnesota Statutes 2006, section 71A.04, subdivision 1, is amended to read:
266.6 Subdivision 1. Premium tax. The attorney-in-fact
266.7
266.8commissioner of revenue all amounts required under chapter 297I.
266.9EFFECTIVE DATE.This section is effective the day following final enactment.
266.10 Sec. 3. Minnesota Statutes 2006, section 287.22, is amended to read:
266.11287.22 EXEMPTIONS.
266.12 The tax imposed by section
266.13 (1) An executory contract for the sale of real property under which the purchaser is
266.14entitled to or does take possession of the real property, or any assignment or cancellation
266.15of the contract;
266.16 (2) A mortgage or an amendment, assignment, extension, partial release, or
266.17satisfaction of a mortgage;
266.18 (3) A will;
266.19 (4) A plat;
266.20 (5) A lease, amendment of lease, assignment of lease, or memorandum of lease;
266.21 (6) A deed, instrument, or writing in which the United States or any agency or
266.22instrumentality thereof is the grantor, assignor, transferor, conveyor, grantee, or assignee;
266.23 (7) A deed for a cemetery lot or lots;
266.24 (8) A deed of distribution by a personal representative;
266.25 (9) A deed to or from a co-owner partitioning their undivided interest in the same
266.26piece of real property;
266.27 (10) A deed or other instrument of conveyance issued pursuant to a permanent
266.28school fund land exchange under section
266.29 (11) A referee's or sheriff's certificate of sale in a mortgage or lien foreclosure sale;
266.30 (12) A referee's, sheriff's, or certificate holder's certificate of redemption from a
266.31mortgage or lien foreclosure sale issued
266.32section 580.23 or other statute applicable to redemption by an owner of real property;
267.1 (13) A deed, instrument, or writing which grants, creates, modifies, or terminates an
267.2easement; and
267.3 (14) A decree of marriage dissolution, as defined in section
267.4or a deed or other instrument between the parties to the dissolution made pursuant to
267.5the terms of the decree.
267.6EFFECTIVE DATE.This section is effective the day following final enactment.
267.7 Sec. 4. Minnesota Statutes 2006, section 287.2205, is amended to read:
267.8287.2205 TAX-FORFEITED LAND.
267.9 Before a state deed for tax-forfeited land may be issued, the deed tax must be paid
267.10by the purchaser of tax-forfeited land whether the purchase is the result of a public
267.11auction or private sale or a repurchase of tax-forfeited land. State agencies and local
267.12units of government that acquire tax-forfeited land by purchase or any other means are
267.13subject to this section. The deed tax is $1.65 for a conveyance of tax-forfeited lands to a
267.14governmental subdivision for an authorized public use under section 282.01, subdivision
267.151a, or for redevelopment purposes under section 282.01, subdivision 1b.
267.16EFFECTIVE DATE.This section is effective the day following final enactment.
267.17 Sec. 5. Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:
267.18 Subd. 4. Use tax; prescription drugs. (a) A person that receives prescription drugs
267.19for resale or use in Minnesota, other than from a wholesale drug distributor that is subject
267.20to tax under subdivision 3, is subject to a tax equal to the price paid to the wholesale drug
267.21distributor multiplied by the tax percentage specified in this section. Liability for the tax is
267.22incurred when prescription drugs are received or delivered in Minnesota by the person.
267.23
267.24
267.25
267.26
267.27
267.28
267.29
267.30individual for personal consumption.
267.31EFFECTIVE DATE.This section is effective the day following final enactment.
268.1 Sec. 6. Minnesota Statutes 2006, section 295.52, subdivision 4a, is amended to read:
268.2 Subd. 4a. Tax collection. A wholesale drug distributor with nexus in Minnesota,
268.3who is not subject to tax under subdivision 3, on all or a particular transaction
268.4
268.5under subdivision 4, from the purchaser of the drugs and give the purchaser a receipt
268.6for the tax paid. The tax collected shall be remitted to the commissioner in the manner
268.7prescribed by section
268.8EFFECTIVE DATE.This section is effective the day following final enactment.
268.9 Sec. 7. Minnesota Statutes 2006, section 295.54, subdivision 2, is amended to read:
268.10 Subd. 2. Pharmacy refund. A pharmacy may claim an annual refund against the
268.11total amount of tax, if any, the pharmacy owes during that calendar year under section
268.13wholesale drug distributor subject to tax under section
268.14drugs delivered by the pharmacy outside of Minnesota, multiplied by the tax percentage
268.15specified in section
268.16pharmacy under section
268.17pharmacy with a refund equal to the excess amount. Each qualifying pharmacy must apply
268.18for the refund on the annual return as provided under section
268.19refund must be claimed within one year of the due date of the return. Interest on refunds
268.20paid under this subdivision will begin to accrue 60 days after the date a claim for refund is
268.21filed. For purposes of this subdivision, the date a claim is filed is the due date of the return
268.22or the date of the actual claim for refund, whichever is later.
268.23EFFECTIVE DATE.This section is effective the day following final enactment.
268.24 Sec. 8. Minnesota Statutes 2006, section 297F.06, subdivision 4, is amended to read:
268.25 Subd. 4. Tobacco products use tax. The tobacco products use tax does not apply to
268.26the possession, use, or storage of tobacco products
268.27aggregate cost in any calendar month to the consumer of
268.28tobacco products were carried into this state by that consumer.
268.29EFFECTIVE DATE.This section is effective for the possession, use, or storage of
268.30tobacco products on or after July 1, 2007.
268.31 Sec. 9. Minnesota Statutes 2006, section 297F.25, is amended by adding a subdivision
268.32to read:
269.1 Subd. 3a. Consumer use tax; use tax return; cigarette consumer. (a) On or before
269.2the 18th day of each calendar month, a consumer who, during the preceding calendar
269.3month, has acquired title to or possession of cigarettes for use or storage in this state, upon
269.4which the sales tax imposed by this section has not been paid, shall file a return with the
269.5commissioner showing the quantity of cigarettes so acquired or possessed. The return
269.6must be made in the form and manner prescribed by the commissioner, and must contain
269.7any other information required by the commissioner. The return must be accompanied by
269.8a remittance for the full unpaid sales tax liability shown by it.
269.9 (b) The tax imposed under paragraph (a) does not apply if (1) the consumer has
269.10acquired title to or possession of cigarettes for use or storage in this state in quantities
269.11of 200 or fewer in the month, and (2) the cigarettes were carried into this state by that
269.12consumer.
269.13EFFECTIVE DATE.This section is effective for cigarettes which a consumer has
269.14acquired title to or possession of on or after July 1, 2007.
269.15 Sec. 10. Minnesota Statutes 2006, section 297I.06, subdivision 1, is amended to read:
269.16 Subdivision 1. Insurance policies surcharge. (a) Except as otherwise provided in
269.17subdivision 2, each licensed insurer engaged in writing policies of homeowner's insurance
269.18authorized in section 60A.06, subdivision 1, clause (1)(c), or commercial fire policies or
269.19commercial nonliability policies shall collect a surcharge equal to 0.65 percent of the
269.20gross premiums and assessments, less return premiums, on direct business received by
269.21the company, or by its agents for it, for homeowner's insurance policies, commercial fire
269.22policies, and commercial nonliability insurance policies in this state.
269.23 (b) The surcharge amount collected under paragraph (a) or subdivision 2, paragraph
269.24(b), may not be considered premium for any other purpose. The surcharge amount
269.25under paragraph (a) must be separately stated on either a billing or policy declaration or
269.26document containing similar information sent to an insured.
269.27 (c) Amounts collected by the commissioner under this section must be deposited in
269.28the fire safety account established pursuant to subdivision 3.
269.29EFFECTIVE DATE.This section is effective July 1, 2007, and applies to policies
269.30written or renewed on or after July 1, 2007.
269.31 Sec. 11. Minnesota Statutes 2006, section 297I.06, subdivision 2, is amended to read:
270.1 Subd. 2. Exemptions. (a) This section does not apply to a farmers' mutual fire
270.2insurance company or township mutual fire insurance company in Minnesota organized
270.3under chapter 67A.
270.4 (b) An insurer described in section 297I.05, subdivisions 3 and 4, authorized to
270.5transact business in Minnesota shall elect to remit to the Department of Revenue for
270.6deposit in the fire safety account either (1) the surcharge amount
270.7
270.8one-half of one percent on the gross fire premiums and assessments, less return premiums,
270.9on all direct business received by the insurer or agents of the insurer in Minnesota, in
270.10cash or otherwise, during the year.
270.11 (c) The election must be made prior to July 1, 2007, for policies written or renewed
270.12between July 1, 2007, and December 31, 2007, and by December 31 of each year for
270.13insurance for policies written or renewed in the succeeding calendar year. An insurer
270.14who elects to remit the one-half of one percent surcharge on gross fire premiums and
270.15assessments must not charge the insured the surcharge imposed under subdivision 1.
270.16
270.17includes premiums on policies covering fire risks only on automobiles, whether written or
270.18under floater form or otherwise.
270.19EFFECTIVE DATE.The requirement for certain insurers to make an election
270.20before July 1, 2007, is effective the day following final enactment. The rest of this section
270.21is effective July 1, 2007, and applies to insurance policies written or renewed on or after
270.22that date.
270.23 Sec. 12. Minnesota Statutes 2006, section 297I.20, subdivision 2, is amended to read:
270.24 Subd. 2. Joint Underwriting Association offset. An insurance company may offset
270.25against its premium tax liability to this state any amount paid for an assessment made
270.26pursuant to section
270.27
270.28claimed beginning with the taxable year that the assessment is paid. To the extent that the
270.29allowable offset exceeds the tax liability, the remaining offset must be carried forward to
270.30succeeding taxable years until the entire offset has been credited against the insurance
270.31company's liability for premium tax under this chapter.
270.32EFFECTIVE DATE.This section is effective for tax returns due on or after January
270.331, 2008.
271.1 Sec. 13. Minnesota Statutes 2006, section 297I.40, subdivision 5, is amended to read:
271.2 Subd. 5. Definition of tax. The term "tax" as used in this section means the tax
271.3imposed by section
271.4to (5), (b), and
271.5
271.6EFFECTIVE DATE.This section is effective for tax returns due on or after January
271.71, 2008.
271.10 Section 1. Minnesota Statutes 2006, section 16D.04, subdivision 1, is amended to read:
271.11 Subdivision 1. Duties. The commissioner shall provide services to the state and
271.12referring agencies to collect debts
271.13The commissioner is not a collection agency as defined by section
271.14and is not licensed, bonded, or regulated by the commissioner of commerce under sections
271.16except clause (9), (10), (12), or (19). Debts referred to the commissioner for collection
271.17under section
271.18An audited financial statement may not be required as a condition of debt placement with
271.19a private agency if the private agency: (1) has errors and omissions coverage under a
271.20professional liability policy in an amount of at least $1,000,000; or (2) has a fidelity bond
271.21to cover actions of its employees, in an amount of at least $100,000. In cases of debts
271.22referred under section
271.23to the extent they are not in conflict. If they are in conflict, the provisions of section
271.25the Department of Human Services.
271.26EFFECTIVE DATE.This section is effective the day following final enactment.
271.27 Sec. 2. Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read:
271.28 Subd. 2. Agency participation. (a) A referring agency
271.29refer, by electronic means, debts to the commissioner for collection.
271.30Responsibility for the debt, including the reporting of the debt to the commissioner of
271.31finance and the decision with regard to the continuing collection and uncollectibility of the
271.32debt, remains with the referring agency.
272.1 (b) Before a debt becomes 121 days past due, a referring agency may refer the
272.2debt to the commissioner for collection at any time after a debt becomes delinquent and
272.3uncontested and the debtor has no further administrative appeal of the amount of the
272.4debt. When a debt owed to a
272.5referring agency must refer the debt to the commissioner for collection. This requirement
272.6does not apply if there is a dispute over the amount or validity of the debt, if the debt is the
272.7subject of legal action or administrative proceedings, or the agency determines that the
272.8debtor is adhering to acceptable payment arrangements. The commissioner
272.9
272.10referred to the commissioner for collection under this paragraph. Methods and procedures
272.11for referral must follow internal guidelines prepared by the commissioner
272.12 (c) If the referring agency is a court, the court must furnish a debtor's Social Security
272.13number to the commissioner when the court refers the debt.
272.14EFFECTIVE DATE.This section is effective for debts referred on or after January
272.151, 2008.
272.16 Sec. 3. Minnesota Statutes 2006, section 16D.11, subdivision 2, is amended to read:
272.17 Subd. 2. Computation. At the time a debt is referred, the amount of collection
272.18costs is equal to
272.19
272.20
272.21
272.22
272.23
272.24a private collection agency, the debtor requests cancellation of collection costs under
272.25subdivision 3, the debt must be returned to the commissioner for resolution of the request.
272.26EFFECTIVE DATE.This section is effective for debts referred on or after January
272.271, 2008.
272.28 Sec. 4. Minnesota Statutes 2006, section 16D.11, subdivision 7, is amended to read:
272.29 Subd. 7. Adjustment of rate. By June 1 of each year, the commissioner
272.30shall determine the rate of collection costs for debts referred to the enterprise during
272.31the next fiscal year. The rate is a percentage of the debts in an amount that most nearly
272.32equals the costs of the enterprise necessary to process and collect referred debts under this
272.33chapter. In no event
273.1
273.2collection costs exceed 25 percent of the debt. Determination of the rate of collection costs
273.3under this section is not subject to the fee setting requirements of section
273.4EFFECTIVE DATE.This section is effective January 1, 2008.
273.5 Sec. 5. [270C.435] REFUNDS NOT SUBJECT TO ATTACHMENT OR
273.6GARNISHMENT.
273.7 No amount of a tax refund or other payment payable by the commissioner to
273.8a taxpayer is assignable or subject to execution, levy, attachment, garnishment, lien
273.9foreclosure, or other legal process, except as specifically provided by law.
273.10EFFECTIVE DATE.This section is effective the day following final enactment.
273.11 Sec. 6. Minnesota Statutes 2006, section 270C.446, subdivision 2, is amended to read:
273.12 Subd. 2. Required and excluded tax preparers. (a) Subject to the limitations
273.13of paragraph (b), the commissioner must publish lists of tax preparers as defined in
273.14section 289A.60, subdivision 13, paragraph (f), who have been convicted under section
273.1613, paragraph (a).
273.17 (b) For the purposes of this section, tax preparers are not subject to publication if:
273.18 (1) an administrative or court action contesting the penalty has been filed or served
273.19and is unresolved at the time when notice would be given under subdivision 3;
273.20 (2) an appeal period to contest the penalty has not expired; or
273.21 (3) the commissioner has been notified that the tax preparer is deceased.
273.22EFFECTIVE DATE.This section is effective for penalties on returns filed after
273.23December 31, 2007.
273.24 Sec. 7. Minnesota Statutes 2006, section 270C.56, subdivision 1, is amended to read:
273.25 Subdivision 1. Liability imposed. A person who, either singly or jointly with
273.26others, has the control of, supervision of, or responsibility for filing returns or reports,
273.27paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or
273.28a person who is liable under any other law, is liable for the payment of taxes, penalties,
273.29and interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections
273.30and
273.31nonpayment under section 289A.60.
274.1EFFECTIVE DATE.This section is effective for personal liability assessments
274.2made on or after the day following final enactment.
274.3 Sec. 8. Minnesota Statutes 2006, section 270C.63, subdivision 9, is amended to read:
274.4 Subd. 9. Period of limitations. The lien imposed by this section shall,
274.5notwithstanding any other provision of law to the contrary, be enforceable from the time
274.6the lien arises and for ten years from the date of filing the notice of lien, which must be
274.7filed by the commissioner within five years after the date of assessment of the tax or final
274.8administrative or judicial determination of the assessment. A notice of lien filed at the
274.9Office of the Secretary of State may be transcribed to any county within ten years after the
274.10date of its filing, but the transcription does not extend the period during which the lien is
274.11enforceable. A notice of lien filed in one county may be transcribed to the secretary of
274.12state or to any other county within ten years after the date of its filing, but the transcription
274.13shall not extend the period during which the lien is enforceable. A notice of lien may be
274.14renewed by the commissioner before the expiration of the ten-year period for an additional
274.15ten years. The taxpayer must receive written notice of the renewal.
274.16EFFECTIVE DATE.This section is effective for liens transcribed on or after the
274.17day following final enactment.
274.18 Sec. 9. Minnesota Statutes 2006, section 424A.10, subdivision 3, is amended to read:
274.19 Subd. 3. State reimbursement. (a)
274.20
274.21for state reimbursement of the amount of supplemental benefits paid under subdivision 2
274.22during the preceding calendar year, the relief association must apply to the commissioner
274.23of revenue by February 15. By March 15 the commissioner shall reimburse the relief
274.24association for the amount of the supplemental benefits paid to qualified recipients.
274.25 (b) The commissioner of revenue shall prescribe the form of and supporting
274.26information that must be supplied as part of the application for state reimbursement.
274.27The commissioner of revenue shall reimburse the relief association by paying the
274.28reimbursement amount to the treasurer of the municipality where the association is located.
274.29Within 30 days after receipt, the municipal treasurer shall transmit the state reimbursement
274.30to the treasurer of the association if the association has filed a financial report with the
274.31municipality. If the relief association has not filed a financial report with the municipality,
274.32the municipal treasurer shall delay transmission of the reimbursement payment to the
274.33association until the complete financial report is filed. If the association has dissolved or
274.34has been removed as a trustee of state aid, the treasurer shall deposit the money in a
275.1special account in the municipal treasury, and the money may be disbursed only for the
275.2purposes and in the manner provided in section 424A.08. When paid to the association,
275.3
275.4association.
275.5
275.6to the commissioner of revenue.
275.7EFFECTIVE DATE.This section is effective January 1, 2007, and thereafter.
275.10 Section 1. Minnesota Statutes 2006, section 3.987, subdivision 1, is amended to read:
275.11 Subdivision 1. Local impact notes. The commissioner of finance shall coordinate
275.12the development of a local impact note for any proposed legislation introduced after June
275.1330, 1997,
275.14ranking minority member of either legislative Tax Committee. Upon receipt of a request
275.15to prepare a local impact note, the commissioner must notify the authors of the proposed
275.16legislation
275.17
275.18to the public upon request. If the action is among the exceptions listed in section
275.19a local impact note need not be requested nor prepared. The commissioner shall make
275.20a reasonable and timely estimate of the local fiscal impact on each type of political
275.21subdivision that would result from the proposed legislation. The commissioner of finance
275.22may require any political subdivision or the commissioner of an administrative agency
275.23of the state to supply in a timely manner any information determined to be necessary to
275.24determine local fiscal impact. The political subdivision, its representative association, or
275.25commissioner shall convey the requested information to the commissioner of finance with
275.26a signed statement to the effect that the information is accurate and complete to the best
275.27of its ability. The political subdivision, its representative association, or commissioner,
275.28when requested, shall update its determination of local fiscal impact based on actual
275.29cost or revenue figures, improved estimates, or both. Upon completion of the note, the
275.30commissioner must provide a copy to the authors of the proposed legislation
275.31
275.32 Sec. 2. Minnesota Statutes 2006, section 3.988, subdivision 3, is amended to read:
276.1 Subd. 3. Miscellaneous exceptions. A local impact note or an attachment as
276.2provided in section
276.3action if the law
276.4 (1) accommodates a specific local request;
276.5 (2) results in no new local government duties;
276.6 (3) leads to revenue losses from exemptions to taxes;
276.7 (4) provided only clarifying or conforming, nonsubstantive charges on local
276.8government;
276.9 (5) imposes additional net local costs that are minor (an amount less than or equal
276.10to one-half of one percent of the local revenue base as defined in section
276.11subdivision 27
276.12mandate does not apply statewide or less than $1,000,000 if the mandate is statewide);
276.13 (6) is a law or executive order enacted before July 1, 1997, or a rule initially
276.14implementing a law enacted before July 1, 1997;
276.15 (7) implements something other than a law or executive order, such as a federal,
276.16court, or voter-approved mandate;
276.17 (8) results in savings that equal or exceed costs;
276.18 (9) requires the holding of elections;
276.19 (10) ensures due process or equal protection;
276.20 (11) provides for the notification and conduct of public meetings;
276.21 (12) establishes the procedures for administrative and judicial review of actions
276.22taken by political subdivisions;
276.23 (13) protects the public from malfeasance, misfeasance, or nonfeasance by officials
276.24of political subdivisions;
276.25 (14) relates directly to financial administration, including the levy, assessment,
276.26and collection of taxes;
276.27 (15) relates directly to the preparation and submission of financial audits necessary
276.28to the administration of state laws; or
276.29 (16) requires uniform standards to apply to public and private institutions without
276.30differentiation.
276.31 Sec. 3. Minnesota Statutes 2006, section 3.989, subdivision 2, is amended to read:
276.32 Subd. 2.
276.33shall prepare by
276.34
276.35
277.1as provided in section 3.987. The commissioner may consult with local government
277.2representatives and legislative fiscal staff to determine which local impact notes were key.
277.3
277.4
277.5 Sec. 4. Minnesota Statutes 2006, section 3.989, subdivision 3, is amended to read:
277.6 Subd. 3. Certain political subdivisions; report. The political subdivisions that
277.7have opted to administer class B state mandates shall report to the commissioner of
277.8finance by September 1, 1998, and by September 1 of each year thereafter, identifying
277.9each instance when revenue for a class B state mandate has fallen below 85 percent of
277.10the total cost of the program and the political subdivision intends to cease administration
277.11of the program.
277.12 The commissioner shall forward a copy of the report to the chairs of the appropriate
277.13funding committees of the senate and the house
277.14
277.15 The political subdivision may exercise its option to cease administration only if the
277.16legislature has failed to include the shortfall as an appropriation in the state budget for
277.17the next fiscal year.
277.18 Sec. 5. Minnesota Statutes 2006, section 16A.103, subdivision 1a, is amended to read:
277.19 Subd. 1a. Forecast parameters. The forecast must assume the continuation of
277.20current laws and reasonable estimates of projected growth in the national and state
277.21economies and affected populations. Revenue must be estimated for all sources provided
277.22for in current law. Expenditures must be estimated for all obligations imposed by law and
277.23those projected to occur as a result of inflation and variables outside the control of the
277.24legislature.
277.25inflation estimate must not include inflation on debt service or on programs for which a
277.26statutory growth factor is already included in the forecast.
277.27EFFECTIVE DATE.This section is effective the day following final enactment.
277.28 Sec. 6. Minnesota Statutes 2006, section 16A.103, subdivision 1b, is amended to read:
277.29 Subd. 1b. Forecast variable. In determining the rate of inflation, the application
277.30of inflation, the amount of state bonding as it affects debt service, the calculation of
277.31investment income, and the other variables to be included in the expenditure part of the
277.32forecast, the commissioner must consult with the chairs and lead minority members of the
277.33senate
278.1and legislative fiscal staff. This consultation must occur at least three weeks before the
278.2forecast is to be released. No later than two weeks prior to the release of the forecast,
278.3the commissioner must inform the chairs and lead minority members of the senate
278.4
278.5legislative fiscal staff of any changes in these variables from the previous forecast.
278.6EFFECTIVE DATE.This section is effective the day following final enactment.
278.7 Sec. 7. Minnesota Statutes 2006, section 16A.103, subdivision 2, is amended to read:
278.8 Subd. 2. Local revenue. In February and November of each year, the commissioner
278.9of revenue shall prepare and deliver to the governor and the legislature forecasts of
278.10revenue to be received by school districts as a group, counties as a group, and the group of
278.11cities and towns that have a population of more than 2,500. The forecasts must assume
278.12the continuation of current laws, projections of valuation changes in real property, and
278.13reasonable estimates of projected growth in the national and state economies and affected
278.14populations. Revenue must be estimated for property taxes, state and federal aids, local
278.15sales taxes, if any, and a single projection for all other revenue for each group of affected
278.16local governmental units.
278.17
278.18
278.19 Sec. 8. Minnesota Statutes 2006, section 16A.152, subdivision 1b, is amended to read:
278.20 Subd. 1b. Budget reserve increase. On July 1,
278.21finance shall transfer
278.22general fund.
278.23
278.24purpose
278.25 Sec. 9. Minnesota Statutes 2006, section 16A.152, subdivision 2, is amended to read:
278.26 Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general
278.27fund revenues and expenditures, the commissioner of finance determines that there will be
278.28a positive unrestricted budgetary general fund balance at the close of the biennium, the
278.29commissioner of finance must allocate money to the following accounts and purposes in
278.30priority order:
278.31 (1) the cash flow account established in subdivision 1 until that account reaches
278.32$350,000,000;
279.1 (2) the budget reserve account established in subdivision 1a until that account
279.2reaches
279.3 (3) the amount necessary to increase the aid payment schedule for school district
279.4aids and credits payments in section
279.5nearest tenth of a percent without exceeding the amount available and with any remaining
279.6funds deposited in the budget reserve; and
279.7 (4) the amount necessary to restore all or a portion of the net aid reductions under
279.8section
279.10article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section
279.1120, by the same amount.
279.12 (b) The amounts necessary to meet the requirements of this section are appropriated
279.13from the general fund within two weeks after the forecast is released or, in the case of
279.14transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations
279.15schedules otherwise established in statute.
279.16 (c)
279.17
279.18
279.19
279.20reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The
279.21commissioner of education shall increase the aid payment percentage and reduce the
279.22property tax shift percentage by these amounts and apply those reductions to the current
279.23fiscal year and thereafter.
279.24 Sec. 10. Minnesota Statutes 2006, section 80A.28, subdivision 1, as amended by Laws
279.252007, chapter 57, article 3, section 34, is amended to read:
279.26 Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of
279.27$100 for every application for registration or notice filing. There shall be an additional fee
279.28of one-tenth of one percent of the maximum aggregate offering price at which the securities
279.29are to be offered in this state, and the maximum combined fees shall not exceed $300.
279.30 (b) When an application for registration is withdrawn before the effective date or a
279.31preeffective stop order is entered under section
279.32filing fee shall be returned. If an application to register securities is denied, the total of all
279.33fees received shall be retained.
279.34 (c) Where a filing is made in connection with a federal covered security under
279.35section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing.
280.1If the filing is made in connection with redeemable securities issued by an open end
280.2management company or unit investment trust, as defined in the Investment Company Act
280.3of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate
280.4offering price at which the securities are to be offered in this state during the notice filing
280.5period. The fee must be paid at the time of the initial filing and thereafter in connection
280.6with each renewal no later than July 1 of each year and must be sufficient to cover the
280.7shares the issuer expects to sell in this state over the next 12 months. If during a current
280.8notice filing the issuer determines it is likely to sell shares in excess of the shares for
280.9which fees have been paid to the commissioner, the issuer shall submit an amended notice
280.10filing to the commissioner under section
280.11a fee of 1/20 of one percent of the maximum aggregate offering price of the additional
280.12shares. Shares for which a fee has been paid, but which have not been sold at the time
280.13of expiration of the notice filing, may not be sold unless an additional fee to cover the
280.14shares has been paid to the commissioner as provided in this section and section
280.15subdivision 4a
280.16such a company or trust, there is no maximum fee for securities filings made according to
280.17this paragraph. If the filing is made in connection with any other federal covered security
280.18under Section 18(b)(2) of the Securities Act of 1933, there is an additional fee of one-tenth
280.19of one percent of the maximum aggregate offering price at which the securities are to be
280.20offered in this state, and the combined fees shall not exceed $300.
280.21
280.22
280.23
280.24
280.25
280.26
280.27
280.28
280.29
280.30EFFECTIVE DATE.This section is effective the day following final enactment.
280.31 Sec. 11. Minnesota Statutes 2006, section 80A.65, subdivision 1, as amended by Laws
280.322007, chapter 57, article 3, section 35, is amended to read:
280.33 Subdivision 1. Registration or notice filing fee. (a) There shall be a filing fee of
280.34$100 for every application for registration or notice filing. There shall be an additional fee
281.1of one-tenth of one percent of the maximum aggregate offering price at which the securities
281.2are to be offered in this state, and the maximum combined fees shall not exceed $300.
281.3 (b) When an application for registration is withdrawn before the effective date
281.4or a preeffective stop order is entered under section
281.5shall be returned. If an application to register securities is denied, the total of all fees
281.6received shall be retained.
281.7 (c) Where a filing is made in connection with a federal covered security under
281.8section 18(b)(2) of the Securities Act of 1933, there is a fee of $100 for every initial filing.
281.9If the filing is made in connection with redeemable securities issued by an open end
281.10management company or unit investment trust, as defined in the Investment Company Act
281.11of 1940, there is an additional annual fee of 1/20 of one percent of the maximum aggregate
281.12offering price at which the securities are to be offered in this state during the notice filing
281.13period. The fee must be paid at the time of the initial filing and thereafter in connection
281.14with each renewal no later than July 1 of each year and must be sufficient to cover the
281.15shares the issuer expects to sell in this state over the next 12 months. If during a current
281.16notice filing the issuer determines it is likely to sell shares in excess of the shares for which
281.17fees have been paid to the administrator, the issuer shall submit an amended notice filing
281.18to the administrator under section
281.19maximum aggregate offering price of the additional shares. Shares for which a fee has
281.20been paid, but which have not been sold at the time of expiration of the notice filing, may
281.21not be sold unless an additional fee to cover the shares has been paid to the administrator
281.22as provided in this section and section
281.23redeemable securities issued by such a company or trust, there is no maximum fee for
281.24securities filings made according to this paragraph. If the filing is made in connection
281.25with any other federal covered security under Section 18(b)(2) of the Securities Act of
281.261933, there is an additional fee of one-tenth of one percent of the maximum aggregate
281.27offering price at which the securities are to be offered in this state, and the combined fees
281.28shall not exceed $300.
281.29
281.30
281.31
281.32
281.33
281.34
281.35
282.1
282.2
282.3EFFECTIVE DATE.This section is effective the day following final enactment.
282.4 Sec. 12. Minnesota Statutes 2006, section 270A.03, subdivision 2, is amended to read:
282.5 Subd. 2. Claimant agency. "Claimant agency" means any state agency, as defined
282.6by section
282.7court of the state, any county, any statutory or home rule charter city, including a city that
282.8is presenting a claim for a municipal hospital or a public library or a municipal ambulance
282.9service, a hospital district, a private nonprofit hospital that leases its building from the
282.10county or city in which it is located, any public agency responsible for child support
282.11enforcement, any public agency responsible for the collection of court-ordered restitution,
282.12and any public agency established by general or special law that is responsible for the
282.13administration of a low-income housing program, and the Minnesota collection enterprise
282.14as defined in section
282.15under section
282.16service licensed under chapter 144E if the ambulance service's primary service area is
282.17located at least in part within the county, but more than one county may not act as a
282.18claimant agency for a licensed ambulance service with respect to the same debt.
282.19 Sec. 13. Minnesota Statutes 2006, section 270A.10, is amended to read:
282.20270A.10 PRIORITY OF CLAIMS.
282.21 If two or more debts, in a total amount exceeding the debtor's refund, are submitted
282.22for setoff, the priority of payment shall be as follows:
282.23 (1) delinquent tax obligations of the debtor which are owed to the department
282.24
282.25 (2) debts for child support based on the order in time in which the commissioner
282.26received the debts
282.27 (3) payment of restitution obligations
282.28 (4) claims brought for a hospital or an ambulance service;
282.29 (5) the remaining debts based on the order in time in which the commissioner
282.30received the debts.
282.31 Sec. 14. Minnesota Statutes 2006, section 270C.03, subdivision 1, is amended to read:
283.1 Subdivision 1. Powers and duties. The commissioner shall have and exercise
283.2the following powers and duties:
283.3 (1) administer and enforce the assessment and collection of taxes;
283.4 (2) make determinations, corrections, and assessments with respect to taxes,
283.5including interest, additions to taxes, and assessable penalties;
283.6 (3) use statistical or other sampling techniques consistent with generally accepted
283.7auditing standards in examining returns or records and making assessments;
283.8 (4) investigate the tax laws of other states and countries, and formulate and submit
283.9to the legislature such legislation as the commissioner may deem expedient to prevent
283.10evasions of state revenue laws and to secure just and equal taxation and improvement in
283.11the system of state revenue laws;
283.12 (5) consult and confer with the governor upon the subject of taxation, the
283.13administration of the laws in regard thereto, and the progress of the work of the
283.14department, and furnish the governor, from time to time, such assistance and information
283.15as the governor may require relating to tax matters;
283.16 (6) execute and administer any agreement with the secretary of the treasury or the
283.17Bureau of Alcohol, Tobacco, Firearms, and Explosives in the Department of Justice of the
283.18United States or a representative of another state regarding the exchange of information
283.19and administration of the state revenue laws;
283.20 (7) require town, city, county, and other public officers to report information as to the
283.21collection of taxes received from licenses and other sources, and such other information
283.22as may be needful in the work of the commissioner, in such form as the commissioner
283.23may prescribe;
283.24 (8) authorize the use of unmarked motor vehicles to conduct seizures or criminal
283.25investigations pursuant to the commissioner's authority;
283.26 (9) maintain toll-free telephone access for taxpayer assistance for calls from
283.27locations within the state; and
283.28 (10) exercise other powers and authority and perform other duties required of or
283.29imposed upon the commissioner by law.
283.30EFFECTIVE DATE.This section is effective January 1, 2008.
283.31 Sec. 15. [270C.21] TAXPAYER ASSISTANCE GRANTS.
283.32 When the commissioner awards grants to nonprofit organizations to coordinate,
283.33facilitate, encourage, and aid in the provision of taxpayer assistance services, the
283.34commissioner must provide public notice of the grants in a timely manner so that the
283.35grant process is completed and grants are awarded by October 1, in order for recipient
284.1organizations to adequately plan expenditures for the filing season. At the time the
284.2commissioner provides public notice, the commissioner must also notify nonprofit
284.3organizations that received grants in the previous biennium.
284.4EFFECTIVE DATE.This section is effective the day following final enactment.
284.5 Sec. 16. MINNESOTA FOOTBALL STADIUM TASK FORCE.
284.6 Subdivision 1. Creation; purpose. A Minnesota Football Stadium Task Force
284.7is created. The task force must evaluate the plan to redevelop the Metrodome site
284.8that includes a new multiuse stadium. The task force must analyze issues related to
284.9infrastructure, light rail transit, stadium development, and financing of the project. The
284.10task force must develop and present stadium financing options, and make a specific
284.11recommendation on a preferred finance plan.
284.12 Subd. 2. Membership. The subcommittee must consist of 15 members as follows:
284.13 (1) five members of the senate, including at least one member of the minority party,
284.14to be appointed by the Subcommittee on Committees of the senate Rules Committee;
284.15 (2) five members of the house of representatives, including at least one member of
284.16the minority party, to be appointed by the speaker of the house of representatives; and
284.17 (3) five members appointed by the governor, including the chair of the Metropolitan
284.18Sports Facilities Commission, who will be the chair of the task force.
284.19 Appointments must be made by June 15, 2007.
284.20 Subd. 3. Staff assistance. The Metropolitan Sports Facilities Commission will
284.21provide staff assistance and other resources to support the work of the task force.
284.22 Subd. 4. Initial meeting. The chair of the task force must convene the first meeting
284.23of the task force no later than June 15, 2007.
284.24 Subd. 5. Report. The task force shall provide a report to the governor and to the
284.25chairs of the committees on taxes of the senate and the house of representatives on its
284.26findings and recommendations by February 15, 2008.
284.27EFFECTIVE DATE.This section is effective the day following final enactment.
284.28 Sec. 17. DATA UPDATE.
284.29 The commissioner of revenue must continue to maintain, update, and make available
284.30the information required under Laws 1987, chapter 268, article 7, section 1, subdivision
284.316, paragraph (b). The commissioner must provide the most complete and current data
284.32available, when requested, to the chairs of the senate and house of representatives
284.33committees on taxes.
285.1 Sec. 18. FINANCIAL MANAGEMENT.
285.2 Notwithstanding the provisions of Minnesota Statutes, section 16A.1522,
285.3subdivision 4, the commissioner of finance shall designate any positive general fund
285.4budgetary balance on June 30, 2007, as an unrestricted balance. Money so designated shall
285.5remain available for general fund appropriations authorized in fiscal years 2008 and 2009.
285.6 Sec. 19. APPROPRIATIONS.
285.7 (a) $223,000 is appropriated for fiscal year 2008 from the general fund to the
285.8commissioner of revenue to administer this act.
285.9 (b) Of this amount:
285.10 (i) $150,000 in fiscal year 2008 is for the fiscal disparities study required under
285.11article 2; and
285.12 (ii) $73,000 in fiscal year 2008 is for administering 1099 reporting requirements
285.13under article 4.
285.14 (c) All of these appropriations are onetime and are not added to the agency's base
285.15budget.
285.16 Sec. 20. TAXPAYER ASSISTANCE SERVICES; APPROPRIATION.
285.17 (a) $75,000 in fiscal year 2008 and $75,000 in fiscal year 2009 are appropriated from
285.18the general fund to the commissioner of revenue to make grants to one or more nonprofit
285.19organizations, qualifying under section 501(c)(3) of the Internal Revenue Code of 1986, to
285.20coordinate, facilitate, encourage, and aid in the provision of taxpayer assistance services.
285.21 (b) "Taxpayer assistance services" means accounting and tax preparation services
285.22provided by volunteers to low-income and disadvantaged Minnesota residents to help
285.23them file federal and state income tax returns and Minnesota property tax refund claims
285.24and may include provision of personal representation before the Department of Revenue
285.25and Internal Revenue Service.
285.26 Sec. 21. APPROPRIATION; ST. PAUL RIVER CENTRE DEBT SERVICE
285.27COSTS.
285.28 $2,000,000 is appropriated from the general fund to the commissioner of employment
285.29and economic development in fiscal year 2010 for a grant to the city of St. Paul to be used
285.30to pay, redeem, or refund debt service costs incurred for the River Centre Campus.
285.31 Sec. 22. REPEALER.
285.32(a) Minnesota Statutes 2006, section 16A.1522, is repealed.
286.1(b) If a bill styled as 2007 H.F. No. 548 is enacted and contains an appropriation
286.2that is the same as that set forth in section 20, section 20 is repealed the day following
286.3final enactment.