HF 3149

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to the financing and operation of state and local government; making
policy, technical, administrative, enforcement, collection, refund, clarifying,
and other changes to income, franchise, property, sales and use, minerals,
wheelage, mortgage, deed, and estate taxes, and other taxes and tax-related
provisions; providing for homestead credit state refund; providing for aids to
local governments; providing city foreclosure and deed grants; changing and
providing property tax exemptions and credits; modifying job opportunity
building zone program; modifying green acre eligibility requirements; providing
aggregate resource preservation property tax law; providing seasonal recreational
property tax deferral program; modifying eligibility for senior citizen tax deferral
program; modifying transit taxing district; modifying levies, property valuation
procedures, homestead provisions, property tax classes, and class rates; providing
for and modifying sales tax exemptions; exempting two-wheel, motorized
vehicles from wheelage tax; providing a seed capital investment credit; providing
for additional financing of metropolitan area transit and paratransit capital
expenditures; authorizing issuance of certain obligations; modifying provision
governing bonding for county libraries; changing and authorizing powers, duties,
and requirements of local governments and authorities and state departments
or agencies; modifying, extending, and authorizing certain tax increment
financing districts; authorizing and modifying local sales taxes; prohibiting
the imposition of new local sales taxes; providing federal updates; changing
accelerated sales tax; creating Surplus Lines Association of Minnesota; creating
Iron Range revitalization account; changing provisions related to data practices
and debt collection; requiring studies; providing appointments; appropriating
money; amending Minnesota Statutes 2006, sections 13.51, subdivision 3;
13.585, subdivision 5; 16D.02, subdivisions 3, 6; 16D.04, subdivision 2, as
amended; 60A.196; 163.051, subdivision 1; 168.012, subdivision 1, by adding a
subdivision; 168.013, subdivision 1f; 168A.03, subdivision 1; 169.01, by adding
a subdivision; 169.781, subdivision 1; 216B.1612, by adding a subdivision;
216B.1646; 270A.08, subdivision 1; 270B.15; 270C.33, subdivision 5; 270C.56,
subdivisions 1, as amended, 3; 270C.85, subdivision 2; 272.02, subdivisions 13,
20, 21, 27, 31, 38, 49, by adding subdivisions; 272.03, subdivision 3, by adding a
subdivision; 273.11, subdivisions 1, 1a, 8, 14b, by adding subdivisions; 273.111,
subdivisions 3, as amended, 4, 8, 9, 11, 11a, by adding a subdivision; 273.121, as
amended; 273.124, subdivisions 1, 6, 13, as amended, 21; 273.128, subdivision
1, as amended; 273.13, subdivisions 23, as amended, 24, 25, as amended,
33, 34, as added; 273.1384, subdivision 1; 274.01, subdivision 3; 274.014,
subdivision 3; 274.14; 275.025, subdivisions 1, 2; 275.065, subdivisions 1c, 6,
8, 9, 10, by adding subdivisions; 276.04, subdivision 2, as amended; 282.08;
287.20, subdivisions 3a, 9, by adding a subdivision; 289A.12, by adding a
subdivision; 289A.18, subdivision 1, as amended; 289A.19, subdivision 2, by
adding a subdivision; 289A.20, subdivision 4, as amended; 289A.40, subdivision
1; 289A.55, by adding a subdivision; 289A.60, subdivision 15, as amended,
by adding a subdivision; 290.01, subdivisions 6b, 19a, as amended, 29, by
adding a subdivision; 290.06, by adding subdivisions; 290.068, subdivisions
1, 3, by adding subdivisions; 290.07, subdivision 1; 290.091, subdivision 2,
as amended; 290.21, subdivision 4; 290.92, subdivisions 1, 26, 31, as added;
290A.03, subdivision 13; 290A.04, subdivisions 2h, 3, 4, by adding subdivisions;
290B.03, subdivision 1; 290B.04, subdivisions 1, 3, 4; 290B.05, subdivision
1; 290B.07; 291.03, subdivision 1; 295.50, subdivision 4; 295.52, subdivision
4, as amended; 295.53, subdivision 4a; 296A.07, subdivision 4; 296A.08,
subdivision 3; 296A.16, subdivision 2; 297A.61, subdivisions 22, 29; 297A.665,
as amended; 297A.67, subdivision 7, as amended; 297A.70, subdivisions
2, 8; 297A.71, subdivision 23, by adding subdivisions; 297A.75; 297A.99,
subdivision 1, as amended; 297A.995, subdivision 10, by adding subdivisions;
297B.01, subdivision 7, by adding a subdivision; 297B.03; 297F.01, subdivision
8; 297F.09, subdivision 10, as amended; 297F.21, subdivision 1; 297G.01,
subdivision 9; 297G.09, subdivision 9, as amended; 297H.09; 297I.05,
subdivision 12; 298.24, subdivision 1, as amended; 298.75, subdivisions 1, 2,
6, 7; 365A.095; 383A.80, subdivision 4; 383A.81, subdivisions 1, 2; 383B.80,
subdivision 4; 383E.20; 429.101, subdivision 1; 469.033, subdivision 6; 469.040,
subdivision 4; 469.174, subdivision 10b; 469.177, subdivision 1c, by adding
a subdivision; 469.1813, subdivision 8; 469.312, by adding a subdivision;
469.319; 469.3201; 473.39, by adding a subdivision; 473.446, subdivisions 2, 8;
477A.011, subdivisions 34, 36, as amended, by adding subdivisions; 477A.0124,
subdivision 5; 477A.013, subdivisions 1, 8, as amended, 9, as amended; 477A.03;
Minnesota Statutes 2007 Supplement, sections 115A.1314, subdivision 2; 268.19,
subdivision 1; 273.1231, subdivision 7, by adding a subdivision; 273.1232,
subdivision 1; 273.1233, subdivisions 1, 3; 273.1234; 273.1235, subdivisions 1,
3; 273.124, subdivision 14; 273.1393; 275.065, subdivisions 1, 1a, 3; 298.227;
Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4, as
amended; Laws 1995, chapter 264, article 5, section 46, subdivision 2; Laws
2003, chapter 127, article 10, section 31, subdivision 1; Laws 2006, chapter 259,
article 10, section 14, subdivision 1; Laws 2008, chapter 154, article 2, section
11; article 3, section 7; article 9, sections 23; 24; proposing coding for new law
in Minnesota Statutes, chapters 60A; 116J; 169; 216F; 273; 298; 373; 383C;
383D; 383E; 469; proposing coding for new law as Minnesota Statutes, chapter
290D; repealing Minnesota Statutes 2006, sections 273.11, subdivisions 14,
14a; 273.111, subdivision 6; 290.191, subdivision 4; 290A.04, subdivisions 2,
2b; 473.4461; 477A.014, subdivision 5; Minnesota Statutes 2007 Supplement,
section 477A.014, subdivision 4; Laws 2005, First Special Session chapter 3,
article 5, section 24; Minnesota Rules, parts 8031.0100, subpart 3; 8093.2100.

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

ARTICLE 1

HOMESTEAD CREDIT STATE REFUND

Section 1.

Minnesota Statutes 2006, section 273.1384, subdivision 1, is amended to
read:

Subdivision 1.

Residential homestead market value credit.

new text begin (a) new text end Each county
auditor shall determine a homestead credit for each class 1a, 1b, and 2a homestead
property within the county equal to 0.4 percent of the first $76,000 of market value
of the property minus .09 percent of the market value in excess of $76,000. The credit
amount may not be less than zero. In the case of an agricultural or resort homestead, only
the market value of the house, garage, and immediately surrounding one acre of land is
eligible in determining the property's homestead credit. In the case of a property that
is classified as part homestead and part nonhomestead, (i) the credit shall apply only
to the homestead portion of the property, but (ii) if a portion of a property is classified
as nonhomestead solely because not all the owners occupy the property, not all the
owners have qualifying relatives occupying the property, or solely because not all the
spouses of owners occupy the property, the credit amount shall be initially computed as
if that nonhomestead portion were also in the homestead class and then prorated to the
owner-occupant's percentage of ownership. For the purpose of this section, when an
owner-occupant's spouse does not occupy the property, the percentage of ownership for
the owner-occupant spouse is one-half of the couple's ownership percentage.

new text begin (b) For property taxes payable in 2009 and thereafter, the county auditor shall
determine the amount of the homestead credit under paragraph (a) and this paragraph.
The county auditor shall report the amount of the credit to the taxpayer on the property
tax statement or in another manner, as authorized by the commissioner of revenue. The
amount of the credit allowed for the property taxes payable year is to be computed as the
following percentage of the credit amount under paragraph (a):
new text end

new text begin (1) for property taxes payable in 2009, 100 percent;
new text end

new text begin (2) for property taxes payable in 2010, 60 percent;
new text end

new text begin (3) for property taxes payable in 2011, 45 percent;
new text end

new text begin (4) for property taxes payable in 2012, 30 percent;
new text end

new text begin (5) for property taxes payable in 2013, 15 percent; and
new text end

new text begin (6) for property taxes payable in 2014 or thereafter, no credit is allowed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for property taxes payable
in 2009.
new text end

Sec. 2.

Minnesota Statutes 2006, section 276.04, subdivision 2, as amended by Laws
2008, chapter 154, article 2, section 19, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the
printing of the tax statements. The commissioner of revenue shall prescribe the form
of the property tax statement and its contents. The statement must contain a tabulated
statement of the dollar amount due to each taxing authority and the amount of the state
tax from the parcel of real property for which a particular tax statement is prepared. The
dollar amounts attributable to the county, the state tax, the voter approved school tax, the
other local school tax, the township or municipality, and the total of the metropolitan
special taxing districts as defined in section 275.065, subdivision 3, paragraph (i), must
be separately stated. The amounts due all other special taxing districts, if any, may be
aggregated except that any levies made by the regional rail authorities in the county of
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be listed on a separate line directly under the appropriate county's levy. If the county
levy under this paragraph includes an amount for a lake improvement district as defined
under sections 103B.501 to 103B.581, the amount attributable for that purpose must be
separately stated from the remaining county levy amount. In the case of Ramsey County,
if the county levy under this paragraph includes an amount for public library service
under section 134.07, the amount attributable for that purpose may be separated from the
remaining county levy amount. The amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount. The amount of the
tax on contamination value imposed under sections 270.91 to 270.98, if any, must also
be separately stated. The dollar amounts, including the dollar amount of any special
assessments, may be rounded to the nearest even whole dollar. For purposes of this section
whole odd-numbered dollars may be adjusted to the next higher even-numbered dollar.
The amount of market value excluded under section 273.11, subdivision 16, if any, must
also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's taxable market value after reductions under section 273.11,
subdivisions 1a and 16;

(3) deleted text begin the property's gross tax, before credits; deleted text end new text begin any items required by the commissioner
of revenue under section 273.1384, subdivision 1, paragraph (b); and new text end

deleted text begin (4) for homestead residential and agricultural properties, the credits under section
273.1384;
deleted text end

deleted text begin (5) any credits received under sections 273.119; 273.123; 273.135; 273.1391;
273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit received
under section 273.135 must be separately stated and identified as "taconite tax relief"; and
deleted text end

deleted text begin (6) deleted text end new text begin (4) new text end the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 3.

Minnesota Statutes 2006, section 290.01, subdivision 19a, as amended by Laws
2008, chapter 154, article 3, section 2, and Laws 2008, chapter 154, article 4, section 3,
is amended to read:

Subd. 19a.

Additions to federal taxable income.

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

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

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue
Code, except the portion of the exempt-interest dividends derived from interest income
on obligations of the state of Minnesota or its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities, but only if the portion of the
exempt-interest dividends from such Minnesota sources paid to all shareholders represents
95 percent or more of the exempt-interest dividends that are paid by the regulated
investment company as defined in section 851(a) of the Internal Revenue Code, or the
fund of the regulated investment company as defined in section 851(g) of the Internal
Revenue Code, making the payment; and

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

(2) the amount of new text begin (i) new text end income or sales and use taxes paid or accrued within the
taxable year under this chapter and the amount of taxes based on net income paid or sales
and use taxes paid to any other state or to any province or territory of Canada, new text begin and (ii)
the amount of real and personal property taxes paid or accrued within the taxable year,
new text end to the extent allowed as a deduction under section 63(d) of the Internal Revenue Code,
but the addition may not be more than the amount by which the itemized deductions as
allowed under section 63(d) of the Internal Revenue Code exceeds the amount of the
standard deduction as defined in section 63(c) of the Internal Revenue Code. For the
purpose of this paragraph, the disallowance of itemized deductions under section 68 of the
Internal Revenue Code of 1986, income or sales and use tax is the last itemized deduction
disallowed new text begin , real property tax is the second to last itemized deduction disallowed, and
personal property tax is the third to last itemized deduction disallowed new text end ;

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

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

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

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

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

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

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

(10) the exclusion allowed under section 139A of the Internal Revenue Code for
federal subsidies for prescription drug plans;

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

(12) for taxable years beginning after December 31, 2006, and before January 1,
2008, the amount deducted for qualified tuition and related expenses under section 222 of
the Internal Revenue Code, to the extent deducted from gross income; and

(13) for taxable years beginning after December 31, 2006, and before January 1,
2008, the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 290A.03, subdivision 13, is amended to read:

Subd. 13.

Property taxes payable.

"Property taxes payable" means the property
tax exclusive of special assessments, penalties, and interest payable on a claimant's
homestead after deductions made under sections 273.135, deleted text begin 273.1384, deleted text end 273.1391, 273.42,
subdivision 2, and any other state paid property tax credits in any calendar year, and
after any refund claimed and allowable under section 290A.04, subdivision 2h, that is
first payable in the year that the property tax is payable. new text begin Beginning for property taxes
payable in 2009, the amount of the credit under section 273.1384, subdivision 1, must
not be deducted in computing property taxes payable. new text end In the case of a claimant who
makes ground lease payments, "property taxes payable" includes the amount of the
payments directly attributable to the property taxes assessed against the parcel on which
the house is located. No apportionment or reduction of the "property taxes payable" shall
be required for the use of a portion of the claimant's homestead for a business purpose if
the claimant does not deduct any business depreciation expenses for the use of a portion
of the homestead in the determination of federal adjusted gross income. For homesteads
which are manufactured homes as defined in section 273.125, subdivision 8, and for
homesteads which are park trailers taxed as manufactured homes under section 168.012,
subdivision 9, "property taxes payable" shall also include 19 percent of the gross rent paid
in the preceding year for the site on which the homestead is located. When a homestead
is owned by two or more persons as joint tenants or tenants in common, such tenants
shall determine between them which tenant may claim the property taxes payable on the
homestead. If they are unable to agree, the matter shall be referred to the commissioner of
revenue whose decision shall be final. Property taxes are considered payable in the year
prescribed by law for payment of the taxes.

In the case of a claim relating to "property taxes payable," the claimant must have
owned and occupied the homestead on January 2 of the year in which the tax is payable
and (i) the property must have been classified as homestead property pursuant to section
273.124, on or before December 15 of the assessment year to which the "property taxes
payable" relate; or (ii) the claimant must provide documentation from the local assessor
that application for homestead classification has been made on or before December 15
of the year in which the "property taxes payable" were payable and that the assessor has
approved the application.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for refund claims based on
property taxes payable in 2009.
new text end

Sec. 5.

Minnesota Statutes 2006, section 290A.04, subdivision 2h, is amended to read:

Subd. 2h.

Additional refund.

(a) If the gross property taxes payable on a
homestead increase more than 12 percent over the property taxes payable in the prior year
on the same property that is owned and occupied by the same owner on January 2 of both
years, and the amount of that increase is $100 or more, a claimant who is a homeowner
shall be allowed an additional refund equal to 60 percent of the amount of the increase
over the greater of 12 percent of the prior year's property taxes payable or $100. This
subdivision shall not apply to any increase in the gross property taxes payable attributable
to improvements made to the homestead after the assessment date for the prior year's
taxes. This subdivision shall not apply to any increase in the gross property taxes payable
attributable to the termination of valuation exclusions under section 273.11, subdivision
16 new text begin , or to the reduction in and elimination of the homestead market value credit under
section 273.1384, subdivision 1, paragraph (b) new text end .

The maximum refund allowed under this subdivision is $1,000.

(b) For purposes of this subdivision "gross property taxes payable" means property
taxes payable determined without regard to the refund allowed under this subdivision.

(c) In addition to the other proofs required by this chapter, each claimant under
this subdivision shall file with the property tax refund return a copy of the property tax
statement for taxes payable in the preceding year or other documents required by the
commissioner.

(d) Upon request, the appropriate county official shall make available the names and
addresses of the property taxpayers who may be eligible for the additional property tax
refund under this section. The information shall be provided on a magnetic computer
disk. The county may recover its costs by charging the person requesting the information
the reasonable cost for preparing the data. The information may not be used for any
purpose other than for notifying the homeowner of potential eligibility and assisting the
homeowner, without charge, in preparing a refund claim.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on property taxes
payable in 2009 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2006, section 290A.04, is amended by adding a subdivision
to read:

new text begin Subd. 2k. new text end

new text begin Homestead credit state refund. new text end

new text begin (a) A claimant who is a homeowner
is entitled to a state refund of the amount of the property taxes payable in excess of two
percent of the claimant's household income, based on the percentage and maximum for the
appropriate household income level shown below. The refund amount determined from the
table must be reduced further by the amount of the homestead market value credit under
section 273.1384, subdivision 1, paragraph (b), but not to an amount that is less than zero.
new text end

new text begin Household Income new text end	new text begin Refund Percentage new text end	new text begin Maximum State Refund new text end
new text begin 0 to $5,399 new text end	new text begin 90 percent new text end	new text begin $2,500 new text end
new text begin 5,400 to 18,899 new text end	new text begin 85 percent new text end	new text begin 2,500 new text end
new text begin 18,900 to 26,999 new text end	new text begin 80 percent new text end	new text begin 2,500 new text end
new text begin 27,000 to 32,399 new text end	new text begin 70 percent new text end	new text begin 2,500 new text end
new text begin 32,400 to 37,799 new text end	new text begin 65 percent new text end	new text begin 2,500 new text end
new text begin 37,800 to 45,899 new text end	new text begin 60 percent new text end	new text begin 2,500 new text end
new text begin 45,900 to 64,699 new text end	new text begin 55 percent new text end	new text begin 2,500 new text end
new text begin 64,700 to 80,899 new text end	new text begin 50 percent new text end	new text begin 2,300 new text end
new text begin 80,900 to 94,399 new text end	new text begin 45 percent new text end	new text begin 2,100 new text end
new text begin 94,400 to 99,299 new text end	new text begin 40 percent new text end	new text begin 1,900 new text end
new text begin 99,300 to 104,099 new text end	new text begin 35 percent new text end	new text begin 1,700 new text end
new text begin 104,100 to 115,599 new text end	new text begin 30 percent new text end	new text begin 1,500 new text end
new text begin 115,600 to 127,199 new text end	new text begin 25 percent new text end	new text begin 1,250 new text end
new text begin 127,200 to 134,099 new text end	new text begin 25 percent new text end	new text begin 1,000 new text end
new text begin 134,100 to 138,799 new text end	new text begin 25 percent new text end	new text begin 750 new text end
new text begin 138,800 to 144,399 new text end	new text begin 25 percent new text end	new text begin 500 new text end
new text begin 144,400 to 200,000 new text end	new text begin 25 percent new text end	new text begin 250 new text end

new text begin (b) No payment is allowed under paragraph (a) if the claimant's household income
is more than $200,000.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for claims based on
property taxes payable in 2009.
new text end

Sec. 7.

Minnesota Statutes 2006, section 290A.04, is amended by adding a subdivision
to read:

new text begin Subd. 2l. new text end

new text begin Revenue neutrality. new text end

new text begin (a) No later than August 1st of each year, beginning
in 2010, the commissioner must calculate the amount of revenue estimated to be raised in
the next fiscal year through the phaseout of the residential homestead market value credit
in section 273.1384, subdivision 1, paragraph (b), and the disallowance of the deduction
of real and personal property taxes in section 290.01, subdivision 19a, clause (2). The
commissioner must also estimate the total amount estimated to be paid to homeowners
in refunds based on taxes payable in the next calendar year under the homestead credit
state refund in subdivision 2k, and the amount that would have been paid in refunds based
on taxes payable in the next calendar year under the homeowner property tax refund if
section 290A.04, subdivision 2, had not been repealed.
new text end

new text begin (b) If the commissioner estimates that more revenue will be raised in the next
fiscal year through the phaseout of the residential homestead market value credit and the
disallowance of the real and personal property tax deduction than will be paid in increased
refunds under the homestead credit state refund as compared with the repealed homeowner
property tax refund, and if the revenue raised exceeds the additional refunds to be paid by
more than $5,000,000, then the commissioner must adjust the maximum refunds allowed
under subdivision 2k for refunds based on taxes payable in the next calendar year. The
adjustment applies to the maximum refunds after the inflation adjustment provided in
subdivision 4. The commissioner must adjust the maximum refunds for all income ranges
proportionately, rounded to the nearest $10 amount as provided in subdivision 4, paragraph
(b), so that the amount estimated to be paid in refunds based on taxes payable in the next
calendar year approximates but does not exceed the revenue estimated to be raised through
the phaseout of the residential homestead market value credit and the disallowance of the
real and personal property tax deduction in the next fiscal year. The determination of the
commissioner under this subdivision is not a rule under the Administrative Procedure Act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
for refunds based on property taxes payable in 2011 and following years.
new text end

Sec. 8.

Minnesota Statutes 2006, section 290A.04, subdivision 3, is amended to read:

Subd. 3.

Table.

The commissioner of revenue shall construct and make available
to taxpayers a comprehensive table showing the deleted text begin property taxes to be paid and deleted text end refund
allowed at various levels of income deleted text begin and assessment deleted text end . The table shall follow the schedule
of income percentages, maximums and other provisions specified in deleted text begin subdivision 2 deleted text end new text begin this
section new text end , except that the commissioner may graduate the transition between income
brackets. All refunds shall be computed in accordance with tables prepared and issued
by the commissioner of revenue.

The commissioner shall include on the form an appropriate space or method for the
claimant to identify if the property taxes paid are for a manufactured home, as defined in
section 273.125, subdivision 8, paragraph (c), or a park trailer taxed as a manufactured
home under section 168.012, subdivision 9.

Sec. 9.

Minnesota Statutes 2006, section 290A.04, subdivision 4, is amended to read:

Subd. 4.

Inflation adjustment.

new text begin (a) new text end Beginning for property tax refunds payable in
calendar year deleted text begin 2002 deleted text end new text begin 2010 new text end , the commissioner shall annually adjust the dollar amounts of the
income thresholds and the maximum refunds under deleted text begin subdivisions 2 and 2a deleted text end new text begin subdivision 2k
new text end for inflation. The commissioner shall make the inflation adjustments in accordance with
section 1(f) of the Internal Revenue Code, except that for purposes of this subdivision
the percentage increase shall be determined from the year ending on June 30, deleted text begin 2000 deleted text end new text begin 2008 new text end ,
to the year ending on June 30 of the year preceding that in which the refund is payable.
The commissioner shall use the appropriate percentage increase to annually adjust the
income thresholds and maximum refunds under deleted text begin subdivisions 2 and 2a deleted text end new text begin subdivision 2k new text end for
inflation without regard to whether or not the income tax brackets are adjusted for inflation
in that year. The commissioner shall round the thresholds and the maximum amounts,
as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
round it up to the next $10 amount.

The commissioner shall annually announce the adjusted refund schedule at the same
time provided under section 290.06. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.

new text begin (b) Beginning for property tax refunds payable in calendar year 2002, the
commissioner shall annually adjust the dollar amounts of the income thresholds and
the maximum refunds under subdivision 2a for inflation. The commissioner shall make
the inflation adjustments in accordance with section 1(f) of the Internal Revenue Code,
except that for purposes of this subdivision the percentage increase shall be determined
from the year ending on June 30, 2000, to the year ending on June 30 of the year
preceding that in which the refund is payable. The commissioner shall use the appropriate
percentage increase to annually adjust the income thresholds and maximum refunds under
subdivision 2a for inflation without regard to whether or not the income tax brackets are
adjusted for inflation in that year. The commissioner shall round the thresholds and the
maximum amounts, as adjusted to the nearest $10 amount. If the amount ends in $5, the
commissioner shall round it up to the next $10 amount. The commissioner shall annually
announce the adjusted refund schedule at the same time provided under section 290.06.
The determination of the commissioner under this subdivision is not a rule under the
Administrative Procedure Act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for claims based on
property taxes payable in 2010.
new text end

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

new text begin Minnesota Statutes 2006, section 290A.04, subdivisions 2 and 2b, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims based on property taxes
payable in 2009 and thereafter.
new text end

ARTICLE 2

AIDS TO LOCAL GOVERNMENTS

Section 1.

Minnesota Statutes 2006, section 477A.011, subdivision 34, is amended to
read:

Subd. 34.

City revenue need.

(a) For a city with a population equal to or greater
than 2,500, "city revenue need" is the sum of (1) 5.0734098 times the pre-1940 housing
percentage; plus (2) 19.141678 times the population decline percentage; plus (3)
2504.06334 times the road accidents factor; plus (4) 355.0547; minus (5) the metropolitan
area factor; minus (6) 49.10638 times the household size.

(b) For a city with a population less than 2,500, "city revenue need" is the sum of
(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
1.206 times the transformed population; minus (5) 62.772.

(c) For a city with a population of 2,500 or more and a population in one of the most
recently available five years that was less than 2,500, "city revenue need" is the sum of (1)
its city revenue need calculated under paragraph (a) multiplied by its transition factor;
plus (2) its city revenue need calculated under the formula in paragraph (b) multiplied
by the difference between one and its transition factor. For purposes of this paragraph, a
city's "transition factor" is equal to 0.2 multiplied by the number of years that the city's
population estimate has been 2,500 or more. This provision only applies for aids payable
in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500. It
applies to any city for aids payable in 2009 and thereafter. new text begin The city revenue need under
this paragraph may not be less than 290.
new text end

(d) The city revenue need cannot be less than zero.

new text begin (e) For aids certified in 2010 and subsequent years, the city revenue need is equal
to the average of (1) the city's revenue need calculated under paragraphs (a) to (d)
based on data available by January 1 in the year the aid is certified, and (2) its revenue
need calculated under paragraphs (a) to (d) based on data available by January 1 in the
previous year.
new text end

deleted text begin (e) deleted text end new text begin (f) new text end For calendar year 2005 and subsequent years, the city revenue need for a city,
as determined in paragraphs (a) to deleted text begin (d) deleted text end new text begin (e) new text end , is multiplied by the ratio of the annual implicit
price deflator for government consumption expenditures and gross investment for state
and local governments as prepared by the United States Department of Commerce, for
the most recently available year to the 2003 implicit price deflator for state and local
government purchases.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2006, section 477A.011, subdivision 36, as amended by
Laws 2008, chapter 154, article 1, section 1, is amended to read:

Subd. 36.

City aid base.

(a) Except as otherwise provided in this subdivision,
"city aid base" is zero.

(b) The city aid base for any city with a population less than 500 is increased by
$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $40,000 for aids payable in calendar year 1995 only, provided that:

(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;

(ii) the city portion of the tax capacity rate exceeds 100 percent; and

(iii) its city aid base is less than $60 per capita.

(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:

(i) the city has a population in 1994 of 2,500 or more;

(ii) the city is located in a county, outside of the metropolitan area, which contains a
city of the first class;

(iii) the city's net tax capacity used in calculating its 1996 aid under section
477A.013 is less than $400 per capita; and

(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
property located in the city is classified as railroad property.

(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:

(i) the city was incorporated as a statutory city after December 1, 1993;

(ii) its city aid base does not exceed $5,600; and

(iii) the city had a population in 1996 of 5,000 or more.

deleted text begin (e) The city aid base for a city is increased by $450,000 in 1999 to 2008 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $450,000 in calendar year 1999 only, provided that:
deleted text end

deleted text begin (i) the city had a population in 1996 of at least 50,000;
deleted text end

deleted text begin (ii) its population had increased by at least 40 percent in the ten-year period ending
in 1996; and
deleted text end

deleted text begin (iii) its city's net tax capacity for aids payable in 1998 is less than $700 per capita.
deleted text end

deleted text begin (f) deleted text end new text begin (e) new text end The city aid base for a city is increased by $150,000 for aids payable in
2000 and thereafter, and the maximum amount of total aid it may receive under section
477A.013, subdivision 9, paragraph (c), is also increased by $150,000 in calendar year
2000 only, provided that:

(1) the city has a population that is greater than 1,000 and less than 2,500;

(2) its commercial and industrial percentage for aids payable in 1999 is greater
than 45 percent; and

(3) the total market value of all commercial and industrial property in the city
for assessment year 1999 is at least 15 percent less than the total market value of all
commercial and industrial property in the city for assessment year 1998.

deleted text begin (g) deleted text end new text begin (f) new text end The city aid base for a city is increased by $200,000 in 2000 and thereafter,
and the maximum amount of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:

(1) the city had a population in 1997 of 2,500 or more;

(2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $650 per capita;

(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
section 477A.013 is greater than 12 percent;

(4) the 1999 local government aid of the city under section 477A.013 is less than
20 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent; and

(5) the city aid base of the city used in calculating aid under section 477A.013
is less than $7 per capita.

deleted text begin (h) deleted text end new text begin (g) new text end The city aid base for a city is increased by $102,000 in 2000 and thereafter,
and the maximum amount of total aid it may receive under section 477A.013, subdivision
9, paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:

(1) the city has a population in 1997 of 2,000 or more;

(2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $455 per capita;

(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
greater than $195 per capita; and

(4) the 1999 local government aid of the city under section 477A.013 is less than
38 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent.

deleted text begin (i) deleted text end new text begin (h) new text end The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:

(1) the city has a population in 1998 that is greater than 200 but less than 500;

(2) the city's revenue need used in calculating aids payable in 2000 was greater
than $200 per capita;

(3) the city net tax capacity for the city used in calculating aids available in 2000
was equal to or less than $200 per capita;

(4) the city aid base of the city used in calculating aid under section 477A.013
is less than $65 per capita; and

(5) the city's formula aid for aids payable in 2000 was greater than zero.

deleted text begin (j) deleted text end new text begin (i) new text end The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:

(1) the city had a population in 1998 that is greater than 200 but less than 500;

(2) the city's commercial industrial percentage used in calculating aids payable in
2000 was less than ten percent;

(3) more than 25 percent of the city's population was 60 years old or older according
to the 1990 census;

(4) the city aid base of the city used in calculating aid under section 477A.013
is less than $15 per capita; and

(5) the city's formula aid for aids payable in 2000 was greater than zero.

deleted text begin (k) deleted text end new text begin (j) new text end The city aid base for a city is increased by $45,000 in 2001 and thereafter
and by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount
of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
only, provided that:

(1) the net tax capacity of the city used in calculating its 2000 aid under section
477A.013 is less than $810 per capita;

(2) the population of the city declined more than two percent between 1988 and 1998;

(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
greater than $240 per capita; and

(4) the city received less than $36 per capita in aid under section 477A.013,
subdivision 9, for aids payable in 2000.

deleted text begin (l) deleted text end new text begin (k) new text end The city aid base for a city with a population of 10,000 or more which is
located outside of the seven-county metropolitan area is increased in 2002 and thereafter,
and the maximum amount of total aid it may receive under section 477A.013, subdivision
9, paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
the lesser of:

(1)(i) the total population of the city, as determined by the United States Bureau of
the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or

(2) $2,500,000.

deleted text begin (m) deleted text end new text begin (l) new text end The city aid base is increased by $50,000 in 2002 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:

(1) the city is located in the seven-county metropolitan area;

(2) its population in 2000 is between 10,000 and 20,000; and

(3) its commercial industrial percentage, as calculated for city aid payable in 2001,
was greater than 25 percent.

deleted text begin (n) deleted text end new text begin (m) new text end The city aid base for a city is increased by $150,000 in calendar years 2002
to 2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum
amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
2009 only, provided that:

(1) the city had a population of at least 3,000 but no more than 4,000 in 1999;

(2) its home county is located within the seven-county metropolitan area;

(3) its pre-1940 housing percentage is less than 15 percent; and

(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
per capita.

deleted text begin (o) deleted text end new text begin (n) new text end The city aid base for a city is increased by $200,000 beginning in calendar
year 2003 and the maximum amount of total aid it may receive under section 477A.013,
subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only,
provided that the city qualified for an increase in homestead and agricultural credit aid
under Laws 1995, chapter 264, article 8, section 18.

deleted text begin (p) deleted text end new text begin (o) new text end The city aid base for a city is increased by $200,000 in 2004 only and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
dry cask storage facility.

deleted text begin (q) deleted text end new text begin (p) new text end The city aid base for a city is increased by $10,000 in 2004 and thereafter
and the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $10,000 in calendar year 2004 only, if the city was included in a federal
major disaster designation issued on April 1, 1998, and its pre-1940 housing stock was
decreased by more than 40 percent between 1990 and 2000.

deleted text begin (r) deleted text end new text begin (q) new text end The city aid base for a city is increased by $30,000 in 2009 and thereafter
and the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $25,000 in calendar year 2006 only if the city had a population in 2003
of at least 1,000 and has a state park for which the city provides rescue services and
which comprised at least 14 percent of the total geographic area included within the
city boundaries in 2000.

deleted text begin (s) The city aid base for a city with a population less than 5,000 is increased in
2006 and thereafter and the minimum and maximum amount of total aid it may receive
under this section is also increased in calendar year 2006 only by an amount equal to
$6 multiplied by its population.
deleted text end

deleted text begin (t) deleted text end new text begin (r) new text end The city aid base for a city is increased by $80,000 in 2009 and thereafter and
the minimum and maximum amount of total aid it may receive under section 477A.013,
subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:

(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
to be placed in trust status as tax-exempt Indian land;

(2) the placement of the land is being challenged administratively or in court; and

(3) due to the challenge, the land proposed to be placed in trust is still on the tax
rolls as of May 1, 2006.

deleted text begin (u) deleted text end new text begin (s) new text end The city aid base for a city is increased by $100,000 in 2007 and thereafter
and the minimum and maximum total amount of aid it may receive under this section is
also increased in calendar year 2007 only, provided that:

(1) the city has a 2004 estimated population greater than 200 but less than 2,000;

(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;

(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
payable in 2006 was greater than 110 percent; and

(4) it is located in a county where at least 15,000 acres of land are classified as
tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.

deleted text begin (v) deleted text end new text begin (t) new text end The city aid base for a city is increased by $30,000 in 2009 only, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than
3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
and one township in 2002.

new text begin (u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and
the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for
aids payable in 2007 of less than $150 per capita and the city experienced flooding on
March 14, 2007, that resulted in evacuation of at least 40 homes.
new text end

new text begin (v) The city aid base for a city is increased by $200,000 in 2009 to 2013, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $200,000 in calendar year 2009 only, if the city:
new text end

new text begin (1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
area;
new text end

new text begin (2) has a 2005 population greater than 7,000 but less than 8,000; and
new text end

new text begin (3) has a 2005 net tax capacity per capita of less than $500.
new text end

new text begin (w) The city aid base is increased by $80,000 in calendar years 2009 to 2018 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
increased by $80,000 in calendar year 2009 only, provided that:
new text end

new text begin (1) the city is located in the seven-county metropolitan area;
new text end

new text begin (2) its population in 2006 is less than 200; and
new text end

new text begin (3) the percentage of its housing stock built before 1940, according to the 2000
United States Census, is greater than 40 percent.
new text end

new text begin (x) The city aid base for a city is increased by $100,000 in 2009 and thereafter and
the minimum and maximum total amount of aid it may receive under this section is also
increased by $100,000 in calendar year 2009 only, provided that:
new text end

new text begin (1) the city is located in the metropolitan area and its 2006 population is less than
2,500;
new text end

new text begin (2) at least 25 percent of its housing was built before 1940 and at least 50 percent of
its housing is rental housing, according to the 2000 United States census;
new text end

new text begin (3) the median household income in the city is 80 percent or less than the median
household income in the metropolitan area and 50 percent or less than the median
household income for all cities contiguous to that city, according to the 2000 United
States Census; and
new text end

new text begin (4) at least 60 percent of the land and water acres in the city are classified as
tax-exempt property, according to its 2008 planning document.
new text end

new text begin (y) The city aid base is increased by $90,000 in calendar year 2009 only and the
minimum and maximum total amount of aid it may receive under section 477A.013,
subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the
city is located in the seven-county metropolitan area, has a 2006 population between 5,000
and 7,000 and has a 1997 population of over 7,000.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2006, section 477A.011, is amended by adding a
subdivision to read:

new text begin Subd. 41. new text end

new text begin Small city aid base. new text end

new text begin (a) "Small city aid base" for a city with a population
less than 5,000 is equal to $9 multiplied by its population. The small city aid base for
all other cities is equal to zero.
new text end

new text begin (b) For calendar year 2010 and subsequent years, the small city aid base for a city,
as determined in paragraph (a), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross investment for state and
local governments as prepared by the United States Department of Commerce for the most
recently available year to the 2007 implicit price deflator for state and local government
purchases.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2006, section 477A.011, is amended by adding a
subdivision to read:

new text begin Subd. 42. new text end

new text begin City jobs base. new text end

new text begin (a) "City jobs base" for a city with a population of 5,000
or more is equal to the product of (1) $30, (2) the number of jobs per capita in the city, and
(3) its population. For cities with a population less than 5,000, the city jobs base is equal
to zero. For a city receiving aid under section 477A.011, subdivision 36, paragraph (l), its
city jobs base is reduced by the lesser of one-half of the amount of aid received under that
paragraph or $1,200,000. No city's jobs base may exceed $5,000,000 under this paragraph.
new text end

new text begin (b) For calendar year 2010 and subsequent years, the city jobs base for a city,
as determined in paragraph (a), is multiplied by the ratio of the annual implicit price
deflator for government consumption expenditures and gross investment for state and
local governments as prepared by the United States Department of Commerce for the most
recently available year to the 2007 implicit price deflator for state and local government
purchases.
new text end

new text begin (c) For purposes of this subdivision, "jobs per capita in the city" means (1) the
average annual number of employees in the city based on the data from the Quarterly
Census of Employment and Wages, as reported by the Department of Employment and
Economic Development, for the most recent calendar year available as of January 1 of
the year in which the aid is calculated, divided by (2) the city's population for the same
calendar year as the employment data.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2006, section 477A.0124, subdivision 5, is amended to read:

Subd. 5.

County transition aid.

(a) deleted text begin For 2005, a county is eligible for transition
aid equal to the amount, if any, by which:
deleted text end

deleted text begin (1) the difference between:
deleted text end

deleted text begin (i) the aid the county received under subdivision 1 in 2004, divided by the total aid
paid to all counties under subdivision 1, multiplied by $205,000,000; and
deleted text end

deleted text begin (ii) the amount of aid the county is certified to receive in 2005 under subdivisions
3 and 4;
deleted text end

deleted text begin exceeds:
deleted text end

deleted text begin (2) three percent of the county's adjusted net tax capacity.
deleted text end

deleted text begin A county's aid under this paragraph may not be less than zero.
deleted text end

deleted text begin (b) In 2006, a county is eligible to receive two-thirds of the transition aid it received
in 2005.
deleted text end

deleted text begin (c) In 2007, deleted text end new text begin For 2009 and each year thereafter, new text end a county is eligible to receive
deleted text begin one-third of deleted text end the transition aid it received in deleted text begin 2005 deleted text end new text begin 2007 new text end .

deleted text begin (d) No county shall receive aid under this subdivision after 2007.
deleted text end

new text begin (b) In 2009 only, a county with (1) a 2006 population less than 30,000, and (2)
an average Part I crimes per capita greater than 3.9 percent based on factors used in
determining county program aid payable in 2008, shall receive $100,000.
new text end

new text begin (c) For aids payable in 2009, 2010, and 2011 only, $250,000 each year shall be
distributed to any county in which (1) the 2006 estimated population exceeds 30,000, and
(2) the 2006 percentage of households receiving food stamps exceeds 15 percent, based
on data used in computing county program aids for aids payable in 2008 and the 2006
estimated household count according to the state demographer. The aid must be used to
meet the county's cost of out-of-home placement programs.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2009 and
thereafter.
new text end

Sec. 6.

Minnesota Statutes 2006, section 477A.013, subdivision 1, is amended to read:

Subdivision 1.

Towns.

deleted text begin In 2002, no deleted text end new text begin In calendar year 2009 and subsequent years,
each organized new text end town is eligible for a distribution under this subdivision new text begin equal to $100 plus
the product of the town aid factor multiplied by its population. Each county with one or
more unorganized townships shall receive $100 plus the product of the town aid factor
multiplied by the total population in all unorganized townships in the county new text end .

new text begin The "town aid factor" is the same for all towns and must be calculated by the
Department of Revenue so that the total aid under this subdivision equals the total amount
available for aid under section 477A.03.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2006, section 477A.013, subdivision 8, as amended by
Laws 2008, chapter 154, article 1, section 2, is amended to read:

Subd. 8.

City formula aid.

In calendar year deleted text begin 2004 deleted text end new text begin 2009 new text end and subsequent years, the
formula aid for a city is equal to new text begin the sum of (1) its city jobs base, (2) its small city aid base,
and (3) new text end the need increase percentage multiplied by the difference between deleted text begin (1) deleted text end new text begin (i) new text end the
city's revenue need multiplied by its population, and deleted text begin (2) deleted text end new text begin (ii) new text end the sum of the city's net tax
capacity multiplied by the tax effort rate.

No city may have a formula aid amount less than zero. The need increase percentage
must be the same for all cities.

The applicable need increase percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03 deleted text begin after the subtraction under section 477A.014, subdivisions 4
and 5 deleted text end . new text begin For aids payable in 2009 only, a city's revenue need, population, net tax capacity,
and tax effort rate will be based on the data available for calculating these factors for
aids payable in 2008.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2006, section 477A.013, subdivision 9, as amended by
Laws 2008, chapter 154, article 1, section 3, is amended to read:

Subd. 9.

City aid distribution.

(a) In calendar year 2009 new text begin and thereafter new text end , each
city shall receive an aid distribution equal to the sum of (1) the city formula aid under
subdivision 8, new text begin and new text end (2) its city aid base deleted text begin , and (3) one-half of the difference between its total
aid in the previous year under this subdivision and its city aid base in the previous year deleted text end .

(b) For aids payable in deleted text begin 2010 and thereafter, each city shall receive an aid distribution
equal to (1) the city aid formula under subdivision 8, (2) its city aid base, and (3) its
formula aid under subdivision 8 in the previous year, prior to any adjustments under
this subdivision deleted text end new text begin 2009 only, the total aid for any city shall not exceed the sum of (1) 40
percent of the city's net levy for the year prior to the aid distribution, plus (2) its total
aid in the previous year new text end .

(c) For aids payable in deleted text begin 2009 deleted text end new text begin 2010 new text end and thereafter, the total aid for any city shall
not exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid
distribution plus (2) its total aid in the previous year. For aids payable in 2009 and
thereafter, the total aid for any city with a population of 2,500 or more may not be less
than its total aid under this section in the previous year minus the lesser of $15 multiplied
by its population, or ten percent of its net levy in the year prior to the aid distribution.

(d) For aids payable in deleted text begin 2009 deleted text end new text begin 2010 new text end and thereafter, the total aid for a city with a
population less than 2,500 must not be less than the amount it was certified to receive in
the previous year minus the lesser of $15 multiplied by its population, or five percent of its
2003 certified aid amount. new text begin For aids payable in 2009 only the total aid for a city with a
population less than 2,500 must not be less than what it received under this section in the
previous year unless its total aid in calendar year 2008 was aid under section 477A.011,
subdivision 36, paragraph (s), in which case its minimum aid is zero. new text end

(e) If a city's net tax capacity used in calculating aid under this section has decreased
in any year by more than 25 percent from its net tax capacity in the previous year due to
property becoming tax-exempt Indian land, the city's maximum allowed aid increase
under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
resulting from the property becoming tax exempt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2006, section 477A.03, is amended to read:

477A.03 APPROPRIATION.

Subd. 2.

Annual appropriation.

A sum sufficient to discharge the duties imposed
by sections 477A.011 to 477A.014 is annually appropriated from the general fund to the
commissioner of revenue.

Subd. 2a.

Cities.

For aids payable in deleted text begin 2004 deleted text end new text begin 2009 and thereafter new text end , the total deleted text begin aids deleted text end new text begin aid new text end paid
under section 477A.013, subdivision 9, deleted text begin are limited to $429,000,000 deleted text end new text begin is $534,148,487 new text end . For
aids payable in deleted text begin 2005, the total aids paid under section 477A.013, subdivision 9, are limited
to $437,052,000. For aids payable in 2006 and thereafter, the total aids paid under section
477A.013, subdivision 9, is limited to $485,052,000 deleted text end new text begin 2009 only, an additional $1,000,000
shall be retained by the commissioner and used to make payments under section 10 new text end .

Subd. 2b.

Counties.

(a) deleted text begin For aids payable in calendar year 2005 and thereafter,
the total aids paid to counties under section 477A.0124, subdivision 3, are limited to
$100,500,000. deleted text end new text begin For aids payable in 2009 and thereafter, the total aid payable under section
477A.0124, subdivision 3, is $110,500,000 minus one-half of the total aid amount
determined under section 477A.0124, subdivision 5, paragraph (a). new text end Each calendar year,
$500,000 shall be retained by the commissioner of revenue to make reimbursements
to the commissioner of finance for payments made under section 611.27. For calendar
year 2004, the amount shall be in addition to the payments authorized under section
477A.0124, subdivision 1. For calendar year 2005 and subsequent years, the amount shall
be deducted from the appropriation under this paragraph. The reimbursements shall be to
defray the additional costs associated with court-ordered counsel under section 611.27.
Any retained amounts not used for reimbursement in a year shall be included in the next
distribution of county need aid that is certified to the county auditors for the purpose of
property tax reduction for the next taxes payable year.

(b) For aids payable in deleted text begin 2005 deleted text end new text begin 2009 and thereafter new text end , the total deleted text begin aids deleted text end new text begin aid new text end under section
477A.0124, subdivision 4, deleted text begin are limited to $105,000,000 deleted text end new text begin is $115,132,923 minus one-half of
the total aid amount determined under section 477A.0124, subdivision 5, paragraph (a) new text end .
deleted text begin For aids payable in 2006 and thereafter, the total aid under section 477A.0124, subdivision
4, is limited to $105,132,923. deleted text end The commissioner of finance shall bill the commissioner of
revenue for the cost of preparation of local impact notes as required by section 3.987, not
to exceed $207,000 in fiscal year 2004 and thereafter. The commissioner of education
shall bill the commissioner of revenue for the cost of preparation of local impact notes
for school districts as required by section 3.987, not to exceed $7,000 in fiscal year 2004
and thereafter. The commissioner of revenue shall deduct the amounts billed under
this paragraph from the appropriation under this paragraph. The amounts deducted are
appropriated to the commissioner of finance and the commissioner of education for the
preparation of local impact notes.

new text begin Subd. 2c. new text end

new text begin Towns. new text end

new text begin For aids payable in 2009 and thereafter, the total aid under section
477A.013, subdivision 1, is $3,000,000.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2009 and thereafter.
new text end

Sec. 10. new text begin CITY FORECLOSURE GRANTS.
new text end

new text begin For calendar 2009 only, a city with a concentration of foreclosures within the city
or within a zip code area of a city in calendar year 2007 may receive a grant under this
section. A "concentration of foreclosures" means that the percent of housing in foreclosure
within the area is at least 50 percent higher than the average percent of housing in
foreclosure in the metropolitan area, as defined in Minnesota Statutes, section 473.121,
subdivision 2. The city must apply to the commissioner of revenue by December 30, 2008,
on the form prescribed by the commissioner. The grant will be paid with other aids paid in
calendar year 2009, as prescribed in Minnesota Statutes, section 477A.015.
new text end

new text begin The commissioner of revenue shall consult with the commissioner of the Housing
Finance Agency to develop a form for cities to use when applying for grants under this
section and to determine whether applications qualify. The appropriation for the grants
under Minnesota Statutes, section 477A.03, shall be divided between successful applicants
based on the number of foreclosures in the area meeting the concentration criteria. No city
may receive a grant of more than $250,000. All decisions by the commissioner regarding
grant qualification and amount shall be final. The grant must be used to fund inspection
and public safety costs associated with housing foreclosures.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for grants made in calendar year 2009.
new text end

Sec. 11. new text begin STUDY OF AIDS TO LOCAL GOVERNMENTS.
new text end

new text begin The chairs of the senate and house of representatives committees with jurisdiction
over taxes shall each appoint five members to a study group of the tax committees to
examine the current system of aids to local governments and make recommendations on
improvements to the system. Of the five members appointed by each chair, two must be
members of the tax committee, one of whom is a majority party member and one of
whom is a minority party member. The remaining members must represent local units of
government. The chairs of the divisions of the tax committees having jurisdiction over
property taxes shall also be members and shall serve as cochairs of the study group.
The study shall include, but not be limited to, consideration of existing disparities in
the distribution of local government aid, the relationship of need for city aid to other
sources of revenue such as local sales taxes, an analysis of current law need and capacity
factors as well as alternative need factors, alternative analytical methods for determining
correlations between factors and need, the formula used to calculate aid for small cities,
and volatility in the local government aid distribution. The group must report on its
specific recommendations to the legislature by December 15, 2010.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 12. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, section 477A.014, subdivision 5, new text end new text begin and new text end new text begin Minnesota Statutes
2007 Supplement, section 477A.014, subdivision 4, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid payable in 2009 and thereafter.
new text end

ARTICLE 3

INCOME AND ESTATE TAXES

Section 1.

Minnesota Statutes 2006, section 270C.56, subdivision 3, is amended to read:

Subd. 3.

Procedure for assessment.

The commissioner may assess liability for the
taxes described in subdivision 1 against a person liable under this section. The assessment
may be based upon information available to the commissioner. It must be made within the
prescribed period of limitations for assessing the underlying tax, or within one year after
the date of an order assessing underlying tax, whichever period expires later. An order
assessing personal liability under this section is reviewable under section 270C.35 and is
appealable to Tax Court. new text begin If any portion of the liability shown on the order is paid after
the time for appealing the order has expired, a claim for refund may be made, but only if
filed within 120 days after the first payment of the liability.
new text end

If a person has been assessed under this section for an amount for a given period
and the time for appeal has expired or there has been a final determination that the person
is liable, collection action is not stayed pursuant to section 270C.33, subdivision 5, for
subsequent assessments of additional amounts for the same person for the same period
and tax type.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for orders issued on or after the
day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.19, subdivision 2, is amended to read:

Subd. 2.

Corporate franchise and mining company taxes.

Corporations or mining
companies shall receive an extension of seven months new text begin or the amount of time granted by
the Internal Revenue Service, whichever is longer, new text end for filing the return of a corporation
subject to tax under chapter 290 or for filing the return of a mining company subject to
tax under sections 298.01 and 298.015. Interest on any balance of tax not paid when the
regularly required return is due must be paid at the rate specified in section 270C.40,
from the date such payment should have been made if no extension was granted, until
the date of payment of such tax.

If a corporation or mining company does not:

(1) pay at least 90 percent of the amount of tax shown on the return on or before the
regular due date of the return, the penalty prescribed by section 289A.60, subdivision 1,
shall be imposed on the unpaid balance of tax; or

(2) pay the balance due shown on the regularly required return on or before the
extended due date of the return, the penalty prescribed by section 289A.60, subdivision 1,
shall be imposed on the unpaid balance of tax from the original due date of the return.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to any federal extension that allows filing after that date.
new text end

Sec. 3.

Minnesota Statutes 2006, section 289A.19, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Federal extensions. new text end

new text begin When an extension of time to file a partnership or
S corporation tax return is granted by the Internal Revenue Service, the commissioner
shall grant an automatic extension to file the comparable Minnesota return for that period.
An extension granted under this subdivision does not affect the due date for making
payments of tax.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to any federal extension that allows filing after that date.
new text end

Sec. 4.

Minnesota Statutes 2006, section 289A.40, subdivision 1, is amended to read:

Subdivision 1.

Time limit; generally.

Unless otherwise provided in this chapter,
a claim for a refund of an overpayment of state tax must be filed within new text begin the latest of the
following time periods that apply:
new text end

new text begin (1) new text end 3-1/2 years from the date prescribed for filing the return, plus any extension of
time granted for filing the return, but only if filed within the extended time deleted text begin , deleted text end new text begin ; new text end or

new text begin (2) new text end one year from the date of an order assessing tax under section 270C.33 or an
order determining an appeal under section 270C.35, subdivision 8, or one year from the
date of a return made by the commissioner under section 270C.33, subdivision 3, upon
payment in full of the tax, penalties, and interest shown on the order or return made by
the commissioner deleted text begin , whichever period expires later deleted text end . Claims for refund, except for taxes
under chapter 297A, filed after the 3-1/2 year period but within the one-year period are
limited to the amount of the tax, penalties, and interest on the order or return made by the
commissioner and to issues determined by the order or return made by the commissioner.
In the case of assessments under section 289A.38, subdivision 5 or 6, claims for refund
under chapter 297A filed after the 3-1/2 year period but within the one-year period are
limited to the amount of the tax, penalties, and interest on the order or return made by the
commissioner that are due for the period before the 3-1/2 year period deleted text begin . deleted text end new text begin ; or
new text end

new text begin (3) 120 days after the first payment of any portion of a tax liability shown on a
return made by the commissioner under section 270C.33, subdivision 3, or shown on an
order of assessment where no return has been filed under section 270C.33, subdivision
4, paragraph (a), clause (2). Claims for refund filed after the 3-1/2 year period and the
one-year period but within the 120-day period are limited to the amount paid during the
120-day period. This clause does not apply to returns or orders which have previously
been the subject of a denied claim for refund or an administrative appeal.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The right to file a claim for refund under this section is
effective July 1, 2008. For claims filed before October 31, 2008, this section is effective
retroactively to payments made after December 31, 2007.
new text end

Sec. 5.

Minnesota Statutes 2006, section 290.01, subdivision 29, is amended to read:

Subd. 29.

Taxable income.

The term "taxable income" means:

(1) for individuals, estates, and trusts, the same as taxable net income;

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095;

(ii) the dividends received deduction under section 290.21, subdivision 4;

(iii) the exemption for operating in a job opportunity building zone under section
469.317;

(iv) the exemption for operating in a biotechnology and health sciences industry
zone under section 469.337; and

(v) the exemption for operating in an international economic development zone
under section 469.326 new text begin ; plus
new text end

new text begin (vi) Minnesota development subsidies new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 6.

Minnesota Statutes 2006, section 290.01, is amended by adding a subdivision
to read:

new text begin Subd. 33. new text end

new text begin Minnesota development subsidies. new text end

new text begin (a) "Minnesota development
subsidies" means the greater of the following amounts:
new text end

new text begin (1) one-half of the amount deducted by the taxpayer in computing federal taxable
income for the taxable year, as property taxes, business expenses or otherwise, that is
attributable to property taxes paid by the taxpayer, either directly or indirectly through a
lease or otherwise, on property located in a tax increment financing district, as defined in
section 469.174, or that receives an abatement under sections 469.1813 to 469.1815, if the
owner of the property or a related party has entered a development or similar agreement
with respect to the increment district or derives a benefit from the abatement by its
property having access to or use of public improvements financed with the abatement or
otherwise; or
new text end

new text begin (2) the amount of payments received by the taxpayer under a development or similar
agreement that provides for payments or reimbursements from the proceeds of increments
from a tax increment financing district or from an abatement under sections 469.1813 to
469.1815, but excluding reimbursements under a development action response plan, as
defined in section 469.174, subdivision 17, to pay for its costs incurred to fund removal
or remedial actions.
new text end

new text begin (b) For purposes of this subdivision, "tax increment financing district" excludes:
new text end

new text begin (1) a housing district, as defined in section 469.174, subdivision 11;
new text end

new text begin (2) a soils condition district, as defined in section 469.174, subdivision 19; and
new text end

new text begin (3) a hazardous substance subdistrict, as defined in section 469.174, subdivision 23.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 7.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 35. new text end

new text begin Investment tax credit. new text end

new text begin (a) A credit is allowed against the tax imposed
by this chapter for a qualified taxpayer's investment in a qualified new business venture.
The credit equals 25 percent of the taxpayer's investment made in the business, but may
not exceed the least of:
new text end

new text begin (1) the liability for tax under this chapter, including the alternative minimum taxes in
sections 290.091 and 290.0921;
new text end

new text begin (2) $25,000 for an individual not part of a partnership; or
new text end

new text begin (3) $300,000 for a pass-through entity or C corporation.
new text end

new text begin (b) For purposes of this subdivision, "qualified taxpayer" means:
new text end

new text begin (1) an accredited investor within the meaning of Regulation D of the Securities and
Exchange Commission, Code of Federal Regulations, title 17, section 230.501(a), whether
part of a pass-through entity or not; and
new text end

new text begin (2) an accredited investor who does not own, control, or hold power to vote 20
percent or more of the outstanding securities of the qualified business venture in which the
eligible investment is proposed.
new text end

new text begin (c) For purposes of this paragraph, "commissioner" means the commissioner
of employment and economic development. Qualified taxpayers must apply to the
commissioner for certification. The application must be in the form and made under the
procedures specified by the commissioner. The commissioner may provide certificates
entitling qualified taxpayers to tax credits under this subdivision. The maximum amount
of credits for which the commissioner may issue certificates in each taxable year is
$2,000,000 for qualified business ventures in a qualified high technology field, as defined
in paragraph (g), $2,000,000 for qualified business ventures in biotechnology and medical
devices, as defined in paragraph (h), and $2,000,000 for qualified business ventures in
qualified green manufacturing, as defined in paragraph (i). In awarding certificates under
this paragraph, the commissioner must award them to qualified taxpayers in the order in
which the applications are received in each of the categories.
new text end

new text begin (d) Each pass-through entity must provide each investor a statement indicating the
investor's share of the credit amount certified to the pass-through entity under paragraph
(c) based on its share of the pass-through entity's assets. The credit shall not exceed
$25,000 for each individual part of a pass-through entity.
new text end

new text begin (e) If the amount of the credit under this subdivision in any taxable year exceeds the
limitation under paragraph (a), clause (1), the excess is a credit carryover to each of the ten
succeeding years but may not exceed $25,000 for an individual not part of a partnership
and $300,000 for a pass-through entity or C corporation. The entire amount of the excess
unused credit must be carried first to the earliest of the taxable years to which the credit
may be carried, and then to each successive year to which the credit may be carried. The
amount of the unused credit that may be added under this paragraph may not exceed the
taxpayer's liability for tax less the credit for the taxable year.
new text end

new text begin (f) Unless otherwise provided under the rules of the Department of Employment and
Economic Development, a business is a qualified business venture for purposes of this
subdivision only if the business satisfies all of the following conditions:
new text end

new text begin (1) the business has its headquarters in Minnesota;
new text end

new text begin (2) at least 51 percent of the business's employees are employed in Minnesota;
new text end

new text begin (3) the business is engaged in, or is committed to engage in:
new text end

new text begin (i) using advanced technology to add value to a product, process, or service in a
qualified high technology field or qualified biotechnology or medical device field;
new text end

new text begin (ii) conducting research in and development of a product, process, or service in a
qualified high technology field or qualified biotechnology or medical device field; or
new text end

new text begin (iii) developing a new product, process, or service in a qualified high technology
field or qualified biotechnology or medical device field;
new text end

new text begin (4) the business is not engaged in real estate development, insurance, banking,
lending, lobbying, political consulting, information technology consulting, wholesale or
retail trade, leisure, hospitality, transportation, construction, ethanol production from
corn, or professional services provided by attorneys, accountants, business consultants,
physicians, or health care consultants;
new text end

new text begin (5) the business has fewer than 25 employees;
new text end

new text begin (6) the business has not been in operation for more than ten consecutive years;
new text end

new text begin (7) the business has not received more than $1,000,000 in investments that have
qualified for and received tax credits under this section;
new text end

new text begin (8) the business has less than $1,000,000 in annual gross sales receipts;
new text end

new text begin (9) the business is not a subsidiary or an affiliate of a business that employs more
than 100 employees or has gross sales receipts for the previous year of more than
$1,000,000, computed by aggregating all of the employees and gross sales receipts of the
business entities affiliated with the business; and
new text end

new text begin (10) the business has not received private equity investments of more than
$2,000,000.
new text end

new text begin (g) For purposes of this subdivision, "qualified high technology field" includes, but
is not limited to, aerospace, agricultural processing, alternative energy, environmental
engineering, food technology, cellulosic ethanol, information technology, green
manufacturing, materials science technology, nanotechnology, and telecommunications,
but excludes business qualifying under the definitions in paragraphs (h) and (i).
new text end

new text begin (h) For purposes of this subdivision, "qualified biotechnology or medical device
field" means the business of manufacturing, processing, assembling, researching or
developing biotechnology or medical device products, including biotechnology and
device products used in agriculture.
new text end

new text begin (i) For purposes of this subdivision, "qualified green manufacturing" means a
business whose primary business activity is production of products, processes, methods,
technologies, or services intended to do one or more of the following:
new text end

new text begin (1) to increase the use of energy from renewable sources, as defined in section
216B.1691;
new text end

new text begin (2) to increase the energy efficiency of the electric utility infrastructure system or to
increase energy conservation related to electricity use, as provided in sections 216B.2401
and 216B.241;
new text end

new text begin (3) to reduce greenhouse gas emissions, as defined in section 216H.01, subdivision
2, or to mitigate greenhouse gas emissions through, but not limited to, carbon capture,
storage, or sequestration;
new text end

new text begin (4) to monitor, protect, restore, and preserve the quality of surface waters; and
new text end

new text begin (5) to expand use of biofuels, including expanding the feasibility or reducing the
cost of producing biofuels or the types of equipment, machinery, and vehicles that can use
biofuels.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 8.

Minnesota Statutes 2006, section 290.068, subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

A corporation, other than a corporation treated as
an "S" corporation under section 290.9725, is allowed a credit against the portion of the
franchise tax computed under section 290.06, subdivision 1, for the taxable year equal to:

(a) deleted text begin 5 deleted text end new text begin 3 new text end percent of the first $2,000,000 of the excess (if any) of

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

(2) the base amount; and

(b) deleted text begin 2.5 deleted text end new text begin 1.5 new text end percent on all of such excess expenses over $2,000,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 9.

Minnesota Statutes 2006, section 290.068, subdivision 3, is amended to read:

Subd. 3.

Limitation; carryover.

(a)(1) The credit new text begin , other than the special credit
under subdivision 7, new text end for the taxable year shall not exceed the liability for tax. "Liability for
tax" for purposes of this section means the tax imposed under this chapter for the taxable
year reduced by the sum of the nonrefundable credits allowed under this chapter.

(2) In the case of a corporation which is a partner in a partnership, the credit new text begin , other
than the special credit under subdivision 7, new text end allowed for the taxable year shall not exceed
the lesser of the amount determined under clause (1) for the taxable year or an amount
(separately computed with respect to the corporation's interest in the trade or business or
entity) equal to the amount of tax attributable to that portion of taxable income which is
allocable or apportionable to the corporation's interest in the trade or business or entity.

(b) If the amount of the credit determined under this section new text begin , other than the special
credit under subdivision 7, new text end for any taxable year exceeds the limitation under clause (a), the
excess shall be a research credit carryover to each of the 15 succeeding taxable years. The
entire amount of the excess unused credit for the taxable year shall be carried first to the
earliest of the taxable years to which the credit may be carried and then to each successive
year to which the credit may be carried. The amount of the unused credit which may be
added under this clause shall not exceed the taxpayer's liability for tax less the research
credit for the taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 10.

Minnesota Statutes 2006, section 290.068, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Special credit; small businesses. new text end

new text begin (a) A qualified business is allowed a tax
credit equal to 20 percent of qualified research expenditures incurred for the taxable year
or the amount of tax credit certificates issued under paragraph (e), whichever is less.
new text end

new text begin (b) For purposes of this subdivision and subdivision 8, a "qualified business" is a
corporation, individual, or partnership that:
new text end

new text begin (1) had no more than 25 full-time equivalent employees in this state during the
preceding taxable year; and
new text end

new text begin (2) is engaged in or is committed to engage in a qualified high technology field.
new text end

new text begin (c) For purposes of applying the requirement under paragraph (b), clause (1), all of
the employees of the unitary business, as that term is used in section 290.17, subdivision
4, must be taken into account and "full-time equivalent" has the meaning given in section
469.318, subdivision 2.
new text end

new text begin (d) For purposes of this subdivision, "qualified high technology field" includes but
is not limited to aerospace, agricultural processing, alternative energy, biotechnology,
defense, drug delivery, environmental engineering, food technology, cellulosic ethanol,
information technology, green manufacturing, materials science technology, medical
devices, nanotechnology, pharmaceutical technology, and telecommunications. Unless
otherwise provided under the rules of the Department of Employment and Economic
Development, a business is a qualified business venture for purposes of this subdivision
only if the business satisfies all of the following conditions:
new text end

new text begin (1) the business has its headquarters in Minnesota;
new text end

new text begin (2) at least 51 percent of the business's employees are employed in Minnesota;
new text end

new text begin (3) the business is engaged in, or is committed to engage in:
new text end

new text begin (i) using advanced technology to add value to a product, process, or service in a
qualified high technology field;
new text end

new text begin (ii) conducting research in and development of a product, process, or service in a
qualified high technology field; or
new text end

new text begin (iii) developing a new product, process, or service in a qualified high technology
field;
new text end

new text begin (4) the business is not engaged in real estate development, insurance, banking,
lending, lobbying, political consulting, information technology consulting, wholesale or
retail trade, leisure, hospitality, transportation, construction, ethanol production from
corn, or professional services provided by attorneys, accountants, business consultants,
physicians, or health care consultants;
new text end

new text begin (5) the business has not been in operation for more than ten consecutive years; and
new text end

new text begin (6) the business had less than $1,000,000 in annual gross sales receipts in the
preceding taxable year.
new text end

new text begin (e) For purposes of this paragraph, "commissioner" means the commissioner
of employment and economic development. Qualified businesses must apply to the
commissioner for certification. The application must be in the form and made under the
procedures specified by the commissioner. The commissioner may provide certificates
entitling qualified taxpayers to tax credits under this subdivision. The maximum amount
of credits for which the commissioner may issue certificates in each taxable year is
$3,000,000. In awarding certificates under this paragraph, the commissioner must award
them to qualified taxpayers in the order in which the applications are received.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 11.

Minnesota Statutes 2006, section 290.068, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Special credit; appropriation. new text end

new text begin (a) If the amount of the special credit under
subdivision 7 for any taxable year exceeds the liability for tax, the commissioner shall
refund the excess to the taxpayer.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this subdivision is annually
appropriated to the commissioner of revenue from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 12.

Minnesota Statutes 2006, section 290.091, subdivision 2, as amended by Laws
2008, chapter 154, article 4, section 7, is amended to read:

Subd. 2.

Definitions.

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

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

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

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

(i) the charitable contribution deduction under section 170 of the Internal Revenue
Code deleted text begin : deleted text end new text begin ; new text end

deleted text begin (A) for taxable years beginning before January 1, 2006, to the extent that the
deduction exceeds 1.0 percent of adjusted gross income; deleted text end

deleted text begin (B) for taxable years beginning after December 31, 2005, to the full extent of the
deduction.
deleted text end

deleted text begin For purposes of this clause, "adjusted gross income" has the meaning given in
section 62 of the Internal Revenue Code;
deleted text end

(ii) the medical expense deduction;

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

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

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

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

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

(6) the amount of addition required by section 290.01, subdivision 19a, clauses
(7) to (9), (11), and (12);

less the sum of the amounts determined under the following:

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

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

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

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b, clauses new text begin (6) and new text end (9) to (16).

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

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

(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 13.

Minnesota Statutes 2006, section 290.92, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(1) Wages. For purposes of this section, the term
"wages" means the same as that term is defined in section 3401(a) and (f) of the Internal
Revenue Code new text begin , except that provisions of section 530 of Public Law 95-600, as amended,
do not apply new text end .

(2) Payroll period. For purposes of this section the term "payroll period" means a
period for which a payment of wages is ordinarily made to the employee by the employee's
employer, and the term "miscellaneous payroll period" means a payroll period other
than a daily, weekly, biweekly, semimonthly, monthly, quarterly, semiannual, or annual
payroll period.

(3) Employee. For purposes of this section the term "employee" means any resident
individual performing services for an employer, either within or without, or both within
and without the state of Minnesota, and every nonresident individual performing services
within the state of Minnesota, the performance of which services constitute, establish, and
determine the relationship between the parties as that of employer and employee. As
used in the preceding sentence, the term "employee" includes an officer of a corporation,
and an officer, employee, or elected official of the United States, a state, or any political
subdivision thereof, or the District of Columbia, or any agency or instrumentality of
any one or more of the foregoing.

(4) Employer. For purposes of this section the term "employer" means any person,
including individuals, fiduciaries, estates, trusts, partnerships, limited liability companies,
and corporations transacting business in or deriving any income from sources within
the state of Minnesota for whom an individual performs or performed any service, of
whatever nature, as the employee of such person, except that if the person for whom the
individual performs or performed the services does not have control of the payment of
the wages for such services, the term "employer," except for purposes of paragraph (1),
means the person having control of the payment of such wages. As used in the preceding
sentence, the term "employer" includes any corporation, individual, estate, trust, or
organization which is exempt from taxation under section 290.05 and further includes, but
is not limited to, officers of corporations who have control, either individually or jointly
with another or others, of the payment of the wages.

(5) Number of withholding exemptions claimed. For purposes of this section, the
term "number of withholding exemptions claimed" means the number of withholding
exemptions claimed in a withholding exemption certificate in effect under subdivision
5, except that if no such certificate is in effect, the number of withholding exemptions
claimed shall be considered to be zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for wages paid after December 31,
2008.
new text end

Sec. 14.

Minnesota Statutes 2006, section 291.03, subdivision 1, is amended to read:

Subdivision 1.

Tax amount.

The tax imposed shall be an amount equal to the
proportion of the maximum credit for state death taxes computed under section 2011 of
the Internal Revenue Code, as amended through December 31, 2000, but using Minnesota
adjusted taxable estate instead of federal adjusted taxable estate, as the Minnesota gross
estate bears to the value of the federal gross estate. The tax determined under this
paragraph shall not be greater than the amount computed by applying the rates and
brackets under section 2001(c) of the Internal Revenue Code to the new text begin sum of the new text end Minnesota
adjusted deleted text begin gross deleted text end new text begin taxable new text end estate and deleted text begin subtracting deleted text end new text begin adjusted taxable gifts, as defined in section
2001(b) of the Internal Revenue Code, and then subtracting new text end the federal credit allowed
under section 2010 of the Internal Revenue Code of 1986, as amended through December
31, 2000. For the purposes of this section, expenses which are deducted for federal income
tax purposes under section 642(g) of the Internal Revenue Code as amended through
December 31, 2002, are not allowable in computing the tax under this chapter.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively as a clarification and
applies to estates of decedents dying after December 31, 2005.
new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, section 290.191, subdivision 4, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

ARTICLE 4

LOCAL DEVELOPMENT

Section 1.

new text begin [116J.8732] SEED CAPITAL INVESTMENT CREDIT;
COMMISSIONER'S RESPONSIBILITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin This section establishes rules that businesses must satisfy to
qualify for the seed capital investment credit under section 290.06, subdivision 34, and the
commissioner's responsibility for certifying the qualifying businesses.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section and section 290.06,
subdivision 34, the following terms have the meanings given.
new text end

new text begin (b) "Border city" means a city qualifying to designate a border city development
zone under section 469.1731.
new text end

new text begin (c) "Pass-through entity" means a corporation that for the applicable tax year is
treated as an S corporation or a general partnership, limited partnership, limited liability
partnership, trust, or limited liability company and which for the applicable taxable year is
not taxed as a corporation under chapter 290.
new text end

new text begin (d) "Primary sector business" means a qualified business that through the
employment of knowledge or labor adds value to a product, process, or service and
increases revenues to a Minnesota business generated by sales of products or services to
customers outside of the state or increases revenues to a qualified business the customers
of which previously were unable to acquire, or had limited availability of the product or
service from a Minnesota provider.
new text end

new text begin (e) "Qualified business" means a business certified by the commissioner as meeting
the requirements of subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Qualified business. new text end

new text begin (a) The commissioner shall certify whether a business
that has requested to become a qualified business meets the requirements of paragraph (b).
new text end

new text begin (b) For purposes of this section, a qualified business must be a primary sector
business, other than a real estate investment trust, that:
new text end

new text begin (1) is incorporated or its satellite operation is incorporated as a for-profit corporation
or is a partnership, limited partnership, limited liability company, limited liability
partnership, or joint venture;
new text end

new text begin (2) is in compliance with the requirements for filings with the commissioner of
commerce under the securities laws of this state;
new text end

new text begin (3) has Minnesota residents as a majority of its employees in its principal office or
the satellite operation, which is located in a border city;
new text end

new text begin (4) has its principal office in a border city and has the majority of its business
activity performed in a border city, except sales activity, or has a significant operation in
a border city that has or is projected to have more than ten employees or $150,000 of
sales annually; and
new text end

new text begin (5) relies on innovation, research, or the development of new products and processes
in its plans for growth and profitability.
new text end

new text begin (c) The commissioner shall establish the necessary forms and procedures for
certifying qualified businesses.
new text end

new text begin (d) A qualified business may apply to the commissioner for a recertification. Only
one recertification is available to a qualified business. The application for recertification
must be filed with the commissioner within 90 days before the original certification
expiration date. The recertification issued by the director must comply with the provisions
of paragraph (e).
new text end

new text begin (e) The commissioner shall issue a certification letter to a business the commissioner
determines is a qualified business. The certification letter must include:
new text end

new text begin (1) the certification effective date; and
new text end

new text begin (2) the certification expiration date, which may not be more than four years from the
certification effective date.
new text end

new text begin Subd. 4. new text end

new text begin Seed capital investment credit reporting. new text end

new text begin Within 30 days after the date
that an investment in a qualified business is purchased, the qualified business shall file with
the commissioner and the commissioner of revenue and provide to the investor completed
forms prescribed by the commissioner of revenue that show as to each investment in the
qualified business the following:
new text end

new text begin (1) the name, address, and Social Security number of the taxpayer who made the
investment; and
new text end

new text begin (2) the dollar amount paid for the investment by the taxpayer.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 216B.1612, is amended by adding a
subdivision to read:

new text begin Subd. 9. new text end

new text begin Local government and political subdivision powers. new text end

new text begin A Minnesota
political subdivision or local government may plan, develop, purchase, acquire, construct,
and own a C-BED project and may sell output from that project as provided for in this
section. A Minnesota political subdivision or local government may operate, maintain,
improve, and expand the C-BED project subject to any restrictions in this section.
new text end

Sec. 3.

new text begin [216F.09] COUNTY; WIND ENERGY CONVERSION SYSTEM.
new text end

new text begin A county may own, construct, acquire, purchase, issue bonds and certificates of
indebtedness for, maintain, and operate a wind energy conversion system, or a portion of a
wind energy conversion system. A county may purchase and sell electricity from a wind
energy conversion system only at wholesale on terms and conditions as the county board
deems is in the best interests of the public. With respect to any wind energy conversion
system, or any portion of a wind energy conversion system, a county may exercise
the powers granted to a municipal power agency and to a city under sections 453.52,
subdivisions 1, 6, and 9; 453.54, subdivision 10; 453.58, subdivision 4; and 453.59, except
that output from that wind energy conversion system may not be sold, transmitted, or
distributed at retail, or provided for end use from an offsite facility by the county. A
county's onsite generation authorized under this subdivision is limited to a total of ten
megawatts. Nothing in this section modifies the exclusive service territories or exclusive
right to serve as provided in sections 216B.37 to 216B.43.
new text end

Sec. 4.

Minnesota Statutes 2007 Supplement, section 268.19, subdivision 1, is
amended to read:

Subdivision 1.

Use of data.

(a) Except as provided by this section, data gathered
from any person under the administration of the Minnesota Unemployment Insurance Law
are private data on individuals or nonpublic data not on individuals as defined in section
13.02, subdivisions 9 and 12, and may not be disclosed except according to a district court
order or section 13.05. A subpoena is not considered a district court order. These data
may be disseminated to and used by the following agencies without the consent of the
subject of the data:

(1) state and federal agencies specifically authorized access to the data by state
or federal law;

(2) any agency of any other state or any federal agency charged with the
administration of an unemployment insurance program;

(3) any agency responsible for the maintenance of a system of public employment
offices for the purpose of assisting individuals in obtaining employment;

(4) the public authority responsible for child support in Minnesota or any other
state in accordance with section 256.978;

(5) human rights agencies within Minnesota that have enforcement powers;

(6) the Department of Revenue to the extent necessary for its duties under Minnesota
laws;

(7) public and private agencies responsible for administering publicly financed
assistance programs for the purpose of monitoring the eligibility of the program's
recipients;

(8) the Department of Labor and Industry and the Division of Insurance Fraud
Prevention in the Department of Commerce for uses consistent with the administration of
their duties under Minnesota law;

(9) local and state welfare agencies for monitoring the eligibility of the data subject
for assistance programs, or for any employment or training program administered by those
agencies, whether alone, in combination with another welfare agency, or in conjunction
with the department or to monitor and evaluate the statewide Minnesota family investment
program by providing data on recipients and former recipients of food stamps or food
support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;

(10) local and state welfare agencies for the purpose of identifying employment,
wages, and other information to assist in the collection of an overpayment debt in an
assistance program;

(11) local, state, and federal law enforcement agencies for the purpose of ascertaining
the last known address and employment location of an individual who is the subject of
a criminal investigation;

(12) the United States Citizenship and Immigration Services has access to data on
specific individuals and specific employers provided the specific individual or specific
employer is the subject of an investigation by that agency;

(13) the Department of Health for the purposes of epidemiologic investigations; deleted text begin and
deleted text end

(14) the Department of Corrections for the purpose of postconfinement employment
tracking of individuals who had been committed to the custody of the commissioner
of corrections deleted text begin . deleted text end new text begin ; and
new text end

new text begin (15) the state auditor to the extent necessary to conduct audits of job opportunity
building zones as required under section 469.3201.
new text end

(b) Data on individuals and employers that are collected, maintained, or used by
the department in an investigation under section 268.182 are confidential as to data
on individuals and protected nonpublic data not on individuals as defined in section
13.02, subdivisions 3 and 13, and must not be disclosed except under statute or district
court order or to a party named in a criminal proceeding, administrative or judicial, for
preparation of a defense.

(c) Data gathered by the department in the administration of the Minnesota
unemployment insurance program must not be made the subject or the basis for any
suit in any civil proceedings, administrative or judicial, unless the action is initiated by
the department.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2006, section 270B.15, is amended to read:

270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR new text begin AND STATE
AUDITOR new text end .

new text begin (a) new text end Returns and return information must be disclosed to the legislative auditor to the
extent necessary for the legislative auditor to carry out sections 3.97 to 3.979.

new text begin (b) The commissioner must disclose return information, including the report
required under section 289A.12, subdivision 15, to the state auditor to the extent necessary
to conduct audits of job opportunity building zones as required under section 469.3201.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Report of job opportunity zone benefits; penalty for failure to file
report. new text end

new text begin (a) By October 15 of each year, every qualified business, as defined under section
469.310, subdivision 11, must file with the commissioner, on a form prescribed by the
commissioner, a report listing the tax benefits under section 469.315 received by the
business for the previous year.
new text end

new text begin (b) The commissioner shall send notice to each business that fails to timely submit
the report required under paragraph (a). The notice shall demand that the business submit
the report within 60 days. Where good cause exists, the commissioner may extend
the period for submitting the report as long as a request for extension is filed by the
business before the expiration of the 60-day period. The commissioner shall notify the
commissioner of the Department of Employment and Economic Development and the
appropriate job opportunity subzone administrator whenever notice is sent to a business
under this paragraph.
new text end

new text begin (c) A business that fails to submit the report as required under paragraph (b) is no
longer a qualified business under section 469.310, subdivision 11, and is subject to the
repayment provisions of section 469.319.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with reports required to be
filed October 15, 2008.
new text end

Sec. 7.

Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
to read:

new text begin Subd. 34. new text end

new text begin Seed capital investment credit. new text end

new text begin (a) An individual, estate, or trust is
allowed a credit against the tax imposed by this chapter for investments in a qualifying
business certified under section 116J.8732, subdivision 3. The credit equals 45 percent
of the amount invested by the taxpayer in qualified businesses during the taxable year.
The credit must not exceed $112,500 for each taxable year.
new text end

new text begin (b) A pass-through entity that invests in a qualified business must be considered to
be the taxpayer for purposes of the investment limitations in this subdivision and the
amount of the credit allowed with respect to a pass-through entity's investment in a
qualified business must be determined at the pass-through entity level. The amount of the
total credit determined at the pass-through entity level must be allowed to the members in
proportion to their respective interests in the pass-through entity.
new text end

new text begin (c) An investment made in a qualified business from the assets of a retirement
plan is deemed to be the retirement plan participant's investment for the purpose of this
subdivision if a separate account is maintained for the plan participant and the participant
directly controls where the account assets are invested.
new text end

new text begin (d) The investment must be made on or after the certification effective date and
must be at risk in the business to be eligible for the tax credit under this subdivision.
An investment for which a credit is received under this subdivision must remain in the
qualified business for at least three years. Investments placed in escrow do not qualify
for the credit.
new text end

new text begin (e) The entire amount of an investment for which a credit is claimed under this
subdivision must be expended by the qualified business for plant, equipment, research and
development, marketing and sales activity, or working capital for the qualified business.
new text end

new text begin (f) A taxpayer who owns a controlling interest in the qualified business or who
receives more than 50 percent of the taxpayer's gross annual income from the qualified
business is not entitled to a credit under this subdivision. A member of the immediate
family of a taxpayer disqualified by this subdivision is not entitled to the credit under this
subdivision. For purposes of this subdivision, "immediate family" means the taxpayer's
spouse, parent, sibling, or child or the spouse of any such person.
new text end

new text begin (g) The commissioner may disallow any credit otherwise allowed under this
subdivision if any representation by a business in the application for certification as a
qualified business proves to be false or if the taxpayer or qualified business fails to satisfy
any conditions under this subdivision or section 116J.8732 or any conditions consistent
with those requirements otherwise determined by the commissioner. The commissioner
has four years after the due date of the return or after the return was filed, whichever
period expires later, to audit the credit and assess additional tax that may be found due
to failure to comply with the provisions of this subdivision and section 116J.8732. The
amount of any credit disallowed by the commissioner that reduced the taxpayer's income
tax liability for any or all applicable tax years, plus penalty and interest as provided under
chapter 289A, must be paid by the taxpayer.
new text end

new text begin (h) If the amount of the credit under this subdivision for any taxable year exceeds
the limitations under paragraph (a), the excess is a credit carryover to each of the four
succeeding taxable years. The entire amount of the excess unused credit for the taxable
year must be carried first to the earliest of the taxable years to which the credit may be
carried. The amount of the unused credit that may be added under this paragraph may
not exceed the taxpayer's liability for tax, less the credit for the taxable year. Each year,
the aggregate amount of seed capital investment tax credit allowed for investments under
this subdivision is limited to allocations that a border city has available for tax reductions
in border city enterprise zones under section 469.169. The city must annually notify the
commissioner of the amount of its section 469.169 allocations that it wishes to use to
provide credits under this paragraph and the commissioner, after verifying the available
allocation, shall implement the limit under this paragraph. If investments in qualified
businesses reported to the commissioner exceed the limit on credits for investments
imposed by this subdivision, the credit must be allowed to taxpayers in the chronological
order of their investments in qualified businesses as determined from the forms filed
under section 116J.8732.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008, for taxable years
beginning after December 31, 2007, and only applies to investments made after the
qualified business has been certified by the commissioner of employment and economic
development.
new text end

Sec. 8.

new text begin [373.48] FINANCING ENERGY PURCHASE CONTRACTS AND
PARTICIPATION IN GENERATION AND TRANSMISSION PROJECTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purpose of this section, "project" means a facility
that generates electricity from renewable energy sources listed in section 216B.1691,
subdivision 1, paragraph (a), clause (1).
new text end

new text begin Subd. 2. new text end

new text begin Energy purchase contracts; generation projects. new text end

new text begin A county may, for
itself or in cooperation with other counties, enter into agreements for the purchase of
electrical energy from one or more projects, and may enter into agreements with a utility
for the purchase and sale of the electrical energy so purchased. Agreements may be for a
term of one year to 20 years. A county may also acquire an ownership interest in a project
and may enter into agreements for the purchase and sale of electrical energy produced. A
county may not sell, transmit, or distribute the electrical energy at retail or provide for end
use from an offsite facility by the county or counties of the electrical energy. A county's
onsite generation authorized under this subdivision is limited to a total of ten megawatts.
Nothing in this section modifies the exclusive service territories or exclusive right to
serve as provided in sections 216B.37 to 216B.43. The energy to be purchased by a
county under agreements entered into under this section and the energy produced by the
county's interest in projects shall not in any year exceed the total amount of energy used
by the county for its own facilities in the immediately preceding year, regardless of the
source from which energy was obtained.
new text end

new text begin Subd. 3. new text end

new text begin Joint purchase of energy and acquisition of generation projects;
financing. new text end

new text begin A county may enter into agreements under section 471.59 with other counties
for joint purchase of energy or joint acquisition of interests in projects. A county may
annually levy an ad valorem tax for the purpose of paying the cost of energy purchased or
acquiring interests in projects in an amount not exceeding 0.015 percent of the market
value of taxable property in the county. A county that enters into a multiyear agreement
for purchase of energy or acquires an interest in a project may finance the estimated cost
of the energy to be purchased during the term of the agreement or the cost to the county
of the interest in the project by the issuance of general obligation bonds of the county,
provided that the annual debt service on all bonds issued under this section, together
with the amounts to be paid by the county in any year for the purchase of energy under
agreements entered into under this section, shall not exceed the amount of taxes authorized
by this section. An agreement entered into under section 471.59 as provided by this
section may provide that each county shall issue bonds to pay their respective shares of
the cost of the projects, or that one of the counties shall issue bonds to pay the full costs of
the project, and that the other participating counties shall levy the tax authorized under
this subdivision and pledge the collections of the tax to the county that issues the bonds.
Bonds issued under this section may be issued without an election and shall not constitute
net debt of any participating county.
new text end

Sec. 9.

Minnesota Statutes 2006, section 383E.20, is amended to read:

383E.20 BONDING FOR COUNTY LIBRARY BUILDINGS.

The Anoka County Board may, by resolution adopted by a four-sevenths vote,
issue and sell general obligation bonds of the county in the manner provided in chapter
475 to acquire, better, and construct county library buildings. The bonds shall not be
subject to the requirements of sections 475.57 to 475.59. The maturity years and amounts
and interest rates of each series of bonds shall be fixed so that the maximum amount of
principal and interest to become due in any year, on the bonds of that series and of all
outstanding series issued by or for the purposes of libraries, shall not exceed an amount
equal to deleted text begin the lesser of (i) deleted text end .01 percent of the taxable market value of all taxable property in
the county, excluding any taxable property taxed by any city for the support of any free
public library deleted text begin , or (ii) $1,250,000 deleted text end . When the tax levy authorized in this section is collected,
it shall be appropriated and credited to a debt service fund for the bonds. The tax levy for
the debt service fund under section 475.61 shall be reduced by the amount available or
reasonably anticipated to be available in the fund to make payments otherwise payable
from the levy pursuant to section 475.61.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body
of Anoka County and its chief clerical officer timely complete their compliance with
Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

Sec. 10.

Minnesota Statutes 2006, section 469.033, subdivision 6, is amended to read:

Subd. 6.

Operation area as taxing district, special tax.

All of the territory
included within the area of operation of any authority shall constitute a taxing district for
the purpose of levying and collecting special benefit taxes as provided in this subdivision.
All of the taxable property, both real and personal, within that taxing district shall be
deemed to be benefited by projects to the extent of the special taxes levied under this
subdivision. Subject to the consent by resolution of the governing body of the city in and
for which it was created, an authority may levy a tax upon all taxable property within that
taxing district. The tax shall be extended, spread, and included with and as a part of
the general taxes for state, county, and municipal purposes by the county auditor, to be
collected and enforced therewith, together with the penalty, interest, and costs. As the tax,
including any penalties, interest, and costs, is collected by the county treasurer it shall be
accumulated and kept in a separate fund to be known as the "housing and redevelopment
project fund." The money in the fund shall be turned over to the authority at the same time
and in the same manner that the tax collections for the city are turned over to the city, and
shall be expended only for the purposes of sections 469.001 to 469.047. It shall be paid
out upon vouchers signed by the chair of the authority or an authorized representative.
The amount of the levy shall be an amount approved by the governing body of the city, but
shall not exceed deleted text begin 0.0144 deleted text end new text begin 0.02 new text end percent of taxable market value deleted text begin for the current levy year,
notwithstanding section 273.032 deleted text end . The authority shall each year formulate and file a budget
in accordance with the budget procedure of the city in the same manner as required of
executive departments of the city or, if no budgets are required to be filed, by August 1.
The amount of the tax levy for the following year shall be based on that budget.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2009.
new text end

Sec. 11.

Minnesota Statutes 2006, section 469.177, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Correction of errors. new text end

new text begin (a) If the county auditor, as a result of an error
or mistake, decertifies a district, fails to certify a district, incorrectly certifies a district,
or otherwise fails to correctly compute the amount of increment, the county auditor may
undertake one or more of the following actions to correct the error or mistake:
new text end

new text begin (1) certify the original tax capacity of the affected parcels at the appropriate value
for a later taxes payable year and extend the duration of the district, in whole or in part,
to compensate;
new text end

new text begin (2) recertify the affected parcels and extend duration of the district, in whole or in
part, to compensate;
new text end

new text begin (3) recertify or correct the original tax capacity rate for the district; or
new text end

new text begin (4) take other appropriate action so that the amount of increment compensates for or
offsets the error or mistake and correctly reflects application of the law.
new text end

new text begin (b) At least 30 days before exercising authority under this subdivision, the county
auditor must notify the authority and the municipality, in writing, of the intent to do so,
including supporting information to describe reason for the proposed action. The authority
and municipality may waive the time requirement of this paragraph. If the city or the
authority objects before expiration of the 30-day period, the matter must be submitted to
the commissioner of revenue for a decision or resolution of the dispute. The commissioner
of revenue shall consult with the Office of the State Auditor before making a decision.
new text end

new text begin (c) The county auditor must notify the commissioner of revenue and the Office
of the State Auditor of corrections made under this subdivision. The notification must
be made in the form and manner and at the time prescribed by the commissioner. The
commissioner shall incorporate the corrections in the tax increment financing district tax
list supplement, as appropriate.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all tax increment financing districts, regardless of when the request for
certification was made.
new text end

Sec. 12.

Minnesota Statutes 2006, section 469.312, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Termination of designation of qualified business. new text end

new text begin No person will be
deemed to be a qualified business eligible for the benefits provided in sections 469.310
to 469.320 unless the person has entered into a business subsidy agreement with a local
government unit as provided in section 469.310, subdivision 11, prior to June 1, 2008.
new text end

Sec. 13.

Minnesota Statutes 2006, section 469.319, is amended to read:

469.319 REPAYMENT OF TAX BENEFITS new text begin BY BUSINESSES THAT NO
LONGER OPERATE IN A ZONE new text end .

Subdivision 1.

Repayment obligation.

A business must repay the deleted text begin amount of the deleted text end
total tax deleted text begin reduction deleted text end new text begin benefits new text end listed in section 469.315 deleted text begin and any refund under section 469.318
in excess of tax liability, deleted text end received during the two years immediately before it new text begin (1) new text end ceased to
deleted text begin operate in the zone, if the business:
deleted text end

deleted text begin (1) received tax reductions authorized by section 469.315; and
deleted text end

deleted text begin (2)(i) did not meet the goals specified in an agreement entered into with the applicant
that states any obligation the qualified business must fulfill in order to be eligible for tax
benefits. The commissioner of employment and economic development may extend for
up to one year the period for meeting any goals provided in an agreement. The applicant
may extend the period for meeting other goals by documenting in writing the reason
for the extension and attaching a copy of the document to its next annual report to the
commissioner of employment and economic development; or
deleted text end

deleted text begin (ii) ceased to operate its facility located within the job opportunity building zone deleted text end
new text begin perform a substantial level of activities described in the business subsidy agreement, new text end or
new text begin (2) new text end otherwise deleted text begin ceases deleted text end new text begin ceased new text end to be deleted text begin or is not deleted text end a qualified business new text begin , other than those subject to
the provisions of section 469.3191 new text end .

new text begin Subd. 1a. new text end

new text begin Repayment obligation of businesses not operating in zone. new text end

new text begin Persons
that receive benefits without operating a business in a zone are subject to repayment
under this section if the business for which those benefits relate is subject to repayment
under this section. Such persons are deemed to have ceased performing in the zone on
the same day that the qualified business for which the benefits relate becomes subject to
repayment under subdivision 1.
new text end

Subd. 2.

Definitions.

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

(b) "Business" means any person deleted text begin who deleted text end new text begin that new text end received tax benefits enumerated in
section 469.315.

(c) "Commissioner" means the commissioner of revenue.

new text begin (d) "Persons that receive benefits without operating a business in a zone" means
persons that claim benefits under section 469.316, subdivision 2 or 4, as well as persons
that own property leased by a qualified business and are eligible for benefits under section
272.02, subdivision 64, or 297A.68, subdivision 37, paragraph (b).
new text end

Subd. 3.

Disposition of repayment.

The repayment must be paid to the state to
the extent it represents a state tax reduction and to the county to the extent it represents a
property tax reduction. Any amount repaid to the state must be deposited in the general
fund. Any amount repaid to the county for the property tax exemption must be distributed
to the deleted text begin local governments deleted text end new text begin taxing authorities new text end with authority to levy taxes in the zone in the
same manner provided for distribution of payment of delinquent property taxes. Any
repayment of local sales taxes must be repaid to new text begin the commissioner for distribution to new text end the
city or county imposing the local sales tax.

Subd. 4.

Repayment procedures.

(a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
file an amended return with the commissioner of revenue and pay any taxes required
to be repaid within 30 days after deleted text begin ceasing to do business in the zone deleted text end new text begin becoming subject
to repayment under this section new text end . The amount required to be repaid is determined by
calculating the tax for the period or periods for which repayment is required without
regard to the exemptions and credits allowed under section 469.315.

(b) For the repayment of taxes imposed under chapter 297B, a business must pay any
taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner
of revenue, within 30 days after deleted text begin ceasing to do business in the zone deleted text end new text begin becoming subject
to repayment under this section new text end .

(c) For the repayment of property taxes, the county auditor shall prepare a tax
statement for the business, applying the applicable tax extension rates for each payable
year and provide a copy to the business new text begin and to the taxpayer of record new text end . The business must
pay the taxes to the county treasurer within 30 days after receipt of the tax statement.
The new text begin business or the new text end taxpayer new text begin of record new text end may appeal the valuation and determination of the
property tax to the Tax Court within 30 days after receipt of the tax statement.

(d) The provisions of chapters 270C and 289A relating to the commissioner's
authority to audit, assess, and collect the tax and to hear appeals are applicable to the
repayment required under paragraphs (a) and (b). The commissioner may impose civil
penalties as provided in chapter 289A, and the additional tax and penalties are subject to
interest at the rate provided in section 270C.40, from 30 days after deleted text begin ceasing to do business
in the job opportunity building zone deleted text end new text begin becoming subject to repayment under this section new text end
until the date the tax is paid.

(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add
the amount required to be repaid to the property taxes assessed against the property for
payment in the year following the year in which the deleted text begin treasurer discovers that the business
ceased to operate in the job opportunity building zone deleted text end new text begin auditor provided the statement
under paragraph (c) new text end .

(f) For determining the tax required to be repaid, a deleted text begin tax deleted text end reduction new text begin of a state or local
sales or use tax new text end is deemed to have been received on the date that the deleted text begin tax would have
been due if the taxpayer had not been entitled to the exemption or on the date a refund
was issued for a refundable tax credit. deleted text end new text begin good or service was purchased or first put to a
taxable use. In the case of an income tax or franchise tax, including the credit payable
under section 469.318, a reduction of tax is deemed to have been received for the two
most recent tax years that have ended prior to the date that the business became subject to
repayment under this section. In the case of a property tax, a reduction of tax is deemed to
have been received for the taxes payable in the year that the business became subject to
repayment under this section and for the taxes payable in the prior year.
new text end

(g) The commissioner may assess the repayment of taxes under paragraph (d)
any time within two years after the business deleted text begin ceases to operate in the job opportunity
building zone deleted text end new text begin becomes subject to repayment under subdivision 1 new text end , or within any period of
limitations for the assessment of tax under section 289A.38, whichever period is later. new text begin The
county auditor may send the statement under paragraph (c) any time within three years
after the business becomes subject to repayment under subdivision 1.
new text end

new text begin (h) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business becomes subject to
repayment under this section nor for any year thereafter. Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the property became subject to repayment under this section nor for any year
thereafter. A business is not eligible for any sales tax benefits beginning with goods
or services purchased or first put to a taxable use on the day that the business becomes
subject to repayment under this section.
new text end

Subd. 5.

Waiver authority.

new text begin (a) new text end The commissioner may waive all or part of a
repayment new text begin required under subdivision 1 new text end , if the commissioner, in consultation with
the commissioner of employment and economic development and appropriate officials
from the local government units in which the qualified business is located, determines
that requiring repayment of the tax is not in the best interest of the state or the local
government units and the business ceased operating as a result of circumstances beyond
its control including, but not limited to:

(1) a natural disaster;

(2) unforeseen industry trends; or

(3) loss of a major supplier or customer.

new text begin (b)(1) The commissioner shall waive repayment required under subdivision 1a if
the commissioner has waived repayment by the operating business under subdivision 1,
unless the person that received benefits without having to operate a business in the zone
was a contributing factor in the qualified business becoming subject to repayment under
subdivision 1;
new text end

new text begin (2) the commissioner shall waive the repayment required under subdivision 1a, even
if the repayment has not been waived for the operating business if:
new text end

new text begin (i) the person that received benefits without having to operate a business in the zone
and the business that operated in the zone are not related parties as defined in section
267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and
new text end

new text begin (ii) actions of the person were not a contributing factor in the qualified business
becoming subject to repayment under subdivision 1.
new text end

Subd. 6.

Reconciliation.

Where this section is inconsistent with section 116J.994,
subdivision 3, paragraph (e), or 6, or any other provisions of sections 116J.993 to
116J.995, this section prevails.

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to subdivision 4, paragraph (c), of this
section is effective the day following final enactment. The amendment to subdivision
4, paragraph (f), is effective retroactively from January 1, 2008, and applies to all
businesses that become subject to this section in 2008. The rest of this section is effective
retroactively from January 1, 2004, except that for violations that occur before the day
following final enactment, this section does not apply if the business has repaid the
benefits or the commissioner has granted a waiver.
new text end

Sec. 14.

new text begin [469.3191] BREACH OF AGREEMENTS BY BUSINESSES THAT
CONTINUE TO OPERATE IN ZONE.
new text end

new text begin (a) A "business in violation of its business subsidy agreement but not subject to
section 469.319" means a business that is operating in violation of the business subsidy
agreement but maintains a level of operations in the zone that does not subject it to the
repayment provisions of section 469.319, subdivision 1, clause (1).
new text end

new text begin (b) A business described in paragraph (a) that does not sign a new or amended
business subsidy agreement, as authorized under paragraph (h), is subject to repayment
of benefits under section 469.319 from the day that it ceases to perform in the zone a
substantial level of activities described in the business subsidy agreement.
new text end

new text begin (c) A business described in paragraph (a) ceases being a qualified business after the
last day that it has to meet the goals stated in the agreement.
new text end

new text begin (d) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business is no longer a qualified
business under paragraph (c), and thereafter. A business is not eligible for sales tax
benefits beginning with goods or services purchased or put to a taxable use on the day that
it is no longer a qualified business under paragraph (c). Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the business is no longer a qualified business under paragraph (c), and thereafter.
new text end

new text begin (e) A business described in paragraph (a) that wants to resume eligibility for benefits
under section 469.315 must request that the commissioner of employment and economic
development determine the length of time that the business is ineligible for benefits. The
commissioner shall determine the length of ineligibility by applying the proportionate
level of performance under the agreement to the total duration of the zone as measured
from the date that the business subsidy agreement was executed. The length of time
must not be less than one full year for each tax benefit listed in section 469.315. The
commissioner of employment and economic development and the appropriate local
government officials shall consult with the commissioner of revenue to ensure that the
period of ineligibility includes at least one full year of benefits for each tax.
new text end

new text begin (f) The length of ineligibility determined under paragraph (e) must be applied by
reducing the zone duration for the property by the duration of the ineligibility.
new text end

new text begin (g) The zone duration of property that has been adjusted under paragraph (f) must
not be altered again to permit the business additional benefits under section 469.315.
new text end

new text begin (h) A business described in paragraph (a) becomes eligible for benefits available
under section 469.315 by entering into a new or amended business subsidy agreement
with the appropriate local government unit. The new or amended agreement must cover
a period beginning from the date of ineligibility under the original business subsidy
agreement, through the zone duration determined by the commissioner under paragraph
(f). No exemption of property taxes under section 272.02, subdivision 64, is available
under the new or amended agreement for property taxes due or paid before the date of
the final execution of the new or amended agreement, but unpaid taxes due after that
date need not be paid.
new text end

new text begin (i) A business that violates the terms of an agreement authorized under paragraph
(h) is permanently barred from seeking benefits under section 469.315 and is subject to
the repayment provisions under section 469.319 effective from the day that the business
ceases to operate as a qualified business in the zone under the second agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2004.
For violations that occur before the day following final enactment, this section does not
apply if the business has repaid the benefits or the commissioner has granted a waiver.
new text end

Sec. 15.

new text begin [469.3192] PROHIBITION AGAINST AMENDMENTS TO BUSINESS
SUBSIDY AGREEMENT.
new text end

new text begin Except as authorized under section 469.3191, under no circumstance shall terms
of any agreement required as a condition for eligibility for benefits listed under section
469.315 be amended to change job creation, job retention, or wage goals included in
the agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all agreements executed before, on, or after the effective date.
new text end

Sec. 16.

new text begin [469.3193] CERTIFICATION OF CONTINUING ELIGIBILITY FOR
JOBZ BENEFITS.
new text end

new text begin (a) By December 1 of each year, every qualified business must certify to the
commissioner of revenue, on a form prescribed by the commissioner of revenue, whether
it is in compliance with any agreement required as a condition for eligibility for benefits
listed under section 469.315. A business that fails to submit the certification, or any
business, including those still operating in the zone, that submits a certification that
the commissioner of revenue later determines materially misrepresents the business's
compliance with the agreement, is subject to the repayment provisions under section
469.319 from January 1 of the year in which the report is due or the date that the business
became subject to section 469.319, whichever is earlier. Any such business is permanently
barred from obtaining benefits under section 469.315. For purposes of this section, the bar
applies to an entity and also applies to any individuals or entities that have an ownership
interest of at least 20 percent of the entity.
new text end

new text begin (b) Before the sanctions under paragraph (a) apply to a business that fails to
submit the certification, the commissioner of revenue shall send notice to the business,
demanding that the certification be submitted within 30 days and advising the business
of the consequences for failing to do so. The commissioner of revenue shall notify
the commissioner of employment and economic development and the appropriate job
opportunity subzone administrator whenever notice is sent to a business under this
paragraph.
new text end

new text begin (c) The certification required under this section is public.
new text end

new text begin (d) The commissioner of revenue shall promptly notify the commissioner of
employment and economic development of all businesses that certify that they are not
in compliance with the terms of their business subsidy agreement and all businesses
that fail to file the certification.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2006, section 469.3201, is amended to read:

469.3201 deleted text begin JOBZ EXPENDITURE LIMITATIONS; AUDITS deleted text end new text begin STATE
AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND
BUSINESS SUBSIDY AGREEMENTS new text end .

The deleted text begin Tax Increment Financing, Investment and Finance Division of the deleted text end Office of the
State Auditor must annually audit the creation and operation of all job opportunity building
zones and business subsidy agreements entered into under Minnesota Statutes, sections
469.310 to 469.320. new text begin To the extent necessary to perform this audit, the state auditor may
request from the commissioner of revenue tax return information of taxpayers who are
eligible to receive tax benefits authorized under section 469.315. To the extent necessary
to perform this audit, the state auditor may request from the commissioner of employment
and economic development wage detail report information required under section 268.044
of taxpayers eligible to receive tax benefits authorized under section 469.315.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2006, section 473.39, is amended by adding a subdivision
to read:

new text begin Subd. 1n. new text end

new text begin Obligations. new text end

new text begin After July 1, 2008, in addition to other authority in this
section, the council may issue certificates of indebtedness, bonds, or other obligations
under this section in an amount not exceeding $33,000,000 for capital expenditures as
prescribed in the council's regional transit master plan and transit capital improvement
program and for related costs, including the costs of issuance and sale of the obligations.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008, and applies in the
counties of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
new text end

Sec. 19.

Laws 1995, chapter 264, article 5, section 46, subdivision 2, is amended to
read:

Subd. 2.

Limitation on use of tax increments.

new text begin (a) new text end All revenues derived from tax
increments must be used in accordance with the housing replacement district plan. The
revenues must be used solely to pay the costs of site acquisition, relocation, demolition
of existing structures, site preparation, and pollution abatement on parcels identified in
the housing replacement district plan, as well as public improvements and administrative
costs directly related to those parcels.

new text begin (b) Notwithstanding paragraph (a), the city of Minneapolis may use revenues
derived from tax increments from its housing replacement district for activities related
to parcels not identified in the housing replacement plan, but which would qualify for
inclusion under section 45, subdivision 1, paragraph (b), clauses (1) to (3).
new text end

new text begin (c) Notwithstanding paragraph (a), or any other provisions of sections 44 to 47, the
Crystal Economic Development Authority may use revenues derived from tax increments
from its housing replacement districts numbers one and two as if those districts were
housing districts under Minnesota Statutes, section 469.174, subdivision 11, provided that
eligible activities may be located anywhere in the city without regard to the boundaries of
housing replacement district numbers one and two or any project area.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section applies to revenues from the housing replacement
districts, regardless of when they were received, and is effective the day following final
enactment and for the city of Minneapolis, upon compliance by the governing body of
the city of Minneapolis with Minnesota Statutes, section 645.021, subdivision 3, and, for
the city of Crystal, upon compliance by the governing body of the city of Crystal with
Minnesota Statutes, section 645.021, subdivision 3.
new text end

Sec. 20.

Laws 2003, chapter 127, article 10, section 31, subdivision 1, is amended to
read:

Subdivision 1.

District extension.

deleted text begin (a) deleted text end The governing body of the city of Hopkins
may elect to extend the duration of its redevelopment tax increment financing district
2-11 by up to four additional years.

deleted text begin (b) Notwithstanding any law to the contrary, effective upon approval of this
subdivision, no increments may be spent on activities located outside of the area of the
district, other than to pay administrative expenses.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Laws 2006, chapter 259, article 10, section 14, subdivision 1, is amended to
read:

Subdivision 1.

Definitions.

(a) "City" means the city of Minneapolis.

(b) "Homeless assistance tax increment district" means a contiguous area of the
city that:

(1) is no larger than deleted text begin six deleted text end new text begin eight new text end acres;

(2) is located within the boundaries of a city municipal development district; and

(3) contains at least two shelters for homeless persons that have been owned or
operated by nonprofit corporations that (i) are qualified charitable organizations under
section 501(c)(3) of the United States Internal Revenue Code, (ii) have operated such
homeless facilities within the district for at least five years, and (iii) have been recipients
of emergency services grants under Minnesota Statutes, section 256E.36.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the city of
Minneapolis with Minnesota Statutes, section 645.021.
new text end

Sec. 22.

Laws 2008, chapter 154, article 9, section 23, is amended to read:

Sec. 23. CITY OF FRIDLEY; TAX INCREMENT FINANCING DISTRICT;
SPECIAL RULES.

(a) If the city elects upon the adoption of a tax increment financing plan for a district,
the rules under this section apply to a redevelopment tax increment financing district
established by the city of Fridley or the housing and redevelopment authority of the city.
The redevelopment tax increment district includes the following parcels and adjacent
railroad property and shall be referred to as the Northstar Transit Station District: parcel
numbers 223024120010, 223024120009, 223024120017, 223024120016, 223024120018,
223024120012, 223024120011, 223024120005, 223024120004, 223024120003,
223024120013, 223024120008, 223024120007, 223024120006, 223024130005,
223024130010, 223024130011, 223024130003, 153024440039, 153024440037,
153024440041, 153024440042, 223024110013, 223024110016, 223024110017,
223024140008, 223024130002, 223024420004, 223024410002, 223024410003,
223024110008, 223024110007, 223024110019, 223024110018, 223024110003,
223024140003, 223024140009, 223024140002, 223024140010, and 223024410007.

(b) The requirements for qualifying a redevelopment tax increment district under
Minnesota Statutes, section 469.174, subdivision 10, do not apply to the parcels located
within the Northstar Transit Station District, which are deemed eligible for inclusion
in a redevelopment tax increment district.

(c) In addition to the costs permitted by Minnesota Statutes, section 469.176,
subdivision 4j, eligible expenditures within the Northstar Transit Station District include
those costs necessary to provide for the construction and land acquisition for a tunnel
under the Burlington Northern Santa Fe railroad tracks new text begin to allow access to the Northstar
Commuter Rail new text end .

(d) Notwithstanding the provisions of Minnesota Statutes, section 469.1763,
subdivision 2, the city of Fridley may expend increments generated from its tax increment
financing districts Nos. 11, 12, and 13 for costs permitted by paragraph (c) and Minnesota
Statutes, section 469.176, subdivision 4j, outside the boundaries of tax increment financing
districts Nos. 11, 12, and 13, but only within the Northstar Transit Station District.

(e) The five-year rule under Minnesota Statutes, section 469.1763, subdivision 3,
does not apply to the Northstar Transit Station District or to tax increment financing
districts Nos. 11, 12, and 13.

(f) The use of revenues for decertification under Minnesota Statutes, section
469.1763, subdivision 4, does not apply to tax increment financing districts Nos. 11,
12, and 13.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing body
of the city of Fridley and upon compliance by the city with Minnesota Statutes, section
645.021, subdivision 3.
new text end

Sec. 23.

Laws 2008, chapter 154, article 9, section 24, is amended to read:

Sec. 24. CITY OF NEW BRIGHTON; TAX INCREMENT FINANCING deleted text begin ;
EXPENDITURES OUTSIDE DISTRICT deleted text end _.

new text begin Subdivision 1. new text end

new text begin Expenditures outside district. new text end

Notwithstanding the provisions
of Minnesota Statutes, section 469.1763, subdivision 2, the city of New Brighton may
expend increments generated from its tax increment financing district No. 26 to facilitate
eligible activities as permitted by Minnesota Statutes, section 469.176, subdivision 4e,
outside the boundaries of tax increment financing district No. 26, but only within the area
described in Laws 1998, chapter 389, article 11, section 24, subdivision 1, and commonly
referred to as the Northwest Quadrant. Minnesota Statutes, section 469.1763, subdivisions
3 and 4, do not apply to expenditures permitted by this section.

new text begin Subd. 2. new text end

new text begin District duration extension. new text end

new text begin Notwithstanding the provisions of Minnesota
Statutes, section 469.176, subdivision 1b, or any other law to the contrary, the duration
limits that apply to redevelopment tax increment financing districts numbers 31 and 32
established under Laws 1998, chapter 389, article 11, section 24, and hazardous substance
subdistricts numbers 31A and 32A established under Minnesota Statutes, sections 469.174
to 469.1799, are extended by four years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing
body of the city of New Brighton and compliance by the city with Minnesota Statutes,
section 645.021, subdivision 3.
new text end

Sec. 24. new text begin CITY OF AUSTIN; TAX INCREMENT FINANCING AUTHORITY.
new text end

new text begin Notwithstanding the requirements of Minnesota Statutes, section 469.1763,
subdivision 3, that activities must be undertaken within a five-year period from the date of
certification of tax increment financing district and notwithstanding the provisions of any
other law, the governing body of the city of Austin may use tax increments from its Tax
Increment Financing District No. 9 to reimburse the city's housing and redevelopment
authority for money spent disposing of soils and debris in the tax increment financing
district, as required by the Minnesota Pollution Control Agency.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Austin with the requirements of Minnesota Statutes, section 645.021.
new text end

Sec. 25. new text begin BLOOMINGTON TAX INCREMENT FINANCING; FIVE-YEAR
RULE.
new text end

new text begin The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of a
tax increment financing district, are increased to a ten-year period for the Port Authority
of the City of Bloomington's Tax Increment Financing District No. 1-I, Bloomington
Central Station.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the Port Authority of the City of Bloomington with the requirements of Minnesota
Statutes, section 645.021.
new text end

Sec. 26. new text begin CITY OF DULUTH; EXTENSION OF TIME FOR ACTIVITY IN TAX
INCREMENT FINANCING DISTRICT NO. 20.
new text end

new text begin The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of
a tax increment financing district, must be considered to be met for Duluth Economic
Development Authority Tax Increment Financing District No. 20 if the activities are
undertaken within ten years from the date of certification of the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Duluth with the requirements of Minnesota Statutes, section 645.021.
new text end

Sec. 27. new text begin CITY OF DULUTH; EXTENSION OF TIME FOR ACTIVITY IN TAX
INCREMENT FINANCING DISTRICT NO. 21.
new text end

new text begin The requirements of Minnesota Statutes, section 469.1763, subdivision 3, that
activities must be undertaken within a five-year period from the date of certification of
a tax increment financing district, must be considered to be met for Duluth Economic
Development Authority Tax Increment Financing District No. 21 if the activities are
undertaken within ten years from the date of certification of the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Duluth with the requirements of Minnesota Statutes, section 645.021.
new text end

Sec. 28. new text begin CITY OF WELLS; DISPOSITION OF TIF REVENUES.
new text end

new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.174, subdivision
25, the following are deemed not to be "increments," "tax increments," or "revenues
derived from tax increment" for purposes of the redevelopment district in the city of
Wells, identified as Downtown Development Program 1, for amounts received after
decertification of the district:
new text end

new text begin (1) rents paid by private tenants for use of a building acquired in whole or in part
with tax increments; and
new text end

new text begin (2) proceeds from the sale of the building.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Wells with the requirements of Minnesota Statutes, section 645.021.
new text end

Sec. 29. new text begin MULTICOUNTY HOUSING AND REDEVELOPMENT AUTHORITY
LEVY AUTHORITY.
new text end

new text begin Notwithstanding Minnesota Statutes, section 469.033, subdivision 6, or any other
law to the contrary, the governing body of the Northwest Minnesota Multicounty Housing
and Redevelopment Authority, upon approval by a two-thirds majority of all its members,
may levy an amount not to exceed 25 percent of the total levy permitted under Minnesota
Statutes, section 469.033, subdivision 6, without approval of that levy by the governing
body of the city or county within which the authority operates. The authority to levy the
remainder of the total levy permitted under that provision remains subject to approval
by the governing body of the city or county. For purposes of the levy authorized under
this section only, the Northwest Minnesota Multicounty Housing and Redevelopment
Authority is considered a special taxing jurisdiction as provided in Minnesota Statutes,
section 275.066.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2008, payable in
2009, and is repealed effective for taxes levied in 2013, payable in 2014, and thereafter.
new text end

Sec. 30. new text begin CITY OF OAKDALE; ORIGINAL TAX CAPACITY.
new text end

new text begin (a) The provisions of this section apply to redevelopment tax increment financing
districts created by the Housing and Redevelopment Authority in and for the city of
Oakdale in the areas comprised of the parcels with the following parcel identification
numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
3102921320060; and 3102921320061; and (2) 3102921330005 and 3102921330004.
new text end

new text begin (b) For a district subject to this section, the Housing and Redevelopment Authority
may, when requesting certification of the original tax capacity of the district under
Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
be certified as the tax capacity of the land.
new text end

new text begin (c) The authority to request certification of a district under this section expires on
July 1, 2013.
new text end

new text begin EFFECTIVE DATE; LOCAL APPROVAL. new text end

new text begin This section is effective upon
approval by the governing body of the city of Oakdale and compliance with Minnesota
Statutes, section 645.021, subdivision 3.
new text end

Sec. 31. new text begin DEED GRANTS.
new text end

new text begin $1,500,000 is appropriated to the commissioner of the Department of Employment
and Economic Development from the general fund for fiscal year 2009 for the purpose of
making grants of $750,000 each to the cities of Minneapolis and Saint Paul for capital
improvements or related costs of the Target Center and RiverCentre facilities.
new text end

ARTICLE 5

PROPERTY TAXES

Section 1.

Minnesota Statutes 2006, section 216B.1646, is amended to read:

216B.1646 RATE deleted text begin REDUCTION deleted text end new text begin ADJUSTMENT new text end ; PROPERTY TAX
deleted text begin REDUCTION deleted text end new text begin CHANGE new text end .

(a) The commission shall, by any method the commission finds appropriate, deleted text begin reduce deleted text end new text begin
adjust new text end the rates each deleted text begin electric deleted text end utility subject to rate regulation by the commission charges
its customers to reflect, on an ongoing basis, the amount by which each utility's property
tax new text begin , including the state general tax, if applicable, new text end on the personal property of its electric
system deleted text begin from taxes payable in 2001 to taxes payable in 2002 is reduced deleted text end new text begin or pipeline system
transporting or distributing natural gas is changed under this act new text end . The commission must
ensure that, to the extent feasible, each dollar of personal property tax deleted text begin reduction allocated
to Minnesota consumers retroactive to January 1, 2002, deleted text end new text begin change in taxes payable in 2009
and subsequent years new text end results in a dollar of deleted text begin savings deleted text end new text begin adjustment new text end to the utility's deleted text begin customers deleted text end new text begin
rates new text end . deleted text begin A utility may voluntarily pass on any additional property tax savings allocated in
the same manner as approved by the commission under this paragraph. deleted text end new text begin The adjustment
under this paragraph is outside of a general rate case proceeding under section 216B.16.
new text end

(b) deleted text begin By April 10, 2002, deleted text end Each utility deleted text begin shall deleted text end new text begin may new text end submit a filing to the commission
containing:

(1) certified information regarding the utility's property tax deleted text begin savings deleted text end new text begin change new text end allocated
to Minnesota retail customers; and

(2) a proposed method of deleted text begin passing these savings on deleted text end new text begin adjusting rates new text end to Minnesota
retail customers.

The utility shall provide the information in clause (1) to the commissioner of revenue at
the same time. The commissioner shall notify the commission within 30 days as to the
accuracy of the property tax data submitted by the utility.

(c) For purposes of this section, "personal property" means tools, implements, and
machinery of deleted text begin the generating plant. It does not apply to transformers, transmission lines,
distribution lines, or any other tools, implements, and machinery that are part of an electric
substation, wherever located deleted text end new text begin an electric system or of a pipeline system transporting or
distributing natural gas new text end .

Sec. 2.

Minnesota Statutes 2006, section 270C.85, subdivision 2, is amended to read:

Subd. 2.

Powers and duties.

The commissioner shall have and exercise the
following powers and duties in administering the property tax laws.

(a) Confer with, advise, and give the necessary instructions and directions to local
assessors and local boards of review throughout the state as to their duties under the
laws of the state.

(b) Direct proceedings, actions, and prosecutions to be instituted to enforce the
laws relating to the liability and punishment of public officers and officers and agents of
corporations for failure or negligence to comply with the provisions of the property tax
laws, and cause complaints to be made against local assessors, members of boards of
equalization, members of boards of review, or any other assessing or taxing officer, to the
proper authority, for their removal from office for misconduct or negligence of duty.

(c) Require county attorneys to assist in the commencement of prosecutions in
actions or proceedings for removal, forfeiture, and punishment, for violation of the
property tax laws in their respective districts or counties.

(d) Require town, city, county, and other public officers to report information as to
the assessment of property, and such other information as may be needful in the work of
the commissioner, in such form as the commissioner may prescribe.

(e) Transmit to the governor, on or before the third Monday in December of each
even-numbered year, and to each member of the legislature, on or before November
15 of each even-numbered year, the report of the department for the preceding years,
showing all the taxable property subject to the property tax laws and the value of the
same, in tabulated form.

(f) Inquire into the methods of assessment and taxation and ascertain whether the
assessors faithfully discharge their duties.

new text begin (g) Assist local assessors in determining the estimated market value of industrial
special-use property. For purposes of this paragraph, "industrial special-use property"
means property that:
new text end

new text begin (1) is designed and equipped for a particular type of industry;
new text end

new text begin (2) is not easily adapted to some other use due to the unique nature of the facilities;
new text end

new text begin (3) has facilities totaling at least 75,000 square feet in size; and
new text end

new text begin (4) has a total estimated market value of $10,000,000 or greater based on the
assessor's preliminary determination.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter, for taxes payable in 2010 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 85. new text end

new text begin Fergus Falls historical zone. new text end

new text begin (a) Property located in the area of the
campus of the former state regional treatment center in the city of Fergus Falls, including
the five buildings and associated land that were acquired by the city prior to January 1,
2007, is exempt from ad valorem taxes levied under chapter 275.
new text end

new text begin (b) The exemption applies for 15 calendar years from the date specified by resolution
of the governing body of the city of Fergus Falls. For the final three assessment years of
the duration limit, the exemption applies to the following percentages of estimated market
value of the property:
new text end

new text begin (1) for the third to the last assessment year of the duration, 75 percent;
new text end

new text begin (2) for the second to the last assessment year of the duration, 50 percent; and
new text end

new text begin (3) for the last assessment year of the duration, 25 percent.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes payable in 2009
and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2006, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 86. new text end

new text begin Electric generation facility; personal property. new text end

new text begin (a) Notwithstanding
subdivision 9, paragraph (a), attached machinery and other personal property which is
part of a simple-cycle combustion-turbine electric generation facility that exceeds 150
megawatts of installed capacity and that meets the requirements of this subdivision is
exempt. At the time of construction, the facility must:
new text end

new text begin (1) utilize natural gas as a primary fuel;
new text end

new text begin (2) be owned by an electric generation and transmission cooperative;
new text end

new text begin (3) be located within one mile of an existing 16-inch natural gas pipeline and a
69-kilovolt and a 230-kilovolt high-voltage electric transmission line;
new text end

new text begin (4) be designed to provide peaking, emergency backup, or contingency services;
new text end

new text begin (5) have received a certificate of need under section 216B.243 demonstrating
demand for its capacity; and
new text end

new text begin (6) have received by resolution the approval from the governing bodies of the county
and the city in which the proposed facility is to be located for the exemption of personal
property under this subdivision.
new text end

new text begin (b) Construction of the facility must be commenced after January 1, 2008, and
before January 1, 2012. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2008 assessment payable in
2009 and thereafter.
new text end

Sec. 5.

new text begin [273.0645] COMMISSIONER REVIEW OF LOCAL ASSESSMENT
PRACTICES.
new text end

new text begin The commissioner of revenue must review the assessment practices in a taxing
jurisdiction if requested in writing by a qualifying number of property owners in that
taxing jurisdiction. The request must be signed by the greater of:
new text end

new text begin (1) one percent of the property owners; or
new text end

new text begin (2) five property owners.
new text end

new text begin The request must identify the city, town, or county and describe why a review is
sought for that taxing jurisdiction. The commissioner must conduct the review in a
reasonable amount of time and report the findings to the county board of the affected
county, to the affected city council or town board, if the review is for a specific city or
town, and to the property owner designated in the request as the person to receive the
report on behalf of all the property owners who signed the request. The commissioner
must also provide the report electronically to all property owners who signed the request
and provided an e-mail address in order to receive the report electronically.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 273.11, subdivision 1, is amended to read:

Subdivision 1.

Generally.

Except as provided in this section or section 273.17,
subdivision 1, all property shall be valued at its market value. The market value as
determined pursuant to this section shall be stated such that any amount under $100 is
rounded up to $100 and any amount exceeding $100 shall be rounded to the nearest $100.
In estimating and determining such value, the assessor shall not adopt a lower or different
standard of value because the same is to serve as a basis of taxation, nor shall the assessor
adopt as a criterion of value the price for which such property would sell at a forced
sale, or in the aggregate with all the property in the town or district; but the assessor
shall value each article or description of property by itself, and at such sum or price as
the assessor believes the same to be fairly worth in money. The assessor shall take into
account the effect on the market value of property of environmental factors in the vicinity
of the property new text begin , and the market value effect of foreclosed property on all property in the
vicinity due to the foreclosures new text end . In assessing any tract or lot of real property, the value
of the land, exclusive of structures and improvements, shall be determined, and also the
value of all structures and improvements thereon, and the aggregate value of the property,
including all structures and improvements, excluding the value of crops growing upon
cultivated land. In valuing real property upon which there is a mine or quarry, it shall be
valued at such price as such property, including the mine or quarry, would sell for at a fair,
voluntary sale, for cash, if the material being mined or quarried is not subject to taxation
under section 298.015 and the mine or quarry is not exempt from the general property
tax under section 298.25. In valuing real property which is vacant, platted property shall
be assessed as provided in subdivision 14. All property, or the use thereof, which is
taxable under section 272.01, subdivision 2, or 273.19, shall be valued at the market
value of such property and not at the value of a leasehold estate in such property, or at
some lesser value than its market value.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2009 assessment and
thereafter.
new text end

Sec. 7.

Minnesota Statutes 2006, section 273.11, subdivision 1a, is amended to read:

Subd. 1a.

Limited market value.

In the case of all property classified as
agricultural homestead or nonhomestead, residential homestead or nonhomestead, timber,
or noncommercial seasonal residential recreational, the assessor shall compare the value
with the taxable portion of the value determined in the preceding assessment.

deleted text begin For assessment years 2004, 2005, and 2006, the amount of the increase shall not
exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 25
percent of the difference between the current assessment and the preceding assessment.
deleted text end

For assessment deleted text begin year deleted text end new text begin years new text end 2007 new text begin through 2009 new text end , the amount of the increase shall not
exceed the greater of (1) 15 percent of the value in the preceding assessment, or (2) 33
percent of the difference between the current assessment and the preceding assessment.

For assessment year deleted text begin 2008 deleted text end new text begin 2010 new text end , the amount of the increase shall not exceed the
greater of (1) 15 percent of the value in the preceding assessment, or (2) 50 percent of the
difference between the current assessment and the preceding assessment.

This limitation shall not apply to increases in value due to improvements. For
purposes of this subdivision, the term "assessment" means the value prior to any exclusion
under subdivision 16.

The provisions of this subdivision shall be in effect through assessment year deleted text begin 2008 deleted text end new text begin
2010 new text end as provided in this subdivision.

For purposes of the assessment/sales ratio study conducted under section 127A.48,
and the computation of state aids paid under chapters 122A, 123A, 123B, 124D, 125A,
126C, 127A, and 477A, market values and net tax capacities determined under this
subdivision and subdivision 16, shall be used.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2008 and
thereafter, for taxes payable in 2009 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2006, section 273.11, subdivision 14b, is amended to read:

Subd. 14b.

Vacant land platted on or after August 1, 2001 deleted text begin ; located in
nonmetropolitan counties deleted text end .

(a) All land platted on or after new text begin (i) new text end August 1, 2001, new text begin and
new text end located in a nonmetropolitan county, new text begin or (ii) August 1, 2008, and located in a metropolitan
county, new text end and not improved with a permanent structure, shall be assessed as provided in this
subdivision. The assessor shall determine the market value of each individual lot based
upon the highest and best use of the property as unplatted land. In establishing the market
value of the property, the assessor shall consider the sale price of the unplatted land or
comparable sales of unplatted land of similar use and similar availability of public utilities.

(b) The market value determined in paragraph (a) shall be increased as follows for
each of the seven assessment years immediately following the final approval of the plat:
one-seventh of the difference between the property's unplatted market value as determined
under paragraph (a) and the market value based upon the highest and best use of the land
as platted property shall be added in each of the seven subsequent assessment years.

(c) Any increase in market value after the first assessment year following the plat's
final approval shall be added to the property's market value in the next assessment year.
Notwithstanding paragraph (b), if new text begin the property is sold or transferred, or new text end construction
begins before the expiration of the seven years in paragraph (b), that lot shall be eligible
for revaluation in the next assessment year. The market value of a platted lot determined
under this subdivision shall not exceed the value of that lot based upon the highest and
best use of the property as platted land.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 9.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision to
read:

new text begin Subd. 14c. new text end

new text begin Vacant land platted on or after August 1, 2001, and prior to August
1, 2008; located in metropolitan county; phase-in readjusted. new text end

new text begin (a) All land platted on or
after August 1, 2001, and prior to August 1, 2008, located in a metropolitan county and not
improved with a structure shall be eligible for the phase-in assessment schedule under this
section. Based upon the assessor's records, the assessor shall obtain the estimated market
value of each individual lot based upon the highest and best use of the property as unplatted
land for the assessment year that the property was platted. In establishing the market value
of the property, the assessor shall have considered the sale price of the unplatted land or
comparable sales of unplatted land of similar use and similar availability of public utilities.
new text end

new text begin (b) The market value determined in paragraph (a) plus one-seventh of the difference
between the property's unplatted market value as determined under paragraph (a) and the
market value based upon the highest and best use of the land as platted property in the
current year, multiplied by the number of assessment years since the property was platted,
shall be added in each of the subsequent assessment years.
new text end

new text begin (c) Notwithstanding paragraph (b), if the property is sold or transferred, or
construction begins before the expiration of the phase-in in paragraph (b), that lot shall
be eligible for revaluation in the next assessment year. The market value of a platted lot
determined under this subdivision shall not exceed the value of that lot based upon the
highest and best use of the property as platted land.
new text end

new text begin (d) For purposes of this section, "metropolitan county" means the counties of Anoka,
Carver, Dakota, Hennepin, Ramsey, Scott, and Washington.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 10.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision
to read:

new text begin Subd. 24. new text end

new text begin Rural vacant land abutting public waters. new text end

new text begin (a) Any property that:
new text end

new text begin (1) is located in a township;
new text end

new text begin (2) is classified as either (i) agricultural property under section 273.13, subdivision
23, paragraph (b), or (ii) rural vacant land under section 273.13, subdivision 23, paragraph
(c), contiguous to agricultural property under the same ownership with at least two-thirds
of the acreage used for agricultural purposes;
new text end

new text begin (3) is not enrolled in the Minnesota agricultural property tax law under section
273.111; and
new text end

new text begin (4) abuts public waters in whole or in part,
new text end

new text begin shall be valued by the assessor on the same basis as rural vacant land of the same quality
that does not abut public waters, until some action is taken to develop the land as specified
in paragraph (c).
new text end

new text begin (b) In each assessment year, the assessor shall determine the estimated market value
of the property as provided under subdivision 1, taking into consideration its highest
and best use. For each year that the property is classified under this subdivision, the
property tax statement shall include a notice that the property is being taxed under a
reduced valuation that will terminate under certain conditions.
new text end

new text begin (c) An owner of property meeting the criteria of this subdivision must notify the
county assessor within 30 days of applying for a development permit from the county
or local zoning board. If development permits are not required, an owner of property
meeting the criteria of this subdivision must notify the assessor prior to all or any portion
of the property being platted or subdivided.
new text end

new text begin (d) When any of the conditions specified in paragraph (c) occurs, additional taxes
shall be imposed in an amount equal to: (1) the average of the difference between the
amount of taxes actually levied on the property in the current year and the two prior years,
and the amount of taxes that would have been levied in the current year and the two prior
years based on the estimated market value determined under paragraph (b); (2) multiplied
by seven or the number of years that the property has qualified under this subdivision,
whichever is less. The additional taxes shall be extended against the property on the tax list
for the current year, provided that no interest or penalties shall be levied on the additional
taxes if timely paid. For purposes of this subdivision, "public waters" means a meandered
lake as defined under section 103G.005, subdivision 15, paragraph (a), clause (3).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2009 assessment and
thereafter.
new text end

Sec. 11.

Minnesota Statutes 2006, section 273.11, is amended by adding a subdivision
to read:

new text begin Subd. 25. new text end

new text begin Limit on taxable valuation; certain restored homes. new text end

new text begin A homestead
property that either (i) has gone through foreclosure or (ii) is located within a disaster
or emergency area and sustained physical damage of at least $5,000 in the disaster or
emergency is eligible for valuation limitation under this subdivision. To qualify for the
limitation, the property must:
new text end

new text begin (i) have been restored or rebuilt within 18 months of the foreclosure or the disaster
or emergency;
new text end

new text begin (ii) have a gross living area that does not exceed 130 percent of the gross living area
prior to the foreclosure or the disaster or emergency; and
new text end

new text begin (iii) have an estimated market value that exceeds its taxable market value for the
assessment year of the foreclosure or the disaster or emergency by at least $20,000, due to
the restoration or reconstruction.
new text end

new text begin In the first assessment year following the restoration or reconstruction, the taxable
value shall be equal to three-quarters of its taxable value in the assessment year of the
foreclosure or disaster or emergency, plus one-quarter of its current estimated market
value. In the second assessment year following the restoration or reconstruction, the
taxable value shall be equal to one-half of its taxable value in the assessment year of the
foreclosure or disaster or emergency, and one-half of its current estimated market value.
In the third assessment year following the restoration or reconstruction, the taxable value
shall be equal to one-quarter of its taxable value in the assessment year of the foreclosure
or disaster or emergency, and three-quarters of its current estimated market value. For
the three assessment years immediately following the restoration or reconstruction, the
property is not subject to the valuation limit under subdivision 1a.
new text end

new text begin For the purposes of this subdivision:
new text end

new text begin (i) "disaster or emergency area" means an area in which the president of the United
States or the administrator of the Small Business Administration has determined that
a disaster exists pursuant to federal law;
new text end

new text begin (ii) "gone through foreclosure" means that a foreclosure sale has been held and that
the person who owned the home prior to the sale did not redeem it from the sale under
section 580.23; and
new text end

new text begin (iii) "gross living area" means the square footage of the home that would customarily
be used as living space.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 12.

Minnesota Statutes 2006, section 273.111, subdivision 3, as amended by Laws
2008, chapter 154, article 13, section 26, is amended to read:

Subd. 3.

Requirements.

(a) Real estate consisting of deleted text begin ten deleted text end new text begin three new text end acres or more or
a nursery or greenhouse, and qualifying for classification as class deleted text begin 1b, deleted text end 2a deleted text begin , or 2b deleted text end under
section 273.13, shall be entitled to valuation and tax deferment under this section deleted text begin only deleted text end
if it deleted text begin is primarily devoted to agricultural use, and meets the qualifications in subdivision
6, and either deleted text end :

(1) is the homestead of the owner, or of a surviving spouse, child, or sibling of the
owner or is real estate which is farmed with the real estate which contains the homestead
property; or

(2) has been in possession of the applicant, the applicant's spouse, parent, or sibling,
or any combination thereof, for a period of at least seven years prior to application for
benefits under the provisions of this section, or is real estate which is farmed with the
real estate which qualifies under this clause and is within four townships or cities or
combination thereof from the qualifying real estate; or

(3) is the homestead of deleted text begin a shareholder in a family farm corporation as defined in deleted text end new text begin an
individual who is part of an entity in compliance with new text end section 500.24 deleted text begin , notwithstanding
the fact that legal title to the real estate may be held in the name of the family farm
corporation deleted text end ; or

(4) is in the possession of a nursery or greenhouse or an entity owned by a proprietor,
partnership, or corporation which also owns the nursery or greenhouse operations on the
parcel or parcels new text begin , provided that only the acres used to produce nursery stock qualify
for treatment under this section new text end .

(b) deleted text begin Valuation of real estate under this section is limited to parcels the ownership of
which is in noncorporate entities except for: deleted text end

deleted text begin (1) family farm corporations organized pursuant to section 500.24; and
deleted text end

deleted text begin (2) corporations that derive 80 percent or more of their gross receipts from the
wholesale or retail sale of horticultural or nursery stock.
deleted text end

deleted text begin (c) deleted text end Land that previously qualified for tax deferment under this section and no longer
qualifies because it is not primarily used for agricultural purposes but would otherwise
qualify under deleted text begin subdivisions deleted text end new text begin Minnesota Statutes 2006, section 273.111, subdivision new text end 3 deleted text begin and 6 deleted text end new text begin ,
new text end for a period of at least three years will not be required to make payment of the previously
deferred taxes, notwithstanding the provisions of subdivision 9. Sale of the land prior to
the expiration of the three-year period requires payment of deferred taxes as follows: sale
in the year the land no longer qualifies requires payment of the current year's deferred
taxes plus payment of deferred taxes for the two prior years; sale during the second year
the land no longer qualifies requires payment of the current year's deferred taxes plus
payment of the deferred taxes for the prior year; and sale during the third year the land
no longer qualifies requires payment of the current year's deferred taxes. Deferred taxes
shall be paid even if the land qualifies pursuant to subdivision 11a. When such property is
sold or no longer qualifies under this paragraph, or at the end of the three-year period,
whichever comes first, all deferred special assessments plus interest are payable in equal
installments spread over the time remaining until the last maturity date of the bonds issued
to finance the improvement for which the assessments were levied. If the bonds have
matured, the deferred special assessments plus interest are payable within 90 days. The
provisions of section 429.061, subdivision 2, apply to the collection of these installments.
Penalties are not imposed on any such special assessments if timely paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009, taxes
payable in 2010 and thereafter.
new text end

Sec. 13.

Minnesota Statutes 2006, section 273.111, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Property no longer eligible for deferment. new text end

new text begin Real estate that qualifies for
tax deferment under this section for assessment year 2008, but which does not qualify
for the current assessment year due to changes in qualification requirements under this
act, shall continue to qualify until the land is sold or transferred, provided that the
property continues to meet the requirements of Minnesota Statutes 2006, section 273.111,
subdivision 3.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 14.

Minnesota Statutes 2006, section 273.111, subdivision 4, is amended to read:

Subd. 4.

Determination of value.

new text begin (a) new text end The value of any real estate described
in subdivision 3 shall upon timely application by the owner, in the manner provided
in subdivision 8, be determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03, subdivision 8, and 273.11. deleted text begin In
determining the value for ad valorem tax purposes, the assessor shall use sales data for
agricultural lands located outside the seven metropolitan counties having similar soil
types, number of degree days, and other similar agricultural characteristics. deleted text end Furthermore,
the assessor shall not consider any added values resulting from nonagricultural factors.
new text begin In order to account for the presence of nonagricultural influences that may affect the value
of agricultural land, the commissioner of revenue shall develop a fair and uniform method
of determining agricultural values for each county in the state that are consistent with this
subdivision. The commissioner shall annually assign the resulting values to each county,
and these values shall be used as the basis for determining the agricultural value for all
properties in the county qualifying for tax deferment under this section.
new text end

new text begin (b) In the case of property qualifying for tax deferment only under subdivision 3a,
the value shall be based on the value in effect for assessment year 2008, multiplied by
the ratio of the total taxable market value of all property in the county for the current
assessment year divided by the total taxable market value of all property in the county
for assessment year 2008.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 15.

Minnesota Statutes 2006, section 273.111, subdivision 8, is amended to read:

Subd. 8.

Application.

Application for deferment of taxes and assessment under this
section shall be filed by May 1 of the year prior to the year in which the taxes are payable.
Any application filed hereunder and granted shall continue in effect for subsequent years
until the property no longer qualifies. Such application shall be filed with the assessor of
the taxing district in which the real property is located on such form as may be prescribed
by the commissioner of revenue. The assessor may require proof by affidavit or otherwise
that the property qualifies under deleted text begin subdivisions deleted text end new text begin subdivision new text end 3 deleted text begin and 6 deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 16.

Minnesota Statutes 2006, section 273.111, subdivision 9, is amended to read:

Subd. 9.

Additional taxes.

When real property which is being, or has been valued
and assessed under this section no longer qualifies under deleted text begin subdivisions deleted text end new text begin subdivision new text end 3
deleted text begin and 6 deleted text end new text begin or 3a new text end , the portion no longer qualifying shall be subject to additional taxes, in the
amount equal to the new text begin average new text end difference between the taxes determined in accordance with
subdivision 4, and the amount determined under subdivision 5, new text begin for the current year and
the two preceding years, multiplied by seven or the number of years enrolled under
section 273.111, whichever is less new text end . Provided, however, that the amount determined under
subdivision 5 shall not be greater than it would have been had the actual bona fide sale
price of the real property at an arm's-length transaction been used in lieu of the market
value determined under subdivision 5. Such additional taxes shall be extended against
the property on the tax list for the current year, provided, however, that no interest or
penalties shall be levied on such additional taxes if timely paid deleted text begin , and provided further, that
such additional taxes shall only be levied with respect to the last three years that the said
property has been valued and assessed under this section deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 17.

Minnesota Statutes 2006, section 273.111, subdivision 11, is amended to read:

Subd. 11.

Special local assessments.

The payment of special local assessments
levied after June 1, 1967, for improvements made to any real property described in
subdivision 3 together with the interest thereon shall, on timely application as provided
in subdivision 8, be deferred as long as such property meets the conditions contained in
deleted text begin subdivisions deleted text end new text begin subdivision new text end 3 deleted text begin and 6 deleted text end new text begin or 3a new text end or is transferred to an agricultural preserve under
sections 473H.02 to 473H.17. If special assessments against the property have been
deferred pursuant to this subdivision, the governmental unit shall file with the county
recorder in the county in which the property is located a certificate containing the legal
description of the affected property and of the amount deferred. When such property
no longer qualifies under deleted text begin subdivisions deleted text end new text begin subdivision new text end 3 deleted text begin and 6 deleted text end new text begin or 3a new text end , all deferred special
assessments plus interest shall be payable in equal installments spread over the time
remaining until the last maturity date of the bonds issued to finance the improvement
for which the assessments were levied. If the bonds have matured, the deferred special
assessments plus interest shall be payable within 90 days. The provisions of section
429.061, subdivision 2, apply to the collection of these installments. Penalty shall not be
levied on any such special assessments if timely paid.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 18.

Minnesota Statutes 2006, section 273.111, subdivision 11a, is amended to read:

Subd. 11a.

Continuation of tax treatment upon sale.

When real property
qualifying under deleted text begin subdivisions deleted text end new text begin subdivision new text end 3 deleted text begin and 6 deleted text end is sold, no additional taxes or deferred
special assessments plus interest shall be extended against the property provided the
property continues to qualify pursuant to deleted text begin subdivisions deleted text end new text begin subdivision new text end 3 deleted text begin and 6 deleted text end , and provided
the new owner files an application for continued deferment within 30 days after the sale.

deleted text begin For purposes of meeting the income requirements of subdivision 6, the property
purchased shall be considered in conjunction with other qualifying property owned by
the purchaser.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter.
new text end

Sec. 19.

new text begin [273.1115] AGGREGATE RESOURCE PRESERVATION PROPERTY
TAX LAW.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, "commercial aggregate
deposit" and "actively mined" have the meanings given them in section 273.13,
subdivision 23, paragraph (l).
new text end

new text begin Subd. 2. new text end

new text begin Requirement. new text end

new text begin Real estate is entitled to valuation under this section only if
all of the following requirements are met:
new text end

new text begin (1) the property is classified 1a, 1b, 2a, or 2b property under section 273.13,
subdivisions 22 and 23;
new text end

new text begin (2) the property is at least ten contiguous acres, when the application is filed under
subdivision 3;
new text end

new text begin (3) the owner has filed a completed application for deferment as specified in
subdivision 3 with the county assessor in the county in which the property is located;
new text end

new text begin (4) there are no delinquent taxes on the property; and
new text end

new text begin (5) a covenant on the land restricts its use as provided in subdivision 3, clause (4).
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin Application for valuation deferment under this section
must be filed by May 1 of the assessment year. Any application filed and granted
continues in effect for subsequent years until the property no longer qualifies, provided
that supplemental affidavits under subdivision 8 are timely filed. The application must
be filed with the assessor of the county in which the real property is located on such
form as may be prescribed by the commissioner of revenue. The application must be
executed and acknowledged in the manner required by law to execute and acknowledge a
deed and must contain at least the following information and any other information the
commissioner deems necessary:
new text end

new text begin (1) the legal description of the area;
new text end

new text begin (2) the name and address of owner;
new text end

new text begin (3) a copy of the affidavit filed under section 273.13, subdivision 23, paragraph
(l), when property is classified as:
new text end

new text begin (i) 1b under section 273.13, subdivision 22, paragraph (b);
new text end

new text begin (ii) 2a under section 273.13, subdivision 23;
new text end

new text begin (iii) 2b under section 273.13, subdivision 23; or
new text end

new text begin (iv) 2e under section 273.13, subdivision 23, paragraph (l).
new text end

new text begin The application must include a similar document with the same information as
contained in the affidavit under section 273.13, subdivision 23, paragraph (l); and
new text end

new text begin (4) a statement of proof from the owner that the land contains a restrictive covenant
limiting its use for the property's surface to that which exists on the date of the application
and limiting its future use to the preparation and removal of the commercial aggregate
deposit under its surface. To qualify under this clause, the covenant must be binding on
the owner or the owner's successor or assignee, and run with the land, except as provided
in subdivision 5 allowing for the cancellation of the covenant under certain conditions.
new text end

new text begin Subd. 4. new text end

new text begin Determination of value. new text end

new text begin Upon timely application by the owner as provided
in subdivision 3, notwithstanding sections 272.03, subdivision 8, and 273.11, the value of
any qualifying land described in subdivision 3 must be valued as if it were agricultural
property, using a per acre valuation equal to the current assessment year's average per acre
valuation of agricultural land in the county. The assessor shall not consider any additional
value resulting from potential alternative and future uses of the property. The buildings
located on the land shall be valued by the assessor in the normal manner.
new text end

new text begin Subd. 5. new text end

new text begin Cancellation of covenant. new text end

new text begin The covenant required under subdivision
3 may be canceled in two ways:
new text end

new text begin (1) by the owner beginning with the next subsequent assessment year provided
that the additional taxes as determined under subdivision 7 are paid by the owner at the
time of cancellation; or
new text end

new text begin (2) by the city or town in which the property is located beginning with the next
subsequent assessment year, if the city council or town board:
new text end

new text begin (i) changes the conditional use of the property;
new text end

new text begin (ii) revokes the mining permit; or
new text end

new text begin (iii) changes the zoning to disallow mining.
new text end

new text begin No additional taxes are imposed on the property under this clause.
new text end

new text begin Subd. 6. new text end

new text begin County termination. new text end

new text begin Within two years of the effective date of this section,
a county may, following notice and public hearing, terminate application of this section
in the county. The termination is effective upon adoption of a resolution of the county
board. A county has 60 days from receipt of the first application for enrollment under
this section to notify the applicant and any subsequent applicants of the county's intent
to begin the process of terminating application of this section in the county. The county
must act on the termination within six months. Upon termination by a vote of the county
board, all applications received prior to and during notification of intent to terminate shall
be deemed void. If the county board does not act on the termination within six months of
notification, all applications for valuation for deferment received shall be deemed eligible
for consideration to be enrolled under this section. Following this initial 60-day grace
period, a termination applies prospectively and does not affect property enrolled under this
section prior to the termination date. A county may reauthorize application of this section
by a resolution of the county board revoking the termination.
new text end

new text begin Subd. 7. new text end

new text begin Additional taxes. new text end

new text begin When real property which has been valued and assessed
under this section no longer qualifies, the portion of the land classified under subdivision
2, clause (1), is subject to additional taxes. The additional tax amount is determined by:
new text end

new text begin (1) computing the difference between (i) the current year's taxes determined in
accordance with subdivision 4, and (ii) an amount as determined by the assessor based
upon the property's current year's estimated market value of like real estate at its highest
and best use and the appropriate local tax rate; and
new text end

new text begin (2) multiplying the amount determined in clause (1) by the number of years the
land was in the program under this section. The current year's estimated market value as
determined by the assessor must not exceed the market value that would result if the
property was sold in an arms-length transaction and must not be greater than it would have
been had the actual bona fide sale price of the property been used in lieu of that market
value. The additional taxes must be extended against the property on the tax list for the
current year, except that interest or penalties must not be levied on these additional taxes if
timely paid. The additional tax under this subdivision must not be imposed on that portion
of the property which has actively been mined and has been removed from the program
based upon the supplemental affidavits filed under subdivision 8.
new text end

new text begin Subd. 8. new text end

new text begin Supplemental affidavits; mining activity on land. new text end

new text begin When any portion
of the property begins to be actively mined, the owner must file a supplemental affidavit
within 60 days from the day any aggregate is removed stating the number of acres of the
property that is actively being mined. The acres actively being mined shall be (1) valued
and classified under section 273.13, subdivision 24, in the next subsequent assessment
year, and (2) removed from the aggregate resource preservation property tax program
under this section. The additional taxes under subdivision 7 must not be imposed on the
acres that are actively being mined and have been removed from the program under this
section. Copies of the original affidavit and all supplemental affidavits must be filed
with the county assessor, the local zoning administrator, and the Department of Natural
Resources, Division of Land and Minerals. A supplemental affidavit must be filed each
time a subsequent portion of the property is actively mined, provided that the minimum
acreage change is five acres, even if the actual mining activity constitutes less than five
acres. Failure to file the affidavits timely shall result in the property losing its valuation
deferment under this section, and additional taxes must be imposed as calculated under
subdivision 7.
new text end

new text begin Subd. 9. new text end

new text begin Lien. new text end

new text begin The additional tax imposed by this section is a lien upon the property
assessed to the same extent and for the same duration as other taxes imposed upon
property within this state and, when collected, must be distributed in the manner provided
by law for the collection and distribution of other property taxes.
new text end

new text begin Subd. 10. new text end

new text begin Continuation of tax treatment upon sale. new text end

new text begin When real property qualifying
under subdivision 2 is sold, additional taxes must not be extended against the property
if the property continues to qualify under subdivision 2, and the new owner files an
application with the assessor for continued deferment within 30 days after the sale.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes assessed in 2009, payable
in 2010, and thereafter, except that for the 2009 assessment year, the application date
under subdivision 5 shall be September 1, 2009, and subdivision 6 is effective the day
following final enactment.
new text end

Sec. 20.

new text begin [273.113] TAX CREDIT FOR PROPERTY IN BOVINE
TUBERCULOSIS MANAGEMENT ZONES.
new text end

new text begin Subdivision 1. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "bovine tuberculosis
management zone" means the area within the ten-mile radius around the five presumptive
tuberculosis-positive deer sampled during the fall 2006 hunter-harvested surveillance
effort.
new text end

new text begin Subd. 2. new text end

new text begin Eligibility; credit on agricultural land; cattle herds. new text end

new text begin Land classified
as class 2a or 2b under section 273.13, subdivision 23, located in a bovine tuberculosis
management zone is eligible for a property tax credit if the property owner has eradicated
a cattle herd that had been kept on that land for at least part of the year in order to prevent
the onset or spread of bovine tuberculosis. The net credit is equal to that portion of the tax
relating to the market value of the land on the parcels where the herd had been located after
all other applicable credits have been deducted. To initially qualify for the tax credit, the
property owner shall file an application with the county by January 2 of the year following
the calendar year when the herd was eradicated. The credit must be given for each taxes
payable year following the calendar year when the herd was eradicated and must terminate
for all taxes payable years beginning after the calendar year when a new herd of cattle was
placed on the land or as provided in subdivision 5. The auditor shall indicate the amount of
the property tax reduction on the property tax statement of each taxpayer receiving a credit
under this section. Notwithstanding section 276.04, subdivision 3, property tax statements
of properties eligible for a credit under this section must be mailed no later than April 15.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility; credit on hunting land; deer and elk herds. new text end

new text begin Land located
in a bovine tuberculosis management zone that is primarily used for hunting purposes is
eligible for a property tax credit if (1) the property owner or the Department of Natural
Resources has eradicated the deer and elk herd on that land in order to prevent the onset or
spread of bovine tuberculosis, (2) the property owner adheres strictly to the deer and elk
feeding ban, and (3) the property owner makes every effort to keep their land free of deer
and elk. The net credit is equal to the property tax on the parcel where the herd had been
located after all other applicable credits have been deducted. The credit is only on that
portion of the tax relating to the market value of the land. To initially qualify for the tax
credit, the property owner shall file an application with the county by January 2 of the
year following the calendar year when the deer or elk herd was eradicated. To receive
the tax credit in subsequent years, the property owner shall file by January 2 of each
subsequent year until the state is upgraded to a bovine tuberculosis status of modified
accredited advanced. The county board must approve the application before the credit
is allowed. The credit is for each taxes payable year following the calendar year when
the deer or elk herd was eradicated and must terminate as provided in subdivision 5.
The auditor shall indicate the amount of the property tax reduction on the property tax
statement of each taxpayer receiving a credit under this section. Notwithstanding section
276.04, subdivision 3, property tax statements of properties eligible for a credit under this
section must be mailed no later than April 15.
new text end

new text begin Subd. 4. new text end

new text begin Reimbursement for lost revenue; appropriations. new text end

new text begin The county auditor
shall certify to the commissioner of revenue, as part of the abstracts of tax lists required to
be filed with the commissioner under section 275.29, the amount of tax lost to the county
from the property tax credit under this section after all other applicable credits have been
deducted. Any prior year adjustments must also be certified in the abstracts of tax lists.
The commissioner of revenue shall review the certifications to determine their accuracy.
The commissioner may make the changes in the certification that are considered necessary
or return a certification to the county auditor for corrections. The commissioner shall
reimburse each taxing district for the taxes lost. The payments must be made at the time
provided in section 273.1398, subdivision 6, for payment to taxing jurisdictions in the
same proportion that the ad valorem tax is distributed. The amount necessary to make the
reimbursements under this section is annually appropriated from the general fund to the
commissioner of revenue. The credits paid under this section shall be deducted from the
tax due on the property as provided in section 273.1393.
new text end

new text begin Subd. 5. new text end

new text begin Termination of credit. new text end

new text begin The credit provided under this section ceases to
be available beginning with any assessment year following the date when the United
States Department of Agriculture publishes notice in the Federal Register that the state is
upgraded to a bovine tuberculosis status of modified accredited advanced.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2009.
new text end

Sec. 21.

Minnesota Statutes 2006, section 273.121, as amended by Laws 2008, chapter
154, article 13, section 28, is amended to read:

273.121 VALUATION OF REAL PROPERTY, NOTICE.

new text begin Subdivision 1. new text end

new text begin Notice. new text end

Any county assessor or city assessor having the powers of a
county assessor, valuing or classifying taxable real property shall in each year notify those
persons whose property is to be included on the assessment roll that year if the person's
address is known to the assessor, otherwise the occupant of the property. The notice shall
be in writing and shall be sent by ordinary mail at least ten days before the meeting of
the local board of appeal and equalization under section 274.01 or the review process
established under section 274.13, subdivision 1c. Upon written request by the owner of the
property, the assessor may send the notice in electronic form or by electronic mail instead
of on paper or by ordinary mail. It shall contain: (1) the market value for the current and
prior assessment, (2) the limited market value under section 273.11, subdivision 1a, for
the current and prior assessment, (3) the qualifying amount of any improvements under
section 273.11, subdivision 16, for the current assessment, (4) the market value subject
to taxation after subtracting the amount of any qualifying improvements for the current
assessment, (5) the classification of the property for the current and prior assessment,
(6) a note that if the property is homestead and at least 45 years old, improvements
made to the property may be eligible for a valuation exclusion under section 273.11,
subdivision 16, (7) the assessor's office address, and (8) the dates, places, and times set for
the meetings of the local board of appeal and equalization, the review process established
under section 274.13, subdivision 1c, and the county board of appeal and equalization.
The commissioner of revenue shall specify the form of the notice. The assessor shall
attach to the assessment roll a statement that the notices required by this section have been
mailed. Any assessor who is not provided sufficient funds from the assessor's governing
body to provide such notices, may make application to the commissioner of revenue
to finance such notices. The commissioner of revenue shall conduct an investigation
and, if satisfied that the assessor does not have the necessary funds, issue a certification
to the commissioner of finance of the amount necessary to provide such notices. The
commissioner of finance shall issue a warrant for such amount and shall deduct such
amount from any state payment to such county or municipality. The necessary funds to
make such payments are hereby appropriated. Failure to receive the notice shall in no way
affect the validity of the assessment, the resulting tax, the procedures of any board of
review or equalization, or the enforcement of delinquent taxes by statutory means.

new text begin Subd. 2. new text end

new text begin Availability of data. new text end

new text begin The notice must state where the information on
the property is available, the times when the information may be viewed by the public,
and the county's Web site address.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for notices prepared in 2009 and
thereafter.
new text end

Sec. 22.

Minnesota Statutes 2006, section 273.124, subdivision 1, is amended to read:

Subdivision 1.

General rule.

(a) Residential real estate that is occupied and used
for the purposes of a homestead by its owner, who must be a Minnesota resident, is
a residential homestead.

Agricultural land, as defined in section 273.13, subdivision 23, that is occupied and
used as a homestead by its owner, who must be a Minnesota resident, is an agricultural
homestead.

Dates for establishment of a homestead and homestead treatment provided to
particular types of property are as provided in this section.

Property held by a trustee under a trust is eligible for homestead classification if the
requirements under this chapter are satisfied.

The assessor shall require proof, as provided in subdivision 13, of the facts upon
which classification as a homestead may be determined. Notwithstanding any other law,
the assessor may at any time require a homestead application to be filed in order to verify
that any property classified as a homestead continues to be eligible for homestead status.
Notwithstanding any other law to the contrary, the Department of Revenue may, upon
request from an assessor, verify whether an individual who is requesting or receiving
homestead classification has filed a Minnesota income tax return as a resident for the most
recent taxable year for which the information is available.

When there is a name change or a transfer of homestead property, the assessor may
reclassify the property in the next assessment unless a homestead application is filed to
verify that the property continues to qualify for homestead classification.

(b) For purposes of this section, homestead property shall include property which
is used for purposes of the homestead but is separated from the homestead by a road,
street, lot, waterway, or other similar intervening property. The term "used for purposes
of the homestead" shall include but not be limited to uses for gardens, garages, or other
outbuildings commonly associated with a homestead, but shall not include vacant land
held primarily for future development. In order to receive homestead treatment for
the noncontiguous property, the owner must use the property for the purposes of the
homestead, and must apply to the assessor, both by the deadlines given in subdivision
9. After initial qualification for the homestead treatment, additional applications for
subsequent years are not required.

(c) Residential real estate that is occupied and used for purposes of a homestead by a
relative of the owner is a homestead but only to the extent of the homestead treatment
that would be provided if the related owner occupied the property. For purposes of this
paragraph and paragraph (g), "relative" means a parent, stepparent, child, stepchild,
grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece. This relationship
may be by blood or marriage. Property that has been classified as seasonal residential
recreational property at any time during which it has been owned by the current owner or
spouse of the current owner will not be reclassified as a homestead unless it is occupied as
a homestead by the owner; this prohibition also applies to property that, in the absence of
this paragraph, would have been classified as seasonal residential recreational property at
the time when the residence was constructed. Neither the related occupant nor the owner
of the property may claim a property tax refund under chapter 290A for a homestead
occupied by a relative. In the case of a residence located on agricultural land, only the
house, garage, and immediately surrounding one acre of land shall be classified as a
homestead under this paragraph, except as provided in paragraph (d).

(d) Agricultural property that is occupied and used for purposes of a homestead by
a relative of the owner, is a homestead, only to the extent of the homestead treatment
that would be provided if the related owner occupied the property, and only if all of the
following criteria are met:

(1) the relative who is occupying the agricultural property is a son, daughter, new text begin brother,
sister, new text end grandson, granddaughter, father, or mother of the owner of the agricultural property
or a son, daughter, new text begin brother, sister, new text end grandson, or granddaughter of the spouse of the owner
of the agricultural property;

(2) the owner of the agricultural property must be a Minnesota resident;

(3) the owner of the agricultural property must not receive homestead treatment on
any other agricultural property in Minnesota; and

(4) the owner of the agricultural property is limited to only one agricultural
homestead per family under this paragraph.

Neither the related occupant nor the owner of the property may claim a property
tax refund under chapter 290A for a homestead occupied by a relative qualifying under
this paragraph. For purposes of this paragraph, "agricultural property" means the house,
garage, other farm buildings and structures, and agricultural land.

Application must be made to the assessor by the owner of the agricultural property to
receive homestead benefits under this paragraph. The assessor may require the necessary
proof that the requirements under this paragraph have been met.

(e) In the case of property owned by a property owner who is married, the assessor
must not deny homestead treatment in whole or in part if only one of the spouses occupies
the property and the other spouse is absent due to: (1) marriage dissolution proceedings,
(2) legal separation, (3) employment or self-employment in another location, or (4) other
personal circumstances causing the spouses to live separately, not including an intent to
obtain two homestead classifications for property tax purposes. To qualify under clause
(3), the spouse's place of employment or self-employment must be at least 50 miles distant
from the other spouse's place of employment, and the homesteads must be at least 50 miles
distant from each other. Homestead treatment, in whole or in part, shall not be denied to
the owner's spouse who previously occupied the residence with the owner if the absence
of the owner is due to one of the exceptions provided in this paragraph.

(f) The assessor must not deny homestead treatment in whole or in part if:

(1) in the case of a property owner who is not married, the owner is absent due to
residence in a nursing home, boarding care facility, or an elderly assisted living facility
property as defined in section 273.13, subdivision 25a, and the property is not otherwise
occupied; or

(2) in the case of a property owner who is married, the owner or the owner's spouse
or both are absent due to residence in a nursing home, boarding care facility, or an elderly
assisted living facility property as defined in section 273.13, subdivision 25a, and the
property is not occupied or is occupied only by the owner's spouse.

(g) If an individual is purchasing property with the intent of claiming it as a
homestead and is required by the terms of the financing agreement to have a relative
shown on the deed as a co-owner, the assessor shall allow a full homestead classification.
This provision only applies to first-time purchasers, whether married or single, or to a
person who had previously been married and is purchasing as a single individual for the
first time. The application for homestead benefits must be on a form prescribed by the
commissioner and must contain the data necessary for the assessor to determine if full
homestead benefits are warranted.

(h) If residential or agricultural real estate is occupied and used for purposes of a
homestead by a child of a deceased owner and the property is subject to jurisdiction of
probate court, the child shall receive relative homestead classification under paragraph (c)
or (d) to the same extent they would be entitled to it if the owner was still living, until
the probate is completed. For purposes of this paragraph, "child" includes a relationship
by blood or by marriage.

(i) If a single-family home, duplex, or triplex classified as either residential
homestead or agricultural homestead is also used to provide licensed child care, the
portion of the property used for licensed child care must be classified as a part of the
homestead property.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 23.

Minnesota Statutes 2007 Supplement, section 273.124, subdivision 14,
is amended to read:

Subd. 14.

Agricultural homesteads; special provisions.

(a) Real estate of less than
ten acres that is the homestead of its owner must be classified as class 2a under section
273.13, subdivision 23, paragraph (a), if:

(1) the parcel on which the house is located is contiguous on at least two sides to (i)
agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
Service, or (iii) land administered by the Department of Natural Resources on which in
lieu taxes are paid under sections 477A.11 to 477A.14;

(2) its owner also owns a noncontiguous parcel of agricultural land that is at least
20 acres;

(3) the noncontiguous land is located not farther than four townships or cities, or a
combination of townships or cities from the homestead; and

(4) the agricultural use value of the noncontiguous land and farm buildings is equal
to at least 50 percent of the market value of the house, garage, and one acre of land.

Homesteads initially classified as class 2a under the provisions of this paragraph shall
remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
properties, as long as the homestead remains under the same ownership, the owner owns a
noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
value qualifies under clause (4). Homestead classification under this paragraph is limited
to property that qualified under this paragraph for the 1998 assessment.

(b)(i) Agricultural property consisting of at least 40 acres shall be classified as the
owner's homestead, to the same extent as other agricultural homestead property, if all
of the following criteria are met:

(1) the owner, the owner's spouse, the son or daughter of the owner or owner's
spouse, new text begin the brother or sister of the owner or owner's spouse, new text end or the grandson or
granddaughter of the owner or the owner's spouse, is actively farming the agricultural
property, either on the person's own behalf as an individual or on behalf of a partnership
operating a family farm, family farm corporation, joint family farm venture, or limited
liability company of which the person is a partner, shareholder, or member;

(2) both the owner of the agricultural property and the person who is actively
farming the agricultural property under clause (1), are Minnesota residents;

(3) neither the owner nor the spouse of the owner claims another agricultural
homestead in Minnesota; and

(4) deleted text begin neither deleted text end the owner deleted text begin nor deleted text end new text begin and new text end the person actively farming the property deleted text begin lives farther
than four townships or cities, or a combination of four townships or cities, from the
agricultural property, deleted text end new text begin must live either in the county where the agricultural property is
located or in a county contiguous to the county where the agricultural property is located, new text end
except that if the owner or the owner's spouse is required to live in employer-provided
housing, the owner or owner's spouse, whichever is actively farming the agricultural
property, may live deleted text begin more than four townships or cities, or combination of four townships
or cities deleted text end new text begin further new text end from the agricultural property new text begin than in the county or county contiguous
to the property new text end .

The relationship under this paragraph may be either by blood or marriage.

(ii) Real property held by a trustee under a trust is eligible for agricultural homestead
classification under this paragraph if the qualifications in clause (i) are met, except that
"owner" means the grantor of the trust.

(iii) Property containing the residence of an owner who owns qualified property
under clause (i) shall be classified as part of the owner's agricultural homestead, if that
property is also used for noncommercial storage or drying of agricultural crops.

(c) Noncontiguous land shall be included as part of a homestead under section
273.13, subdivision 23, paragraph (a), only if the homestead is classified as class 2a
and the detached land is located in the same deleted text begin township or city, or not farther than four
townships or cities or combination thereof from deleted text end new text begin county or in a county contiguous to new text end the
homestead. Any taxpayer of these noncontiguous lands must notify the county assessor
that the noncontiguous land is part of the taxpayer's homestead, and, if the homestead is
located in another county, the taxpayer must also notify the assessor of the other county.

(d) Agricultural land used for purposes of a homestead and actively farmed by a
person holding a vested remainder interest in it must be classified as a homestead under
section 273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a,
any other dwellings on the land used for purposes of a homestead by persons holding
vested remainder interests who are actively engaged in farming the property, and up to
one acre of the land surrounding each homestead and reasonably necessary for the use of
the dwelling as a home, must also be assessed class 2a.

(e) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain
classified as agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of the April 1997 floods;

(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman,
or Wilkin;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1997 assessment year and continue to be used
for agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota and is within 30
miles of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the 1997
floods, and the owner furnishes the assessor any information deemed necessary by the
assessor in verifying the change in dwelling. Further notifications to the assessor are not
required if the property continues to meet all the requirements in this paragraph and any
dwellings on the agricultural land remain uninhabited.

(f) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain
classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by a March 29, 1998, tornado;

(2) the property is located in the county of Blue Earth, Brown, Cottonwood,
LeSueur, Nicollet, Nobles, or Rice;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 1998 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to a March 29,
1998, tornado, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
owner must notify the assessor by December 1, 1998. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.

(g) Agricultural property consisting of at least 40 acres of a family farm corporation,
joint family farm venture, family farm limited liability company, or partnership operating
a family farm as described under subdivision 8 shall be classified homestead, to the same
extent as other agricultural homestead property, if all of the following criteria are met:

(1) a shareholder, member, or partner of that entity is actively farming the
agricultural property;

(2) that shareholder, member, or partner who is actively farming the agricultural
property is a Minnesota resident;

(3) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and

(4) that shareholder, member, or partner deleted text begin does not live farther than four townships
or cities, or a combination of four townships or cities, from the agricultural property deleted text end new text begin
lives in the county where the agricultural property is located or in a county contiguous to
the county where the property is located new text end .

Homestead treatment applies under this paragraph for property leased to a family
farm corporation, joint farm venture, limited liability company, or partnership operating a
family farm if legal title to the property is in the name of an individual who is a member,
shareholder, or partner in the entity.

(h) To be eligible for the special agricultural homestead under this subdivision, an
initial full application must be submitted to the county assessor where the property is
located. Owners and the persons who are actively farming the property shall be required
to complete only a one-page abbreviated version of the application in each subsequent
year provided that none of the following items have changed since the initial application:

(1) the day-to-day operation, administration, and financial risks remain the same;

(2) the owners and the persons actively farming the property continue to live within
deleted text begin the four townships or city criteria deleted text end new text begin the county or a contiguous county new text end and are Minnesota
residents;

(3) the same operator of the agricultural property is listed with the Farm Service
Agency;

(4) a Schedule F or equivalent income tax form was filed for the most recent year;

(5) the property's acreage is unchanged; and

(6) none of the property's acres have been enrolled in a federal or state farm program
since the initial application.

The owners and any persons who are actively farming the property must include
the appropriate Social Security numbers, and sign and date the application. If any of the
specified information has changed since the full application was filed, the owner must
notify the assessor, and must complete a new application to determine if the property
continues to qualify for the special agricultural homestead. The commissioner of revenue
shall prepare a standard reapplication form for use by the assessors.

(i) Agricultural land and buildings that were class 2a homestead property under
section 273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain
classified agricultural homesteads for subsequent assessments if:

(1) the property owner abandoned the homestead dwelling located on the agricultural
homestead as a result of damage caused by the August 2007 floods;

(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted,
Steele, Wabasha, or Winona;

(3) the agricultural land and buildings remain under the same ownership for the
current assessment year as existed for the 2007 assessment year;

(4) the dwelling occupied by the owner is located in this state and is within 50 miles
of one of the parcels of agricultural land that is owned by the taxpayer; and

(5) the owner notifies the county assessor that the relocation was due to the August
2007 floods, and the owner furnishes the assessor any information deemed necessary by
the assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
owner must notify the assessor by December 1, 2008. Further notifications to the assessor
are not required if the property continues to meet all the requirements in this paragraph
and any dwellings on the agricultural land remain uninhabited.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 and
thereafter, except that the provision extending the homestead to brothers and sisters is
effective for taxes payable in 2009 and thereafter.
new text end

Sec. 24.

Minnesota Statutes 2006, section 273.13, subdivision 23, as amended by Laws
2008, chapter 154, article 2, section 12, is amended to read:

Subd. 23.

Class 2.

(a) deleted text begin Class 2a property is agricultural land including any
improvements deleted text end new text begin An agricultural homestead consists of class 2a agricultural land new text end that is
homesteaded new text begin , along with any class 2b rural vacant land that is contiguous to the class 2a
land new text end . The market value of the house and garage and immediately surrounding one acre
of land has the same class rates as class 1a new text begin or 1b new text end property under subdivision 22. The
value of the remaining land including improvements up to the first tier valuation limit of
agricultural homestead property has a net class rate of deleted text begin 0.55 deleted text end new text begin 0.5 new text end percent of market value.
The remaining property over the first tier has a class rate of one percent of market value.
For purposes of this subdivision, the "first tier valuation limit of agricultural homestead
property" and "first tier" means the limit certified under section 273.11, subdivision 23.

(b) new text begin Class 2a agricultural land consists of parcels of property, or portions thereof,
that are agricultural land and buildings. Class 2a property has a net class rate of one
percent of market value, unless it is part of an agricultural homestead under paragraph
(a). Class 2a property may contain an incidental amount of property that would otherwise
be classified as 2b, including but not limited to sloughs, wooded wind shelters, acreage
abutting ditches, and other similar land impractical for the assessor to value separately
from the rest of the property.
new text end

new text begin (c) new text end Class 2b deleted text begin property is (1) deleted text end new text begin rural vacant land consists of parcels of property,
or portions thereof, that are unplatted new text end real estate, rural in character and new text begin not used for
agricultural purposes, including land new text end used deleted text begin exclusively deleted text end for growing trees for timber,
lumber, and wood and wood products deleted text begin ; (2) real estate deleted text end that is not improved with a structure
deleted text begin and is used exclusively for growing trees for timber, lumber, and wood and wood products,
if the owner has participated or is participating in a cost-sharing program for afforestation,
reforestation, or timber stand improvement on that particular property, administered or
coordinated by the commissioner of natural resources; (3) real estate that is nonhomestead
agricultural land; or (4) a landing area or public access area of a privately owned public use
airport deleted text end new text begin , provided that the presence of a minor, ancillary nonresidential structure as defined
by the commissioner of revenue does not disqualify the property from classification
under this paragraph and provided that any parcel improved with a structure that is not a
minor, ancillary nonresidential structure may be split-classified, provided that the acreage
assigned to the split parcel with the structure is at least 20 acres new text end . Class 2b property has
a net class rate of one percent of market value deleted text begin , except that unplatted property described
in clause (1) or (2) has a net class rate of .65 percent if it consists deleted text end new text begin unless it is part of an
agricultural homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
new text end

new text begin (d) Class 2c managed forest land consists new text end of no less than deleted text begin ten deleted text end new text begin 20 new text end and no more than
1,920 acres deleted text begin and deleted text end new text begin statewide per taxpayer that new text end is being managed under a forest management
plan that meets the requirements of chapter 290C, but is not enrolled in the sustainable
forest resource management incentive program new text begin . It has a class rate of .65 percent new text end , provided
that the owner of the property must apply to the assessor deleted text begin annually deleted text end to receive the reduced
class rate and provide the information required by the assessor to verify that the property
qualifies for the reduced rate. new text begin The commissioner of natural resources must concur that the
land is qualified. The commissioner of natural resources shall annually provide county
assessors verification information on a timely basis.
new text end

deleted text begin (c) deleted text end new text begin (e) new text end Agricultural land as used in this section means deleted text begin contiguous acreage of
ten acres or more, deleted text end new text begin property new text end used deleted text begin during the preceding year deleted text end for agricultural purposes.
"Agricultural purposes" as used in this section means the raising deleted text begin or deleted text end new text begin , new text end cultivation new text begin , drying,
or storage new text end of agricultural products new text begin for sale, or the storage of machinery or equipment
used in support of agricultural production new text end . new text begin For a property to be classified as agricultural
based only on the drying or storage of agricultural products, the products being dried or
stored must have been produced by the same farm entity as the entity operating the drying
or storage facility. new text end "Agricultural purposes" also includes enrollment in the Reinvest in
Minnesota program under sections 103F.501 to 103F.535 or the federal Conservation
Reserve Program as contained in Public Law 99-198 if the property was classified as
agricultural (i) under this subdivision for the assessment year 2002 or (ii) in the year prior
to its enrollment. deleted text begin Contiguous acreage on the same parcel, or contiguous acreage on an
immediately adjacent parcel under the same ownership, may also qualify as agricultural
land, but only if it is pasture, timber, waste, unusable wild land, or land included in state
or federal farm programs. deleted text end Agricultural classification deleted text begin for property shall be determined
excluding the house, garage, and immediately surrounding one acre of land, and deleted text end shall not
be based upon the market value of any residential structures on the parcel or contiguous
parcels under the same ownership.

deleted text begin (d) deleted text end new text begin (f) new text end Real estate new text begin of less than five acres new text end , excluding the house, garage, and
immediately surrounding one acre of land, deleted text begin of less than ten acres which is exclusively and
intensively used for raising or cultivating agricultural products, shall be considered as
agricultural land deleted text end new text begin qualifies as class 2a if:
new text end

new text begin (i) the entire parcel is tilled or pastured to produce an agricultural product for sale in
three of the last five years;
new text end

new text begin (ii) the acres are used primarily for drying or storage of grain or storage of machinery
or equipment used to support agricultural activities on other parcels of property operated
by the same farming entity;
new text end

new text begin (iii) the land mass contains a nursery, provided only those acres used to produce
nursery stock are considered agricultural land;
new text end

new text begin (iv) the parcel is used exclusively as a livestock or poultry confinement process; or
new text end

new text begin (v) the parcel is used primarily for market farming; for purposes of this paragraph,
"market farming" means the cultivation of one or more fruits or vegetables or production
of animal or other agricultural products for sale to local markets by the farmer or an
organization with which the farmer is affiliated new text end .

new text begin (g) new text end Land shall be classified as agricultural even if all or a portion of the agricultural
use of that property is the leasing to, or use by another person for agricultural purposes.

deleted text begin Classification under this subdivision is not determinative for qualifying under
section 273.111.
deleted text end

new text begin (h) new text end The property classification under this section supersedes, for property tax
purposes only, any locally administered agricultural policies or land use restrictions that
define minimum or maximum farm acreage.

deleted text begin (e) deleted text end new text begin (i) new text end The term "agricultural products" as used in this subdivision includes
production for sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with
raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for
equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, new text begin including short rotation woody crops, new text end and not
sold for timber, lumber, wood, or wood products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.

deleted text begin (f) deleted text end new text begin (j) new text end If a parcel used for agricultural purposes is also used for commercial or
industrial purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2),
and (3),

the assessor shall classify the part of the parcel used for agricultural purposes as class
1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A greenhouse or other building where horticultural
or nursery products are grown that is also used for the conduct of retail sales must be
classified as agricultural if it is primarily used for the growing of horticultural or nursery
products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
those products. Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the records the market value of
the homestead dwelling and the one acre of land on which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land, their market
value shall not be included in this separate determination.

deleted text begin (g) deleted text end new text begin (k) Class 2d airport landing area consists of a landing area or public access
area of a privately owned public use airport. new text end To qualify for classification under new text begin this new text end
paragraph deleted text begin (b), clause (4) deleted text end , a privately owned public use airport must be licensed as a public
airport under section 360.018. For purposes of new text begin this new text end paragraph deleted text begin (b), clause (4) deleted text end , "landing
area" means that part of a privately owned public use airport properly cleared, regularly
maintained, and made available to the public for use by aircraft and includes runways,
taxiways, aprons, and sites upon which are situated landing or navigational aids. A
landing area also includes land underlying both the primary surface and the approach
surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of
the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under new text begin this new text end paragraph deleted text begin (b), clause (4), deleted text end must be described
and certified by the commissioner of transportation. The certification is effective until it
is modified, or until the airport or landing area no longer meets the requirements of new text begin this
new text end paragraph deleted text begin (b), clause (4) deleted text end . For purposes of new text begin this new text end paragraph deleted text begin (b), clause (4) deleted text end , "public access
area" means property used as an aircraft parking ramp, apron, or storage hangar, or an
arrival and departure building in connection with the airport.

new text begin (l) Class 2e consists of land with a commercial aggregate deposit that is actively
being mined and is not otherwise classified as class 2a or 2b. To qualify for classification
under this paragraph, the property must be at least ten contiguous acres in size and the
owner of the property must record with the county recorder of the county in which the
property is located an affidavit containing:
new text end

new text begin (1) a legal description of the property;
new text end

new text begin (2) a disclosure that the property contains a commercial aggregate deposit that is not
actively being mined but is present on the entire parcel enrolled;
new text end

new text begin (3) documentation that the conditional use under the county or local zoning
ordinance of this property is for mining; and
new text end

new text begin (4) documentation that a permit has been issued by the local unit of government
or the mining activity is allowed under local ordinance. The disclosure must include a
statement from a registered professional geologist, engineer, or soil scientist delineating
the deposit and certifying that it is a commercial aggregate deposit.
new text end

new text begin For purposes of this section and section 273.1115, "commercial aggregate deposit"
means a deposit that will yield crushed stone or sand and gravel that is suitable for use
as a construction aggregate; and "actively mined" means the removal of top soil and
overburden in preparation for excavation or excavation of a commercial deposit.
new text end

new text begin (m) When any portion of the property under this subdivision or subdivision 22
begins to be actively mined, the owner must file a supplemental affidavit within 60 days
from the day any aggregate is removed stating the number of acres of the property that is
actively being mined. The acres actively being mined must be (1) valued and classified
under subdivision 24 in the next subsequent assessment year, and (2) removed from the
aggregate resource preservation property tax program under section 273.1115, if the
land was enrolled in that program. Copies of the original affidavit and all supplemental
affidavits must be filed with the county assessor, the local zoning administrator, and the
Department of Natural Resources, Division of Land and Minerals. A supplemental
affidavit must be filed each time a subsequent portion of the property is actively mined,
provided that the minimum acreage change is five acres, even if the actual mining activity
constitutes less than five acres.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The portion of this section reducing the agricultural class rate,
and expanding the definition of "agricultural purposes" in paragraph (e) and "agricultural
products" in paragraph (h), is effective for taxes payable in 2009 and thereafter. The
remainder of the section is effective for taxes payable in 2010 and thereafter.
new text end

Sec. 25.

Minnesota Statutes 2006, section 273.13, subdivision 24, is amended to read:

Subd. 24.

Class 3.

(a) Commercial and industrial property and utility real and
personal property is class 3a.

(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
real property has a class rate of 1.5 percent of the first tier of market value, and 2.0 percent
of the remaining market value. In the case of contiguous parcels of property owned by the
same person or entity, only the value equal to the first-tier value of the contiguous parcels
qualifies for the reduced class rate, except that contiguous parcels owned by the same
person or entity shall be eligible for the first-tier value class rate on each separate business
operated by the owner of the property, provided the business is housed in a separate
structure. For the purposes of this subdivision, the first tier means the first $150,000 of
market value. Real property owned in fee by a utility for transmission line right-of-way
shall be classified at the class rate for the higher tier.

For purposes of this subdivision, parcels are considered to be contiguous even if
they are separated from each other by a road, street, waterway, or other similar intervening
type of property. Connections between parcels that consist of power lines or pipelines do
not cause the parcels to be contiguous. Property owners who have contiguous parcels of
property that constitute separate businesses that may qualify for the first-tier class rate shall
notify the assessor by July 1, for treatment beginning in the following taxes payable year.

(2) deleted text begin All deleted text end Personal property that is deleted text begin : (i) deleted text end part of an electric generation deleted text begin , transmission, or
distribution deleted text end system deleted text begin ; or (ii) deleted text end new text begin , including tools, implements, and machinery, has a class rate
of 2.4 percent for taxes payable in 2009, and 2.8 percent for taxes payable in 2010 and
thereafter. new text end

new text begin (3) Personal property that is either: (i) new text end part of a pipeline system transporting
or distributing water, gas, crude oil, or petroleum products deleted text begin ; and (iii) not described in
clause (3), and all deleted text end new text begin , including tools, implements, and machinery, or (ii) part of an electric
transmission or distribution system, including tools, implements, and machinery, has a
class rate of 2.0 percent for taxes payable in 2009 and thereafter. new text end

new text begin (4) new text end Railroad operating property has a class rate as provided under clause (1) for
the first tier of market value and the remaining market value. In the case of multiple
parcels in one county that are owned by one person or entity, only one first tier amount
is eligible for the reduced rate.

deleted text begin (3) The entire market value of personal property that is: (i) tools, implements, and
machinery of an electric generation, transmission, or distribution system; (ii) tools,
implements, and machinery of a pipeline system transporting or distributing water, gas,
crude oil, or petroleum products; or (iii) deleted text end deleted text begin the deleted text end new text begin (5) Personal property consisting of new text end mains
and pipes used in the distribution of steam or hot or chilled water for heating or cooling
buildings, has a class rate as provided under clause (1) for the remaining market value
in excess of the first tier.

(b) Employment property defined in section 469.166, during the period provided
in section 469.170, shall constitute class 3b. The class rates for class 3b property are
determined under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 26.

Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws
2008, chapter 154, article 2, section 13, is amended to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
than hospitals exempt under section 272.02, and contiguous property used for hospital
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a class rate of 1.25 percent.

(b) Class 4b deleted text begin includes:
deleted text end

deleted text begin (1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;
deleted text end

deleted text begin (2) manufactured homes not classified under any other provision;
deleted text end

deleted text begin (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and
deleted text end

deleted text begin (4) deleted text end new text begin is new text end unimproved property that is classified residential as determined under
subdivision 33.

The market value of class 4b property has a class rate of 1.25 percent.

(c) Class 4bb includes:

(1) nonhomestead residential real estate containing deleted text begin one unit deleted text end new text begin up to three units new text end , other
than seasonal residential recreational property; deleted text begin and deleted text end

(2) a deleted text begin single family deleted text end dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b) new text begin , containing up to three
units; and
new text end

new text begin (3) manufactured homes not classified under any other provision new text end .

Class 4bb property has the same class rates as class 1a property under subdivision 22.

Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
(b), clause (1), real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes and not devoted to
commercial purposes for more than 250 days in the year preceding the year of assessment.
For purposes of this clause, property is devoted to a commercial purpose on a specific
day if any portion of the property is used for residential occupancy, and a fee is charged
for residential occupancy. Class 4c property must contain three or more rental units. A
"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
camping site equipped with water and electrical hookups for recreational vehicles. Class
4c property must provide recreational activities such as renting ice fishing houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. A camping
pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
regardless of the term of the rental agreement, as long as the use of the camping pad
does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
residential recreational for commercial purposes, at least 40 percent of the annual gross
lodging receipts related to the property must be from business conducted during 90
consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests
during the year must be for periods of at least two consecutive nights; or (ii) at least 20
percent of the annual gross receipts must be from charges for rental of fish houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
services, launch services, and guide services, or the sale of bait and fishing tackle. For
purposes of this determination, a paid booking of five or more nights shall be counted as
two bookings. Class 4c also includes commercial use real property used exclusively
for recreational purposes in conjunction with class 4c property devoted to temporary
and seasonal residential occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational use for more than 250
days in the year preceding the year of assessment and is located within two miles of the
class 4c property with which it is used. Owners of real and personal property devoted
to temporary and seasonal residential occupancy for recreation purposes and all or a
portion of which was devoted to commercial purposes for not more than 250 days in the
year preceding the year of assessment desiring classification as class 4c, must submit a
declaration to the assessor designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which they are located must be
designated class 4c as otherwise provided. The remainder of the cabins or units and
a proportionate share of the land on which they are located will be designated as class
3a. The owner of property desiring designation as class 4c property must provide guest
registers or other records demonstrating that the units for which class 4c designation is
sought were not occupied for more than 250 days in the year preceding the assessment if
so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
(4) conference center or meeting room, and (5) other nonresidential facility operated on a
commercial basis not directly related to temporary and seasonal residential occupancy for
recreation purposes does not qualify for class 4c;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;

(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and that is not used for residential
purposes on either a temporary or permanent basis, qualifies for class 4c provided that
it meets either of the following:

(i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or

(ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.

For purposes of this clause,

(A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section 349.12, subdivision 25, excluding those purposes
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;

(B) "property taxes" excludes the state general tax;

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
Code of 1986, as amended through December 31, 1990; and

(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property qualifying under item (i) which is used for revenue-producing
activities for more than six days in the calendar year preceding the year of assessment
shall be assessed as class 3a. The use of the property for social events open exclusively
to members and their guests for periods of less than 24 hours, when an admission is
not charged nor any revenues are received by the organization shall not be considered a
revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;

(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5) manufactured home parks as defined in section 327.14, subdivision 3;

(6) real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section 473.121, subdivision 2;

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt
under section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;

(8) a privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and

(9) residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:

(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;

(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22.

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property has a class rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a class rate of one percent, (v) the market value of
property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
portion of the market value of property in clause (9) qualifying for class 4c property
has a class rate of 1.25 percent.

(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.

Class 4d property has a class rate of 0.75 percent.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2008 and
thereafter, and for taxes payable in 2009 and thereafter.
new text end

Sec. 27.

Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:

Subd. 33.

Classification of unimproved property.

(a) All real property that is not
improved with a structure must be classified according to its current use.

(b) new text begin Except as provided in subdivision 23, paragraph (c), new text end real property that is not
improved with a structure and for which there is no identifiable current use must be
classified according to its highest and best use permitted under the local zoning ordinance.
If the ordinance permits more than one use, the land must be classified according to the
highest and best use permitted under the ordinance. If no such ordinance exists, the
assessor shall consider the most likely potential use of the unimproved land based upon
the use made of surrounding land or land in proximity to the unimproved land.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 28.

new text begin [273.1388] PROPERTY TAX CREDIT FOR LEASED LAND.
new text end

new text begin Noncommercial seasonal residential recreational property located on land leased
from a governmental unit or agency is eligible for a property tax credit equal to 25 percent
of the annual lease payment. Eligible taxpayers must file an application with the county
auditor prior to November 1 of the year in which the property taxes are payable. The
application shall be on a form prescribed by the commissioner of revenue, and must
include such evidence as the county deems necessary of the annual lease payment for the
period corresponding to the taxes payable year. The county may either pay the credit
directly to the property owner or subtract it as a credit on the property tax statement,
whichever it considers to be more administratively cost-efficient. If the county makes a
direct payment of the credit to the property owner, the county must pay the credit by
August 1 of the year in which the taxes are payable or within 45 days of receipt of the
application, whichever is later.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 29.

Minnesota Statutes 2007 Supplement, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are
determined by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) homestead and agricultural credits as provided in section 273.1384;

(8) taconite homestead credit as provided in section 273.135; deleted text begin and deleted text end

(9) supplemental homestead credit as provided in section 273.1391 new text begin ; and
new text end

new text begin (10) bovine tuberculosis management credit as provided in section 273.113 new text end .

The combination of all property tax credits must not exceed the gross tax amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 30.

Minnesota Statutes 2006, section 274.14, is amended to read:

274.14 LENGTH OF SESSION; RECORD.

The board may meet on any ten consecutive meeting days in June, after the second
Friday in June. The actual meeting dates must be contained on the valuation notices
mailed to each property owner in the county as provided in section 273.121. For this
purpose, "meeting days" is defined as any day of the week excluding deleted text begin Saturday and deleted text end Sunday. new text begin
At the board's discretion, "meeting days" may include Saturday. new text end No action taken by the
county board of review after June 30 is valid, except for corrections permitted in sections
273.01 and 274.01. The county auditor shall keep an accurate record of the proceedings
and orders of the board. The record must be published like other proceedings of county
commissioners. A copy of the published record must be sent to the commissioner of
revenue, with the abstract of assessment required by section 274.16.

new text begin For counties that conduct either regular board of review meetings or open book
meetings, at least one of the meeting days must include a meeting that does not end
before 7:00 p.m. For counties that require taxpayer appointments for the board of review,
appointments must include some available times that extend until at least 7:00 p.m. The
county may have a Saturday meeting in lieu of, or in addition to, the extended meeting
times under this paragraph.
new text end

Sec. 31.

Minnesota Statutes 2006, section 275.025, subdivision 1, is amended to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy base amount is $592,000,000 for taxes payable in
2002. For taxes payable in subsequent years, the levy base amount is increased each year
by multiplying the levy base amount for the prior year by the sum of one plus the rate of
increase, if any, in the implicit price deflator for government consumption expenditures
and gross investment for state and local governments prepared by the Bureau of Economic
Analysts of the United States Department of Commerce for the 12-month period ending
March 31 of the year prior to the year the taxes are payable. The tax under this section is
not treated as a local tax rate under section 469.177 and is not the levy of a governmental
unit under chapters 276A and 473F.

new text begin In setting the rate, the commissioner shall exclude the tax capacity of property
described in section 473.625 from the tax base. new text end The commissioner shall increase or
decrease the preliminary or final rate for a year as necessary to account for errors and tax
base changes that affected a preliminary or final rate for either of the two preceding years.
Adjustments are allowed to the extent that the necessary information is available to the
commissioner at the time the rates for a year must be certified, and for the following
reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported on the abstracts of tax lists submitted under
section 275.29 that was not reported on the abstracts of assessment submitted under
section 270C.89 for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for property taxes payable
in 2009.
new text end

Sec. 32.

Minnesota Statutes 2006, section 275.025, subdivision 2, is amended to read:

Subd. 2.

Commercial-industrial tax capacity.

For the purposes of this section,
"commercial-industrial tax capacity" means the tax capacity of all taxable property
classified as class 3 or class 5(1) under section 273.13, except for electric generation
attached machinery under class 3 deleted text begin and property described in section 473.625 deleted text end . County
commercial-industrial tax capacity amounts are not adjusted for the captured net tax
capacity of a tax increment financing district under section 469.177, subdivision 2, the
net tax capacity of transmission lines deducted from a local government's total net tax
capacity under section 273.425, or fiscal disparities contribution and distribution net
tax capacities under chapter 276A or 473F.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for taxes payable in 2009.
new text end

Sec. 33.

Minnesota Statutes 2007 Supplement, section 275.065, subdivision 1, is
amended to read:

Subdivision 1.

Proposed levy.

(a) Notwithstanding any law or charter to the
contrary, on or before September deleted text begin 15 deleted text end new text begin 1 new text end , each taxing authority, other than a school district,
shall adopt a proposed budget and shall certify to the county auditor the proposed or, in
the case of a town, the final property tax levy for taxes payable in the following year.

(b) On or before September deleted text begin 30 deleted text end new text begin 15 new text end , each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than deleted text begin October 7 deleted text end new text begin
September 22 new text end . The school district shall certify the proposed levy as:

(1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or

(2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.

(c) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by
September deleted text begin 15 deleted text end new text begin 1 new text end , the city shall be deemed to have certified its levies for those taxing
jurisdictions.

(d) For purposes of this section, "taxing authority" includes all home rule and
statutory cities, towns, counties, school districts, and special taxing districts as defined
in section 275.066. Intermediate school districts that levy a tax under chapter 124 or
136D, joint powers boards established under sections 123A.44 to 123A.446, and Common
School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing
districts for purposes of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 34.

Minnesota Statutes 2007 Supplement, section 275.065, subdivision 1a,
is amended to read:

Subd. 1a.

Overlapping jurisdictions.

In the case of a taxing authority lying in two
or more counties, the home county auditor shall certify the proposed levy and the proposed
local tax rate to the other county auditor by October 5, unless the home county has agreed
to delay the certification of its proposed property tax levy, in which case the home county
auditor shall certify the proposed levy and the proposed local tax rate to the other county
auditor by deleted text begin October 10 deleted text end new text begin September 5 new text end . The home county auditor must estimate the levy or
rate in preparing the notices required in subdivision 3, if the other county has not certified
the appropriate information. If requested by the home county auditor, the other county
auditor must furnish an estimate to the home county auditor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 35.

Minnesota Statutes 2006, section 275.065, subdivision 1c, is amended to read:

Subd. 1c.

Levy; shared, merged, consolidated services.

If two or more taxing
authorities are in the process of negotiating an agreement for sharing, merging, or
consolidating services between those taxing authorities at the time the proposed levy is to
be certified under subdivision 1, each taxing authority involved in the negotiation shall
certify its total proposed levy as provided in that subdivision, including a notification to the
county auditor of the specific service involved in the agreement which is not yet finalized.
The affected taxing authorities may amend their proposed levies under subdivision 1 until
deleted text begin October deleted text end new text begin September new text end 10 for levy amounts relating only to the specific service involved.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 36.

Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
to read:

new text begin Subd. 1d. new text end

new text begin Failure to certify proposed levy. new text end

new text begin If a taxing authority fails to certify
its proposed levy by the due dates specified under subdivisions 1, 1a, and 1c, the county
auditor shall use the authority's previous year's final levy under section 275.07, subdivision
1, for purposes of determining its proposed property tax notices and public advertisements
under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for notices prepared in 2008, for
property taxes payable in 2009 and thereafter.
new text end

Sec. 37.

Minnesota Statutes 2007 Supplement, section 275.065, subdivision 3, is
amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare
and the county treasurer shall deliver after deleted text begin November 10 deleted text end new text begin October 15 new text end and on or before
deleted text begin November deleted text end new text begin October new text end 24 each year, by first class mail to each taxpayer at the address listed
on the county's current year's assessment roll, a notice of proposed property taxes.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the case
of a town, or in the case of the state general tax, the final tax amount will be its proposed
tax. In the case of taxing authorities required to hold a public meeting under subdivision 6,
the notice must clearly state that each taxing authority, including regional library districts
established under section 134.201, and including the metropolitan taxing districts as
defined in paragraph (i), but excluding all other special taxing districts and towns, will
hold a public meeting to receive public testimony on the proposed budget and proposed or
final property tax levy, or, in case of a school district, on the current budget and proposed
property tax levy. It must clearly state the time and place of each taxing authority's
meeting, a telephone number for the taxing authority that taxpayers may call if they have
questions related to the notice, and an address where comments will be received by mail.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used
for computing property taxes payable in the following year and for taxes payable in the
current year as each appears in the records of the county assessor on deleted text begin November deleted text end new text begin October new text end
1 of the current year; and, in the case of residential property, whether the property is
classified as homestead or nonhomestead. The notice must clearly inform taxpayers of the
years to which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, net of the residential and agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of the special taxing districts,
and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include
the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value
reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by deleted text begin November deleted text end new text begin October new text end 27 or
within three days of receipt of the notice, whichever is later. A taxpayer may notify the
county treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises
to which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
taxing districts" means the following taxing districts in the seven-county metropolitan area
that levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy and shall be discussed at that
county's public hearing.

(j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 38.

Minnesota Statutes 2006, section 275.065, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Supplemental notice of proposed levy increases. new text end

new text begin (a) If a city that has a
population of more than 2,500 or a county proposes a levy that would cause a levy plus
aid increase greater than the threshold increase calculated under paragraph (b), it shall
prepare and deliver by first class mail a supplemental proposed property tax notice to each
property taxpayer in the taxing jurisdiction, as described in this subdivision.
new text end

new text begin (b) The threshold increase in the proposed property tax levy plus aid is equal to
the levy plus aid amount in the previous year, multiplied by the sum of (i) one percent,
(ii) the percentage growth, if any, in the population in the taxing jurisdiction for the
most recent available year, (iii) the percentage increase in the total market value in the
taxing jurisdiction due to new construction of commercial and industrial property, and
(iv) the percentage increase in the implicit price deflator for government consumption
expenditures and gross investment for state and local governments as prepared by the
United States Department of Commerce for the most recent 12-month period ending
March of the levy year.
new text end

new text begin (c) The supplemental proposed notice must show the taxing jurisdiction's (1) levy
plus aid amount for the previous year, (2) its threshold levy plus aid increase indicating that
this increase is calculated to reflect reasonable growth adjusting for population increases,
increased demand from new business, and inflation, (3) the aid amount corresponding to
the proposed levy year, (4) the proposed property tax increase, and (5) the amount the
proposed increase in levy plus aid exceeds the threshold increase. The notice must contain
a description of why the jurisdiction needs to raise property taxes above the threshold
amount and how the taxing jurisdiction plans to spend the additional revenue.
new text end

new text begin (d) For purposes of this subdivision, "aid" means county program aid under section
477A.0124 or local government aid under section 477A.013.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 39.

Minnesota Statutes 2006, section 275.065, subdivision 6, is amended to read:

Subd. 6.

Public hearing; adoption of budget and levy.

(a) For purposes of this
section, the following terms shall have the meanings given:

(1) "Initial hearing" means the first and primary hearing held to discuss the taxing
authority's proposed budget and proposed property tax levy for taxes payable in the
following year, or, for school districts, the current budget and the proposed property tax
levy for taxes payable in the following year.

(2) "Continuation hearing" means a hearing held to complete the initial hearing, if
the initial hearing is not completed on its scheduled date.

(3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final
property tax levy, and, in the case of taxing authorities other than school districts, the final
budget, for taxes payable in the following year.

(b) Between November deleted text begin 29 deleted text end new text begin 9 new text end and December deleted text begin 20 deleted text end new text begin 1 new text end , the governing bodies of a city that
has a population over 500, county, metropolitan special taxing districts as defined in
subdivision 3, paragraph (i), and regional library districts shall each hold an initial public
hearing to discuss and seek public comment on its final budget and property tax levy for
taxes payable in the following year, and the governing body of the school district shall
hold an initial public hearing to review its current budget and proposed property tax
levy for taxes payable in the following year. The metropolitan special taxing districts
shall be required to hold only a single joint initial public hearing, the location of which
will be determined by the affected metropolitan agencies. A city, county, metropolitan
special taxing district as defined in subdivision 3, paragraph (i), regional library district
established under section 134.201, or school district is not required to hold a public
hearing under this subdivision unless its proposed property tax levy for taxes payable
in the following year, as certified under subdivision 1, has increased over its final
property tax levy for taxes payable in the current year by a percentage that is greater
than the percentage increase in the implicit price deflator for government consumption
expenditures and gross investment for state and local governments prepared by the Bureau
of Economic Analysts of the United States Department of Commerce for the 12-month
period ending March 31 of the current year.

(c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No initial hearing may be held on a Sunday.

(d) At the initial hearing under this subdivision, the percentage increase in property
taxes proposed by the taxing authority, if any, and the specific purposes for which property
tax revenues are being increased must be discussed. During the discussion, the governing
body shall hear comments regarding a proposed increase and explain the reasons for the
proposed increase. The public shall be allowed to speak and to ask questions. At the public
hearing, the school district must also provide and discuss information on the distribution
of its revenues by revenue source, and the distribution of its spending by program area.

(e) If the initial hearing is not completed on its scheduled date, the taxing authority
must announce, prior to adjournment of the hearing, the date, time, and place for the
continuation of the hearing. The continuation hearing must be held at least five business
days but no more than 14 business days after the initial hearing. A continuation hearing
may not be held later than December 20 except as provided in paragraphs (f) and (g).
A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No continuation hearing may be held on a Sunday.

(f) The governing body of a county shall hold its initial hearing on the deleted text begin first deleted text end new text begin second
new text end Thursday in deleted text begin December deleted text end new text begin November new text end each year, and may hold additional initial hearings on
other dates before December deleted text begin 20 deleted text end new text begin 1 new text end if necessary for the convenience of county residents. If
the county needs a continuation of its hearing, the continuation hearing shall be held on
the third Tuesday in deleted text begin December. If the third Tuesday in December falls on December 21,
the county's continuation hearing shall be held on Monday, December 20 deleted text end new text begin November new text end .

(g) The metropolitan special taxing districts shall hold a joint initial public hearing
on the first Wednesday of December. A continuation hearing, if necessary, shall be held on
the second Wednesday of December even if that second Wednesday is after December 10.

(h) The county auditor shall provide for the coordination of initial and continuation
hearing dates for all school districts and cities within the county to prevent conflicts under
clauses (i) and (j).

(i) By August 10, each school board and the board of the regional library district
shall certify to the county auditors of the counties in which the school district or regional
library district is located the dates on which it elects to hold its initial hearing and any
continuation hearing. If a school board or regional library district does not certify these
dates by August 10, the auditor will assign the initial and continuation hearing dates. The
dates elected or assigned must not conflict with the initial and continuation hearing dates
of the county or the metropolitan special taxing districts.

(j) By August 20, the county auditor shall notify the clerks of the cities within the
county of the dates on which school districts and regional library districts have elected
to hold their initial and continuation hearings. At the time a city certifies its proposed
levy under subdivision 1 it shall certify the dates on which it elects to hold its initial
hearing and any continuation hearing. Until September 15, the deleted text begin first and deleted text end second deleted text begin Mondays deleted text end
new text begin Monday new text end of December deleted text begin are deleted text end new text begin is new text end reserved for the use of the cities. If a city does not certify its
hearing dates by September 15, the auditor shall assign the initial and continuation hearing
dates. The dates elected or assigned for the initial hearing must not conflict with the
initial hearing dates of the county, metropolitan special taxing districts, regional library
districts, or school districts within which the city is located. To the extent possible, the
dates of the city's continuation hearing should not conflict with the continuation hearing
dates of the county, metropolitan special taxing districts, regional library districts, or
school districts within which the city is located. This paragraph does not apply to cities
of 500 population or less.

(k) The county initial hearing date and the city, metropolitan special taxing district,
regional library district, and school district initial hearing dates must be designated on
the notices required under subdivision 3. The continuation hearing dates need not be
stated on the notices.

(l) At a subsequent hearing, each county, school district, city over 500 population,
and metropolitan special taxing district may amend its proposed property tax levy
and must adopt a final property tax levy. Each county, city over 500 population, and
metropolitan special taxing district may also amend its proposed budget and must adopt a
final budget at the subsequent hearing. The final property tax levy must be adopted prior
to adopting the final budget. A school district is not required to adopt its final budget at the
subsequent hearing. The subsequent hearing of a taxing authority must be held on a date
subsequent to the date of the taxing authority's initial public hearing. If a continuation
hearing is held, the subsequent hearing must be held either immediately following the
continuation hearing or on a date subsequent to the continuation hearing. The subsequent
hearing may be held at a regularly scheduled board or council meeting or at a special
meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing
of a taxing authority does not have to be coordinated by the county auditor to prevent a
conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any
other taxing authority. All subsequent hearings must be held prior to five working days
after December 20 of the levy year. The date, time, and place of the subsequent hearing
must be announced at the initial public hearing or at the continuation hearing.

(m) The property tax levy certified under section 275.07 by a city of any population,
county, metropolitan special taxing district, regional library district, or school district
must not exceed the proposed levy determined under subdivision 1, except by an amount
up to the sum of the following amounts:

(1) the amount of a school district levy whose voters approved a referendum to
increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after
the proposed levy was certified;

(2) the amount of a city or county levy approved by the voters after the proposed
levy was certified;

(3) the amount of a levy to pay principal and interest on bonds approved by the
voters under section 475.58 after the proposed levy was certified;

(4) the amount of a levy to pay costs due to a natural disaster occurring after the
proposed levy was certified, if that amount is approved by the commissioner of revenue
under subdivision 6a;

(5) the amount of a levy to pay tort judgments against a taxing authority that become
final after the proposed levy was certified, if the amount is approved by the commissioner
of revenue under subdivision 6a;

(6) the amount of an increase in levy limits certified to the taxing authority by the
commissioner of education or the commissioner of revenue after the proposed levy was
certified; and

(7) the amount required under section 126C.55.

(n) This subdivision does not apply to towns and special taxing districts other than
regional library districts and metropolitan special taxing districts.

(o) Notwithstanding the requirements of this section, the employer is required to
meet and negotiate over employee compensation as provided for in chapter 179A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 40.

Minnesota Statutes 2006, section 275.065, subdivision 8, is amended to read:

Subd. 8.

Hearing.

Notwithstanding any other provision of law, Ramsey County,
the city of St. Paul, and Independent School District No. 625 are authorized to and shall
hold their initial public hearing jointly. The hearing must be held deleted text begin on deleted text end new text begin during the week of new text end
the second Tuesday of deleted text begin December deleted text end new text begin November new text end each year. The advertisement required in
subdivision 5a may be a joint advertisement. The hearing is otherwise subject to the
requirements of this section.

Ramsey County is authorized to hold an additional initial hearing or hearings as
provided under this section, provided that any additional hearings must not conflict
with the initial or continuation hearing dates of the other taxing districts. However, if
Ramsey County elects not to hold such additional initial hearing or hearings, the joint
initial hearing required by this subdivision must be held in a St. Paul location convenient
to residents of Ramsey County.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter, except that
proposed notices and hearings held in 2008 may be held during the week of the second
Tuesday of December.
new text end

Sec. 41.

Minnesota Statutes 2006, section 275.065, subdivision 9, is amended to read:

Subd. 9.

Aitkin County and school district hearing.

Notwithstanding any other
law, Aitkin County and Independent School District No. 1, and the city of Aitkin, or any
two of them, may hold their initial public hearing jointly. The hearing must be held on
the second Tuesday of deleted text begin December deleted text end new text begin November new text end each year. The advertisement required in
subdivision 5a may be a joint advertisement. The hearing is otherwise subject to the
requirements of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 42.

Minnesota Statutes 2006, section 275.065, subdivision 10, is amended to read:

Subd. 10.

Nobles County; joint initial public hearing.

Notwithstanding any
other law, Nobles County, the city of Worthington, and Independent School District No.
518, Worthington, or any two of them, may hold their initial public hearing jointly. The
hearing must be held on the second Tuesday of deleted text begin December deleted text end new text begin November new text end each year. The
advertisement required in subdivision 5a may be a joint advertisement. The hearing is
otherwise subject to the requirements of this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed notices and hearings
held in 2009 and thereafter, for property taxes payable in 2010 and thereafter.
new text end

Sec. 43.

Minnesota Statutes 2006, section 282.08, is amended to read:

282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.

The net proceeds from the sale or rental of any parcel of forfeited land, or from the
sale of products from the forfeited land, must be apportioned by the county auditor to the
taxing districts interested in the land, as follows:

(1) the portion required to pay any amounts included in the appraised value
under section 282.01, subdivision 3, as representing increased value due to any public
improvement made after forfeiture of the parcel to the state, but not exceeding the amount
certified by the deleted text begin clerk of the municipality deleted text end new text begin appropriate governmental authority new text end must be
apportioned to the deleted text begin municipal deleted text end new text begin governmental new text end subdivision entitled to it;

(2) the portion required to pay any amount included in the appraised value under
section 282.019, subdivision 5, representing increased value due to response actions
taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses
certified by the Pollution Control Agency or the commissioner of agriculture, must be
apportioned to the agency or the commissioner of agriculture and deposited in the fund
from which the expenses were paid;

(3) the portion of the remainder required to discharge any special assessment
chargeable against the parcel for drainage or other purpose whether due or deferred at
the time of forfeiture, must be apportioned to the deleted text begin municipal deleted text end new text begin governmental new text end subdivision
entitled to it; and

(4) any balance must be apportioned as follows:

(i) The county board may annually by resolution set aside no more than 30 percent
of the receipts remaining to be used for forest development on tax-forfeited land and
dedicated memorial forests, to be expended under the supervision of the county board. It
must be expended only on projects improving the health and management of the forest
resource.

(ii) The county board may annually by resolution set aside no more than 20 percent
of the receipts remaining to be used for the acquisition and maintenance of county parks
or recreational areas as defined in sections 398.31 to 398.36, to be expended under the
supervision of the county board.

(iii) Any balance remaining must be apportioned as follows: county, 40 percent;
town or city, 20 percent; and school district, 40 percent, provided, however, that in
unorganized territory that portion which would have accrued to the township must be
administered by the county board of commissioners.

new text begin EFFECTIVE DATE. new text end

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

Sec. 44.

Minnesota Statutes 2006, section 290B.03, subdivision 1, is amended to read:

Subdivision 1.

Program qualifications.

The qualifications for the senior citizens'
property tax deferral program are as follows:

(1) the property must be owned and occupied as a homestead by a person 65 years
of age or older. In the case of a married couple, deleted text begin both deleted text end new text begin only one new text end of the spouses must be at
least 65 years old new text begin and the other spouse must be at least 62 years old new text end at the time the first
property tax deferral is granted, regardless of whether the property is titled in the name
of one spouse or both spouses, or titled in another way that permits the property to have
homestead status;

(2) the total household income of the qualifying deleted text begin homeowners deleted text end new text begin homeowner, or in the
case of a married couple, the qualifying homeowner and spouse new text end , as defined in section
290A.03, subdivision 5, for the calendar year preceding the year of the initial application
may not exceed deleted text begin $60,000 deleted text end new text begin $80,000 new text end ;

(3) the homestead must have been owned and occupied as the homestead of at
least one of the deleted text begin qualifying deleted text end homeowners for at least 15 years prior to the year the initial
application is filed;

(4) there are no state or federal tax liens or judgment liens on the homesteaded
property;

(5) there are no mortgages or other liens on the property that secure future advances,
except for those subject to credit limits that result in compliance with clause (6); and

(6) the total unpaid balances of debts secured by mortgages and other liens on the
property, including unpaid and delinquent special assessments and interest and any
delinquent property taxes, penalties, and interest, but not including property taxes payable
during the year, does not exceed 75 percent of the assessor's estimated market value for
the year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed on or after
July 1, 2008.
new text end

Sec. 45.

Minnesota Statutes 2006, section 290B.04, subdivision 3, is amended to read:

Subd. 3.

Excess-income certification by taxpayer.

A taxpayer whose initial
application has been approved under subdivision 2 shall notify the commissioner of
revenue in writing by July 1 if the taxpayer's household income for the preceding calendar
year exceeded deleted text begin $60,000 deleted text end new text begin $80,000 new text end . The certification must state the homeowner's total
household income for the previous calendar year. No property taxes may be deferred
under this chapter in any year following the year in which a program participant filed or
should have filed an excess-income certification under this subdivision new text begin showing income in
excess of the maximum allowed new text end , unless the participant has filed a resumption of eligibility
certification as described in subdivision 4.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed on or after
July 1, 2008.
new text end

Sec. 46.

Minnesota Statutes 2006, section 290B.04, subdivision 4, is amended to read:

Subd. 4.

Resumption of eligibility certification by taxpayer.

A taxpayer who has
previously filed an excess-income certification under subdivision 3 may resume program
participation if the taxpayer's household income for a subsequent year is deleted text begin $60,000 deleted text end new text begin $80,000 new text end
or less. If the taxpayer chooses to resume program participation, the taxpayer must notify
the commissioner of revenue in writing by July 1 of the year following a calendar year in
which the taxpayer's household income is deleted text begin $60,000 deleted text end new text begin $80,000 new text end or less. The certification must
state the taxpayer's total household income for the previous calendar year. Once a taxpayer
resumes participation in the program under this subdivision, participation will continue
until the taxpayer files a subsequent excess-income certification under subdivision 3 or
until participation is terminated under section 290B.08, subdivision 1.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed on or after
July 1, 2008.
new text end

Sec. 47.

Minnesota Statutes 2006, section 290B.05, subdivision 1, is amended to read:

Subdivision 1.

Determination by commissioner.

The commissioner shall
determine each qualifying homeowner's "annual maximum property tax amount"
following approval of the homeowner's initial application and following the receipt of a
resumption of eligibility certification. The "annual maximum property tax amount" equals
three percent of the homeowner's total household income for the year preceding either the
initial application or the resumption of eligibility certification, whichever is applicable.
Following approval of the initial application, the commissioner shall determine the
qualifying homeowner's "maximum allowable deferral." No tax may be deferred relative
to the appropriate assessment year for any homeowner whose total household income
for the previous year exceeds deleted text begin $60,000 deleted text end new text begin $80,000 new text end . No tax shall be deferred in any year in
which the homeowner does not meet the program qualifications in section 290B.03. The
maximum allowable total deferral is equal to 75 percent of the assessor's estimated market
value for the year, less the balance of any mortgage loans and other amounts secured by
liens against the property at the time of application, including any unpaid and delinquent
special assessments and interest and any delinquent property taxes, penalties, and interest,
but not including property taxes payable during the year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications received on or after
July 1, 2008.
new text end

Sec. 48.

Minnesota Statutes 2006, section 290B.07, is amended to read:

290B.07 LIEN; DEFERRED PORTION.

(a) Payment by the state to the county treasurer of property taxes, penalties, interest,
or special assessments and interest deferred under this chapter is deemed a loan from the
state to the program participant. The commissioner must deleted text begin compute the interest as provided
in section 270C.40, subdivision 5, but not to exceed five percent, and deleted text end maintain records of
the total deferred amount and interest for each participant. Interest shall accrue beginning
September 1 of the payable year for which the taxes are deferred new text begin , provided that no interest
shall be charged on (1) deferred property tax amounts on applications filed on or after
July 1, 2008, or (2) deferred property taxes beginning with taxes payable in 2009 on
applications filed prior to July 1, 2008 new text end . Any deferral made under this chapter shall not
be construed as delinquent property taxes.

The lien created under section 272.31 continues to secure payment by the taxpayer,
or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
respect to all years for which amounts are deferred. The lien for deferred taxes and interest
has the same priority as any other lien under section 272.31, except that liens, including
mortgages, recorded or filed prior to the recording or filing of the notice under section
290B.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
seller's interest in a contract for deed, in which a qualifying homeowner is the purchaser
or an assignee of the purchaser, has priority over deferred taxes and interest on deferred
taxes, regardless of whether the contract for deed is recorded or filed. The lien for deferred
taxes and interest for future years has the same priority as the lien for deferred taxes and
interest for the first year, which is always higher in priority than any mortgages or other
liens filed, recorded, or created after the notice recorded or filed under section 290B.04,
subdivision 2. The county treasurer or auditor shall maintain records of the deferred
portion and shall list the amount of deferred taxes for the year and the cumulative deferral
and interest for all previous years as a lien against the property. In any certification of
unpaid taxes for a tax parcel, the county auditor shall clearly distinguish between taxes
payable in the current year, deferred taxes and interest, and delinquent taxes. Payment
of the deferred portion becomes due and owing at the time specified in section 290B.08.
Upon receipt of the payment, the commissioner shall issue a receipt for it to the person
making the payment upon request and shall notify the auditor of the county in which the
parcel is located, within ten days, identifying the parcel to which the payment applies.
Upon receipt by the commissioner of revenue of collected funds in the amount of the
deferral, the state's loan to the program participant is deemed paid in full.

(b) If property for which taxes have been deferred under this chapter forfeits
under chapter 281 for nonpayment of a nondeferred property tax amount, or because
of nonpayment of amounts previously deferred following a termination under section
290B.08, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
canceled by the county auditor as provided in section 282.07. However, notwithstanding
any other law to the contrary, any proceeds from a subsequent sale of the property under
chapter 282 or another law, must be used to first reimburse the county's forfeited tax sale
fund for any direct costs of selling the property or any costs directly related to preparing
the property for sale, and then to reimburse the state for the amount of the canceled lien.
Within 90 days of the receipt of any sale proceed to which the state is entitled under these
provisions, the county auditor must pay those funds to the commissioner of revenue by
warrant for deposit in the general fund. No other deposit, use, distribution, or release of
gross sale proceeds or receipts may be made by the county until payments sufficient
to fully reimburse the state for the canceled lien amount have been transmitted to the
commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 49.

new text begin [290D.01] CITATION.
new text end

new text begin This program shall be named the "seasonal recreational property tax deferral
program."
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009.
new text end

Sec. 50.

new text begin [290D.02] TERMS.
new text end

new text begin Subdivision 1. new text end

new text begin Terms. new text end

new text begin For purposes of sections 290D.01 to 290D.08, the terms
defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Primary property owner. new text end

new text begin "Primary property owner" means a person who
(1) has been the owner, or one of the owners, of the eligible property for at least 15 years
prior to the year the application is filed under section 290D.04; and (2) applies for the
deferral of property taxes under section 290D.04.
new text end

new text begin Subd. 3. new text end

new text begin Secondary property owner. new text end

new text begin "Secondary property owner" means any
person, other than the primary property owner, who has been an owner of the eligible
property for at least 15 years prior to the year the initial application is filed for deferral
of property taxes under section 290D.04.
new text end

new text begin Subd. 4. new text end

new text begin Eligible property. new text end

new text begin "Eligible property" means a parcel of property or
contiguous parcels of property under the same ownership classified as noncommercial
seasonal residential recreational 4c(1) property under section 273.13, subdivision 25.
new text end

new text begin Subd. 5. new text end

new text begin Base property tax amount. new text end

new text begin "Base property tax amount" means the total
property taxes levied by all taxing jurisdictions, including special assessments, on the
eligible property in the year prior to the year that the initial application is approved under
section 290D.04 and payable in the year of the application.
new text end

new text begin Subd. 6. new text end

new text begin Special assessments. new text end

new text begin "Special assessments" means any assessment, fee, or
other charge that may be made by law, and that appears on the property tax statement for
the property for collection under the laws applicable to the enforcement of real estate taxes.
new text end

new text begin Subd. 7. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 51.

new text begin [290D.03] QUALIFICATIONS FOR DEFERRAL.
new text end

new text begin In order for an eligible property to qualify for treatment under this program:
new text end

new text begin (1) the eligible property must have been owned solely by the primary property owner,
or jointly with others, for at least 15 years prior to the year the initial application is filed;
new text end

new text begin (2) there must be no state or federal tax liens or judgment liens on the eligible
property;
new text end

new text begin (3) there must be no mortgages or other liens on the eligible property that secure
future advances, except for those subject to credit limits that result in compliance with
clause (4); and
new text end

new text begin (4) the total unpaid balances of debts secured by mortgages and other liens on the
eligible property, including unpaid and delinquent special assessments and interest and
any delinquent property taxes, penalties, and interest, but not including property taxes
payable during the year, must not exceed 60 percent of the assessor's estimated market
value for the current assessment year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 52.

new text begin [290D.04] APPLICATION FOR DEFERRAL.
new text end

new text begin Subdivision 1. new text end

new text begin Initial application. new text end

new text begin (a) A primary owner of a property meeting
the qualifications under section 290D.03 may apply to the commissioner for deferral
of taxes on the eligible property. Applications are due on or before July 1 for deferral
of any taxes payable in the following year. The application, which must be prescribed
by the commissioner, shall include the following items and any other information the
commissioner deems necessary:
new text end

new text begin (1) the name, address, and Social Security number of the primary property owner
and secondary property owners, if any;
new text end

new text begin (2) a copy of the property tax statement for the current taxes payable year for the
eligible property;
new text end

new text begin (3) the initial year of ownership of the primary property owner and any second
property owners of the eligible property;
new text end

new text begin (4) information on any mortgage loans or other amounts secured by mortgages or
other liens against the eligible property, for which purpose the commissioner may require
the applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
balance owing on the mortgage loan provided by the mortgage holder. The commissioner
may require the appropriate documents in connection with obtaining and confirming
information on unpaid amounts secured by other liens; and
new text end

new text begin (5) the signatures of the primary property owner and all other owners, if any, stating
that each owner agrees to enroll the eligible property in the program to defer property
taxes under this chapter.
new text end

new text begin The application must state that program participation is voluntary. The application
must also state that program participation includes authorization for the annual deferred
amount. The deferred property tax calculated by the county and the cumulative deferred
property tax amount is public data.
new text end

new text begin (b) As part of the initial application process, if the property is abstract property, the
commissioner may require the applicant to obtain at the applicant's cost a report prepared
by a licensed abstracter showing the last deed and any unsatisfied mortgages, liens,
judgments, and state and federal tax lien notices which were recorded on or after the date
of that last deed with respect to the eligible property or to the applicant.
new text end

new text begin The certificate or report need not include references to any documents filed or
recorded more than 40 years prior to the date of the certification or report. The certification
or report must be as of a date not more than 30 days prior to submission of the application
under this section.
new text end

new text begin The commissioner may also require the county recorder or county registrar of the
county where the eligible property is located to provide copies of recorded documents
related to the applicant of the eligible property, for which the recorder or registrar shall
not charge a fee. The commissioner may use any information available to determine or
verify eligibility under this section.
new text end

new text begin Subd. 2. new text end

new text begin Approval; recording. new text end

new text begin The commissioner shall approve all initial
applications that qualify under this chapter and shall notify the primary property owner on
or before December 1. The commissioner may investigate the facts or require confirmation
in regard to an application. The commissioner shall record or file a notice of qualification
for deferral, including the names of the primary and any secondary property owners and a
legal description of the eligible property, in the office of the county recorder, or registrar of
titles, whichever is applicable, in the county where the eligible property is located. The
notice must state that it serves as a notice of lien and that it includes deferrals under this
section for future years. The primary property owner shall pay the recording or filing fees
for the notice, which, notwithstanding section 357.18, shall be paid by that owner at the
time of satisfaction of the lien.
new text end

new text begin Subd. 3. new text end

new text begin Penalty for failure; investigations. new text end

new text begin (a) The commissioner shall assess
a penalty equal to 20 percent of the property taxes improperly deferred in the case of a
false application. The commissioner shall assess a penalty equal to 50 percent of the
property taxes improperly deferred if the taxpayer knowingly filed a false application. The
commissioner shall assess penalties under this section through the issuance of an order
under the provisions of chapter 270C. Persons affected by a commissioner's order issued
under this section may appeal as provided in chapter 270C.
new text end

new text begin (b) The commissioner may conduct investigations related to initial applications
required under this chapter within the period ending 3-1/2 years from the due date of
the application.
new text end

new text begin Subd. 4. new text end

new text begin Annual certification to commissioner. new text end

new text begin Annually on or before July 1,
the primary property owner must certify to the commissioner that the person continues
to qualify as a primary property owner. If the primary owner has died or has transferred
the property in the preceding year, a certification may be filed by the primary owner's
spouse, or by one of the secondary owners, provided that the person is currently an
owner of the property. In this case, the primary owner's spouse or the secondary owner
shall be considered the primary owner from that point forward. If neither the primary
owner, the primary owner's spouse, or a secondary owner is eligible to file the required
annual certification for the property, the property's participation in the program shall be
terminated, and the procedures in section 290D.07 apply.
new text end

new text begin Subd. 5. new text end

new text begin Annual notice to primary property owner. new text end

new text begin Annually, on or before
September 1, the commissioner shall notify each primary property owner, in writing, of
the total cumulative deferred taxes and accrued interest on the qualifying property as of
that date.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 53.

new text begin [290D.05] DEFERRED PROPERTY TAX AMOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Calculation of deferred property tax amount. new text end

new text begin Each year after
the county auditor has determined the final property tax rates under section 275.08, the
"deferred property tax amount" must be calculated on each eligible property. The deferred
property tax amount is equal to 50 percent of the amount of the difference between (1) the
total amount of property taxes and special assessments levied upon the eligible property
for the current year by all taxing jurisdictions and (2) the eligible property's base property
tax amount. Any tax attributable to new improvements made to the eligible property after
the initial application has been approved under section 290D.04, subdivision 2, must be
excluded in determining the deferred property tax amount. The eligible property's total
current year's tax less the deferred property tax amount for the current year must be listed
on the property tax statement and is the amount due to the county under chapter 276.
Reference that the property is enrolled in the seasonal recreational property tax deferral
program under this chapter and a state lien has been recorded must be clearly printed on
the statement.
new text end

new text begin Subd. 2. new text end

new text begin Certification to commissioner. new text end

new text begin The county auditor shall annually, on or
before April 15, certify to the commissioner the property tax deferral amounts determined
under this section for each eligible property in the county. The commissioner shall
prescribe the information that is necessary to identify the eligible properties.
new text end

new text begin Subd. 3. new text end

new text begin Limitation on total amount of deferred taxes. new text end

new text begin The total amount of
deferred taxes and interest on a property, when added to (1) the balance owed on any
mortgages on the property at the time of initial application; (2) other amounts secured by
liens on the property at the time of the initial application; and (3) any unpaid and delinquent
special assessments and interest and any delinquent property taxes, penalties, and interest,
but not including property taxes payable during the year, must not exceed 60 percent of
the assessor's estimated market value of the property for the current assessment year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 54.

new text begin [290D.06] LIEN; DEFERRED PORTION.
new text end

new text begin (a) Payment by the state to the county treasurer of property taxes, penalties, interest,
or special assessments and interest, deferred under this chapter is deemed a loan from the
state to the program participant. The commissioner shall compute the interest as provided
in section 270C.40, subdivision 5, but not to exceed two percent over the maximum
interest rate provided in section 290B.07, paragraph (a), and maintain records of the total
deferred amount and interest for each participant. Interest accrues beginning September 1
of the payable year for which the taxes are deferred. Any deferral made under this chapter
must not be construed as delinquent property taxes.
new text end

new text begin The lien created under section 272.31 continues to secure payment by the taxpayer,
or by the taxpayer's successors or assigns, of the amount deferred, including interest, with
respect to all years for which amounts are deferred. The lien for deferred taxes and interest
has the same priority as any other lien under section 272.31, except that liens, including
mortgages, recorded or filed prior to the recording or filing of the notice under section
290D.04, subdivision 2, have priority over the lien for deferred taxes and interest. A
seller's interest in a contract for deed, in which a qualifying owner is the purchaser or an
assignee of the purchaser, has priority over deferred taxes and interest on deferred taxes,
regardless of whether the contract for deed is recorded or filed. The lien for deferred taxes
and interest for future years has the same priority as the lien for deferred taxes and interest
for the first year, which is always higher in priority than any mortgages or other liens filed,
recorded, or created after the notice recorded or filed under section 290D.04, subdivision
2. The county treasurer or auditor shall maintain records of the deferred portion and shall
list the amount of deferred taxes for the year and the cumulative deferral and interest for
all previous years as a lien against the eligible property. In any certification of unpaid
taxes for a tax parcel, the county auditor shall clearly distinguish between taxes payable in
the current year, deferred taxes and interest, and delinquent taxes. Payment of the deferred
portion becomes due and owing at the time specified in section 290D.07. Upon receipt of
the payment, the commissioner shall issue a receipt to the person making the payment
upon request and shall notify the auditor of the county in which the parcel is located,
within ten days, identifying the parcel to which the payment applies. Upon receipt by the
commissioner of collected funds in the amount of the deferral, the state's loan to the
program participant is deemed paid in full.
new text end

new text begin (b) If eligible property for which taxes have been deferred under this chapter forfeits
under chapter 281 for nonpayment of a nondeferred property tax amount, or because
of nonpayment of amounts previously deferred following a termination under section
290D.07, the lien for the taxes deferred under this chapter, plus interest and costs, shall be
canceled by the county auditor as provided in section 282.07. However, notwithstanding
any other law to the contrary, any proceeds from a subsequent sale of the eligible property
under chapter 282 or another law must be used to first reimburse the county's forfeited
tax sale fund for any direct costs of selling the eligible property or any costs directly
related to preparing the eligible property for sale, and then to reimburse the state for
the amount of the canceled lien. Within 90 days of the receipt of any sale proceeds to
which the state is entitled under these provisions, the county auditor must pay those funds
to the commissioner by warrant for deposit in the general fund. No other deposit, use,
distribution, or release of gross sale proceeds or receipts may be made by the county until
payments sufficient to fully reimburse the state for the canceled lien amount have been
transmitted to the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 55.

new text begin [290D.07] TERMINATION OF DEFERRAL; PAYMENT OF
DEFERRED TAXES.
new text end

new text begin Subdivision 1. new text end

new text begin Termination. new text end

new text begin (a) The deferral of taxes granted under this chapter
terminates when one of the following occurs:
new text end

new text begin (1) the eligible property is sold or transferred to someone other than the primary
owner's spouse or a secondary owner;
new text end

new text begin (2) the death of the primary owner, or in the case of a married couple, after the
death of both spouses, provided that there is not a secondary owner eligible to become
the primary owner;
new text end

new text begin (3) the primary property owner notifies the commissioner, in writing, that all owners,
including any secondary property owners, desire to discontinue the deferral; or
new text end

new text begin (4) the eligible property no longer qualifies under section 290D.03.
new text end

new text begin (b) An eligible property is not terminated from the program because no deferred
property tax amount is determined for any given year after the eligible property's initial
enrollment into the program.
new text end

new text begin (c) An eligible property is not terminated from the program if the eligible property
subsequently becomes the homestead of one or more of the property owners and the
property and the owners qualify for, and are immediately enrolled in, the senior deferral
program under chapter 290B.
new text end

new text begin Subd. 2. new text end

new text begin Payment upon termination. new text end

new text begin Upon the termination of the deferral under
subdivision 1, the amount of deferred taxes, penalties, interest, and special assessments
and interest, plus the recording or filing fees under this subdivision and section 290D.04,
subdivision 2, becomes due and payable to the commissioner within 90 days of termination
of the deferral for terminations under subdivision 1, paragraph (a), clauses (1) and (2),
and within one year of termination of the deferral for terminations under subdivision 1,
paragraph (a), clauses (3) and (4). No additional interest is due on the deferral if timely
paid. On receipt of payment, the commissioner shall, within ten days, notify the auditor
of the county in which the parcel is located, identifying the parcel to which the payment
applies and shall remit the recording or filing fees under this subdivision and section
290D.04, subdivision 2, to the auditor. A notice of termination of deferral, containing the
legal description and the recording or filing data for the notice of qualification for deferral
under section 290D.04, subdivision 2, shall be prepared and recorded or filed by the
county auditor in the same office in which the notice of qualification for deferral under
section 290D.04, subdivision 2, was recorded or filed, and the county auditor shall mail a
copy of the notice of termination to the property owner. The property owner shall pay the
recording or filing fees. Upon recording or filing of the notice of termination of deferral,
the notice of qualification for deferral under section 290D.04, subdivision 2, and the lien
created by it are discharged. If the deferral is not timely paid, the penalty, interest, lien,
forfeiture, and other rules for the collection of ad valorem property taxes apply.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 56.

new text begin [290D.08] STATE REIMBURSEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Determination; payment. new text end

new text begin The county auditor shall determine the
total current year's deferred amount of property tax under this chapter in the county, and
submit those amounts as part of the abstracts of tax lists submitted by the county auditors
under section 275.29. The commissioner may make changes in the abstracts of tax lists as
deemed necessary. The commissioner, after such review, shall pay the deferred amount of
property tax to each county treasurer on or before August 31.
new text end

new text begin The county treasurer shall distribute, as part of the October settlement, the funds
received as if they had been collected as part of the property tax.
new text end

new text begin Subd. 2. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the total amount of property
tax determined under subdivision 1, plus any amounts paid under section 290D.04,
subdivision 4, is annually appropriated from the general fund to the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications filed July 1, 2009,
and thereafter.
new text end

Sec. 57.

Minnesota Statutes 2006, section 298.75, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

Except as may otherwise be provided, the following
words, when used in this section, shall have the meanings herein ascribed to them.

(1) "Aggregate material" shall mean nonmetallic natural mineral aggregate including,
but not limited to sand, silica sand, gravel, crushed rock, limestone, granite, and borrow,
but only if the borrow is transported on a public road, street, or highway. Aggregate
material shall not include dimension stone and dimension granite. Aggregate material
must be measured or weighed after it has been extracted from the pit, quarry, or deposit.

(2) "Person" shall mean any individual, firm, partnership, corporation, organization,
trustee, association, or other entity.

(3) "Operator" shall mean any person engaged in the business of removing aggregate
material from the surface or subsurface of the soil, for the purpose of sale, either directly
or indirectly, through the use of the aggregate material in a marketable product or service.

(4) "Extraction site" shall mean a pit, quarry, or deposit containing aggregate
material and any contiguous property to the pit, quarry, or deposit which is used by the
operator for stockpiling the aggregate material.

(5) "Importer" shall mean any person who buys aggregate material deleted text begin produced deleted text end new text begin
excavated new text end from a county not listed in paragraph (6) or another state and causes the
aggregate material to be imported into a county in this state which imposes a tax on
aggregate material.

(6) "County" shall mean the counties of Pope, Stearns, Benton, Sherburne, Carver,
Scott, Dakota, Le Sueur, Kittson, Marshall, Pennington, Red Lake, Polk, Norman,
Mahnomen, Clay, Becker, Carlton, St. Louis, Rock, Murray, Wilkin, Big Stone, Sibley,
Hennepin, Washington, Chisago, and Ramsey. County also means any other county whose
board has voted after a public hearing to impose the tax under this section and has notified
the commissioner of revenue of the imposition of the tax.

(7) "Borrow" shall mean granular borrow, consisting of durable particles of gravel
and sand, crushed quarry or mine rock, crushed gravel or stone, or any combination
thereof, the ratio of the portion passing the (#200) sieve divided by the portion passing the
(1 inch) sieve may not exceed 20 percent by mass.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 58.

Minnesota Statutes 2006, section 298.75, subdivision 2, is amended to read:

Subd. 2.

Tax imposed.

new text begin (a) new text end A county new text begin that imposes the aggregate production tax new text end shall
impose upon every deleted text begin importer and deleted text end operator a production tax deleted text begin up to ten cents deleted text end new text begin of 21.5 cents new text end per
cubic yard or deleted text begin up to seven deleted text end new text begin 15 new text end cents per ton of aggregate material deleted text begin removed deleted text end new text begin excavated in the
county new text end except that the county board may decide not to impose this tax if it determines
that in the previous year operators removed less than 20,000 tons or 14,000 cubic yards of
aggregate material from that county. The tax shall new text begin not new text end be imposed on aggregate material
deleted text begin produced deleted text end new text begin excavated new text end in the county deleted text begin when deleted text end new text begin until new text end the aggregate material is transported from
the extraction site or sold new text begin , whichever occurs first new text end . When aggregate material is stored in a
stockpile within the state of Minnesota and a public highway, road or street is not used
for transporting the aggregate material, the tax shall new text begin not new text end be imposed new text begin until new text end either when the
aggregate material is sold, or when it is transported from the stockpile site, or when it is
used from the stockpile, whichever occurs first.

new text begin (b) A county that imposes the aggregate production tax under paragraph (a) shall
impose upon every importer a production tax of 21.5 cents per cubic yard or 15 cents per
ton of aggregate material imported into the county. The tax shall be imposed when the
aggregate material is imported from the extraction site or sold. When imported aggregate
material is stored in a stockpile within the state of Minnesota and a public highway, road,
or street is not used for transporting the aggregate material, the tax shall be imposed either
when the aggregate material is sold, when it is transported from the stockpile site, or when
it is used from the stockpile, whichever occurs first. new text end The tax shall be imposed on an
importer when the aggregate material is imported into the county that imposes the tax.

new text begin (c) new text end If the aggregate material is transported directly from the extraction site to a
waterway, railway, or another mode of transportation other than a highway, road or street,
the tax imposed by this section shall be apportioned equally between the county where the
aggregate material is extracted and the county to which the aggregate material is originally
transported. If that destination is not located in Minnesota, then the county where the
aggregate material was extracted shall receive all of the proceeds of the tax.

new text begin (d) A county, city, or town that receives revenue under this section is prohibited
from imposing any additional host community fees on aggregate production within that
county, city, or town.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 59.

Minnesota Statutes 2006, section 298.75, subdivision 6, is amended to read:

Subd. 6.

Penalties; removal of aggregate if previous tax not paid; false report.

It is a misdemeanor for any operator or importer to remove aggregate material from a
pit, quarry, or deposit or for any importer to import aggregate material unless all taxes
due under this section for deleted text begin the deleted text end new text begin all new text end previous reporting deleted text begin period deleted text end new text begin periods new text end have been paid or
objections thereto have been filed pursuant to subdivision 4.

It is a misdemeanor for the operator or importer who is required to file a report to file
a false report with intent to evade the tax.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 60.

Minnesota Statutes 2006, section 298.75, subdivision 7, is amended to read:

Subd. 7.

Proceeds of taxes.

new text begin (a) new text end All money collected as taxes under this section
shall be deposited in the county treasury and credited deleted text begin as follows, for expenditure by the
county board: deleted text end new text begin according to this subdivision.
new text end

new text begin (b) The county auditor may retain an annual administrative fee of up to five percent
of the total taxes collected in any year.
new text end

new text begin (c) The balance of the taxes, after any deduction under paragraph (b), shall be
credited as follows:
new text end

deleted text begin (a) Sixty deleted text end new text begin (1) 42.5 new text end percent to the county road and bridge fund for expenditure for the
maintenance, construction and reconstruction of roads, highways and bridges;

deleted text begin (b) Thirty deleted text end new text begin (2) 42.5 new text end percent to the deleted text begin road and bridge fund of those towns as determined
by the county board and to the deleted text end general fund deleted text begin or other designated fund of those cities as
determined by the county board deleted text end new text begin of the city or town in which the mine is located, or to the
county, if the mine is located in an unorganized town new text end , to be expended for maintenance,
construction and reconstruction of roads, highways and bridges; and

deleted text begin (c) Ten deleted text end new text begin (3) 15 new text end percent to a special reserve fund which is hereby established, for
expenditure for the restoration of abandoned pits, quarries, or deposits located deleted text begin upon public
and tax forfeited lands deleted text end within the county.

If there are no abandoned pits, quarries or deposits located deleted text begin upon public or tax
forfeited lands deleted text end within the county, this portion of the tax shall be deleted text begin deposited in the county
road and bridge fund for expenditure for the maintenance, construction and reconstruction
of roads, highways and bridges deleted text end new text begin used for any other unmet reclamation need or for
conservation or other environmental needs new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 61.

Minnesota Statutes 2006, section 365A.095, is amended to read:

365A.095 PETITION FOR REMOVAL OF DISTRICT; PROCEDURE new text begin ;
REFUND OF SURPLUS new text end .

new text begin Subdivision 1. new text end

new text begin Petition; procedure. new text end

A petition signed by at least 75 percent of the
property owners in the territory of the subordinate service district requesting the removal
of the district may be presented to the town board. Within 30 days after the town board
receives the petition, the town clerk shall determine the validity of the signatures on
the petition. If the requisite number of signatures are certified as valid, the town board
must hold a public hearing on the petitioned matter. Within 30 days after the end of
the hearing, the town board must decide whether to discontinue the subordinate service
district, continue as it is, or take some other action with respect to it.

new text begin Subd. 2. new text end

new text begin Option to refund surplus. new text end

new text begin If the district is removed under subdivision 1,
after all outstanding obligations of the district have been paid in full, the town board may
vote to refund any surplus tax revenue or service charge, or any part of it, collected from
the district under section 365A.08. The refund must be distributed equally to the owners
of any property within the discontinued district that were charged the extra tax or service
fee during the most recent tax year for which the tax or service fee was imposed. Any
surplus not refunded under this section must be transferred to the town's general fund.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 62.

Minnesota Statutes 2006, section 429.101, subdivision 1, is amended to read:

Subdivision 1.

Ordinances.

(a) In addition to any other method authorized by
law or charter, the governing body of any municipality may provide for the collection
of unpaid special charges new text begin as a special assessment against the property benefited new text end for all
or any part of the cost of:

(1) snow, ice, or rubbish removal from sidewalks;

(2) weed elimination from streets or private property;

(3) removal or elimination of public health or safety hazards from private property,
excluding any structure included under the provisions of sections 463.15 to 463.26;

(4) installation or repair of water service lines, street sprinkling or other dust
treatment of streets;

(5) the trimming and care of trees and the removal of unsound trees from any street;

(6) the treatment and removal of insect infested or diseased trees on private property,
the repair of sidewalks and alleys;

(7) the operation of a street lighting system;

(8) the operation and maintenance of a fire protection or a pedestrian skyway system;

(9) deleted text begin reinspections which find noncompliance after the due date for compliance with
an order to correct deleted text end new text begin inspections relating to new text end a municipal housing maintenance code violation;

(10) the recovery of any disbursements under section 504B.445, subdivision 4,
clause (5), including disbursements for payment of utility bills and other services, even if
provided by a third party, necessary to remedy violations as described in section 504B.445,
subdivision 4, clause (2); or

(11) [Repealed, 2004 c 275 s 5]

deleted text begin as a special assessment against the property benefited.
deleted text end

new text begin (12) the recovery of delinquent vacant building registration fees under a municipal
program designed to identify and register vacant buildings.
new text end

(b) The council may by ordinance adopt regulations consistent with this section to
make this authority effective, including, at the option of the council, provisions for placing
primary responsibility upon the property owner or occupant to do the work personally
(except in the case of street sprinkling or other dust treatment, alley repair, tree trimming,
care, and removal or the operation of a street lighting system) upon notice before the work
is undertaken, and for collection from the property owner or other person served of the
charges when due before unpaid charges are made a special assessment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 63.

Minnesota Statutes 2006, section 469.1813, subdivision 8, is amended to read:

Subd. 8.

Limitation on abatements.

In any year, the total amount of property
taxes abated by a political subdivision under this section may not exceed (1) ten percent
of the deleted text begin current levy deleted text end new text begin net tax capacity of the political subdivision for the taxes payable year
to which the abatement applies new text end , or (2) $200,000, whichever is greater. The limit under
this subdivision does not apply to:

(i) an uncollected abatement from a prior year that is added to the abatement levy; or

(ii) a taxpayer whose real and personal property is subject to valuation under
Minnesota Rules, chapter 8100.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for abatement resolutions approved
after the day following final enactment.
new text end

Sec. 64.

Minnesota Statutes 2006, section 473.446, subdivision 2, is amended to read:

Subd. 2.

Transit taxing district.

The metropolitan transit taxing district deleted text begin is hereby
designated as that portion of the metropolitan transit area lying within the following
named cities, towns, or unorganized territory within the counties indicated:
deleted text end

deleted text begin (a) Anoka County. Anoka, Blaine, Centerville, Columbia Heights, Coon Rapids,
Fridley, Circle Pines, Hilltop, Lexington, Lino Lakes, Spring Lake Park;
deleted text end

deleted text begin (b) Carver County. Chanhassen, the city of Chaska;
deleted text end

deleted text begin (c) Dakota County. Apple Valley, Burnsville, Eagan, Inver Grove Heights, Lilydale,
Mendota, Mendota Heights, Rosemount, South St. Paul, Sunfish Lake, West St. Paul;
deleted text end

deleted text begin (d) Ramsey County. All of the territory within Ramsey County;
deleted text end

deleted text begin (e) Hennepin County. Bloomington, Brooklyn Center, Brooklyn Park, Champlin,
Chanhassen, Crystal, Deephaven, Eden Prairie, Edina, Excelsior, Golden Valley,
Greenwood, Hopkins, Long Lake, Maple Grove, Medicine Lake, Minneapolis,
Minnetonka, Minnetonka Beach, Mound, New Hope, Orono, Osseo, Plymouth, Richfield,
Robbinsdale, St. Anthony, St. Louis Park, Shorewood, Spring Park, Tonka Bay, Wayzata,
Woodland, the unorganized territory of Hennepin County;
deleted text end

deleted text begin (f) Scott County. Prior Lake, Savage, Shakopee;
deleted text end

deleted text begin (g) Washington County. Baytown, the city of Stillwater, White Bear Lake, Bayport,
Birchwood, Cottage Grove, Dellwood, Lake Elmo, Landfall, Mahtomedi, Newport,
Oakdale, Oak Park Heights, Pine Springs, St. Paul Park, Willernie, Woodbury deleted text end new text begin means the
metropolitan area new text end .

The Metropolitan Council in its sole discretion may provide transit service by
contract deleted text begin beyond the boundaries of the metropolitan transit taxing district or deleted text end to cities and
towns deleted text begin within the taxing district deleted text end which are receiving financial assistance under section
473.388, upon petition therefor by an interested city, township or political subdivision
within the metropolitan transit area. The Metropolitan Council may establish such
terms and conditions as it deems necessary and advisable for providing the transit
service, including such combination of fares and direct payments by the petitioner as
will compensate the council for the full capital and operating cost of the service and the
related administrative activities of the council. The amount of the levy made by any
municipality to pay for the service shall be disregarded when calculation of levies subject
to limitations is made, provided that cities and towns receiving financial assistance under
section 473.388 shall not make a special levy under this subdivision without having first
exhausted the available local transit funds as defined in section 473.388. The council shall
not be obligated to extend service deleted text begin beyond the boundaries of the taxing district, or deleted text end to cities
and towns within the taxing district which are receiving financial assistance under section
473.388, under any law or contract unless or until payment therefor is received.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 65.

Minnesota Statutes 2006, section 473.446, subdivision 8, is amended to read:

Subd. 8.

State review.

The commissioner of revenue shall certify the council's levy
limitation under this section to the council by August 1 of the levy year. The council
must certify its proposed property tax levy under this section to the commissioner of
revenue by September 1 of the levy year. The commissioner of revenue shall annually
determine whether the property tax for transit purposes certified by the council for levy
following the adoption of its proposed budget is within the levy limitation imposed by
deleted text begin subdivisions deleted text end new text begin subdivision new text end 1 deleted text begin and 1b deleted text end . deleted text begin The commissioner shall also annually determine
whether the transit tax imposed on all taxable property within the metropolitan transit area
but outside of the metropolitan transit taxing district is within the levy limitation imposed
by subdivision 1a. deleted text end The determination must be completed prior to September 10 of each
year. If current information regarding market valuation in any county is not transmitted to
the commissioner in a timely manner, the commissioner may estimate the current market
valuation within that county for purposes of making the calculations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2009 and
thereafter.
new text end

Sec. 66.

Laws 2008, chapter 154, article 2, section 11, the effective date, is amended to
read:

EFFECTIVE DATE.

The amendments of this section to paragraph (b) new text begin and to the
class rate decrease and the market value increase of the first tier of class 1c homestead
resorts new text end are effective for taxes payable in 2009 and thereafter. The rest of this section is
effective for taxes payable in 2010 and thereafter.

new text begin EFFECTIVE DATE. new text end

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

Sec. 67. new text begin FISCAL DISPARITIES STUDY.
new text end

new text begin The commissioner of revenue shall conduct a study of the metropolitan revenue
distribution program contained in Minnesota Statutes, chapter 473F, commonly known
as the fiscal disparities program. On or before February 1, 2010, the commissioner shall
make a report to the chairs of the house of representatives and senate tax committees
consisting of the findings of the study and any recommendations resulting from the study.
new text end

new text begin The study must consider to what extent the program is meeting the following goals,
and what changes could be made to the program in the furtherance of meeting those goals:
new text end

new text begin (1) reducing the extent to which the property tax encourages development patterns
that do not make cost-effective use of public infrastructure or impose other high public
costs;
new text end

new text begin (2) ensuring that the benefits of economic growth of the region are shared throughout
the region, especially for growth that results from state or regional decisions;
new text end

new text begin (3) improving the ability of each jurisdiction within the region to deliver services at
a level commensurate with its tax effort;
new text end

new text begin (4) compensating jurisdictions containing properties that provide regional benefits
for the costs those properties impose on their host jurisdictions in excess of their tax
payments;
new text end

new text begin (5) promoting a fair distribution of property tax burdens across jurisdictions of
the region; and
new text end

new text begin (6) reducing the economic losses that result from competition among communities
for commercial-industrial tax base.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 68. new text begin WHITE COMMUNITY HOSPITAL DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Authorized. new text end

new text begin Notwithstanding the contiguity requirement in
Minnesota Statutes, section 447.31, subdivision 2, any two or more of the following cities
and towns in St. Louis County may establish by resolution of their respective governing
bodies the White Community Hospital District: the cities of Aurora, Biwabik, and Hoyt
Lakes, and the towns of Biwabik, White, and Colvin. The proposed resolution to establish
the hospital district must be published and is subject to referendum as provided in section
447.31, subdivision 2.
new text end

new text begin Subd. 2. new text end

new text begin Powers; may make grants. new text end

new text begin (a) Except as otherwise provided in this
section, the White Community Hospital District shall be organized and have the powers
and duties provided in Minnesota Statutes, sections 447.31, except subdivisions 2, 5, and
6; 447.32, subdivisions 5, 7, and 9; 447.345; 447.37; and 447.38.
new text end

new text begin (b) The hospital district may levy taxes as provided in this section to provide funding
to make grants to the White Community Hospital and any affiliated health care facility or
provider for any purpose authorized for hospital districts in Minnesota Statutes, sections
447.31 to 447.38, except 447.331. A grant must not be made under this section until the
governing body of the White Community Hospital, and any of its affiliated health care
facilities or providers receiving a grant, have entered into a written agreement with the
hospital district board stating that the governing body will comply with and is subject to
all provisions of the Minnesota open meeting law in Minnesota Statutes, chapter 13D.
new text end

new text begin Subd. 3. new text end

new text begin Annexation; detachment. new text end

new text begin Once the hospital district is established, any
other city, town, or unorganized area in St. Louis County may join the hospital district
in the same manner provided in subdivision 1 for establishment of the hospital district.
A city, town, or unorganized area that is a member of the hospital district may detach
from the district in the same manner as it may join. An annexation to or detachment
from the hospital district is effective for taxes payable in the following calendar year if
the resolution is adopted, or in the case of an unorganized area the petition submitted
to the county auditor, before July 1 of the levy year. A resolution adopted or petition
submitted after July 1 of any year is effective for the taxes payable the year following
the next levy year.
new text end

new text begin Subd. 4. new text end

new text begin Unorganized areas. new text end

new text begin An unorganized area in St. Louis County shall
become a member of the hospital district if at least 51 percent of the residents of the
unorganized area signed a petition submitted to the hospital district board and the county
auditor requesting to participate in the hospital district.
new text end

new text begin Subd. 5. new text end

new text begin Hospital district board. new text end

new text begin The hospital district shall be governed by a
hospital board composed of one member of each participating city and town's governing
body, appointed by the governing body. If the hospital district only has two members,
each member city or town shall appoint two board members. The hospital district board
must appoint from among its members a chair, clerk, treasurer, and any other officers the
board deems necessary or useful. The St. Louis County Board of Commissioners shall
appoint a resident of any unorganized area that is participating in the hospital district. All
board members serve at the pleasure of the respective appointing authorities.
new text end

new text begin Subd. 6. new text end

new text begin No compensation; expenses. new text end

new text begin Board members shall serve without
compensation but shall be eligible for per diem and expenses provided by, and at the
discretion of, their respective appointing authorities.
new text end

new text begin Subd. 7. new text end

new text begin Operating tax levy. new text end

new text begin The hospital district board may levy a tax as
provided in Minnesota Statutes, section 447.34, except as provided in this subdivision.
If the hospital district board levies it must be a uniform tax rate levied against the net
tax capacity of all taxable properties located within each participating city, town, or
unorganized area. The maximum amount that may be levied in the hospital district must
not exceed 0.066088 percent of the fully taxable market value of all taxable properties
located within each participating city, town, or unorganized area.
new text end

new text begin Any tax levied by the hospital district is in addition to all other taxes levied on the
property, including taxes levied for any other hospital purpose by a participating city
or town. The levy must be disregarded in the calculation of all other rate or per capita
levy limitations imposed by law.
new text end

new text begin EFFECTIVE DATE; NO LOCAL APPROVAL. new text end

new text begin This section is effective the
day following final enactment without local approval under Minnesota Statutes, section
645.023, subdivision 1, paragraph (a), for taxes levied in 2008, payable in 2009, and
thereafter.
new text end

Sec. 69. new text begin VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION;
STORM SEWER UTILITY FEES.
new text end

new text begin Notwithstanding any other law to the contrary and pursuant to joint powers
agreements authorized under Minnesota Statutes, sections 103B.211 and 471.59, the
Vadnais Lake Area Water Management Organization may certify to the county auditor any
fees or charges imposed by the organization under Minnesota Statutes, section 103B.211
or 444.075, and the parcels on which the charges are imposed. The county auditor shall
extend the charges on the property tax statements. The amounts must be certified by
November 30 to appear on statements for taxes payable in the following year. The charges,
if not paid, become delinquent and are subject to the same penalties, the same rate of
interest, and become a lien upon the property in the same manner, as real property taxes.
The charges shall be paid to the Vadnais Lake Area Water Management Organization by
the county auditor in the same manner and at the same time as property taxes. The county
auditor may charge the Vadnais Lake Area Water Management Organization a fee in the
amount necessary to recover the costs of administering the charges.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 70. new text begin CITY OF BROOKLYN CENTER; PARTICIPATION IN CRIME-FREE
MULTIHOUSING PROGRAM.
new text end

new text begin (a) In addition to the requirements of Minnesota Statutes, section 273.128, if
property located in the city of Brooklyn Center qualifies under paragraph (b), the owners
or managers must complete the three phases of the city's crime-free multihousing program
and the qualifying property must be annually certified by the police as participating
in the program. If a qualifying property is not certified within one year after it is first
determined to be a qualifying property under paragraph (b), or does not annually maintain
its certification in the program, the city shall notify the property owner that the qualifying
property must comply with the requirements of this section to maintain its classification
as class 4d property. If a qualifying property is not in compliance within one year after
receiving the notice from the city, the city shall issue a second notice and require the
owners to enter into a plan to achieve compliance within one year. If, upon expiration
of the one-year time period, the qualifying property has not been certified by the police
as completing the program, the city shall notify the commissioner of the Housing
Finance Agency and the commissioner shall remove the property from the list of class 4d
properties certified to the assessor under Minnesota Statutes, section 273.128, subdivision
3. Once removed from the list, the property is not eligible for class 4d classification until
it complies with this section and its compliance has been certified to the Housing Finance
Agency by the city. Certification to the Housing Finance Agency must be made by May
15 to be effective for taxes payable in the following year.
new text end

new text begin (b) A property is a qualifying property for purposes of this section's requirements if
it satisfies each of the following requirements:
new text end

new text begin (1) the city offers a crime-free multihousing program through its city police;
new text end

new text begin (2) over the preceding three-year period, the number of police calls to the property
exceeded the city's average number of calls for multiunit rental properties for the period
by at least 25 percent, adjusted for the number of rental units;
new text end

new text begin (3) the police department has requested, in writing, the owners or managers of the
property to enroll in the crime-free multihousing program and the owners or managers
refused or failed to enroll within 60 days after the request, or failed to complete phases
one and three within 90 days and all three phases of the program within a one-year time
period; and
new text end

new text begin (4) the governing body of the city, by resolution, determines the property is a
qualifying property under clauses (1) to (3).
new text end

new text begin (c) Calls for police or emergency assistance in response to domestic abuse or
medical assistance shall not be counted toward the number of calls in paragraph (b), clause
(2). For purposes of this section, "domestic abuse" has the meaning given in Minnesota
Statutes, section 518B.01, subdivision 2.
new text end

new text begin (d) Low-income qualifying rental housing property classified as class 4d property
for taxes payable in 2008 must meet the requirements of this section by May 15, 2011.
new text end

new text begin EFFECTIVE DATE; LOCAL APPROVAL. new text end

new text begin This section is effective the day after
compliance by the governing body of the city of Brooklyn Center and its chief clerical
officer with Minnesota Statutes, section 645.021, subdivisions 2 and 3.
new text end

Sec. 71. new text begin ASSESSMENT OF PROPERTIES OF PURELY PUBLIC CHARITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin (a) To facilitate a review by the 2009 legislature of
the property tax exemption for property of nonprofit organizations as purely public
charities and the development of standards and criteria for the tax status of these facilities,
this section:
new text end

new text begin (1) requires the commissioner of revenue to conduct an analysis of standards applied
to determine the tax status of these organizations; and
new text end

new text begin (2) prohibits changes in assessment practices and policies regarding the property of
these organizations.
new text end

new text begin (b) The purpose of this study is to allow the legislature to evaluate whether the
judicially established rules and the assessment practices and policies in applying those
rules to determine the tax status of these properties ensure that public benefits are, at
least, commensurate with the costs of the exemption. The legislature does not intend, in
requiring this study, to indicate an intention to expand or to narrow the existing rules for
exempting institutions of purely public charity.
new text end

new text begin Subd. 2. new text end

new text begin Report by commissioner of revenue. new text end

new text begin (a) The commissioner of revenue
shall survey all county assessors on:
new text end

new text begin (1) the tax status of property of institutions of purely public charity located in the
state, including detail on the type of organization and the use of the property; and
new text end

new text begin (2) their practices and policies in determining the tax status of property of institutions
of purely public charity, including the extent to which the assessment practices and
policies require the institutions to provide goods or services at free or below market prices
and on the treatment of government payments.
new text end

new text begin (b) The commissioner shall report the findings to the chairs of the house and senate
committees with jurisdiction over taxation by February 1, 2009.
new text end

new text begin Subd. 3. new text end

new text begin Moratorium on changes in assessment practices. new text end

new text begin (a) An assessor
may not change the current practices or policies used generally in assessing property
of institutions of purely public charities.
new text end

new text begin (b) An assessor may not change the assessment of the taxable status of an existing
property of an organization of purely public charity, unless the change is made as a result of
a change in ownership, occupancy or use of the facility, or to correct an error. For currently
taxable properties, the assessor may change the estimated market value of the property.
new text end

new text begin (c) This subdivision expires on the earlier of:
new text end

new text begin (1) the enactment of legislation establishing criteria for the property taxation of
purely public charities; or
new text end

new text begin (2) adjournment of the 2009 regular legislative session to a date in calendar year
2010.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for the 2008 assessment, taxes
payable in 2009.
new text end

Sec. 72. new text begin FEDERAL AUDIT; SCHOOL DISTRICT LEVY.
new text end

new text begin Subdivision 1. new text end

new text begin Calculation. new text end

new text begin The commissioner of education must calculate the total
amount of revenue that each school district needs to replace federal funds that have been
disallowed resulting from the settlement of an audit by the federal Office of Inspector
General of Local Collaborative Time Study school-based services claimed in Minnesota.
new text end

new text begin Subd. 2. new text end

new text begin State aid. new text end

new text begin The commissioner of education must make a state aid payment
to each school district in fiscal year 2009 equal to one-third of the amount calculated in
subdivision 1.
new text end

new text begin Subd. 3. new text end

new text begin Levy. new text end

new text begin A school district may levy a property tax for taxes payable in 2010
and 2011 only, not to exceed one-third of the amount calculated in subdivision 1 in each
year.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin The amount necessary to fund the payments required
under subdivision 2 is appropriated in fiscal year 2009 to the commissioner of education.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 73. new text begin SCHOOL DISTRICT LEASE PURCHASES; REVERSE
REFERENDUM.
new text end

new text begin Subdivision 1. new text end

new text begin Limitation. new text end

new text begin After the effective date of this section, a school district
located wholly or partially within the borders of a city of the first class with a population
of less than 100,000 inhabitants must not enter into a binding legal agreement under
Minnesota Statutes, section 126C.40, subdivision 6, without first holding a school board
meeting authorizing that contract and adopting a written resolution authorizing the
contract.
new text end

new text begin Subd. 2. new text end

new text begin Board Meeting. new text end

new text begin The school board must allow for public testimony on
the proposed contract before adopting a written resolution authorizing the contract. The
resolution becomes final 45 days after its adoption unless a petition has been filed under
subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Reverse referendum. new text end

new text begin A referendum on the question of authorizing the
lease purchase contract must be called by the board upon the written petition of qualified
voters of the district. A referendum to enter into a lease purchase contract must state the
amount of the contract. A petition authorized by this subdivision is effective if signed
by a number of qualified voters in excess of 15 percent of the registered voters of the
district on the day the petition is filed with the board. A referendum invoked by petition
must be held on a date determined by the school board. If an effective petition is filed
with the board by August 15, 2008, the board must hold the election at the time of the
2008 state primary. The approval of 50 percent plus one of those voting on the question is
required to authorize the contract.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 74. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2006, section 273.11, subdivisions 14 and 14a, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2006, section 273.111, subdivision 6, new text end new text begin is repealed.
new text end

new text begin (c) new text end new text begin Minnesota Statutes 2006, section 473.4461, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (a) and (c) are effective for taxes payable in 2009
and thereafter. Paragraph (b) is effective for taxes payable in 2010 and thereafter.
new text end

ARTICLE 6

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2006, section 297A.70, subdivision 2, is amended to
read:

Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council new text begin or the Department of Transportation new text end , for its purchases
of vehicles and repair parts to equip operations provided for in deleted text begin section deleted text end new text begin sections 174.90 and
new text end 473.4051 new text begin , including, but not limited to, the Northstar Corridor rail project new text end ;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) sales to public libraries, public library systems, multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5,
except for leases entered into by the United States or its agencies or instrumentalities; or

(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
(2), and prepared food, candy, and soft drinks, except for lodging, prepared food, candy,
and soft drinks purchased directly by the United States or its agencies or instrumentalities.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, section 297A.70, subdivision 8, is amended to read:

Subd. 8.

Regionwide public safety radio communication system; products and
services.

Products and services including, but not limited to, end user equipment used
for construction, ownership, operation, maintenance, and enhancement of the backbone
system of the regionwide public safety radio communication system established under
sections 403.21 to , are exempt. For purposes of this subdivision, backbone
system is defined in section 403.21, subdivision 9. This subdivision is effective for
purchases, sales, storage, use, or consumption for use in the first and second phases of the
system, as defined in section 403.21, subdivisions 3, 10, and 11, deleted text begin and deleted text end that portion of the
third phase of the system that is located in the southeast district of the State Patrol and
the counties of Benton, Sherburne, Stearns, and Wright new text begin , and that portion of the system
that is located in Itasca County new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2007.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297A.71, subdivision 23, is amended to read:

Subd. 23.

Construction materials for qualified low-income housing projects.

(a)
Purchases of materials and supplies used or consumed in and equipment incorporated into
the construction, improvement, or expansion of qualified low-income housing projects are
exempt from the tax imposed under this chapter if the owner of the qualified low-income
housing project is:

(1) the public housing agency or housing and redevelopment authority of a political
subdivision;

(2) an entity exercising the powers of a housing and redevelopment authority within
a political subdivision;

(3) a limited partnership in which the sole new text begin or managing new text end general partner is an
authority under clause (1) or an entity under clause (2) new text begin or (4) new text end ;

(4) a nonprofit corporation subject to the provisions of chapter 317A, and qualifying
under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended; or

(5) an owner entity, as defined in Code of Federal Regulations, title 24, part 941.604,
for a qualified low-income housing project described in paragraph (b), clause (5).

This exemption applies regardless of whether the purchases are made by the owner
of the facility or a contractor.

(b) For purposes of this exemption, "qualified low-income housing project" means:

(1) a housing or mixed use project in which at least 20 percent of the residential units
are qualifying low-income rental housing units as defined in section 273.126;

(2) a federally assisted low-income housing project financed by a mortgage insured
or held by the United States Department of Housing and Urban Development under
United States Code, title 12, section 1701s, 1715l(d)(3), 1715l(d)(4), or 1715z-1; United
States Code, title 42, section 1437f; the Native American Housing Assistance and
Self-Determination Act, United States Code, title 25, section 4101 et seq.; or any similar
successor federal low-income housing program;

(3) a qualified low-income housing project as defined in United States Code, title
26, section 42(g), meeting all of the requirements for a low-income housing credit under
section 42 of the Internal Revenue Code regardless of whether the project actually applies
for or receives a low-income housing credit;

(4) a project that will be operated in compliance with Internal Revenue Service
revenue procedure 96-32; or

(5) a housing or mixed use project in which all or a portion of the residential units
are subject to the requirements of section 5 of the United States Housing Act of 1937.

(c) For a project, a portion of which is not used for low-income housing units,
the amount of purchases that are exempt under this subdivision must be determined by
multiplying the total purchases, as specified in paragraph (a), by the ratio of:

(1) the total gross square footage of units subject to the income limits under section
273.126, the financing for the project, the federal low-income housing tax credit, revenue
procedure 96-32, or section 5 of the United States Housing Act of 1937, as applicable
to the project; and

(2) the total gross square footage of all units in the project.

(d) The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied, and then refunded in the manner provided in section 297A.75.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 40. new text end

new text begin Construction materials; Central Corridor light rail transit. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the construction
or improvement of the Central Corridor light rail transit line and associated facilities
including, but not limited to, stations, park-and-ride facilities, and maintenance facilities,
are exempt. The tax must be imposed and collected as if the rate under section 297A.62,
subdivision 1, applied and then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 5.

Minnesota Statutes 2006, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 41. new text end

new text begin Construction materials; Northstar Corridor rail project. new text end

new text begin Materials
and supplies used or consumed in, and equipment incorporated into, the construction or
improvement of the Northstar Corridor rail project and associated facilities by a public
entity or under a contract with a public entity including, but not limited to, track and signal
improvements, stations, park-and-ride facilities, and maintenance facilities, are exempt.
The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied and then refunded in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after January 1, 2007.
new text end

Sec. 6.

Minnesota Statutes 2006, section 297A.75, is amended to read:

297A.75 REFUND; APPROPRIATION.

Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) capital equipment exempt under section 297A.68, subdivision 5;

(2) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(3) building materials for mineral production facilities exempt under section
297A.71, subdivision 14;

(4) building materials for correctional facilities under section 297A.71, subdivision
3;

(5) building materials used in a residence for disabled veterans exempt under section
297A.71, subdivision 11;

(6) elevators and building materials exempt under section 297A.71, subdivision 12;

(7) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;

(8) materials, supplies, fixtures, furnishings, and equipment for a county law
enforcement and family service center under section 297A.71, subdivision 26;

(9) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(10) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(11) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section 297A.68,
subdivision 37; deleted text begin and
deleted text end

(12) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (13) materials, supplies, and equipment for construction or improvement of projects
and facilities under section 297A.71, subdivisions 40 and 41.
new text end

Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;

(2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental
subdivision;

(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (9), the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilities; deleted text begin and deleted text end

(7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business deleted text begin . deleted text end new text begin ; and
new text end

new text begin (8) for subdivision 1, clause (13), the applicant must be the governmental entity that
owns or contracts for the project or facility.
new text end

Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10),
(11), deleted text begin or deleted text end (12) new text begin , or (13) new text end , the contractor, subcontractor, or builder must furnish to the refund
applicant a statement including the cost of the exempt items and the taxes paid on the
items unless otherwise specifically provided by this subdivision. The provisions of
sections 289A.40 and 289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

Subd. 4.

Interest.

Interest must be paid on the refund at the rate in section 270C.405
from 90 days after the refund claim is filed with the commissioner for taxes paid under
subdivision 1.

Subd. 5.

Appropriation.

new text begin (a) new text end The amount required to make the refunds new text begin , except for
refunds under subdivision 1, clause (13), new text end is annually appropriated to the commissioner.

new text begin (b) $15,000,000 in fiscal year 2009 is appropriated from the general fund to the
commissioner. The appropriation under this paragraph shall be used to make refunds of
sales tax for the exemptions under subdivision 1, clause (13). The appropriation does not
cancel and is available until expended. In fiscal years 2010 and 2011, the commissioner
shall make payments from the appropriation under this paragraph to the general fund
to reimburse it for the revenue loss in those years due to the extension of the sales tax
exemption to the Department of Transportation under section 297A.70, subdivision
2, clause (4).
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 297A.99, subdivision 1, as amended by Laws
2008, chapter 152, article 4, section 1, is amended to read:

Subdivision 1.

Authorization; scope.

(a) A political subdivision of this state may
impose a general sales tax (1) under section 297A.992, (2) under section 297A.993,
(3) if permitted by special law new text begin enacted prior to May 20, 2008 new text end , or (4) if the political
subdivision enacted and imposed the tax before the effective date of section 477A.016 and
its predecessor provision.

(b) This section governs the imposition of a general sales tax by the political
subdivision. The provisions of this section preempt the provisions of any special law:

(1) enacted before June 2, 1997, or

(2) enacted on or after June 2, 1997, new text begin new text end that does not explicitly exempt the special law
provision from this section's rules by reference.

(c) This section does not apply to or preempt a sales tax on motor vehicles or a
special excise tax on motor vehicles.

new text begin (d) Until after December 31, 2011, a political subdivision may not advertise,
promote, expend funds, or hold a referendum to support imposing a local option sales tax
unless the tax was authorized by a special law enacted prior to May 20, 2008.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2006, section 297B.03, is amended to read:

297B.03 EXEMPTIONS.

There is specifically exempted from the provisions of this chapter and from
computation of the amount of tax imposed by it the following:

(1) purchase or use, including use under a lease purchase agreement or installment
sales contract made pursuant to section 465.71, of any motor vehicle by the United States
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section 297A.67, subdivision 11;

(2) purchase or use of any motor vehicle by any person who was a resident of
another state or country at the time of the purchase and who subsequently becomes a
resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
such person began residing in the state of Minnesota and the motor vehicle was registered
in the person's name in the other state or country;

(3) purchase or use of any motor vehicle by any person making a valid election to be
taxed under the provisions of section 297A.90;

(4) purchase or use of any motor vehicle previously registered in the state of
Minnesota when such transfer constitutes a transfer within the meaning of section 118,
331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;

(5) purchase or use of any vehicle owned by a resident of another state and leased
to a Minnesota-based private or for-hire carrier for regular use in the transportation of
persons or property in interstate commerce provided the vehicle is titled in the state of
the owner or secured party, and that state does not impose a sales tax or sales tax on
motor vehicles used in interstate commerce;

(6) purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;

(7) purchase of a motor vehicle for use as an ambulance by an ambulance service
licensed under section 144E.10;

(8) purchase of a motor vehicle by or for a public library, as defined in section
134.001, subdivision 2, as a bookmobile or library delivery vehicle;

(9) purchase of a ready-mixed concrete truck;

(10) purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles,
vans, or pickup trucks;

(11) purchase or use of a motor vehicle by a corporation, society, association,
foundation, or institution organized and operated exclusively for charitable, religious,
or educational purposes, except a public school, university, or library, but only if the
vehicle is:

(i) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a
passenger automobile, as defined in section 168.011, if the automobile is designed and
used for carrying more than nine persons including the driver; and

(ii) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose;

(12) purchase of a motor vehicle for use by a transit provider exclusively to provide
transit service is exempt if the transit provider is either (i) receiving financial assistance or
reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29,
473.388, or 473.405;

(13) purchase or use of a motor vehicle by a qualified business, as defined in section
469.310, located in a job opportunity building zone, if the motor vehicle is principally
garaged in the job opportunity building zone and is primarily used as part of or in direct
support of the person's operations carried on in the job opportunity building zone. The
exemption under this clause applies to sales, if the purchase was made and delivery
received during the duration of the job opportunity building zone. The exemption under
this clause also applies to any local sales and use tax deleted text begin . deleted text end new text begin ;
new text end

new text begin (14) purchase outside the United States of a passenger automobile, as defined in
section 168.011, subdivision 7, or motorcycle, as defined in section 168.011, subdivision
26, by a member of the United States armed forces while the member is serving outside the
United States in federal active military service, as defined in section 190.05, subdivision
5c, limited to one qualifying motor vehicle during the servicemember's lifetime; and
new text end

new text begin (15) purchase of a leased vehicle by the lessee who was a participant in a
lease-to-own program from a charitable organization that is:
new text end

new text begin (i) described in section 501(c)(3) of the Internal Revenue Code; and
new text end

new text begin (ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) Clauses (1) to (14) are effective for sales and purchases
made after December 31, 2007, and for other motor vehicles for which the tax first
becomes due after December 31, 2007.
new text end

new text begin (b) Clause (15) is effective for sales and purchases made after June 30, 2008.
new text end

Sec. 9.

Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by
Laws 1998, chapter 389, article 8, section 28, is amended to read:

Subd. 3.

Use of revenues.

Revenues received from taxes authorized by subdivisions
1 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or a
portion of the expenses of constructing and deleted text begin operating deleted text end new text begin improving new text end facilities as part of an
urban revitalization project in downtown Mankato known as Riverfront 2000. Authorized
expenses include, but are not limited to, acquiring property and paying relocation expenses
related to the development of Riverfront 2000 and related facilities, and securing or paying
debt service on bonds or other obligations issued to finance the construction of Riverfront
2000 and related facilities. For purposes of this section, "Riverfront 2000 and related
facilities" means a civic-convention center, an arena, a riverfront park, a technology center
and related educational facilities, and all publicly owned real or personal property that
the governing body of the city determines will be necessary to facilitate the use of these
facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
landscaping. new text begin It also includes the performing arts theatre and the Southern Minnesota
Women's Hockey Exposition Center, attached to the Mankato Civic Center for use by
Minnesota State University, Mankato.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and after compliance with section 11.
new text end

Sec. 10.

Laws 1991, chapter 291, article 8, section 27, subdivision 4, as amended by
Laws 2005, First Special Session chapter 3, article 5, section 25, is amended to read:

Subd. 4.

Expiration of taxing authority and expenditure limitation.

The
authority granted by subdivisions 1 and 2 to the city to impose a sales tax and an excise
tax shall expire on deleted text begin December 31, 2015, unless sufficient revenues are not available to
defease any bonds or obligations issued to finance construction of Riverfront 2000 and
related facilities. If sufficient funds are not available to defease the bonds, the tax expires deleted text end
December 31, 2018 deleted text begin , but all revenues from taxes imposed after December 31, 2015, must be
used to defease the bonds deleted text end . The city may, by ordinance, terminate the tax at an earlier date.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and after compliance with section 11.
new text end

Sec. 11. new text begin CITY OF MANKATO, LOCAL TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Food and beverage tax authorized. new text end

new text begin Notwithstanding Minnesota
Statutes, section 477A.016, or any ordinance, city charter, or other provision of law, the
city of Mankato may, by ordinance, impose a sales tax of up to one percent on the gross
receipts on all sales of food and beverages by a restaurant or place of refreshment, as
defined by resolution of the city, that are located within the city. For purposes of this
section, "food and beverages" include retail on-sale of intoxicating liquor and fermented
malt beverages.
new text end

new text begin Subd. 2. new text end

new text begin Entertainment tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any ordinance, city charter, or other provision of law, the city of Mankato
may, by ordinance, impose a tax of up to one percent on the gross receipts on admissions to
an entertainment event located within the city. For purposes of this section "entertainment
event" means any event for which persons pay money in order to be admitted to the
premises and to be entertained including, but not limited to, theaters, concerts, and
sporting events.
new text end

new text begin Subd. 3. new text end

new text begin Use of proceeds from authorized taxes. new text end

new text begin The proceeds of any tax imposed
under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses
of operation and maintenance of the Riverfront 2000 and related facilities, including a
performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center,
attached to the Mankato Civic Center for use by Minnesota State University, Mankato.
Authorized expenses include securing or paying debt service on bonds or other obligations
issued to finance the construction of the facilities.
new text end

new text begin Subd. 4. new text end

new text begin Collection, administration, and enforcement. new text end

new text begin If the city desires, it may
enter into an agreement with the commissioner of revenue to administer, collect, and
enforce the taxes authorized under subdivisions 1 and 2. If the commissioner agrees
to collect the tax, the provisions of Minnesota Statutes, section 297A.99, related to
collection, administration, and enforcement apply.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Mankato and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 12. new text begin COOK COUNTY; LODGING AND ADMISSIONS TAXES.
new text end

new text begin Subdivision 1. new text end

new text begin Lodging tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, the Board of
Commissioners of Cook County may impose, by ordinance, a tax of up to one percent on
the gross receipts subject to the lodging tax under Minnesota Statutes, section 469.190.
This tax is in addition to any tax imposed under Minnesota Statutes, section 469.190, and
the total tax imposed under that section and this provision must not exceed four percent.
new text end

new text begin Subd. 2. new text end

new text begin Admissions and recreation tax. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, the Board of
Commissioners of Cook County may impose, by ordinance, a tax of up to three percent on
admissions to entertainment and recreational facilities and rental of recreation equipment.
new text end

new text begin Subd. 3. new text end

new text begin Use of taxes. new text end

new text begin The taxes imposed in subdivisions 1 and 2 must be used
to fund a new Cook County Event and Visitors Bureau as established by the Board of
Commissioners of Cook County. The Board of Commissioners of Cook County must
annually review the budget of the Cook County Event and Visitors Bureau. The event and
visitors bureau may not receive revenues raised from the taxes imposed in subdivisions 1
and 2 until the board of commissioners approves the annual budget.
new text end

new text begin Subd. 4. new text end

new text begin Termination. new text end

new text begin The taxes imposed in subdivisions 1 and 2 terminate 15
years after they are first imposed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases after June
30, 2008.
new text end

Sec. 13. new text begin CITY OF CLEARWATER; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, pursuant to the
approval of the voters on November 7, 2006, the city of Clearwater may impose by
ordinance a sales and use tax of up to one-half of one percent for the purposes specified in
subdivision 2. Except as otherwise provided in this section, the provisions of Minnesota
Statutes, section 297A.99, govern the imposition, administration, collection, and
enforcement of the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, the city of Clearwater
may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
engaged within the city in the business of selling motor vehicles at retail.
new text end

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin The proceeds of the tax imposed under this section shall
be used to pay for the costs of acquisition, construction, improvement, and development
of a pedestrian bridge, and land and buildings for a community and recreation center. The
total amount of revenues from the taxes in subdivisions 1 and 2 that may be used to fund
these projects is $12,000,000 plus any associated bond costs.
new text end

new text begin Subd. 4. new text end

new text begin Bonding authority. new text end

new text begin The city of Clearwater may issue bonds in an amount
not to exceed $12,000,000 under Minnesota Statutes, chapter 475, to finance the capital
expenditures and improvements authorized by the referendum under subdivision 1. An
election to approve the bonds under Minnesota Statutes, section 475.59, is not required.
The issuance of bonds under this subdivision is not subject to Minnesota Statutes, section
275.60 or 275.61. The debt represented by the bonds must not be included in computing
any debt limitations applicable to the city, and the levy of taxes required by Minnesota
Statutes, section 475.61, to pay the principal or any interest on the bonds must not be
subject to any levy limitation.
new text end

new text begin Subd. 5. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under subdivision 1 terminates at
the earlier of (1) 20 years after the date of initial imposition of the tax, or (2) when the
city council determines that sufficient funds have been raised from the tax to finance the
capital and administrative costs of the improvements described in subdivision 3, plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
4, including interest on the bonds. Any funds remaining after completion of the projects
specified in subdivision 3 and retirement or redemption of the bonds in subdivision 4 may
be placed in the general fund of the city. The tax imposed under subdivision 1 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by the
governing body of the city of Clearwater with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end

Sec. 14. new text begin CITY OF NORTH MANKATO; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
the approval of the voters on November 7, 2006, the city of North Mankato may impose
by ordinance a sales and use tax of one-half of one percent for the purposes specified
in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the
imposition, administration, collection, and enforcement of the taxes authorized under
this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the tax authorized by
subdivision 1 must be used to pay all or part of the capital costs of the following projects:
new text end

new text begin (1) the local share of the Trunk Highway 14/County State-Aid Highway 41
interchange project;
new text end

new text begin (2) development of regional parks and hiking and biking trails;
new text end

new text begin (3) expansion of the North Mankato Taylor Library;
new text end

new text begin (4) riverfront redevelopment; and
new text end

new text begin (5) lake improvement projects.
new text end

new text begin The total amount of revenues from the tax in subdivision 1 that may be used to fund
these projects is $6,000,000 plus any associated bond costs.
new text end

new text begin Subd. 3. new text end

new text begin Bonds. new text end

new text begin (a) The city of North Mankato, pursuant to the approval of the
voters at the November 7, 2006 referendum authorizing the imposition of the taxes in
this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
administrative expenses for the projects described in subdivision 2, in an amount that
does not exceed $6,000,000. A separate election to approve the bonds under Minnesota
Statutes, section 475.58, is not required.
new text end

new text begin (b) The debt represented by the bonds is not included in computing any debt
limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
475.61, to pay principal and interest on the bonds is not subject to any levy limitation.
new text end

new text begin Subd. 4. new text end

new text begin Termination of taxes. new text end

new text begin The tax imposed under subdivision 1 expires
when the city council determines that the amount of revenues received from the taxes
to pay for the projects under subdivision 2 first equals or exceeds $6,000,000 plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
3, including interest on the bonds. Any funds remaining after completion of the projects
and retirement or redemption of the bonds shall be placed in a capital facilities and
equipment replacement fund of the city. The tax imposed under subdivision 1 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by the
governing body of the city of North Mankato with Minnesota Statutes, section 645.021,
subdivision 3.
new text end

Sec. 15. new text begin CITY OF WINONA; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the
voters at a general or special election held before December 31, 2009, the city of Winona
may impose by ordinance a sales and use tax of up to one-half of one percent for the
purpose specified in subdivision 2. Except as otherwise provided in this section, the
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin The proceeds of the tax imposed under this section shall
be used to pay the city-borne costs for the construction of a street connection from the city
of Winona to Minnesota marked State Highways 61 and 43. The construction will provide
access to the city's newly built industrial park and additional access to a hospital. The total
amount of revenues from the tax in subdivision 1 that may be used to fund this project is
$8,000,000 plus any associated bond costs.
new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin The city of Winona may issue bonds in an amount
not to exceed $8,000,000 under Minnesota Statutes, chapter 475, to finance the capital
expenditures under subdivision 2. An election to approve the bonds under Minnesota
Statutes, section 475.58, is not required. The issuance of bonds under this subdivision is
not subject to Minnesota Statutes, section 275.60 or 275.61. The debt represented by the
bonds must not be included in computing any debt limitations applicable to the city, and
the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or
any interest on the bonds must not be subject to any levy limitation.
new text end

new text begin Subd. 4. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under subdivision 1 terminates
at the earlier of: (1) five years after the date of initial imposition of the tax; or (2) when
the city council determines that sufficient funds have been raised from the tax to finance
the capital and administrative costs of the project described in subdivision 2, plus the
additional amount needed to pay the costs related to issuance of bonds under subdivision
3, including interest on the bonds. Any funds remaining after completion of the project
specified in subdivision 2 and retirement or redemption of the bonds in subdivision 3 may
be placed in the general fund of the city. The tax imposed under subdivision 1 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by
the governing body of the city of Winona with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Laws 2005, First Special Session chapter 3, article 5, section 24, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon enactment of section 9.
new text end

ARTICLE 7

JUNE ACCELERATED TAX PAYMENTS

Section 1.

Minnesota Statutes 2006, section 289A.20, subdivision 4, as amended by
Laws 2008, chapter 154, article 6, section 1, is amended to read:

Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $120,000 or more during a fiscal year ending June
30 must remit the June liability for the next year in the following manner:

(1) Two business days before June 30 of the year, the vendor must remit deleted text begin 80 deleted text end new text begin 85 new text end
percent of the estimated June liability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.

(c) A vendor having a liability of:

(1) $20,000 or more in the fiscal year ending June 30, 2005; or

(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years
thereafter,

must remit all liabilities on returns due for periods beginning in the subsequent calendar
year by electronic means on or before the 20th day of the month following the month in
which the taxable event occurred, or on or before the 20th day of the month following the
month in which the sale is reported under section 289A.18, subdivision 4, except for deleted text begin 80 deleted text end new text begin 85 new text end
percent of the estimated June liability, which is due two business days before June 30. The
remaining amount of the June liability is due on August 20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.60, subdivision 15, as amended by
Laws 2008, chapter 154, article 6, section 2, is amended to read:

Subd. 15.

Accelerated payment of June sales tax liability; penalty for
underpayment.

For payments made after December 31, 2006, if a vendor is required by
law to submit an estimation of June sales tax liabilities and deleted text begin 80 deleted text end new text begin 85 new text end percent payment by a
certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual
June liability required to be paid in June less the amount remitted in June. The penalty
must not be imposed, however, if the amount remitted in June equals the lesser of deleted text begin 80 deleted text end new text begin 85 new text end
percent of the preceding May's liability or deleted text begin 80 deleted text end new text begin 85 new text end percent of the average monthly liability
for the previous calendar year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297F.09, subdivision 10, as amended by Laws
2008, chapter 154, article 6, section 3, is amended to read:

Subd. 10.

Accelerated tax payment; cigarette or tobacco products distributor.

A cigarette or tobacco products distributor having a liability of $120,000 or more during a
fiscal year ending June 30, shall remit the June liability for the next year in the following
manner:

(a) Two business days before June 30 of the year, the distributor shall remit the
actual May liability and deleted text begin 80 deleted text end new text begin 85 new text end percent of the estimated June liability to the commissioner
and file the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the distributor shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June, less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:

(1) deleted text begin 80 deleted text end new text begin 85 new text end percent of the actual June liability; or

(2) deleted text begin 80 deleted text end new text begin 85 new text end percent of the preceding May's liability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

Sec. 4.

Minnesota Statutes 2006, section 297G.09, subdivision 9, as amended by Laws
2008, chapter 154, article 6, section 4, is amended to read:

Subd. 9.

Accelerated tax payment; penalty.

A person liable for tax under this
chapter having a liability of $120,000 or more during a fiscal year ending June 30, shall
remit the June liability for the next year in the following manner:

(a) Two business days before June 30 of the year, the taxpayer shall remit the actual
May liability and deleted text begin 80 deleted text end new text begin 85 new text end percent of the estimated June liability to the commissioner and file
the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the taxpayer shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:

(1) deleted text begin 80 deleted text end new text begin 85 new text end percent of the actual June liability; or

(2) deleted text begin 80 deleted text end new text begin 85 new text end percent of the preceding May liability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with June 2009 tax
liabilities.
new text end

ARTICLE 8

SPECIAL TAXES

Section 1.

Minnesota Statutes 2006, section 163.051, subdivision 1, is amended to read:

Subdivision 1.

Tax authorized.

new text begin (a) Except as provided in paragraph (b), new text end the board
of commissioners of each metropolitan county is authorized to levy a wheelage tax of $5
for the year 1972 and each subsequent year thereafter by resolution on each motor vehicle deleted text begin ,
except motorcycles as defined in section 169.01, subdivision 4, which deleted text end new text begin that new text end is kept in such
county when not in operation and deleted text begin which deleted text end new text begin that new text end is subject to annual registration and taxation
under chapter 168. The board may provide by resolution for collection of the wheelage
tax by county officials or it may request that the tax be collected by the state registrar of
motor vehicles, and the state registrar of motor vehicles shall collect such tax on behalf
of the county if requested, as provided in subdivision 2.

new text begin (b) The following vehicles are exempt from the wheelage tax:
new text end

new text begin (1) motorcycles, as defined in section 169.01, subdivision 4;
new text end

new text begin (2) motorized bicycles, as defined in section 169.01, subdivision 4a;
new text end

new text begin (3) electric-assisted bicycles, as defined in section 169.01, subdivision 4b; and
new text end

new text begin (4) motorized foot scooters, as defined in section 169.01, subdivision 4c.
new text end

Sec. 2.

Minnesota Statutes 2006, section 168.012, subdivision 1, is amended to read:

Subdivision 1.

Vehicles exempt from tax, fees, or plate display.

(a) The following
vehicles are exempt from the provisions of this chapter requiring payment of tax and
registration fees, except as provided in subdivision 1c:

(1) vehicles owned and used solely in the transaction of official business by the
federal government, the state, or any political subdivision;

(2) vehicles owned and used exclusively by educational institutions and used solely
in the transportation of pupils to and from those institutions;

(3) vehicles used solely in driver education programs at nonpublic high schools;

(4) vehicles owned by nonprofit charities and used exclusively to transport disabled
persons for charitable, religious, or educational purposes;

new text begin (5) vehicles owned by nonprofit charities and used exclusively for disaster response
and related activities;
new text end

deleted text begin (5) deleted text end new text begin (6) new text end ambulances owned by ambulance services licensed under section 144E.10,
the general appearance of which is unmistakable; and

deleted text begin (6) deleted text end new text begin (7) new text end vehicles owned by a commercial driving school licensed under section
171.34, or an employee of a commercial driving school licensed under section 171.34, and
the vehicle is used exclusively for driver education and training.

(b) Vehicles owned by the federal government, municipal fire apparatuses including
fire-suppression support vehicles, police patrols, and ambulances, the general appearance
of which is unmistakable, are not required to register or display number plates.

(c) Unmarked vehicles used in general police work, liquor investigations, or arson
investigations, and passenger automobiles, pickup trucks, and buses owned or operated by
the Department of Corrections, must be registered and must display appropriate license
number plates, furnished by the registrar at cost. Original and renewal applications for
these license plates authorized for use in general police work and for use by the Department
of Corrections must be accompanied by a certification signed by the appropriate chief of
police if issued to a police vehicle, the appropriate sheriff if issued to a sheriff's vehicle,
the commissioner of corrections if issued to a Department of Corrections vehicle, or the
appropriate officer in charge if issued to a vehicle of any other law enforcement agency.
The certification must be on a form prescribed by the commissioner and state that the
vehicle will be used exclusively for a purpose authorized by this section.

(d) Unmarked vehicles used by the Departments of Revenue and Labor and Industry,
fraud unit, in conducting seizures or criminal investigations must be registered and must
display passenger vehicle classification license number plates, furnished at cost by the
registrar. Original and renewal applications for these passenger vehicle license plates
must be accompanied by a certification signed by the commissioner of revenue or the
commissioner of labor and industry. The certification must be on a form prescribed by
the commissioner and state that the vehicles will be used exclusively for the purposes
authorized by this section.

(e) Unmarked vehicles used by the Division of Disease Prevention and Control of the
Department of Health must be registered and must display passenger vehicle classification
license number plates. These plates must be furnished at cost by the registrar. Original
and renewal applications for these passenger vehicle license plates must be accompanied
by a certification signed by the commissioner of health. The certification must be on a
form prescribed by the commissioner and state that the vehicles will be used exclusively
for the official duties of the Division of Disease Prevention and Control.

(f) Unmarked vehicles used by staff of the Gambling Control Board in gambling
investigations and reviews must be registered and must display passenger vehicle
classification license number plates. These plates must be furnished at cost by the
registrar. Original and renewal applications for these passenger vehicle license plates must
be accompanied by a certification signed by the board chair. The certification must be on a
form prescribed by the commissioner and state that the vehicles will be used exclusively
for the official duties of the Gambling Control Board.

(g) All other motor vehicles must be registered and display tax-exempt number
plates, furnished by the registrar at cost, except as provided in subdivision 1c. All
vehicles required to display tax-exempt number plates must have the name of the state
department or political subdivision, nonpublic high school operating a driver education
program, or licensed commercial driving school, plainly displayed on both sides of the
vehicle; except that each state hospital and institution for persons who are mentally ill
and developmentally disabled may have one vehicle without the required identification
on the sides of the vehicle, and county social service agencies may have vehicles used
for child and vulnerable adult protective services without the required identification on
the sides of the vehicle. This identification must be in a color giving contrast with that
of the part of the vehicle on which it is placed and must endure throughout the term of
the registration. The identification must not be on a removable plate or placard and must
be kept clean and visible at all times; except that a removable plate or placard may be
utilized on vehicles leased or loaned to a political subdivision or to a nonpublic high
school driver education program.

Sec. 3.

Minnesota Statutes 2006, section 168.012, is amended by adding a subdivision
to read:

new text begin Subd. 2c. new text end

new text begin Spotter trucks. new text end

new text begin Spotter trucks, as defined in section 169.01, subdivision
7a, must not be taxed as motor vehicles using the public streets and highways, and are
exempt from the provisions of this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and expires June 30, 2013.
new text end

Sec. 4.

Minnesota Statutes 2006, section 168.013, subdivision 1f, is amended to read:

Subd. 1f.

Bus; commuter van.

(a) On all intercity buses, the tax during each
the first two years of vehicle life shall be based on the gross weight of the vehicle and
graduated according to the following schedule:

	Gross Weight of Vehicle . Tax
	Under 6,000 lbs. . $125
	6,000 to 8,000 lbs., incl. . 125
	8,001 to 10,000 lbs., incl. . 125
	10,001 to 12,000 lbs., incl. . 150
	12,001 to 14,000 lbs., incl. . 190
	14,001 to 16,000 lbs., incl. . 210
	16,001 to 18,000 lbs., incl. . 225
	18,001 to 20,000 lbs., incl. . 260
	20,001 to 22,000 lbs., incl. . 300
	22,001 to 24,000 lbs., incl. . 350
	24,001 to 26,000 lbs., incl. . 400
	26,001 to 28,000 lbs., incl. . 450
	28,001 to 30,000 lbs., incl. . 500
	30,001 and over . 550

(b) During each of the third and fourth years of vehicle life, the tax shall be 75
percent of the foregoing scheduled tax; during the fifth year of vehicle life, the tax shall be
50 percent of the foregoing scheduled tax; during the sixth year of vehicle life, the tax
shall be 37-1/2 percent of the foregoing scheduled tax; and during the seventh and each
succeeding year of vehicle life, the tax shall be 25 percent of the foregoing scheduled tax;
provided that the annual tax paid in any year of its life for an intercity bus shall be not less
than $175 for a vehicle of over 25 passenger seating capacity and not less than $125 for a
vehicle of 25 passenger and less seating capacity.

(c) On all intracity buses operated by an auto transportation company in the business
of transporting persons for compensation as a common carrier and operating within the
limits of cities deleted text begin having populations in excess of 200,000 inhabitants deleted text end , the tax during each
year of the vehicle life of each such bus shall be deleted text begin $40 deleted text end deleted text begin ; on all of such intracity buses operated
deleted text end deleted text begin in cities having a population of less than 200,000 and more than 70,000 inhabitants, the
deleted text end deleted text begin tax during each year of vehicle life of each bus shall be $10; and on all of such intracity
deleted text end deleted text begin buses operating in cities having a population of less than 70,000 inhabitants, the tax during
deleted text end deleted text begin each year of vehicle life of each bus shall be deleted text end $2.

(d) On all other buses and commuter vans, as defined in section 168.126, the tax
during each of the first three years of the vehicle life shall be based on the gross weight of
the vehicle and graduated according to the following schedule: Where the gross weight
of the vehicle is 6,000 pounds or less, $25. Where the gross weight of the vehicle is
more than 6,000 pounds, and not more than 8,000 pounds, the tax shall be $25 plus an
additional tax of $5 per ton for the ton or major portion in excess of 6,000 pounds. Where
the gross weight of the vehicle is more than 8,000 pounds, and not more than 20,000
pounds, the tax shall be $30 plus an additional tax of $10 per ton for each ton or major
portion in excess of 8,000 pounds. Where the gross weight of the vehicle is more than
20,000 pounds and not more than 24,000 pounds, the tax shall be $90 plus an additional
tax of $15 per ton for each ton or major portion in excess of 20,000 pounds. Where the
gross weight of the vehicle is more than 24,000 pounds and not more than 28,000 pounds,
the tax shall be $120 plus an additional tax of $25 per ton for each ton or major portion
in excess of 24,000 pounds. Where the gross weight of the vehicle is more than 28,000
pounds, the tax shall be $170 plus an additional tax of $30 per ton for each ton or major
portion in excess of 28,000 pounds.

(e) During the fourth and succeeding years of vehicle life, the tax shall be 80 percent
of the foregoing scheduled tax but in no event less than $20 per vehicle.

Sec. 5.

Minnesota Statutes 2006, section 168A.03, subdivision 1, is amended to read:

Subdivision 1.

No certificate issued.

The registrar shall not issue a certificate of
title for:

(1) a vehicle owned by the United States;

(2) a vehicle owned by a nonresident and not required by law to be registered in
this state;

(3) a vehicle owned by a nonresident and regularly engaged in the interstate
transportation of persons or property for which a currently effective certificate of title
has been issued in another state;

(4) a vehicle moved solely by animal power;

(5) an implement of husbandry;

(6) special mobile equipment;

(7) a self-propelled wheelchair or invalid tricycle;

(8) a trailer (i) having a gross weight of 4,000 pounds or less unless a secured party
holds an interest in the trailer or a certificate of title was previously issued by this state or
any other state or (ii) designed primarily for agricultural purposes except a recreational
vehicle or a manufactured home, both as defined in section 168.011, subdivisions 8 and 25;

(9) a snowmobile deleted text begin . deleted text end new text begin ; and
new text end

new text begin (10) a spotter truck, as defined in section 169.01, subdivision 7a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and expires June 30, 2013.
new text end

Sec. 6.

Minnesota Statutes 2006, section 169.01, is amended by adding a subdivision
to read:

new text begin Subd. 7a. new text end

new text begin Spotter truck. new text end

new text begin "Spotter truck" means a truck-tractor used exclusively for
staging or shuttling trailers in the course of a truck freight operation or freight shipping
operation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and expires June 30, 2013.
new text end

Sec. 7.

new text begin [169.228] SPOTTER TRUCKS.
new text end

new text begin Notwithstanding any other law, a spotter truck may be operated on public streets
and highways if:
new text end

new text begin (1) the operator has a valid class A, B, or C driver's license;
new text end

new text begin (2) the vehicle complies with the size, weight, and load restrictions under this
chapter;
new text end

new text begin (3) the vehicle meets all inspection requirements under section 169.781; and
new text end

new text begin (4) the vehicle is operated within a zone of two air miles from the truck freight
operation or freight shipping operation where the vehicle is housed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and expires June 30, 2013.
new text end

Sec. 8.

Minnesota Statutes 2006, section 169.781, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For purposes of sections 169.781 to 169.783:

(a) "Commercial motor vehicle" means:

(1) a commercial motor vehicle as defined in section 169.01, subdivision 75,
paragraph (a); deleted text begin and deleted text end

(2) each vehicle in a combination of more than 26,000 pounds deleted text begin . deleted text end new text begin ; and
new text end

new text begin (3) a spotter truck.
new text end

"Commercial motor vehicle" does not include deleted text begin (1) deleted text end a school bus or Head Start bus
displaying a certificate under section 169.451, deleted text begin (2) deleted text end a bus operated by the Metropolitan
Council or by a local transit commission created in chapter 458A, or deleted text begin (3) deleted text end a motor vehicle
deleted text begin that is deleted text end required to be placarded under Code of Federal Regulations, title 49, parts 100-185.

(b) "Commissioner" means the commissioner of public safety.

(c) "Owner" means a person who owns, or has control, under a lease of more than 30
days' duration, of one or more commercial motor vehicles.

(d) "Storage semitrailer" means a semitrailer that (1) is used exclusively to store
property at a location not on a street or highway, (2) does not contain any load when
moved on a street or highway, (3) is operated only during daylight hours, and (4) is marked
on each side of the semitrailer "storage only" in letters at least six inches high.

(e) "Building mover vehicle" means a vehicle owned or leased by a building mover
as defined in section 221.81, subdivision 1, paragraph (a), and used exclusively for
moving buildings.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and expires June 30, 2013.
new text end

Sec. 9.

Minnesota Statutes 2006, section 383A.80, subdivision 4, is amended to read:

Subd. 4.

Expiration.

The authority to impose the tax under this section expires
January 1, deleted text begin 2008 deleted text end new text begin 2013 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and the tax may be imposed on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2006, section 383A.81, subdivision 1, is amended to read:

Subdivision 1.

Creation.

An environmental response fund is created for the
purposes specified in this section. The taxes imposed by section 383A.80 must be
deposited in the fund. The board of county commissioners shall administer the fund either
as a county board deleted text begin , deleted text end new text begin or new text end a housing and redevelopment authority deleted text begin , or a regional rail authority deleted text end .

Sec. 11.

Minnesota Statutes 2006, section 383A.81, subdivision 2, is amended to read:

Subd. 2.

Uses of fund.

The fund created in subdivision 1 must be used for the
following purposes:

(1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;

(2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;

(3) paying for the costs of remediating the acquired land or property; new text begin or
new text end

(4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances deleted text begin ; or
deleted text end

deleted text begin (5) paying for the costs associated with improving the property for economic
development, recreational, housing, transportation or rail traffic deleted text end .

Sec. 12.

Minnesota Statutes 2006, section 383B.80, subdivision 4, is amended to read:

Subd. 4.

Expiration.

The authority to impose the tax under this section expires
January 1, deleted text begin 2008 deleted text end new text begin 2013 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and the tax may be imposed on or after that date.
new text end

Sec. 13.

new text begin [383C.798] COUNTY DEED AND MORTGAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose; rate. new text end

new text begin (a) The governing body of St. Louis
County may impose a mortgage registry and deed tax.
new text end

new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal.
new text end

new text begin (c) The rate of the deed tax equals .0001 of the amount.
new text end

new text begin Subd. 2. new text end

new text begin General law provisions apply. new text end

new text begin The taxes under this section apply to
the same base and must be imposed, collected, administered, and enforced in the same
manner as provided under chapter 287 for the state mortgage registry and deed taxes.
All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
subdivision 1, the term "St. Louis County" must be substituted for "the state," and the
revenue must be deposited as provided in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of revenues. new text end

new text begin All revenues from the tax are for the use of the
St. Louis County Board of Commissioners and must be deposited in the county's
environmental response fund under section 383C.799.
new text end

new text begin Subd. 4. new text end

new text begin Initial implementation. new text end

new text begin Documents presented for recording within 60
days after the date of imposition of the tax by the county that are acknowledged, sworn to
before a notary, or certified before the imposition date, must not be rejected for failure to
include the tax imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to impose the tax under this section expires
January 1, 2013.
new text end

Sec. 14.

new text begin [383C.799] ENVIRONMENTAL RESPONSE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin An environmental response fund is created for the
purposes specified in this section. The taxes imposed under section 383C.798 must be
deposited in the fund. The Board of County Commissioners shall administer the fund
either as a county board or a housing and redevelopment authority.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin The fund created in subdivision 1 must be used for the
following purposes:
new text end

new text begin (1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;
new text end

new text begin (2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;
new text end

new text begin (3) paying for the costs of remediating the acquired land or property; or
new text end

new text begin (4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances.
new text end

new text begin Subd. 3. new text end

new text begin Matching funds. new text end

new text begin In expending funds under this section, the county shall
seek matching funds from contamination cleanup funds administered by the commissioner
of the Department of Employment and Economic Development, the federal government,
the private sector, and any other source.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The county may pledge the proceeds from the taxes imposed by
section 383C.798 to bonds issued under this section and chapters 462, 469, and 475.
new text end

new text begin Subd. 5. new text end

new text begin Land sales. new text end

new text begin Land or property acquired under this section may be resold
at fair market value. Proceeds from the sale of the land must be deposited in the
environmental response fund.
new text end

Sec. 15.

new text begin [383D.75] COUNTY DEED AND MORTGAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose; rate. new text end

new text begin (a) The governing body of Dakota
County may impose a mortgage registry and deed tax.
new text end

new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal.
new text end

new text begin (c) The rate of the deed tax equals .0001 of the amount.
new text end

new text begin Subd. 2. new text end

new text begin General law provisions apply. new text end

new text begin The taxes under this section apply to
the same base and must be imposed, collected, administered, and enforced in the same
manner as provided under chapter 287 for the state mortgage registry and deed taxes.
All the provisions of chapter 287 apply to these taxes, except the rate is as specified in
subdivision 1, the term "Dakota County" must be substituted for "the state," and the
revenue must be deposited as provided in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of revenues. new text end

new text begin All revenues from the tax are for the use of
the Dakota County Board of Commissioners and must be deposited in the county's
environmental response fund under section new text end

new text begin Subd. 4. new text end

new text begin Initial implementation. new text end

new text begin Documents presented for recording within 60
days after the date of imposition of the tax by the county that are acknowledged, sworn to
before a notary, or certified before the imposition date, must not be rejected for failure to
include the tax imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to impose the tax under this section expires
January 1, 2013.
new text end

Sec. 16.

new text begin [383D.76] ENVIRONMENTAL RESPONSE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin An environmental response fund is created for the
purposes specified in this section. The taxes imposed under section 383D.75 must be
deposited in the fund. The Board of County Commissioners shall administer the fund
either as a county board or a housing and redevelopment authority.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin The fund created in subdivision 1 must be used for the
following purposes:
new text end

new text begin (1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;
new text end

new text begin (2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;
new text end

new text begin (3) paying for the costs of remediating the acquired land or property; or
new text end

new text begin (4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances.
new text end

new text begin Subd. 3. new text end

new text begin Matching funds. new text end

new text begin In expending funds under this section, the county shall
seek matching funds from contamination cleanup funds administered by the commissioner
of the Department of Employment and Economic Development, the Metropolitan Council,
the federal government, the private sector, and any other source.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The county may pledge the proceeds from the taxes imposed by
section to bonds issued under this chapter and chapters 462, 469, and 475.
new text end

new text begin Subd. 5. new text end

new text begin Land sales. new text end

new text begin Land or property acquired under this section may be resold
at fair market value. Proceeds from the sale of the land must be deposited in the
environmental response fund.
new text end

Sec. 17.

new text begin [383E.235] COUNTY DEED AND MORTGAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to impose; rate. new text end

new text begin (a) The governing body of Anoka
County may impose a mortgage registry and deed tax.
new text end

new text begin (b) The rate of the mortgage registry tax equals .0001 of the principal.
new text end

new text begin (c) The rate of the deed tax equals .0001 of the amount.
new text end

new text begin Subd. 2. new text end

new text begin General law provisions apply. new text end

new text begin The taxes under this section apply to
the same base and must be imposed, collected, administered, and enforced in the same
manner as provided under chapter 287 for the state mortgage registry and deed taxes.
All the provisions of chapter 287 apply to these taxes, except the rate is as specified
in subdivision 1, the term "Anoka County" must be substituted for "the state," and the
revenue must be deposited as provided in subdivision 3.
new text end

new text begin Subd. 3. new text end

new text begin Deposit of revenues. new text end

new text begin All revenues from the tax are for the use of the Anoka
County Board of Commissioners and must be deposited in the county's environmental
response fund under section 383E.236.
new text end

new text begin Subd. 4. new text end

new text begin Initial implementation. new text end

new text begin Documents presented for recording within 60
days after the date of imposition of the tax by the county that are acknowledged, sworn to
before a notary, or certified before the imposition date, must not be rejected for failure to
include the tax imposed under this section.
new text end

new text begin Subd. 5. new text end

new text begin Expiration. new text end

new text begin The authority to impose the tax under this section expires
January 1, 2013.
new text end

Sec. 18.

new text begin [383E.236] ENVIRONMENTAL RESPONSE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Creation. new text end

new text begin An environmental response fund is created for the
purposes specified in this section. The taxes imposed under section 383E.235 must be
deposited in the fund. The Board of County Commissioners shall administer the fund
either as a county board or a housing and redevelopment authority.
new text end

new text begin Subd. 2. new text end

new text begin Uses of fund. new text end

new text begin The fund created in subdivision 1 must be used for the
following purposes:
new text end

new text begin (1) acquisition through purchase or condemnation of lands or property which are
polluted or contaminated with hazardous substances;
new text end

new text begin (2) paying the costs associated with indemnifying or holding harmless the
entity taking title to lands or property from any liability arising out of the ownership,
remediation, or use of the land or property;
new text end

new text begin (3) paying for the costs of remediating the acquired land or property; or
new text end

new text begin (4) paying the costs associated with remediating lands or property which are polluted
or contaminated with hazardous substances.
new text end

new text begin Subd. 3. new text end

new text begin Matching funds. new text end

new text begin In expending funds under this section, the county shall
seek matching funds from contamination cleanup funds administered by the commissioner
of the Department of Employment and Economic Development, the Metropolitan Council,
the federal government, the private sector, and any other source.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The county may pledge the proceeds from the taxes imposed by
section 383E.235 to bonds issued under this section and chapters 462, 469, and 475.
new text end

new text begin Subd. 5. new text end

new text begin Land sales. new text end

new text begin Land or property acquired under this section may be resold
at fair market value. Proceeds from the sale of the land must be deposited in the
environmental response fund.
new text end

new text begin Subd. 6. new text end

new text begin DOT assistance. new text end

new text begin The commissioner of transportation shall collaborate with
the county and any affected municipality by providing technical assistance and support in
cleaning up a contaminated site related to a trunk highway or railroad improvement.
new text end

ARTICLE 9

FEDERAL UPDATE

Section 1.

Minnesota Statutes 2006, section 272.02, subdivision 13, is amended to read:

Subd. 13.

Emergency shelters for victims of domestic abuse.

Property used in
a continuous program to provide emergency shelter for victims of domestic abuse is
exempt, provided the organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code
deleted text begin of 1986, as amended through December 31, 1992 deleted text end , notwithstanding the fact that the
sponsoring organization receives funding under Section 8 of the United States Housing
Act of 1937, as amended.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 272.02, subdivision 20, is amended to read:

Subd. 20.

Transitional housing facilities.

Transitional housing facilities are
exempt. "Transitional housing facility" means a facility that meets the following
requirements. (i) It provides temporary housing to individuals, couples, or families. (ii)
It has the purpose of reuniting families and enabling parents or individuals to obtain
self-sufficiency, advance their education, get job training, or become employed in jobs
that provide a living wage. (iii) It provides support services such as child care, work
readiness training, and career development counseling; and a self-sufficiency program
with periodic monitoring of each resident's progress in completing the program's goals.
(iv) It provides services to a resident of the facility for at least three months but no longer
than three years, except residents enrolled in an educational or vocational institution or job
training program. These residents may receive services during the time they are enrolled
but in no event longer than four years. (v) It is owned and operated or under lease from a
unit of government or governmental agency under a property disposition program and
operated by one or more organizations exempt from federal income tax under section
501(c)(3) of the Internal Revenue Code deleted text begin of 1986, as amended through December 31,
1992 deleted text end . This exemption applies notwithstanding the fact that the sponsoring organization
receives financing by a direct federal loan or federally insured loan or a loan made by the
Minnesota Housing Finance Agency under the provisions of either Title II of the National
Housing Act new text begin , as amended, new text end or the Minnesota Housing Finance Agency Law of 1971 new text begin ,
chapter 462A, new text end or rules promulgated by the agency pursuant to it, and notwithstanding the
fact that the sponsoring organization receives funding under Section 8 of the United
States Housing Act of 1937, as amended.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 272.02, subdivision 21, is amended to read:

Subd. 21.

Property used to provide computing resources to University of
Minnesota.

Real and personal property, including leasehold or other personal property
interests, is exempt if it is owned and operated by a corporation of which more than 50
percent of the total voting power of the stock of the corporation is owned collectively by:
(i) the Board of Regents of the University of Minnesota, (ii) the University of Minnesota
Foundation, an organization exempt from federal income taxation under section 501(c)(3)
of the Internal Revenue Code deleted text begin of 1986, as amended through December 31, 1992 deleted text end , and (iii)
a corporation organized under chapter 317A, which by its articles of incorporation is
prohibited from providing pecuniary gain to any person or entity other than the regents
of the University of Minnesota; which property is used primarily to manage or provide
goods, services, or facilities utilizing or relating to large-scale advanced scientific
computing resources to the regents of the University of Minnesota and others.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2006, section 272.02, subdivision 27, is amended to read:

Subd. 27.

Superior National Forest; recreational property for use by disabled
veterans.

Real and personal property is exempt if it is located in the Superior National
Forest, and owned or leased and operated by a nonprofit organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code deleted text begin of
1986, as amended through December 31, 1992, deleted text end and primarily used to provide recreational
opportunities for disabled veterans and their families.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2006, section 272.02, subdivision 31, is amended to read:

Subd. 31.

Business incubator property.

Property owned by a nonprofit charitable
organization that qualifies for tax exemption under section 501(c)(3) of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1997, deleted text end that is intended to be
used as a business incubator in a high-unemployment county, is exempt. As used in this
subdivision, a "business incubator" is a facility used for the development of nonretail
businesses, offering access to equipment, space, services, and advice to the tenant
businesses, for the purpose of encouraging economic development, diversification, and
job creation in the area served by the organization, and "high-unemployment county" is a
county that had an average annual unemployment rate of 7.9 percent or greater in 1997.
Property that qualifies for the exemption under this subdivision is limited to no more than
two contiguous parcels and structures that do not exceed in the aggregate 40,000 square
feet. This exemption expires after taxes payable in 2011.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 272.02, subdivision 49, is amended to read:

Subd. 49.

Agricultural historical society property.

Property is exempt from
taxation if it is owned by a nonprofit charitable or educational organization that qualifies
for exemption under section 501(c)(3) of the Internal Revenue Code deleted text begin of 1986, as amended
through December 31, 2000, deleted text end and meets the following criteria:

(1) the property is primarily used for storing and exhibiting tools, equipment, and
artifacts useful in providing an understanding of local or regional agricultural history.
Primary use is determined each year based on the number of days the property is used
solely for storage and exhibition purposes;

(2) the property is limited to a maximum of 20 acres per owner per county, but
includes the land and any taxable structures, fixtures, and equipment on the land;

(3) the property is not used for a revenue-producing activity for more than ten days
in each calendar year; and

(4) the property is not used for residential purposes on either a temporary or
permanent basis.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 272.03, subdivision 3, is amended to read:

Subd. 3.

Construction of terms.

For the purposes of chapters 270 to 284, unless a
different meaning is indicated by the context, the words, phrases, and terms defined in
deleted text begin subdivisions 4 to 11 shall deleted text end new text begin this section new text end have the meanings given them.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2006, section 272.03, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Internal Revenue Code. new text end

new text begin Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code as defined in section 289A.02,
subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

new text begin [273.105] INTERNAL REVENUE CODE.
new text end

new text begin Unless specifically defined otherwise, for purposes of this chapter, "Internal Revenue
Code" means the Internal Revenue Code as defined in section 289A.02, subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2006, section 273.11, subdivision 8, is amended to read:

Subd. 8.

Limited equity cooperative apartments.

For the purposes of this
subdivision, the terms defined in this subdivision have the meanings given them.

A "limited equity cooperative" is a corporation organized under chapter 308A or
308B, which has as its primary purpose the provision of housing and related services to
its members which meets one of the following criteria with respect to the income of its
members: (1) a minimum of 75 percent of members must have incomes at or less than
90 percent of area median income, (2) a minimum of 40 percent of members must have
incomes at or less than 60 percent of area median income, or (3) a minimum of 20 percent
of members must have incomes at or less than 50 percent of area median income. For
purposes of this clause, "member income" shall mean the income of a member existing at
the time the member acquires cooperative membership, and median income shall mean
the St. Paul-Minneapolis metropolitan area median income as determined by the United
States Department of Housing and Urban Development. It must also meet the following
requirements:

(a) The articles of incorporation set the sale price of occupancy entitling cooperative
shares or memberships at no more than a transfer value determined as provided in the
articles. That value may not exceed the sum of the following:

(1) the consideration paid for the membership or shares by the first occupant of the
unit, as shown in the records of the corporation;

(2) the fair market value, as shown in the records of the corporation, of any
improvements to the real property that were installed at the sole expense of the member
with the prior approval of the board of directors;

(3) accumulated interest, or an inflation allowance not to exceed the greater of a ten
percent annual noncompounded increase on the consideration paid for the membership or
share by the first occupant of the unit, or the amount that would have been paid on that
consideration if interest had been paid on it at the rate of the percentage increase in the
revised Consumer Price Index for All Urban Consumers for the Minneapolis-St. Paul
metropolitan area prepared by the United States Department of Labor, provided that the
amount determined pursuant to this clause may not exceed $500 for each year or fraction
of a year the membership or share was owned; plus

(4) real property capital contributions shown in the records of the corporation to
have been paid by the transferor member and previous holders of the same membership,
or of separate memberships that had entitled occupancy to the unit of the member
involved. These contributions include contributions to a corporate reserve account the
use of which is restricted to real property improvements or acquisitions, contributions to
the corporation which are used for real property improvements or acquisitions, and the
amount of principal amortized by the corporation on its indebtedness due to the financing
of real property acquisition or improvement or the averaging of principal paid by the
corporation over the term of its real property-related indebtedness.

(b) The articles of incorporation require that the board of directors limit the purchase
price of stock or membership interests for new member-occupants or resident shareholders
to an amount which does not exceed the transfer value for the membership or stock as
defined in clause (a).

(c) The articles of incorporation require that the total distribution out of capital to a
member shall not exceed that transfer value.

(d) The articles of incorporation require that upon liquidation of the corporation any
assets remaining after retirement of corporate debts and distribution to members will
be conveyed to a charitable organization described in section 501(c)(3) of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1992, deleted text end or a public agency.

A "limited equity cooperative apartment" is a dwelling unit owned by a limited
equity cooperative.

"Occupancy entitling cooperative share or membership" is the ownership interest
in a cooperative organization which entitles the holder to an exclusive right to occupy a
dwelling unit owned or leased by the cooperative.

For purposes of taxation, the assessor shall value a unit owned by a limited equity
cooperative at the lesser of its market value or the value determined by capitalizing the net
operating income of a comparable apartment operated on a rental basis at the capitalization
rate used in valuing comparable buildings that are not limited equity cooperatives. If a
cooperative fails to operate in accordance with the provisions of clauses (a) to (d), the
property shall be subject to additional property taxes in the amount of the difference
between the taxes determined in accordance with this subdivision for the last ten years that
the property had been assessed pursuant to this subdivision and the amount that would
have been paid if the provisions of this subdivision had not applied to it. The additional
taxes, plus interest at the rate specified in section 549.09, shall be extended against the
property on the tax list for the current year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2006, section 273.124, subdivision 6, is amended to read:

Subd. 6.

Leasehold cooperatives.

When one or more dwellings or one or more
buildings which each contain several dwelling units is owned by a nonprofit corporation
subject to the provisions of chapter 317A and qualifying under section 501(c)(3) or
501(c)(4) of the Internal Revenue Code deleted text begin of 1986, as amended through December 31,
1990 deleted text end , or a limited partnership which corporation or partnership operates the property in
conjunction with a cooperative association, and has received public financing, homestead
treatment may be claimed by the cooperative association on behalf of the members of
the cooperative for each dwelling unit occupied by a member of the cooperative. The
cooperative association must provide the assessor with the Social Security numbers of
those members. To qualify for the treatment provided by this subdivision, the following
conditions must be met:

(a) the cooperative association must be organized under chapter 308A or 308B and
all voting members of the board of directors must be resident tenants of the cooperative
and must be elected by the resident tenants of the cooperative;

(b) the cooperative association must have a lease for occupancy of the property for a
term of at least 20 years, which permits the cooperative association, while not in default on
the lease, to participate materially in the management of the property, including material
participation in establishing budgets, setting rent levels, and hiring and supervising a
management agent;

(c) to the extent permitted under state or federal law, the cooperative association
must have a right under a written agreement with the owner to purchase the property if the
owner proposes to sell it; if the cooperative association does not purchase the property it is
offered for sale, the owner may not subsequently sell the property to another purchaser at
a price lower than the price at which it was offered for sale to the cooperative association
unless the cooperative association approves the sale;

(d) a minimum of 40 percent of the cooperative association's members must have
incomes at or less than 60 percent of area median gross income as determined by the
United States Secretary of Housing and Urban Development under section 142(d)(2)(B)
of the Internal Revenue Code deleted text begin of 1986, as amended through December 31, 1991 deleted text end . For
purposes of this clause, "member income" means the income of a member existing at the
time the member acquires cooperative membership;

(e) if a limited partnership owns the property, it must include as the managing
general partner a nonprofit organization operating under the provisions of chapter 317A
and qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code deleted text begin of 1986,
as amended through December 31, 1990, deleted text end and the limited partnership agreement must
provide that the managing general partner have sufficient powers so that it materially
participates in the management and control of the limited partnership;

(f) prior to becoming a member of a leasehold cooperative described in this
subdivision, a person must have received notice that (1) describes leasehold cooperative
property in plain language, including but not limited to the effects of classification
under this subdivision on rents, property taxes and tax credits or refunds, and operating
expenses, and (2) states that copies of the articles of incorporation and bylaws of the
cooperative association, the lease between the owner and the cooperative association, a
sample sublease between the cooperative association and a tenant, and, if the owner is a
partnership, a copy of the limited partnership agreement, can be obtained upon written
request at no charge from the owner, and the owner must send or deliver the materials
within seven days after receiving any request;

(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on
which the unit became leasehold cooperative property described in this subdivision, the
notice described in paragraph (f) must have been sent by first class mail to the occupant of
the unit at least 60 days prior to the date on which the unit became leasehold cooperative
property. For purposes of the notice under this paragraph, the copies of the documents
referred to in paragraph (f) may be in proposed version, provided that any subsequent
material alteration of those documents made after the occupant has requested a copy
shall be disclosed to any occupant who has requested a copy of the document. Copies of
the articles of incorporation and certificate of limited partnership shall be filed with the
secretary of state after the expiration of the 60-day period unless the change to leasehold
cooperative status does not proceed;

(h) the county attorney of the county in which the property is located must certify to
the assessor that the property meets the requirements of this subdivision;

(i) the public financing received must be from at least one of the following sources:

(1) tax increment financing proceeds used for the acquisition or rehabilitation of the
building or interest rate write-downs relating to the acquisition of the building;

(2) government issued bonds exempt from taxes under section 103 of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1991 deleted text end , the proceeds of which
are used for the acquisition or rehabilitation of the building;

(3) programs under section 221(d)(3), 202, or 236, of Title II of the National
Housing Act;

(4) rental housing program funds under Section 8 of the United States Housing Act
of 1937 new text begin , as amended, new text end or the market rate family graduated payment mortgage program
funds administered by the Minnesota Housing Finance Agency that are used for the
acquisition or rehabilitation of the building;

(5) low-income housing credit under section 42 of the Internal Revenue Code deleted text begin of
1986, as amended through December 31, 1991 deleted text end ;

(6) public financing provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from (i) federal community
development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued
under chapter 474A; or

(7) other rental housing program funds provided by the Minnesota Housing Finance
Agency for the acquisition or rehabilitation of the building;

(j) at the time of the initial request for homestead classification or of any transfer of
ownership of the property, the governing body of the municipality in which the property is
located must hold a public hearing and make the following findings:

(1) that the granting of the homestead treatment of the apartment's units will
facilitate safe, clean, affordable housing for the cooperative members that would otherwise
not be available absent the homestead designation;

(2) that the owner has presented information satisfactory to the governing body
showing that the savings garnered from the homestead designation of the units will be
used to reduce tenant's rents or provide a level of furnishing or maintenance not possible
absent the designation; and

(3) that the requirements of paragraphs (b), (d), and (i) have been met.

Homestead treatment must be afforded to units occupied by members of the
cooperative association and the units must be assessed as provided in subdivision 3,
provided that any unit not so occupied shall be classified and assessed pursuant to the
appropriate class. No more than three acres of land may, for assessment purposes,
be included with each dwelling unit that qualifies for homestead treatment under this
subdivision.

When dwelling units no longer qualify under this subdivision, the current owner
must notify the assessor within 60 days. Failure to notify the assessor within 60 days shall
result in the loss of benefits under this subdivision for taxes payable in the year that the
failure is discovered. For these purposes, "benefits under this subdivision" means the
difference in the net tax capacity of the units which no longer qualify as computed under
this subdivision and as computed under the otherwise applicable law, times the local tax
rate applicable to the building for that taxes payable year. Upon discovery of a failure to
notify, the assessor shall inform the auditor of the difference in net tax capacity for the
building or buildings in which units no longer qualify, and the auditor shall calculate the
benefits under this subdivision. Such amount, plus a penalty equal to 100 percent of that
amount, shall then be demanded of the building's owner. The property owner may appeal
the county's determination by serving copies of a petition for review with county officials
as provided in section 278.01 and filing a proof of service as provided in section 278.01
with the Minnesota Tax Court within 60 days of the date of the notice from the county.
The appeal shall be governed by the Tax Court procedures provided in chapter 271, for
cases relating to the tax laws as defined in section 271.01, subdivision 5; disregarding
sections 273.125, subdivision 5, and 278.03, but including section 278.05, subdivision 2.
If the amount of the benefits under this subdivision and penalty are not paid within 60
days, and if no appeal has been filed, the county auditor shall certify the amount of the
benefit and penalty to the succeeding year's tax list to be collected as part of the property
taxes on the affected buildings.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2006, section 273.128, subdivision 1, as amended by Laws
2008, chapter 154, article 2, section 10, is amended to read:

Subdivision 1.

Requirement.

Low-income rental property classified as class 4d
under section 273.13, subdivision 25, is entitled to valuation under this section if at least 20
percent of the units in the rental housing property meet any of the following qualifications:

(1) the units are subject to a housing assistance payments contract under Section 8
of the United States Housing Act of 1937, as amended;

(2) the units are rent-restricted and income-restricted units of a qualified low-income
housing project receiving tax credits under section 42(g) of the Internal Revenue Code
deleted text begin of 1986, as amended deleted text end ;

(3) the units are financed by the Rural Housing Service of the United States
Department of Agriculture and receive payments under the rental assistance program
pursuant to section 521(a) of the Housing Act of 1949, as amended; or

(4) the units are subject to rent and income restrictions under the terms of financial
assistance provided to the rental housing property by the federal government or the
state of Minnesota, or a local unit of government, as evidenced by a document recorded
against the property.

The restrictions must require assisted units to be occupied by residents whose
household income at the time of initial occupancy does not exceed 60 percent of the
greater of area or state median income, adjusted for family size, as determined by the
United States Department of Housing and Urban Development. The restriction must also
require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of
area or state median income, adjusted for family size, as determined by the United States
Department of Housing and Urban Development.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2006, section 273.13, subdivision 25, as amended by Laws
2008, chapter 154, article 2, section 13, is amended to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
than hospitals exempt under section 272.02, and contiguous property used for hospital
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a class rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and

(4) unimproved property that is classified residential as determined under subdivision
33.

The market value of class 4b property has a class rate of 1.25 percent.

(c) Class 4bb includes:

(1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property; and

(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b).

Class 4bb property has the same class rates as class 1a property under subdivision 22.

Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
(b), clause (1), real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes and not devoted to
commercial purposes for more than 250 days in the year preceding the year of assessment.
For purposes of this clause, property is devoted to a commercial purpose on a specific
day if any portion of the property is used for residential occupancy, and a fee is charged
for residential occupancy. Class 4c property must contain three or more rental units. A
"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
camping site equipped with water and electrical hookups for recreational vehicles. Class
4c property must provide recreational activities such as renting ice fishing houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. A camping
pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
regardless of the term of the rental agreement, as long as the use of the camping pad
does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
residential recreational for commercial purposes, at least 40 percent of the annual gross
lodging receipts related to the property must be from business conducted during 90
consecutive days and either (i) at least 60 percent of all paid bookings by lodging guests
during the year must be for periods of at least two consecutive nights; or (ii) at least 20
percent of the annual gross receipts must be from charges for rental of fish houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment, or charges for marina
services, launch services, and guide services, or the sale of bait and fishing tackle. For
purposes of this determination, a paid booking of five or more nights shall be counted as
two bookings. Class 4c also includes commercial use real property used exclusively
for recreational purposes in conjunction with class 4c property devoted to temporary
and seasonal residential occupancy for recreational purposes, up to a total of two acres,
provided the property is not devoted to commercial recreational use for more than 250
days in the year preceding the year of assessment and is located within two miles of the
class 4c property with which it is used. Owners of real and personal property devoted
to temporary and seasonal residential occupancy for recreation purposes and all or a
portion of which was devoted to commercial purposes for not more than 250 days in the
year preceding the year of assessment desiring classification as class 4c, must submit a
declaration to the assessor designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which they are located must be
designated class 4c as otherwise provided. The remainder of the cabins or units and
a proportionate share of the land on which they are located will be designated as class
3a. The owner of property desiring designation as class 4c property must provide guest
registers or other records demonstrating that the units for which class 4c designation is
sought were not occupied for more than 250 days in the year preceding the assessment if
so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
(4) conference center or meeting room, and (5) other nonresidential facility operated on a
commercial basis not directly related to temporary and seasonal residential occupancy for
recreation purposes does not qualify for class 4c;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;

(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and that is not used for residential
purposes on either a temporary or permanent basis, qualifies for class 4c provided that
it meets either of the following:

(i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or

(ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.

For purposes of this clause,

(A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section 349.12, subdivision 25, excluding those purposes
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;

(B) "property taxes" excludes the state general tax;

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (10), or (19) of the Internal Revenue
Code deleted text begin of 1986, as amended through December 31, 1990 deleted text end ; and

(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property qualifying under item (i) which is used for revenue-producing
activities for more than six days in the calendar year preceding the year of assessment
shall be assessed as class 3a. The use of the property for social events open exclusively
to members and their guests for periods of less than 24 hours, when an admission is
not charged nor any revenues are received by the organization shall not be considered a
revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;

(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5) manufactured home parks as defined in section 327.14, subdivision 3;

(6) real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section 473.121, subdivision 2;

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt
under section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;

(8) a privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and

(9) residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:

(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;

(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22.

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property has a class rate of one percent for the first $500,000 of
market value, and 1.25 percent for the remaining market value, (iv) the market value of
property described in clause (4) has a class rate of one percent, (v) the market value of
property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
portion of the market value of property in clause (9) qualifying for class 4c property
has a class rate of 1.25 percent.

(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.

Class 4d property has a class rate of 0.75 percent.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2006, section 287.20, subdivision 3a, is amended to read:

Subd. 3a.

Designated transfer.

"Designated transfer" means any of the following:

(1) a transfer between (i) an entity owned by a sole owner, and (ii) that sole owner;

(2) a transfer between (i) an entity in which a husband, a wife, or both are the sole
owners, and (ii) the husband, wife, or both;

(3) a transfer between (i) an entity with multiple co-owners, and (ii) all of the
co-owners, so long as each of the co-owners maintains the same percentage ownership
interest in the transferred real property, whether directly or through ownership of a
percentage of the entity;

(4) a transfer between (i) a revocable trust, and (ii) the grantor or grantors of the
revocable trust; or

(5) a transfer of substantially all of the assets of one or more entities pursuant to a
reorganization, as defined in section 287.20, subdivision 9.

For purposes of this definition of designated transfer, an interest in an entity that is
owned, directly or indirectly, by or for another entity shall be considered as being owned
proportionately by or for the owners of the other entity under provisions similar to those
of section 267(c)(1) and (5) of the Internal Revenue Code deleted text begin of 1986, as amended through
December 31, 2004 deleted text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2006, section 287.20, subdivision 9, is amended to read:

Subd. 9.

Reorganization.

"Reorganization" means the transfer of substantially all
of the assets of a corporation, a limited liability company, or a partnership not in the usual
or regular course of business if at the time of the transfer the transfer qualifies as: (i) a
corporate reorganization under section 368(a) of the Internal Revenue Code deleted text begin of 1986, as
amended through December 31, 2004 deleted text end ; or (ii) a transfer from a partnership to another
partnership when the transferee is treated as a continuation of the transferor under section
708 of the Internal Revenue Code deleted text begin of 1986, as amended through December 31, 2004 deleted text end .

Sec. 16.

Minnesota Statutes 2006, section 287.20, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Internal Revenue Code. new text end

new text begin Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code as defined in section 289A.02,
subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2006, section 295.53, subdivision 4a, is amended to read:

Subd. 4a.

Credit for research.

(a) In addition to the exemptions allowed under
subdivision 1, a hospital or health care provider may claim an annual credit against the
total amount of tax, if any, the hospital or health care provider owes for that calendar year
under sections 295.50 to 295.57. The credit shall equal 2.5 percent of revenues for patient
services used to fund expenditures for qualifying research conducted by an allowable
research program. The amount of the credit shall not exceed the tax liability of the hospital
or health care provider under sections 295.50 to 295.57.

(b) For purposes of this subdivision, the following requirements apply:

(1) expenditures must be for program costs of qualifying research conducted by
an allowable research program;

(2) an allowable research program must be a formal program of medical and health
care research conducted by an entity which is exempt under section 501(c)(3) of the
Internal Revenue Code deleted text begin of 1986 deleted text end new text begin as defined in section 289A.02, subdivision 7, new text end or is owned
and operated under authority of a governmental unit;

(3) qualifying research must:

(A) be approved in writing by the governing body of the hospital or health care
provider which is taking the deduction under this subdivision;

(B) have as its purpose the development of new knowledge in basic or applied
science relating to the diagnosis and treatment of conditions affecting the human body;

(C) be subject to review by individuals with expertise in the subject matter of the
proposed study but who have no financial interest in the proposed study and are not
involved in the conduct of the proposed study; and

(D) be subject to review and supervision by an institutional review board operating
in conformity with federal regulations if the research involves human subjects or
an institutional animal care and use committee operating in conformity with federal
regulations if the research involves animal subjects. Research expenses are not exempt if
the study is a routine evaluation of health care methods or products used in a particular
setting conducted for the purpose of making a management decision. Costs of clinical
research activities paid directly for the benefit of an individual patient are excluded from
this exemption. Basic research in fields including biochemistry, molecular biology, and
physiology are also included if such programs are subject to a peer review process.

(c) No credit shall be allowed under this subdivision for any revenue received by the
hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
government or nongovernment source, on which the tax liability under section 295.52 is
not imposed.

(d) The taxpayer shall apply for the credit under this section on the annual return
under section 295.55, subdivision 5.

(e) Beginning September 1, 2001, if the actual or estimated amount paid under
this section for the calendar year exceeds $2,500,000, the commissioner of finance shall
determine the rate of the research credit for the following calendar year to the nearest
one-half percent so that refunds paid under this section will most closely equal $2,500,000.
The commissioner of finance shall publish in the State Register by October 1 of each year
the rate of the credit for the following calendar year. A determination under this section
is not subject to the rulemaking provisions of chapter 14.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2006, section 296A.16, subdivision 2, is amended to read:

Subd. 2.

Fuel used in other vehicle; claim for refund.

Any person who buys and
uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles
except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose
other than use in licensed motor vehicles, and who paid the tax directly or indirectly
through the amount of the tax being included in the price of the gasoline or special fuel, or
otherwise, shall be reimbursed and repaid the amount of the tax paid upon filing with the
commissioner a claim for refund in the form and manner prescribed by the commissioner,
and containing the information the commissioner shall require. By signing any such claim
which is false or fraudulent, the applicant shall be subject to the penalties provided in this
chapter for knowingly making a false claim. The claim shall set forth the total amount
of the gasoline so purchased and used by the applicant other than in motor vehicles, or
special fuel purchased and used by the applicant other than in licensed motor vehicles,
and shall state when and for what purpose it was used. When a claim contains an error
in computation or preparation, the commissioner is authorized to adjust the claim in
accordance with the evidence shown on the claim or other information available to the
commissioner. The commissioner, on being satisfied that the claimant is entitled to the
payments, shall approve the claim and transmit it to the commissioner of finance. The
words "gasoline" or "special fuel" as used in this subdivision do not include aviation
gasoline or special fuel for aircraft. Gasoline or special fuel bought and used for a
"qualifying purpose" means:

(1) Gasoline or special fuel used in carrying on a trade or business, used on a farm
situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose"
have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue
Code deleted text begin of 1986, as amended through December 31, 1997 deleted text end new text begin as defined in section 289A.02,
subdivision 7 new text end .

(2) Gasoline or special fuel used for off-highway business use.

(i) "Off-highway business use" means any use off the public highway by a person in
that person's trade, business, or activity for the production of income.

(ii) Off-highway business use includes use of a passenger snowmobile off the public
highways as part of the operations of a resort as defined in section 157.15, subdivision 11;
and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not
including fuel consumed during idling time.

(iii) Off-highway business use does not include use as a fuel in a motor vehicle
which, at the time of use, is registered or is required to be registered for highway use under
the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu
of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in
this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the
fuel tank of a licensed motor vehicle and must be stored in a separate supply tank.

(3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles,
manufactured in Minnesota, and shipped by interstate carrier to destinations in other
states or foreign countries.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2006, section 297A.61, subdivision 22, is amended to read:

Subd. 22.

Internal Revenue Code.

Unless specifically provided otherwise,
"Internal Revenue Code" means the Internal Revenue Code deleted text begin of 1986, as amended through
December 31, 2000 deleted text end new text begin as defined in section 289A.02, subdivision 7 new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2006, section 297B.01, subdivision 7, is amended to read:

Subd. 7.

Sale, sells, selling, purchase, purchased, or acquired.

(a) "Sale," "sells,"
"selling," "purchase," "purchased," or "acquired" means any transfer of title of any motor
vehicle, whether absolutely or conditionally, for a consideration in money or by exchange
or barter for any purpose other than resale in the regular course of business.

(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
or by holding it in an effort to so lease it, and which is put to no other use by the owner
other than resale after such lease or effort to lease, shall be considered property purchased
for resale.

(c) The terms also shall include any transfer of title or ownership of a motor vehicle
by other means, for or without consideration, except that these terms shall not include:

(1) the acquisition of a motor vehicle by inheritance from or by bequest of, a
decedent who owned it;

(2) the transfer of a motor vehicle which was previously licensed in the names of
two or more joint tenants and subsequently transferred without monetary consideration to
one or more of the joint tenants;

(3) the transfer of a motor vehicle by way of gift between individuals, or gift
from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an
individual, when the transfer is with no monetary or other consideration or expectation
of consideration and the parties to the transfer submit an affidavit to that effect at the
time the title transfer is recorded;

(4) the voluntary or involuntary transfer of a motor vehicle between a husband and
wife in a divorce proceeding; or

(5) the transfer of a motor vehicle by way of a gift to an organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code deleted text begin , as
amended through December 31, 1996, deleted text end when the motor vehicle will be used exclusively for
religious, charitable, or educational purposes.

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2006, section 297B.01, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Internal Revenue Code. new text end

new text begin Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code as defined in section 289A.02,
subdivision 7.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2006, section 297B.03, is amended to read:

297B.03 EXEMPTIONS.

There is specifically exempted from the provisions of this chapter and from
computation of the amount of tax imposed by it the following:

(1) purchase or use, including use under a lease purchase agreement or installment
sales contract made pursuant to section 465.71, of any motor vehicle by the United States
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section 297A.67, subdivision 11;

(2) purchase or use of any motor vehicle by any person who was a resident of
another state or country at the time of the purchase and who subsequently becomes a
resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
such person began residing in the state of Minnesota and the motor vehicle was registered
in the person's name in the other state or country;

(3) purchase or use of any motor vehicle by any person making a valid election to be
taxed under the provisions of section 297A.90;

(4) purchase or use of any motor vehicle previously registered in the state of
Minnesota when such transfer constitutes a transfer within the meaning of section 118,
331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1999 deleted text end ;

(5) purchase or use of any vehicle owned by a resident of another state and leased
to a Minnesota-based private or for-hire carrier for regular use in the transportation of
persons or property in interstate commerce provided the vehicle is titled in the state of
the owner or secured party, and that state does not impose a sales tax or sales tax on
motor vehicles used in interstate commerce;

(6) purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;

(7) purchase of a motor vehicle for use as an ambulance by an ambulance service
licensed under section 144E.10;

(8) purchase of a motor vehicle by or for a public library, as defined in section
134.001, subdivision 2, as a bookmobile or library delivery vehicle;

(9) purchase of a ready-mixed concrete truck;

(10) purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles,
vans, or pickup trucks;

(11) purchase or use of a motor vehicle by a corporation, society, association,
foundation, or institution organized and operated exclusively for charitable, religious,
or educational purposes, except a public school, university, or library, but only if the
vehicle is:

(i) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a
passenger automobile, as defined in section 168.011, if the automobile is designed and
used for carrying more than nine persons including the driver; and

(ii) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose;

(12) purchase of a motor vehicle for use by a transit provider exclusively to provide
transit service is exempt if the transit provider is either (i) receiving financial assistance or
reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29,
473.388, or 473.405;

(13) purchase or use of a motor vehicle by a qualified business, as defined in section
469.310, located in a job opportunity building zone, if the motor vehicle is principally
garaged in the job opportunity building zone and is primarily used as part of or in direct
support of the person's operations carried on in the job opportunity building zone. The
exemption under this clause applies to sales, if the purchase was made and delivery
received during the duration of the job opportunity building zone. The exemption under
this clause also applies to any local sales and use tax.

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2006, section 297F.01, subdivision 8, is amended to read:

Subd. 8.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code deleted text begin of 1986, as amended through December
31, 1996 deleted text end new text begin as defined in section 289A.02, subdivision 7 new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2006, section 297G.01, subdivision 9, is amended to read:

Subd. 9.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code deleted text begin of 1986, as amended through December
31, 1996 deleted text end new text begin as defined in section 289A.02, subdivision 7 new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2006, section 297H.09, is amended to read:

297H.09 BAD DEBTS.

The remitter of the solid waste management tax may offset against the tax payable,
with respect to any reporting period, the amount of tax imposed by this chapter previously
remitted to the commissioner of revenue which qualified as a bad debt under section
166(a) of the Internal Revenue Code deleted text begin , deleted text end as deleted text begin amended through December 31, 1993 deleted text end new text begin defined
in section 289A.02, subdivision 7 new text end , during such reporting period, but only in proportion
to the portion of such debt which became uncollectable. This section applies only to
accrual basis remitters that remit tax before it is collected and to the extent they are
unable to collect the tax.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 10

DEPARTMENT INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2006, section 289A.18, subdivision 1, as amended by
Laws 2008, chapter 154, article 11, section 5, is amended to read:

Subdivision 1.

Individual income, fiduciary income, corporate franchise, and
entertainment taxes; partnership and S corporation returns; information returns;
mining company returns.

The returns required to be made under sections 289A.08 and
289A.12 must be filed at the following times:

(1) returns made on the basis of the calendar year must be filed on April 15 following
the close of the calendar year, except that returns of corporations must be filed on March
15 following the close of the calendar year;

(2) returns made on the basis of the fiscal year must be filed on the 15th day of the
fourth month following the close of the fiscal year, except that returns of corporations
must be filed on the 15th day of the third month following the close of the fiscal year;

(3) returns for a fractional part of a year must be filed on the 15th day of the fourth
month following the end of the month in which falls the last day of the period for which
the return is made, except that the returns of corporations must be filed on the 15th day of
the third month following the end of the tax year new text begin ; or, in the case of a corporation which is
a member of a unitary group, the return of the corporation must be filed on the 15th day of
the third month following the end of the tax year new text end of the unitary group in which falls the
last day of the period for which the return is made;

(4) in the case of a final return of a decedent for a fractional part of a year, the return
must be filed on the 15th day of the fourth month following the close of the 12-month
period that began with the first day of that fractional part of a year;

(5) in the case of the return of a cooperative association, returns must be filed on or
before the 15th day of the ninth month following the close of the taxable year;

(6) if a corporation has been divested from a unitary group and files a return for
a fractional part of a year in which it was a member of a unitary business that files a
combined report under section deleted text begin 290.34 deleted text end new text begin 290.17 new text end , subdivision deleted text begin 2 deleted text end new text begin 4 new text end , the divested corporation's
return must be filed on the 15th day of the third month following the close of the common
accounting period that includes the fractional year;

(7) returns of entertainment entities must be filed on April 15 following the close of
the calendar year;

(8) returns required to be filed under section 289A.08, subdivision 4, must be filed
on the 15th day of the fifth month following the close of the taxable year;

(9) returns of mining companies must be filed on May 1 following the close of the
calendar year; and

(10) returns required to be filed with the commissioner under section 289A.12,
subdivision 2 or 4 to 10, must be filed within 30 days after being demanded by the
commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
except that the change in clause (6) is effective for taxable years beginning after December
31, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read:

Subd. 6b.

Foreign operating corporation.

The term "foreign operating
corporation," when applied to a corporation, means a domestic corporation with the
following characteristics:

(1) it is part of a unitary business at least one member of which is taxable in this state;

(2) it is not a foreign sales corporation under section 922 of the Internal Revenue
Code, as amended through December 31, 1999, for the taxable year;

(3)(i) the average of the percentages of its property and payrolls, including the pro
rata share of its unitary partnerships' property and payrolls, assigned to locations outside
the United States, where the United States includes the District of Columbia and excludes
the commonwealth of Puerto Rico and possessions of the United States, as determined
under section 290.191 or 290.20, is 80 percent or more; or (ii) it has in effect a valid
election under section 936 of the Internal Revenue Code; and

(4) it has new text begin a minimum of new text end $1,000,000 of payroll and $2,000,000 of property, as
determined under section 290.191 or 290.20, that are located outside the United States. If
the domestic corporation does not have payroll as determined under section 290.191 or
290.20, but it or its partnerships have paid $1,000,000 for work, performed directly for the
domestic corporation or the partnerships, outside the United States, then paragraph (3)(i)
shall not require payrolls to be included in the average calculation.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 290.068, subdivision 3, is amended to read:

Subd. 3.

Limitation; carryover.

(a)(1) The credit for the taxable year shall not
exceed the liability for tax. "Liability for tax" for purposes of this section means the tax
imposed under deleted text begin this chapter deleted text end new text begin section 290.06, subdivision 1, new text end for the taxable year reduced by
the sum of the nonrefundable credits allowed under this chapter.

(2) In the case of a corporation which is a partner in a partnership, the credit allowed
for the taxable year shall not exceed the lesser of the amount determined under clause (1)
for the taxable year or an amount (separately computed with respect to the corporation's
interest in the trade or business or entity) equal to the amount of tax attributable to that
portion of taxable income which is allocable or apportionable to the corporation's interest
in the trade or business or entity.

(b) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under clause (a), the excess shall be a research credit carryover to
each of the 15 succeeding taxable years. The entire amount of the excess unused credit for
the taxable year shall be carried first to the earliest of the taxable years to which the credit
may be carried and then to each successive year to which the credit may be carried. The
amount of the unused credit which may be added under this clause shall not exceed the
taxpayer's liability for tax less the research credit for the taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 290.07, subdivision 1, is amended to read:

Subdivision 1.

Annual accounting period.

Net income and taxable net income
shall be computed upon the basis of the taxpayer's annual accounting period. If a taxpayer
has no annual accounting period, or has one other than a fiscal year, as heretofore defined,
the net income and taxable net income shall be computed on the basis of the calendar year.
Taxpayers shall employ the same accounting period on which they report, or would be
required to report, their net income under the Internal Revenue Code. The commissioner
shall provide by rule for the determination of the accounting period for taxpayers who
file a combined report under section deleted text begin 290.34 deleted text end new text begin 290.17 new text end , subdivision deleted text begin 2 deleted text end new text begin 4 new text end , when members of
the group use different accounting periods for federal income tax purposes. Unless the
taxpayer changes its accounting period for federal purposes, the due date of the return
is not changed.

A taxpayer may change accounting periods only with the consent of the
commissioner. In case of any such change, the taxpayer shall pay a tax for the period
not included in either the taxpayer's former or newly adopted taxable year, computed as
provided in section 290.32.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 5.

Minnesota Statutes 2006, section 290.21, subdivision 4, is amended to read:

Subd. 4.

Dividends received from another corporation.

(a)(1) Eighty percent
of dividends received by a corporation during the taxable year from another corporation,
in which the recipient owns 20 percent or more of the stock, by vote and value, not
including stock described in section 1504(a)(4) of the Internal Revenue Code when the
corporate stock with respect to which dividends are paid does not constitute the stock in
trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
constitute property held by the taxpayer primarily for sale to customers in the ordinary
course of the taxpayer's trade or business, or when the trade or business of the taxpayer
does not consist principally of the holding of the stocks and the collection of the income
and gains therefrom; and

(2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
an affiliated company transferred in an overall plan of reorganization and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989;

(ii) the remaining 20 percent of dividends if the dividends are received from a
corporation which is subject to tax under section 290.36 and which is a member of an
affiliated group of corporations as defined by the Internal Revenue Code and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989, or is deducted under an election under section
243(b) of the Internal Revenue Code; or

(iii) the remaining 20 percent of the dividends if the dividends are received from a
property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the Internal Revenue Code
and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
under an election under section 243(b) of the Internal Revenue Code.

(b) Seventy percent of dividends received by a corporation during the taxable year
from another corporation in which the recipient owns less than 20 percent of the stock,
by vote or value, not including stock described in section 1504(a)(4) of the Internal
Revenue Code when the corporate stock with respect to which dividends are paid does not
constitute the stock in trade of the taxpayer, or does not constitute property held by the
taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
business, or when the trade or business of the taxpayer does not consist principally of the
holding of the stocks and the collection of income and gain therefrom.

(c) The dividend deduction provided in this subdivision shall be allowed only with
respect to dividends that are included in a corporation's Minnesota taxable net income
for the taxable year.

The dividend deduction provided in this subdivision does not apply to a dividend
from a corporation which, for the taxable year of the corporation in which the distribution
is made or for the next preceding taxable year of the corporation, is a corporation exempt
from tax under section 501 of the Internal Revenue Code.

The dividend deduction provided in this subdivision applies to the amount of
regulated investment company dividends only to the extent determined under section
854(b) of the Internal Revenue Code.

The dividend deduction provided in this subdivision shall not be allowed with
respect to any dividend for which a deduction is not allowed under the provisions of
section 246(c) of the Internal Revenue Code.

(d) If dividends received by a corporation that does not have nexus with Minnesota
under the provisions of Public Law 86-272 are included as income on the return of
an affiliated corporation permitted or required to file a combined report under section new text begin
290.17, subdivision 4 or new text end 290.34, subdivision 2, then for purposes of this subdivision the
determination as to whether the trade or business of the corporation consists principally
of the holding of stocks and the collection of income and gains therefrom shall be made
with reference to the trade or business of the affiliated corporation having a nexus with
Minnesota.

(e) The deduction provided by this subdivision does not apply if the dividends are
paid by a FSC as defined in section 922 of the Internal Revenue Code.

(f) If one or more of the members of the unitary group whose income is included on
the combined report received a dividend, the deduction under this subdivision for each
member of the unitary business required to file a return under this chapter is the product
of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
income apportionable to this state for the taxable year under section 290.191 or 290.20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 6.

Minnesota Statutes 2006, section 290.92, subdivision 26, is amended to read:

Subd. 26.

Extension of withholding to certain payments where identifying
number not furnished or inaccurate.

(a) If, in the case of any reportable payment, (1)
the payee fails to furnish the payee's Social Security account number to the payor, deleted text begin or deleted text end
(2) new text begin the payee is subject to federal backup withholding on the reportable payment under
section 3406 of the Internal Revenue Code, or (3) new text end the commissioner notifies the payor that
the Social Security account number furnished by the payee is incorrect, then the payor
shall deduct and withhold from the payment a tax equal to the amount of the payment
multiplied by the highest rate used in determining the income tax liability of an individual
under section 290.06, subdivision 2c.

(b)(1) In the case of any failure described in clause (a)(1), clause (a) shall apply to
any reportable payment made by the payor during the period during which the Social
Security account number has not been furnished.

(2) In any case where there is a notification described in clause (a) deleted text begin (2) deleted text end new text begin (3) new text end , clause (a)
shall apply to any reportable payment made by the payor (i) after the close of the 30th
day after the day on which the payor received the notification, and (ii) before the payee
furnishes another Social Security account number.

(3)(i) Unless the payor elects not to have this subparagraph apply with respect to
the payee, clause (a) shall also apply to any reportable payment made after the close of
the period described in paragraph (1) or (2) (as the case may be) and before the 30th
day after the close of the period.

(ii) If the payor elects the application of this subparagraph with respect to the payee,
clause (a) shall also apply to any reportable payment made during the 30-day period
described in paragraph (2).

(iii) The payor may elect a period shorter than the grace period set forth in
subparagraph (i) or (ii) as the case may be.

(c) The provisions of section 3406 of the Internal Revenue Code shall apply and
shall govern when withholding shall be required and the definition of terms. The term
"reportable payment" shall include only those payments for personal services. No tax
shall be deducted or withheld under this subdivision with respect to any amount for
which withholding is otherwise required under this section. For purposes of this section,
payments which are subject to withholding under this subdivision shall be treated as if
they were wages paid by an employer to an employee and amounts deducted and withheld
under this subdivision shall be treated as if deducted and withheld under subdivision 2a.

(d) Whenever the commissioner notifies a payor under this subdivision that the
Social Security account number furnished by any payee is incorrect, the commissioner
shall at the same time furnish a copy of the notice to the payor, and the payor shall
promptly furnish the copy to the payee. If the commissioner notifies a payor under this
subdivision that the Social Security account number furnished by any payee is incorrect
and the payee subsequently furnishes another Social Security account number to the
payor, the payor shall promptly notify the commissioner of the other Social Security
account number furnished.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments made after December
31, 2008.
new text end

Sec. 7.

Minnesota Statutes 2006, section 290.92, subdivision 31, as added by Laws
2008, chapter 154, article 3, section 8, is amended to read:

Subd. 31.

Payments to persons who are not employees.

(a) For purposes of this
subdivision, "contractor" means a person carrying on a trade or business described in
industry code numbers 23 through 238990 of the North American Industry Classification
System.

(b) A contractor deleted text begin or a third-party bulk filer acting on behalf of a contractor, deleted text end who
makes payments to an individual deleted text begin , deleted text end carrying on a trade or business described in paragraph
(a) as a sole proprietorship deleted text begin , deleted text end must deduct and withhold two percent of the payment as
Minnesota withholding tax when the amount the contractor paid to that individual during
the calendar year exceeds $600.

(c) A payment subject to withholding under this subdivision must be treated as if
the payment were a wage paid by an employer to an employee. The requirements in the
definitions of "employee" and "employer" in subdivision 1 relating to geographic location
apply in determining whether withholding tax applies under this subdivision, but without
regard to whether the contractor or the individual otherwise satisfy the definition of an
employer or an employee. Each recipient of a payment subject to withholding under this
subdivision must furnish the contractor with a statement of the recipient's name, address,
and Social Security account number.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Laws 2008, chapter 154, article 3, section 7, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective for taxable years beginning
after December 31, 2007, except that to the extent this section impacts an employer's
requirement to withhold Minnesota tax, the requirement to withhold is effective for wages
paid after deleted text begin April 1 deleted text end new text begin December 31 new text end , 2008.

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Rules, part 8031.0100, subpart 3, new text end new text begin is repealed effective the day following
final enactment.
new text end

new text begin Minnesota Rules, part 8093.2100, new text end new text begin is repealed effective the day following final
enactment.
new text end

ARTICLE 11

DEPARTMENT SALES AND USE TAXES

Section 1.

Minnesota Statutes 2006, section 289A.55, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Relief for purchasers. new text end

new text begin A purchaser that meets the requirements of section
297A.995, subdivision 11, is relieved from the imposition of interest on tax and penalty.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2008.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision
to read:

new text begin Subd. 29. new text end

new text begin Relief for purchasers. new text end

new text begin A purchaser that meets the requirements of
section 297A.995, subdivision 11, is relieved from the imposition of penalty.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2008.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297A.61, subdivision 29, is amended to read:

Subd. 29.

State.

Unless specifically provided otherwise, "state" means any state of
the United States new text begin , the Commonwealth of Puerto Rico, new text end and the District of Columbia.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2006, section 297A.665, as amended by Laws 2008, chapter
154, article 12, section 20, is amended to read:

297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.

(a) For the purpose of the proper administration of this chapter and to prevent
evasion of the tax, until the contrary is established, it is presumed that:

(1) all gross receipts are subject to the tax; and

(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
in Minnesota.

(b) The burden of proving that a sale is not a taxable retail sale is on the seller.
However, a seller is relieved of liability if:

(1) the seller obtains a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, at the time of the sale or within
90 days after the date of the sale; or

(2) if the seller has not obtained a fully completed exemption certificate or all the
relevant information required by section 297A.72, subdivision 2, within the time provided
in clause (1), within 120 days after a request for substantiation by the commissioner,
the seller either:

(i) obtains in good faith a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, from the purchaser; or

(ii) proves by other means that the transaction was not subject to tax.

(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:

(1) fraudulently fails to collect the tax; or

(2) solicits purchasers to participate in the unlawful claim of an exemption.

new text begin (d) A certified service provider, as defined in section 297A.995, subdivision 2, is
relieved of liability under this section to the extent a seller who is its client is relieved of
liability.
new text end

deleted text begin (d) deleted text end new text begin (e) new text end A purchaser of tangible personal property or any items listed in section
297A.63 that are shipped or brought to Minnesota by the purchaser has the burden
of proving that the property was not purchased from a retailer for storage, use, or
consumption in Minnesota.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after December 31, 2007.
new text end

Sec. 5.

Minnesota Statutes 2006, section 297A.67, subdivision 7, as amended by Laws
2008, chapter 154, article 12, section 26, is amended to read:

Subd. 7.

Drugs; medical devices.

(a) Sales of the following drugs and medical
devices new text begin for human use new text end are exempt:

(1) drugs deleted text begin for human use deleted text end , including over-the-counter drugs;

(2) single-use finger-pricking devices for the extraction of blood and other single-use
devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
diabetes;

(3) insulin and medical oxygen for human use, regardless of whether prescribed
or sold over the counter;

(4) prosthetic devices;

(5) durable medical equipment for home use only;

(6) mobility enhancing equipment;

(7) prescription corrective eyeglasses; and

(8) kidney dialysis equipment, including repair and replacement parts.

(b) For purposes of this subdivision:

(1) "Drug" means a compound, substance, or preparation, and any component of
a compound, substance, or preparation, other than food and food ingredients, dietary
supplements, or alcoholic beverages that is:

(i) recognized in the official United States Pharmacopoeia, official Homeopathic
Pharmacopoeia of the United States, or official National Formulary, and supplement
to any of them;

(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
of disease; or

(iii) intended to affect the structure or any function of the body.

(2) "Durable medical equipment" means equipment, including repair and
replacement parts, but not including mobility enhancing equipment, that:

(i) can withstand repeated use;

(ii) is primarily and customarily used to serve a medical purpose;

(iii) generally is not useful to a person in the absence of illness or injury; and

(iv) is not worn in or on the body.

new text begin For purposes of this clause, "repair and replacement parts" includes all components
or attachments used in conjunction with the durable medical equipment, but does not
include repair and replacement parts which are for single patient use only.
new text end

(3) "Mobility enhancing equipment" means equipment, including repair and
replacement parts, but not including durable medical equipment, that:

(i) is primarily and customarily used to provide or increase the ability to move from
one place to another and that is appropriate for use either in a home or a motor vehicle;

(ii) is not generally used by persons with normal mobility; and

(iii) does not include any motor vehicle or equipment on a motor vehicle normally
provided by a motor vehicle manufacturer.

(4) "Over-the-counter drug" means a drug that contains a label that identifies the
product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
label must include a "drug facts" panel or a statement of the active ingredients with a list of
those ingredients contained in the compound, substance, or preparation. Over-the-counter
drugs do not include grooming and hygiene products, regardless of whether they otherwise
meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.

(5) "Prescribed" and "prescription" means a direction in the form of an order,
formula, or recipe issued in any form of oral, written, electronic, or other means of
transmission by a duly licensed health care professional.

(6) "Prosthetic device" means a replacement, corrective, or supportive device,
including repair and replacement parts, worn on or in the body to:

(i) artificially replace a missing portion of the body;

(ii) prevent or correct physical deformity or malfunction; or

(iii) support a weak or deformed portion of the body.

Prosthetic device does not include corrective eyeglasses.

(7) "Kidney dialysis equipment" means equipment that:

(i) is used to remove waste products that build up in the blood when the kidneys are
not able to do so on their own; and

(ii) can withstand repeated use, including multiple use by a single patient new text begin ,
notwithstanding the provisions of clause (2) new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 297A.995, subdivision 10, is amended to read:

Subd. 10.

Relief from certain liability.

new text begin (a) new text end Notwithstanding subdivision 9, sellers
and certified service providers are relieved from liability to the state for having charged
and collected the incorrect amount of sales or use tax resulting from the seller or certified
service provider (1) relying on erroneous data provided by deleted text begin this state deleted text end new text begin the commissioner
in the database files new text end on tax rates, boundaries, or taxing jurisdiction assignments, or (2)
relying on erroneous data provided by the state in its taxability matrix concerning the
taxability of products and services.

new text begin (b) Notwithstanding subdivision 9, sellers and certified service providers are
relieved from liability to the state for having charged and collected the incorrect amount
of sales or use tax resulting from the seller or certified service provider relying on the
certification by the commissioner as to the accuracy of a certified automated system as to
the taxability of product categories. The relief from liability provided by this paragraph
does not apply when the sellers or certified service providers have incorrectly classified
an item or transaction into a product category, unless the item or transaction within a
product category was approved by the commissioner or approved jointly by the states that
are signatories to the agreement. The sellers and certified service providers must revise a
classification within ten days after receipt of notice from the commissioner that an item or
transaction within a product category is incorrectly classified as to its taxability, or they
are not relieved from liability for the incorrect classification following the notification.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after December 31, 2007.
new text end

Sec. 7.

Minnesota Statutes 2006, section 297A.995, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Purchaser relief from certain liability. new text end

new text begin (a) Notwithstanding other
provisions in the law, a purchaser is relieved from liability resulting from having paid
the incorrect amount of sales or use tax if a purchaser, whether or not holding a direct
pay permit, or a purchaser's seller or certified service provider relied on erroneous data
provided by this state in the database files on tax rates, boundaries, taxing jurisdiction
assignments, or in the taxability matrix. After providing an address-based database for
assigning taxing jurisdictions and their associated rates, no relief for errors resulting from
the purchaser's reliance on a database using zip codes is allowed.
new text end

new text begin new text end

new text begin new text end

new text begin (b) With respect to reliance on the taxability matrix provided by this state in
paragraph (a), relief is limited to erroneous classifications in the taxability matrix for
items included within the classifications as "taxable," "exempt," "included in sales
price," "excluded from sales price," "included in the definition," and "excluded from
the definition."
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2008.
new text end

Sec. 8.

Minnesota Statutes 2006, section 297A.995, is amended by adding a
subdivision to read:

new text begin Subd. 12. new text end

new text begin Database files. new text end

new text begin For purposes of this section, "database files on tax rates,
boundaries, and taxing jurisdiction assignments" and the "taxability matrix" means those
databases and the taxability matrix required under the agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after December 31, 2007.
new text end

ARTICLE 12

DEPARTMENT SPECIAL TAXES AND FEES

Section 1.

Minnesota Statutes 2007 Supplement, section 115A.1314, subdivision 2,
is amended to read:

Subd. 2.

Creation of account; appropriations.

(a) The electronic waste account
is established in the environmental fund. The commissioner of revenue must deposit
receipts from the fee established in subdivision 1 in the account. Any interest earned on
the account must be credited to the account. Money from other sources may be credited to
the account. Beginning in the second program year and continuing each program year
thereafter, as of the last day of each program year, the commissioner new text begin of revenue new text end shall
determine the total amount of the variable fees that were collected. new text begin By July 15, 2009, and
each July 15 thereafter, the commissioner of the Pollution Control Agency shall inform
the commissioner of revenue of the amount necessary to operate the program in the new
program year. new text end To the extent that the total fees collected by the commissioner new text begin of revenue new text end in
connection with this section deleted text begin exceeds deleted text end new text begin exceed new text end the amount the commissioner new text begin of the Pollution
Control Agency new text end determines necessary to operate the program for the new program
year, the commissioner new text begin of revenue new text end shall refund on a pro rata basis, to all manufacturers
who paid any fees for the previous program year, the amount of fees collected by the
commissioner new text begin of revenue new text end in excess of the amount necessary to operate the program for the
new program year. No individual refund is required of amounts of $100 or less for a fiscal
year. Manufacturers who report collections less than 50 percent of their obligation for the
previous program year are not eligible for a refund. new text begin Amounts not refunded pursuant to this
paragraph shall remain in the account. The commissioner of revenue shall issue refunds
by August 10. In lieu of issuing a refund, the commissioner of revenue may grant credit
against a manufacturer's variable fee due by September 1.
new text end

(b) Until June 30, 2009, money in the account is annually appropriated to the
Pollution Control Agency:

(1) for the purpose of implementing sections 115A.1312 to 115A.1330, including
transfer to the commissioner of revenue to carry out the department's duties under
section 115A.1320, subdivision 2, and transfer to the commissioner of administration for
responsibilities under section 115A.1324; and

(2) to the commissioner of the Pollution Control Agency to be distributed on a
competitive basis through contracts with counties outside the 11-county metropolitan
area, as defined in paragraph (c), and with private entities that collect for recycling
covered electronic devices in counties outside the 11-county metropolitan area, where the
collection and recycling is consistent with the respective county's solid waste plan, for
the purpose of carrying out the activities under sections 115A.1312 to 115A.1330. In
awarding competitive grants under this clause, the commissioner must give preference to
counties and private entities that are working cooperatively with manufacturers to help
them meet their recycling obligations under section 115A.1318, subdivision 1.

(c) The 11-county metropolitan area consists of the counties of Anoka, Carver,
Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 270C.56, subdivision 1, as amended by Laws
2008, chapter 154, article 15, section 7, is amended to read:

Subdivision 1.

Liability imposed.

A person who, either singly or jointly with
others, has the control of, supervision of, or responsibility for filing returns or reports,
paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
person who is liable under any other law, is liable for the payment of taxes, penalties, and
interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections new text begin 256.9658,
new text end 290.92 and 297E.02, and, for the taxes listed in this subdivision, the applicable penalties
for nonpayment under section 289A.60.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fees due after June 30, 2008.
new text end

Sec. 3.

Minnesota Statutes 2006, section 295.50, subdivision 4, is amended to read:

Subd. 4.

Health care provider.

(a) "Health care provider" means:

(1) a person whose health care occupation is regulated or required to be regulated by
the state of Minnesota furnishing any or all of the following goods or services directly to a
patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services,
drugs, laboratory, diagnostic or therapeutic services;

(2) a person who provides goods and services not listed in clause (1) that qualify for
reimbursement under the medical assistance program provided under chapter 256B;

(3) a staff model health plan company;

(4) an ambulance service required to be licensed; or

(5) a person who sells or repairs hearing aids and related equipment or prescription
eyewear.

(b) Health care provider does not include:

(1) hospitals; medical supplies distributors, except as specified under paragraph
(a), clause (5); nursing homes licensed under chapter 144A or licensed in any other
jurisdiction; new text begin wholesale drug distributors; new text end pharmacies; surgical centers; bus and taxicab
transportation, or any other providers of transportation services other than ambulance
services required to be licensed; supervised living facilities for persons with developmental
disabilities, licensed under Minnesota Rules, parts 4665.0100 to 4665.9900; housing
with services establishments required to be registered under chapter 144D; board
and lodging establishments providing only custodial services that are licensed under
chapter 157 and registered under section 157.17 to provide supportive services or health
supervision services; adult foster homes as defined in Minnesota Rules, part 9555.5105;
day training and habilitation services for adults with developmental disabilities as defined
in section 252.41, subdivision 3; boarding care homes, as defined in Minnesota Rules, part
4655.0100; and adult day care centers as defined in Minnesota Rules, part 9555.9600;

(2) home health agencies as defined in Minnesota Rules, part 9505.0175, subpart
15; a person providing personal care services and supervision of personal care services
as defined in Minnesota Rules, part 9505.0335; a person providing private duty nursing
services as defined in Minnesota Rules, part 9505.0360; and home care providers required
to be licensed under chapter 144A;

(3) a person who employs health care providers solely for the purpose of providing
patient services to its employees; deleted text begin and
deleted text end

(4) an educational institution that employs health care providers solely for the
purpose of providing patient services to its students if the institution does not receive fee
for service payments or payments for extended coverage deleted text begin . deleted text end new text begin ; and
new text end

new text begin (5) a person who receives all payments for patient services from health care
providers, surgical centers, or hospitals for goods and services that are taxable to the
paying health care providers, surgical centers, or hospitals, as provided under section
295.53, subdivision 1, clause (3) or (4), or from a source of funds that is exempt from tax
under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (b), clause (1) is effective the day following final
enactment. Paragraph (b), clause (5) is effective for payments received after June 30, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 295.52, subdivision 4, as amended by Laws
2008, chapter 154, article 14, section 5, is amended to read:

Subd. 4.

Use tax; deleted text begin prescription deleted text end new text begin legend new text end drugs.

(a) A person that receives
prescription drugs for resale or use in Minnesota, other than from a wholesale drug
distributor that is subject to tax under subdivision 3, is subject to a tax equal to the
price paid to the wholesale drug distributor new text begin for the legend drugs, new text end multiplied by the tax
percentage specified in this section. Liability for the tax is incurred when prescription
drugs are received or delivered in Minnesota by the person.

(b) A tax imposed under this subdivision does not apply to purchases by an
individual for personal consumption.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for drug purchases after June 30,
2008.
new text end

Sec. 5.

Minnesota Statutes 2006, section 296A.07, subdivision 4, is amended to read:

Subd. 4.

Exemptions.

The provisions of subdivision 1 do not apply to gasoline new text begin or
denatured ethanol new text end purchased by:

(1) a transit system or transit provider receiving financial assistance or
reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; deleted text begin or
deleted text end

(2) an ambulance service licensed under chapter 144E new text begin ; or
new text end

new text begin (3) a licensed distributor to be delivered to a terminal for use in blending new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2006, section 296A.08, subdivision 3, is amended to read:

Subd. 3.

Exemptions.

The provisions of subdivisions 1 and 2 do not apply to
special fuel or alternative fuels purchased by:

(1) a transit system or transit provider receiving financial assistance or
reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; deleted text begin or deleted text end

(2) an ambulance service licensed under chapter 144E new text begin ; or
new text end

new text begin (3) a licensed distributor to be delivered to a terminal for use in blending new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 297F.21, subdivision 1, is amended to read:

Subdivision 1.

Contraband defined.

The following are declared to be contraband
and therefore subject to civil and criminal penalties under this chapter:

(a) Cigarette packages which do not have stamps affixed to them as provided in this
chapter, including but not limited to (i) packages with illegible stamps and packages with
stamps that are not complete or whole even if the stamps are legible, and (ii) all devices
for the vending of cigarettes in which packages as defined in item (i) are found, including
all contents contained within the devices.

(b) A device for the vending of cigarettes and all packages of cigarettes, where the
device does not afford at least partial visibility of contents. Where any package exposed
to view does not carry the stamp required by this chapter, it shall be presumed that all
packages contained in the device are unstamped and contraband.

(c) A device for the vending of cigarettes to which the commissioner or authorized
agents have been denied access for the inspection of contents. In lieu of seizure, the
commissioner or an agent may seal the device to prevent its use until inspection of
contents is permitted.

(d) A device for the vending of cigarettes which does not carry the name and address
of the owner, plainly marked and visible from the front of the machine.

(e) A device including, but not limited to, motor vehicles, trailers, snowmobiles,
airplanes, and boats used with the knowledge of the owner or of a person operating with
the consent of the owner for the storage or transportation of more than 5,000 cigarettes
which are contraband under this subdivision. When cigarettes are being transported in
the course of interstate commerce, or are in movement from either a public warehouse to
a distributor upon orders from a manufacturer or distributor, or from one distributor to
another, the cigarettes are not contraband, notwithstanding the provisions of clause (a).

(f) A device including, but not limited to, motor vehicles, trailers, snowmobiles,
airplanes, and boats used with the knowledge of the owner, or of a person operating with
the consent of the owner, for the storage or transportation of untaxed tobacco products
intended for sale in Minnesota other than those in the possession of a licensed distributor
on or before the due date for payment of the tax under section 297F.09, subdivision 2.

(g) Cigarette packages or tobacco products obtained from an unlicensed seller.

(h) Cigarette packages offered for sale or held as inventory in violation of section
297F.20, subdivision 7.

(i) Tobacco products on which the tax has not been paid by a licensed distributor.

(j) Any cigarette packages or tobacco products offered for sale or held as inventory
for which there is not an invoice from a licensed seller as required under section 297F.13,
subdivision 4.

(k) Cigarette packages which have been imported into the United States in violation
of United States Code, title 26, section 5754. All cigarettes held in violation of that section
shall be presumed to have entered the United States after December 31, 1999, in the
absence of proof to the contrary.

new text begin (l) Cigarettes and cigarette packaging which are not in compliance with fire safety
requirements of sections 299F.850 to 299F.859.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Property added in paragraph (l) of this section is contraband
effective December 1, 2008.
new text end

Sec. 8.

Minnesota Statutes 2006, section 297I.05, subdivision 12, is amended to read:

Subd. 12.

Other entities.

(a) A tax is imposed equal to two percent of:

(1) gross premiums less return premiums written for risks resident or located in
Minnesota by a risk retention group;

(2) gross premiums less return premiums received by an attorney in fact acting
in accordance with chapter 71A;

(3) gross premiums less return premiums received pursuant to assigned risk policies
and contracts of coverage under chapter 79;

(4) the direct funded premium received by the reinsurance association under section
79.34 from self-insurers approved under section 176.181 and political subdivisions that
self-insure; new text begin and
new text end

deleted text begin (5) gross premiums less return premiums received by a nonprofit health service plan
corporation authorized under chapter 62C; and
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end gross premiums less return premiums paid to an insurer other than a licensed
insurance company or a surplus lines licensee for coverage of risks resident or located in
Minnesota by a purchasing group or any members of the purchasing group to a broker or
agent for the purchasing group.

(b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
rate of tax is equal to two percent of the total amount of claims paid during the fund year,
with no deduction for claims wholly or partially reimbursed through stop-loss insurance.

(c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
The rate of tax is equal to two percent of the total amount of claims paid during the
fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
stop-loss insurance.

(d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5,
on the gross premiums less return premiums on all coverages received by an accountable
provider network or agents of an accountable provider network in Minnesota, in cash or
otherwise, during the year.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 13

DEPARTMENT PROPERTY TAXES AND AIDS

Section 1.

Minnesota Statutes 2006, section 13.51, subdivision 3, is amended to read:

Subd. 3.

Data on income of individuals.

Income information on individuals
collected and maintained by political subdivisions to determine eligibility of property for
class 4d under deleted text begin section 273.126 deleted text end new text begin sections 273.128 new text end and 273.13, is private data on individuals
as defined in section 13.02, subdivision 12.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for data collected or maintained by
political subdivisions beginning the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2006, section 13.585, subdivision 5, is amended to read:

Subd. 5.

Private data on individuals.

Income information on individuals collected
and maintained by a housing agency to determine eligibility of property for class 4d
under sections and 273.13, is private data on individuals as defined in
section 13.02, subdivision 12. The data may be disclosed to the county and local assessors
responsible for determining eligibility of the property for classification 4d.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for data collected or maintained by a
housing agency beginning the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2006, section 272.02, subdivision 38, is amended to read:

Subd. 38.

Conversion to exempt or taxable uses.

(a) Any property new text begin , except
property taxed as personal property under section 273.125, that is new text end exempt from taxation on
January 2 of any year which, due to sale or other reason, loses its exemption prior to July 1
of any year, shall be placed on the current assessment rolls for that year.

The valuation shall be determined with respect to its value on January 2 of such
year. The classification shall be based upon the use to which the property was put by the
purchaser, or in the event the purchaser has not utilized the property by July 1, the intended
use of the property, determined by the county assessor, based upon all relevant facts.

(b) Property new text begin , except property taxed as personal property under section 273.125, that
is new text end subject to tax on January 2 that is acquired before July 1 of the year is exempt for that
assessment year if the property is to be used for an exempt purpose under subdivisions 2
to 8.

(c) Property which forfeits to the state for nonpayment of real estate taxes on or
before December 31 in an assessment year, shall be removed from the assessment rolls for
that assessment year. Forfeited property that is repurchased, or sold at a public or private
sale, on or before December 31 of an assessment year shall be placed on the assessment
rolls for that year's assessment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2007 Supplement, section 273.1231, subdivision 7, is
amended to read:

Subd. 7.

Reassessed market value.

"Reassessed market value" means the taxable
market value of the property established for the January 2 assessment in the year that the
disaster or destruction occurs, as adjusted by the county assessor or the commissioner of
revenue to reflect the loss in market value caused by the damage. deleted text begin As soon as practical, the
assessor or commissioner shall report the reassessed value to the county auditor. deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2007 Supplement, section 273.1231, is amended by adding
a subdivision to read:

new text begin Subd. 8. new text end

new text begin Utility property. new text end

new text begin "Utility property" means property appraised and
classified for tax purposes by the commissioner of revenue under sections 273.33 to
273.3711.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2007 Supplement, section 273.1232, subdivision 1, is
amended to read:

Subdivision 1.

Reassessments required.

For the purposes of sections 273.1231
to 273.1235, the county assessor must reassess all damaged property in a disaster or
emergency area, deleted text begin and the county assessor or deleted text end new text begin except that new text end the commissioner of revenue
deleted text begin as appropriate deleted text end shall reassess all property for which an application is submitted new text begin to the
commissioner new text end under section 273.1233 or 273.1235. new text begin As soon as practical, the assessor or
commissioner of revenue must report the reassessed value to the county auditor.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2007 Supplement, section 273.1233, subdivision 1, is
amended to read:

Subdivision 1.

Abatement authorization.

(a) Notwithstanding section 375.192,
a county board may grant an abatement of net tax for homestead and nonhomestead
property under the provisions of this paragraph for taxes payable in the year in which
the destruction occurs if:

(1) the owner submits a written application to the county assessor as soon as
practical after the damage has occurred;

(2) the owner submits a written application to the county board as soon as practical
after the damage has occurred; and

(3) the county assessor determines that 50 percent or more of a homestead dwelling
or other building has been (i) unintentionally or accidentally destroyed, or (ii) destroyed
by arson or vandalism by someone other than the owner.

Abatements granted under this paragraph are not subject to approval by the
commissioner of revenue.

(b) Notwithstanding sections 270C.86 and 375.192, the commissioner of revenue
may grant an abatement of net tax for new text begin utility new text end property deleted text begin that the commissioner is required by
law to appraise deleted text end for taxes payable in the year in which the destruction occurs if:

(1) the owner submits a written application to the commissioner as soon as practical
after the damage has occurred;

(2) the owner forwards a copy of the written application to the county board as soon
as practical after the damage has occurred; and

(3) the commissioner determines that 50 percent or more of the property has been
(i) unintentionally or accidentally destroyed, or (ii) destroyed by arson or vandalism by
someone other than the owner.

Abatements granted under this paragraph are not subject to approval by the county
board of the county where the property is located.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2007 Supplement, section 273.1233, subdivision 3, is
amended to read:

Subd. 3.

Reimbursement, levy, and appropriation.

(a) If the destruction occurs as
a result of a disaster or emergency and the property is located in a disaster or emergency
area, the county auditor shall certify the abatements granted under this section to the
commissioner of revenue for reimbursement to each taxing jurisdiction in which the
damaged property is located. The commissioner shall make the payments to the taxing
jurisdictions containing the property, other than school districts and the state, at the time
distributions are made under section 473H.10, subdivision 3. Reimbursements to school
districts shall be made as provided in section 273.1392. No reimbursement is to be paid
to the state treasury.

(b) Local taxing authorities may levy in the following year the amount of
unreimbursed tax dollars lost as a result of the reductions granted pursuant to this
deleted text begin subdivision deleted text end new text begin section and sections 273.1234 and 273.1235 new text end outside of any statutory
restriction as to levy amount or tax rate.

(c) There is annually appropriated from the general fund to the commissioner of
revenue an amount necessary to make the payments required by this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2007 Supplement, section 273.1234, is amended to read:

273.1234 TAX RELIEF FOR DESTROYED PROPERTY; HOMESTEAD
AND DISASTER CREDITS.

Subdivision 1.

Credit provided.

The county auditor shall compute a credit for taxes
payable in the year following the year in which the damage or destruction occurred for
each reassessed homestead new text begin property new text end within the county that is located within a disaster
or emergency area. The credit is equal to the difference in the net tax on the property
computed using the market value of the property established for the January 2 assessment
in the year in which the damage occurred and as computed using the reassessed value.

Subd. 2.

Credit reimbursements.

The county auditor shall certify the credits
granted under this section to the commissioner of revenue for reimbursement to each
taxing jurisdiction in which the damaged property is located. The commissioner shall
make the payments to the taxing jurisdictions containing the property, other than
school districts and the state, at the time distributions are made under section 473H.10,
subdivision 3. Reimbursements to school districts shall be made as provided in section
273.1392. deleted text begin No reimbursement is to be paid to the state treasury. deleted text end

Subd. 3.

Appropriation.

There is annually appropriated from the general fund
to the commissioner of revenue an amount necessary to make the payments required
by this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2007 Supplement, section 273.1235, subdivision 1,
is amended to read:

Subdivision 1.

Credit provided.

The county board may grant a credit for taxes
payable in the year following the year in which the damage or destruction occurred
for: (1) homestead deleted text begin properties deleted text end new text begin property that meets all the requirements under section
273.1233, subdivision 1, paragraph (a), but new text end that deleted text begin do deleted text end new text begin does new text end not qualify for a credit under
section 273.1234 new text begin , except that an application need only be submitted by the end of the
year in which the damage occurred new text end ; and (2) nonhomestead new text begin and utility new text end property deleted text begin meeting
the requirements deleted text end new text begin that meets all the requirements new text end under section 273.1233 new text begin , subdivision 1,
paragraph (b), except that an application need only be submitted by the end of the year
in which the damage occurred new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2007 Supplement, section 273.1235, subdivision 3,
is amended to read:

Subd. 3.

Credit reimbursements.

The county auditor shall certify the credits
granted under this section for property within a disaster or emergency area to the
commissioner of revenue for reimbursement to each taxing jurisdiction in which the
damaged property is located. The commissioner shall make the payments to the taxing
jurisdictions containing the property, other than school districts and the state, at the time
distributions are made under section 473H.10, subdivision 3. Reimbursements to school
districts shall be made as provided in section 273.1392. deleted text begin No reimbursement is to be paid
to the state treasury. deleted text end No reimbursement is to be made for credits to property not located
in a disaster or emergency area.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2006, section 273.124, subdivision 13, as amended by
Laws 2008, chapter 154, article 13, section 29, is amended to read:

Subd. 13.

Homestead application.

(a) A person who meets the homestead
requirements under subdivision 1 must file a homestead application with the county
assessor to initially obtain homestead classification.

(b) The format and contents of a uniform homestead application shall be prescribed
by the commissioner of revenue. The application must clearly inform the taxpayer that
this application must be signed by all owners who occupy the property or by the qualifying
relative and returned to the county assessor in order for the property to receive homestead
treatment.

(c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number of each occupant who is listed as an owner
of the property on the deed of record, the name and address of each owner who does not
occupy the property, and the name and Social Security number of each owner's spouse who
occupies the property. The application must be signed by each owner who occupies the
property and by each owner's spouse who occupies the property, or, in the case of property
that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not
claim another property as a homestead unless the property owner and the property owner's
spouse file with the assessor an affidavit or other proof required by the assessor stating that
the property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously
occupied with the other spouse, either of whom fail to include the other spouse's name
and Social Security number on the homestead application or provide the affidavits or
other proof requested, will be deemed to have elected to receive only partial homestead
treatment of their residence. The remainder of the residence will be classified as
nonhomestead residential. When an owner or spouse's name and Social Security number
appear on homestead applications for two separate residences and only one application is
signed, the owner or spouse will be deemed to have elected to homestead the residence for
which the application was signed.

The Social Security numbers new text begin , state or federal tax returns or tax return information,
including the federal income tax schedule F required by this section, new text end or affidavits or other
proofs of the property owners and spouses deleted text begin , and the federal income tax schedule F required
by this section, deleted text end new text begin submitted under this or another section to support a claim for a property
tax homestead classification new text end are private data on individuals as defined by section 13.02,
subdivision 12, but, notwithstanding that section, the private data may be disclosed to the
commissioner of revenue, or, for purposes of proceeding under the Revenue Recapture
Act to recover personal property taxes owing, to the county treasurer.

(d) If residential real estate is occupied and used for purposes of a homestead by a
relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
order for the property to receive homestead status, a homestead application must be filed
with the assessor. The Social Security number of each relative and spouse of a relative
occupying the property shall be required on the homestead application filed under this
subdivision. If a different relative of the owner subsequently occupies the property, the
owner of the property must notify the assessor within 30 days of the change in occupancy.
The Social Security number of a relative or relative's spouse occupying the property
is private data on individuals as defined by section 13.02, subdivision 12, but may be
disclosed to the commissioner of revenue, or, for the purposes of proceeding under the
Revenue Recapture Act to recover personal property taxes owing, to the county treasurer.

(e) The homestead application shall also notify the property owners that the
application filed under this section will not be mailed annually and that if the property
is granted homestead status for any assessment year, that same property shall remain
classified as homestead until the property is sold or transferred to another person, or
the owners, the spouse of the owner, or the relatives no longer use the property as their
homestead. Upon the sale or transfer of the homestead property, a certificate of value must
be timely filed with the county auditor as provided under section 272.115. Failure to
notify the assessor within 30 days that the property has been sold, transferred, or that the
owner, the spouse of the owner, or the relative is no longer occupying the property as a
homestead, shall result in the penalty provided under this subdivision and the property
will lose its current homestead status.

(f) If the homestead application is not returned within 30 days, the county will send a
second application to the present owners of record. The notice of proposed property taxes
prepared under section 275.065, subdivision 3, shall reflect the property's classification. If
a homestead application has not been filed with the county by December 15, the assessor
shall classify the property as nonhomestead for the current assessment year for taxes
payable in the following year, provided that the owner may be entitled to receive the
homestead classification by proper application under section 375.192.

(g) At the request of the commissioner, each county must give the commissioner a
list that includes the name and Social Security number of each occupant of homestead
property who is the property owner, property owner's spouse, qualifying relative of a
property owner, or a spouse of a qualifying relative. The commissioner shall use the
information provided on the lists as appropriate under the law, including for the detection
of improper claims by owners, or relatives of owners, under chapter 290A.

(h) If the commissioner finds that a property owner may be claiming a fraudulent
homestead, the commissioner shall notify the appropriate counties. Within 90 days of
the notification, the county assessor shall investigate to determine if the homestead
classification was properly claimed. If the property owner does not qualify, the county
assessor shall notify the county auditor who will determine the amount of homestead
benefits that had been improperly allowed. For the purpose of this section, "homestead
benefits" means the tax reduction resulting from the classification as a homestead under
section 273.13, the taconite homestead credit under section 273.135, the residential
homestead and agricultural homestead credits under section 273.1384, and the
supplemental homestead credit under section 273.1391.

The county auditor shall send a notice to the person who owned the affected property
at the time the homestead application related to the improper homestead was filed,
demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
of the homestead benefits. The person notified may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section
278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
Court within 60 days of the date of the notice from the county. Procedurally, the appeal
is governed by the provisions in chapter 271 which apply to the appeal of a property tax
assessment or levy, but without requiring any prepayment of the amount in controversy. If
the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
has been filed, the county auditor shall certify the amount of taxes and penalty to the county
treasurer. The county treasurer will add interest to the unpaid homestead benefits and
penalty amounts at the rate provided in section 279.03 for real property taxes becoming
delinquent in the calendar year during which the amount remains unpaid. Interest may be
assessed for the period beginning 60 days after demand for payment was made.

If the person notified is the current owner of the property, the treasurer may add the
total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
otherwise payable on the property by including the amounts on the property tax statements
under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
valorem taxes shall include interest accrued through December 31 of the year preceding
the taxes payable year for which the amounts are first added. These amounts, when added
to the property tax statement, become subject to all the laws for the enforcement of real or
personal property taxes for that year, and for any subsequent year.

If the person notified is not the current owner of the property, the treasurer may
collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
tax obligations of the person who owned the property at the time the application related
to the improperly allowed homestead was filed. The treasurer may relieve a prior owner
of personal liability for the homestead benefits, penalty, interest, and costs, and instead
extend those amounts on the tax lists against the property as provided in this paragraph
to the extent that the current owner agrees in writing. On all demands, billings, property
tax statements, and related correspondence, the county must list and state separately the
amounts of homestead benefits, penalty, interest and costs being demanded, billed or
assessed.

(i) Any amount of homestead benefits recovered by the county from the property
owner shall be distributed to the county, city or town, and school district where the
property is located in the same proportion that each taxing district's levy was to the total
of the three taxing districts' levy for the current year. Any amount recovered attributable
to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
deposited in the taconite property tax relief account. Any amount recovered that is
attributable to supplemental homestead credit is to be transmitted to the commissioner of
revenue for deposit in the general fund of the state treasury. The total amount of penalty
collected must be deposited in the county general fund.

(j) If a property owner has applied for more than one homestead and the county
assessors cannot determine which property should be classified as homestead, the county
assessors will refer the information to the commissioner. The commissioner shall make
the determination and notify the counties within 60 days.

(k) In addition to lists of homestead properties, the commissioner may ask the
counties to furnish lists of all properties and the record owners. The Social Security
numbers and federal identification numbers that are maintained by a county or city
assessor for property tax administration purposes, and that may appear on the lists retain
their classification as private or nonpublic data; but may be viewed, accessed, and used by
the county auditor or treasurer of the same county for the limited purpose of assisting the
commissioner in the preparation of microdata samples under section 270C.12.

(l) On or before April 30 each year beginning in 2007, each county must provide the
commissioner with the following data for each parcel of homestead property by electronic
means as defined in section 289A.02, subdivision 8:

(i) the property identification number assigned to the parcel for purposes of taxes
payable in the current year;

(ii) the name and Social Security number of each occupant of homestead property
who is the property owner, property owner's spouse, qualifying relative of a property
owner, or spouse of a qualifying relative;

(iii) the classification of the property under section 273.13 for taxes payable in the
current year and in the prior year;

(iv) an indication of whether the property was classified as a homestead for taxes
payable in the current year because of occupancy by a relative of the owner or by a
spouse of a relative;

(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;

(vi) the market value of improvements to the property first assessed for tax purposes
for taxes payable in the current year;

(vii) the assessor's estimated market value assigned to the property for taxes payable
in the current year and the prior year;

(viii) the taxable market value assigned to the property for taxes payable in the
current year and the prior year;

(ix) whether there are delinquent property taxes owing on the homestead;

(x) the unique taxing district in which the property is located; and

(xi) such other information as the commissioner decides is necessary.

The commissioner shall use the information provided on the lists as appropriate
under the law, including for the detection of improper claims by owners, or relatives
of owners, under chapter 290A.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2006, section 273.124, subdivision 21, is amended to read:

Subd. 21.

Trust property; homestead.

Real property held by a trustee under a trust
is eligible for classification as homestead property if:

(1) the grantor or surviving spouse of the grantor of the trust occupies and uses the
property as a homestead;

(2) a relative or surviving relative of the grantor who meets the requirements of
subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1,
paragraph (d), in the case of agricultural property, occupies and uses the property as
a homestead;

(3) a family farm corporation, joint farm venture, limited liability company, or
partnership operating a family farm new text begin in which the grantor or the grantor's surviving spouse
is a shareholder, member, or partner new text end rents the property deleted text begin held by a trustee under a trust deleted text end , and
deleted text begin the grantor, the spouse of the grantor, or the son or daughter of the grantor, who is also deleted text end a
shareholder, member, or partner of the corporation, joint farm venture, limited liability
company, or partnership occupies and uses the property as a homestead, or is actively
farming the property on behalf of the corporation, joint farm venture, limited liability
company, or partnership; or

(4) a person who has received homestead classification for property taxes payable in
2000 on the basis of an unqualified legal right under the terms of the trust agreement to
occupy the property as that person's homestead and who continues to use the property as
a homestead or a person who received the homestead classification for taxes payable in
2005 under clause (3) who does not qualify under clause (3) for taxes payable in 2006
or thereafter but who continues to qualify under clause (3) as it existed for taxes payable
in 2005.

For purposes of this subdivision, "grantor" is defined as the person creating or
establishing a testamentary, inter Vivos, revocable or irrevocable trust by written
instrument or through the exercise of a power of appointment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2006, section 273.13, subdivision 34, as added by Laws
2008, chapter 154, article 2, section 14, is amended to read:

Subd. 34.

Homestead of disabled veteran.

(a) All or a portion of the market
value of property new text begin owned by a veteran or by the veteran and their spouse, new text end qualifying
for homestead classification under subdivision 22 or 23 is excluded in determining the
property's taxable market value if it serves as the homestead of a military veteran, as
defined in section 197.447, who has a service-connected disability of 70 percent or more.
To qualify for exclusion under this subdivision, the veteran must have been honorably
discharged from the United States armed forces, as indicated by United States Government
Form DD214 or other official military discharge papers, and must be certified by the
United States Veterans Administration as having a service-connected disability.

(b)(1) For a disability rating of 70 percent or more, $150,000 of market value is
excluded, except as provided in clause (2); and

(2) for a total (100 percent) and permanent disability, $300,000 of market value is
excluded.

(c) If a disabled veteran qualifying for a valuation exclusion under paragraph (b),
clause (2), predeceases the veteran's spouse, and if upon the death of the veteran the
spouse holds the legal or beneficial title to the homestead and permanently resides there,
the exclusion shall carry over to the benefit of the veteran's spouse until such time as
the spouse sells, transfers, or otherwise disposes of the property. new text begin The benefits granted
under this section for the property of a surviving spouse also apply to property that
received surviving-spouse benefits under subdivision 22, paragraph (b), clause (2), for
taxes payable in 2008.
new text end

(d) In the case of an agricultural homestead, only the portion of the property
consisting of the house and garage and immediately surrounding one acre of land qualifies
for the valuation exclusion under this subdivision.

(e) A property qualifying for a valuation exclusion under this subdivision is not
eligible for the credit under section 273.1384, subdivision 1 new text begin , or classification under
subdivision 22, paragraph (b) new text end .

(f) To qualify for a valuation exclusion under this subdivision a property owner must
apply to the assessor by July 1 of each assessment year, except that an annual reapplication
is not required once a property has been accepted for a valuation exclusion under paragraph
(b), clause (2), and the property continues to qualify until there is a change in ownership.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2008 and
thereafter, for taxes payable in 2009 and thereafter, except that the application date in
paragraph (f) for the 2008 assessment year is extended to September 1, 2008.
new text end

Sec. 15.

Minnesota Statutes 2006, section 274.01, subdivision 3, is amended to read:

Subd. 3.

Local board duties transferred to county.

The town board of any town
or the governing body of any home rule charter or statutory city may transfer its powers
and duties under subdivision 1 to the county board, and no longer perform the function
of a local board. Before the town board or the governing body of a city transfers the
powers and duties to the county board, the town board or city's governing body shall give
public notice of the meeting at which the proposal for transfer is to be considered. The
public notice shall follow the procedure contained in section 13D.04, subdivision 2. A
transfer of duties as permitted under this subdivision must be communicated to the county
assessor, in writing, before December 1 of any year to be effective for the following
year's assessment. This transfer of duties to the county may either be permanent or for a
specified number of years, provided that the transfer cannot be for less than three years.
Its length must be stated in writing. A town or city may renew its option to transfer. deleted text begin The
option to transfer duties under this subdivision is only available to a town or city whose
assessment is done by the county. deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2006, section 274.014, subdivision 3, is amended to read:

Subd. 3.

Proof of compliance; transfer of duties.

(a) Any city or town that
conducts local boards of appeal and equalization meetings must provide proof to the
county assessor by December 1, 2006, and each year thereafter, that it is in compliance
with the requirements of subdivision 2. Beginning in 2006, this notice must also verify
that there was a quorum of voting members at each meeting of the board of appeal
and equalization in the current year. A city or town that does not comply with these
requirements is deemed to have transferred its board of appeal and equalization powers
to the county beginning with the following year's assessment and continuing unless the
powers are reinstated under paragraph (c).

(b) The county shall notify the taxpayers when the board of appeal and equalization
for a city or town has been transferred to the county under this subdivision and, prior to
the meeting time of the county board of equalization, the county shall make available to
those taxpayers a procedure for a review of the assessments, including, but not limited to,
open book meetings. This alternate review process shall take place in April and May.

(c) A local board whose powers are transferred to the county under this subdivision
may be reinstated by resolution of the governing body of the city or town and upon proof
of compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the county assessor by December 1 in order to be effective for the following
year's assessment.

new text begin (d) A local board whose powers are transferred to the county under this subdivision
may continue to employ a local assessor and is not deemed to have transferred its powers
to make assessments.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2006, section 290B.04, subdivision 1, is amended to read:

Subdivision 1.

Initial application.

(a) A taxpayer meeting the program
qualifications under section 290B.03 may apply to the commissioner of revenue for the
deferral of taxes. Applications are due on or before July 1 for deferral of any of the
following year's property taxes. A taxpayer may apply in the year in which the taxpayer
becomes 65 years old, provided that no deferral of property taxes will be made until the
calendar year after the taxpayer becomes 65 years old. The application, which shall be
prescribed by the commissioner of revenue, shall include the following items and any
other information which the commissioner deems necessary:

(1) the name, address, and Social Security number of the owner or owners;

(2) a copy of the property tax statement for the current payable year for the
homesteaded property;

(3) the initial year of ownership and occupancy as a homestead;

(4) the owner's household income for the previous calendar year; and

(5) information on any mortgage loans or other amounts secured by mortgages or
other liens against the property, for which purpose the commissioner may require the
applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
balance owing on the mortgage loan provided by the mortgage holder. The commissioner
may require the appropriate documents in connection with obtaining and confirming
information on unpaid amounts secured by other liens.

The application must state that program participation is voluntary. The application
must also state that the deferred amount depends directly on the applicant's household
income, and that program participation includes authorization for the annual deferred
amount, the cumulative deferral and interest that appear on each year's notice prepared by
the county under subdivision 6, is public data.

The application must state that program participants may claim the property tax
refund based on the full amount of property taxes eligible for the refund, including any
deferred amounts. The application must also state that property tax refunds will be used to
offset any deferral and interest under this program, and that any other amounts subject to
revenue recapture under section 270A.03, subdivision 7, will also be used to offset any
deferral and interest under this program.

(b) As part of the initial application process, the commissioner may require the
applicant to obtain at the applicant's own cost and submit:

(1) if the property is registered property under chapter 508 or 508A, a copy of the
original certificate of title in the possession of the county registrar of titles (sometimes
referred to as "condition of register"); or

(2) if the property is abstract property, a report prepared by a licensed abstracter
showing the last deed and any unsatisfied mortgages, liens, judgments, and state and
federal tax lien notices which were recorded on or after the date of that last deed with
respect to the property or to the applicant.

The certificate or report under clauses (1) and (2) need not include references to
any documents filed or recorded more than 40 years prior to the date of the certification
or report. The certification or report must be as of a date not more than 30 days prior
to submission of the application.

The commissioner may also require the county recorder or county registrar of the
county where the property is located to provide copies of recorded documents related to
the applicant or the property, for which the recorder or registrar shall not charge a fee. The
commissioner may use any information available to determine or verify eligibility under
this section. new text begin The household income from the application is private data on individuals as
defined in section 13.02, subdivision 12.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for data collected or maintained by
the commissioner of revenue beginning the day following final enactment.
new text end

Sec. 18.

Minnesota Statutes 2006, section 469.040, subdivision 4, is amended to read:

Subd. 4.

Facilities funded from multiple sources.

In the metropolitan area, as
defined in section 473.121, subdivision 2, the tax treatment provided in subdivision 3
applies to that portion of any multifamily rental housing facility represented by the ratio of
(1) the number of units in the facility that are subject to the requirements of Section 5 of
the United States Housing Act of 1937, as the result of the implementation of a federal
court order or consent decree to (2) the total number of units within the facility.

The housing and redevelopment authority for the city in which the facility is located,
any public entity exercising the powers of such housing and redevelopment authority, or
the county housing and redevelopment authority for the county in which the facility is
located, shall annually certify to the assessor responsible for assessing the facility, at the
time and in the manner required by the assessor, the number of units in the facility that are
subject to the requirements of Section 5 of the United States Housing Act of 1937.

Nothing in this subdivision shall prevent that portion of the facility not subject to
this subdivision from meeting the requirements of section deleted text begin 273.126 deleted text end new text begin 273.128 new text end , and for that
purpose the total number of units in the facility must be taken into account.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxes payable in
2006 and thereafter.
new text end

Sec. 19.

Minnesota Statutes 2006, section 469.174, subdivision 10b, is amended to
read:

Subd. 10b.

Qualified disaster area.

A "qualified disaster area" is an area that
meets the following requirements:

(1) parcels consisting of 70 percent of the area of the district were occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar structures
immediately before the disaster or emergency;

(2) the area of the district was subject to a disaster or emergency, as defined in
section deleted text begin 273.123, subdivision 1 deleted text end new text begin 273.1231, subdivision 2 new text end , within the 18-month period
ending on the day the request for certification of the district is made; and

(3) 50 percent or more of the buildings in the area have suffered substantial damage
as a result of the disaster or emergency.

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2006, section 469.177, subdivision 1c, is amended to read:

Subd. 1c.

Original net tax capacity adjustments; presidential disaster area.

(a)
The provisions of this subdivision apply to a district located in a disaster area, as described
in section deleted text begin 273.123, subdivision 1, paragraph (b) deleted text end new text begin 273.1231, subdivision 3, paragraph (a) new text end ,
clause (1), and are effective for taxes payable in the first calendar year beginning at least
four months after the date of the determination.

(b) For a district certified before the date of the disaster area determination as
provided in section deleted text begin 273.123, subdivision 1, paragraph (b) deleted text end new text begin 273.1231, subdivision 3,
paragraph (a) new text end , clause (1), upon the request of the municipality, the county auditor shall
reduce the original net tax capacity of the district by the reduction in the net tax capacity
of properties in the district that is attributable to the physical effects of the disaster, but not
below zero. The assessor shall determine the amount of the reduction in market value that
is attributable to the physical effects of the disaster to be used by the county auditor in
computing the reduction in net tax capacity.

(c) For a district that does not qualify under paragraph (b) and for which the request
for certification is made in the same calendar year as the disaster area determination,
upon the request of the municipality, the assessor shall determine the reduction in market
value of properties in the district that is attributable to the physical effects of the disaster.
The county auditor shall use the reduced market value in certifying the original net tax
capacity of the district.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 14

DEPARTMENT MISCELLANEOUS

Section 1.

Minnesota Statutes 2006, section 16D.02, subdivision 3, is amended to read:

Subd. 3.

Debt.

"Debt" means an amount owed to the state directly, or through a
state agency, on account of a fee, duty, lease, direct loan, loan insured or guaranteed by
the state, rent, service, sale of real or personal property, overpayment, fine, assessment,
penalty, restitution, damages, interest, tax, bail bond, forfeiture, reimbursement, liability
owed, an assignment to the state including assignments under section 256.741, the Social
Security Act, or other state or federal law, recovery of costs incurred by the state, or any
other source of indebtedness to the state. Debt also includes amounts owed to individuals
as a result of civil, criminal, or administrative action brought by the state or a state agency
pursuant to its statutory authority or for which the state or state agency acts in a fiduciary
capacity in providing collection services in accordance with the regulations adopted under
the Social Security Act at Code of Federal Regulations, title 45, section 302.33. new text begin When the
commissioner provides collection services pursuant to a debt qualification plan, new text end debt also
includes an amount owed to the courts new text begin , local government units, Minnesota state colleges
and universities governed by the Board of Trustees of the Minnesota State Colleges and
Universities, new text end or University of Minnesota deleted text begin for which the commissioner provides collection
services pursuant to contract deleted text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2006, section 16D.02, subdivision 6, is amended to read:

Subd. 6.

Referring agency.

"Referring agency" means a state agency new text begin , local
government unit, Minnesota state colleges and universities governed by the Board of
Trustees of the Minnesota State Colleges and Universities, University of Minnesota, new text end or
a court new text begin , new text end that has entered into a debt qualification plan with the commissioner to refer
debts to the commissioner for collection.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 16D.04, subdivision 2, as amended by Laws
2008, chapter 154, article 15, section 2, is amended to read:

Subd. 2.

Agency participation.

(a) A referring agency must refer, by electronic
means, debts to the commissioner for collection. deleted text begin Responsibility for the debt, including the
reporting of the debt to the commissioner of finance and the decision with regard to the
continuing collection and uncollectibility of the debt, remains with the referring agency. deleted text end
new text begin Decisions with regard to continuing collection and the uncollectibility of referred debts
shall be made by the commissioner who shall then notify the commissioner of finance and
the referring agency. A decision by the commissioner that a referred debt is uncollectible
does not prevent the referring agency from taking additional collection action.
new text end

(b) Before a debt becomes 121 days past due, a referring agency may refer the
debt to the commissioner for collection at any time after a debt becomes delinquent and
uncontested and the debtor has no further administrative appeal of the amount of the debt.
When a debt owed to a referring agency becomes 121 days past due, the referring agency
must refer the debt to the commissioner for collection. This requirement does not apply if
there is a dispute over the amount or validity of the debt, if the debt is the subject of legal
action or administrative proceedings, or the agency determines that the debtor is adhering
to acceptable payment arrangements. The commissioner may provide that certain types of
debt need not be referred to the commissioner for collection under this paragraph. Methods
and procedures for referral must follow internal guidelines prepared by the commissioner.

(c) If the referring agency is a court, the court must furnish a debtor's Social Security
number to the commissioner when the court refers the debt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for debts referred after December
31, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 270A.08, subdivision 1, is amended to read:

Subdivision 1.

Notice to debtor.

new text begin (a) new text end Not later than five days after the claimant
agency has sent notification to the department pursuant to section 270A.07, subdivision 1,
the claimant agency shall send a written notification to the debtor asserting the right of the
claimant agency to the refund or any part thereof. If the notice is returned to the claimant
agency as undeliverable, or the claimant agency has reason to believe the debtor did not
receive the notice, the claimant agency shall obtain the deleted text begin current deleted text end new text begin last known new text end address of the
debtor from the commissioner and resend the corrected notice.

new text begin (b) If a debt has been referred to the commissioner for collection under chapter 16D
and the referring agency meets the definition of claimant agency under this chapter, the
commissioner must notify the debtor prior to using revenue recapture under this chapter
for collection of the debt. The notice must be sent by United States mail or personal
delivery to the last known address of the debtor.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for debts referred after December
31, 2008.
new text end

Sec. 5.

Minnesota Statutes 2006, section 270C.33, subdivision 5, is amended to read:

Subd. 5.

Prohibition against collection during appeal period of an order.

No
collection action can be taken on an order of assessment, new text begin or any other order imposing a
liability, new text end including the filing of liens under section 270C.63, and no late payment penalties
may be imposed when a return has been filed for the tax type and period upon which the
order is based, during the appeal period of an order. The appeal period of an order ends:
(1) 60 days after the order has been mailed to the taxpayer by the commissioner; (2) if an
administrative appeal is filed under section 270C.35, 60 days after determination of the
administrative appeal; (3) if an appeal to Tax Court is filed under chapter 271, when the
decision of the Tax Court is made; or (4) if an appeal to Tax Court is filed and the appeal is
based upon a constitutional challenge to the tax, 60 days after final determination of the
appeal. This subdivision does not apply to a jeopardy assessment under section 270C.36,
or a jeopardy collection under section 270C.36.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 15

MISCELLANEOUS TAXES

Section 1.

Minnesota Statutes 2006, section 60A.196, is amended to read:

60A.196 DEFINITIONS.

Unless the context otherwise requires, the following terms have the meanings given
them for the purposes of sections 60A.195 to 60A.209:

(a) "Surplus lines insurance" means insurance placed with an insurer permitted
to transact the business of insurance in this state only pursuant to sections 60A.195 to
60A.209.

(b) "Eligible surplus lines insurer" means an insurer recognized as eligible to write
insurance business under sections 60A.195 to 60A.209 but not licensed by any other
Minnesota law to transact the business of insurance.

(c) "Ineligible surplus lines insurer" means an insurer not recognized as an eligible
surplus lines insurer pursuant to sections 60A.195 to 60A.209 and not licensed by any
other Minnesota law to transact the business of insurance. "Ineligible surplus lines
insurer" includes a risk retention group as defined under the Liability Risk Retention
Act, Public Law 99-563.

(d) "Surplus lines licensee" or "licensee" means a person licensed under sections
60A.195 to 60A.209 to place insurance with an eligible or ineligible surplus lines insurer.

(e) "Association" means an association registered under section 60A.208.

(f) "Alien insurer" means any insurer which is incorporated or otherwise organized
outside of the United States.

(g) "Insurance laws" means chapters 60 to 79 inclusive.

new text begin (h) "Stamping" means electronically assigning a unique identifying number that is
specific to a submitted policy, contract, or insurance document.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to policies written or renewed on or after that date.
new text end

Sec. 2.

new text begin [60A.2085] SURPLUS LINES ASSOCIATION OF MINNESOTA.
new text end

new text begin Subdivision 1. new text end

new text begin Association created; duties. new text end

new text begin There is hereby created a nonprofit
association to be known as the Surplus Lines Association of Minnesota. All surplus lines
licensees are members of this association. Section 60A.208, subdivision 5, does not apply
to the provisions of this section. The association shall perform its functions under the
plan of operation established under subdivision 3 and must exercise its powers through a
board of directors established under subdivision 2. The association shall be authorized
and have the duty to:
new text end

new text begin (1) receive, record, and stamp all surplus lines insurance documents that surplus
lines licensees are required to file with the association;
new text end

new text begin (2) prepare and deliver monthly to the commissioners of revenue and commerce a
report regarding surplus lines business. The report must include a list of all the business
procured during the preceding month, in the form the commissioners prescribe;
new text end

new text begin (3) educate its members regarding the surplus lines law of this state including
insurance tax responsibilities and the rules and regulations of the commissioners of
revenue and commerce relative to surplus lines insurance;
new text end

new text begin (4) communicate with organizations of agents, brokers, and admitted insurers with
respect to the proper use of the surplus lines market;
new text end

new text begin (5) employ and retain persons necessary to carry out the duties of the association;
new text end

new text begin (6) borrow money necessary to effect the purposes of the association;
new text end

new text begin (7) enter contracts necessary to effect the purposes of the association;
new text end

new text begin (8) provide other services to its members that are incidental or related to the
purposes of the association; and
new text end

new text begin (9) take other actions reasonably required to implement the provisions of this section.
new text end

new text begin Subd. 2. new text end

new text begin Board of directors. new text end

new text begin (a) The commissioner shall appoint an interim board
of five directors within 30 days of enactment of this section. The interim board must:
new text end

new text begin (1) establish a plan of operation within 60 days after the appointment of the interim
board;
new text end

new text begin (2) create a stamping office that is operational no later than December 31, 2008; and
new text end

new text begin (3) conduct an election for a board of directors by the membership after December
31, 2008, and no later than one year after the appointment of the interim board.
new text end

new text begin (b) Once the responsibilities of the interim board in paragraph (a) are fulfilled, the
association shall function through a board of directors composed of the following:
new text end

new text begin (1) one director appointed by the commissioner of revenue;
new text end

new text begin (2) one director appointed by the commissioner of commerce; and
new text end

new text begin (3) at least five but no more than seven directors elected by the members. The
elected directors must be members of the association.
new text end

new text begin Directors may serve until their successors are appointed or elected and their terms
are completed as outlined in the plan of operation.
new text end

new text begin Subd. 3. new text end

new text begin Plan of operation. new text end

new text begin (a) The plan of operation shall provide for the
formation, operation, and governance of the association. The plan of operation must
provide for the election of a board of directors by the members of the association. The
board of directors shall elect officers as provided for in the plan of operation. The plan
of operation shall establish the manner of voting and may weigh each member's vote to
reflect the annual surplus lines insurance premium written by the member. Members
employed by the same or affiliated employers may consolidate their premiums written
and delegate an individual officer or partner to represent the member in the exercise of
association affairs, including service on the board of directors.
new text end

new text begin (b) The plan of operation shall provide for an independent audit once each year of all
the books and records of the association and a report of such independent audit shall be
made to the board of directors, the commissioner of revenue, and the commissioner of
commerce, with a copy made available to each member to review at the association office.
new text end

new text begin (c) The plan of operation and any amendments to the plan of operation shall be
submitted to the commissioner and shall be effective upon approval in writing by the
commissioner. The association and all members shall comply with the plan of operation or
any amendments to it. Failure to comply with the plan of operation or any amendments
shall constitute a violation for which the commissioner may issue an order requiring
discontinuance of the violation.
new text end

new text begin (d) If the interim board of directors fails to submit a suitable plan of operation
within 60 days following the creation of the interim board, or if at any time thereafter the
association fails to submit required amendments to the plan, the commissioner may submit
to the association a plan of operation or amendments to the plan, which the association
must follow. The plan of operation or amendments submitted by the commissioner shall
continue in force until amended by the commissioner or superseded by a plan of operation
or amendment submitted by the association and approved by the commissioner. A plan
of operation or an amendment submitted by the commissioner constitutes an order of
the commissioner.
new text end

new text begin Subd. 4. new text end

new text begin Reporting requirement. new text end

new text begin The association shall file with the commissioner:
new text end

new text begin (1) a copy of its plan of operation and any amendments to it;
new text end

new text begin (2) a current list of its members revised at least annually; and
new text end

new text begin (3) the name and address of a member of the board residing in this state upon
whom notices or orders of the commissioner or processes issued at the direction of the
commissioner may be served.
new text end

new text begin Subd. 5. new text end

new text begin Examination. new text end

new text begin The commissioner shall, at such times as deemed necessary,
make or cause to be made an examination of the association. The officers, managers,
agents, and employees of the association may be examined at any time, under oath, and
shall exhibit all books, records, accounts, documents, or agreements governing its method
of operation. The commissioner shall furnish a copy of the examination report to the
association. If the commissioner finds the association to be in violation of this section, the
commissioner may issue an order requiring the discontinuance of the violation.
new text end

new text begin Subd. 6. new text end

new text begin Immunity. new text end

new text begin There shall be no liability on the part of and no causes of action
of any nature shall arise against the association, its directors, officers, agents, or employees
for any action taken or omitted by them in the performance of their powers and duties
under this section, absent gross negligence or willful misconduct.
new text end

new text begin Subd. 7. new text end

new text begin Stamping fee. new text end

new text begin The services performed by the association shall be
funded by a stamping fee assessed for each premium-bearing document submitted to
the association. The stamping fee shall be established by the board of directors of the
association from time to time. The stamping fee shall be paid by the insured to the surplus
lines licensee and remitted electronically to the association by the surplus lines licensee.
new text end

new text begin Subd. 8. new text end

new text begin Data classification. new text end

new text begin Unless otherwise classified by statute, a temporary
classification under section 13.06, or federal law, information obtained by the
commissioner from the association is public, except that any data identifying insureds is
private data on individuals or nonpublic data as defined in section 13.02, subdivisions
9 and 12.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to policies written or renewed on or after that date.
new text end

Sec. 3.

new text begin [60A.2086] LICENSEE'S DUTY TO SUBMIT DOCUMENTS; PENALTY.
new text end

new text begin Subdivision 1. new text end

new text begin Submission of documents to the Surplus Lines Association
of Minnesota; certification. new text end

new text begin (a) A surplus lines licensee shall submit every insurance
policy or contract issued under the licensee's license to the Surplus Lines Association of
Minnesota for recording and stamping. The submission and stamping must be effected
through electronic means. The submission must include:
new text end

new text begin (1) the name of the insured;
new text end

new text begin (2) a description and location of the insured property or risk;
new text end

new text begin (3) the amount insured;
new text end

new text begin (4) the gross premiums charged or returned;
new text end

new text begin (5) the name of the surplus lines insurer from whom coverage has been procured;
new text end

new text begin (6) the kind or kinds of insurance procured; and
new text end

new text begin (7) the amount of premium subject to tax.
new text end

new text begin (b) The submission of insurance policies or contracts to the Surplus Lines
Association of Minnesota constitutes a certification by the surplus lines licensee, or by the
insurance producer who presented the risk to the surplus lines licensee for placement as a
surplus lines risk, that the insurance policies or contracts were procured in accordance
with sections 60A.195 to 60A.209.
new text end

new text begin Subd. 2. new text end

new text begin Stamping requirement; penalty. new text end

new text begin (a) It shall be unlawful for an insurance
agent, broker, or surplus lines licensee to deliver in this state any surplus lines insurance
policy or contract unless the insurance document is stamped by the association. A
licensee's failure to comply with the requirements of this subdivision shall not affect the
validity of the coverage.
new text end

new text begin (b) Any insurance agent, broker, or surplus lines licensee who delivers in this state
any insurance policy or contract that has not been stamped by the association shall be
subject to a penalty payable to the commissioner as follows:
new text end

new text begin (1) $50 for delivery of the first unstamped policy;
new text end

new text begin (2) $250 for delivery of a second unstamped policy; and
new text end

new text begin (3) $1,000 per policy for delivery of any additional unstamped policies.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, and applies to
policies written or renewed after December 31, 2008.
new text end

Sec. 4.

Minnesota Statutes 2007 Supplement, section 298.227, is amended to read:

298.227 TACONITE ECONOMIC DEVELOPMENT FUND.

new text begin For production in 2007, distributions in 2008, and beginning for production in
2013, distributions in 2014 and thereafter, new text end an amount equal to that distributed pursuant to
each taconite producer's taxable production and qualifying sales under section 298.28,
subdivision 9a, shall be held by the Iron Range Resources and Rehabilitation Board in a
separate taconite economic development fund for each taconite and direct reduced ore
producer. Money from the fund for each producer shall be released by the commissioner
after review by a joint committee consisting of an equal number of representatives of the
salaried employees and the nonsalaried production and maintenance employees of that
producer. The District 11 director of the United States Steelworkers of America, on advice
of each local employee president, shall select the employee members. In nonorganized
operations, the employee committee shall be elected by the nonsalaried production and
maintenance employees. The review must be completed no later than six months after the
producer presents a proposal for expenditure of the funds to the committee. The funds
held pursuant to this section may be released only for acquisition of plant and stationary
mining equipment and facilities for the producer or for research and development in
Minnesota on new mining, or taconite, iron, or steel production technology, but only if
the producer provides a matching expenditure to be used for the same purpose of at least
50 percent of the distribution based on 14.7 cents per ton beginning with distributions in
2002. Effective for proposals for expenditures of money from the fund beginning May 26,
2007, the commissioner may not release the funds before the next scheduled meeting of
the board. If the board rejects a proposed expenditure, the funds must be deposited in the
Taconite Environmental Protection Fund under sections 298.222 to 298.225. If a producer
uses money which has been released from the fund prior to May 26, 2007 to procure
haulage trucks, mobile equipment, or mining shovels, and the producer removes the piece
of equipment from the taconite tax relief area defined in section 273.134 within ten years
from the date of receipt of the money from the fund, a portion of the money granted
from the fund must be repaid to the taconite economic development fund. The portion
of the money to be repaid is 100 percent of the grant if the equipment is removed from
the taconite tax relief area within 12 months after receipt of the money from the fund,
declining by ten percent for each of the subsequent nine years during which the equipment
remains within the taconite tax relief area. If a taconite production facility is sold after
operations at the facility had ceased, any money remaining in the fund for the former
producer may be released to the purchaser of the facility on the terms otherwise applicable
to the former producer under this section. If a producer fails to provide matching funds
for a proposed expenditure within six months after the commissioner approves release
of the funds, the funds are available for release to another producer in proportion to the
distribution provided and under the conditions of this section. Any portion of the fund
which is not released by the commissioner within two years of its deposit in the fund shall
be divided between the taconite environmental protection fund created in section 298.223
and the Douglas J. Johnson economic protection trust fund created in section 298.292 for
placement in their respective special accounts. Two-thirds of the unreleased funds shall be
distributed to the taconite environmental protection fund and one-third to the Douglas J.
Johnson economic protection trust fund.

Sec. 5.

new text begin [298.2271] IRON RANGE REVITALIZATION ACCOUNT.
new text end

new text begin For production years 2008 through 2012, and for distributions in 2009 through
distributions in 2013 only, an amount equal to that distributed pursuant to each taconite
producer's taxable production and qualifying sales under section new text end new text begin 298.28, subdivision
9a new text end new text begin , shall be held by the Iron Range Resources and Rehabilitation Board in a separate
Iron Range revitalization account. Funds from the account may be spent for projects
including but not limited to public facility improvements, community development,
economic development, renewable energy, and diversification of the Iron Range economy.
Money from the account shall be released by the commissioner only after the Iron Range
Resources and Rehabilitation Board has approved the project by a majority vote. A
project review panel shall consist of nine members. Three members shall be Iron Range
Resources and Rehabilitation Board members appointed by the chair; three members shall
be selected by the District 11 director of the United States Steelworkers of America;
and three members shall be mining company representatives, one each from United
States Steel Corporation, Cleveland-Cliffs Incorporated, and ArcelorMittal. The review
panel must review each project for which funds are sought under this section and make
recommendations to the board by August 31 of each year. The board must vote on the
recommendations no later than October 31 of each year.
new text end

Sec. 6.

Minnesota Statutes 2006, section 298.24, subdivision 1, as amended by Laws
2008, chapter 154, article 8, section 5, is amended to read:

Subdivision 1.

Imposed; calculation.

(a) For concentrate produced in 2001, 2002,
and 2003, there is imposed upon taconite and iron sulphides, and upon the mining and
quarrying thereof, and upon the production of iron ore concentrate therefrom, and upon
the concentrate so produced, a tax of $2.103 per gross ton of merchantable iron ore
concentrate produced therefrom. For concentrates produced in 2005, the tax rate is the
same rate imposed for concentrates produced in 2004.

(b) new text begin (1) new text end For concentrates produced in 2006 and subsequent years, the tax rate shall be
equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate
multiplied by the percentage increase in the implicit price deflator from the fourth quarter
of the second preceding year to the fourth quarter of the preceding year. "Implicit price
deflator" means the implicit price deflator for the gross domestic product prepared by the
Bureau of Economic Analysis of the United States Department of Commerce.
new text begin new text end

new text begin (2) For concentrates produced in 2009, the amount of the increase in the tax rate
under this paragraph over the tax rate applicable to concentrates produced in 2008 equals
the greater of (A) the increase computed under clause (1) or (B) ten cents per taxable
ton. The resulting tax rate for concentrates produced in 2009 must be used as the base
for determining the tax rate under this paragraph for concentrates produced in 2010 and
subsequent years.
new text end

(c) On concentrates produced in 1997 and thereafter, an additional tax is imposed
equal to three cents per gross ton of merchantable iron ore concentrate for each one
percent that the iron content of the product exceeds 72 percent, when dried at 212 degrees
Fahrenheit.

(d) The tax shall be imposed on the average of the production for the current year
and the previous two years. The rate of the tax imposed will be the current year's tax rate.
This clause shall not apply in the case of the closing of a taconite facility if the property
taxes on the facility would be higher if this clause and section 298.25 were not applicable.

(e) If the tax or any part of the tax imposed by this subdivision is held to be
unconstitutional, a tax of $2.103 per gross ton of merchantable iron ore concentrate
produced shall be imposed.

(f) Consistent with the intent of this subdivision to impose a tax based upon the
weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
determine the weight of merchantable iron ore concentrate included in fluxed pellets by
subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
flux additives included in the pellets from the weight of the pellets. For purposes of this
paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
No subtraction from the weight of the pellets shall be allowed for binders, mineral and
chemical additives other than basic flux additives, or moisture.

(g)(1) Notwithstanding any other provision of this subdivision, for the first two years
of a plant's commercial production of direct reduced ore, no tax is imposed under this
section. As used in this paragraph, "commercial production" is production of more than
50,000 tons of direct reduced ore in the current year or in any prior year, "noncommercial
production" is production of 50,000 tons or less of direct reduced ore in any year, and
"direct reduced ore" is ore that results in a product that has an iron content of at least 75
percent. For the third year of a plant's commercial production of direct reduced ore, the
rate to be applied to direct reduced ore is 25 percent of the rate otherwise determined
under this subdivision. For the fourth commercial production year, the rate is 50 percent of
the rate otherwise determined under this subdivision; for the fifth commercial production
year, the rate is 75 percent of the rate otherwise determined under this subdivision; and for
all subsequent commercial production years, the full rate is imposed.

(2) Subject to clause (1), production of direct reduced ore in this state is subject to
the tax imposed by this section, but if that production is not produced by a producer
of taconite or iron sulfides, the production of taconite or iron sulfides consumed in the
production of direct reduced iron in this state is not subject to the tax imposed by this
section on taconite or iron sulfides.

(3) Notwithstanding any other provision of this subdivision, no tax is imposed
on direct reduced ore under this section during the facility's noncommercial production
of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
production of direct reduced ore is subject to the tax imposed by this section on taconite
and iron sulphides. Three-year average production of direct reduced ore does not
include production of direct reduced ore in any noncommercial year. Three-year average
production for a direct reduced ore facility that has noncommercial production is the
average of the commercial production of direct reduced ore for the current year and the
previous two commercial years.

(4) This paragraph applies only to plants for which all environmental permits have
been obtained and construction has begun before July 1, 2008.