HF 3669

as introduced - 92nd Legislature (2021 - 2022) Posted on 04/04/2022 05:07pm

A bill for an act
relating to taxation; modifying individual income and corporate franchise taxes,
sales taxes, property taxes, local government aids, and other miscellaneous taxes
and tax provisions; proposing certain federal conformity for individual income
and corporate franchise taxes; modifying and expanding certain income tax credits;
proposing new sales tax construction exemptions for certain entities; modifying
eligibility for certain property tax programs; proposing public safety aid and soil
and water conservation district aid for local governments; proposing onetime direct
payments to taxpayers; appropriating money; amending Minnesota Statutes 2020,
sections 273.124, subdivisions 6, 13a, 13c, 13d; 273.1245, subdivision 1; 273.1315,
subdivision 2; 289A.02, subdivision 7; 290.0123, subdivision 3; 290.0131, by
adding subdivisions; 290.0132, subdivision 18, by adding subdivisions; 290.0133,
by adding subdivisions; 290.0134, by adding subdivisions; 290.067, subdivisions
1, 2b, by adding a subdivision; 290.0671, subdivision 1a; 290.0674, subdivisions
2, 2a, by adding a subdivision; 290.0675, subdivision 1; 290.091, subdivision 2;
290.095, subdivision 11; 290A.03, subdivision 15; 290B.03, subdivision 1;
290B.04, subdivisions 3, 4; 290B.05, subdivision 1; 291.005, subdivision 1;
297A.71, by adding a subdivision; Minnesota Statutes 2021 Supplement, sections
116J.8737, subdivisions 5, 12; 273.124, subdivisions 13, 14; 273.13, subdivision
23; 289A.08, subdivision 7; 290.01, subdivisions 19, 31; 290.06, subdivision 2c;
290.0671, subdivision 1; 290.993; 297A.75, subdivisions 1, 2, 3; Laws 2021, First
Special Session chapter 1, article 2, section 6; proposing coding for new law in
Minnesota Statutes, chapter 477A.

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

ARTICLE 1

FEDERAL UPDATE

Section 1.

Minnesota Statutes 2020, section 289A.02, subdivision 7, is amended to read:

Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
31, 2018 deleted text end new text begin November 15, 2021 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time the
changes were effective for federal purposes, but are subject to the application of Minnesota
Statutes, section 290.993, subdivision 2.
new text end

Sec. 2.

Minnesota Statutes 2021 Supplement, section 289A.08, subdivision 7, is amended
to read:

Subd. 7.

Composite income tax returns for nonresident partners, shareholders, and
beneficiaries.

(a) The commissioner may allow a partnership with nonresident partners to
file a composite return and to pay the tax on behalf of nonresident partners who have no
other Minnesota source income. This composite return must include the names, addresses,
Social Security numbers, income allocation, and tax liability for the nonresident partners
electing to be covered by the composite return.

(b) The computation of a partner's tax liability must be determined by multiplying the
income allocated to that partner by the highest rate used to determine the tax liability for
individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard
deductions, or personal exemptions are not allowed.

(c) The partnership must submit a request to use this composite return filing method for
nonresident partners. The requesting partnership must file a composite return in the form
prescribed by the commissioner of revenue. The filing of a composite return is considered
a request to use the composite return filing method.

(d) The electing partner must not have any Minnesota source income other than the
income from the partnership, other electing partnerships, and other qualifying entities
electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined
that the electing partner has other Minnesota source income, the inclusion of the income
and tax liability for that partner under this provision will not constitute a return to satisfy
the requirements of subdivision 1. The tax paid for the individual as part of the composite
return is allowed as a payment of the tax by the individual on the date on which the composite
return payment was made. If the electing nonresident partner has no other Minnesota source
income, filing of the composite return is a return for purposes of subdivision 1.

(e) This subdivision does not negate the requirement that an individual pay estimated
tax if the individual's liability would exceed the requirements set forth in section 289A.25.
The individual's liability to pay estimated tax is, however, satisfied when the partnership
pays composite estimated tax in the manner prescribed in section 289A.25.

(f) If an electing partner's share of the partnership's gross income from Minnesota sources
is less than the filing requirements for a nonresident under this subdivision, the tax liability
is zero. However, a statement showing the partner's share of gross income must be included
as part of the composite return.

(g) The election provided in this subdivision is only available to a partner who has no
other Minnesota source income and who is either (1) a full-year nonresident individual or
(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the
Internal Revenue Code.

(h) A corporation defined in section 290.9725 and its nonresident shareholders may
make an election under this paragraph. The provisions covering the partnership apply to
the corporation and the provisions applying to the partner apply to the shareholder.

(i) Estates and trusts distributing current income only and the nonresident individual
beneficiaries of the estates or trusts may make an election under this paragraph. The
provisions covering the partnership apply to the estate or trust. The provisions applying to
the partner apply to the beneficiary.

(j) For the purposes of this subdivision, "income" means the partner's share of federal
adjusted gross income from the partnership modified by the additions provided in section
290.0131, subdivisions 8 to 10, 16, deleted text begin and deleted text end 17, new text begin 19, and 20, new text end and the subtractions provided in:
(1) section 290.0132, subdivisions 9, 27, and 28, to the extent the amount is assignable or
allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14 new text begin , 31,
and 32 new text end . The subtraction allowed under section 290.0132, subdivision 9, is only allowed on
the composite tax computation to the extent the electing partner would have been allowed
the subtraction.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 3.

Minnesota Statutes 2021 Supplement, section 290.01, subdivision 19, is amended
to read:

Subd. 19.

Net income.

(a) For a trust or estate taxable under section 290.03, and a
corporation taxable under section 290.02, the term "net income" means the federal taxable
income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through
the date named in this subdivision, incorporating the federal effective dates of changes to
the Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in sections 290.0131 to 290.0136.

(b) For an individual, the term "net income" means federal adjusted gross income with
the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(c) In the case of a regulated investment company or a fund thereof, as defined in section
851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue
Code must be applied by allowing a deduction for capital gain dividends and exempt-interest
dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code;
and

(3) the deduction for dividends paid must also be applied in the amount of any
undistributed capital gains which the regulated investment company elects to have treated
as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section
856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the
Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal
Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through deleted text begin December 31, 2018 deleted text end new text begin
November 15, 2021 new text end , applies for taxable years beginning after December 31, 1996 deleted text begin , except
the sections of federal law in section 290.0111 shall also apply deleted text end .

(g) Except as otherwise provided, references to the Internal Revenue Code in this
subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of
determining net income for the applicable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time the
changes were effective for federal purposes, but are subject to the application of Minnesota
Statutes, section 290.993, subdivision 2.
new text end

Sec. 4.

Minnesota Statutes 2021 Supplement, section 290.01, subdivision 31, is amended
to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text begin December
31, 2018, except the sections of federal law in section 290.0111 shall also apply deleted text end new text begin November
15, 2021 new text end . Internal Revenue Code also includes any uncodified provision in federal law that
relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time the
changes were effective for federal purposes, but are subject to the application of Minnesota
Statutes, section 290.993, subdivision 2.
new text end

Sec. 5.

Minnesota Statutes 2020, section 290.0123, subdivision 3, is amended to read:

Subd. 3.

Amount for dependents.

For an individual who is a dependent, as defined in
sections 151 and 152 of the Internal Revenue Code, of another taxpayer for a taxable year
beginning in the calendar year in which the individual's taxable year begins, the standard
deduction for that individual is limited to the greater of:

(1) $1,100; or

(2) the lesser of (i) the sum of $350 and that individual's earned income, as defined in
section 32(c) of the Internal Revenue Code new text begin , except that a taxpayer must use earned income
from the current taxable year new text end ; or (ii) the standard deduction amount allowed under subdivision
1, clause (3).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017.
new text end

Sec. 6.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 19. new text end

new text begin Meal expenses. new text end

new text begin The amount of meal expenses in excess of the 50 percent
limitation under section 274(n)(1) of the Internal Revenue Code allowed under subsection
(n), paragraph (2), subparagraph (D), of that section is an addition.
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, 2021.
new text end

Sec. 7.

Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Special limited adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that increases net income for the taxable year is an addition.
new text end

new text begin (b) Partners, shareholders, or beneficiaries who file their returns on a calendar year basis,
and who received an addition from a pass-through entity filing their return on a fiscal year
basis, must make the addition in the taxable year it is received as required for federal income
tax purposes.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 8.

Minnesota Statutes 2020, section 290.0132, subdivision 18, is amended to read:

Subd. 18.

Net operating losses.

new text begin (a) new text end The amount of the net operating loss allowed under
section 290.095, subdivision 11, paragraph (c), is a subtraction.

new text begin (b) The unused portion of a net operating loss carryover under section 290.095,
subdivision 11, paragraph (d), is a subtraction. The subtraction is the lesser of:
new text end

new text begin (1) the amount carried into the taxable year minus any subtraction made under this
section for prior taxable years; or
new text end

new text begin (2) 80 percent of Minnesota taxable net income in a single taxable year and determined
without regard to this subtraction.
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, 2021.
new text end

Sec. 9.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 31. new text end

new text begin Special Limited Adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that decreases net income for the taxable year is a subtraction.
new text end

new text begin (b) Partners, shareholders, or beneficiaries who file their returns on a calendar year basis,
and who received a subtraction from a pass-through entity filing their return on a fiscal year
basis, must make the subtraction in the taxable year it is received as required for federal
income tax purposes.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 10.

Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 32. new text end

new text begin Delayed business interest. new text end

new text begin For each of the five taxable years beginning after
December 31, 2021, there is allowed a subtraction equal to one-fifth of the adjustment
amount, to the extent not already deducted, for the exclusion under section 290.993,
subdivision 2, paragraph (c), clause (11), due to the Coronavirus Aid, Relief and Economic
Security Act, Public Law 116-136, section 2306.
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, 2021.
new text end

Sec. 11.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Meal expenses. new text end

new text begin The amount of meal expenses in excess of the 50 percent
limitation under section 274(n)(1) of the Internal Revenue Code allowed under section
274(n)(2)(D) of the Internal Revenue Code is an addition.
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, 2021.
new text end

Sec. 12.

Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Special Limited Adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that increases net income for the taxable year is an addition.
new text end

new text begin (b) Partners, shareholders, or beneficiaries who file their returns on a calendar year basis,
and who received an addition from a pass-through entity filing their return on a fiscal year
basis, must make the addition in the taxable year it is received as required for federal income
tax purposes.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 13.

Minnesota Statutes 2020, section 290.0134, is amended by adding a subdivision
to read:

new text begin Subd. 20. new text end

new text begin Special Limited Adjustment. new text end

new text begin (a) For taxable years beginning after December
31, 2021, and before January 1, 2023, the amount calculated under section 290.993,
subdivision 2, paragraph (c), that decreases net income for the taxable year is a subtraction.
new text end

new text begin (b) Partners, shareholders, or beneficiaries who file their returns on a calendar year basis,
and who received a subtraction from a pass-through entity filing their return on a fiscal year
basis, must make the subtraction in the taxable year it is received as required for federal
income tax purposes.
new text end

new text begin (c) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 14.

Minnesota Statutes 2020, section 290.0134, is amended by adding a subdivision
to read:

new text begin Subd. 21. new text end

new text begin Delayed business interest. new text end

new text begin For each of the five taxable years beginning after
December 31, 2021, there is allowed a subtraction equal to one-fifth of the adjustment
amount, to the extent not already deducted, for the exclusion under section 290.993,
subdivision 2, paragraph (c), clause (11), due to the Coronavirus Aid, Relief and Economic
Security Act, Public Law 116-136, section 2306.
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, 2021.
new text end

Sec. 15.

Minnesota Statutes 2021 Supplement, section 290.06, subdivision 2c, is amended
to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:

(1) On the first $38,770, 5.35 percent;

(2) On all over $38,770, but not over $154,020, 6.8 percent;

(3) On all over $154,020, but not over $269,010, 7.85 percent;

(4) On all over $269,010, 9.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $26,520, 5.35 percent;

(2) On all over $26,520, but not over $87,110, 6.8 percent;

(3) On all over $87,110, but not over $161,720, 7.85 percent;

(4) On all over $161,720, 9.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $32,650, 5.35 percent;

(2) On all over $32,650, but not over $131,190, 6.8 percent;

(3) On all over $131,190, but not over $214,980, 7.85 percent;

(4) On all over $214,980, 9.85 percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin and deleted text end
17, new text begin 19, and 20, new text end and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, deleted text begin and deleted text end 27, new text begin 31, and 32, new text end and 290.0137, paragraph (c), after
applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17;
and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, deleted text begin and deleted text end
17, new text begin 19, and 20, new text end and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, deleted text begin and deleted text end
27, new text begin 31, and 32, new text end and 290.0137, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 16.

Minnesota Statutes 2020, section 290.0671, subdivision 1a, is amended to read:

Subd. 1a.

Definitions.

For purposes of this section, the new text begin following new text end terms deleted text begin "qualifying
child," and "earned income," deleted text end have the meanings given deleted text begin in section 32(c) of the Internal
Revenue Code, and the term "adjusted gross income" has the meaning given in section 62
of the Internal Revenue Code. deleted text end new text begin :
new text end

deleted text begin "Earned income of the lesser-earning spouse" has the meaning given in section 290.0675,
subdivision 1, paragraph (d).
deleted text end

new text begin (1) "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue
Code;
new text end

new text begin (2) "earned income" has the meaning given in section 32(c)(2) of the Internal Revenue
Code, except that a taxpayer must use earned income from the current taxable year;
new text end

new text begin (3) "adjusted gross income" has the meaning given in section 62 of the Internal Revenue
Code; and
new text end

new text begin (4) "earned income of the lesser earning spouse" has the meaning given in section
290.0675, subdivision 1, paragraph (d).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017.
new text end

Sec. 17.

Minnesota Statutes 2020, section 290.0675, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

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

(b) "Earned income" means the sum of the following, to the extent included in Minnesota
taxable income:

(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code new text begin , except
that a taxpayer must use earned income from the current taxable year new text end ;

(2) income received from a retirement pension, profit-sharing, stock bonus, or annuity
plan; and

(3) Social Security benefits as defined in section 86(d)(1) of the Internal Revenue Code.

(c) "Taxable income" means net income as defined in section 290.01, subdivision 19.

(d) "Earned income of lesser-earning spouse" means the earned income of the spouse
with the lesser amount of earned income as defined in paragraph (b) for the taxable year
minus one-half the amount of the standard deduction under section 290.0123, subdivision
1, clause (1).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2017.
new text end

Sec. 18.

Minnesota Statutes 2020, section 290.091, subdivision 2, is amended to read:

Subd. 2.

Definitions.

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

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

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

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

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

(ii) the medical expense deduction;

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

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

(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 290.0131, subdivision 2;

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, deleted text begin and deleted text end 16 new text begin , and
20 new text end ;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

(iii) 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;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to deleted text begin 29 deleted text end new text begin 31 new text end ;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
deleted text begin paragraph deleted text end new text begin paragraphs new text end (c) new text begin and (d) new text end ; and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.

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, except alternative minimum
taxable income must be increased by the addition in section 290.0131, subdivision 16.

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 19.

Minnesota Statutes 2020, section 290.095, subdivision 11, is amended to read:

Subd. 11.

Carryback or carryover adjustments.

(a) Except as provided in paragraph
(c), for individuals, estates, and trusts the amount of a net operating loss that may be carried
back or carried over shall be the same dollar amount allowable in the determination of
federal taxable income, provided that, notwithstanding any other provision, estates and
trusts must apply the following adjustments to the amount of the net operating loss that may
be carried back or carried over:

(1) Nonassignable income or losses as required by section 290.17.

(2) Deductions not allocable to Minnesota under section 290.17.

(b) The net operating loss carryback or carryover applied as a deduction in the taxable
year to which the net operating loss is carried back or carried over shall be equal to the net
operating loss carryback or carryover applied in the taxable year in arriving at federal taxable
income provided that trusts and estates must apply the following modifications:

(1) Increase the amount of carryback or carryover applied in the taxable year by the
amount of losses and interest, taxes and other expenses not assignable or allowable to
Minnesota incurred in the taxable year.

(2) Decrease the amount of carryback or carryover applied in the taxable year by the
amount of income not assignable to Minnesota earned in the taxable year. For estates and
trusts, the net operating loss carryback or carryover to the next consecutive taxable year
shall be the net operating loss carryback or carryover as calculated in clause (b) less the
amount applied in the earlier taxable year(s). No additional net operating loss carryback or
carryover shall be allowed to estates and trusts if the entire amount has been used to offset
Minnesota income in a year earlier than was possible on the federal return. However, if a
net operating loss carryback or carryover was allowed to offset federal income in a year
earlier than was possible on the Minnesota return, an estate or trust shall still be allowed to
offset Minnesota income but only if the loss was assignable to Minnesota in the year the
loss occurred.

(c) This paragraph does not apply to eligible small businesses that make a valid election
to carry back their losses for federal purposes under section 172(b)(1)(H) of the Internal
Revenue Code as amended through March 31, 2009.

(1) A net operating loss of an individual, estate, or trust that is allowed under this
subdivision and for which the taxpayer elects to carry back for more than two years under
section 172(b)(1)(H) of the Internal Revenue Code is a net operating loss carryback to each
of the two taxable years preceding the loss, and unused portions may be carried forward for
20 taxable years after the loss.

(2) The entire amount of the net operating loss for any taxable year must be carried to
the earliest of the taxable years to which the loss may be carried. The portion of the loss
which may be carried to each of the other taxable years is the excess, if any, of the amount
of the loss over the greater of the taxable net income or alternative minimum taxable income
for each of the taxable years to which the loss may be carried.

new text begin (d) For net operating loss carryovers or carrybacks arising in taxable years beginning
after December 31, 2017, and before December 31, 2020, a net operating loss carryover or
carryback is allowed as provided in the Internal Revenue Code as amended through December
31, 2018, as follows:
new text end

new text begin (1) the entire amount of the net operating loss, to the extent not already deducted, must
be carried to the earliest taxable year and any unused portion may be carried forward for
20 taxable years after the loss; and
new text end

new text begin (2) the portion of the loss which may be carried to each of the other taxable years is the
excess, if any, of the amount of the loss over the greater of the taxable net income or
alternative minimum taxable income for each of the taxable years to which the loss may be
carried.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for losses arising in taxable
years beginning after December 31, 2017, and before December 31, 2020.
new text end

Sec. 20.

Minnesota Statutes 2021 Supplement, section 290.993, is amended to read:

290.993 SPECIAL LIMITED ADJUSTMENT.

new text begin Subdivision 1. new text end

new text begin Tax year 2018. new text end

(a) For an individual, estate, or trust, or a partnership
that elects to file a composite return under section 289A.08, subdivision 7, for taxable years
beginning after December 31, 2017, and before January 1, 2019, the following special rules
apply:

(1) an individual income taxpayer may: (i) take the standard deduction; or (ii) make an
election under section 63(e) of the Internal Revenue Code to itemize, for Minnesota individual
income tax purposes, regardless of the choice made on their federal return; and

(2) there is an adjustment to tax equal to the difference between the tax calculated under
this chapter using the Internal Revenue Code as amended through December 16, 2016, and
the tax calculated under this chapter using the Internal Revenue Code amended through
December 31, 2018, before the application of credits. The end result must be zero additional
tax due or refund.

(b) The adjustment in deleted text begin paragraph (a), clause (2) deleted text end new text begin this subdivision new text end , does not apply to any
changes due to sections 11012, 13101, 13201, 13202, 13203, 13204, 13205, 13207, 13301,
13302, 13303, 13313, 13502, 13503, 13801, 14101, 14102, 14211 through 14215, and
14501 of Public Law 115-97; and section 40411 of Public Law 115-123.

new text begin Subd. 2. new text end

new text begin Tax years 2017 to 2021. new text end

new text begin (a) For all taxpayers, including an entity that elects
to file a composite return under section 289A.08, subdivision 7, and an entity that elects to
pay the pass-through entity tax under section 289A.08, subdivision 7a; for taxable years
beginning after December 31, 2016, and before January 1, 2022, the following rules apply.
new text end

new text begin (b) There is an adjustment to net income equal to the difference between the amount
calculated and reported under this chapter incorporating the Internal Revenue Code as
amended through Minnesota Laws 2021, First Special Session chapter 14, and the amount
calculated under this chapter incorporating the Internal Revenue Code as amended through
November 15, 2021. This adjustment is only allowed as provided in paragraph (c) and to
the extent the taxpayer reported a related nonconformity adjustment on their return for
taxable years beginning after December 31, 2016, and before January 1, 2022. This
adjustment does not include the changes due to the:
new text end

new text begin (1) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
114, exclusion of gross income of discharge of qualified principal residence indebtedness;
new text end

new text begin (2) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
304(b), special rules for disaster-related personal casualty losses; and
new text end

new text begin (3) American Rescue Plan Act, Public Law 117-2, section 9675, modification of treatment
of student loan forgiveness.
new text end

new text begin (c) For purposes of this subdivision, the term "nonconformity adjustment" means the
difference between adjusted gross income as defined under section 62 of the Internal Revenue
Code for individuals, and federal taxable income as defined under section 63 of the Internal
Revenue Code for all other taxpayers incorporating the Internal Revenue Code as amended
through Minnesota Laws 2021, First Special Session chapter 14, and the amount calculated
under this chapter incorporating the Internal Revenue Code as amended through November
15, 2021, but does not include impacts to state tax credits. The nonconformity adjustment
is an addition or subtraction to net income but does not include the following federal law
changes:
new text end

new text begin (1) Taxpayer Certainty and Disaster Relief Act of 2019, Public Law 116-94, section
104, deduction of qualified tuition and related expenses;
new text end

new text begin (2) Taxpayer Certainty and Disaster Relief Act of 2019, Public Law 116-94, section
203, employee retention credit for employers affected by qualified disasters;
new text end

new text begin (3) Families First Coronavirus Response Act, Public Law 116-127, section 7001, payroll
credit for required paid sick leave;
new text end

new text begin (4) Families First Coronavirus Response Act, Public Law 116-127, section 7003, payroll
credit for required paid family leave;
new text end

new text begin (5) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2204, allowance of partial above the line deduction for charitable contributions;
new text end

new text begin (6) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2205, excluding subsection (a), paragraph (B), temporary modification of limitations on
charitable contributions as it applies to individual taxpayers only and including carryovers;
new text end

new text begin (7) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2206, exclusion of certain employer payment of student loans;
new text end

new text begin (8) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2301, employee retention credit for employers subject to closure due to COVID-19;
new text end

new text begin (9) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2303, modifications for net operating losses;
new text end

new text begin (10) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2304, modification of limitation on losses for taxpayers other than corporations;
new text end

new text begin (11) Coronavirus Aid, Relief and Economic Security Act, Public Law 116-136, section
2306, limitation on business interest;
new text end

new text begin (12) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
207, extension and modification of employee retention and rehiring credit;
new text end

new text begin (13) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
210, temporary allowance of full deduction for business meals;
new text end

new text begin (14) Taxpayer Certainty and Disaster Relief Act of 2020, Public Law 116-260, section
303, employee retention credit for employers affected by qualified disasters;
new text end

new text begin (15) American Rescue Plan Act, Public Law 117-2, section 9501(b), preserving health
benefits for workers;
new text end

new text begin (16) American Rescue Plan Act, Public Law 117-2, section 9631, refundability and
enhancement of child and dependent care tax credit;
new text end

new text begin (17) American Rescue Plan Act, Public Law 117-2, section 9641, payroll sick and family
leave credits; and
new text end

new text begin (18) American Rescue Plan Act, Public Law, 117-2, section 9651, extension of employee
retention credit.
new text end

new text begin The addition or subtraction required must only be made in taxable years beginning after
December 31, 2021, and before January 1, 2023. Except partners, shareholders, or
beneficiaries who file their returns on a calendar year basis, and who received an addition
or subtraction from a pass-through entity filing their return on a fiscal year basis, must make
the addition or subtraction in the taxable year it is received as required for federal income
tax purposes. For purposes of this subdivision, a pass-through entity is defined as an entity
that is not subject to the tax imposed under section 290.02, including but not limited to S
corporations, partnerships, estates, and trusts other than grantor trusts.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2016, and before January 1, 2024.
new text end

Sec. 21.

Minnesota Statutes 2020, section 290A.03, subdivision 15, is amended to read:

Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended through deleted text begin December 31, 2018 deleted text end new text begin November 15, 2021 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on property
taxes payable in 2022 and rent paid in 2021 and thereafter.
new text end

Sec. 22.

Minnesota Statutes 2020, section 291.005, subdivision 1, is amended to read:

Subdivision 1.

Scope.

Unless the context otherwise clearly requires, the following terms
used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the
commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued
and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
increased by the value of any property in which the decedent had a qualifying income interest
for life and for which an election was made under section 291.03, subdivision 1d, for
Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986,
as amended through deleted text begin December 31, 2018 deleted text end new text begin November 15, 2021 new text end .

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
excluding therefrom any property included in the estate which has its situs outside Minnesota,
and (b) including any property omitted from the federal gross estate which is includable in
the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of death
was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person appointed
by the court to administer and dispose of the property of the decedent. If there is no executor,
administrator or other person appointed, qualified, and acting within this state, then any
person in actual or constructive possession of any property having a situs in this state which
is included in the federal gross estate of the decedent shall be deemed to be a personal
representative to the extent of the property and the Minnesota estate tax due with respect
to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death was
in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply
to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept or
located at the time of the decedent's death or for a gift of tangible personal property within
three years of death, the state or country in which it was normally kept or located when the
gift was executed;

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
Code, owned by a nonresident decedent and that is normally kept or located in this state
because it is on loan to an organization, qualifying as exempt from taxation under section
501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was domiciled
at death or for a gift of intangible personal property within three years of death, the state or
country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with
assets that include real or tangible personal property, situs of the real or tangible personal
property, including qualified works of art, is determined as if the pass-through entity does
not exist and the real or tangible personal property is personally owned by the decedent. If
the pass-through entity is owned by a person or persons in addition to the decedent, ownership
of the property is attributed to the decedent in proportion to the decedent's capital ownership
share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue
Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of whether
it is taxed as an association or is disregarded for federal income tax purposes under Code
of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includable in the decedent's federal gross estate;
but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated
by the Securities and Exchange Commission as a national securities exchange under section
6 of the Securities Exchange Act, United States Code, title 15, section 78f.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment, except
the changes incorporated by federal changes are effective retroactively at the same time the
changes were effective for federal purposes.
new text end

ARTICLE 2

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2021 Supplement, section 116J.8737, subdivision 5, is
amended to read:

Subd. 5.

Credit allowed.

(a) A qualified investor or qualified fund is eligible for a credit
equal to 25 percent of the qualified investment in a qualified small business. Investments
made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The
commissioner must not allocate to qualified investors or qualified funds more than the dollar
amount in credits allowed for the taxable years listed in paragraph (i). For each taxable year,
50 percent must be allocated to credits for qualified investments in qualified greater
Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified
small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for
qualified investments in greater Minnesota businesses and minority-owned, women-owned,
or veteran-owned qualified small businesses in Minnesota that is not allocated by September
30 of the taxable year is available for allocation to other credit applications beginning on
October 1. Any portion of a taxable year's credits that is not allocated by the commissioner
does not cancel and may be carried forward to subsequent taxable years until all credits
have been allocated.

(b) The commissioner may not allocate more than a total maximum amount in credits
for a taxable year to a qualified investor for the investor's cumulative qualified investments
as an individual qualified investor and as an investor in a qualified fund; for married couples
filing joint returns the maximum is $250,000, and for all other filers the maximum is
$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits
over all taxable years for qualified investments in any one qualified small business.

(c) The commissioner may not allocate a credit to a qualified investor either as an
individual qualified investor or as an investor in a qualified fund if, at the time the investment
is proposed:

(1) the investor is an officer or principal of the qualified small business; or

(2) the investor, either individually or in combination with one or more members of the
investor's family, owns, controls, or holds the power to vote 20 percent or more of the
outstanding securities of the qualified small business.

A member of the family of an individual disqualified by this paragraph is not eligible for a
credit under this section. For a married couple filing a joint return, the limitations in this
paragraph apply collectively to the investor and spouse. For purposes of determining the
ownership interest of an investor under this paragraph, the rules under section 267(c) and
267(e) of the Internal Revenue Code apply.

(d) Applications for tax credits must be made available on the department's website by
November 1 of the preceding year.

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits.
Tax credits must be allocated to qualified investors or qualified funds in the order that the
tax credit request applications are filed with the department. The commissioner must approve
or reject tax credit request applications within 15 days of receiving the application. The
investment specified in the application must be made within 60 days of the allocation of
the credits. If the investment is not made within 60 days, the credit allocation is canceled
and available for reallocation. A qualified investor or qualified fund that fails to invest as
specified in the application, within 60 days of allocation of the credits, must notify the
commissioner of the failure to invest within five business days of the expiration of the
60-day investment period.

(f) All tax credit request applications filed with the department on the same day must
be treated as having been filed contemporaneously. If two or more qualified investors or
qualified funds file tax credit request applications on the same day, and the aggregate amount
of credit allocation claims exceeds the aggregate limit of credits under this section or the
lesser amount of credits that remain unallocated on that day, then the credits must be allocated
among the qualified investors or qualified funds who filed on that day on a pro rata basis
with respect to the amounts claimed. The pro rata allocation for any one qualified investor
or qualified fund is the product obtained by multiplying a fraction, the numerator of which
is the amount of the credit allocation claim filed on behalf of a qualified investor and the
denominator of which is the total of all credit allocation claims filed on behalf of all
applicants on that day, by the amount of credits that remain unallocated on that day for the
taxable year.

(g) A qualified investor or qualified fund, or a qualified small business acting on their
behalf, must notify the commissioner when an investment for which credits were allocated
has been made, and the taxable year in which the investment was made. A qualified fund
must also provide the commissioner with a statement indicating the amount invested by
each investor in the qualified fund based on each investor's share of the assets of the qualified
fund at the time of the qualified investment. After receiving notification that the investment
was made, the commissioner must issue credit certificates for the taxable year in which the
investment was made to the qualified investor or, for an investment made by a qualified
fund, to each qualified investor who is an investor in the fund. The certificate must state
that the credit is subject to revocation if the qualified investor or qualified fund does not
hold the investment in the qualified small business for at least three years, consisting of the
calendar year in which the investment was made and the two following years. The three-year
holding period does not apply if:

(1) the investment by the qualified investor or qualified fund becomes worthless before
the end of the three-year period;

(2) 80 percent or more of the assets of the qualified small business is sold before the end
of the three-year period;

(3) the qualified small business is sold before the end of the three-year period;

(4) the qualified small business's common stock begins trading on a public exchange
before the end of the three-year period; or

(5) the qualified investor dies before the end of the three-year period.

(h) The commissioner must notify the commissioner of revenue of credit certificates
issued under this section.

(i) The credit allowed under this subdivision is effective as follows:

(1) $10,000,000 for taxable years beginning after December 31, 2020, and before January
1, 2022; deleted text begin and
deleted text end

(2) deleted text begin $5,000,000 deleted text end new text begin $12,000,000 new text end for taxable years beginning after December 31, 2021, and
before January 1, 2023 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (3) $5,000,000 per year for taxable years beginning after December 31, 2022, and before
January 1, 2031.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2021.
new text end

Sec. 2.

Minnesota Statutes 2021 Supplement, section 116J.8737, subdivision 12, is amended
to read:

Subd. 12.

Sunset.

This section expires for taxable years beginning after December 31,
deleted text begin 2022 deleted text end new text begin 2030 new text end , except that reporting requirements under subdivision 6 and revocation of credits
under subdivision 7 remain in effect through deleted text begin 2024 deleted text end new text begin 2032 new text end for qualified investors and qualified
funds, and through deleted text begin 2026 deleted text end new text begin 2034 new text end for qualified small businesses, reporting requirements under
subdivision 9 remain in effect through deleted text begin 2022 deleted text end new text begin 2030 new text end , and the appropriation in subdivision 11
remains in effect through deleted text begin 2026 deleted text end new text begin 2034 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. 3.

Minnesota Statutes 2020, section 290.067, subdivision 1, is amended to read:

Subdivision 1.

Amount of credit.

(a) A taxpayer may take as a credit against the tax
due from the taxpayer and a spouse, if any, under this chapter an amount equal to the
dependent care credit for which the taxpayer is eligible pursuant to the provisions of section
21 of the Internal Revenue Code except that in determining whether the child qualified as
a dependent, income received as a Minnesota family investment program grant or allowance
to or on behalf of the child must not be taken into account in determining whether the child
received more than half of the child's support from the taxpayer.

(b) If a child who has not attained the age of six years at the close of the taxable year is
cared for at a licensed family day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child is 16 months old or younger
at the close of the taxable year, the amount of expenses deemed to have been paid equals
the maximum limit for one qualified individual under section 21(c) and (d) of the Internal
Revenue Code. If the child is older than 16 months of age but has not attained the age of
six years at the close of the taxable year, the amount of expenses deemed to have been paid
equals the amount the licensee would charge for the care of a child of the same age for the
same number of hours of care.

(c) If a deleted text begin married couple: deleted text end new text begin taxpayer
new text end

deleted text begin (1) deleted text end has a child who has not attained the age of one year at the close of the taxable year deleted text begin ;
deleted text end

deleted text begin (2) files a joint tax return for the taxable year; deleted text end and

deleted text begin (3) deleted text end does not participate in a dependent care assistance program as defined in section 129
of the Internal Revenue Code, in lieu of the actual employment related expenses paid for
that child under paragraph (a) or the deemed amount under paragraph (b), new text begin the deemed
employment-related expenses will be:
new text end

new text begin (1) for married individuals filing joint returns, new text end the lesser of (i) the combined earned
income of the deleted text begin couple deleted text end new text begin spouses, new text end or (ii) the amount of the maximum limit for one qualified
individual under section 21(c) and (d) of the Internal Revenue Code deleted text begin will be deemed to be
the employment related expense paid for that child. The earned income limitation of section
21(d) of the Internal Revenue Code shall not apply to this deemed amount. deleted text end new text begin ; and
new text end

new text begin (2) for all other filers, excluding married individuals filing separately, the lesser of (i)
the earned income of the taxpayer, or (ii) the amount of the maximum limit for one qualified
individual under section 21(c) and (d) of the Internal Revenue Code.
new text end

These deemed amounts apply regardless of whether any employment-related expenses have
been paid.

(d) If the taxpayer is not required and does not file a federal individual income tax return
for the tax year, no credit is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number of the person are included on
the return claiming the credit; or

(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue
Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name
and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence,
the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.

(e) In the case of a nonresident, part-year resident, or a person who has earned income
not subject to tax under this chapter including earned income excluded pursuant to section
290.0132, subdivision 10, the credit determined under section 21 of the Internal Revenue
Code must be allocated based on the ratio by which the earned income of the claimant and
the claimant's spouse from Minnesota sources bears to the total earned income of the claimant
and the claimant's spouse.

(f) For residents of Minnesota, the subtractions for military pay under section 290.0132,
subdivisions 11 and 12, are not considered "earned income not subject to tax under this
chapter."

(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the
Internal Revenue Code is not considered "earned income not subject to tax under this
chapter."

(h) For taxpayers with federal adjusted gross income in excess of deleted text begin $52,230 deleted text end new text begin $70,000 new text end , the
credit is equal to the lesser of the credit otherwise calculated under this subdivision, or the
amount equal to $600 minus five percent of federal adjusted gross income in excess of
deleted text begin $52,230 deleted text end new text begin $70,000 new text end for taxpayers with one qualified individual, or $1,200 minus five percent
of federal adjusted gross income in excess of deleted text begin $52,230 deleted text end new text begin $70,000 new text end for taxpayers with two or
more qualified individuals, but in no case is the credit less than zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 4.

Minnesota Statutes 2020, section 290.067, subdivision 2b, is amended to read:

Subd. 2b.

Inflation adjustment.

The commissioner shall annually adjust the dollar
amount of the income threshold at which the maximum credit begins to be reduced under
subdivision 1 as provided in section 270C.22. The statutory year is taxable year deleted text begin 2019 deleted text end new text begin 2022 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, 2021.
new text end

Sec. 5.

Minnesota Statutes 2020, section 290.067, is amended by adding a subdivision to
read:

new text begin Subd. 7. new text end

new text begin Special rule for 2022 and 2023. new text end

new text begin (a) In any taxable year beginning after
December 31, 2021, and before January 1, 2024, a taxpayer may take as a credit against the
tax due from the taxpayer and a spouse, if any, under this chapter an amount equal to 130
percent of the dependent care credit for which the taxpayer is eligible under this section.
For taxpayers with federal adjusted gross income in excess of $70,000, the credit is equal
to the lesser of the credit otherwise calculated under this section, or the amount equal to
$780 minus five percent of federal adjusted gross income in excess of $70,000 for taxpayers
with one qualified individual, or $1,560 minus five percent of federal adjusted gross income
in excess of $70,000 for taxpayers with two or more qualified individuals, but in no case is
the credit less than zero. The provisions of subdivision 1, paragraph (h), do not apply to this
subdivision.
new text end

new text begin (b) This subdivision expires for taxable years beginning after December 31, 2023.
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, 2021, and before January 1, 2024.
new text end

Sec. 6.

Minnesota Statutes 2021 Supplement, section 290.0671, subdivision 1, is amended
to read:

Subdivision 1.

Credit allowed.

(a) An individual who is a resident of Minnesota is
allowed a credit against the tax imposed by this chapter equal to a percentage of earned
income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code, except that:

(1) a taxpayer with no qualifying children who has attained the age of 19, but not attained
age 65 before the close of the taxable year and is otherwise eligible for a credit under section
32 of the Internal Revenue Code may also receive a credit; deleted text begin and
deleted text end

(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal
Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted
gross income exceeds the income limitation under section 32 of the Internal Revenue Code deleted text begin . deleted text end new text begin ;
and
new text end

new text begin (3) the requirements of section 32(m) of the Internal Revenue Code do not apply.
new text end

(b) For individuals with no qualifying children, the credit equals 3.9 percent of the first
$7,150 of earned income. The credit is reduced by 2.0 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first
$11,950 of earned income. The credit is reduced by 6.0 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.

(d) For individuals with two qualifying children, the credit equals 11 percent of the first
$19,600 of earned income. The credit is reduced by 10.5 percent of earned income or adjusted
gross income, whichever is greater, in excess of the phaseout threshold, but in no case is
the credit less than zero.

(e) For individuals with three or more qualifying children, the credit equals 12.5 percent
of the first $20,000 of earned income. The credit is reduced by 10.5 percent of earned income
or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in
no case is the credit less than zero.

(f) For a part-year resident, the credit must be allocated based on the percentage calculated
under section 290.06, subdivision 2c, paragraph (e).

(g) For a person who was a resident for the entire tax year and has earned income not
subject to tax under this chapter, including income excluded under section 290.0132,
subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross
income reduced by the earned income not subject to tax under this chapter over federal
adjusted gross income. For purposes of this paragraph, the following clauses are not
considered "earned income not subject to tax under this chapter":

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;

(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and

(3) income derived from an Indian reservation by an enrolled member of the reservation
while living on the reservation.

(h) For the purposes of this section, the phaseout threshold equals:

(1) $14,570 for married taxpayers filing joint returns with no qualifying children;

(2) $8,730 for all other taxpayers with no qualifying children;

(3) $28,610 for married taxpayers filing joint returns with one qualifying child;

(4) $22,770 for all other taxpayers with one qualifying child;

(5) $32,840 for married taxpayers filing joint returns with two qualifying children;

(6) $27,000 for all other taxpayers with two qualifying children;

(7) $33,140 for married taxpayers filing joint returns with three or more qualifying
children; and

(8) $27,300 for all other taxpayers with three or more qualifying children.

(i) The commissioner shall construct tables showing the amount of the credit at various
income levels and make them available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may graduate the transition
between income brackets.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 7.

Minnesota Statutes 2020, section 290.0674, subdivision 2, is amended to read:

Subd. 2.

Limitations.

(a) For claimants with income not greater than deleted text begin $33,500 deleted text end new text begin $70,000 new text end ,
the maximum credit allowed for a family is $1,000 multiplied by the number of qualifying
children in kindergarten through grade 12 in the family. The maximum credit for families
with one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of
deleted text begin household deleted text end income over deleted text begin $33,500 deleted text end new text begin $70,000 new text end , and the maximum credit for families with two or
more qualifying children in kindergarten through grade 12 is reduced by $2 for each $4 of
deleted text begin household deleted text end income over deleted text begin $33,500 deleted text end new text begin $70,000 new text end , but in no case is the credit less than zero.

(b) In the case of a married claimant, a credit is not allowed unless a joint income tax
return is filed.

(c) For a nonresident or part-year resident, the credit determined under subdivision 1
and the maximum credit amount in paragraph (a) must be allocated using the percentage
calculated in section 290.06, subdivision 2c, paragraph (e).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 8.

Minnesota Statutes 2020, section 290.0674, subdivision 2a, is amended to read:

Subd. 2a.

Income.

deleted text begin (a) deleted text end For purposes of this section, "income" means deleted text begin the sum of the
following:
deleted text end

deleted text begin (1) deleted text end federal adjusted gross income as defined in section 62 of the Internal Revenue Code deleted text begin ;
and deleted text end new text begin .
new text end

deleted text begin (2) the sum of the following amounts to the extent not included in clause (1):
deleted text end

deleted text begin (i) all nontaxable income;
deleted text end

deleted text begin (ii) the amount of a passive activity loss that is not disallowed as a result of section 469,
paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss
carryover allowed under section 469(b) of the Internal Revenue Code;
deleted text end

deleted text begin (iii) an amount equal to the total of any discharge of qualified farm indebtedness of a
solvent individual excluded from gross income under section 108(g) of the Internal Revenue
Code;
deleted text end

deleted text begin (iv) cash public assistance and relief;
deleted text end

deleted text begin (v) any pension or annuity (including railroad retirement benefits, all payments received
under the federal Social Security Act, Supplemental Security Income, and veterans benefits),
which was not exclusively funded by the claimant or spouse, or which was funded exclusively
by the claimant or spouse and which funding payments were excluded from federal adjusted
gross income in the years when the payments were made;
deleted text end

deleted text begin (vi) interest received from the federal or a state government or any instrumentality or
political subdivision thereof;
deleted text end

deleted text begin (vii) workers' compensation;
deleted text end

deleted text begin (viii) nontaxable strike benefits;
deleted text end

deleted text begin (ix) the gross amounts of payments received in the nature of disability income or sick
pay as a result of accident, sickness, or other disability, whether funded through insurance
or otherwise;
deleted text end

deleted text begin (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;
deleted text end

deleted text begin (xi) contributions made by the claimant to an individual retirement account, including
a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of
the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal
Revenue Code;
deleted text end

deleted text begin (xii) nontaxable scholarship or fellowship grants;
deleted text end

deleted text begin (xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
deleted text end

deleted text begin (xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
Code;
deleted text end

deleted text begin (xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue
Code; and
deleted text end

deleted text begin (xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code.
deleted text end

In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.

deleted text begin (b) "Income" does not include:
deleted text end

deleted text begin (1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
deleted text end

deleted text begin (2) amounts of any pension or annuity that were exclusively funded by the claimant or
spouse if the funding payments were not excluded from federal adjusted gross income in
the years when the payments were made;
deleted text end

deleted text begin (3) surplus food or other relief in kind supplied by a governmental agency;
deleted text end

deleted text begin (4) relief granted under chapter 290A;
deleted text end

deleted text begin (5) child support payments received under a temporary or final decree of dissolution or
legal separation; and
deleted text end

deleted text begin (6) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001,
Public Law 107-16.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2021.
new text end

Sec. 9.

Minnesota Statutes 2020, section 290.0674, is amended by adding a subdivision
to read:

new text begin Subd. 2b. new text end

new text begin Inflation adjustment. new text end

new text begin The commissioner shall annually adjust the dollar
amount of the income threshold at which the maximum credit begins to be reduced under
subdivision 2 as provided in section 270C.22. The statutory year is taxable year 2022.
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, 2021.
new text end

ARTICLE 3

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2020, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 54. new text end

new text begin Construction materials purchased by contractors; exemption for certain
entities. new text end

new text begin (a) Materials and supplies used or consumed in and equipment incorporated into
the construction, reconstruction, repair, maintenance, or improvement of buildings or
facilities used principally by the following entities are exempt:
new text end

new text begin (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
new text end

new text begin (2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d);
new text end

new text begin (3) hospitals and nursing homes owned and operated by political subdivisions of the
state, as described under section 297A.70, subdivision 2, paragraph (a), clause (3);
new text end

new text begin (4) county law libraries under chapter 134A and public libraries, regional public library
systems, and multicounty, multitype library systems, as defined in section 134.001;
new text end

new text begin (5) nonprofit groups, as defined under section 297A.70, subdivision 4;
new text end

new text begin (6) hospitals, outpatient surgical centers, and critical access dental providers, as defined
under section 297A.70, subdivision 7; and
new text end

new text begin (7) nursing homes and boarding care homes, as defined under section 297A.70,
subdivision 18.
new text end

new text begin (b) Materials and supplies used or consumed in and equipment incorporated into the
construction, reconstruction, repair, maintenance, or improvement of public infrastructure
of any kind, including but not limited to roads, bridges, culverts, drinking water facilities,
and wastewater facilities, purchased by a contractor, subcontractor, or builder as part of a
contract with the following entities are exempt:
new text end

new text begin (1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
new text end

new text begin (2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d).
new text end

new text begin (c) The tax on purchases exempt under this subdivision 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 June 30, 2021.
new text end

Sec. 2.

Minnesota Statutes 2021 Supplement, section 297A.75, subdivision 1, is amended
to read:

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) building materials for an agricultural processing facility exempt under section
297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section 297A.71,
subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for veterans with a disability exempt under
section 297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23;

(7) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35;

(8) 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;

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph
(a), clause (10);

(10) materials, supplies, and equipment for construction or improvement of projects and
facilities under section 297A.71, subdivision 40;

(11) materials, supplies, and equipment for construction, improvement, or expansion of
a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 45;

(12) enterprise information technology equipment and computer software for use in a
qualified data center exempt under section 297A.68, subdivision 42;

(13) materials, supplies, and equipment for qualifying capital projects under section
297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);

(14) items purchased for use in providing critical access dental services exempt under
section 297A.70, subdivision 7, paragraph (c);

(15) items and services purchased under a business subsidy agreement for use or
consumption primarily in greater Minnesota exempt under section 297A.68, subdivision
44;

(16) building materials, equipment, and supplies for constructing or replacing real
property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51;

(17) building materials, equipment, and supplies for qualifying capital projects under
section 297A.71, subdivision 52; deleted text begin and
deleted text end

(18) building materials, equipment, and supplies for constructing, remodeling, expanding,
or improving a fire station, police station, or related facilities exempt under section 297A.71,
subdivision 53 deleted text begin . deleted text end new text begin ; and
new text end

new text begin (19) building construction or reconstruction materials, supplies, and equipment exempt
under section 297A.71, subdivision 54.
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 June 30, 2021.
new text end

Sec. 3.

Minnesota Statutes 2021 Supplement, section 297A.75, subdivision 2, is amended
to read:

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), (2), and (14), the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a
joint venture of municipal electric utilities;

(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying
business;

(8) for subdivision 1, clauses (9), (10), (13), (17), and (18), the applicant must be the
governmental entity that owns or contracts for the project or facility; deleted text begin and
deleted text end

(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the
building or project deleted text begin . deleted text end new text begin ; and
new text end

new text begin (10) for subdivision 1, clause (19), the applicant must be the entity:
new text end

new text begin (i) listed in section 297A.71, subdivision 54, paragraph (a), that principally uses the
building or facility; or
new text end

new text begin (ii) listed in section 297A.71, subdivision 54, paragraph (b), that contracts with a
contractor, subcontractor, or builder for the public infrastructure project.
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 June 30, 2021.
new text end

Sec. 4.

Minnesota Statutes 2021 Supplement, section 297A.75, subdivision 3, is amended
to read:

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, clauses (3) to (13) or (15) to deleted text begin (18) deleted text end new text begin (19) 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after June 30, 2021.
new text end

ARTICLE 4

PROPERTY TAXES

Section 1.

Minnesota Statutes 2020, 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, 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 new text begin or
individual tax identification numbers new text end 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. 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 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, 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, as amended, 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;

(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 retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 2.

Minnesota Statutes 2021 Supplement, section 273.124, subdivision 13, 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 commissioner shall prescribe the content, format, and manner of the homestead
application required to be filed under this chapter pursuant to section 270C.30. 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 new text begin or individual tax identification number new text end 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 new text begin or individual tax identification number new text end of the spouse of each occupying owner. 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 new text begin or individual tax identification number new text end 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 new text begin or individual tax identification number new text end 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.

(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 new text begin or individual tax identification number new text end of each relative
occupying the property and the name and Social Security number new text begin or individual tax
identification number new text end of the 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 new text begin or individual tax
identification number new text end of a relative occupying the property or the spouse of a relative
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 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 a homestead application has not been filed with the county by December 31, 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2020, section 273.124, subdivision 13a, is amended to read:

Subd. 13a.

Occupant list.

At the request of the commissioner, each county must give
the commissioner a list that includes the name and Social Security number new text begin or individual
tax identification number new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2020, section 273.124, subdivision 13c, is amended to read:

Subd. 13c.

Property lists.

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 new text begin , individual tax identification numbers, new text end 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. 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 retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2020, section 273.124, subdivision 13d, is amended to read:

Subd. 13d.

Homestead data.

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:

(1) the property identification number assigned to the parcel for purposes of taxes payable
in the current year;

(2) the name and Social Security number new text begin or individual tax identification number new text end of each
occupant of homestead property who is the property owner or qualifying relative of a property
owner, and the spouse of the property owner who occupies homestead property or spouse
of a qualifying relative of a property owner who occupies homestead property;

(3) the classification of the property under section 273.13 for taxes payable in the current
year and in the prior year;

(4) 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;

(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;

(6) the market value of improvements to the property first assessed for tax purposes for
taxes payable in the current year;

(7) the assessor's estimated market value assigned to the property for taxes payable in
the current year and the prior year;

(8) the taxable market value assigned to the property for taxes payable in the current
year and the prior year;

(9) whether there are delinquent property taxes owing on the homestead;

(10) the unique taxing district in which the property is located; and

(11) 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 retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2021 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 or section 477A.17;

(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 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 agricultural property consists of at least 40 acres including undivided government
lots and correctional 40's;

(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner
or of 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;

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

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

(5) neither the owner nor the person actively farming the agricultural property lives
farther than four townships or cities, or a combination of four townships or cities, from the
agricultural property, 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 more than four townships or cities, or combination of
four townships or cities from the agricultural property.

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

(ii) 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.

(iii) As used in this paragraph, "agricultural property" means class 2a property and any
class 2b property that is contiguous to and under the same ownership as the class 2a property.

(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 township or city, or not farther than four townships or cities or
combination thereof from 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 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) the property consists of at least 40 acres including undivided government lots and
correctional 40's;

(2) a shareholder, member, or partner of that entity is actively farming the agricultural
property;

(3) that shareholder, member, or partner who is actively farming the agricultural property
is a Minnesota resident;

(4) neither that shareholder, member, or partner, nor the spouse of that shareholder,
member, or partner claims another agricultural homestead in Minnesota; and

(5) that shareholder, member, or partner does not live farther than four townships or
cities, or a combination of four townships or cities, from the agricultural property.

Homestead treatment applies under this paragraph even if:

(i) the shareholder, member, or partner of that entity is actively farming the agricultural
property on the shareholder's, member's, or partner's own behalf; or

(ii) the family farm is operated by a family farm corporation, joint family farm venture,
partnership, or limited liability company other than the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land, provided that:

(A) the shareholder, member, or partner of the family farm corporation, joint family
farm venture, partnership, or limited liability company that owns the land who is actively
farming the land is a shareholder, member, or partner of the family farm corporation, joint
family farm venture, partnership, or limited liability company that is operating the farm;
and

(B) more than half of the shareholders, members, or partners of each family farm
corporation, joint family farm venture, partnership, or limited liability company are persons
or spouses of persons who are a qualifying relative under section 273.124, subdivision 1,
paragraphs (c) and (d).

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 the
four townships or city criteria 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 new text begin or individual tax identification numbers new text end , 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.

(j) Agricultural land and buildings that were class 2a homestead property under section
273.13, subdivision 23, paragraph (a), for the 2008 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 March 2009 floods;

(2) the property is located in the county of Marshall;

(3) the agricultural land and buildings remain under the same ownership for the current
assessment year as existed for the 2008 assessment year and continue to be used for
agricultural purposes;

(4) the dwelling occupied by the owner is located in Minnesota 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 2009 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2020, section 273.1245, subdivision 1, is amended to read:

Subdivision 1.

Private or nonpublic data.

The following data are private or nonpublic
data as defined in section 13.02, subdivisions 9 and 12, when they are submitted to a county
or local assessor under section 273.124, 273.13, or another section, to support a claim for
the property tax homestead classification under section 273.13, or other property tax
classification or benefit:

(1) Social Security numbers;

new text begin (2) individual tax identification numbers;
new text end

deleted text begin (2) deleted text end new text begin (3) new text end copies of state or federal income tax returns; and

deleted text begin (3) deleted text end new text begin (4) new text end state or federal income tax return information, including the federal income tax
schedule F.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2021 Supplement, section 273.13, subdivision 23, is amended
to read:

Subd. 23.

Class 2.

(a) An agricultural homestead consists of class 2a agricultural land
that is homesteaded, along with any class 2b rural vacant land that is contiguous to the class
2a land under the same ownership. The market value of the house and garage and immediately
surrounding one acre of land has the same classification rates as class 1a or 1b 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 classification rate of 0.5
percent of market value. The remaining property over the first tier has a classification 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) Class 2a agricultural land consists of parcels of property, or portions thereof, that
are agricultural land and buildings. Class 2a property has a classification rate of one percent
of market value, unless it is part of an agricultural homestead under paragraph (a). Class 2a
property must also include any property that would otherwise be classified as 2b, but is
interspersed with class 2a property, including but not limited to sloughs, wooded wind
shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
and other similar land that is impractical for the assessor to value separately from the rest
of the property or that is unlikely to be able to be sold separately from the rest of the property.

An assessor may classify the part of a parcel described in this subdivision that is used
for agricultural purposes as class 2a and the remainder in the class appropriate to its use.

(c) Class 2b rural vacant land consists of parcels of property, or portions thereof, that
are unplatted real estate, rural in character and not used for agricultural purposes, including
land used for growing trees for timber, lumber, and wood and wood products, that is not
improved with a structure. 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. Any parcel of 20 acres or more improved with a structure that is not
a minor, ancillary nonresidential structure must be split-classified, and ten acres must be
assigned to the split parcel containing the structure. If a parcel of 20 acres or more is enrolled
in the sustainable forest management incentive program under chapter 290C, the number
of acres assigned to the split parcel improved with a structure that is not a minor, ancillary
nonresidential structure must equal three acres or the number of acres excluded from the
sustainable forest incentive act covenant due to the structure, whichever is greater. Class
2b property has a classification rate of one percent of market value unless it is part of an
agricultural homestead under paragraph (a), or qualifies as class 2c under paragraph (d).

(d) Class 2c managed forest land consists of no less than 20 and no more than 1,920
acres statewide per taxpayer that 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. It has a classification rate of .65 percent, provided that the
owner of the property must apply to the assessor in order for the property to initially qualify
for the reduced rate and provide the information required by the assessor to verify that the
property qualifies for the reduced rate. If the assessor receives the application and information
before May 1 in an assessment year, the property qualifies beginning with that assessment
year. If the assessor receives the application and information after April 30 in an assessment
year, the property may not qualify until the next assessment year. 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.
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.

(e) Agricultural land as used in this section means:

(1) contiguous acreage of ten acres or more, used during the preceding year for
agricultural purposes; or

(2) contiguous acreage used during the preceding year for an intensive livestock or
poultry confinement operation, provided that land used only for pasturing or grazing does
not qualify under this clause.

"Agricultural purposes" as used in this section means the raising, cultivation, drying, or
storage of agricultural products for sale, or the storage of machinery or equipment used in
support of agricultural production by the same farm entity. 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. "Agricultural purposes" also includes (i) enrollment in a local
conservation program or 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
or a similar state or federal conservation program if the property was classified as agricultural
(A) under this subdivision for taxes payable in 2003 because of its enrollment in a qualifying
program and the land remains enrolled or (B) in the year prior to its enrollment, or (ii) use
of land, not to exceed three acres, to provide environmental benefits such as buffer strips,
old growth forest restoration or retention, or retention ponds to prevent soil erosion. For
purposes of this section, a "local conservation program" means a program administered by
a town, statutory or home rule charter city, or county, including a watershed district, water
management organization, or soil and water conservation district, in which landowners
voluntarily enroll land and receive incentive payments equal to at least $50 per acre in
exchange for use or other restrictions placed on the land. In order for property to qualify
under the local conservation program provision, a taxpayer must apply to the assessor by
February 1 of the assessment year and must submit the information required by the assessor,
including but not limited to a copy of the program requirements, the specific agreement
between the land owner and the local agency, if applicable, and a map of the conservation
area. Agricultural classification shall not be based upon the market value of any residential
structures on the parcel or contiguous parcels under the same ownership.

"Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
of, a set of contiguous tax parcels under that section that are owned by the same person.

(f) Agricultural land under this section also includes:

(1) contiguous acreage that is less than ten acres in size and exclusively used in the
preceding year for raising or cultivating agricultural products; or

(2) contiguous acreage that contains a residence and is less than 11 acres in size, if the
contiguous acreage exclusive of the house, garage, and surrounding one acre of land was
used in the preceding year for one or more of the following three uses:

(i) for an intensive grain drying or storage operation, or for intensive machinery or
equipment storage activities used to support agricultural activities on other parcels of property
operated by the same farming entity;

(ii) as a nursery, provided that only those acres used intensively to produce nursery stock
are considered agricultural land; or

(iii) for intensive 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.

"Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
described in section 272.193, or all of a set of contiguous tax parcels under that section that
are owned by the same person.

(g) 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.

Classification under this subdivision is not determinative for qualifying under section
273.111.

(h) 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.

(i) 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) aquacultural products for sale and consumption, as defined under section 17.47, if
the aquaculture occurs on land zoned for agricultural use;

(3) the commercial boarding of horses, which may include related horse training and
riding instruction, if the boarding is done on property that is also used for raising pasture
to graze horses or raising or cultivating other 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 (i) on a game farm licensed under section
97A.105, provided that the annual licensing report to the Department of Natural Resources,
which must be submitted annually by March 30 to the assessor, indicates that at least 500
birds were raised or used for breeding stock on the property during the preceding year and
that the owner provides a copy of the owner's most recent schedule F; or (ii) 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, including short rotation woody crops, and not sold
for timber, lumber, wood, or wood products; deleted text begin and
deleted text end

(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 . deleted text end new text begin ; and
new text end

new text begin (9) hemp.
new text end

(j) 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.

(k) 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.

(l) Class 2d airport landing area consists of a landing area or public access area of a
privately owned public use airport. It has a classification rate of one percent of market value.
To qualify for classification under this paragraph, a privately owned public use airport must
be licensed as a public airport under section 360.018. For purposes of this paragraph, "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 this paragraph 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 this paragraph. For
purposes of this paragraph, "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.

(m) Class 2e consists of land with a commercial aggregate deposit that is not actively
being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
located in a county that has elected to opt-out of the aggregate preservation program as
provided in section 273.1115, subdivision 6. It has a classification rate of one percent of
market value. 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:

(1) a legal description of the property;

(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;

(3) documentation that the conditional use under the county or local zoning ordinance
of this property is for mining; and

(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.

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.

(n) 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.

(o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are not
rules and are exempt from the rulemaking provisions of chapter 14, and the provisions in
section 14.386 concerning exempt rules do not apply.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2023 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2020, section 273.1315, subdivision 2, is amended to read:

Subd. 2.

Class 1b homestead declaration 2009 and thereafter.

(a) Any property owner
seeking classification and assessment of the owner's homestead as class 1b property pursuant
to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file with the
county assessor a class 1b homestead declaration, on a form prescribed by the commissioner
of revenue. The declaration must contain the following information:

(1) the information necessary to verify that, on or before June 30 of the filing year, the
property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision
22, paragraph (b), for class 1b classification; and

(2) any additional information prescribed by the commissioner.

(b) The declaration must be filed on or before October 1 to be effective for property
taxes payable during the succeeding calendar year. The Social Security numbers new text begin , individual
tax identification numbers, new text end and income and medical information received from the property
owner pursuant to this subdivision are private data on individuals as defined in section
13.02. If approved by the assessor, the declaration remains in effect until the property no
longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify the
assessor within 30 days that the property no longer qualifies under that paragraph because
of a sale, change in occupancy, or change in the status or condition of an occupant shall
result in the penalty provided in section 273.124, subdivision 13b, computed on the basis
of the class 1b benefits for the property, and the property shall lose its current class 1b
classification.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for homestead applications
filed in 2022 and thereafter.
new text end

Sec. 10.

Minnesota Statutes 2020, 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, at least one of the spouses must be at least 65
years old 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, and the other spouse must be at least 62 years
of age;

(2) the total household income of the qualifying homeowners, 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 $75,000 new text end ;

(3) the homestead must have been owned and occupied as the homestead of at least one
of the qualifying 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 or debts secured by a residential PACE lien, as defined in section 216C.435, subdivision
10d, 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 received for deferral of
taxes payable in 2023 and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2020, 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 $75,000 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, 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 received for deferral of
taxes payable in 2023 and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2020, 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 $75,000 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 $75,000 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 received for deferral of
taxes payable in 2023 and thereafter.
new text end

Sec. 13.

Minnesota Statutes 2020, 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 $75,000 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 for deferral of
taxes payable in 2023 and thereafter.
new text end

ARTICLE 5

PUBLIC SAFETY AID

Section 1.

new text begin [477A.0127] PUBLIC SAFETY AID.
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, the following terms have the
meanings given:
new text end

new text begin (1) "City" means a statutory or home rule charter city that directly employs at least one
peace officer as defined by section 477C.01, subdivision 7, clauses (1) and (3) to (4).
new text end

new text begin (2) "City per capita aid amount" equals the amount appropriated to every city by
subdivision 7, divided by the total population of every city.
new text end

new text begin (3) "County per capita aid amount" equals the amount appropriated to counties and
Tribal governments by subdivision 7, divided by the sum of the total population of every
county plus the total Tribal population but excluding the total population of every city.
new text end

new text begin (4) "Population" means population estimates made or conducted by the United States
Bureau of the Census, the Metropolitan Council pursuant to section 473.24, or by the state
demographer pursuant to section 4A.02, paragraph (d), whichever is the most recent estimate
and available as of January 1 of the year in which the aid is calculated.
new text end

new text begin (5) "Tribal governments" has the meaning given to "Minnesota Tribal governments" in
section 10.65, subdivision 2.
new text end

new text begin (6) "Tribal population" means population estimates made or conducted by the United
States Bureau of the Census of the federally recognized American Indian reservations and
off-reservation trust lands in Minnesota, whichever is the most recent estimate and available
as of January 1 of the year in which the aid is calculated.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to provide property tax relief and
ongoing financial support to counties, Tribal governments, and cities to aid in the funding
and providing of public safety.
new text end

new text begin Subd. 3. new text end

new text begin Distribution. new text end

new text begin The commissioner of revenue will distribute payments under this
section as follows:
new text end

new text begin (1) A county's public safety aid amount equals:
new text end

new text begin (i) the county's population minus the total population of every city located in that county,
times;
new text end

new text begin (ii) the county per capita aid amount.
new text end

new text begin (2) A Tribal government's public safety aid amount equals:
new text end

new text begin (i) the Tribe's population times;
new text end

new text begin (ii) the county per capita aid amount.
new text end

new text begin (3) A city's public safety aid amount equals:
new text end

new text begin (i) the city's population times;
new text end

new text begin (ii) the city per capita aid amount.
new text end

new text begin Subd. 4. new text end

new text begin Certifications to commissioner. new text end

new text begin The commissioner of public safety must
certify to the commissioner of revenue, on or before June 1 each year, each city that meets
the definition of city in subdivision 1 as of January 1 of the aid calculation year.
new text end

new text begin Subd. 5. new text end

new text begin Use of proceeds. new text end

new text begin (a) Counties, Tribal governments, and cities that receive a
distribution under this section must use the proceeds to provide public safety. Use of proceeds
may include, but is not limited to, paying personnel and equipment costs.
new text end

new text begin (b) Counties must consult with their county sheriff in determining how to use the
proceeds.
new text end

new text begin (c) Counties, Tribal governments, and cities that receive a distribution under this section
may not apply the proceeds toward:
new text end

new text begin (1) their employer contribution to the public employees police and fire fund, if that
county, Tribal government, or city received police state aid under chapter 477C in the year
immediately prior to a distribution under this section; or
new text end

new text begin (2) any costs associated with alleged wrongdoing or misconduct.
new text end

new text begin Subd. 6. new text end

new text begin Payments. new text end

new text begin The commissioner of revenue must calculate the amount of public
safety aid payable to each county, Tribal government, and city under this section. On or
before August 1 each year, the commissioner must certify the amount to be paid to each
county, Tribal government, and city in the following year. The commissioner must distribute
public safety aid in the same manner and at the same times as aid payments under section
477A.015. For aid payable in 2022 only, the commissioner shall certify the amount to be
paid in 2022 to each county, Tribal government, and city by August 1, 2022, and the full
2022 payment to the counties, Tribal governments, and cities must be made at the time
provided in section 477A.015 for the second installment of local government aid.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation. new text end

new text begin $100,000,000 is annually appropriated from the general fund
to the commissioner of revenue to make payments required under this section as follows:
(1) $30,000,000 to counties and Tribal governments; and (2) $70,000,000 to cities.
new text end

new text begin Subd. 8. new text end

new text begin Redistribution of a city's public safety aid to a county. new text end

new text begin (a) Any statutory or
home rule charter city that receives a distribution under this section when that statutory or
home rule charter city did not meet the definition of city as defined in subdivision 1 shall
redistribute those payments to the county where the statutory or home rule charter city is
located.
new text end

new text begin (b) If a statutory or home rule charter city that must redistribute aid under paragraph (a)
is located in two or more counties, that statutory or home rule charter city shall redistribute
aid payments proportionally to each county where it is located based on the share of
population in each county, as population is defined in subdivision 1.
new text end

new text begin Subd. 9. new text end

new text begin Aid amount corrections. new text end

new text begin If, due to a clerical error, the amount certified by the
commissioner to a county, Tribal government, or city is less than the amount to which the
county, Tribal government, or city is entitled pursuant to this section, the commissioner of
revenue shall distribute additional aid payments in the same manner as additional aid
payments are made under section 477A.014. The additional payments shall be paid from
the general fund and shall not diminish the distributions made to other counties, Tribal
governments, and cities under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aid payable in 2022 and
thereafter.
new text end

ARTICLE 6

SOIL AND WATER CONSERVATION DISTRICT AID

Section 1.

new text begin [477A.23] SOIL AND WATER CONSERVATION DISTRICT AID.
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, the following terms have the
meanings given:
new text end

new text begin (1) "nonpublic land" means tract, lot, parcel, and piece or parcel of land as defined by
section 272.03, subdivision 6, that is not owned by the federal government, the state, or a
local government unit; and
new text end

new text begin (2) "soil and water conservation district" means a district under chapter 103C that is
implementing the duties under that chapter as determined by the Board of Water and Soil
Resources as of the date the board provides the certification to the commissioner of revenue
required by subdivision 4.
new text end

new text begin Subd. 2. new text end

new text begin Purpose. new text end

new text begin The purpose of this section is to provide ongoing financial support
to soil and water conservation districts to aid in the execution of chapter 103C and other
duties and services prescribed by statute.
new text end

new text begin Subd. 3. new text end

new text begin Distribution. new text end

new text begin The Board of Water and Soil Resources must calculate the amount
of aid to be distributed to the certified soil and water conservation districts from the
appropriation in subdivision 7 as follows:
new text end

new text begin (1) 70 percent of the appropriation must be distributed equally among the districts; and
new text end

new text begin (2) 30 percent of the appropriation must be distributed proportionally among the districts
according to the amount of nonpublic land located in a district as compared to the amount
of nonpublic land in the state.
new text end

new text begin Subd. 4. new text end

new text begin Certification to commissioner. new text end

new text begin On or before June 1 each year, the Board of
Water and Soil Resources must certify to the commissioner of revenue the soil and water
conservation districts that will receive a payment under this section and the amount of each
payment.
new text end

new text begin Subd. 5. new text end

new text begin Use of proceeds. new text end

new text begin (a) Notwithstanding section 103C.401, subdivision 2, a soil
and water conservation district that receives a distribution under this section must use the
proceeds to implement chapter 103C and other duties and services prescribed by statute.
new text end

new text begin (b) The board of each soil and water conservation district must establish, by resolution,
annual guidelines for using payments received under this section. Current year guidelines
and guidelines from the year immediately prior must be posted on the district website.
new text end

new text begin (c) A soil and water conservation district that receives a payment under this section may
appropriate any portion of the payment to a governmental unit with which the district has
a cooperative agreement under section 103C.231. Any payment received under this section
and appropriated by the district must be used as required by this section.
new text end

new text begin Subd. 6. new text end

new text begin Payments. new text end

new text begin The commissioner of revenue must distribute soil and water
conservation district aid in the same manner and at the same times as aid payments provided
under section 477A.015.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation. new text end

new text begin $22,000,000 is annually appropriated from the general fund
to the commissioner of revenue to make the payments required under his section.
new text end

new text begin Subd. 8. new text end

new text begin Aid amount corrections. new text end

new text begin If, due to a clerical error, the amount certified by the
Board of Soil and Water Resources to a soil and water conservation district is less than the
amount to which the district is entitled under this section, the Board of Water and Soil
Resources shall recertify the correct amount to the commissioner of revenue and communicate
the error and the corrected amount to the affected soil and water conservation district as
soon as practical after the error is discovered. The commissioner of revenue shall then
distribute additional aid payments in the same manner as additional aid payments are made
under section 477A.014. The additional aid payments shall be made from the general fund
and shall not diminish the distributions made to other soil and water conservation districts
under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2022 and
thereafter.
new text end

Sec. 2.

Laws 2021, First Special Session chapter 1, article 2, section 6, is amended to read:

Sec. 6. BOARD OF WATER AND SOIL RESOURCES

$

68,584,000

$

deleted text begin 73,216,000 deleted text end new text begin 61,216,000 new text end

(a) $21,197,000 the first year and $22,367,000
the second year are for performance-based
grants with multiyear implementation plans
to local government units. The grants may be
used to implement projects that protect,
enhance, and restore surface water quality in
lakes, rivers, and streams; protect groundwater
from degradation; and protect drinking water
sources. Projects must be identified in a
comprehensive watershed plan developed
under the One Watershed, One Plan and
seven-county metropolitan groundwater or
surface water management frameworks as
provided for in Minnesota Statutes, chapters
103B, 103C, 103D, and 114D. Grant recipients
must identify a nonstate match and may use
other legacy funds to supplement projects
funded under this paragraph. This
appropriation may be used for:

(1) implementation grants to watershed
planning areas with approved plans, including
but not limited to Buffalo-Red River, Cannon
River, Cedar River, Clearwater River, Des
Moines River, Hawk Creek, Lac qui Parle
Yellow Bank, Lake of the Woods, Lake
Superior North, Le Seuer River, Leech Lake
River, Long Prairie River, Lower Minnesota
River North, Lower Minnesota River West,
Lower Minnesota River South, Lower St.
Croix River, Marsh and Wild Rice, Middle
Snake Tamarack Rivers, Mississippi East,
Mississippi River Headwaters, Mississippi
West, Missouri River Basin, Mustinka/Bois
de Sioux, Nemadji River, North Fork Crow
River, Otter Tail, Pine River, Pomme de Terre
River, Red Lake River, Redeye River, Root
River, Rum River, Sauk River, Shell Rock
River/Winnebago Watershed, Snake River,
South Fork Crow River, St. Louis River, Thief
River, Two Rivers Plus, Vermillion,
Watonwan River, Winona La Crescent,
Yellow Medicine River, and Zumbro River;

(2) seven-county metropolitan groundwater
or surface water management frameworks;
and

(3) other comprehensive watershed
management plan planning areas that have a
board-approved and local-government-adopted
plan as authorized in Minnesota Statutes,
section 103B.801.

The board may determine whether a planning
area is not ready to proceed, does not have the
nonstate match committed, or has not
expended all money granted to it. Upon
making the determination, the board may
allocate a grant's proposed or unexpended
allocation to another planning area to
implement priority projects, programs, or
practices.

(b) $10,762,000 the first year and $11,504,000
the second year are for grants to local
government units to protect and restore surface
water and drinking water; to keep water on
the land; to protect, enhance, and restore water
quality in lakes, rivers, and streams; and to
protect groundwater and drinking water,
including feedlot water quality and subsurface
sewage treatment system projects and stream
bank, stream channel, shoreline restoration,
and ravine stabilization projects. The projects
must use practices demonstrated to be
effective, be of long-lasting public benefit,
include a match, and be consistent with total
maximum daily load (TMDL) implementation
plans, watershed restoration and protection
strategies (WRAPS), or local water
management plans or their equivalents. Up to
20 percent of this appropriation is available
for land-treatment projects and practices that
benefit drinking water.

(c) $4,841,000 the first year and $4,841,000
the second year are for accelerated
implementation, local resource protection,
enhancement grants, statewide analytical
targeting or technology tools that fill an
identified gap, program enhancements for
technical assistance, citizen and community
outreach, compliance, and training and
certification.

(d) $1,250,000 the first year and $1,250,000
the second year are:

(1) to provide state oversight and
accountability, evaluate and communicate
results, provide implementation tools, and
measure the value of conservation program
implementation by local governments; and

(2) to prepare, in consultation with the
commissioners of natural resources, health,
agriculture, and the Pollution Control Agency,
and submit to the legislature by March 1 each
even-numbered year a biennial report detailing
the recipients and projects funded under this
section and the amount of pollution reduced.

(e) $1,936,000 the first year and $1,936,000
the second year are to provide assistance,
oversight, and grants for supporting local
governments in implementing and complying
with riparian protection and excessive soil loss
requirements.

(f) $1,936,000 the first year and $1,936,000
the second year are to develop a pilot working
lands floodplain program and to purchase,
restore, or preserve riparian land and
floodplains adjacent to lakes, rivers, streams,
and tributaries, by conservation easements or
contracts to keep water on the land, to decrease
sediment, pollutant, and nutrient transport;
reduce hydrologic impacts to surface waters;
and increase infiltration for groundwater
recharge. Up to $180,000 is for deposit in a
monitoring and enforcement account.

(g) $2,500,000 the first year and $2,500,000
the second year are for permanent
conservation easements on wellhead protection
areas under Minnesota Statutes, section
103F.515, subdivision 2, paragraph (d), or for
grants to local units of government for fee title
acquisition to permanently protect
groundwater supply sources on wellhead
protection areas or for otherwise ensuring
long-term protection of groundwater supply
sources as described under alternative
management tools in the Department of
Agriculture Minnesota Nitrogen Fertilizer
Management Plan, including using
low-nitrogen cropping systems or
implementing nitrogen fertilizer best
management practices. Priority must be placed
on land that is located where the vulnerability
of the drinking water supply is designated as
high or very high by the commissioner of
health, where drinking water protection plans
have identified specific activities that will
achieve long-term protection, and on lands
with expiring conservation reserve program
contracts. Up to $250,000 is for deposit in a
monitoring and enforcement account.

(h) $42,000 the first year and $42,000 the
second year are for a technical evaluation
panel to conduct ten restoration evaluations
under Minnesota Statutes, section 114D.50,
subdivision 6.

(i) $2,904,000 the first year and $2,904,000
the second year are for assistance, oversight,
and grants to local governments to transition
local water management plans to a watershed
approach as provided for in Minnesota
Statutes, section 103B.801.

(j) $850,000 the first year and $850,000 the
second year are for technical assistance and
grants for the conservation drainage program,
in consultation with the Drainage Work Group,
coordinated under Minnesota Statutes, section
103B.101, subdivision 13, and including
projects to improve multipurpose water
management under Minnesota Statutes, section
103E.015.

(k) $1,771,000 the first year and $3,829,000
the second year are to purchase and restore
permanent conservation sites via easements
or contracts to treat and store water on the land
for water quality improvement purposes and
related technical assistance. This work may
be done in cooperation with the United States
Department of Agriculture with a first-priority
use to accomplish a conservation reserve
enhancement program, or equivalent, in the
state. Up to $280,000 is for deposit in a
monitoring and enforcement account. This
appropriation is available until June 30, 2028.

(l) $1,234,000 the first year and $1,234,000
the second year are to purchase permanent
conservation easements to protect lands
adjacent to public waters that have good water
quality but that are threatened with
degradation. Up to $300,000 is for deposit in
a monitoring and enforcement account.

(m) $362,000 the first year and $362,000 the
second year are for grants or contracts for a
program to systematically collect data and
produce county, watershed, and statewide
estimates of soil erosion caused by water and
wind, along with tracking adoption of
conservation measures, including cover crops,
to address erosion. This appropriation may be
used for grants to or contracts with the
University of Minnesota to complete this
work.

(n) $400,000 the first year and $600,000 the
second year are for developing and
implementing a water legacy grant program
to expand partnerships for clean water.

(o) $2,599,000 the first year and $3,061,000
the second year are for permanent
conservation easements to protect and restore
wetlands and associated uplands. Up to
$280,000 is for deposit in a monitoring and
enforcement account.

(p) $2,000,000 the first year and $2,000,000
the second year are for grants to farmers who
own or rent land to enhance adoption of cover
crops and other soil health practices in areas
where there are direct benefits to public water
supplies. Up to $400,000 is for an agreement
with the University of Minnesota Office for
Soil Health for applied research and education
on Minnesota's agroecosystems and soil health
management systems.

(q) $12,000,000 the first year deleted text begin and $12,000,000
the second year are deleted text end new text begin is new text end for payments to soil and
water conservation districts for the purposes
of Minnesota Statutes, sections 103C.321 and
103C.331. From this appropriation, each soil
and water conservation district shall receive
an increase in its base funding of $100,000
per year. Money remaining after the base
increase is available for grants to soil and
water conservation districts as determined by
the board based on county allocations to soil
and water conservation districts and the
amount of private land and public waters. The
board and other agencies may reduce the
amount of grants to a county by an amount
equal to any reduction in the county's
allocation to a soil and water conservation
district from the county's previous year
allocation when the board determines that the
reduction was disproportionate. The board
may use up to two percent for the
administration of payments.

(r) The board, in consultation with an advisory
group consisting of one representative from
the Department of Natural Resources, one
representative from the Association of
Minnesota Counties, one representative from
Friends of the Minnesota Valley, and one
representative from the Red River Watershed
Management Board, must study the
development, implementation, and funding of
a statewide river watch program. By January
15, 2022, the board must submit a report with
recommendations and proposed legislation to
the chairs and ranking minority members of
the house of representatives and senate
environment finance and legacy committees.

(s) The board must contract for delivery of
services with Conservation Corps Minnesota
for restoration, maintenance, and other
activities under this section for up to $750,000
the first year and up to $750,000 the second
year.

(t) The board may shift grant, cost-share, or
easement funds in this section and may adjust
the technical and administrative assistance
portion of the funds to leverage federal or
other nonstate funds or to address oversight
responsibilities or high-priority needs
identified in local water management plans.

(u) The board must require grantees to specify
the outcomes that will be achieved by the
grants before making any grant awards.

(v) The appropriations in this section are
available until June 30, 2026, except grant
funds are available for five years after the date
a grant is executed. Returned grant funds must
be regranted consistent with the purposes of
this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2022 and
thereafter.
new text end

ARTICLE 7

MISCELLANEOUS

Section 1. new text begin DIRECT PAYMENT; APPROPRIATION.
new text end

new text begin (a) The following individuals are eligible for a direct payment:
new text end

new text begin (1) an individual who was a resident of Minnesota, as defined in Minnesota Statutes,
section 290.01, subdivision 7, for any part of 2020, and filed a 2020 Minnesota individual
income tax return by October 15, 2021; and
new text end

new text begin (2) an individual who was eligible for and who filed a claim for refund by December
31, 2021, under Minnesota Statutes, chapter 290A.04, subdivision 2, for property taxes
payable in 2021 or subdivision 3, for rent constituting property taxes paid in 2020.
new text end

new text begin (b) An individual is not eligible for a direct payment if the individual's taxable net income,
as defined in Minnesota Statutes, section 290.01, subdivision 22, as reported on the
individual's original 2020 Minnesota individual income tax return exceeded:
new text end

new text begin (1) $164,400 in the case of a single individual filer;
new text end

new text begin (2) $273,470 in the case of a married individual who filed a joint return;
new text end

new text begin (3) $218,540 in the case of an individual who filed as head of household; or
new text end

new text begin (4) $136,735 in the case of a married individual who filed a separate return.
new text end

new text begin (c) The direct payment is equal to:
new text end

new text begin (1) $175 for a single filer or a married individual who filed a separate return; and
new text end

new text begin (2) $350 for a married couple who filed a joint return or an individual who filed as head
of household.
new text end

new text begin (d) For an individual who was a resident of Minnesota for less than the entire year, the
direct payment equals the direct payment under paragraph (c) for their filing status multiplied
by the percentage determined pursuant to Minnesota Statutes, section 290.06, subdivision
2c, paragraph (e), as calculated on their original 2020 individual income tax return.
new text end

new text begin (e) A direct payment under this section shall be paid by the commissioner of revenue
based on information available in the commissioner's records. A person eligible for a direct
payment does not have to file a claim to receive the payment.
new text end

new text begin (f) The commissioner of revenue shall pay individuals who filed a joint income tax return
or joint property tax refund return for 2020 a joint direct payment.
new text end

new text begin (g) The direct payment is a "Minnesota tax law" for purpose of Minnesota Statutes,
section 270B.01, subdivision 8.
new text end

new text begin (h) The commissioner of revenue must not apply, and must not certify to another agency
to apply, a payment under this section to any unpaid tax or nontax debt owed by an individual
who is paid a direct payment.
new text end

new text begin (i) A payment under this section is not considered income of a recipient in determining
their Minnesota individual income tax, any Minnesota individual income tax credits, the
Minnesota property tax refund, or the Minnesota senior citizen property tax deferral. A
direct payment must not be counted as income or as an asset, personal property, or resource
when determining eligibility for any program administered by the Department of Human
Services. A direct payment is not assistance based on need for purposes of Minnesota
Statutes, section 550.37, subdivision 14.
new text end

new text begin (j) If an individual eligible to receive a direct payment dies prior to the issuance of the
direct payment the right to the payment lapses.
new text end

new text begin (k) If the commissioner of revenue cannot locate an individual entitled to a direct payment
within two years of the date that the original check or warrant was issued, or if an individual
to whom a direct payment was made has not cashed the check or warrant within two years
of the date that the original check or warrant was issued, the right to the payment lapses. If
an individual to whom a direct payment was made by debit card has not withdrawn from
the card the total amount of the direct payment within two years of the date of issuance of
the original debit card, the right to any remaining balance lapses to the state general fund.
new text end

new text begin (l) The commissioner of revenue may recover a previously made direct payment if the
commissioner determines after the direct payment has been made that the individual or
married couple had taxable net income for 2020 that exceeded a threshold in paragraph (b).
The recovery may be made using the same procedures used in assessing additional tax under
Minnesota Statutes, section 270C.33. The recovery must be made within the period of
limitation for assessing additional tax for 2020 for the person who was paid the direct
payment. The assessment may be made on the same order of assessment that adjusts the
income tax liability of the direct payment recipient. If a direct payment check or warrant is
cashed by someone other than the payee or payees of the check or warrant, and the
commissioner of revenue determines that the check has been forged or improperly endorsed,
the commissioner may recover the amount of the check or warrant from the endorsee or
forger. The recovery may be made using the same procedures used in assessing additional
tax under Minnesota Statutes, section 270C.33. The assessment must be made within two
years after the check or warrant is cashed. If a direct payment was made through a debit
card and the commissioner determines that the card was activated and accessed by an
unauthorized person, the commissioner may recover from the unauthorized person the
amount of any unauthorized withdrawals. The recovery may be made using the same
procedures used in assessing additional tax under Minnesota Statutes, section 270C.33. The
assessment must be made within two years after the last unauthorized withdrawal.
new text end

new text begin (m) Notwithstanding Minnesota Statutes, sections 9.031, 16B.49, chapter 16C, and any
other law to the contrary, the commissioner of revenue may take whatever actions the
commissioner deems necessary to pay the direct payment required by this section, and may,
in consultation with the commissioner of management and budget, contract with a private
vendor or vendors to process, print, mail, or deliver the checks, warrants, or debit cards
required under this section and receive and disburse state funds to make the direct payments
by check, warrant, electronic funds transfer, or debit card.
new text end

new text begin (n) The amount necessary to make the direct payments provided in this section is
appropriated from the general fund to the commissioner of revenue in fiscal year 2022 and
is available until June 30, 2023.
new text end

new text begin (o) $7,752,000 in fiscal year 2022 and $215,000 in fiscal year 2023 are appropriated
from the general fund to the commissioner of revenue to administer this section. Any
unencumbered balance remaining on June 30, 2022, does not cancel but is available for
expenditure by the commissioner of revenue until June 30, 2023. These are onetime
appropriations that are not added to the agency's budget base.
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. new text begin ADMINISTRATIVE APPROPRIATION.
new text end

new text begin $606,000 in fiscal year 2023 is appropriated from the general fund to the commissioner
of revenue to administer this act. The base in fiscal year 2024 is $389,000. The base in fiscal
year 2025 and beyond is $382,000.
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