HF 3729

Conference Committee Report - 86th Legislature (2009 - 2010) Posted on 12/26/2012 11:18pm

A bill for an act
relating to the financing of state and local government; making technical, policy,
administrative, enforcement, and clarifying changes to individual income,
corporate franchise, estate, sales and use, lodging, gross receipts, cigarette,
tobacco, insurance, property, credits, payments, minerals, petroleum, local
taxes, local government aid, job opportunity building zones, emergency debt
certificates, and various taxes and tax-related provisions; clarifying nexus
standards for sales and income taxes; specifying duties of assessors; tax
increment financing; tax-forfeited lands; increasing watershed district borrowing
authority; amending Minnesota Statutes 2008, sections 60A.209, subdivision
1; 82B.035, subdivision 2; 103D.335, subdivision 17; 270.41, subdivision 5;
270C.34, subdivision 1; 270C.52, subdivision 2; 270C.87; 270C.94, subdivision
3; 272.02, subdivision 42; 272.025, subdivisions 1, 3; 272.029, subdivisions
4, 7; 273.061, subdivisions 7, 8; 273.113, subdivision 3; 273.1392; 275.71,
subdivision 5; 279.01, subdivision 3; 279.37, subdivision 1; 282.01, subdivisions
1, 1a, 1b, 1c, 1d, 2, 3, 4, 7, 7a, by adding subdivisions; 289A.08, subdivision
7; 289A.09, subdivision 2; 289A.10, subdivision 1; 289A.12, subdivision 14;
289A.30, subdivision 2; 289A.50, subdivisions 2, 4; 289A.60, subdivision
7; 290.014, subdivision 2; 290.067, subdivision 1; 290.0921, subdivision 3;
290.17, subdivision 2; 295.55, subdivisions 2, 3; 297A.61, subdivisions 3, 7, by
adding subdivisions; 297A.62, as amended; 297A.66, by adding a subdivision;
297A.665; 297A.68, subdivision 39, by adding a subdivision; 297A.70,
subdivision 13; 297A.995, subdivisions 10, 11; 297F.01, subdivision 22a;
297F.04, by adding a subdivision; 297F.07, subdivision 4; 297F.25, subdivision
1; 297I.01, subdivision 9; 297I.05, subdivision 7; 297I.30, subdivisions 1, 2,
7, 8; 297I.40, subdivisions 1, 5; 297I.65, by adding a subdivision; 298.282,
subdivision 1; 469.319, subdivision 5; 469.3193; Minnesota Statutes 2009
Supplement, sections 134.34, subdivision 4; 273.111, subdivision 9; 273.114,
subdivision 2; 273.124, subdivision 3a; 273.13, subdivision 25; 275.065,
subdivision 3; 275.70, subdivision 5; 289A.18, subdivision 1; 290.01,
subdivisions 19a, 19b, 19d; 290.06, subdivision 2c; 290.0671, subdivision 1;
290.091, subdivision 2; 291.005, subdivision 1; 297I.35, subdivision 2; 469.174,
subdivision 22; 475.755; 477A.013, subdivision 8; Laws 2001, First Special
Session chapter 5, article 3, section 50, as amended; Laws 2009, chapter 88,
article 4, section 5; proposing coding for new law in Minnesota Statutes,
chapters 270C; 296A; 645; repealing Minnesota Statutes 2008, sections 282.01,
subdivisions 9, 10, 11; 297I.30, subdivisions 4, 5, 6; 383A.76; Laws 2009,
chapter 88, article 12, section 21.

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

ARTICLE 1

INDIVIDUAL INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

Section 1.

Minnesota Statutes 2008, 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 and other electing partnerships. 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.
A composite estimate may, however, be filed in a manner similar to and containing the
information required under paragraph (a).

(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 290.01, subdivision 19a, clauses (6) to (10), and the subtractions provided in: (i)
section 290.01, subdivision 19b, clause deleted text begin (9) deleted text end new text begin (8) new text end , to the extent the amount is assignable or
allocable to Minnesota under section 290.17; and (ii) section 290.01, subdivision 19b,
clause deleted text begin (14) deleted text end new text begin (13) new text end . The subtraction allowed under section 290.01, subdivision 19b, clause
deleted text begin (9) deleted text end new text begin (8) new text end , 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 the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2008, section 289A.09, subdivision 2, is amended to read:

Subd. 2.

Withholding statement.

(a) A person required to deduct and withhold
from an employee a tax under section 290.92, subdivision 2a or 3, or 290.923, subdivision
2, or who would have been required to deduct and withhold a tax under section 290.92,
subdivision 2a or 3, or persons required to withhold tax under section 290.923, subdivision
2, determined without regard to section 290.92, subdivision 19, if the employee or payee
had claimed no more than one withholding exemption, or who paid wages or made
payments not subject to withholding under section 290.92, subdivision 2a or 3, or 290.923,
subdivision 2, to an employee or person receiving royalty payments in excess of $600,
or who has entered into a voluntary withholding agreement with a payee under section
290.92, subdivision 20, must give every employee or person receiving royalty payments in
respect to the remuneration paid by the person to the employee or person receiving royalty
payments during the calendar year, on or before January 31 of the succeeding year, or, if
employment is terminated before the close of the calendar year, within 30 days after the
date of receipt of a written request from the employee if the 30-day period ends before
January 31, a written statement showing the following:

(1) name of the person;

(2) the name of the employee or payee and the employee's or payee's Social Security
account number;

(3) the total amount of wages as that term is defined in section 290.92, subdivision
1, paragraph (1); the total amount of remuneration subject to withholding under section
290.92, subdivision 20; the amount of sick pay as required under section 6051(f) of the
Internal Revenue Code; and the amount of royalties subject to withholding under section
290.923, subdivision 2; and

(4) the total amount deducted and withheld as tax under section 290.92, subdivision
2a or 3, or 290.923, subdivision 2.

(b) The statement required to be furnished by paragraph (a) with respect to any
remuneration must be furnished at those times, must contain the information required, and
must be in the form the commissioner prescribes.

(c) The commissioner may prescribe rules providing for reasonable extensions of
time, not in excess of 30 days, to employers or payers required to give the statements to
their employees or payees under this subdivision.

(d) A duplicate of any statement made under this subdivision and in accordance
with rules prescribed by the commissioner, along with a reconciliation in the form the
commissioner prescribes of the statements for the calendar year, including a reconciliation
of the quarterly returns required to be filed under subdivision 1, must be filed with the
commissioner on or before February 28 of the year after the payments were made.

(e) If an employer cancels the employer's Minnesota withholding account number
required by section 290.92, subdivision 24, the information required by paragraph (d),
must be filed with the commissioner within 30 days of the end of the quarter in which
the employer cancels its account number.

(f) The employer must submit the statements required to be sent to the commissioner
in the same manner required to satisfy the federal reporting requirements of section
6011(e) of the Internal Revenue Code and the regulations issued under it. deleted text begin For wages paid
in calendar year 2008, deleted text end An employer must submit statements to the commissioner required
by this section by electronic means if the employer is required to send more than deleted text begin 100 deleted text end new text begin
25 new text end statements to the commissioner, even though the employer is not required to submit
the returns federally by electronic means. For deleted text begin calendar year 2009, the 100 statements
threshold is reduced to 50, and for calendar year 2010, the threshold is reduced to 25, and
for deleted text end new text begin statements issued for wages paid in new text end 2011 and after, the threshold is deleted text begin reduced to deleted text end ten.
new text begin All statements issued for withholding required under section 290.92 are aggregated for
purposes of determining whether the electronic submission threshold is met.
new text end

(g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph
(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
paragraph (a), with the commissioner by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for statements required to be filed
after December 31, 2010.
new text end

Sec. 3.

Minnesota Statutes 2008, section 289A.10, subdivision 1, is amended to read:

Subdivision 1.

Return required.

In the case of a decedent who has an interest in
property with a situs in Minnesota, the personal representative must submit a Minnesota
estate tax return to the commissioner, on a form prescribed by the commissioner, if:

(1) a federal estate tax return is required to be filed; or

(2) the federal gross estate exceeds deleted text begin $700,000 for estates of decedents dying after
December 31, 2001, and before January 1, 2004; $850,000 for estates of decedents dying
after December 31, 2003, and before January 1, 2005; $950,000 for estates of decedents
dying after December 31, 2004, and before January 1, 2006; and deleted text end $1,000,000 deleted text begin for estates of
decedents dying after December 31, 2005 deleted text end .

The return must contain a computation of the Minnesota estate tax due. The return
must be signed by the personal representative.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for estates of decedents dying after
December 31, 2005.
new text end

Sec. 4.

Minnesota Statutes 2008, section 289A.12, subdivision 14, is amended to read:

Subd. 14.

Regulated investment companies; reporting exempt-interest
dividends.

(a) A regulated investment company paying $10 or more in exempt-interest
dividends to an individual who is a resident of Minnesota must make a return indicating
the amount of the exempt-interest dividends, the name, address, and Social Security
number of the recipient, and any other information that the commissioner specifies. The
return must be provided to the shareholder deleted text begin no later than 30 days after the close of the
taxable year deleted text end new text begin by February 15 of the year following the year of the payment new text end . The return
provided to the shareholder must include a clear statement, in the form prescribed by the
commissioner, that the exempt-interest dividends must be included in the computation of
Minnesota taxable income. deleted text begin The regulated investment company is required in a manner
prescribed by the commissioner to file a copy of the return with the commissioner. deleted text end new text begin By
June 1 of each year, the regulated investment company must file a copy of the return
with the commissioner.
new text end

(b) This subdivision applies to regulated investment companies required to register
under chapter 80A.

(c) For purposes of this subdivision, the following definitions apply.

(1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
exempt-interest dividends that are not required to be added to federal taxable income
under section 290.01, subdivision 19a, clause (1)(ii).

(2) "Regulated investment company" means regulated investment company as
defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
investment company as defined in section 851(g) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for returns due after December 31,
2010.
new text end

Sec. 5.

Minnesota Statutes 2009 Supplement, section 289A.18, subdivision 1, is
amended to read:

Subdivision 1.

Individual income, fiduciary income, corporate franchise, and
entertainment taxes; partnership and S corporation returns; information returns;
mining company returns.

The returns required to be made under sections 289A.08 and
289A.12 must be filed at the following times:

(1) returns made on the basis of the calendar year must be filed on April 15
following the close of the calendar year, except that returns of corporations must be filed
on deleted text begin March 15 following the close of the calendar year deleted text end new text begin the due date for filing the federal
income tax return new text end ;

(2) returns made on the basis of the fiscal year must be filed on the 15th day of the
fourth month following the close of the fiscal year, except that returns of corporations
must be filed on the deleted text begin 15th day of the third month following the close of the fiscal year deleted text end new text begin due
date for filing the federal income tax return new text end ;

(3) returns for a fractional part of a year must be filed on the deleted text begin 15th day of the fourth
month following the end of the month in which falls the last day of the period for which
the return is made, except that the returns of corporations must be filed on the 15th day of
the third month following the end of the tax year; or, in the case of a corporation which
is a member of a unitary group, the return of the corporation must be filed on the 15th
day of the third month following the end of the tax year of the unitary group in which
falls the last day of the period for which the return is made deleted text end new text begin due date for filing the federal
income tax return new text end ;

(4) in the case of a final return of a decedent for a fractional part of a year, the return
must be filed on the 15th day of the fourth month following the close of the 12-month
period that began with the first day of that fractional part of a year;

(5) in the case of the return of a cooperative association, returns must be filed on or
before the 15th day of the ninth month following the close of the taxable year;

(6) if a corporation has been divested from a unitary group and files a return for
a fractional part of a year in which it was a member of a unitary business that files a
combined report under section 290.17, subdivision 4, the divested corporation's return
must be filed on the 15th day of the third month following the close of the common
accounting period that includes the fractional year;

(7) returns of entertainment entities must be filed on April 15 following the close of
the calendar year;

(8) returns required to be filed under section 289A.08, subdivision 4, must be filed
on the 15th day of the fifth month following the close of the taxable year;

(9) returns of mining companies must be filed on May 1 following the close of the
calendar year; and

(10) returns required to be filed with the commissioner under section 289A.12,
subdivision 2, 4 to 10, or 16 must be filed within 30 days after being demanded by the
commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2009.
new text end

Sec. 6.

Minnesota Statutes 2008, section 289A.30, subdivision 2, is amended to read:

Subd. 2.

Estate tax.

Where good cause exists, the commissioner may extend the
time for payment of estate tax for a period of not more than six months. If an extension to
pay the federal estate tax has been granted under section 6161 of the Internal Revenue
Code, the time for payment of the estate tax without penalty is extended for that period. A
taxpayer who owes at least $5,000 in taxes and who, under section 6161 or 6166 of the
Internal Revenue Code has been granted an extension for payment of the tax shown on the
return, may elect to pay the tax due to the commissioner in equal amounts at the same
time as required for federal purposes. A taxpayer electing to pay the tax in installments
new text begin shall defer a percentage of tax that does not exceed the percentage of federal tax deferred
and new text end must notify the commissioner in writing no later than nine months after the death of
the person whose estate is subject to taxation. If the taxpayer fails to pay an installment on
time, unless it is shown that the failure is due to reasonable cause, the election is revoked
and the entire amount of unpaid tax plus accrued interest is due and payable 90 days after
the date on which the installment was payable.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2008, section 289A.50, subdivision 4, is amended to read:

Subd. 4.

Notice of refund.

The commissioner shall determine the amount of refund,
if any, that is due, and notify the taxpayer of the determination as soon as practicable
after a claim has been filed.

new text begin If the commissioner determines that the address provided by the taxpayer to claim a
refund is invalid or is no longer the current address of the taxpayer, then the date of the
mailing of the notification provided under this subdivision is considered the date that
the refund is paid for purposes of the payment of interest under section 289A.56 and is
considered the date of issuance of the original warrant or check for purposes of issuing a
new warrant or check under section 270C.347.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 289A.60, subdivision 7, is amended to read:

Subd. 7.

Penalty for frivolous return.

If a taxpayer files what purports to be
a tax return or a claim for refund but which does not contain information on which
the substantial correctness of the purported return or claim for refund may be judged
or contains information that on its face shows that the purported return or claim for
refund is substantially incorrect and the conduct is due to a position that is frivolous or
a desire that appears on the purported return or claim for refund to delay or impede the
administration of Minnesota tax laws, then the deleted text begin individual deleted text end new text begin taxpayer new text end shall pay a penalty of
the greater of $1,000 or 25 percent of the amount of tax required to be shown on the
return. In a proceeding involving the issue of whether or not a deleted text begin person deleted text end new text begin taxpayer new text end is liable for
this penalty, the burden of proof is on the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for returns filed after the day
following final enactment.
new text end

Sec. 9.

Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19a, is
amended to read:

Subd. 19a.

Additions to federal taxable income.

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

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

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

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

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

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

(2) the amount of income, sales and use, motor vehicle sales, or excise taxes paid
or accrued within the taxable year under this chapter and the amount of taxes based on
net income paid, sales and use, motor vehicle sales, or excise taxes paid to any other
state or to any province or territory of Canada, to the extent allowed as a deduction
under section 63(d) of the Internal Revenue Code, but the addition may not be more
than the amount by which the itemized deductions as allowed under section 63(d) of
the Internal Revenue Code exceeds the amount of the standard deduction as defined in
section 63(c) of the Internal Revenue Code, disregarding the amounts allowed under
sections 63(c)(1)(C) and 63(c)(1)(E) of the Internal Revenue Code. For the purpose of
this paragraph, the disallowance of itemized deductions under section 68 of the Internal
Revenue Code of 1986, income, sales and use, motor vehicle sales, or excise taxes are
the last itemized deductions disallowed;

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

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

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

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

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

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

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

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

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

(12) the amount deducted for qualified tuition and related expenses under section
222 of the Internal Revenue Code, to the extent deducted from gross income;

(13) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code, to the extent deducted
from gross income;

(14) the additional standard deduction for property taxes payable that is allowable
under section 63(c)(1)(C) of the Internal Revenue Code;

(15) the additional standard deduction for qualified motor vehicle sales taxes
allowable under section 63(c)(1)(E) of the Internal Revenue Code;

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

(17) the amount of unemployment compensation exempt from tax under section
85(c) of the Internal Revenue Code.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19b,
is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

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

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

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

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

(4) income as provided under section 290.0802;

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

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

deleted text begin (7) for taxable years beginning before January 1, 2008, the amount of the federal
small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue Code;
deleted text end

deleted text begin (8) deleted text end new text begin (7) new text end for individuals who are allowed a federal foreign tax credit for taxes that do
not qualify for a credit under section 290.06, subdivision 22, an amount equal to the
carryover of subnational foreign taxes for the taxable year, but not to exceed the total
subnational foreign taxes reported in claiming the foreign tax credit. For purposes of
this clause, "federal foreign tax credit" means the credit allowed under section 27 of the
Internal Revenue Code, and "carryover of subnational foreign taxes" equals the carryover
allowed under section 904(c) of the Internal Revenue Code minus national level foreign
taxes to the extent they exceed the federal foreign tax credit;

deleted text begin (9) deleted text end new text begin (8) new text end in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (7), or 19c, clause (15), in the case
of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19a, clause (7), or
subdivision 19c, clause (15), in the case of a shareholder of an S corporation, minus the
positive value of any net operating loss under section 172 of the Internal Revenue Code
generated for the tax year of the addition. The resulting delayed depreciation cannot be
less than zero;

deleted text begin (10) deleted text end new text begin (9) new text end job opportunity building zone income as provided under section 469.316;

deleted text begin (11) deleted text end new text begin (10) new text end to the extent included in federal taxable income, the amount of
compensation paid to members of the Minnesota National Guard or other reserve
components of the United States military for active service performed in Minnesota,
excluding compensation for services performed under the Active Guard Reserve (AGR)
program. For purposes of this clause, "active service" means (i) state active service as
defined in section 190.05, subdivision 5a, clause (1); (ii) federally funded state active
service as defined in section 190.05, subdivision 5b; or (iii) federal active service as
defined in section 190.05, subdivision 5c, but "active service" excludes service performed
in accordance with section 190.08, subdivision 3;

deleted text begin (12) deleted text end new text begin (11) new text end to the extent included in federal taxable income, the amount of
compensation paid to Minnesota residents who are members of the armed forces of the
United States or United Nations for active duty performed outside Minnesota under United
States Code, title 10, section 101(d); United States Code, title 32, section 101(12); or the
authority of the United Nations;

deleted text begin (13) deleted text end new text begin (12) new text end an amount, not to exceed $10,000, equal to qualified expenses related to a
qualified donor's donation, while living, of one or more of the qualified donor's organs
to another person for human organ transplantation. For purposes of this clause, "organ"
means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
"human organ transplantation" means the medical procedure by which transfer of a human
organ is made from the body of one person to the body of another person; "qualified
expenses" means unreimbursed expenses for both the individual and the qualified donor
for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
may be subtracted under this clause only once; and "qualified donor" means the individual
or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
individual may claim the subtraction in this clause for each instance of organ donation for
transplantation during the taxable year in which the qualified expenses occur;

deleted text begin (14) deleted text end new text begin (13) new text end in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19a, clause (8), or 19c, clause (16), in the case of a
shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16), in the
case of a shareholder of a corporation that is an S corporation, minus the positive value of
any net operating loss under section 172 of the Internal Revenue Code generated for the
tax year of the addition. If the net operating loss exceeds the addition for the tax year, a
subtraction is not allowed under this clause;

deleted text begin (15) deleted text end new text begin (14) new text end to the extent included in federal taxable income, compensation paid to a
service member as defined in United States Code, title 10, section 101(a)(5), for military
service as defined in the Servicemembers Civil Relief Act, Public Law 108-189, section
101(2);

deleted text begin (16) deleted text end new text begin (15) new text end international economic development zone income as provided under
section 469.325;

deleted text begin (17) deleted text end new text begin (16) new text end to the extent included in federal taxable income, the amount of national
service educational awards received from the National Service Trust under United States
Code, title 42, sections 12601 to 12604, for service in an approved Americorps National
Service program; and

deleted text begin (18) deleted text end new text begin (17) new text end to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19a, clause (16).

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2009 Supplement, section 290.01, subdivision 19d,
is amended to read:

Subd. 19d.

Corporations; modifications decreasing federal taxable income.

For
corporations, there shall be subtracted from federal taxable income after the increases
provided in subdivision 19c:

(1) the amount of foreign dividend gross-up added to gross income for federal
income tax purposes under section 78 of the Internal Revenue Code;

(2) the amount of salary expense not allowed for federal income tax purposes due to
claiming the work opportunity credit under section 51 of the Internal Revenue Code;

(3) any dividend (not including any distribution in liquidation) paid within the
taxable year by a national or state bank to the United States, or to any instrumentality of
the United States exempt from federal income taxes, on the preferred stock of the bank
owned by the United States or the instrumentality;

(4) amounts disallowed for intangible drilling costs due to differences between
this chapter and the Internal Revenue Code in taxable years beginning before January
1, 1987, as follows:

(i) to the extent the disallowed costs are represented by physical property, an amount
equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
subdivision 7, subject to the modifications contained in subdivision 19e; and

(ii) to the extent the disallowed costs are not represented by physical property, an
amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
290.09, subdivision 8;

(5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
Internal Revenue Code, except that:

(i) for capital losses incurred in taxable years beginning after December 31, 1986,
capital loss carrybacks shall not be allowed;

(ii) for capital losses incurred in taxable years beginning after December 31, 1986,
a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
allowed;

(iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
capital loss carryback to each of the three taxable years preceding the loss year, subject to
the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and

(iv) for capital losses incurred in taxable years beginning before January 1, 1987,
a capital loss carryover to each of the five taxable years succeeding the loss year to the
extent such loss was not used in a prior taxable year and subject to the provisions of
Minnesota Statutes 1986, section 290.16, shall be allowed;

(6) an amount for interest and expenses relating to income not taxable for federal
income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
291 of the Internal Revenue Code in computing federal taxable income;

(7) in the case of mines, oil and gas wells, other natural deposits, and timber for
which percentage depletion was disallowed pursuant to subdivision 19c, clause (9), a
reasonable allowance for depletion based on actual cost. In the case of leases the deduction
must be apportioned between the lessor and lessee in accordance with rules prescribed
by the commissioner. In the case of property held in trust, the allowable deduction must
be apportioned between the income beneficiaries and the trustee in accordance with the
pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
of the trust's income allocable to each;

(8) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
1986, section 290.09, subdivision 7;

(9) amounts included in federal taxable income that are due to refunds of income,
excise, or franchise taxes based on net income or related minimum taxes paid by the
corporation to Minnesota, another state, a political subdivision of another state, the
District of Columbia, or a foreign country or possession of the United States to the extent
that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
clause (1), in a prior taxable year;

(10) 80 percent of royalties, fees, or other like income accrued or received from a
foreign operating corporation or a foreign corporation which is part of the same unitary
business as the receiving corporation, unless the income resulting from such payments or
accruals is income from sources within the United States as defined in subtitle A, chapter
1, subchapter N, part 1, of the Internal Revenue Code;

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

(12) the amount of disability access expenditures in the taxable year which are not
allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;

(13) the amount of qualified research expenses not allowed for federal income tax
purposes under section 280C(c) of the Internal Revenue Code, but only to the extent that
the amount exceeds the amount of the credit allowed under section 290.068;

(14) the amount of salary expenses not allowed for federal income tax purposes due
to claiming the Indian employment credit under section 45A(a) of the Internal Revenue
Code;

deleted text begin (15) for taxable years beginning before January 1, 2008, the amount of the federal
small ethanol producer credit allowed under section 40(a)(3) of the Internal Revenue Code
which is included in gross income under section 87 of the Internal Revenue Code;
deleted text end

deleted text begin (16) deleted text end new text begin (15) new text end for a corporation whose foreign sales corporation, as defined in section
922 of the Internal Revenue Code, constituted a foreign operating corporation during any
taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
claiming the deduction under section 290.21, subdivision 4, for income received from
the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
income excluded under section 114 of the Internal Revenue Code, provided the income is
not income of a foreign operating company;

deleted text begin (17) deleted text end new text begin (16) new text end any decrease in subpart F income, as defined in section 952(a) of the
Internal Revenue Code, for the taxable year when subpart F income is calculated without
regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;

deleted text begin (18) deleted text end new text begin (17) new text end in each of the five tax years immediately following the tax year in which
an addition is required under subdivision 19c, clause (15), an amount equal to one-fifth
of the delayed depreciation. For purposes of this clause, "delayed depreciation" means
the amount of the addition made by the taxpayer under subdivision 19c, clause (15). The
resulting delayed depreciation cannot be less than zero;

deleted text begin (19) deleted text end new text begin (18) new text end in each of the five tax years immediately following the tax year in which an
addition is required under subdivision 19c, clause (16), an amount equal to one-fifth of
the amount of the addition; and

deleted text begin (20) deleted text end new text begin (19) new text end to the extent included in federal taxable income, discharge of indebtedness
income resulting from reacquisition of business indebtedness included in federal taxable
income under section 108(i) of the Internal Revenue Code. This subtraction applies only
to the extent that the income was included in net income in a prior year as a result of the
addition under section 290.01, subdivision 19c, clause (25).

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2008, section 290.014, subdivision 2, is amended to read:

Subd. 2.

Nonresident individuals.

Except as provided in section 290.015, a
nonresident individual is subject to the return filing requirements and to tax as provided in
this chapter to the extent that the income of the nonresident individual is:

(1) allocable to this state under section 290.17, 290.191, or 290.20;

(2) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as a beneficiary of an estate with income allocable
to this state under section 290.17, 290.191, or 290.20 and the income, taking into account
the income character provisions of section 662(b) of the Internal Revenue Code, would be
allocable to this state under section 290.17, 290.191, or 290.20 if realized by the individual
directly from the source from which realized by the estate;

(3) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character that is taxable under
this chapter) in the individual's capacity as a beneficiary or grantor or other person treated
as a substantial owner of a trust with income allocable to this state under section 290.17,
290.191, or 290.20 and the income, taking into account the income character provisions of
section 652(b), 662(b), or 664(b) of the Internal Revenue Code, would be allocable to this
state under section 290.17, 290.191, or 290.20 if realized by the individual directly from
the source from which realized by the trust;

(4) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as a limited or general partner in a partnership
with income allocable to this state under section 290.17, 290.191, or 290.20 and the
income, taking into account the income character provisions of section 702(b) of the
Internal Revenue Code, would be allocable to this state under section 290.17, 290.191,
or 290.20 if realized by the individual directly from the source from which realized by
the partnership; deleted text begin or deleted text end

(5) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as a shareholder of a corporation treated as an
"S" corporation under section 290.9725, and income allocable to this state under section
290.17, 290.191, or 290.20 and the income, taking into account the income character
provisions of section 1366(b) of the Internal Revenue Code, would be allocable to this
state under section 290.17, 290.191, or 290.20 if realized by the individual directly from
the source from which realized by the corporation deleted text begin . deleted text end new text begin ; or new text end

new text begin (6) taxed to the individual under the Internal Revenue Code (or not taxed under the
Internal Revenue Code by reason of its character but of a character which is taxable under
this chapter) in the individual's capacity as the sole member of a limited liability company
that is disregarded for federal income tax purposes, with income allocable to this state
under section 290.17, 290.191, or 290.20, as though realized by the individual directly
from the source from which it was realized by the limited liability company.
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. 13.

Minnesota Statutes 2009 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 $25,680, 5.35 percent;

(2) On all over $25,680, but not over $102,030, 7.05 percent;

(3) On all over $102,030, 7.85 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.

(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 $17,570, 5.35 percent;

(2) On all over $17,570, but not over $57,710, 7.05 percent;

(3) On all over $57,710, 7.85 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 $21,630, 5.35 percent;

(2) On all over $21,630, but not over $86,910, 7.05 percent;

(3) On all over $86,910, 7.85 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 the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
(13), (16), and (17), and reduced by the Minnesota assignable portion of the subtraction
for United States government interest under section 290.01, subdivision 19b, clause
(1), and the subtractions under section 290.01, subdivision 19b, clauses deleted text begin (9), (10), (14),
(15), (16), and (18) deleted text end new text begin (8), (9), (13), (14), (15), and (17) new text end , 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 of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), (16), and
(17), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
deleted text begin (9), (10), (14), (15), (16), and (18) deleted text end new text begin (8), (9), (13), (14), (15), and (17) 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. 14.

Minnesota Statutes 2008, 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 subject to the limitations provided in subdivision
2 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, and the provisions of section 32(b)(1)(D) of
the Internal Revenue Code do not apply.

(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 married couple:

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

(2) files a joint tax return for the taxable year; and

(3) 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), the lesser of
(i) the combined earned income of the couple or (ii) the amount of the maximum limit for
one qualified individual under section 21(c) and (d) of the Internal Revenue Code 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. 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.

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
290.01, subdivision 19b, clause deleted text begin (10) deleted text end new text begin (9) new text end or deleted text begin (16) deleted text end new text begin (15) new text end , 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.

For residents of Minnesota, the subtractions for military pay under section 290.01,
subdivision 19b, clauses deleted text begin (11) deleted text end new text begin (10) new text end and deleted text begin (12) deleted text end new text begin (11) new text end , are not considered "earned income not
subject to tax under this chapter."

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."

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2009 Supplement, section 290.0671, subdivision 1,
is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual 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.

(b) For individuals with no qualifying children, the credit equals 1.9125 percent of
the first $4,620 of earned income. The credit is reduced by 1.9125 percent of earned
income or adjusted gross income, whichever is greater, in excess of $5,770, but in no
case is the credit less than zero.

(c) For individuals with one qualifying child, the credit equals 8.5 percent of the first
$6,920 of earned income and 8.5 percent of earned income over $12,080 but less than
$13,450. The credit is reduced by 5.73 percent of earned income or adjusted gross income,
whichever is greater, in excess of $15,080, but in no case is the credit less than zero.

(d) For individuals with two or more qualifying children, the credit equals ten
percent of the first $9,720 of earned income and 20 percent of earned income over
$14,860 but less than $16,800. The credit is reduced by 10.3 percent of earned income
or adjusted gross income, whichever is greater, in excess of $17,890, but in no case is
the credit less than zero.

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

(f) 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 290.01,
subdivision 19b, clause deleted text begin (10) deleted text end new text begin (9) new text end or deleted text begin (16) deleted text end new text begin (15) new text end , 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
subtractions for military pay under section 290.01, subdivision 19b, clauses deleted text begin (11) deleted text end new text begin (10) new text end and
deleted text begin (12) deleted text end new text begin (11) new text end , are not considered "earned income not subject to tax under this chapter."

For the purposes of this paragraph, 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."

(g) For tax years beginning after December 31, 2007, and before December 31,
2010, the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in
paragraph (d), after being adjusted for inflation under subdivision 7, are each increased by
$3,000 for married taxpayers filing joint returns. For tax years beginning after December
31, 2008, the commissioner shall annually adjust the $3,000 by the percentage determined
pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
section 1(f)(3)(B), the word "2007" shall be substituted for the word "1992." For 2009,
the commissioner shall then determine the percent change from the 12 months ending on
August 31, 2007, to the 12 months ending on August 31, 2008, and in each subsequent
year, from the 12 months ending on August 31, 2007, to the 12 months ending on August
31 of the year preceding the taxable year. The earned income thresholds as adjusted
for inflation must be rounded to the nearest $10. If the amount ends in $5, the amount
is rounded up to the nearest $10. The determination of the commissioner under this
subdivision is not a rule under the Administrative Procedure Act.

(h) 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 the day following final enactment.
new text end

Sec. 16.

Minnesota Statutes 2009 Supplement, section 290.091, subdivision 2, is
amended to read:

Subd. 2.

Definitions.

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

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

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

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

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

(ii) the medical expense deduction;

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

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

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

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

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

(6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
to (9), (12), (13), (16), and (17);

less the sum of the amounts determined under the following:

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

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

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

(4) amounts subtracted from federal taxable income as provided by section 290.01,
subdivision 19b, clauses (6), deleted text begin (9) deleted text end new text begin (8) new text end to deleted text begin (16) deleted text end new text begin (15) new text end , and deleted text begin (18) deleted text end new text begin (17) new text end .

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

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

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

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

(e) "Tentative minimum tax" equals 6.4 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 the day following final enactment.
new text end

Sec. 17.

Minnesota Statutes 2008, section 290.0921, subdivision 3, is amended to read:

Subd. 3.

Alternative minimum taxable income.

"Alternative minimum taxable
income" is Minnesota net income as defined in section 290.01, subdivision 19, and
includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
Minnesota tax return, the minimum tax must be computed on a separate company basis.
If a corporation is part of a tax group filing a unitary return, the minimum tax must be
computed on a unitary basis. The following adjustments must be made.

(1) For purposes of the depreciation adjustments under section 56(a)(1) and
56(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
income tax purposes, including any modification made in a taxable year under section
290.01, subdivision 19e, or Minnesota Statutes 1986, section 290.09, subdivision 7,
paragraph (c).

For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
allowance in the first taxable year after December 31, 2000.

(2) The portion of the depreciation deduction allowed for federal income tax
purposes under section 168(k) of the Internal Revenue Code that is required as an
addition under section 290.01, subdivision 19c, clause (15), is disallowed in determining
alternative minimum taxable income.

(3) The subtraction for depreciation allowed under section 290.01, subdivision
19d, clause deleted text begin (18) deleted text end new text begin (17) new text end , is allowed as a depreciation deduction in determining alternative
minimum taxable income.

(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
of the Internal Revenue Code does not apply.

(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
Revenue Code does not apply.

(6) The special rule for dividends from section 936 companies under section
56(g)(4)(C)(iii) does not apply.

(7) The tax preference for depletion under section 57(a)(1) of the Internal Revenue
Code does not apply.

(8) The tax preference for intangible drilling costs under section 57(a)(2) of the
Internal Revenue Code must be calculated without regard to subparagraph (E) and the
subtraction under section 290.01, subdivision 19d, clause (4).

(9) The tax preference for tax exempt interest under section 57(a)(5) of the Internal
Revenue Code does not apply.

(10) The tax preference for charitable contributions of appreciated property under
section 57(a)(6) of the Internal Revenue Code does not apply.

(11) For purposes of calculating the tax preference for accelerated depreciation or
amortization on certain property placed in service before January 1, 1987, under section
57(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
deduction allowed under section 290.01, subdivision 19e.

For taxable years beginning after December 31, 2000, the amount of any remaining
modification made under section 290.01, subdivision 19e, not previously deducted is a
depreciation or amortization allowance in the first taxable year after December 31, 2004.

(12) For purposes of calculating the adjustment for adjusted current earnings in
section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
minimum taxable income as defined in this subdivision, determined without regard to the
adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.

(13) For purposes of determining the amount of adjusted current earnings under
section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), (ii) the
amount of refunds of income, excise, or franchise taxes subtracted as provided in section
290.01, subdivision 19d, clause (9), or (iii) the amount of royalties, fees or other like
income subtracted as provided in section 290.01, subdivision 19d, clause (10).

(14) Alternative minimum taxable income excludes the income from operating in a
job opportunity building zone as provided under section 469.317.

(15) Alternative minimum taxable income excludes the income from operating in a
biotechnology and health sciences industry zone as provided under section 469.337.

(16) Alternative minimum taxable income excludes the income from operating in an
international economic development zone as provided under section 469.326.

Items of tax preference must not be reduced below zero as a result of the
modifications in this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2008, section 290.17, subdivision 2, is amended to read:

Subd. 2.

Income not derived from conduct of a trade or business.

The income of
a taxpayer subject to the allocation rules that is not derived from the conduct of a trade or
business must be assigned in accordance with paragraphs (a) to (f):

(a)(1) Subject to paragraphs (a)(2) and (a)(3), income from wages as defined in
section 3401(a) and (f) of the Internal Revenue Code is assigned to this state if, and to the
extent that, the work of the employee is performed within it; all other income from such
sources is treated as income from sources without this state.

Severance pay shall be considered income from labor or personal or professional
services.

(2) In the case of an individual who is a nonresident of Minnesota and who is an
athlete or entertainer, income from compensation for labor or personal services performed
within this state shall be determined in the following manner:

(i) The amount of income to be assigned to Minnesota for an individual who is a
nonresident salaried athletic team employee shall be determined by using a fraction in
which the denominator contains the total number of days in which the individual is under
a duty to perform for the employer, and the numerator is the total number of those days
spent in Minnesota. For purposes of this paragraph, off-season training activities, unless
conducted at the team's facilities as part of a team imposed program, are not included in
the total number of duty days. Bonuses earned as a result of play during the regular season
or for participation in championship, play-off, or all-star games must be allocated under
the formula. Signing bonuses are not subject to allocation under the formula if they are
not conditional on playing any games for the team, are payable separately from any other
compensation, and are nonrefundable; and

(ii) The amount of income to be assigned to Minnesota for an individual who is a
nonresident, and who is an athlete or entertainer not listed in clause (i), for that person's
athletic or entertainment performance in Minnesota shall be determined by assigning to
this state all income from performances or athletic contests in this state.

(3) For purposes of this section, amounts received by a nonresident as "retirement
income" as defined in section (b)(1) of the State Income Taxation of Pension Income
Act, Public Law 104-95, are not considered income derived from carrying on a trade
or business or from wages or other compensation for work an employee performed in
Minnesota, and are not taxable under this chapter.

(b) Income or gains from tangible property located in this state that is not employed
in the business of the recipient of the income or gains must be assigned to this state.

(c) Income or gains from intangible personal property not employed in the business
of the recipient of the income or gains must be assigned to this state if the recipient of the
income or gains is a resident of this state or is a resident trust or estate.

Gain on the sale of a partnership interest is allocable to this state in the ratio of the
original cost of partnership tangible property in this state to the original cost of partnership
tangible property everywhere, determined at the time of the sale. If more than 50 percent
of the value of the partnership's assets consists of intangibles, gain or loss from the sale
of the partnership interest is allocated to this state in accordance with the sales factor of
the partnership for its first full tax period immediately preceding the tax period of the
partnership during which the partnership interest was sold.

new text begin Gain on the sale of an interest in a single member limited liability company that
is disregarded for federal income tax purposes is allocable to this state as if the single
member limited liability company did not exist and the assets of the limited liability
company are personally owned by the sole member.
new text end

Gain on the sale of goodwill or income from a covenant not to compete that is
connected with a business operating all or partially in Minnesota is allocated to this state
to the extent that the income from the business in the year preceding the year of sale was
assignable to Minnesota under subdivision 3.

When an employer pays an employee for a covenant not to compete, the income
allocated to this state is in the ratio of the employee's service in Minnesota in the calendar
year preceding leaving the employment of the employer over the total services performed
by the employee for the employer in that year.

(d) Income from winnings on a bet made by an individual while in Minnesota is
assigned to this state. In this paragraph, "bet" has the meaning given in section 609.75,
subdivision 2, as limited by section 609.75, subdivision 3, clauses (1), (2), and (3).

(e) All items of gross income not covered in paragraphs (a) to (d) and not part of the
taxpayer's income from a trade or business shall be assigned to the taxpayer's domicile.

(f) For the purposes of this section, working as an employee shall not be considered
to be conducting a trade or business.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2009 Supplement, 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 new text begin required to
be new text end valued and otherwise determined for federal estate tax purposes deleted text begin by federal taxing
authorities pursuant to the provisions of deleted text end new text begin under new text end the Internal Revenue Code.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through March 31, 2009 new text begin , but without regard to the provisions of
sections 501 and 901 of Public Law 107-16 new text end .

(4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
defined by section 2011(b)(3) of the Internal Revenue Code, increased by the amount of
deduction for state death taxes allowed under section 2058 of the Internal Revenue Code.

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

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

(7) "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.

(8) "Resident decedent" means an individual whose domicile at the time of death
was in Minnesota.

(9) "Situs of property" means, with respect to real property, the state or country in
which it is located; with respect to tangible personal property, the state or country in which
it was normally kept or located at the time of the decedent's death; and with respect to
intangible personal property, the state or country in which the decedent was domiciled
at death. new text begin 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 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.
new text end

new text begin (10) "Pass-through entity" includes the following:
new text end

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

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

new text begin (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
new text end

new text begin (iv) a trust.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin (a) The amendments to clauses (2) and (3) are effective the
day following final enactment and apply regardless of when the decedent died.
new text end

new text begin (b) The amendment to clause (9) and the addition of clause (10) are effective for
estates of decedents dying after December 31, 2009.
new text end

ARTICLE 2

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2008, section 289A.50, subdivision 2, is amended to
read:

Subd. 2.

Refund of sales tax to vendors; limitation.

new text begin (a) new text end If a vendor has collected
from a purchaser and remitted to the state a tax on a transaction that is not subject to the
tax imposed by chapter 297A, the tax is refundable to the vendor only if and to the extent
that the tax and any interest earned on the tax is credited to amounts due to the vendor by
the purchaser or returned to the purchaser by the vendor.

new text begin (b) new text end In addition to the requirements of subdivision 1, a claim for refund under this
subdivision must state in writing that the tax and interest earned on the tax has been or
will be refunded or credited to the purchaser by the vendor.

new text begin (c) Within 60 days after the date the commissioner issues the refund, any amount not
refunded or credited to the purchaser by the vendor, as required by paragraph (a), must be
returned to the commissioner by the vendor.
new text end

new text begin (d) After the commissioner refunds the tax and interest to the vendor, if the
commissioner determines that the vendor did not refund or credit the tax and interest as
provided in this subdivision, or did not return the amount required to be returned under
paragraph (c), the commissioner may assess the vendor for underpayment of tax and
interest equal to that portion of the amount that was not refunded or credited to the
purchaser. The assessment bears interest which is computed at the rate specified in section
270C.40, subdivision 5, on the unpaid amount from the date the commissioner issues the
refund until the date the amount is paid to the commissioner. The assessment may be made
at any time within 3-1/2 years after the commissioner refunds the tax and interest to the
vendor. If part of the refund was induced by fraud or misrepresentation of a material fact,
the assessment may be made at any time.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for refunds issued after June 30, 2010.
new text end

Sec. 2.

Minnesota Statutes 2008, section 297A.61, subdivision 3, is amended to read:

Subd. 3.

Sale and purchase.

(a) "Sale" and "purchase" include, but are not limited
to, each of the transactions listed in this subdivision.

(b) Sale and purchase include:

(1) any transfer of title or possession, or both, of tangible personal property, whether
absolutely or conditionally, for a consideration in money or by exchange or barter; and

(2) the leasing of or the granting of a license to use or consume, for a consideration
in money or by exchange or barter, tangible personal property, other than a manufactured
home used for residential purposes for a continuous period of 30 days or more.

(c) Sale and purchase include the production, fabrication, printing, or processing of
tangible personal property for a consideration for consumers who furnish either directly or
indirectly the materials used in the production, fabrication, printing, or processing.

(d) Sale and purchase include the preparing for a consideration of food.
Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
to, the following:

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

(e) A sale and a purchase includes the furnishing for a consideration of electricity,
gas, water, or steam for use or consumption within this state.

(f) A sale and a purchase includes the transfer for a consideration of prewritten
computer software whether delivered electronically, by load and leave, or otherwise.

(g) A sale and a purchase includes the furnishing for a consideration of the following
services:

(1) the privilege of admission to places of amusement, recreational areas, or athletic
events, and the making available of amusement devices, tanning facilities, reducing
salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp, including furnishing the guest of the facility with access to
telecommunication services, and the granting of any similar license to use real property in
a specific facility, other than the renting or leasing of it for a continuous period of 30 days
or more under an enforceable written agreement that may not be terminated without prior
notice new text begin and including accommodations intermediary services provided in connection with
other services provided under this clause new text end ;

(3) nonresidential parking services, whether on a contractual, hourly, or other
periodic basis, except for parking at a meter;

(4) the granting of membership in a club, association, or other organization if:

(i) the club, association, or other organization makes available for the use of its
members sports and athletic facilities, without regard to whether a separate charge is
assessed for use of the facilities; and

(ii) use of the sports and athletic facility is not made available to the general public
on the same basis as it is made available to members.

Granting of membership means both onetime initiation fees and periodic membership
dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
swimming pools; and other similar athletic or sports facilities;

(5) delivery of aggregate materials by a third party, excluding delivery of aggregate
material used in road construction, and delivery of concrete block by a third party if
the delivery would be subject to the sales tax if provided by the seller of the concrete
block; and

(6) services as provided in this clause:

(i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
include services provided by coin operated facilities operated by the customer;

(ii) motor vehicle washing, waxing, and cleaning services, including services
provided by coin operated facilities operated by the customer, and rustproofing,
undercoating, and towing of motor vehicles;

(iii) building and residential cleaning, maintenance, and disinfecting services and
pest control and exterminating services;

(iv) detective, security, burglar, fire alarm, and armored car services; but not
including services performed within the jurisdiction they serve by off-duty licensed peace
officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
organization for monitoring and electronic surveillance of persons placed on in-home
detention pursuant to court order or under the direction of the Minnesota Department
of Corrections;

(v) pet grooming services;

(vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
public utility lines. Services performed under a construction contract for the installation of
shrubbery, plants, sod, trees, bushes, and similar items are not taxable;

(vii) massages, except when provided by a licensed health care facility or
professional or upon written referral from a licensed health care facility or professional for
treatment of illness, injury, or disease; and

(viii) the furnishing of lodging, board, and care services for animals in kennels and
other similar arrangements, but excluding veterinary and horse boarding services.

In applying the provisions of this chapter, the terms "tangible personal property"
and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if
one of the entities owns or controls more than 80 percent of the voting power of the
equity interest in the other entity. Services performed between members of an affiliated
group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
group of corporations" means those entities that would be classified as members of an
affiliated group as defined under United States Code, title 26, section 1504, disregarding
the exclusions in section 1504(b).

For purposes of clause (5), "road construction" means construction of (1) public
roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
metropolitan area up to the point of the emergency response location sign.

(h) A sale and a purchase includes the furnishing for a consideration of tangible
personal property or taxable services by the United States or any of its agencies or
instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
subdivisions.

(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, ancillary services associated with telecommunication
services, cable television services, new text begin and new text end direct satellite services deleted text begin , and ring tones deleted text end .
Telecommunication services include, but are not limited to, the following services,
as defined in section 297A.669: air-to-ground radiotelephone service, mobile
telecommunication service, postpaid calling service, prepaid calling service, prepaid
wireless calling service, and private communication services. The services in this
paragraph are taxed to the extent allowed under federal law.

(j) A sale and a purchase includes the furnishing for a consideration of installation if
the installation charges would be subject to the sales tax if the installation were provided
by the seller of the item being installed.

(k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
65B.29, subdivision 1, clause (1).

new text begin EFFECTIVE DATE. new text end

new text begin (a) The amendments to paragraph (g), clause (2), are effective
the day following final enactment and confirms the interpretation of the legislature that the
original legislative intent of the tax on lodging and related services applied to the full price
and charges paid by the final consumer for the occupancy, including any reservation or
similar ancillary services that are part of the transaction.
new text end

new text begin (b) The amendment to paragraph (i) is effective for sales and purchases made after
June 30, 2010.
new text end

Sec. 3.

Minnesota Statutes 2008, section 297A.61, subdivision 7, is amended to read:

Subd. 7.

Sales price.

(a) "Sales price" means the measure subject to sales tax, and
means the total amount of consideration, including cash, credit, personal property, and
services, for which personal property or services are sold, leased, or rented, valued in
money, whether received in money or otherwise, without any deduction for the following:

(1) the seller's cost of the property sold;

(2) the cost of materials used, labor or service cost, interest, losses, all costs of
transportation to the seller, all taxes imposed on the seller, and any other expenses of
the seller;

(3) charges by the seller for any services necessary to complete the sale, other than
delivery and installation charges;

(4) delivery charges, except the percentage of the delivery charge allocated to
delivery of tax exempt property, when the delivery charge is allocated by using either (i) a
percentage based on the total sales price of the taxable property compared to the total sales
price of all property in the shipment, or (ii) a percentage based on the total weight of the
taxable property compared to the total weight of all property in the shipment; and

(5) installation charges.

(b) Sales price does not include:

(1) discounts, including cash, terms, or coupons, that are not reimbursed by a third
party and that are allowed by the seller and taken by a purchaser on a sale;

(2) interest, financing, and carrying charges from credit extended on the sale of
personal property or services, if the amount is separately stated on the invoice, bill of sale,
or similar document given to the purchaser; and

(3) any taxes legally imposed directly on the consumer that are separately stated on
the invoice, bill of sale, or similar document given to the purchaser.

(c) Sales price includes consideration received by the seller from third parties if:

(1) the seller actually receives consideration from a party other than the purchaser
and the consideration is directly related to a price reduction or discount on the sale;

(2) the seller has an obligation to pass the price reduction or discount through to
the purchaser;

(3) the amount of the consideration attributable to the sale is fixed and determinable
by the seller at the time of the sale of the item to the purchaser; and

(4) one of the following criteria is met:

(i) the purchaser presents a coupon, certificate, or other documentation to the seller
to claim a price reduction or discount when the coupon, certificate, or documentation is
authorized, distributed, or granted by a third party with the understanding that the third
party will reimburse any seller to whom the coupon, certificate, or documentation is
presented;

(ii) the purchaser identifies himself or herself to the seller as a member of a group or
organization entitled to a price reduction or discount. A "preferred customer" card that is
available to any customer does not constitute membership in such a group; or

(iii) the price reduction or discount is identified as a third-party price reduction or
discount on the invoice received by the purchaser or on a coupon, certificate, or other
documentation presented by the purchaser.

new text begin (d) For services as defined in subdivision 3, paragraph (g), clause (2), sales price
includes amounts charged for services provided by an accommodations intermediary
delivered or provided in connection with services defined in subdivision 3, paragraph
(g), clause (2).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and confirms the interpretation of the legislature that the original legislative intent of
the tax on lodging and related services applied to the full price and charges paid by the
final consumer for the occupancy, including any reservation or similar ancillary services
that are part of the transaction.
new text end

Sec. 4.

Minnesota Statutes 2008, section 297A.61, is amended by adding a subdivision
to read:

new text begin Subd. 47. new text end

new text begin Accommodations intermediary. new text end

new text begin "Accommodations intermediary"
means any person or entity, other than an accommodations provider, that facilitates the
sale of lodging as defined in section 297A.61, subdivision 3, paragraph (g), clause (2),
and that charges a room charge to the customer. The term "facilitates the sale" includes
brokering, coordinating, or in any way arranging for the purchase of or the right to use
accommodations by a customer.
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. 5.

Minnesota Statutes 2008, section 297A.61, is amended by adding a subdivision
to read:

new text begin Subd. 48. new text end

new text begin Accommodations provider. new text end

new text begin "Accommodations provider" means any
person or entity that furnishes lodging as defined in section 297A.61, subdivision 3,
paragraph (g), clause (2), to the general public for compensation. The term "furnishes"
includes the sale of use or possession, or the sale of the right to use or possess.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 297A.62, as amended by Laws 2009, chapter
88, article 4, section 4, is amended to read:

297A.62 SALES TAX IMPOSED; RATES.

Subdivision 1.

Generally.

Except as otherwise provided in subdivision 3 or in this
chapter, a sales tax of 6.5 percent is imposed on the gross receipts from retail sales as
defined in section 297A.61, subdivision 4, made in this state or to a destination in this
state by a person who is required to have or voluntarily obtains a permit under section
297A.83, subdivision 1.

Subd. 1a.

Constitutionally required sales tax increase.

new text begin Except as otherwise
provided in subdivision 3 or in this chapter, new text end an additional sales tax of 0.375 percent, as
required under the Minnesota Constitution, article XI, section 15, is imposed on the gross
receipts from retail sales as defined in section 297A.61, subdivision 4, made in this state or
to a destination in this state by a person who is required to have or voluntarily obtains a
permit under section 297A.83, subdivision 1. This additional tax expires July 1, 2034.

Subd. 3.

Manufactured housing and park trailers.

For retail sales of
manufactured homes as defined in section 327.31, subdivision 6, for residential uses, the
sales tax under deleted text begin subdivision deleted text end new text begin subdivisions new text end 1 new text begin and 1a new text end is imposed on 65 percent of the dealer's
cost of the manufactured home. For retail sales of new or used park trailers, as defined in
section 168.002, subdivision 23, the sales tax under deleted text begin subdivision deleted text end new text begin subdivisions new text end 1 new text begin and 1a new text end is
imposed on 65 percent of the sales price of the park trailer.

new text begin Subd. 4. new text end

new text begin Combined rates. new text end

new text begin In this chapter, wherever there is a reference to the rate
under subdivision 1, or to a combined rate under subdivisions 1 and 1a, the rate to be
applied is the combined rate under subdivisions 1 and 1a until the additional tax imposed
by subdivision 1a expires. This subdivision does not apply to section 297A.65.
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, 2009, except for sales and purchases subject to subdivision 3. This
section is effective for sales and purchases subject to subdivision 3 made after June 30,
2010.
new text end

Sec. 7.

Minnesota Statutes 2008, section 297A.66, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Lodging services. new text end

new text begin An accommodations intermediary shall collect sales
and use tax and remit them to the commissioner under section 297A.77 for services
provided in connection with or for lodging located in this state. The accommodation
provider is deemed to be the agent of the accommodations intermediary for purposes of
establishing the intermediary's obligation to collect.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for lodging and related services
provided after June 30, 2010.
new text end

Sec. 8.

Minnesota Statutes 2008, section 297A.665, is amended to read:

297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.

(a) For the purpose of the proper administration of this chapter and to prevent
evasion of the tax, until the contrary is established, it is presumed that:

(1) all gross receipts are subject to the tax; and

(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
in Minnesota.

(b) The burden of proving that a sale is not a taxable retail sale is on the seller.
However, a seller is relieved of liability if:

(1) the seller obtains a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, at the time of the sale or within
90 days after the date of the sale; or

(2) if the seller has not obtained a fully completed exemption certificate or all the
relevant information required by section 297A.72, subdivision 2, within the time provided
in clause (1), within 120 days after a request for substantiation by the commissioner,
the seller either:

(i) obtains in good faith a fully completed exemption certificate or all the relevant
information required by section 297A.72, subdivision 2, from the purchaser; or

(ii) proves by other means that the transaction was not subject to tax.

(c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:

(1) fraudulently fails to collect the tax; or

(2) solicits purchasers to participate in the unlawful claim of an exemption.

(d) A certified service provider, as defined in section 297A.995, subdivision 2, is
relieved of liability under this section to the extent a seller who is its client is relieved of
liability.

(e) A purchaser of tangible personal property or any items listed in section 297A.63
that are shipped or brought to Minnesota by the purchaser has the burden of proving
that the property was not purchased from a retailer for storage, use, or consumption in
Minnesota.

new text begin (f) If a seller claiming that certain sales are exempt and does not provide the
certificate, information, or proof required by paragraph (b), clause (2), within 120 days
after the date of the commissioner's request for substantiation, then the exemptions
claimed by the seller that required substantiation are disallowed.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2008, section 297A.68, subdivision 39, is amended to read:

Subd. 39.

Preexisting bids or contracts.

(a) The sale of tangible personal property
or services is exempt from tax or a tax rate increase for a period of six months from
the effective date of the law change that results in the imposition of the tax or the tax
rate increase under this chapter if:

(1) the act imposing the tax or increasing the tax rate does not have transitional
effective date language for existing construction contracts and construction bids; and

(2) the requirements of paragraph (b) are met.

(b) A sale is tax exempt under paragraph (a) if it meets the requirements of either
clause (1) or (2):

(1) For a construction contract:

(i) the goods or services sold must be used for the performance of a bona fide written
lump sum or fixed price construction contract;

(ii) the contract must be entered into before the date the goods or services become
subject to the sales tax or the tax rate was increased;

(iii) the contract must not provide for allocation of future taxes; and

(iv) for each qualifying contract the contractor must deleted text begin give the seller deleted text end new text begin keep new text end
documentation of the contract on which an exemption is to be claimed.

(2) For a construction bid:

(i) the goods or services sold must be used pursuant to an obligation of a bid or bids;

(ii) the bid or bids must be submitted and accepted before the date the goods or
services became subject to the sales tax or the tax rate was increased;

(iii) the bid or bids must not be able to be withdrawn, modified, or changed without
forfeiting a bond; and

(iv) for each qualifying bid, the contractor must deleted text begin give the seller deleted text end new text begin keep new text end documentation
of the bid on which an exemption is to be claimed.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 297A.68, is amended by adding a
subdivision to read:

new text begin Subd. 42. new text end

new text begin Lodging services purchased for resale. new text end

new text begin Services purchased from an
accommodations provider for resale by an accommodations intermediary are exempt.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2010.
new text end

Sec. 11.

Minnesota Statutes 2008, section 297A.70, subdivision 13, is amended to read:

Subd. 13.

Fund-raising sales by or for nonprofit groups.

(a) The following
sales by the specified organizations for fund-raising purposes are exempt, subject to the
limitations listed in paragraph (b):

(1) all sales made by deleted text begin an deleted text end new text begin a nonprofit new text end organization that exists solely for the purpose of
providing educational or social activities for young people primarily age 18 and under;

(2) all sales made by an organization that is a senior citizen group or association of
groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii)
no part of its net earnings inures to the benefit of any private shareholders;

(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if
the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization
under section 501(c)(3) of the Internal Revenue Code; and

(4) sales of candy sold for fund-raising purposes by a nonprofit organization that
provides educational and social activities primarily for young people age 18 and under.

(b) The exemptions listed in paragraph (a) are limited in the following manner:

(1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross
annual receipts of the organization from fund-raising do not exceed $10,000; and

(2) the exemption under paragraph (a), clause (1), does not apply if the sales are
derived from admission charges or from activities for which the money must be deposited
with the school district treasurer under section 123B.49, subdivision 2, or be recorded in
the same manner as other revenues or expenditures of the school district under section
123B.49, subdivision 4.

(c) Sales of tangible personal property are exempt if the entire proceeds, less the
necessary expenses for obtaining the property, will be contributed to a registered combined
charitable organization described in section 43A.50, to be used exclusively for charitable,
religious, or educational purposes, and the registered combined charitable organization
has given its written permission for the sale. Sales that occur over a period of more than
24 days per year are not exempt under this paragraph.

(d) For purposes of this subdivision, a club, association, or other organization of
elementary or secondary school students organized for the purpose of carrying on sports,
educational, or other extracurricular activities is a separate organization from the school
district or school for purposes of applying the $10,000 limit.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2008, section 297A.995, subdivision 10, is amended to
read:

Subd. 10.

Relief from certain liability.

(a) Notwithstanding subdivision 9, sellers
and certified service providers are relieved from liability to the state for having charged
and collected the incorrect amount of sales or use tax resulting from the seller or certified
service provider (1) relying on erroneous data provided by the commissioner in the
database files on tax rates, boundaries, or taxing jurisdiction assignments, or (2) relying
on erroneous data provided by the state in its taxability matrix concerning the taxability
of products and services.

(b) Notwithstanding subdivision 9, sellers and certified service providers are
relieved from liability to the state for having charged and collected the incorrect amount
of sales or use tax resulting from the seller or certified service provider relying on the
certification by the commissioner as to the accuracy of a certified automated system as to
the taxability of product categories. The relief from liability provided by this paragraph
does not apply when the sellers or certified service providers have incorrectly classified
an item or transaction into a product category, unless the item or transaction within a
product category was approved by the commissioner or approved jointly by the states that
are signatories to the agreement. The sellers and certified service providers must revise a
classification within ten days after receipt of notice from the commissioner that an item or
transaction within a product category is incorrectly classified as to its taxability, or they
are not relieved from liability for the incorrect classification following the notification.

new text begin (c) Notwithstanding subdivision 9, if there are not at least 30 days between the
enactment of a new tax rate and the effective date of the new rate, sellers and certified
service providers shall be relieved from liability for failing to collect tax at the new rate
during the first 30 days of the rate change, beginning on the day after the date of enactment
of the rate change, provided the seller or certified service provider continued to impose
and collect the tax at the immediately preceding tax rate during this period. Relief from
liability provided by this paragraph shall not apply if the failure to collect at the newly
effective rate extends beyond 30 days after the enactment of the new rate. The relief
provided by this paragraph shall not apply if the commissioner determines that the seller or
certified service provider fraudulently failed to collect at the new rate or that the seller or
certified service provider solicited purchasers based on the immediately preceding tax rate.
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. 13.

Minnesota Statutes 2008, section 297A.995, subdivision 11, is amended to
read:

Subd. 11.

Purchaser relief from certain liability.

(a) Notwithstanding other
provisions in the law, a purchaser is relieved from liability resulting from having paid
the incorrect amount of sales or use tax if a purchaser, whether or not deleted text begin holding a deleted text end new text begin the
commissioner gave the purchaser new text end direct pay deleted text begin permit deleted text end new text begin authorization new text end , or a purchaser's seller or
certified service provider relied on erroneous data provided by this state in the database
files on tax rates, boundaries, taxing jurisdiction assignments, or in the taxability matrix.
After providing an address-based database for assigning taxing jurisdictions and their
associated rates, no relief for errors resulting from the purchaser's reliance on a database
using zip codes is allowed.

(b) With respect to reliance on the taxability matrix provided by this state in
paragraph (a), relief is limited to erroneous classifications in the taxability matrix for
items included within the classifications as "taxable," "exempt," "included in sales
price," "excluded from sales price," "included in the definition," and "excluded from
the definition."

new text begin (c) Notwithstanding other provisions in the law, if there are not at least 30 days
between the enactment of a new tax rate and the effective date of the new rate, a purchaser
shall be relieved from liability resulting from failing to pay the tax at the new rate during
the first 30 days of the rate change, beginning on the day after the date of enactment of
the rate change, whether or not the purchaser has been given direct pay authorization by
the commissioner. Relief from liability provided by this paragraph shall not apply if the
failure to pay at the newly effective rate extends beyond 30 days after the enactment of
the new rate, and shall not apply to a purchaser that did not continue to pay the tax at the
immediately preceding tax rate during the 30-day period. The relief provided by this
paragraph shall not apply if the commissioner determines that the purchaser fraudulently
failed to pay at the new rate.
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. 14.

new text begin [645.025] SPECIAL LAWS; LOCAL TAXES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) If a special law grants a local government unit
or group of units the authority to impose a local tax other than sales tax, including but
not limited to taxes such as lodging, entertainment, admissions, or food and beverage
taxes, and the Department of Revenue either has agreed to or is required to administer
the tax, such that the tax is reported and paid with the chapter 297A taxes, then the local
government unit or group of units must adopt each definition used in the special law
as follows:
new text end

new text begin (1) the definition must be identical to the definition found in chapter 297A or in
Minnesota Rules, chapter 8130; or
new text end

new text begin (2) if the specific term is not defined either in chapter 297A or in Minnesota Rules,
chapter 8130, then the definition must be consistent with the position of the Department of
Revenue as to the extent of the tax base.
new text end

new text begin (b) This subdivision does not apply to terms that are defined by the authorizing
special law.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin This section applies to a special law that is described in
subdivision 1 that was:
new text end

new text begin (1) originally enacted prior to 2010, and that was amended by special law in or after
2010, to extend the time for imposing the tax or to modify the tax base; or
new text end

new text begin (2) first enacted in or after 2010.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Laws 2009, chapter 88, article 4, section 5, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective July 1, 2009, and applies to
deleted text begin registrations deleted text end new text begin leases or rentals new text end made or renewed on or after that date.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for leases or rentals
made or renewed after June 30, 2009.
new text end

Sec. 16. new text begin TRANSITION PROVISION.
new text end

new text begin (a) This section applies to sales and use tax imposed on accommodations
intermediaries for sales made before July 1, 2010, if the lodging was purchased by the
accommodations intermediary for resale and the accommodations provider imposed tax
under Minnesota Statutes, chapter 297A, on the sale. In computing the sales price for
the tax to be collected from the accommodations intermediary, the amount paid by the
accommodations intermediary to the accommodations provider is excluded.
new text end

new text begin (b) The provisions of this section apply to local taxes imposed under Minnesota
Statutes, section 469.190, or any special law.
new text end

new text begin (c) For purposes of this section, the terms defined under Minnesota Statutes, chapter
297A, apply.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made before
July 1, 2010.
new text end

ARTICLE 3

SPECIAL TAXES

Section 1.

Minnesota Statutes 2008, section 60A.209, subdivision 1, is amended to
read:

Subdivision 1.

Authorization; regulation.

A resident of this state may obtain
insurance from an ineligible surplus lines insurer in this state through a surplus lines
licensee. The licensee shall first attempt to place the insurance with a licensed insurer, or
if that is not possible, with an eligible surplus lines insurer. If coverage is not obtainable
from a licensed insurer or an eligible surplus lines insurer, the licensee shall certify to the
commissioner, on a form prescribed by the commissioner, that these attempts were made.
Upon obtaining coverage from an ineligible surplus lines insurer, the licensee shall:

(a) Have printed, typed, or stamped in red ink upon the face of the policy in
not less than 10-point type the following notice: "THIS INSURANCE IS ISSUED
PURSUANT TO THE MINNESOTA SURPLUS LINES INSURANCE ACT. THIS
INSURANCE IS PLACED WITH AN INSURER THAT IS NOT LICENSED BY THE
STATE NOR RECOGNIZED BY THE COMMISSIONER OF COMMERCE AS AN
ELIGIBLE SURPLUS LINES INSURER. IN CASE OF ANY DISPUTE RELATIVE
TO THE TERMS OR CONDITIONS OF THE POLICY OR THE PRACTICES OF
THE INSURER, THE COMMISSIONER OF COMMERCE WILL NOT BE ABLE TO
ASSIST IN THE DISPUTE. IN CASE OF INSOLVENCY, PAYMENT OF CLAIMS IS
NOT GUARANTEED." The notice may not be covered or concealed in any manner; and

(b) Collect from the insured appropriate premium taxes new text begin , as provided under chapter
297I, new text end and report the transaction to the commissioner of revenue on a form prescribed by
the commissioner. If the insured fails to pay the taxes when due, the insured shall be
subject to a civil fine of not more than $3,000, plus accrued interest from the inception of
the insurance.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 295.55, subdivision 2, is amended to read:

Subd. 2.

Estimated tax; hospitals; surgical centers.

(a) Each hospital or surgical
center must make estimated payments of the taxes for the calendar year in monthly
installments to the commissioner within 15 days after the end of the month.

(b) Estimated tax payments are not required of hospitals or surgical centers if: (1)
the tax for the current calendar year is deleted text begin less than deleted text end $500 new text begin or less new text end ; or (2) the tax for the previous
calendar year is deleted text begin less than deleted text end $500 deleted text begin , if the taxpayer had a tax liability and was doing business
the entire year deleted text end new text begin or less new text end .

(c) Underpayment of estimated installments bear interest at the rate specified in
section 270C.40, from the due date of the payment until paid or until the due date of the
annual return whichever comes first. An underpayment of an estimated installment is the
difference between the amount paid and the lesser of (1) 90 percent of one-twelfth of the
tax for the calendar year or (2) one-twelfth of the total tax for the previous calendar year
deleted text begin if the taxpayer had a tax liability and was doing business the entire year deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross revenues received after
December 31, 2010.
new text end

Sec. 3.

Minnesota Statutes 2008, section 295.55, subdivision 3, is amended to read:

Subd. 3.

Estimated tax; other taxpayers.

(a) Each taxpayer, other than a hospital
or surgical center, must make estimated payments of the taxes for the calendar year in
quarterly installments to the commissioner by April 15, July 15, October 15, and January
15 of the following calendar year.

(b) Estimated tax payments are not required if: (1) the tax for the current calendar
year is deleted text begin less than deleted text end $500 new text begin or less new text end ; or (2) the tax for the previous calendar year is deleted text begin less than deleted text end
$500 deleted text begin , if the taxpayer had a tax liability and was doing business the entire year deleted text end new text begin or less new text end .

(c) Underpayment of estimated installments bear interest at the rate specified in
section 270C.40, from the due date of the payment until paid or until the due date of the
annual return whichever comes first. An underpayment of an estimated installment is the
difference between the amount paid and the lesser of (1) 90 percent of one-quarter of the
tax for the calendar year or (2) one-quarter of the total tax for the previous calendar year
deleted text begin if the taxpayer had a tax liability and was doing business the entire year deleted text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for gross revenues received after
December 31, 2010.
new text end

Sec. 4.

new text begin [296A.061] CANCELLATION OR NONRENEWAL OF LICENSES.
new text end

new text begin The commissioner may cancel a license or not renew a license if one of the following
conditions occurs:
new text end

new text begin (1) the license holder has not filed a petroleum tax return or report for at least one
year;
new text end

new text begin (2) the license holder has not reported any petroleum tax liability on the license
holder's returns or reports for at least one year; or
new text end

new text begin (3) the license holder requests cancellation of the license.
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. 5.

Minnesota Statutes 2008, section 297F.01, subdivision 22a, is amended to read:

Subd. 22a.

Weighted average retail price.

"Weighted average retail price" means
(1) the average retail price per pack of 20 cigarettes, with the average price weighted by
the number of packs sold at each price, (2) reduced by the sales tax included in the retail
price, and (3) adjusted for the expected inflation deleted text begin from the time of the survey to the average
of the 12 months that the sales tax will be imposed. The commissioner shall make the
inflation adjustment in accordance with the Consumer Price Index for all urban consumers
inflation indicator as published in the most recent state budget forecast. The inflation
factor for the calendar year in which the new tax rate takes effect must be used. If the
survey indicates that the average retail price of cigarettes has not increased relative to the
average retail price in the previous year's survey, then no inflation adjustment must be
made deleted text end new text begin as provided in section 297F.25, subdivision 1 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2011.
new text end

Sec. 6.

Minnesota Statutes 2008, section 297F.04, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Cancellation or nonrenewal. new text end

new text begin The commissioner may cancel a license or
not renew a license if one of the following conditions occurs:
new text end

new text begin (1) the license holder has not filed a cigarette or tobacco products tax return for at
least one year;
new text end

new text begin (2) the license holder has not reported any cigarette or tobacco products tax liability
on the license holder's returns for at least one year; or
new text end

new text begin (3) the license holder requests cancellation of the license.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2008, section 297F.07, subdivision 4, is amended to read:

Subd. 4.

Sales to nonqualified buyers.

A retailer who sells or otherwise disposes of
unstamped or untaxed stock other than to a qualified purchaser shall collect from the buyer
or transferee the tax imposed by section 297F.05, and remit the tax to the Department of
Revenue at the same time and manner as required by section 297F.09. If the retailer fails
to collect the tax from the buyer or transferee, or fails to remit the tax, the retailer is
personally responsible for the tax and the commissioner may seize any product destined to
be delivered to the retailer. The product so seized shall be considered contraband and be
subject to the procedures outlined in section 297F.21, subdivision 3. deleted text begin The proceeds of the
sale of the stock may be applied to any tax liability owed by the retailer after deducting all
costs and expenses. deleted text end

This section does not relieve the buyer or possessor of unstamped or untaxed stock
from personal liability for the tax.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 297F.25, subdivision 1, is amended to read:

Subdivision 1.

Imposition.

new text begin (a) new text end A tax is imposed on distributors on the sale of
cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
state. The tax is equal to 6.5 percent of the weighted average retail price deleted text begin . The weighted
average retail price deleted text end new text begin and new text end must be expressed in cents per pack deleted text begin when deleted text end rounded to the nearest
one-tenth of a cent. The weighted average retail price must be determined annually,
with new rates published by deleted text begin May deleted text end new text begin November new text end 1, and effective for sales on or after deleted text begin August deleted text end new text begin
January new text end 1 new text begin of the following year new text end . The weighted average retail price must be established
by surveying cigarette retailers statewide in a manner and time determined by the
commissioner. new text begin The commissioner shall make an inflation adjustment in accordance with
the Consumer Price Index for all urban consumers inflation indicator as published in the
most recent state budget forecast. The commissioner shall use the inflation factor for
the calendar year in which the new tax rate takes effect. If the survey indicates that the
average retail price of cigarettes has not increased relative to the average retail price in
the previous year's survey, then the commissioner shall not make an inflation adjustment.
new text end The determination of the commissioner pursuant to this subdivision is not a "rule" and is
not subject to the Administrative Procedure Act contained in chapter 14. deleted text begin As of August 1,
2005, the tax is 25.5 cents per pack of 20 cigarettes. deleted text end For packs of cigarettes with other
than 20 cigarettes, the tax must be adjusted proportionally.

new text begin (b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
tax calculation of the weighted average retail price for the sales of cigarettes from August
1, 2011, through December 31, 2011, shall be calculated by (1) increasing the average
retail price per pack of 20 cigarettes from the most recent survey by the percentage change
in a weighted average of the presumed legal prices for cigarettes during the year after
completion of that survey, as reported and published by the Department of Commerce
under section 325D.371; (2) subtracting the sales tax included in the retail price; and (3)
adjusting for expected inflation. The rate is published by May 1 and is effective for sales
after July 31. If the weighted average of the presumed legal prices indicates that the
average retail price of cigarettes has not increased relative to the average retail price in the
most recent survey, then no inflation adjustment must be made. For packs of cigarettes
with other than 20 cigarettes, the tax must be adjusted proportionally.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2011.
new text end

Sec. 9.

Minnesota Statutes 2008, section 297I.01, subdivision 9, is amended to read:

Subd. 9.

Gross premiums.

"Gross premiums" means total premiums paid by
policyholders and applicants of policies, whether received in the form of money or other
valuable consideration, on property, persons, lives, interests and other risks located,
resident, or to be performed in this state, but excluding consideration and premiums for
reinsurance assumed from other insurance companies.

deleted text begin The term deleted text end new text begin (a) new text end "Gross premiums" includes the total consideration paid to bail bond
agents for bail bonds.

new text begin (b) new text end For title insurance companies, "gross premiums" means the charge for title
insurance made by a title insurance company or its agents according to the company's rate
filing approved by the commissioner of commerce without a deduction for commissions
paid to or retained by the agent. Gross premiums of a title insurance company does not
include any other charge or fee for abstracting, searching, or examining the title, or
escrow, closing, or other related services.

deleted text begin The term deleted text end new text begin (c) new text end "Gross premiums" includes any workers' compensation special
compensation fund premium surcharge pursuant to section 176.129.

new text begin (d) "Gross premiums" for surplus lines insurance includes all charges, commissions,
and fees received by the licensee. "Gross premiums" does not include the stamping fee,
as provided under section 60A.2085, subdivision 7, nor the operating assessment, as
provided under section 60A.208, subdivision 8.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 297I.05, subdivision 7, is amended to read:

Subd. 7.

Surplus lines tax.

(a) A tax is imposed on surplus lines licensees. The rate
of tax is equal to three percent of the gross premiums less return premiums deleted text begin received by the
licensee minus any licensee association operating assessments paid under section 60A.208 deleted text end .

(b) If surplus lines insurance placed by a surplus lines licensee and taxed under this
subdivision covers a subject of insurance residing, located, or to be performed outside
this state, a proper pro rata portion of the entire premium payable for all of that insurance
must be allocated according to the subjects of insurance residing, located, or to be
performed in this state.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2008, section 297I.30, subdivision 1, is amended to read:

Subdivision 1.

General rule.

On or before March 1, every deleted text begin insurer deleted text end new text begin taxpayer new text end subject
to taxation under section 297I.05, subdivisions 1 to deleted text begin 6 deleted text end new text begin 5 new text end , new text begin 9, 10, new text end deleted text begin and deleted text end 12, paragraphs (a),
clauses (1) to deleted text begin (5) deleted text end new text begin (4) new text end , deleted text begin and deleted text end (b), new text begin (c), and (d), and subdivision 14, new text end shall file an annual return
for the preceding calendar year deleted text begin setting forth such information as the commissioner may
reasonably require on forms deleted text end new text begin in the form new text end prescribed by the commissioner.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2008, section 297I.30, subdivision 2, is amended to read:

Subd. 2.

Surplus lines licensees and purchasing groups.

On or before February 15
and August 15 of each year, every surplus lines licensee subject to taxation under section
297I.05, subdivision 7, and every purchasing group or member of a purchasing group
subject to tax under section 297I.05, subdivision 12, paragraph (a), clause deleted text begin (6) deleted text end new text begin (5) new text end , shall file
a return with the commissioner for the preceding six-month period ending December 31,
or June 30, deleted text begin setting forth any information the commissioner reasonably prescribes on forms deleted text end
new text begin in the form new text end prescribed by the commissioner.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2008, section 297I.30, subdivision 7, is amended to read:

Subd. 7.

Surcharge.

(a) deleted text begin (1) deleted text end By April 30 of each year, every company required to pay
the surcharge under section 297I.10, subdivision 1, shall file a return for the five-month
period ending March 31 deleted text begin setting forth any information the commissioner reasonably
requires on forms deleted text end new text begin in the form new text end prescribed by the commissioner.

deleted text begin (2) deleted text end new text begin (b) new text end By June 30 of each year, every company required to pay the surcharge under
section 297I.10, subdivision 1, shall file a return for the two-month period ending May 31
deleted text begin setting forth any information the commissioner reasonably requires on forms deleted text end new text begin in the form
new text end prescribed by the commissioner.

deleted text begin (3) deleted text end new text begin (c) new text end By November 30 of each year, every company required to pay the surcharge
under section 297I.10, subdivision 1, shall file a return for the five-month period ending
October 31 deleted text begin setting forth any information the commissioner reasonably requires on forms deleted text end
new text begin in the form new text end prescribed by the commissioner.

deleted text begin (b) By February 15 and August 15 of each year, every company required to pay
a surcharge under section 297I.10, subdivision 2, must file a return for the preceding
six-month period ending December 31 and June 30.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2008, section 297I.30, subdivision 8, is amended to read:

Subd. 8.

Fire insurance surcharge.

On or before May 15, August 15, November
15, and February 15 of each year, every insurer required to pay the surcharge under
section 297I.06, subdivisions 1 and 2, shall file a return with the commissioner for the
preceding three-month period ending March 31, June 30, September 30, and December
31, deleted text begin setting forth any information the commissioner reasonably requires on forms deleted text end new text begin in the
form new text end prescribed by the commissioner.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2009 Supplement, section 297I.35, subdivision 2, is
amended to read:

Subd. 2.

Electronic payments.

If the aggregate amount of tax and surcharges
due under this chapter during a deleted text begin calendar deleted text end new text begin fiscal new text end year new text begin ending June 30 new text end is equal to or
exceeds $10,000, or if the taxpayer is required to make payment of any other tax to the
commissioner by electronic means, then all tax and surcharge payments in the subsequent
calendar year must be paid by electronic means.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments due in calendar year
2010 and thereafter, based upon liabilities incurred in the fiscal year ending June 30,
2009, and in fiscal years thereafter.
new text end

Sec. 16.

Minnesota Statutes 2008, section 297I.40, subdivision 1, is amended to read:

Subdivision 1.

Requirement to pay.

On or before March 15, June 15, September
15, and December 15 of the current year, every taxpayer subject to tax under section
297I.05, subdivisions 1 to deleted text begin 6 deleted text end new text begin 5 new text end , and 12, paragraphs (a), clauses (1) to deleted text begin (5), (b), and (e) deleted text end new text begin (4),
and subdivision 14 new text end , must pay to the commissioner an installment equal to one-fourth of
the insurer's total estimated tax for the current year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2008, section 297I.40, subdivision 5, is amended to read:

Subd. 5.

Definition of tax.

The term "tax" as used in this section means the tax
imposed by section 297I.05, subdivisions 1 to deleted text begin 6 deleted text end new text begin 5 new text end , 11, and 12, paragraphs (a), clauses (1)
to deleted text begin (5) deleted text end new text begin (4) new text end , (b), and (d), new text begin and 14, new text end less any offset in section 297I.20.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2008, section 297I.65, is amended by adding a subdivision
to read:

new text begin Subd. 4. new text end

new text begin Omission in excess of 25 percent. new text end

new text begin Additional taxes or surcharges may be
assessed within 6-1/2 years after the due date of the return or the date the return was filed,
whichever is later, if the taxpayer omits from a gross premiums tax or surcharge return an
amount of tax in excess of 25 percent of the tax or surcharge reported in the return.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for premium taxes due after
December 31, 2010.
new text end

Sec. 19.

Minnesota Statutes 2008, section 298.282, subdivision 1, is amended to read:

Subdivision 1.

Distribution of taconite municipal aid account.

The amount
deposited with the county as provided in section 298.28, subdivision 3, must be distributed
as provided by this section among: (1) the municipalities comprising a deleted text begin tax relief deleted text end new text begin taconite
assistance new text end area under section deleted text begin 273.134, paragraph (b) deleted text end new text begin 273.1341 new text end ; (2) a township that
contains a state park consisting primarily of an underground iron ore mine; and (3) a city
located within five miles of that state park, each being referred to in this section as a
qualifying municipality.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for distributions made after the
day following final enactment.
new text end

Sec. 20. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 297I.30, subdivisions 4, 5, and 6, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 4

PROPERTY TAXES AND AIDS

Section 1.

Minnesota Statutes 2008, section 82B.035, subdivision 2, is amended to read:

Subd. 2.

Assessors.

Nothing in this chapter shall be construed as requiring the
licensing of persons employed and acting in their capacity as assessors for political
subdivisions of the state new text begin and performing duties enumerated in section 273.061, subdivision
7 or 8 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
for testimony offered and opinions or reports prepared in cases or proceedings that have
not been finally resolved.
new text end

Sec. 2.

Minnesota Statutes 2009 Supplement, section 134.34, subdivision 4, is
amended to read:

Subd. 4.

Limitation.

(a) For calendar year 2010 and later, a regional library
basic system support grant shall not be made to a regional public library system for a
participating city or county which decreases the dollar amount provided for support for
operating purposes of public library service below the amount provided by it for the
second, or third preceding year, whichever is less. For purposes of this subdivision and
subdivision 1, any funds provided under section 473.757, subdivision 2, for extending
library hours of operation shall not be considered amounts provided by a city or county for
support for operating purposes of public library service. This subdivision shall not apply
to participating cities or counties where the adjusted net tax capacity of that city or county
has decreased, if the dollar amount of the reduction in support is not greater than the dollar
amount by which support would be decreased if the reduction in support were made in
direct proportion to the decrease in adjusted net tax capacity.

(b) For calendar year 2009 and later, in any calendar year in which a city's or
county's aid under sections 477A.011 to 477A.014 or deleted text begin credits deleted text end new text begin credit reimbursement new text end under
section 273.1384 is reduced after the city or county has certified its levy payable in that
year, it may reduce its local support by the lesser of:

(1) ten percent; or

(2) a percent equal to the ratio of the aid and credit new text begin reimbursement new text end reductions to the
city's or county's revenue base, based on aids certified for the current calendar year. For
calendar year 2009 only, the reduction under this paragraph shall be based on 2008 aid and
credit new text begin reimbursement new text end reductions under the December 2008 unallotment, as well as any
aid and credit new text begin reimbursement new text end reductions in calendar year 2009. For pay 2009 only, the
commissioner of revenue will calculate the reductions under this paragraph and certify
them to the commissioner of education within 15 days of May 17, 2009.

(c) For taxes payable in 2010 and later, in any payable year in which the total
amounts certified for city or county aids under sections 477A.011 to 477A.014 are less
than the total amounts paid under those sections in the previous calendar year, a city or
county may reduce its local support by the lesser of:

(1) ten percent; or

(2) a percent equal to the ratio of:

(i) the difference between (A) the sum of the aid it was paid under sections 477A.011
to 477A.014 and the deleted text begin credits deleted text end new text begin credit reimbursement new text end it received under section deleted text begin 273.1398 deleted text end
in the previous calendar year and (B) the sum of the aid it is certified to be paid
in the current calendar year under sections 477A.011 to 477A.014 and the deleted text begin credits deleted text end new text begin credit
reimbursement new text end estimated to be paid under section deleted text begin 273.1398 deleted text end new text begin 273.1384 new text end ; to

(ii) its revenue base for the previous year, based on aids actually paid in the previous
calendar year. The commissioner of revenue shall calculate the percent aid cut for each
county and city under this paragraph and certify the percentage cuts to the commissioner
of education by August 1 of the year prior to the year in which the reduced aids and deleted text begin credits deleted text end
new text begin credit reimbursements new text end are to be paid. The percentage of reduction related to reductions to
deleted text begin credits deleted text end new text begin credit reimbursements new text end under section 273.1384 shall be based on the best estimation
available as of July 30.

(d) Notwithstanding paragraph (a), (b), or (c), no city or county shall reduce its
support for public libraries below the minimum level specified in subdivision 1.

(e) For purposes of this subdivision, "revenue base" means the sum of:

(1) its levy for taxes payable in the current calendar year, including the levy on
the fiscal disparities distribution under section 276A.06, subdivision 3, paragraph (a),
or 473F.08, subdivision 3, paragraph (a);

(2) its aid under sections 477A.011 to 477A.014 in the current calendar year; and

(3) its taconite aid in the current calendar year under sections 298.28 and 298.282.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for support in calendar
year 2009 and thereafter and for library grants paid in fiscal year 2010 and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2008, section 270.41, subdivision 5, is amended to read:

Subd. 5.

Prohibited activity.

A licensed assessor or other person employed by an
assessment jurisdiction or contracting with an assessment jurisdiction for the purpose
of valuing or classifying property for property tax purposes is prohibited from making
appraisals or analyses, accepting an appraisal assignment, or preparing an appraisal report
as defined in section 82B.02, subdivisions 2 to 5, on any property within the assessment
jurisdiction where the individual is employed or performing the duties of the assessor
under contract. Violation of this prohibition shall result in immediate revocation of the
individual's license to assess property for property tax purposes. This prohibition must
not be construed to prohibit an individual from carrying out any duties required for the
proper assessment of property for property tax purposes new text begin or performing duties enumerated
in section 273.061, subdivision 7 or 8 new text end . If a formal resolution has been adopted by the
governing body of a governmental unit, which specifies the purposes for which such
work will be done, this prohibition does not apply to appraisal activities undertaken on
behalf of and at the request of the governmental unit that has employed or contracted with
the individual. The resolution may only allow appraisal activities which are related to
condemnations, right-of-way acquisitions, or special assessments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
for testimony offered and opinions or reports prepared in cases or proceedings that have
not been finally resolved.
new text end

Sec. 4.

Minnesota Statutes 2008, section 270C.87, is amended to read:

270C.87 REVISION OF MINNESOTA ASSESSORS' MANUAL.

In accordance with the provisions of section deleted text begin 270C.06 deleted text end new text begin 270C.85 new text end , the commissioner
shall periodically revise the Minnesota assessors' manual.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2008, section 270C.94, subdivision 3, is amended to read:

Subd. 3.

Failure to appraise.

When an assessor has failed to properly appraise at
least one-fifth of the parcels of property in a district or county as provided in section
273.01, the commissioner deleted text begin shall deleted text end new text begin may new text end appoint a special assessor and deputy assessor
as necessary and cause a reappraisal to be made of the property due for reassessment
in accordance with law.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 272.02, subdivision 42, is amended to read:

Subd. 42.

Property leased to deleted text begin school districts deleted text end new text begin schools new text end .

new text begin (a) new text end Property that is leased or
rented to a school district is exempt from taxation if it meets the following requirements:

(1) the lease must be for a period of at least 12 consecutive months;

(2) the terms of the lease must require the school district to pay a nominal
consideration for use of the building;

(3) the school district must use the property to provide direct instruction in any
grade from kindergarten through grade 12; special education for disabled children; adult
basic education as described in section 124D.52; preschool and early childhood family
education; or community education programs, including provision of administrative
services directly related to the educational program at that site; and

(4) the lease must provide that the school district has the exclusive use of the
property during the lease period.

new text begin (b) Property that is leased or rented to a charter school formed and operated under
section 124D.10 is exempt from taxation if it meets all of the following requirements:
new text end

new text begin (1) the lease is for a period of at least 12 consecutive months;
new text end

new text begin (2) the charter school must use the property to provide direct instruction in any grade
from kindergarten through grade 12, to provide special education for disabled children,
or to provide administrative services directly related to the educational program at that
site; and
new text end

new text begin (3) except for lease provisions that allow for the shared use of the property by the
charter school and another public or private school, by the charter school and a church,
or by the charter school and the state or a political subdivision of the state, the lease
must provide that the charter school has the exclusive right to use the property during
the lease period.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 7.

Minnesota Statutes 2008, section 272.025, subdivision 1, is amended to read:

Subdivision 1.

Statement of exemption.

(a) Except in the case of deleted text begin churches and
houses of worship, property solely used for educational purposes by academies, colleges,
universities or seminaries of learning, deleted text end property owned by the state of Minnesota or any
political subdivision thereof, and property exempt from taxation under section 272.02,
subdivisions 9, 10, 13, 15, 18, 20, and 22 to deleted text begin 26 deleted text end new text begin 25 new text end , and at the times provided in subdivision
3, a taxpayer claiming an exemption from taxation on property described in section
272.02, subdivisions 1 to 33, deleted text begin shall deleted text end new text begin must new text end file a statement of exemption with the assessor of
the assessment district in which the property is located.

(b) A taxpayer claiming an exemption from taxation on property described in section
272.02, subdivision 10, deleted text begin shall deleted text end new text begin must new text end file a statement of exemption with the commissioner
of revenue, on or before February 15 of each year for which the taxpayer claims an
exemption.

(c) In case of sickness, absence or other disability or for good cause, the assessor
new text begin or the commissioner new text end may extend the time for filing the statement of exemption for a
period not to exceed 60 days.

(d) The commissioner of revenue shall prescribe the form and contents of the
statement of exemption.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 8.

Minnesota Statutes 2008, section 272.025, subdivision 3, is amended to read:

Subd. 3.

Filing dates.

new text begin (a) new text end The statement required by subdivision 1, paragraph
(a), must be filed with the assessor by February 1 of the assessment year, however, any
taxpayer who has filed the statement required by subdivision 1 more than 12 months prior
to February 1, 1983, or February 1 of each third year after 1983, shall file a statement by
February 1, 1983, and by February 1 of each third year thereafter.

new text begin (b) For churches and houses of worship, and property solely used for educational
purposes by academies, colleges, universities, or seminaries of learning, no statement is
required after the statement filed for the assessment year in which the exemption began.
new text end

new text begin (c) This section does not apply to existing churches and houses of worship, and
property solely used for educational purposes by academies, colleges, universities, or
seminaries of learning that were exempt for taxes payable in 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2012 and
thereafter.
new text end

Sec. 9.

Minnesota Statutes 2008, section 272.029, subdivision 4, is amended to read:

Subd. 4.

Reports.

(a) An owner of a wind energy conversion system subject to tax
under subdivision 3 shall file a report with the commissioner of revenue annually on or
before February 1 detailing the amount of electricity in kilowatt-hours that was produced
by the wind energy conversion system for the previous calendar year. The commissioner
shall prescribe the form of the report. The report must contain the information required
by the commissioner to determine the tax due to each county under this section for the
current year. If an owner of a wind energy conversion system subject to taxation under
this section fails to file the report by the due date, the commissioner of revenue shall
determine the tax based upon the nameplate capacity of the system multiplied by a
capacity factor of deleted text begin 40 deleted text end new text begin 60 new text end percent.

(b) On or before February 28, the commissioner of revenue shall notify the owner of
the wind energy conversion systems of the tax due to each county for the current year and
shall certify to the county auditor of each county in which the systems are located the tax
due from each owner for the current year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with reports due on
February 1, 2011, and thereafter.
new text end

Sec. 10.

Minnesota Statutes 2008, section 272.029, subdivision 7, is amended to read:

Subd. 7.

Exemption.

The tax imposed under this section does not apply to
electricity produced by wind energy conversion systems located in a job opportunity
building zone deleted text begin , designated under section 469.314, deleted text end for the duration of the zone. The
exemption applies beginning for the first calendar year after designation of the zone
and applies to each calendar year that begins during the designation of the zone. new text begin The
exemption only applies if the owner of the system is a qualified business under section
469.310, subdivision 11, who has entered into a business subsidy agreement that covers
the land on which the system is situated. new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2008, section 273.061, subdivision 7, is amended to read:

Subd. 7.

Division of duties between local and county assessor.

The duty of the
duly appointed local assessor shall be to view and appraise the value of all property as
provided by law, but all the book work shall be done by the county assessor, or the
assessor's assistants, and the value of all property subject to assessment and taxation
shall be determined by the county assessor, except as otherwise hereinafter provided. new text begin If
directed by the county assessor, the local assessor shall perform the duties enumerated
in subdivision 8, paragraph (16).
new text end

Sec. 12.

Minnesota Statutes 2008, section 273.061, subdivision 8, is amended to read:

Subd. 8.

Powers and duties.

The county assessor shall have the following powers
and duties:

(1) To call upon and confer with the township and city assessors in the county, and
advise and give them the necessary instructions and directions as to their duties under
the laws of this state, to the end that a uniform assessment of all real property in the
county will be attained.

(2) To assist and instruct the local assessors in the preparation and proper use of land
maps and record cards, in the property classification of real and personal property, and in
the determination of proper standards of value.

(3) To keep the local assessors in the county advised of all changes in assessment
laws and all instructions which the assessor receives from the commissioner of revenue
relating to their duties.

(4) To have authority to require the attendance of groups of local assessors at
sectional meetings called by the assessor for the purpose of giving them further assistance
and instruction as to their duties.

(5) To immediately commence the preparation of a large scale topographical land
map of the county, in such form as may be prescribed by the commissioner of revenue,
showing thereon the location of all railroads, highways and roads, bridges, rivers and
lakes, swamp areas, wooded tracts, stony ridges and other features which might affect
the value of the land. Appropriate symbols shall be used to indicate the best, the fair, and
the poor land of the county. For use in connection with the topographical land map,
the assessor shall prepare and keep available in the assessor's office tables showing fair
average minimum and maximum market values per acre of cultivated, meadow, pasture,
cutover, timber and waste lands of each township. The assessor shall keep the map and
tables available in the office for the guidance of town assessors, boards of review, and
the county board of equalization.

(6) To also prepare and keep available in the office for the guidance of town
assessors, boards of review and the county board of equalization, a land valuation map
of the county, in such form as may be prescribed by the commissioner of revenue. This
map, which shall include the bordering tier of townships of each county adjoining, shall
show the average market value per acre, both with and without improvements, as finally
equalized in the last assessment of real estate, of all land in each town or unorganized
township which lies outside the corporate limits of cities.

(7) To regularly examine all conveyances of land outside the corporate limits of
cities of the first and second class, filed with the county recorder of the county, and keep a
file, by descriptions, of the considerations shown thereon. From the information obtained
by comparing the considerations shown with the market values assessed, the assessor
shall make recommendations to the county board of equalization of necessary changes in
individual assessments or aggregate valuations.

(8) To become familiar with the values of the different items of personal property
so as to be in a position when called upon to advise the boards of review and the county
board of equalization concerning property, market values thereof.

(9) While the county board of equalization is in session, to give it every possible
assistance to enable it to perform its duties. The assessor shall furnish the board with all
necessary charts, tables, comparisons, and data which it requires in its deliberations, and
shall make whatever investigations the board may desire.

(10) At the request of either the board of county commissioners or the commissioner
of revenue, to investigate applications for reductions of valuation and abatements and
settlements of taxes, examine the real or personal property involved, and submit written
reports and recommendations with respect to the applications, in such form as may be
prescribed by the board of county commissioners and commissioner of revenue.

(11) To make diligent search each year for real and personal property which has been
omitted from assessment in the county, and report all such omissions to the county auditor.

(12) To regularly confer with county assessors in all adjacent counties about the
assessment of property in order to uniformly assess and equalize the value of similar
properties and classes of property located in adjacent counties. The conference shall
emphasize the assessment of agricultural and commercial and industrial property or other
properties that may have an inadequate number of sales in a single county.

(13) To render such other services pertaining to the assessment of real and personal
property in the county as are not inconsistent with the duties set forth in this section, and as
may be required by the board of county commissioners or by the commissioner of revenue.

(14) To maintain a record, in conjunction with other county offices, of all transfers of
property to assist in determining the proper classification of property, including but not
limited to, transferring homestead property and name changes on homestead property.

(15) To determine if a homestead application is required due to the transfer of
homestead property or an owner's name change on homestead property.

new text begin (16) To perform appraisals of property, review the original assessment and determine
the accuracy of the original assessment, prepare an appraisal or appraisal report, and
testify before any court or other body as an expert or otherwise on behalf of the assessor's
jurisdiction with respect to properties in that jurisdiction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
for testimony offered and opinions or reports prepared in cases or proceedings that have
not been finally resolved.
new text end

Sec. 13.

Minnesota Statutes 2009 Supplement, section 273.111, subdivision 9, is
amended to read:

Subd. 9.

Additional taxes.

(a) Except as provided in paragraph (b), when real
property which is being, or has been valued and assessed under this section no longer
qualifies under subdivision 3, the portion no longer qualifying shall be subject to additional
taxes, in the amount equal to the difference between the taxes determined in accordance
with subdivision 4, and the amount determined under subdivision 5. Provided, however,
that the amount determined under subdivision 5 shall not be greater than it would have
been had the actual bona fide sale price of the real property at an arm's-length transaction
been used in lieu of the market value determined under subdivision 5. Such additional
taxes shall be extended against the property on the tax list for the current year, provided,
however, that no interest or penalties shall be levied on such additional taxes if timely
paid, and provided further, that such additional taxes shall only be levied with respect to
the last three years that the said property has been valued and assessed under this section.

(b) Real property that has been valued and assessed under this section prior to
May 29, 2008, and that ceases to qualify under this section after May 28, 2008, and is
withdrawn from the program before deleted text begin May 1 deleted text end new text begin August 16 new text end , 2010, is not subject to additional
taxes under this subdivision or subdivision 3, paragraph (c). If additional taxes have been
paid under this subdivision with respect to property described in this paragraph prior to
April 3, 2009, the county must repay the property owner in the manner prescribed by the
commissioner of revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for withdrawals after April 30, 2010.
new text end

Sec. 14.

Minnesota Statutes 2008, section 273.113, subdivision 3, is amended to read:

Subd. 3.

Reimbursement for lost revenue.

The county auditor shall certify
to the commissioner of revenue, as part of the abstracts of tax lists required to be filed
with the commissioner under section 275.29, the amount of tax lost to the county from
the property tax credit under subdivision 2. Any prior year adjustments must also be
certified in the abstracts of tax lists. The commissioner of revenue shall review the
certifications to determine their accuracy. The commissioner may make the changes
in the certification that are considered necessary or return a certification to the county
auditor for corrections. The commissioner shall reimburse each taxing district new text begin , other than
school districts, new text end for the taxes lost. The payments must be made at the time provided in
section 473H.10 for payment to taxing jurisdictions in the same proportion that the ad
valorem tax is distributed. new text begin Reimbursements to school districts must be made as provided
in section 273.1392. new text end The amount necessary to make the reimbursements under this section
is annually appropriated from the general fund to the commissioner of revenue.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2009 Supplement, section 273.114, subdivision 2, is
amended to read:

Subd. 2.

Requirements.

Class 2a or 2b property that had been assessed under
Minnesota Statutes 2006, section 273.111, or that is part of an agricultural homestead
under Minnesota Statutes, section 273.13, subdivision 23, paragraph (a), is entitled to
valuation and tax deferment under this section if:

(1) the land consists of at least ten acres;

(2) a conservation management plan for the land must be prepared by an approved
plan writer and implemented during the period in which the land is subject to valuation
and deferment under this section;

(3) the land must be enrolled for a minimum of ten years; deleted text begin and
deleted text end

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

deleted text begin Real estate may deleted text end new text begin (5) the property is new text end not deleted text begin be deleted text end new text begin also new text end enrolled for valuation and deferment
under deleted text begin this section and deleted text end section 273.111 deleted text begin , deleted text end new text begin or new text end 273.112, deleted text begin or 273.117, deleted text end or chapter 290C deleted text begin ,
concurrently deleted text end new text begin or 473H 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. 16.

Minnesota Statutes 2009 Supplement, section 273.124, subdivision 3a,
is amended to read:

Subd. 3a.

Manufactured home park cooperative.

new text begin (a) new text end When a manufactured home
park is owned by a corporation or association organized under chapter 308A or 308B,
and each person who owns a share or shares in the corporation or association is entitled
to occupy a lot within the park, the corporation or association may claim homestead
treatment for deleted text begin each lot occupied by a shareholder deleted text end new text begin the park new text end . Each lot must be designated
by legal description or number, and each lot is limited to not more than one-half acre of
land deleted text begin for each homestead deleted text end .

new text begin (b) new text end The manufactured home park shall be deleted text begin valued and assessed as if it were
homestead property within class 1 deleted text end new text begin entitled to homestead treatment new text end if all of the following
criteria are met:

(1) deleted text begin the occupant is using the property as a permanent residence;
deleted text end

deleted text begin (2) deleted text end the occupant or the cooperative new text begin corporation or new text end association is paying the ad
valorem property taxes and any special assessments levied against the land and structure
either directly, or indirectly through dues to the corporation new text begin or association new text end ; and

deleted text begin (3) deleted text end new text begin (2) new text end the corporation or association organized under chapter 308A or 308B is
wholly owned by persons having a right to occupy a lot owned by the corporation or
association.

new text begin (c) new text end A charitable corporation, organized under the laws of Minnesota with no
outstanding stock, and granted a ruling by the Internal Revenue Service for 501(c)(3)
tax-exempt status, qualifies for homestead treatment with respect to deleted text begin member residents of
the deleted text end new text begin a new text end manufactured home park deleted text begin who deleted text end new text begin if its members new text end hold residential participation warrants
entitling them to occupy a lot in the manufactured home park.

new text begin (d) "Homestead treatment" under this subdivision means the class rate provided for
class 4c(5)(ii) property under section 273.13, subdivision 25. The homestead market
value credit under section 273.1384 does not apply and the property taxes assessed
against the park shall not be included in the determination of taxes payable for rent paid
under section 290A.03.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 17.

Minnesota Statutes 2009 Supplement, section 273.13, subdivision 25, is
amended to read:

Subd. 25.

Class 4.

(a) Class 4a is residential real estate containing four or more
units and used or held for use by the owner or by the tenants or lessees of the owner
as a residence for rental periods of 30 days or more, excluding property qualifying for
class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
than hospitals exempt under section 272.02, and contiguous property used for hospital
purposes, without regard to whether the property has been platted or subdivided. The
market value of class 4a property has a class rate of 1.25 percent.

(b) Class 4b includes:

(1) residential real estate containing less than four units that does not qualify as class
4bb, other than seasonal residential recreational property;

(2) manufactured homes not classified under any other provision;

(3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
farm classified under subdivision 23, paragraph (b) containing two or three units; and

(4) unimproved property that is classified residential as determined under subdivision
33.

The market value of class 4b property has a class rate of 1.25 percent.

(c) Class 4bb includes:

(1) nonhomestead residential real estate containing one unit, other than seasonal
residential recreational property; and

(2) a single family dwelling, garage, and surrounding one acre of property on a
nonhomestead farm classified under subdivision 23, paragraph (b).

Class 4bb property has the same class rates as class 1a property under subdivision 22.

Property that has been classified as seasonal residential recreational property at
any time during which it has been owned by the current owner or spouse of the current
owner does not qualify for class 4bb.

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), real and personal property
devoted to temporary and seasonal residential occupancy for recreation purposes,
including real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes and not devoted to commercial purposes for more
than 250 days in the year preceding the year of assessment. For purposes of this clause,
property is devoted to a commercial purpose on a specific day if any portion of the
property is used for residential occupancy, and a fee is charged for residential occupancy.
Class 4c property under this clause must contain three or more rental units. A "rental unit"
is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site
equipped with water and electrical hookups for recreational vehicles. Class 4c property
under this clause must provide recreational activities such as renting ice fishing houses,
boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. A camping pad
offered for rent by a property that otherwise qualifies for class 4c under this clause is also
class 4c under this clause regardless of the term of the rental agreement, as long as the use
of the camping pad does not exceed 250 days. In order for a property to be classified as
class 4c, seasonal residential recreational for commercial purposes under this clause, at
least 40 percent of the annual gross lodging receipts related to the property must be from
business conducted during 90 consecutive days and either (i) at least 60 percent of all paid
bookings by lodging guests during the year must be for periods of at least two consecutive
nights; or (ii) at least 20 percent of the annual gross receipts must be from charges for
rental of fish houses, boats and motors, snowmobiles, downhill or cross-country ski
equipment, or charges for marina services, launch services, and guide services, or the
sale of bait and fishing tackle. For purposes of this determination, a paid booking of
five or more nights shall be counted as two bookings. Class 4c property classified under
this clause also includes commercial use real property used exclusively for recreational
purposes in conjunction with other class 4c property classified under this clause and
devoted to temporary and seasonal residential occupancy for recreational purposes, up to a
total of two acres, provided the property is not devoted to commercial recreational use for
more than 250 days in the year preceding the year of assessment and is located within two
miles of the class 4c property with which it is used. Owners of real and personal property
devoted to temporary and seasonal residential occupancy for recreation purposes and all
or a portion of which was devoted to commercial purposes for not more than 250 days in
the year preceding the year of assessment desiring classification as class 4c, must submit a
declaration to the assessor designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which they are located must
be designated class 4c under this clause as otherwise provided. The remainder of the
cabins or units and a proportionate share of the land on which they are located will be
designated as class 3a. The owner of property desiring designation as class 4c property
under this clause must provide guest registers or other records demonstrating that the units
for which class 4c designation is sought were not occupied for more than 250 days in the
year preceding the assessment if so requested. The portion of a property operated as a
(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
nonresidential facility operated on a commercial basis not directly related to temporary
and seasonal residential occupancy for recreation purposes does not qualify for class 4c;

(2) qualified property used as a golf course if:

(i) it is open to the public on a daily fee basis. It may charge membership fees or
dues, but a membership fee may not be required in order to use the property for golfing,
and its green fees for golfing must be comparable to green fees typically charged by
municipal courses; and

(ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).

A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
with the golf course is classified as class 3a property;

(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and not used for residential purposes
on either a temporary or permanent basis, provided that:

(i) the property is not used for a revenue-producing activity for more than six days
in the calendar year preceding the year of assessment; or

(ii) the organization makes annual charitable contributions and donations at least
equal to the property's previous year's property taxes and the property is allowed to be
used for public and community meetings or events for no charge, as appropriate to the
size of the facility.

For purposes of this clause,

(A) "charitable contributions and donations" has the same meaning as lawful
gambling purposes under section 349.12, subdivision 25, excluding those purposes
relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;

(B) "property taxes" excludes the state general tax;

(C) a "nonprofit community service oriented organization" means any corporation,
society, association, foundation, or institution organized and operated exclusively for
charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
Revenue Code; and

(D) "revenue-producing activities" shall include but not be limited to property or that
portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
insurance business, or office or other space leased or rented to a lessee who conducts a
for-profit enterprise on the premises.

Any portion of the property not qualifying under either item (i) or (ii) is class 3a. The use
of the property for social events open exclusively to members and their guests for periods
of less than 24 hours, when an admission is not charged nor any revenues are received by
the organization shall not be considered a revenue-producing activity.

The organization shall maintain records of its charitable contributions and donations
and of public meetings and events held on the property and make them available upon
request any time to the assessor to ensure eligibility. An organization meeting the
requirement under item (ii) must file an application by May 1 with the assessor for
eligibility for the current year's assessment. The commissioner shall prescribe a uniform
application form and instructions;

(4) postsecondary student housing of not more than one acre of land that is owned by
a nonprofit corporation organized under chapter 317A and is used exclusively by a student
cooperative, sorority, or fraternity for on-campus housing or housing located within two
miles of the border of a college campus;

(5) new text begin (i) new text end manufactured home parks as defined in section 327.14, subdivision 3 new text begin ,
excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
manufactured home parks as defined in section 327.14, subdivision 3, that are described in
section 273.124, subdivision 3a new text end ;

(6) real property that is actively and exclusively devoted to indoor fitness, health,
social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
and is located within the metropolitan area as defined in section 473.121, subdivision 2;

(7) a leased or privately owned noncommercial aircraft storage hangar not exempt
under section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land is on an airport owned or operated by a city, town, county, Metropolitan
Airports Commission, or group thereof; and

(ii) the land lease, or any ordinance or signed agreement restricting the use of the
leased premise, prohibits commercial activity performed at the hangar.

If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
be filed by the new owner with the assessor of the county where the property is located
within 60 days of the sale;

(8) a privately owned noncommercial aircraft storage hangar not exempt under
section 272.01, subdivision 2, and the land on which it is located, provided that:

(i) the land abuts a public airport; and

(ii) the owner of the aircraft storage hangar provides the assessor with a signed
agreement restricting the use of the premises, prohibiting commercial use or activity
performed at the hangar; and

(9) residential real estate, a portion of which is used by the owner for homestead
purposes, and that is also a place of lodging, if all of the following criteria are met:

(i) rooms are provided for rent to transient guests that generally stay for periods
of 14 or fewer days;

(ii) meals are provided to persons who rent rooms, the cost of which is incorporated
in the basic room rate;

(iii) meals are not provided to the general public except for special events on fewer
than seven days in the calendar year preceding the year of the assessment; and

(iv) the owner is the operator of the property.

The market value subject to the 4c classification under this clause is limited to five rental
units. Any rental units on the property in excess of five, must be valued and assessed as
class 3a. The portion of the property used for purposes of a homestead by the owner must
be classified as class 1a property under subdivision 22;

(10) real property up to a maximum of three acres and operated as a restaurant
as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
is either devoted to commercial purposes for not more than 250 consecutive days, or
receives at least 60 percent of its annual gross receipts from business conducted during
four consecutive months. Gross receipts from the sale of alcoholic beverages must be
included in determining the property's qualification under subitem (B). The property's
primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
sales located on the premises must be excluded. Owners of real property desiring 4c
classification under this clause must submit an annual declaration to the assessor by
February 1 of the current assessment year, based on the property's relevant information for
the preceding assessment year; and

(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
the public and devoted to recreational use for marina services. The marina owner must
annually provide evidence to the assessor that it provides services, including lake or
river access to the public. No more than 800 feet of lakeshore may be included in this
classification. Buildings used in conjunction with a marina for marina services, including
but not limited to buildings used to provide food and beverage services, fuel, boat repairs,
or the sale of bait or fishing tackle, are classified as class 3a property.

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) new text begin , item (i), new text end have the same class rate as class 4b property new text begin , and the market value
of manufactured home parks assessed under clause (5), item (ii), has the same class rate
as class 4d property new text end , (iii) commercial-use seasonal residential recreational property and
marina recreational land as described in clause (11), has a class rate of one percent for the
first $500,000 of market value, and 1.25 percent for the remaining market value, (iv) the
market value of property described in clause (4) has a class rate of one percent, (v) the
market value of property described in clauses (2), (6), and (10) has a class rate of 1.25
percent, and (vi) that portion of the market value of property in clause (9) qualifying for
class 4c property has a class rate of 1.25 percent.

(e) Class 4d property is qualifying low-income rental housing certified to the assessor
by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
of the units in the building qualify as low-income rental housing units as certified under
section 273.128, subdivision 3, only the proportion of qualifying units to the total number
of units in the building qualify for class 4d. The remaining portion of the building shall be
classified by the assessor based upon its use. Class 4d also includes the same proportion of
land as the qualifying low-income rental housing units are to the total units in the building.
For all properties qualifying as class 4d, the market value determined by the assessor must
be based on the normal approach to value using normal unrestricted rents.

Class 4d property has a class rate of 0.75 percent.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2011 and
thereafter.
new text end

Sec. 18.

Minnesota Statutes 2008, section 273.1392, is amended to read:

273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of new text begin bovine tuberculosis credit reimbursements under section 273.113;
new text end conservation tax credits under section 273.119; disaster or emergency reimbursement
under sections 273.1231 to 273.1235; homestead and agricultural credits under section
273.1384; aids and credits under section 273.1398; wetlands reimbursement under
section 275.295; enterprise zone property credit payments under section 469.171; and
metropolitan agricultural preserve reduction under section 473H.10 for school districts,
shall be certified to the Department of Education by the Department of Revenue. The
amounts so certified shall be paid according to section 127A.45, subdivisions 9 and 13.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2009 Supplement, section 275.065, subdivision 3, is
amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare
and the county treasurer shall deliver after November 10 and on or before November 24
each year, by first class mail to each taxpayer at the address listed on the county's current
year's assessment roll, a notice of proposed property taxes. Upon written request by
the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
instead of on paper or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes
each taxing authority proposes to collect for taxes payable the following year. In the
case of a town, or in the case of the state general tax, the final tax amount will be its
proposed tax. The notice must clearly state for each city new text begin that has a population over 500 new text end ,
county, school district, regional library authority established under section 134.201, and
metropolitan taxing districts as defined in paragraph (i), the time and place of deleted text begin the deleted text end new text begin a meeting
for each new text end taxing deleted text begin authorities' regularly scheduled meetings deleted text end new text begin authority new text end in which the budget
and levy will be discussed and new text begin public input allowed, prior to new text end the final budget and levy
deleted text begin determined, which must occur after November 24 deleted text end new text begin determination new text end . The taxing authorities
must provide the county auditor with the information to be included in the notice on or
before the time it certifies its proposed levy under subdivision 1. The public must be
allowed to speak at deleted text begin the meetings and the meetings shall deleted text end new text begin that meeting, which must occur
after November 24 and must new text end not be held before 6:00 p.m. It must provide a telephone
number for the taxing authority that taxpayers may call if they have questions related to
the notice and an address where comments will be received by mail.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used
for computing property taxes payable in the following year and for taxes payable in the
current year as each appears in the records of the county assessor on November 1 of the
current year; and, in the case of residential property, whether the property is classified as
homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
which the market values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, net of the residential and agricultural homestead credit under section 273.1384, voter
approved school levy, other local school levy, and the sum of the special taxing districts,
and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement
district as defined under sections 103B.501 to 103B.581, the amount attributable for that
purpose must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed
tax unless the town changes its levy at a special town meeting under section 365.52. If a
school district has certified under section 126C.17, subdivision 9, that a referendum will
be held in the school district at the November general election, the county auditor must
note next to the school district's proposed amount that a referendum is pending and that, if
approved by the voters, the tax amount may be higher than shown on the notice. In the
case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
listed separately from the remaining amount of the city's levy. In the case of the city of
St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
remaining amount of the city's levy. In the case of Ramsey County, any amount levied
under section 134.07 may be listed separately from the remaining amount of the county's
levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
proposed tax levy on the tax capacity subject to the areawide tax must each be stated
separately and not included in the sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and
the total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under
the senior citizens' property tax deferral program under chapter 290B is the total amount
of property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include
the following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified,
including bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first
Monday in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster
occurring after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value
reductions for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or
the county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
renter, or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within
three days of receipt of the notice, whichever is later. A taxpayer may notify the county
treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
which the notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
473.446, 473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent
of the county board, include supplemental information with the statement of proposed
property taxes about the impact of state aid increases or decreases on property tax
increases or decreases and on the level of services provided in the affected jurisdiction.
This supplemental information may include information for the following year, the current
year, and for as many consecutive preceding years as deemed appropriate by the governing
body of the county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and
local government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2009 Supplement, section 275.70, subdivision 5, is
amended to read:

Subd. 5.

Special levies.

"Special levies" means those portions of ad valorem taxes
levied by a local governmental unit for the following purposes or in the following manner:

(1) to pay the costs of the principal and interest on bonded indebtedness or to
reimburse for the amount of liquor store revenues used to pay the principal and interest
due on municipal liquor store bonds in the year preceding the year for which the levy
limit is calculated;

(2) to pay the costs of principal and interest on certificates of indebtedness issued for
any corporate purpose except for the following:

(i) tax anticipation or aid anticipation certificates of indebtedness;

(ii) certificates of indebtedness issued under sections 298.28 and 298.282;

(iii) certificates of indebtedness used to fund current expenses or to pay the costs of
extraordinary expenditures that result from a public emergency; or

(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or an
insufficiency in other revenue sources new text begin , provided that nothing in this subdivision limits the
special levy authorized under section 475.755 new text end ;

(3) to provide for the bonded indebtedness portion of payments made to another
political subdivision of the state of Minnesota;

(4) to fund payments made to the Minnesota State Armory Building Commission
under section 193.145, subdivision 2, to retire the principal and interest on armory
construction bonds;

(5) property taxes approved by voters which are levied against the referendum
market value as provided under section 275.61;

(6) to fund matching requirements needed to qualify for federal or state grants or
programs to the extent that either (i) the matching requirement exceeds the matching
requirement in calendar year 2001, or (ii) it is a new matching requirement that did not
exist prior to 2002;

(7) to pay the expenses reasonably and necessarily incurred in preparing for or
repairing the effects of natural disaster including the occurrence or threat of widespread
or severe damage, injury, or loss of life or property resulting from natural causes, in
accordance with standards formulated by the Emergency Services Division of the state
Department of Public Safety, as allowed by the commissioner of revenue under section
275.74, subdivision 2;

(8) pay amounts required to correct an error in the levy certified to the county
auditor by a city or county in a levy year, but only to the extent that when added to the
preceding year's levy it is not in excess of an applicable statutory, special law or charter
limitation, or the limitation imposed on the governmental subdivision by sections 275.70
to 275.74 in the preceding levy year;

(9) to pay an abatement under section 469.1815;

(10) to pay any costs attributable to increases in the employer contribution rates
under chapter 353, or locally administered pension plans, that are effective after June
30, 2001;

(11) to pay the operating or maintenance costs of a county jail as authorized in
section 641.01 or 641.262, or of a correctional facility as defined in section 241.021,
subdivision 1, paragraph (f), to the extent that the county can demonstrate to the
commissioner of revenue that the amount has been included in the county budget as
a direct result of a rule, minimum requirement, minimum standard, or directive of the
Department of Corrections, or to pay the operating or maintenance costs of a regional jail
as authorized in section 641.262. For purposes of this clause, a district court order is
not a rule, minimum requirement, minimum standard, or directive of the Department of
Corrections. If the county utilizes this special levy, except to pay operating or maintenance
costs of a new regional jail facility under sections 641.262 to 641.264 which will not
replace an existing jail facility, any amount levied by the county in the previous levy year
for the purposes specified under this clause and included in the county's previous year's
levy limitation computed under section 275.71, shall be deducted from the levy limit
base under section 275.71, subdivision 2, when determining the county's current year
levy limitation. The county shall provide the necessary information to the commissioner
of revenue for making this determination;

(12) to pay for operation of a lake improvement district, as authorized under section
103B.555. If the county utilizes this special levy, any amount levied by the county in the
previous levy year for the purposes specified under this clause and included in the county's
previous year's levy limitation computed under section 275.71 shall be deducted from
the levy limit base under section 275.71, subdivision 2, when determining the county's
current year levy limitation. The county shall provide the necessary information to the
commissioner of revenue for making this determination;

(13) to repay a state or federal loan used to fund the direct or indirect required
spending by the local government due to a state or federal transportation project or other
state or federal capital project. This authority may only be used if the project is not a
local government initiative;

(14) to pay for court administration costs as required under section 273.1398,
subdivision 4b, less the (i) county's share of transferred fines and fees collected by the
district courts in the county for calendar year 2001 and (ii) the aid amount certified to be
paid to the county in 2004 under section 273.1398, subdivision 4c; however, for taxes
levied to pay for these costs in the year in which the court financing is transferred to the
state, the amount under this clause is limited to the amount of aid the county is certified to
receive under section 273.1398, subdivision 4a;

(15) to fund a police or firefighters relief association as required under section 69.77
to the extent that the required amount exceeds the amount levied for this purpose in 2001;

(16) for purposes of a storm sewer improvement district under section 444.20;

(17) to pay for the maintenance and support of a city or county society for the
prevention of cruelty to animals under section 343.11, but not to exceed in any year
$4,800 or the sum of $1 per capita based on the county's or city's population as of the most
recent federal census, whichever is greater. If the city or county uses this special levy, any
amount levied by the city or county in the previous levy year for the purposes specified
in this clause and included in the city's or county's previous year's levy limit computed
under section 275.71, must be deducted from the levy limit base under section 275.71,
subdivision 2, in determining the city's or county's current year levy limit;

(18) for counties, to pay for the increase in their share of health and human service
costs caused by reductions in federal health and human services grants effective after
September 30, 2007;

(19) for a city, for the costs reasonably and necessarily incurred for securing,
maintaining, or demolishing foreclosed or abandoned residential properties, as allowed by
the commissioner of revenue under section 275.74, subdivision 2. A city must have either
(i) a foreclosure rate of at least 1.4 percent in 2007, or (ii) a foreclosure rate in 2007 in
the city or in a zip code area of the city that is at least 50 percent higher than the average
foreclosure rate in the metropolitan area, as defined in section 473.121, subdivision 2,
to use this special levy. For purposes of this paragraph, "foreclosure rate" means the
number of foreclosures, as indicated by sheriff sales records, divided by the number of
households in the city in 2007;

(20) for a city, for the unreimbursed costs of redeployed traffic-control agents and
lost traffic citation revenue due to the collapse of the Interstate 35W bridge, as certified
to the Federal Highway Administration;

(21) to pay costs attributable to wages and benefits for sheriff, police, and fire
personnel. If a local governmental unit did not use this special levy in the previous year its
levy limit base under section 275.71 shall be reduced by the amount equal to the amount it
levied for the purposes specified in this clause in the previous year;

(22) an amount equal to any reductions in the certified aids or deleted text begin credits deleted text end new text begin credit
reimbursements new text end payable under sections 477A.011 to 477A.014, and section 273.1384,
due to unallotment under section 16A.152. The amount of the levy allowed under this
clause new text begin for each year new text end is deleted text begin equal deleted text end new text begin limited new text end to the amount unallotted deleted text begin in deleted text end new text begin from the aids and credit
reimbursements certified for payment in the year following new text end the calendar year in which the
tax new text begin levy new text end is deleted text begin levied deleted text end new text begin certified new text end unless the unallotment amount is not known by September 1 of
the levy new text begin certification new text end year, and the local government has not adjusted its levy under section
275.065, subdivision 6, or 275.07, subdivision 6, in which case deleted text begin the deleted text end new text begin that new text end unallotment
amount may be levied in the following year;

(23) to pay for the difference between one-half of the costs of confining sex offenders
undergoing the civil commitment process and any state payments for this purpose pursuant
to section 253B.185, subdivision 5;

(24) for a county to pay the costs of the first year of maintaining and operating a new
facility or new expansion, either of which contains courts, corrections, dispatch, criminal
investigation labs, or other public safety facilities and for which all or a portion of the
funding for the site acquisition, building design, site preparation, construction, and related
equipment was issued or authorized prior to the imposition of levy limits in 2008. The
levy limit base shall then be increased by an amount equal to the new facility's first full
year's operating costs as described in this clause; and

(25) for the estimated amount of reduction to credits under section 273.1384 for
credits payable in the year in which the levy is payable.

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2008, section 275.71, subdivision 5, is amended to read:

Subd. 5.

Property tax levy limit.

new text begin (a) new text end For taxes levied in 2008 through 2010, the
property tax levy limit for a local governmental unit is equal to its adjusted levy limit
base determined under subdivision 4 plus any additional levy authorized under section
275.73, which is levied against net tax capacity, reduced by the sum of (i) the total amount
of aids and reimbursements that the local governmental unit is certified to receive under
sections 477A.011 to 477A.014, (ii) taconite aids under sections 298.28 and 298.282
including any aid which was required to be placed in a special fund for expenditure in
the next succeeding year, (iii) estimated payments to the local governmental unit under
section 272.029, adjusted for any error in estimation in the preceding year, and (iv) aids
under section 477A.16.

new text begin (b) If an aid, payment, or other amount used in paragraph (a) to reduce a local
government unit's levy limit is reduced by an unallotment under section 16A.152, the
amount of the aid, payment, or other amount prior to the unallotment is used in the
computations in paragraph (a). In order for a local government unit to levy outside of its
limit to offset the reduction in revenues attributable to an unallotment, it must do so under,
and to the extent authorized by, a special levy authorization.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2008, section 279.01, subdivision 3, is amended to read:

Subd. 3.

Agricultural property.

In the case of class 1b agricultural homestead, new text begin and
new text end class 2a deleted text begin agricultural homestead deleted text end new text begin and 2b new text end property, deleted text begin and class 2b(3) agricultural nonhomestead
property, deleted text end no penalties shall attach to the second one-half property tax payment as provided
in this section if paid by November 15. Thereafter for class 1b agricultural homestead and
class 2a new text begin and 2b new text end homestead property, on November 16 following, a penalty of six percent
shall accrue and be charged on all such unpaid taxes and on December 1 following, an
additional two percent shall be charged on all such unpaid taxes. Thereafter for class deleted text begin 2b(3)
agricultural deleted text end new text begin 2a and 2b new text end nonhomestead property, on November 16 following, a penalty of
eight percent shall accrue and be charged on all such unpaid taxes and on December 1
following, an additional four percent shall be charged on all such unpaid taxes.

If the owner of class 1b agricultural homestead deleted text begin , deleted text end new text begin or new text end class 2a deleted text begin , or class 2b(3)
agricultural deleted text end new text begin or 2b new text end property receives a consolidated property tax statement that shows
only an aggregate of the taxes and special assessments due on that property and on other
property not classified as class 1b agricultural homestead deleted text begin , deleted text end new text begin or new text end class 2a deleted text begin , or class 2b(3)
agricultural deleted text end new text begin or 2b new text end property, the aggregate tax and special assessments shown due on the
property by the consolidated statement will be due on November 15.

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2008, section 279.37, subdivision 1, is amended to read:

Subdivision 1.

Composition into one item.

Delinquent taxes upon any parcel of real
estate may be composed into one item or amount by confession of judgment at any time
prior to the forfeiture of the parcel of land to the state for taxes, for the aggregate amount
of all the taxes, costs, penalties, and interest accrued against the parcel, as provided in this
section. Taxes upon property which, for the previous year's assessment, was classified
as mineral property, employment property, or commercial or industrial property are only
eligible to be composed into any confession of judgment under this section as provided in
subdivision 1a. Delinquent taxes for property that has been reclassified from 4bb to 4b
under section 273.1319 may not be composed into a confession of judgment under this
subdivision. Delinquent taxes on unimproved land are eligible to be composed into a
confession of judgment only if the land is classified new text begin under section 273.13 new text end as homestead,
agricultural, deleted text begin or timberland deleted text end new text begin rural vacant land, or managed forest land, new text end in the previous year
or is eligible for installment payment under subdivision 1a. The entire parcel is eligible
for the ten-year installment plan as provided in subdivision 2 if 25 percent or more of the
market value of the parcel is eligible for confession of judgment under this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2009 Supplement, section 469.174, subdivision 22,
is amended to read:

Subd. 22.

Tourism facility.

"Tourism facility" means property that:

(1) is located in a county where the median income is no more than 85 percent of
the state median income;

(2) is located in a county in development region new text begin 1, new text end 2, 3, 4, 5, or 7E, as defined
in section 462.385;

(3) is not located in a city with a population in excess of 20,000; and

(4) is acquired, constructed, or rehabilitated for use as a convention and meeting
facility that is privately owned, marina, hotel, motel, lodging facility, or nonhomestead
dwelling unit that in each case is intended to serve primarily individuals from outside
the county.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification is made after June 30, 2010.
new text end

Sec. 25.

Minnesota Statutes 2009 Supplement, section 475.755, is amended to read:

475.755 EMERGENCY DEBT CERTIFICATES.

(a) If at any time during a fiscal year the receipts of a local government are
reasonably expected to be reduced below the amount provided in the local government's
budget when the final property tax levy to be collected during the fiscal year was certified
and the receipts are insufficient to meet the expenses incurred or to be incurred during the
fiscal year, the governing body of the local government may authorize and sell certificates
of indebtedness to mature within two years or less from the end of the fiscal year in which
the certificates are issued. The maximum principal amount of the certificates that it may
issue in a fiscal year is limited to the expected reduction in receipts plus the cost of
issuance. The certificates may be issued in the manner and on the terms the governing
body determines by resolution.

(b) The governing body of the local government shall levy taxes for the payment of
principal and interest on the certificates in accordance with section 475.61.

(c) The certificates are not to be included in the net debt of the issuing local
government.

(d) To the extent that a local government issues certificates under this section to fund
an unallotment or other reduction in its state aid, the local government deleted text begin may deleted text end new text begin must new text end not use deleted text begin a deleted text end
new text begin the new text end special levy new text begin authority new text end for deleted text begin the deleted text end aid deleted text begin reduction deleted text end new text begin reductions new text end under section 275.70, subdivision
5, clause (22), or a similar or successor provision deleted text begin . This provision does not affect the status
of the deleted text end new text begin , but must instead use the special levy authority for the repayment of indebtedness
under section 275.70, subdivision 5, clause (2), in order to new text end levy under section 475.61 to
deleted text begin pay deleted text end new text begin fund repayment of new text end the certificates deleted text begin as deleted text end new text begin with new text end a levy that is not subject to levy limits.

(e) For purposes of this section, the following terms have the meanings given:

(1) "Local government" means a statutory or home rule charter city, a town, or
a county.

(2) "Receipts" includes the following amounts scheduled to be received by the
local government for the fiscal year from:

(i) taxes;

(ii) aid payments previously certified by the state to be paid to the local government;

(iii) state reimbursement payments for property tax credits; and

(iv) any other source.

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2009 Supplement, section 477A.013, subdivision 8,
is amended to read:

Subd. 8.

City formula aid.

deleted text begin (a) deleted text end deleted text begin In calendar year 2009, the formula aid for a city
is equal to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need
increase percentage multiplied by its unmet need.
deleted text end

deleted text begin (b) In calendar year 2010 and subsequent years, deleted text end The formula aid for a city is equal
to the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
percentage multiplied by the average of its unmet need for the most recently available
two years.

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

The applicable need increase percentage must be calculated by the Department of
Revenue so that the total of the aid under subdivision 9 equals the total amount available
for aid under section 477A.03. deleted text begin For aids payable in 2009 only, all data used in calculating
aid to cities under sections 477A.011 to 477A.013 will be based on the data available for
calculating aid to cities for aids payable in 2008. For aids payable in 2010 and thereafter, deleted text end
Data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be the
most recently available data as of January 1 in the year in which the aid is calculated except
deleted text begin as provided in section 477A.011, subdivisions 3 and 35 deleted text end new text begin that the data used to compute "net
levy" in subdivision 9 is the data most recently available at the time of the aid computation new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Laws 2001, First Special Session chapter 5, article 3, section 50, the effective
date, as amended by Laws 2009, chapter 86, article 1, section 87, is amended to read:

EFFECTIVE DATE.

Clause (22) of this section is effective for taxes levied in 2002,
payable in 2003, deleted text begin through taxes levied in 2011, payable in 2012 deleted text end new text begin and thereafter new text end . Clause (23)
of this section is effective for taxes levied in 2001, payable in 2002, and thereafter.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28. new text begin CITY OF EAST GRAND FORKS; PERMITTED USE OF TIF.
new text end

new text begin Notwithstanding any other law to the contrary or the provisions of the tax increment
financing plan, the governing body of the city of East Grand Forks may authorize, by
resolution, the expenditure of tax increments from redevelopment district 1-1, 1-2 or
both for the purpose of making improvements to the Red River State Recreation Area,
including the construction of additional campsites. If so authorized, the expenditures are
permitted expenditures of tax increments by the authority.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
without local approval.
new text end

ARTICLE 5

MISCELLANEOUS

Section 1.

Minnesota Statutes 2008, section 103D.335, subdivision 17, is amended to
read:

Subd. 17.

Borrowing funds.

The managers may borrow funds from an agency of
the federal government, a state agency, a county where the watershed district is located
in whole or in part, or a financial institution authorized under chapter 47 to do business
in this state. A county board may lend the amount requested by a watershed district. A
watershed district may not have more than a total of deleted text begin $600,000 deleted text end new text begin $2,000,000 new text end in loans from
counties and financial institutions under this subdivision outstanding at any time.

Sec. 2.

new text begin [270C.311] FAILURE TO PRODUCE RECORDS.
new text end

new text begin (a) A taxpayer who fails to produce records or documents that support items on a
return is subject to a penalty equal to the greater of $500 or 25 percent of the amount of
the additional tax on any assessment made by the commissioner that results from the
failure to produce the documents or records.
new text end

new text begin (b) The penalty cannot be imposed unless the commissioner:
new text end

new text begin (1) makes a preliminary written request for the records or documents that gives the
taxpayer at least 30 days to comply; and
new text end

new text begin (2) makes a final written request, after the deadline provided in the preliminary
written request, for records or documents that gives the taxpayer at least 30 days to
comply. This request must notify the taxpayer of the consequences for failing to provide
the records or documents.
new text end

new text begin (c) The penalty may not be imposed, and if imposed, may be abated, if the taxpayer
shows that the response, or failure to respond, was due to reasonable cause.
new text end

new text begin (d) Records or documents submitted after the deadline provided in the request made
under paragraph (b) may be used to determine the correct tax. However, the late records or
documents must not reduce any penalty assessed under this section unless the penalty is
abated under paragraph (c).
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 2008, section 270C.34, subdivision 1, is amended to read:

Subdivision 1.

Authority.

(a) The commissioner may abate, reduce, or refund any
penalty or interest that is imposed by a law administered by the commissioner new text begin , or imposed
by section 270.0725, subdivision 1 or 2, new text end as a result of the late payment of tax or late
filing of a return, if the failure to timely pay the tax or failure to timely file the return is
due to reasonable cause, or if the taxpayer is located in a presidentially declared disaster
new text begin or in a presidentially declared state of emergency new text end area new text begin or in an area declared to be in a
state of emergency by the governor under section 12.31 new text end .

(b) The commissioner shall abate any part of a penalty or additional tax charge
under section 289A.25, subdivision 2, or 289A.26, subdivision 4, attributable to erroneous
advice given to the taxpayer in writing by an employee of the department acting in
an official capacity, if the advice:

(1) was reasonably relied on and was in response to a specific written request of the
taxpayer; and

(2) was not the result of failure by the taxpayer to provide adequate or accurate
information.

deleted text begin (c) The commissioner may abate a penalty imposed under section 270.0725,
subdivision 1 or 2, if the failure to timely file is due to reasonable cause, or if the airline
company is located in a presidentially declared disaster area.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 270C.52, subdivision 2, is amended to read:

Subd. 2.

Payment agreements.

(a) When any portion of any tax payable to the
commissioner together with interest and penalty thereon, if any, has not been paid, the
commissioner may extend the time for payment for a further period. When the authority
of this section is invoked, the extension shall be evidenced by written agreement signed by
the taxpayer and the commissioner, stating the amount of the tax with penalty and interest,
if any, and providing for the payment of the amount in installments.

(b) The agreement may contain a confession of judgment for the amount and for any
unpaid portion thereof. If the agreement contains a confession of judgment, the confession
of judgment must provide that the commissioner may enter judgment against the taxpayer
in the district court of the county of residence as shown upon the taxpayer's tax return for
the unpaid portion of the amount specified in the extension agreement.

(c) The agreement shall provide that it can be terminated, after notice by the
commissioner, if information provided by the taxpayer prior to the agreement was
inaccurate or incomplete, collection of the tax covered by the agreement is in jeopardy,
there is a subsequent change in the taxpayer's financial condition, the taxpayer has failed
to make a payment due under the agreement, or the taxpayer has failed to pay any other
tax or file a tax return coming due after the agreement.

(d) The notice must be given at least 14 calendar days prior to termination, and shall
advise the taxpayer of the right to request a reconsideration from the commissioner of
whether termination is reasonable and appropriate under the circumstances. A request for
reconsideration does not stay collection action beyond the 14-day notice period. If the
commissioner has reason to believe that collection of the tax covered by the agreement
is in jeopardy, the commissioner may proceed under section 270C.36 and terminate the
agreement without regard to the 14-day period.

(e) The commissioner may accept other collateral the commissioner considers
appropriate to secure satisfaction of the tax liability. The principal sum specified in the
agreement shall bear interest at the rate specified in section 270C.40 on all unpaid portions
thereof until the same has been fully paid or the unpaid portion thereof has been entered as
a judgment. The judgment shall bear interest at the rate specified in section 270C.40.

(f) If it appears to the commissioner that the tax reported by the taxpayer is in excess
of the amount actually owing by the taxpayer, the extension agreement or the judgment
entered pursuant thereto shall be corrected. If after making the extension agreement
or entering judgment with respect thereto, the commissioner determines that the tax as
reported by the taxpayer is less than the amount actually due, the commissioner shall
assess a further tax in accordance with the provisions of law applicable to the tax.

(g) The authority granted to the commissioner by this section is in addition to any
other authority granted to the commissioner by law to extend the time of payment or the
time for filing a return and shall not be construed in limitation thereof.

new text begin (h) The commissioner shall charge a fee for entering into payment agreements
that reflects the commissioner's costs for entering into payment agreements. The fee is
initially set at $25 and is adjusted annually as necessary. The fee is charged for entering
into a payment agreement, for entering into a new payment agreement after the taxpayer
has defaulted on a prior agreement, and for entering into a new payment agreement as
a result of renegotiation of the terms of an existing agreement. The fee is paid to the
commissioner before the payment agreement becomes effective and does not reduce
the amount of the liability.
new text end

new text begin By June 1 of each year, the commissioner shall determine the cost to the
commissioner for entering into payment agreements during the fiscal year and adjust the
payment agreement fee as necessary to most nearly equal those costs. Determination
of the fee for payment agreements under this section is not subject to the fee setting
requirements of section 16A.1283.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payment agreements entered
into or renegotiated after June 30, 2010.
new text end

Sec. 5.

Minnesota Statutes 2008, section 469.319, subdivision 5, is amended to read:

Subd. 5.

Waiver authority.

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

(1) a natural disaster;

(2) unforeseen industry trends; or

(3) loss of a major supplier or customer.

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

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

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

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

new text begin (c) Requests for waiver must be made no later than 60 days after the notice date of
an order issued under subdivision 4, paragraph (d), or, in the case of property taxes, within
60 days of the date of a tax statement issued under subdivision 4, paragraph (c).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for waivers requested in response
to notices issued after the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2008, section 469.3193, is amended to read:

469.3193 CERTIFICATION OF CONTINUING ELIGIBILITY FOR JOBZ
BENEFITS.

(a) By deleted text begin December 1 deleted text end new text begin October 15 new text end of each year, every qualified business must certify
to the commissioner of revenue, on a form prescribed by the commissioner of revenue,
whether it is in compliance with any agreement required as a condition for eligibility for
benefits listed under section 469.315. A business that fails to submit the certification, or
any business, including those still operating in the zone, that submits a certification that
the commissioner of revenue later determines materially misrepresents the business's
compliance with the agreement, is subject to the repayment provisions under section
469.319 from January 1 of the year in which the report is due or the date that the business
became subject to section 469.319, whichever is earlier. Any such business is permanently
barred from obtaining benefits under section 469.315. For purposes of this section, the bar
applies to an entity and also applies to any individuals or entities that have an ownership
interest of at least 20 percent of the entity.

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

(c) The certification required under this section is public.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for certifications required to be
made in 2010 and thereafter.
new text end

Sec. 7. new text begin REPEALER.
new text end

new text begin Laws 2009, chapter 88, article 12, section 21, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from July 1, 2009.
new text end

ARTICLE 6

CONDITIONAL USE DEEDS

Section 1.

Minnesota Statutes 2008, section 282.01, subdivision 1, is amended to read:

Subdivision 1.

Classification as conservation or nonconservation.

deleted text begin It is the
general policy of this state to encourage the best use of tax-forfeited lands, recognizing deleted text end new text begin
(a) When acting on behalf of the state under laws allowing the county board to classify
and manage tax-forfeited lands held by the state in trust for the local units as provided in
section 281.25, the county board has the discretion to decide new text end that some lands in public
ownership should be retained and managed for public benefits while other lands should be
returned to private ownership. Parcels of land becoming the property of the state in trust
under law declaring the forfeiture of lands to the state for taxes must be classified by the
county board of the county in which the parcels lie as conservation or nonconservation. In
making the classification the board shall consider the present use of adjacent lands, the
productivity of the soil, the character of forest or other growth, accessibility of lands
to established roads, schools, and other public services, their peculiar suitability or
desirability for particular uses new text begin , new text end and the suitability of the forest resources on the land for
multiple use deleted text begin , deleted text end new text begin and new text end sustained yield management. The classification, furthermore, must new text begin : (1) new text end
encourage and foster a mode of land utilization that will facilitate the economical and
adequate provision of transportation, roads, water supply, drainage, sanitation, education,
and recreation; new text begin (2) new text end facilitate reduction of governmental expenditures; new text begin (3) new text end conserve and
develop the natural resources; and new text begin (4) new text end foster and develop agriculture and other industries
in the districts and places best suited to them.

deleted text begin In making the classification the county board may use information made available
by any office or department of the federal, state, or local governments, or by any other
person or agency possessing pertinent information at the time the classification is made.
The lands may be reclassified from time to time as the county board considers necessary
or desirable, except for conservation lands held by the state free from any trust in favor of
any taxing district.
deleted text end

deleted text begin If the lands are located within the boundaries of an organized town, with taxable
valuation in excess of $20,000, or incorporated municipality, the classification or
reclassification and sale must first be approved by the town board of the town or the
governing body of the municipality in which the lands are located. The town board of
the town or the governing body of the municipality is considered to have approved
the classification or reclassification and sale if the county board is not notified of the
disapproval of the classification or reclassification and sale within 60 days of the date the
request for approval was transmitted to the town board of the town or governing body
of the municipality. If the town board or governing body desires to acquire any parcel
lying in the town or municipality by procedures authorized in this section, it must file a
written application with the county board to withhold the parcel from public sale. The
application must be filed within 60 days of the request for classification or reclassification
and sale. The county board shall then withhold the parcel from public sale for six months.
A municipality or governmental subdivision shall pay maintenance costs incurred by
the county during the six-month period while the property is withheld from public sale,
provided the property is not offered for public sale after the six-month period. A clerical
error made by county officials does not serve to eliminate the request of the town board
or governing body if the board or governing body has forwarded the application to the
county auditor. If the town board or governing body of the municipality fails to submit an
application and a resolution of the board or governing body to acquire the property within
the withholding period, the county may offer the property for sale upon the expiration of
the withholding period.
deleted text end

new text begin (b) Whenever the county board deems it appropriate, the board may hold a meeting
for the purpose of reclassifying tax-forfeited land that has not been sold or released from
the trust. The criteria and procedures for reclassification are the same as those required for
an initial classification.
new text end

new text begin (c) Prior to meeting for the purpose of classifying or reclassifying tax-forfeited lands,
the county board must give notice of its intent to meet for that purpose as provided in this
paragraph. The notice must be given no more than 90 days and no less than 60 days before
the date of the meeting; provided that if the meeting is rescheduled, notice of the new
date, time, and location must be given at least 14 days before the date of the rescheduled
meeting. The notice must be posted on a Web site. The notice must also be mailed or
otherwise delivered to each person who has filed a request for notice of special meetings
with the public body, regardless of whether the matter is considered at a regular or special
meeting. The notice must be mailed or delivered at least 60 days before the date of the
meeting. If the meeting is rescheduled, notice of the new date, time, and location must be
mailed or delivered at least 14 days before the date of the rescheduled meeting. The public
body shall publish the notice once, at least 30 days before the meeting, in a newspaper of
general circulation within the area of the public body's authority. The board must also mail
a notice by electronic means to each person who requests notice of meetings dealing with
this subject and who agrees as provided in chapter 325L to accept notice that is mailed
by electronic means. Receipt of actual notice under the conditions specified in section
13D.04, subdivision 7, satisfies the notice requirements of this paragraph.
new text end

new text begin The board may classify or reclassify tax-forfeited lands at any regular or special
meeting, as those terms are defined in chapter 13D and may conduct only this business, or
this business as well as other business or activities at the meeting.
new text end

new text begin (d) At the meeting, the county board must allow any person or agency possessing
pertinent information to make or submit comments and recommendations about the
pending classification or reclassification. In addition, representatives of governmental
entities in attendance must be allowed to describe plans, ideas, or projects that may
involve use or acquisition of the property by that or another governmental entity. The
county board must solicit and consider any relevant components of current municipal or
metropolitan comprehensive land use plans that incorporate the area in which the land
is located. After allowing testimony, the board may classify, reclassify, or delay taking
action on any parcel or parcels. In order for a state agency or a governmental subdivision
of the state to preserve its right to request a purchase or other acquisition of a forfeited
parcel, it may, at any time following forfeiture, file a written request to withhold the parcel
from sale or lease to others under the provisions of subdivision 1a.
new text end

new text begin (e) When classifying, reclassifying, appraising, and selling lands under this chapter,
the county board may designate the tracts as assessed and acquired, or may by resolution
provide for the subdivision of the tracts into smaller units or for the grouping of several
tracts into one tract when the subdivision or grouping is deemed advantageous for
conservation or sale purposes. This paragraph does not authorize the county board to
subdivide a parcel or tract of tax-forfeited land that, as assessed and acquired, is withheld
from sale under section 282.018, subdivision 1.
new text end

new text begin (f) A county board may by resolution elect to use the classification and
reclassification procedures provided in paragraphs (g), (h), and (i), instead of the
procedures provided in paragraphs (b), (c), and (d). Once an election is made under this
paragraph, it is effective for a minimum of five years.
new text end

new text begin (g) The classification or reclassification of tax-forfeited land that has not been sold or
released from the trust may be made by the county board using information made available
to it by any office or department of the federal, state, or local governments, or by any other
person or agency possessing pertinent information at the time the classification is made.
new text end

new text begin (h) If the lands are located within the boundaries of an organized town or
incorporated municipality, a classification or reclassification and sale must first be
approved by the town board of the town or the governing body of the municipality in
which the lands are located. The town board of the town or the governing body of the
municipality is considered to have approved the classification or reclassification and sale
if the county board is not notified of the disapproval of the classification or reclassification
and sale within 60 days of the date the request for approval was transmitted to the town
board of the town or governing body of the municipality. If the town board or governing
body disapproves of the classification or reclassification and sale, the county board must
follow the procedures in paragraphs (c) and (d), with regard to the parcel, and must
additionally cause to be published in a newspaper a notice of the date, time, location, and
purpose of the required meeting.
new text end

new text begin (i) If a town board or a governing body of a municipality or a park and recreation
board in a city of the first class desires to acquire any parcel lying in the town or
municipality by procedures authorized in this section, it may file a written request under
subdivision 1a, paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 2.

Minnesota Statutes 2008, section 282.01, subdivision 1a, is amended to read:

Subd. 1a.

Conveyance deleted text begin ; generally deleted text end new text begin to public entities new text end .

new text begin (a) Upon written request
from a state agency or a governmental subdivision of the state, a parcel of unsold
tax-forfeited land must be withheld from sale or lease to others for a maximum of six
months. The request must be submitted to the county auditor. Upon receipt, the county
auditor must withhold the parcel from sale or lease to any other party for six months, and
must confirm the starting date of the six-month withholding period to the requesting
agency or subdivision. If the request is from a governmental subdivision of the state, the
governmental subdivision must pay the maintenance costs incurred by the county during
the period the parcel is withheld. The county board may approve a sale or conveyance to
the requesting party during the withholding period. A conveyance of the property to the
requesting party terminates the withholding period.
new text end

new text begin A governmental subdivision of the state must not make, and a county auditor must
not act upon, a second request to withhold a parcel from sale or lease within 18 months
of a previous request for that parcel. A county may reject a request made under this
paragraph if the request is made more than 30 days after the county has given notice to the
requesting state agency or governmental subdivision of the state that the county intends to
sell or otherwise dispose of the property.
new text end

new text begin (b) new text end new text begin Nonconservation new text end tax-forfeited lands may be sold new text begin by the county board, for
their market value as determined new text end by the county board new text begin , new text end to an organized or incorporated
governmental subdivision of the state for any public purpose for which the subdivision is
authorized to acquire property deleted text begin or deleted text end new text begin . When the term "market value" is used in this section, it
means an estimate of the full and actual market value of the parcel as determined by the
county board, but in making this determination, the board and the persons employed by or
under contract with the board in order to perform, conduct, or assist in the determination,
are exempt from the licensure requirements of chapter 82B.
new text end

new text begin (c) Nonconservation tax-forfeited lands new text end may be released from the trust in favor of the
taxing districts on application deleted text begin of deleted text end new text begin to the county board by new text end a state agency for an authorized
use at not less than their new text begin market new text end value as determined by the county board.

new text begin (d) Nonconservation tax-forfeited lands may be sold by the county board to an
organized or incorporated governmental subdivision of the state or state agency for less
than their market value if:
new text end

new text begin (1) the county board determines that a sale at a reduced price is in the public interest
because a reduced price is necessary to provide an incentive to correct the blighted
conditions that make the lands undesirable in the open market, or the reduced price will
lead to the development of affordable housing; and
new text end

new text begin (2) the governmental subdivision or state agency has documented its specific plans
for correcting the blighted conditions or developing affordable housing, and the specific
law or laws that empower it to acquire real property in furtherance of the plans.
new text end

new text begin If the sale under this paragraph is to a governmental subdivision of the state, the
commissioner of revenue must convey the property on behalf of the state by quit claim
deed. If the sale under this paragraph is to a state agency, the commissioner must issue a
conveyance document that releases the property from the trust in favor of the taxing
districts.
new text end

new text begin (e) Nonconservation tax-forfeited land held in trust in favor of the taxing districts
may be conveyed by new text end the commissioner of revenue deleted text begin may convey by deed deleted text end in the name
of the state deleted text begin a tract of tax-forfeited land held in trust in favor of the taxing districts deleted text end to a
governmental subdivision for an authorized public use, if an application is submitted to
the commissioner which includes a statement of facts as to the use to be made of the tract
deleted text begin and the need therefor deleted text end and the new text begin favorable new text end recommendation of the county board. new text begin For the
purposes of this paragraph, "authorized public use" means a use that allows an indefinite
segment of the public to physically use and enjoy the property in numbers appropriate
to its size and use, or is for a public service facility. Authorized public uses as defined
in this paragraph are limited to:
new text end

new text begin (1) a road, or right-of-way for a road;
new text end

new text begin (2) a park that is both available to, and accessible by, the public that contains
amenities such as campgrounds, playgrounds, athletic fields, trails, or shelters;
new text end

new text begin (3) trails for walking, bicycling, snowmobiling, or other recreational purposes, along
with a reasonable amount of surrounding land maintained in its natural state;
new text end

new text begin (4) transit facilities for buses, light rail transit, commuter rail or passenger rail,
including transit ways, park-and-ride lots, transit stations, maintenance and garage
facilities, and other facilities related to a public transit system;
new text end

new text begin (5) public beaches or boat launches;
new text end

new text begin (6) public parking;
new text end

new text begin (7) civic recreation or conference facilities; and
new text end

new text begin (8) public service facilities such as fire halls, police stations, lift stations, water
towers, sanitation facilities, water treatment facilities, and administrative offices.
new text end

new text begin No monetary compensation or consideration is required for the conveyance, except as
provided in subdivision 1g, but the conveyance is subject to the conditions provided in
law, including, but not limited to, the reversion provisions of subdivisions 1c and 1d.
new text end

new text begin (f) The commissioner of revenue shall convey a parcel of nonconservation
tax-forfeited land to a local governmental subdivision of the state by quit claim deed
on behalf of the state upon the favorable recommendation of the county board if the
governmental subdivision has certified to the board that prior to forfeiture the subdivision
was entitled to the parcel under a written development agreement or instrument, but
the conveyance failed to occur prior to forfeiture. No compensation or consideration is
required for, and no conditions attach to, the conveyance.
new text end

new text begin (g) The commissioner of revenue shall convey a parcel of nonconservation
tax-forfeited land to the association of a common interest community by quit claim deed
upon the favorable recommendation of the county board if the association certifies to the
board that prior to forfeiture the association was entitled to the parcel under a written
agreement, but the conveyance failed to occur prior to forfeiture. No compensation or
consideration is required for, and no conditions attach to, the conveyance.
new text end

new text begin (h) Conservation tax-forfeited land may be sold to a governmental subdivision of the
state for less than its market value for either: (1) creation or preservation of wetlands;
(2) drainage or storage of storm water under a storm water management plan; or (3)
preservation, or restoration and preservation, of the land in its natural state. The deed must
contain a restrictive covenant limiting the use of the land to one of these purposes for
30 years or until the property is reconveyed back to the state in trust. At any time, the
governmental subdivision may reconvey the property to the state in trust for the taxing
districts. The deed of reconveyance is subject to approval by the commissioner of revenue.
No part of a purchase price determined under this paragraph shall be refunded upon a
reconveyance, but the amount paid for a conveyance under this paragraph may be taken
into account by the county board when setting the terms of a future sale of the same
property to the same governmental subdivision under paragraph (b) or (d). If the lands
are unplatted and located outside of an incorporated municipality and the commissioner
of natural resources determines there is a mineral use potential, the sale is subject to the
approval of the commissioner of natural resources.
new text end

new text begin (i) A park and recreation board in a city of the first class is a governmental
subdivision for the purposes of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 3.

Minnesota Statutes 2008, section 282.01, subdivision 1b, is amended to read:

Subd. 1b.

Conveyance; targeted neighborhood lands.

deleted text begin (a) deleted text end Notwithstanding
subdivision 1a, in the case of tax-forfeited lands located in a targeted neighborhood deleted text begin , as
defined in section 469.201, subdivision 10 deleted text end new text begin in a city of the first class new text end , the commissioner of
revenue shall convey by new text begin quit claim new text end deed in the name of the state any tract of tax-forfeited
land held in trust in favor of the taxing districts, to a political subdivision new text begin of the state new text end that
submits an application to the commissioner of revenue and the new text begin favorable new text end recommendation
of the county board. new text begin For purposes of this subdivision, the term "targeted neighborhood"
has the meaning given in section 469.201, subdivision 10, except that the land must be
located within a first class city.
new text end

deleted text begin (b) The application under paragraph (a) must include a statement of facts as to the
use to be made of the tract, the need therefor, and a resolution, adopted by the governing
body of the political subdivision, finding that the conveyance of a tract of tax-forfeited
land to the political subdivision is necessary to provide for the redevelopment of land as
productive taxable property. Deeds of conveyance issued under paragraph (a) are not
conditioned on continued use of the property for the use stated in the application.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 4.

Minnesota Statutes 2008, section 282.01, subdivision 1c, is amended to read:

Subd. 1c.

Deed of conveyance; form; approvals.

The deed of conveyance for
property conveyed for deleted text begin a deleted text end new text begin an authorized new text end public use new text begin under the authorities in subdivision
1a, paragraph (e), new text end must be on a form approved by the attorney general and must be
conditioned on continued use for the purpose stated in the application new text begin as provided in this
section. These deeds are conditional use deeds that convey a defeasible estate. Reversion
of the estate occurs by operation of law and without the requirement for any affirmative
act by or on behalf of the state when there is a failure to put the property to the approved
authorized public use for which it was conveyed, or an abandonment of that use, except as
provided in subdivision 1d new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 5.

Minnesota Statutes 2008, section 282.01, subdivision 1d, is amended to read:

Subd. 1d.

Reverter for failure to use; conveyance to state.

new text begin (a) new text end If after three years
from the date of the conveyance a governmental subdivision to which tax-forfeited land
has been conveyed for deleted text begin a specified deleted text end new text begin an authorized new text end public use as provided in deleted text begin this section deleted text end new text begin
subdivision 1a, paragraph (e), new text end fails to put the land to that use, or abandons that use, the
governing body of the subdivision deleted text begin may, deleted text end new text begin must: (1) new text end with the approval of the county board,
purchase the property for an authorized public purpose at the present deleted text begin appraised deleted text end new text begin market new text end
value as determined by the county board deleted text begin . In that case, the commissioner of revenue shall,
upon proper written application approved by the county board, issue an appropriate deed
to the subdivisions free of a use restriction and reverter. The governing body may also deleted text end new text begin , or
(2) new text end authorize the proper officers to convey the land, or the part of the land not required for
an authorized public use, to the state of Minnesota deleted text begin . deleted text end new text begin in trust for the taxing districts. If the
governing body purchases the property under clause (1), the commissioner of revenue
shall, upon proper application submitted by the county auditor, convey the property on
behalf of the state by quit claim deed to the subdivision free of a use restriction and the
possibility of reversion or defeasement. If the governing body decides to reconvey the
property to the state under this clause, new text end the officers shall execute a deed of conveyance
immediately. The conveyance is subject to the approval of the commissioner and its form
must be approved by the attorney general. deleted text begin A sale, lease, transfer, or other conveyance
of tax-forfeited lands by a housing and redevelopment authority, a port authority, an
economic development authority, or a city as authorized by chapter 469 is not an
abandonment of use and the lands shall not be reconveyed to the state nor shall they
revert to the state. A certificate made by a housing and redevelopment authority, a port
authority, an economic development authority, or a city referring to a conveyance by it
and stating that the conveyance has been made as authorized by chapter 469 may be filed
with the county recorder or registrar of titles, and the rights of reverter in favor of the state
provided by subdivision 1e will then terminate. No vote of the people is required for the
conveyance. deleted text end new text begin For the purposes of this paragraph, there is no failure to put the land to the
authorized public use and no abandonment of that use if a formal plan of the governmental
subdivision, including, but not limited to, a comprehensive plan or land use plan that
shows an intended future use of the land for the authorized public use.
new text end

new text begin (b) Property held by a governmental subdivision of the state under a conditional use
deed executed under subdivision 1a, paragraph (e), by the commissioner of revenue on or
after January 1, 2007, may be acquired by that governmental subdivision after 15 years
from the date of the conveyance if the commissioner determines upon written application
from the subdivision that the subdivision has in fact put the property to the authorized
public use for which it was conveyed, and the subdivision has made a finding that it
has no current plans to change the use of the lands. Prior to conveying the property, the
commissioner shall inquire whether the county board where the land is located objects to a
conveyance of the property to the subdivision without conditions and without further act
by or obligation of the subdivision. If the county does not object within 60 days, and the
commissioner makes a favorable determination, the commissioner shall issue a quit claim
deed on behalf of the state unconditionally conveying the property to the governmental
subdivision. For purposes of this paragraph, demonstration of an intended future use
for the authorized public use in a formal plan of the governmental subdivision does not
constitute use for that authorized public use.
new text end

new text begin (c) Property held by a governmental subdivision of the state under a conditional
use deed executed under subdivision 1a, paragraph (e), by the commissioner of revenue
before January 1, 2007, is released from the use restriction and possibility of reversion on
January 1, 2022, if the county board records a resolution describing the land and citing
this paragraph. The county board may authorize the county treasurer to deduct the amount
of the recording fees from future settlements of property taxes to the subdivision.
new text end

new text begin (d) All property conveyed under a conditional use deed executed under subdivision
1a, paragraph (e), by the commissioner of revenue is released from the use restriction and
reverter, and any use restriction or reverter for which no declaration of reversion has been
recorded with the county recorder or registrar of titles, as appropriate, is nullified on the
later of: (1) January 1, 2015; (2) 30 years from the date the deed was acknowledged; or
(3) final resolution of an appeal to district court under subdivision 1e, if a lis pendens
related to the appeal is recorded in the office of the county recorder or registrar of titles,
as appropriate, prior to January 1, 2015.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 6.

Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision
to read:

new text begin Subd. 1g. new text end

new text begin Conditional use deed fees. new text end

new text begin (a) A governmental subdivision of the state
applying for a conditional use deed under subdivision 1a, paragraph (e), must submit a fee
of $250 to the commissioner of revenue along with the application. If the application is
denied, the commissioner shall refund $150 of the application fee.
new text end

new text begin (b) The proceeds from the fees must be deposited in a Department of Revenue
conditional use deed revolving fund. The sums deposited into the revolving fund are
appropriated to the commissioner of revenue for the purpose of making the refunds
described in this subdivision, and administering conditional use deed laws.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for applications received by the
commissioner after June 30, 2010.
new text end

Sec. 7.

Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision
to read:

new text begin Subd. 1h. new text end

new text begin Conveyance; form. new text end

new text begin The instruments of conveyance executed and issued
by the commissioner of revenue under subdivision 1a, paragraphs (c), (d), (e), (f), (g),
and (h), and subdivision 1d, paragraph (b), must be on a form approved by the attorney
general and are prima facie evidence of the facts stated therein and that the execution and
issuance of the conveyance complies with the applicable laws.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for deeds executed by the
commissioner of revenue after June 30, 2010.
new text end

Sec. 8.

Minnesota Statutes 2008, section 282.01, subdivision 2, is amended to read:

Subd. 2.

Conservation lands; county board supervision.

new text begin (a) new text end Lands classified as
conservation lands deleted text begin , unless reclassified as nonconservation lands, sold to a governmental
subdivision of the state, designated as lands primarily suitable for forest production and
sold as hereinafter provided, or released from the trust in favor of the taxing districts, as
herein provided, will deleted text end new text begin must new text end be held under the supervision of the county board of the county
within which deleted text begin such deleted text end new text begin the new text end parcels lie deleted text begin . deleted text end new text begin and must not be conveyed or sold unless the lands are:
new text end

deleted text begin The county board may, by resolution duly adopted, declare lands classified as
conservation lands as primarily suitable for timber production and as lands which should
be placed in private ownership for such purposes. If such action be approved by the
commissioner of natural resources, the lands so designated, or any part thereof, may be
sold by the county board in the same manner as provided for the sale of lands classified as
nonconservation lands. Such county action and the approval of the commissioner shall be
limited to lands lying within areas zoned for restricted uses under the provisions of Laws
1939, chapter 340, or any amendments thereof.
deleted text end

new text begin (1) reclassified as nonconservation lands;
new text end

new text begin (2) conveyed to a governmental subdivision of the state under subdivision 1a;
new text end

new text begin (3) released from the trust in favor of the taxing districts as provided in paragraph
(b); or
new text end

new text begin (4) conveyed or sold under the authority of another general or special law.
new text end

new text begin (b) new text end The county board may, by resolution duly adopted, resolve that certain lands
classified as conservation lands shall be devoted to conservation uses and may submit
deleted text begin such deleted text end new text begin a new text end resolution to the commissioner of natural resources. If, upon investigation,
the commissioner of natural resources determines that the lands covered by deleted text begin such deleted text end new text begin the new text end
resolution, or any part thereof, can be managed and developed for conservation purposes,
the commissioner shall make a certificate describing the lands and reciting the acceptance
thereof on behalf of the state deleted text begin for such purposes deleted text end . The commissioner shall transmit the
certificate to the county auditor, who shall note the same upon the auditor's records and
record the same with the county recorder. The title to all lands so accepted shall be held
by the state free from any trust in favor of any and all taxing districts and deleted text begin such deleted text end new text begin the new text end lands
shall be devoted thereafter to the purposes of forestry, water conservation, flood control,
parks, game refuges, controlled game management areas, public shooting grounds, or
other public recreational or conservation uses, and managed, controlled, and regulated
deleted text begin for such purposes deleted text end under the jurisdiction of the commissioner of natural resources and
the divisions of the department.

new text begin (c) All proceeds derived from the sale of timber, lease of crops of hay, or other
revenue from lands under the jurisdiction of the commissioner of natural resources shall
be credited to the general fund of the state.
new text end

deleted text begin In case deleted text end new text begin (d) If new text end the commissioner of natural resources deleted text begin shall determine deleted text end new text begin determines new text end that
any tract of land deleted text begin so held deleted text end new text begin acquired new text end by the state new text begin under paragraph (b) new text end and situated within or
adjacent to the boundaries of any governmental subdivision of the state is suitable for use
by deleted text begin such deleted text end new text begin the new text end subdivision for any authorized public purpose, the commissioner may convey
deleted text begin such deleted text end new text begin the new text end tract by deed in the name of the state to deleted text begin such deleted text end new text begin the new text end subdivision upon the filing
with the commissioner of a resolution adopted by a majority vote of all the members
of the governing body thereof, stating the purpose for which the land is desired. The
deed of conveyance shall be upon a form approved by the attorney general new text begin and must be
new text end conditioned upon continued use for the purpose stated in the resolution. deleted text begin All proceeds
derived from the sale of timber, lease of hay stumpage, or other revenue from such
lands under the jurisdiction of the natural resources commissioner shall be paid into the
general fund of the state.
deleted text end

new text begin (e) new text end The county auditor, with the approval of the county board, may lease conservation
lands remaining under the deleted text begin jurisdiction deleted text end new text begin supervision new text end of the county board and sell timber
and hay stumpage thereon in the manner hereinafter provided, and all proceeds derived
therefrom shall be distributed in the same manner as provided in section 282.04.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 9.

Minnesota Statutes 2008, section 282.01, subdivision 3, is amended to read:

Subd. 3.

Nonconservation lands; appraisal and sale.

new text begin (a) new text end All parcels of land
classified as nonconservation, except those which may be reserved, shall be sold as
provided, if it is determined, by the county board of the county in which the parcels lie,
that it is advisable to do so, having in mind their accessibility, their proximity to existing
public improvements, and the effect of their sale and occupancy on the public burdens.
Any parcels of land proposed to be sold shall be first appraised by the county board of
the county in which the parcels lie. The parcels may be reappraised whenever the county
board deems it necessary to carry out the intent of sections 282.01 to 282.13.

new text begin (b) new text end In an appraisal the value of the land and any standing timber on it shall be
separately determined. No parcel of land containing any standing timber may be sold until
the appraised value of the timber on it and the sale of the land have been approved by the
commissioner of natural resources. The commissioner shall base review of a proposed
sale on the policy and considerations specified in subdivision 1. The decision of the
commissioner shall be in writing and shall state the reasons for it. The commissioner's
decision is exempt from the rulemaking provisions of chapter 14 and section 14.386
does not apply. The county may appeal the decision of the commissioner in accordance
with chapter 14.

new text begin (c) new text end In any county in which a state forest or any part of it is located, the county
auditor shall submit to the commissioner at least 60 days before the first publication of the
list of lands to be offered for sale a list of all lands included on the list which are situated
outside of any incorporated municipality. If, at any time before the opening of the sale, the
commissioner notifies the county auditor in writing that there is standing timber on any
parcel of deleted text begin such deleted text end land, the parcel shall not be sold unless the requirements of this section
respecting the separate appraisal of the timber and the approval of the appraisal by the
commissioner have been complied with. The commissioner may waive the requirement
of the 60-day notice as to any parcel of land which has been examined and the timber
value approved as required by this section.

new text begin (d) new text end If any public improvement is made by a municipality after any parcel of land has
been forfeited to the state for the nonpayment of taxes, and the improvement is assessed in
whole or in part against the property benefited by it, the clerk of the municipality shall
certify to the county auditor, immediately upon the determination of the assessments for
the improvement, the total amount that would have been assessed against the parcel of land
if it had been subject to assessment; or if the public improvement is made, petitioned for,
ordered in or assessed, whether the improvement is completed in whole or in part, at any
time between the appraisal and the sale of the parcel of land, the cost of the improvement
shall be included as a separate item and added to the appraised value of the parcel of land
at the time it is sold. No sale of a parcel of land shall discharge or free the parcel of land
from lien for the special benefit conferred upon it by reason of the public improvement
until the cost of it, including penalties, if any, is paid. The county board shall determine
the amount, if any, by which the value of the parcel was enhanced by the improvement and
include the amount as a separate item in fixing the appraised value for the purpose of sale.
deleted text begin In classifying, appraising, and selling the lands, the county board may designate the tracts
as assessed and acquired, or may by resolution provide for the subdivision of the tracts into
smaller units or for the grouping of several tracts into one tract when the subdivision or
grouping is deemed advantageous for the purpose of sale. Each such smaller tract or larger
tract must be classified and appraised as such before being offered for sale. If any such
lands have once been classified, the board of county commissioners, in its discretion, may,
by resolution, authorize the sale of the smaller tract or larger tract without reclassification.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 10.

Minnesota Statutes 2008, section 282.01, subdivision 4, is amended to read:

Subd. 4.

Sale: method, requirements, effects.

The sale new text begin authorized under
subdivision 3 new text end must be conducted by the county auditor at the county seat of the county in
which the parcels lie, except that in St. Louis and Koochiching Counties, the sale may
be conducted in any county facility within the county. new text begin The sale must not be for less than
the appraised value except as provided in subdivision 7a. new text end The parcels must be sold for
cash only deleted text begin and at not less than the appraised value deleted text end , unless the county board of the county
has adopted a resolution providing for their sale on terms, in which event the resolution
controls with respect to the sale. When the sale is made on terms other than for cash only
(1) a payment of at least ten percent of the purchase price must be made at the time of
purchase, and the balance must be paid in no more than ten equal annual installments, or
(2) the payments must be made in accordance with county board policy, but in no event
may the board require more than 12 installments annually, and the contract term must not
be for more than ten years. Standing timber or timber products must not be removed from
these lands until an amount equal to the appraised value of all standing timber or timber
products on the lands at the time of purchase has been paid by the purchaser. If a parcel of
land bearing standing timber or timber products is sold at public auction for more than
the appraised value, the amount bid in excess of the appraised value must be allocated
between the land and the timber in proportion to their respective appraised values. In that
case, standing timber or timber products must not be removed from the land until the
amount of the excess bid allocated to timber or timber products has been paid in addition
to the appraised value of the land. The purchaser is entitled to immediate possession,
subject to the provisions of any existing valid lease made in behalf of the state.

For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price
is subject to interest at the rate determined pursuant to section 549.09. The unpaid balance
of the purchase price for sales occurring after December 31, 1990, is subject to interest
at the rate determined in section 279.03, subdivision 1a. The interest rate is subject to
change each year on the unpaid balance in the manner provided for rate changes in section
549.09 or 279.03, subdivision 1a, whichever, is applicable. Interest on the unpaid contract
balance on sales occurring before July 1, 1982, is payable at the rate applicable to the sale
at the time that the sale occurred.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 11.

Minnesota Statutes 2008, section 282.01, subdivision 7, is amended to read:

Subd. 7.

County sales; notice, purchase price, disposition.

The sale must
commence at the time determined by the county board of the county in which the parcels
are located. The county auditor shall offer the parcels of land in order in which they
appear in the notice of sale, and shall sell them to the highest bidder, but not for a sum
less than the appraised value, until all of the parcels of land have been offered. Then the
county auditor shall sell any remaining parcels to anyone offering to pay the appraised
value, except that if the person could have repurchased a parcel of property under section
282.012 or 282.241, that person may not purchase that same parcel of property at the sale
under this subdivision for a purchase price less than the sum of all taxes, assessments,
penalties, interest, and costs due at the time of forfeiture computed under section 282.251,
and any special assessments for improvements certified as of the date of sale. The sale
must continue until all the parcels are sold or until the county board orders a reappraisal or
withdraws any or all of the parcels from sale. The list of lands may be added to and the
added lands may be sold at any time by publishing the descriptions and appraised values.
The added lands must be: (1) parcels of land that have become forfeited and classified
as nonconservation since the commencement of any prior sale; (2) parcels new text begin classified as
nonconservation new text end that have been reappraised; (3) parcels that have been reclassified as
nonconservation; or (4) other parcels that are subject to sale but were omitted from the
existing list for any reason. The descriptions and appraised values must be published in
the same manner as provided for the publication of the original list. Parcels added to the
list must first be offered for sale to the highest bidder before they are sold at appraised
value. All parcels of land not offered for immediate sale, as well as parcels that are offered
and not immediately sold, continue to be held in trust by the state for the taxing districts
interested in each of the parcels, under the supervision of the county board. Those parcels
may be used for public purposes until sold, as directed by the county board.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 12.

Minnesota Statutes 2008, section 282.01, subdivision 7a, is amended to read:

Subd. 7a.

City sales; alternate procedures.

Land located in a home rule charter
or statutory city, or in a town which cannot be improved because of noncompliance with
local ordinances regarding minimum area, shape, frontage or access may be sold by the
county auditor pursuant to this subdivision if the auditor determines that a nonpublic sale
will encourage the approval of sale of the land by the city or town and promote its return
to the tax rolls. If the physical characteristics of the land indicate that its highest and best
use will be achieved by combining it with an adjoining parcel and the city or town has not
adopted a local ordinance governing minimum area, shape, frontage, or access, the land
may also be sold pursuant to this subdivision. If the property consists of an undivided
interest in land or land and improvements, the property may also be sold to the other
owners under this subdivision. The sale of land pursuant to this subdivision shall be
subject to any conditions imposed by the county board pursuant to section 282.03. The
governing body of the city or town may recommend to the county board conditions to be
imposed on the sale. The county auditor may restrict the sale to owners of lands adjoining
the land to be sold. The county auditor shall conduct the sale by sealed bid or may select
another means of sale. The land shall be sold to the highest bidder deleted text begin but in no event shall the
land deleted text end new text begin and may new text end be sold for less than its appraised value. All owners of land adjoining the
land to be sold shall be given a written notice at least 30 days prior to the sale.

This subdivision shall be liberally construed to encourage the sale and utilization
of tax-forfeited land, to eliminate nuisances and dangerous conditions and to increase
compliance with land use ordinances.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end

Sec. 13.

Minnesota Statutes 2008, section 282.01, is amended by adding a subdivision
to read:

new text begin Subd. 12. new text end

new text begin Notice; public hearing for use change. new text end

new text begin If a governmental subdivision
that acquired a parcel for public use under this section later determines to change the use,
it must hold a public hearing on the proposed use change. The governmental subdivision
must mail written notice of the proposed use change and the public hearing to each owner
of property that is within 400 feet of the parcel at least ten days and no more than 60 days
before it holds the hearing. The notice must identify: (1) the parcel, (2) its current use,
(3) the proposed use, (4) the date, time, and place of the public hearing, and (5) where
to submit written comments on the proposal and that the public is invited to testify at
the public hearing.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010, and applies to a change
in use of a parcel acquired under Minnesota Statutes, section 282.01, whether acquired by
the governmental subdivision before or after the effective date of this section.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 282.01, subdivisions 9, 10, and 11; and 383A.76, new text end new text begin
are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2010.
new text end