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HF 677

4th Engrossment - 88th Legislature (2013 - 2014) Posted on 08/26/2013 02:07pm

KEY: stricken = removed, old language. underscored = added, new language.

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Version List Authors and Status

Bill Text Versions

Engrossments

Introduction Pdf Posted on 02/18/2013
1st Engrossment Pdf Posted on 04/18/2013
2nd Engrossment Pdf Posted on 04/20/2013
3rd Engrossment Pdf Posted on 04/24/2013
4th Engrossment Pdf Posted on 05/21/2013

Unofficial Engrossments

1st Unofficial Engrossment Pdf Posted on 04/30/2013

Conference Committee Reports

LS88-CCR-HF0677 Pdf Posted on 05/19/2013

Current Version - 4th Engrossment

1.1A bill for an act
1.2relating to financing and operation of state and local government; making
1.3changes to individual income, corporate franchise, property, sales and use,
1.4estate, mineral, tobacco, alcohol, special, local, and other taxes and tax-related
1.5provisions modifying the property tax refund; changing property tax aids and
1.6credits; modifying the Sustainable Forest Incentive Act; modifying education
1.7aids and levies; providing additional pension funding; modifying definitions and
1.8distributions for property taxes; providing for property tax exemptions; modifying
1.9the payment in lieu of tax provisions; modifying education aids and levies;
1.10modifying tobacco tax provisions; making changes to additions and subtractions
1.11from federal taxable income; providing for federal conformity; changing income
1.12tax rates for individuals, estates, and trusts; providing income tax credits;
1.13modifying estate tax provisions; providing for a state gift tax; expanding the sales
1.14tax base; modifying the duty to collect and remit sales taxes for certain sellers;
1.15imposing the sales tax on digital products and selected services; modifying the
1.16definition of sale and purchase; modifying provisions for the rental motor vehicle
1.17tax rate; providing for multiple points of use certificates; modifying sales tax
1.18exemptions; authorizing local sales taxes; authorizing economic development
1.19powers; modifying tax increment financing rules; providing authority,
1.20organization, powers, duties, and requiring a prevailing wage for development
1.21of a Destination Medical Center; authorizing state infrastructure aid; modifying
1.22the distribution of taconite production taxes; authorizing taconite production tax
1.23bonds for grants to school districts; modifying and providing provisions for
1.24public finance; providing funding for legislative office facilities; modifying the
1.25definition of market value for tax, debt, and other purposes; making conforming,
1.26policy, and technical changes to tax provisions; requiring studies and reports;
1.27appropriating money;amending Minnesota Statutes 2012, sections 13.792;
1.2816A.46; 16A.727; 38.18; 40A.15, subdivision 2; 69.011, subdivision 1; 69.021,
1.29subdivisions 7, 8; 88.51, subdivision 3; 103B.102, subdivision 3; 103B.245,
1.30subdivision 3; 103B.251, subdivision 8; 103B.335; 103B.3369, subdivision 5;
1.31103B.635, subdivision 2; 103B.691, subdivision 2; 103C.501, subdivision 4;
1.32103D.905, subdivisions 2, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions
1.331, 2, 8; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, subdivision
1.345; 123A.455, subdivision 1; 126C.10, subdivision 1, by adding a subdivision;
1.35126C.13, subdivision 4; 126C.17; 126C.48, subdivision 8; 127A.48, subdivision
1.361; 138.053; 144F.01, subdivision 4; 162.07, subdivisions 3, 4; 163.04, subdivision
1.373; 163.06, subdivision 6; 165.10, subdivision 1; 168.012, subdivision 9, by
1.38adding a subdivision; 216C.436, subdivision 7; 237.52, subdivision 3, by adding
1.39a subdivision; 270.077; 270.41, subdivisions 3, 5, by adding a subdivision;
2.1270.45; 270B.01, subdivision 8; 270B.03, subdivision 1; 270B.12, subdivision
2.24; 270C.03, subdivision 1; 270C.34, subdivision 1; 270C.38, subdivision 1;
2.3270C.42, subdivision 2; 270C.56, subdivision 1; 271.06, subdivision 2a, as added;
2.4272.01, subdivision 2; 272.02, subdivisions 39, 97, by adding subdivisions;
2.5272.03, subdivision 9, by adding subdivisions; 273.032; 273.061, subdivision
2.62; 273.0645; 273.11, subdivision 1; 273.114, subdivision 6; 273.117; 273.124,
2.7subdivisions 3a, 13; 273.13, subdivisions 21b, 23, 25; 273.1398, subdivisions 3,
2.84; 273.19, subdivision 1; 273.372, subdivision 4; 273.39; 275.011, subdivision 1;
2.9275.077, subdivision 2; 275.71, subdivision 4; 276.04, subdivision 2; 276A.01,
2.10subdivisions 10, 12, 13, 15; 276A.06, subdivision 10; 279.01, subdivision 1, by
2.11adding a subdivision; 279.02; 279.06, subdivision 1; 279.37, subdivisions 1a, 2;
2.12281.14; 281.17; 287.05, by adding a subdivision; 287.08; 287.20, by adding a
2.13subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.08, subdivision
2.143; 289A.10, subdivision 1, by adding a subdivision; 289A.12, subdivision 14, by
2.15adding a subdivision; 289A.18, by adding a subdivision; 289A.20, subdivisions
2.163, 4, by adding a subdivision; 289A.26, subdivisions 3, 4, 7, 9; 289A.55,
2.17subdivision 9; 289A.60, subdivision 4; 290.01, subdivisions 19, as amended,
2.1819b, 19c, 19d; 290.06, subdivisions 2c, 2d, by adding a subdivision; 290.0677,
2.19subdivision 2; 290.068, subdivisions 3, 6a; 290.0681, subdivisions 1, 3, 4, 5, 10;
2.20290.091, subdivisions 1, 2, 6; 290.0921, subdivision 3; 290.0922, subdivision 1;
2.21290.095, subdivision 2; 290.10, subdivision 1; 290.17, subdivision 4; 290.191,
2.22subdivision 5; 290.21, subdivision 4; 290.9705, subdivision 1; 290A.03,
2.23subdivision 3; 290A.04, subdivisions 2, 2a, 4; 290B.04, subdivision 2; 290C.02,
2.24subdivision 6; 290C.03; 290C.055; 290C.07; 291.005, subdivision 1; 291.03,
2.25subdivisions 1, 8, 9, 10, 11, by adding a subdivision; 296A.01, subdivisions 7, 8,
2.2614, 19, 20, 23, 24, 26, by adding a subdivision; 296A.09, subdivision 2; 296A.17,
2.27subdivision 3; 296A.22, subdivisions 1, 3; 297A.61, subdivisions 3, 4, 10, 25,
2.2838, 45, by adding subdivisions; 297A.64, subdivision 1; 297A.66, subdivision
2.293, by adding a subdivision; 297A.665; 297A.668, by adding a subdivision;
2.30297A.67, subdivisions 7, 13, by adding a subdivision; 297A.68, subdivisions
2.312, 5, 42, by adding a subdivision; 297A.70, subdivisions 2, 4, 5, 7, 13, 14, by
2.32adding subdivisions; 297A.71, by adding subdivisions; 297A.75, subdivisions
2.331, 2, 3; 297A.82, subdivision 4, by adding a subdivision; 297A.99, subdivision
2.341; 297B.11; 297E.021, subdivision 3; 297E.14, subdivision 7; 297F.01,
2.35subdivisions 3, 19, 23, by adding subdivisions; 297F.05, subdivisions 1, 3, 4, by
2.36adding subdivisions; 297F.09, subdivision 9; 297F.18, subdivision 7; 297F.24,
2.37subdivision 1; 297F.25, subdivision 1; 297G.04, subdivision 2; 297G.09,
2.38subdivision 8; 297G.17, subdivision 7; 297I.05, subdivisions 7, 11, 12; 297I.30,
2.39subdivisions 1, 2; 297I.80, subdivision 1; 298.01, subdivisions 3, 3b; 298.018;
2.40298.17; 298.227, as amended; 298.24, subdivision 1; 298.28, subdivisions 4, 6,
2.419c, 10; 325D.32, subdivision 2; 325F.781, subdivision 1; 349.166, subdivision
2.421; 353G.08, subdivision 2; 360.531; 360.66; 365.025, subdivision 4; 366.095,
2.43subdivision 1; 366.27; 368.01, subdivision 23; 368.47; 370.01; 373.01,
2.44subdivisions 1, 3; 373.40, subdivisions 1, 2, 4; 375.167, subdivision 1; 375.18,
2.45subdivision 3; 375.555; 383A.80, subdivision 4; 383B.152; 383B.245; 383B.73,
2.46subdivision 1; 383B.80, subdivision 4; 383D.41, by adding a subdivision;
2.47383E.20; 383E.23; 385.31; 394.36, subdivision 1; 398A.04, subdivision 8;
2.48401.05, subdivision 3; 403.02, subdivision 21, by adding subdivisions; 403.06,
2.49subdivision 1a; 403.11, subdivision 1, by adding subdivisions; 410.32; 412.221,
2.50subdivision 2; 412.301; 428A.02, subdivision 1; 428A.101; 428A.21; 430.102,
2.51subdivision 2; 447.10; 450.19; 450.25; 458A.10; 458A.31, subdivision 1; 465.04;
2.52469.033, subdivision 6; 469.034, subdivision 2; 469.053, subdivisions 4, 4a, 6;
2.53469.071, subdivision 5; 469.107, subdivision 1; 469.169, by adding a subdivision;
2.54469.176, subdivisions 4c, 4g, 6; 469.177, subdivisions 1a, 9, by adding
2.55subdivisions; 469.180, subdivision 2; 469.187; 469.206; 469.319, subdivision
2.564; 469.340, subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325,
2.57subdivision 2; 473.39, by adding a subdivision; 473.606, subdivision 3; 473.629;
2.58473.661, subdivision 3; 473.667, subdivision 9; 473.671; 473.711, subdivision
3.12a; 473F.02, subdivisions 12, 14, 15, 23; 473F.08, subdivisions 3a, 10, by adding
3.2a subdivision; 474A.04, subdivision 1a; 474A.062; 474A.091, subdivision 3a;
3.3475.521, subdivisions 1, 2, 4; 475.53, subdivisions 1, 3, 4; 475.58, subdivisions
3.42, 3b; 475.73, subdivision 1; 477A.011, subdivisions 20, 30, 34, 42, by adding
3.5subdivisions; 477A.0124, subdivision 2; 477A.013, subdivisions 1, 8, 9, by
3.6adding a subdivision; 477A.015; 477A.03, subdivisions 2a, 2b, by adding a
3.7subdivision; 477A.11, subdivisions 3, 4, by adding subdivisions; 477A.12,
3.8subdivisions 1, 2, 3; 477A.14, subdivision 1, by adding a subdivision; 641.23;
3.9641.24; 645.44, by adding a subdivision; Laws 1971, chapter 773, section 1,
3.10subdivision 2, as amended; Laws 1988, chapter 645, section 3, as amended;
3.11Laws 1993, chapter 375, article 9, section 46, subdivisions 2, as amended, 5, as
3.12amended; Laws 1998, chapter 389, article 8, section 43, subdivisions 1, 3, as
3.13amended, 5, as amended; Laws 1999, chapter 243, article 6, section 11; Laws
3.142002, chapter 377, article 3, section 25, as amended; Laws 2005, First Special
3.15Session chapter 3, article 5, section 37, subdivisions 2, 4; Laws 2006, chapter
3.16259, article 11, section 3, as amended; Laws 2008, chapter 366, article 5, sections
3.1726; 33; 34, as amended; article 7, section 19, subdivision 3, as amended; Laws
3.182009, chapter 88, article 2, section 46, subdivisions 1, 3; Laws 2010, chapter 216,
3.19sections 11; 55; Laws 2010, chapter 389, article 1, section 12; article 5, section 6,
3.20subdivision 6; proposing coding for new law in Minnesota Statutes, chapters 116J;
3.21116V; 124D; 136A; 270C; 287; 290A; 292; 403; 423A; 469; 477A; repealing
3.22Minnesota Statutes 2012, sections 16A.725; 97A.061; 256.9658; 272.69; 273.11,
3.23subdivisions 1a, 22; 276A.01, subdivision 11; 289A.60, subdivision 31; 290.01,
3.24subdivision 6b; 290.06, subdivision 22a; 290.0921, subdivision 7; 290.171;
3.25290.173; 290.174; 297A.61, subdivision 27; 297A.68, subdivision 35; 473F.02,
3.26subdivision 13; 477A.011, subdivisions 2a, 19, 21, 29, 31, 32, 33, 36, 39, 40, 41;
3.27477A.013, subdivisions 11, 12; 477A.0133; 477A.0134; Laws 1973, chapter 567,
3.28section 7, as amended; Laws 2009, chapter 88, article 4, section 23, as amended.
3.29BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.30ARTICLE 1
3.31HOMESTEAD CREDIT REFUND AND RENTER PROPERTY TAX REFUND

3.32    Section 1. Minnesota Statutes 2012, section 290A.03, subdivision 3, is amended to read:
3.33    Subd. 3. Income. (1) "Income" means the sum of the following:
3.34    (a) federal adjusted gross income as defined in the Internal Revenue Code; and
3.35    (b) the sum of the following amounts to the extent not included in clause (a):
3.36    (i) all nontaxable income;
3.37    (ii) the amount of a passive activity loss that is not disallowed as a result of section
3.38469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
3.39loss carryover allowed under section 469(b) of the Internal Revenue Code;
3.40    (iii) an amount equal to the total of any discharge of qualified farm indebtedness
3.41of a solvent individual excluded from gross income under section 108(g) of the Internal
3.42Revenue Code;
3.43    (iv) cash public assistance and relief;
3.44    (v) any pension or annuity (including railroad retirement benefits, all payments
3.45received under the federal Social Security Act, Supplemental Security Income, and
4.1veterans benefits), which was not exclusively funded by the claimant or spouse, or which
4.2was funded exclusively by the claimant or spouse and which funding payments were
4.3excluded from federal adjusted gross income in the years when the payments were made;
4.4    (vi) interest received from the federal or a state government or any instrumentality
4.5or political subdivision thereof;
4.6    (vii) workers' compensation;
4.7    (viii) nontaxable strike benefits;
4.8    (ix) the gross amounts of payments received in the nature of disability income or
4.9sick pay as a result of accident, sickness, or other disability, whether funded through
4.10insurance or otherwise;
4.11    (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
4.121986, as amended through December 31, 1995;
4.13    (xi) contributions made by the claimant to an individual retirement account,
4.14including a qualified voluntary employee contribution; simplified employee pension plan;
4.15self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
4.16of the Internal Revenue Code; or deferred compensation plan under section 457 of the
4.17Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base
4.18amount for the claimant and spouse;
4.19    (xii) to the extent not included in federal adjusted gross income, distributions received
4.20by the claimant or spouse from a traditional or Roth style retirement account or plan;
4.21    (xiii) nontaxable scholarship or fellowship grants;
4.22    (xiii) (xiv) the amount of deduction allowed under section 199 of the Internal
4.23Revenue Code;
4.24    (xiv) (xv) the amount of deduction allowed under section 220 or 223 of the Internal
4.25Revenue Code;
4.26    (xv) (xvi) the amount of deducted for tuition expenses required to be added to
4.27income under section 290.01, subdivision 19a, clause (12); under section 222 of the
4.28Internal Revenue Code; and
4.29    (xvi) (xvii) the amount deducted for certain expenses of elementary and secondary
4.30school teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
4.31    (xvii) unemployment compensation.
4.32    In the case of an individual who files an income tax return on a fiscal year basis, the
4.33term "federal adjusted gross income" shall mean federal adjusted gross income reflected
4.34in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
4.35reduced by the amount of a net operating loss carryback or carryforward or a capital loss
4.36carryback or carryforward allowed for the year.
5.1    (2) "Income" does not include:
5.2    (a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
5.3    (b) amounts of any pension or annuity which was exclusively funded by the claimant
5.4or spouse and which funding payments were not excluded from federal adjusted gross
5.5income in the years when the payments were made;
5.6    (c) to the extent included in federal adjusted gross income, amounts contributed by
5.7the claimant or spouse to a traditional or Roth style retirement account or plan, but not
5.8to exceed the retirement base amount reduced by the amount of contributions excluded
5.9from federal adjusted gross income, but not less than zero;
5.10    (d) surplus food or other relief in kind supplied by a governmental agency;
5.11    (d) (e) relief granted under this chapter;
5.12    (e) (f) child support payments received under a temporary or final decree of
5.13dissolution or legal separation; or
5.14    (f) (g) restitution payments received by eligible individuals and excludable interest
5.15as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
5.162001, Public Law 107-16.
5.17    (3) The sum of the following amounts may be subtracted from income:
5.18    (a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
5.19    (b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
5.20    (c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
5.21    (d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
5.22    (e) for the claimant's fifth dependent, the exemption amount; and
5.23    (f) if the claimant or claimant's spouse was disabled or attained the age of 65
5.24on or before December 31 of the year for which the taxes were levied or rent paid, the
5.25exemption amount.
5.26    For purposes of this subdivision, the "exemption amount" means the exemption
5.27amount under section 151(d) of the Internal Revenue Code for the taxable year for which
5.28the income is reported; "retirement base amount" means the deductible amount for the
5.29taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal
5.30Revenue Code, adjusted for inflation as provided in section 219(b)(5)(D) of the Internal
5.31Revenue Code, without regard to whether the claimant or spouse claimed a deduction;
5.32and "traditional or Roth style retirement account or plan" means retirement plans under
5.33sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.
5.34EFFECTIVE DATE.This section is effective beginning with refunds based on
5.35property taxes payable in 2014 and rent paid in 2013.

6.1    Sec. 2. Minnesota Statutes 2012, section 290A.04, subdivision 2, is amended to read:
6.2    Subd. 2. Homeowners; homestead credit refund. A claimant whose property
6.3taxes payable are in excess of the percentage of the household income stated below shall
6.4pay an amount equal to the percent of income shown for the appropriate household
6.5income level along with the percent to be paid by the claimant of the remaining amount
6.6of property taxes payable. The state refund equals the amount of property taxes payable
6.7that remain, up to the state refund amount shown below.
6.8
6.9
6.10
Household Income
Percent of Income
Percent Paid by
Claimant
Maximum
State
Refund
6.11
$0 to 1,549
1.0 percent
15 percent
$
2,460
6.12
1,550 to 3,089
1.1 percent
15 percent
$
2,460
6.13
3,090 to 4,669
1.2 percent
15 percent
$
2,460
6.14
4,670 to 6,229
1.3 percent
20 percent
$
2,460
6.15
6,230 to 7,769
1.4 percent
20 percent
$
2,460
6.16
7,770 to 10,879
1.5 percent
20 percent
$
2,460
6.17
10,880 to 12,429
1.6 percent
20 percent
$
2,460
6.18
12,430 to 13,989
1.7 percent
20 percent
$
2,460
6.19
13,990 to 15,539
1.8 percent
20 percent
$
2,460
6.20
15,540 to 17,079
1.9 percent
25 percent
$
2,460
6.21
17,080 to 18,659
2.0 percent
25 percent
$
2,460
6.22
18,660 to 21,759
2.1 percent
25 percent
$
2,460
6.23
21,760 to 23,309
2.2 percent
30 percent
$
2,460
6.24
23,310 to 24,859
2.3 percent
30 percent
$
2,460
6.25
24,860 to 26,419
2.4 percent
30 percent
$
2,460
6.26
26,420 to 32,629
2.5 percent
35 percent
$
2,460
6.27
32,630 to 37,279
2.6 percent
35 percent
$
2,460
6.28
37,280 to 46,609
2.7 percent
35 percent
$
2,000
6.29
46,610 to 54,369
2.8 percent
35 percent
$
2,000
6.30
54,370 to 62,139
2.8 percent
40 percent
$
1,750
6.31
62,140 to 69,909
3.0 percent
40 percent
$
1,440
6.32
69,910 to 77,679
3.0 percent
40 percent
$
1,290
6.33
77,680 to 85,449
3.0 percent
40 percent
$
1,130
6.34
85,450 to 90,119
3.5 percent
45 percent
$
960
6.35
90,120 to 93,239
3.5 percent
45 percent
$
790
6.36
93,240 to 97,009
3.5 percent
50 percent
$
650
6.37
97,010 to 100,779
3.5 percent
50 percent
$
480
6.38
6.39
6.40
Household Income
Percent of Income
Percent Paid by
Claimant
Maximum
State
Refund
6.41
$0 to 1,619
1.0 percent
15 percent
$
2,580
6.42
1,620 to 3,229
1.1 percent
15 percent
$
2,580
7.1
3,230 to 4,889
1.2 percent
15 percent
$
2,580
7.2
4,890 to 6,519
1.3 percent
20 percent
$
2,580
7.3
6,520 to 8,129
1.4 percent
20 percent
$
2,580
7.4
8,130 to 11,389
1.5 percent
20 percent
$
2,580
7.5
11,390 to 13,009
1.6 percent
20 percent
$
2,580
7.6
13,010 to 14,649
1.7 percent
20 percent
$
2,580
7.7
14,650 to 16,269
1.8 percent
20 percent
$
2,580
7.8
16,270 to 17,879
1.9 percent
25 percent
$
2,580
7.9
17,880 to 22,779
2.0 percent
25 percent
$
2,580
7.10
22,780 to 24,399
2.0 percent
30 percent
$
2,580
7.11
24,400 to 27,659
2.0 percent
30 percent
$
2,580
7.12
27,660 to 39,029
2.0 percent
35 percent
$
2,580
7.13
39,030 to 56,919
2.0 percent
35 percent
$
2,090
7.14
56,920 to 65,049
2.0 percent
40 percent
$
1,830
7.15
65,050 to 73,189
2.1 percent
40 percent
$
1,510
7.16
73,190 to 81,319
2.2 percent
40 percent
$
1,350
7.17
81,320 to 89,449
2.3 percent
40 percent
$
1,180
7.18
89,450 to 94,339
2.4 percent
45 percent
$
1,000
7.19
94,340 to 97,609
2.5 percent
45 percent
$
830
7.20
97,610 to 101,559
2.5 percent
50 percent
$
680
7.21
101,560 to 105,499
2.5 percent
50 percent
$
500
7.22    The payment made to a claimant shall be the amount of the state refund calculated
7.23under this subdivision. No payment is allowed if the claimant's household income is
7.24$100,780 $105,500 or more.
7.25EFFECTIVE DATE.This section is effective for refund claims based on taxes
7.26payable in 2014 and thereafter.

7.27    Sec. 3. Minnesota Statutes 2012, section 290A.04, subdivision 2a, is amended to read:
7.28    Subd. 2a. Renters. A claimant whose rent constituting property taxes exceeds the
7.29percentage of the household income stated below must pay an amount equal to the percent
7.30of income shown for the appropriate household income level along with the percent to
7.31be paid by the claimant of the remaining amount of rent constituting property taxes. The
7.32state refund equals the amount of rent constituting property taxes that remain, up to the
7.33maximum state refund amount shown below.
7.34
7.35
7.36
Household Income
Percent of Income
Percent Paid by
Claimant
Maximum
State
Refund
7.37
$0 to 3,589
1.0 percent
5 percent
$
1,190
7.38
3,590 to 4,779
1.0 percent
10 percent
$
1,190
8.1
4,780 to 5,969
1.1 percent
10 percent
$
1,190
8.2
5,970 to 8,369
1.2 percent
10 percent
$
1,190
8.3
8,370 to 10,759
1.3 percent
15 percent
$
1,190
8.4
10,760 to 11,949
1.4 percent
15 percent
$
1,190
8.5
11,950 to 13,139
1.4 percent
20 percent
$
1,190
8.6
13,140 to 15,539
1.5 percent
20 percent
$
1,190
8.7
15,540 to 16,729
1.6 percent
20 percent
$
1,190
8.8
16,730 to 17,919
1.7 percent
25 percent
$
1,190
8.9
17,920 to 20,319
1.8 percent
25 percent
$
1,190
8.10
20,320 to 21,509
1.9 percent
30 percent
$
1,190
8.11
21,510 to 22,699
2.0 percent
30 percent
$
1,190
8.12
22,700 to 23,899
2.2 percent
30 percent
$
1,190
8.13
23,900 to 25,089
2.4 percent
30 percent
$
1,190
8.14
25,090 to 26,289
2.6 percent
35 percent
$
1,190
8.15
26,290 to 27,489
2.7 percent
35 percent
$
1,190
8.16
27,490 to 28,679
2.8 percent
35 percent
$
1,190
8.17
28,680 to 29,869
2.9 percent
40 percent
$
1,190
8.18
29,870 to 31,079
3.0 percent
40 percent
$
1,190
8.19
31,080 to 32,269
3.1 percent
40 percent
$
1,190
8.20
32,270 to 33,459
3.2 percent
40 percent
$
1,190
8.21
33,460 to 34,649
3.3 percent
45 percent
$
1,080
8.22
34,650 to 35,849
3.4 percent
45 percent
$
960
8.23
35,850 to 37,049
3.5 percent
45 percent
$
830
8.24
37,050 to 38,239
3.5 percent
50 percent
$
720
8.25
38,240 to 39,439
3.5 percent
50 percent
$
600
8.26
38,440 to 40,629
3.5 percent
50 percent
$
360
8.27
40,630 to 41,819
3.5 percent
50 percent
$
120
8.28
$0 to 4,909
1.0 percent
5 percent
$
2,000
8.29
4,910 to 6,529
1.0 percent
10 percent
$
2,000
8.30
6,530 to 8,159
1.1 percent
10 percent
$
1,950
8.31
8,160 to 11,439
1.2 percent
10 percent
$
1,900
8.32
11,440 to 14,709
1.3 percent
15 percent
$
1,850
8.33
14,710 to 16,339
1.4 percent
15 percent
$
1,800
8.34
16,340 to 17,959
1.4 percent
20 percent
$
1,750
8.35
17,960 to 21,239
1.5 percent
20 percent
$
1,700
8.36
21,240 to 22,869
1.6 percent
20 percent
$
1,650
8.37
22,870 to 24,499
1.7 percent
25 percent
$
1,650
8.38
24,500 to 27,779
1.8 percent
25 percent
$
1,650
8.39
27,780 to 29,399
1.9 percent
30 percent
$
1,650
8.40
29,400 to 34,299
2.0 percent
30 percent
$
1,650
8.41
34,300 to 39,199
2.0 percent
35 percent
$
1,650
8.42
39,200 to 45,739
2.0 percent
40 percent
$
1,650
8.43
45,740 to 47,369
2.0 percent
45 percent
$
1,500
9.1
47,370 to 49,009
2.0 percent
45 percent
$
1,350
9.2
49,010 to 50,649
2.0 percent
45 percent
$
1,150
9.3
50,650 to 52,269
2.0 percent
50 percent
$
1,000
9.4
52,270 to 53,909
2.0 percent
50 percent
$
900
9.5
53,910 to 55,539
2.0 percent
50 percent
$
500
9.6
55,540 to 57,169
2.0 percent
50 percent
$
200
9.7    The payment made to a claimant is the amount of the state refund calculated under
9.8this subdivision. No payment is allowed if the claimant's household income is $41,820
9.9 $57,170 or more.
9.10EFFECTIVE DATE.This section is effective for claims based on rent paid in
9.112013 and following years.

9.12    Sec. 4. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read:
9.13    Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in
9.14calendar year 2002, the commissioner shall annually adjust the dollar amounts of the
9.15income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation.
9.16The commissioner shall make the inflation adjustments in accordance with section 1(f) of
9.17the Internal Revenue Code, except that for purposes of this subdivision the percentage
9.18increase shall be determined as provided in this subdivision.
9.19    (b) In adjusting the dollar amounts of the income thresholds and the maximum
9.20refunds under subdivision 2 for inflation, the percentage increase shall be determined
9.21from the year ending on June 30, 2011 2013, to the year ending on June 30 of the year
9.22preceding that in which the refund is payable.
9.23    (c) In adjusting the dollar amounts of the income thresholds and the maximum
9.24refunds under subdivision 2a for inflation, the percentage increase shall be determined
9.25from the year ending on June 30, 2000 2013, to the year ending on June 30 of the year
9.26preceding that in which the refund is payable.
9.27    (d) The commissioner shall use the appropriate percentage increase to annually
9.28adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for
9.29inflation without regard to whether or not the income tax brackets are adjusted for inflation
9.30in that year. The commissioner shall round the thresholds and the maximum amounts,
9.31as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
9.32round it up to the next $10 amount.
9.33    (e) The commissioner shall annually announce the adjusted refund schedule at the
9.34same time provided under section 290.06. The determination of the commissioner under
9.35this subdivision is not a rule under the Administrative Procedure Act.
10.1EFFECTIVE DATE.This section is effective for refund claims based on taxes
10.2payable in 2014 and rent paid in 2013 and following years.

10.3    Sec. 5. [290A.28] NOTIFICATION OF POTENTIAL ELIGIBILITY.
10.4    Subdivision 1. Notification of eligibility. (a) By September 1, 2014, the
10.5commissioner shall notify, in writing or electronically, individual homeowners whom the
10.6commissioner determines may be eligible for a homestead credit refund under this chapter
10.7for that property taxes payable year as provided in this section. In determining whether
10.8to notify a homeowner, the commissioner shall consider the property tax information
10.9available to the commissioner under paragraph (b) for the homeowner and must estimate
10.10the homeowner's household income using the most recent income information available to
10.11the commissioner from filing under this chapter for the prior year, under chapter 290 for
10.12the current or prior year, and any other income information available to the commissioner.
10.13For each homeowner, the commissioner must estimate the homestead credit refund
10.14amount under the schedule in section 290A.04, subdivision 2, using the homeowner's
10.15property tax amount and estimated household income. If the estimated homestead credit
10.16refund is at least $1,000, the commissioner must notify the homeowner of potential
10.17eligibility for the homestead credit refund. The notification must include information
10.18on how to file for the homestead credit refund. The notification requirement under this
10.19section does not apply to a homeowner who has already filed for the homestead credit
10.20refund for the current or prior year.
10.21    (b) By May 15, 2014, each county auditor shall transmit to the commissioner
10.22of revenue the following information for each property classified as a residential or
10.23agricultural homestead under section 273.13, subdivision 22 or 23:
10.24    (1) the property taxes payable;
10.25    (2) the name and address of the owner;
10.26    (3) the Social Security number or numbers of the owners; and
10.27    (4) any other information the commissioner deems necessary or useful to carry
10.28out the provisions of this section.
10.29The information must be provided in the form and manner prescribed by the commissioner.
10.30    Subd. 2. Reports. (a) By March 15, 2015, the commissioner must provide a written
10.31report to the chairs and ranking minority members of the legislative committees with
10.32jurisdiction over taxes, in compliance with sections 3.195 and 3.197. The report must
10.33provide information on the number and dollar amount of homeowner property tax refund
10.34claims based on taxes payable in 2014, including:
11.1    (1) the number and dollar amount of claims projected for homestead credit refunds
11.2based on taxes payable in 2014 prior to enactment of the notification requirement in
11.3this section;
11.4    (2) the number of notifications issued as provided in this section, including the
11.5number issued by county;
11.6    (3) preliminary information on the number and dollar amount of claims for
11.7homestead credit refunds based on taxes payable in 2014; and
11.8    (4) a description of any outreach efforts undertaken by the commissioner for
11.9homestead credit refunds based on taxes payable in 2014, in addition to the notification
11.10required in this section.
11.11    (b) By February 1, 2016, the commissioner must provide a written report to the chairs
11.12and ranking minority members of the legislative committees with jurisdiction over taxes,
11.13in compliance with sections 3.195 and 3.197. The report must include the information
11.14required in paragraph (a) and must also include final information on the number and dollar
11.15amount of claims for homestead credit refunds based on taxes payable in 2014.
11.16EFFECTIVE DATE.This section is effective for refund claims based on property
11.17taxes payable in 2014.

11.18ARTICLE 2
11.19PROPERTY TAX AIDS AND CREDITS

11.20    Section 1. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
11.21    Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
11.22class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
11.23is located in a border city that has an enterprise zone, as defined in section 469.166; (2)
11.24the property is located in a city with a population greater than 2,500 and less than 35,000
11.25according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
11.26immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
11.27in the other state has a population of greater than 5,000 and less than 75,000 according to
11.28the 1980 decennial census.
11.29    (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
11.30property to 2.3 1.9 percent of the property's market value and (ii) the tax on class 3a
11.31property to 2.3 1.9 percent of market value.
11.32    (c) The county auditor shall annually certify the costs of the credits to the
11.33Department of Revenue. The department shall reimburse local governments for the
11.34property taxes forgone as the result of the credits in proportion to their total levies.
12.1EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

12.2    Sec. 2. Minnesota Statutes 2012, section 290C.02, subdivision 6, is amended to read:
12.3    Subd. 6. Forest land. "Forest land" means land containing a minimum of 20
12.4contiguous acres for which the owner has implemented a forest management plan that was
12.5prepared or updated within the past ten years by an approved plan writer. For purposes of
12.6this subdivision, acres are considered to be contiguous even if they are separated by a road,
12.7waterway, railroad track, or other similar intervening property. At least 50 percent of the
12.8contiguous acreage must meet the definition of forest land in section 88.01, subdivision
12.97
. For the purposes of sections 290C.01 to 290C.11, forest land does not include (i)
12.10land used for residential or agricultural purposes, (ii) land enrolled in the reinvest in
12.11Minnesota program, a state or federal conservation reserve or easement reserve program
12.12under sections 103F.501 to 103F.531, the Minnesota agricultural property tax law under
12.13section 273.111, or land subject to agricultural land preservation controls or restrictions
12.14as defined in section 40A.02 or under the Metropolitan Agricultural Preserves Act under
12.15chapter 473H, or (iii) land exceeding 60,000 acres that is subject to a single conservation
12.16easement funded under section 97A.056 or a comparable permanent easement conveyed
12.17to a governmental or nonprofit entity; (iv) any land that becomes subject to a conservation
12.18easement funded under section 97A.056 or a comparable permanent easement conveyed
12.19to a governmental or nonprofit entity after May 30, 2013; or (v) land improved with a
12.20structure, pavement, sewer, campsite, or any road, other than a township road, used for
12.21purposes not prescribed in the forest management plan.
12.22EFFECTIVE DATE.This section is effective for certifications and applications
12.23due in 2013 and thereafter.

12.24    Sec. 3. Minnesota Statutes 2012, section 290C.03, is amended to read:
12.25290C.03 ELIGIBILITY REQUIREMENTS.
12.26(a) Land may be enrolled in the sustainable forest incentive program under this
12.27chapter if all of the following conditions are met:
12.28(1) the land consists of at least 20 contiguous acres and at least 50 percent of the
12.29land must meet the definition of forest land in section 88.01, subdivision 7, during the
12.30enrollment;
12.31(2) a forest management plan for the land must be prepared by an approved plan
12.32writer and implemented during the period in which the land is enrolled;
13.1(3) timber harvesting and forest management guidelines must be used in conjunction
13.2with any timber harvesting or forest management activities conducted on the land during
13.3the period in which the land is enrolled;
13.4(4) the land must be enrolled for a minimum of eight years;
13.5(5) there are no delinquent property taxes on the land; and
13.6(6) claimants enrolling more than 1,920 acres in the sustainable forest incentive
13.7program must allow year-round, nonmotorized access to fish and wildlife resources and
13.8motorized access on established and maintained roads and trails, unless the road or trail is
13.9temporarily closed for safety, natural resource, or road damage reasons on enrolled land
13.10except within one-fourth mile of a permanent dwelling or during periods of high fire
13.11hazard as determined by the commissioner of natural resources.
13.12(b) Claimants required to allow access under paragraph (a), clause (6), do not by
13.13that action:
13.14(1) extend any assurance that the land is safe for any purpose;
13.15(2) confer upon the person the legal status of an invitee or licensee to whom a duty
13.16of care is owed; or
13.17(3) assume responsibility for or incur liability for any injury to the person or property
13.18caused by an act or omission of the person.
13.19EFFECTIVE DATE.This section is effective for calculations made in 2013 and
13.20thereafter.

13.21    Sec. 4. Minnesota Statutes 2012, section 290C.055, is amended to read:
13.22290C.055 LENGTH OF COVENANT.
13.23(a) The covenant remains in effect for a minimum of eight years. If land is removed
13.24from the program before it has been enrolled for four years, the covenant remains in
13.25effect for eight years from the date recorded.
13.26(b) If land that has been enrolled for four years or more is removed from the program
13.27for any reason, there is a waiting period before the covenant terminates. The covenant
13.28terminates on January 1 of the fifth calendar year that begins after the date that:
13.29(1) the commissioner receives notification from the claimant that the claimant wishes
13.30to remove the land from the program under section 290C.10; or
13.31(2) the date that the land is removed from the program under section 290C.11.
13.32(c) Notwithstanding the other provisions of this section, the covenant is terminated:
13.33(1) at the same time that the land is removed from the program due to acquisition of
13.34title or possession for a public purpose under section 290C.10; or
14.1(2) at the request of the claimant after a reduction in payments due to changes in the
14.2payment formula under section 290C.07.
14.3EFFECTIVE DATE.This section is effective for calculations made in 2013 and
14.4thereafter.

14.5    Sec. 5. Minnesota Statutes 2012, section 290C.07, is amended to read:
14.6290C.07 CALCULATION OF INCENTIVE PAYMENT.
14.7    (a) An approved claimant under the sustainable forest incentive program is eligible
14.8to receive an annual payment. The payment shall equal $7 per acre for each acre enrolled
14.9in the sustainable forest incentive program.
14.10(b) The annual payment for each Social Security number or state or federal business
14.11tax identification number must not exceed $100,000.
14.12EFFECTIVE DATE.This section is effective for calculations made in 2013 and
14.13thereafter.

14.14    Sec. 6. [423A.022] POLICE AND FIREFIGHTER RETIREMENT
14.15SUPPLEMENTAL STATE AID.
14.16    Subdivision 1. Supplemental state aid. Annually, the commissioner of revenue
14.17shall allocate police and firefighter retirement supplemental state aid appropriated under
14.18subdivision 6 as provided in subdivision 2 and paid as provided in subdivision 4.
14.19    Subd. 2. Allocation. Of the total amount appropriated as supplemental state aid:
14.20    (1) 58.065 percent must be paid to the executive director of the Public Employees
14.21Retirement Association for deposit in the public employees police and fire retirement fund
14.22established by section 353.65, subdivision 1;
14.23    (2) 35.484 percent must be paid to municipalities other than municipalities solely
14.24employing firefighters with retirement coverage provided by the public employees police
14.25and fire retirement plan which qualified to receive fire state aid in that calendar year,
14.26allocated in proportion to the most recent amount of fire state aid paid under section
14.2769.021, subdivision 7, for the municipality bears to the most recent total fire state aid
14.28for all municipalities other than the municipalities solely employing firefighters with
14.29retirement coverage provided by the public employees police and fire retirement plan
14.30paid under section 69.021, subdivision 7, with the allocated amount for fire departments
14.31participating in the voluntary statewide lump-sum volunteer firefighter retirement plan
14.32paid to the executive director of the Public Employees Retirement Association for deposit
14.33in the fund established by section 353G.02, subdivision 3, and credited to the respective
15.1account and with the balance paid to the treasurer of each municipality for transmittal
15.2within 30 days of receipt to the treasurer of the applicable volunteer firefighter relief
15.3association for deposit in its special fund; and
15.4    (3) 6.452 percent must be paid to the executive director of the Minnesota State
15.5Retirement System for deposit in the state patrol retirement fund.
15.6    Subd. 3. Reporting; definitions. (a) On or before September 1, annually, the
15.7executive director of the Public Employees Retirement Association shall report to the
15.8commissioner of revenue the following:
15.9    (1) the municipalities which employ firefighters with retirement coverage by the
15.10public employees police and fire retirement plan;
15.11    (2) the number of firefighters with public employees police and fire retirement plan
15.12coverage employed by each municipality;
15.13    (3) the fire departments covered by the voluntary statewide lump-sum volunteer
15.14firefighter retirement plan; and
15.15    (4) any other information requested by the commissioner to administer the police
15.16and firefighter retirement supplemental state aid program.
15.17    (b) For this subdivision, (i) the number of firefighters employed by a municipality
15.18who have public employees police and fire retirement plan coverage means the number
15.19of firefighters with public employees police and fire retirement plan coverage that were
15.20employed by the municipality for not less than 30 hours per week for a minimum of six
15.21months prior to December 31 preceding the date of the payment under this section and, if
15.22the person was employed for less than the full year, prorated to the number of full months
15.23employed; and (ii) the number of active police officers certified for police state aid receipt
15.24under section 69.011, subdivisions 2 and 2b, means, for each municipality, the number of
15.25police officers meeting the definition of peace officer in section 69.011, subdivision 1,
15.26counted as provided and limited by section 69.011, subdivisions 2 and 2b.
15.27    Subd. 4. Payments; conditions prerequisite. (a) The payments under this section
15.28must be made on October 1 each year, with interest at one percent for each month, or
15.29portion of a month, that the amount remains unpaid after October 1. Any necessary
15.30adjustments must be made to subsequent payments.
15.31    (b) The provisions of sections 69.011 to 69.051 that prevent municipalities and relief
15.32associations from being eligible for, or receiving fire state aid under sections 69.011 to
15.3369.051 until the applicable financial reporting requirements have been complied with,
15.34apply to the amounts payable to municipalities and relief associations under this section.
15.35    Subd. 5. Aid termination. The aid program under this section ends on the
15.36December 1 next following the actuarial valuation date on which the assets of the
16.1retirement plan on a market value basis equals or exceeds 90 percent of the total
16.2actuarial accrued liabilities of the retirement plan as disclosed in an actuarial valuation
16.3prepared under section 356.215 and the Standards for Actuarial Work promulgated by the
16.4Legislative Commission on Pensions and Retirement, for the State Patrol retirement plan
16.5or the public employees police and fire retirement plan, whichever occurs last.
16.6    Subd. 6. Appropriation. $15,500,000 is appropriated annually to the commissioner
16.7of revenue for this aid program.
16.8EFFECTIVE DATE.This section is effective beginning in the fiscal year beginning
16.9July 1, 2013.

16.10    Sec. 7. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to read:
16.11    Subd. 30. Pre-1940 housing percentage. (a) Except as provided in paragraph (b),
16.12"pre-1940 housing percentage" for a city is 100 times the most recent federal census count
16.13by the United States Bureau of the Census of all housing units in the city built before
16.141940, divided by the total number of all housing units in the city. Housing units includes
16.15both occupied and vacant housing units as defined by the federal census. For aids payable
16.16in 2014, "pre-1940 housing percentage" shall be based on 2010 housing data.
16.17    (b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal
16.18to 100 times the 1990 federal census count of all housing units in the city built before
16.191940, divided by the most recent count by the United States Bureau of the Census of all
16.20housing units in the city. Housing units includes both occupied and vacant housing units
16.21as defined by the federal census.
16.22EFFECTIVE DATE.This section is effective for aids payable in calendar year
16.232014 and thereafter.

16.24    Sec. 8. Minnesota Statutes 2012, section 477A.011, is amended by adding a
16.25subdivision to read:
16.26    Subd. 30a. Percent of housing built between 1940 and 1970. "Percent of housing
16.27built between 1940 and 1970" is equal to 100 times the most recent count by the United
16.28States Bureau of the Census of all housing units in the city built after 1939 but before
16.291970, divided by the total number of all housing units in the city. Housing units includes
16.30both occupied and vacant housing units as defined by the federal census. For aids payable
16.31in 2014, "percent of housing built between 1940 and 1970" shall be based on 2010
16.32housing data.
17.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
17.22014 and thereafter.

17.3    Sec. 9. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:
17.4    Subd. 34. City revenue need. (a) For a city with a population equal to or greater
17.5than 2,500 10,000, "city revenue need" is the greater of 285 or 1.15 times the sum of (1)
17.65.0734098 4.59 times the pre-1940 housing percentage; plus (2) 19.141678 times the
17.7population decline percentage 0.622 times the percent of housing built between 1940 and
17.81970; plus (3) 2504.06334 times the road accidents factor 169.415 times the jobs per
17.9capita; plus (4) 355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638
17.10times the household size the sparsity adjustment; plus (5) 307.664.
17.11    (b) For a city with a population equal to or greater than 2,500 and less than 10,000,
17.12"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940
17.13housing percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak
17.14population decline.
17.15    (b) (c) For a city with a population less than 2,500, "city revenue need" is the sum of
17.16(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
17.17industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
17.181.206 times the transformed population; minus (5) 62.772 410 plus 0.367 times the city's
17.19population over 100. The city revenue need under this paragraph shall not exceed 630.
17.20    (c) (d) For a city with a population of at least 2,500 or more and a population in one
17.21of the most recently available five years that was less than 2,500, "city revenue need"
17.22is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its
17.23transition factor; plus (2) its city revenue need calculated under the formula in paragraph
17.24(b) multiplied by the difference between one and its transition factor. For purposes of this
17.25paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that
17.26the city's population estimate has been 2,500 or more. This provision only applies for aids
17.27payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500.
17.28It applies to any city for aids payable in 2009 and thereafter but less than 3,000, the "city
17.29revenue need" equals (1) the transition factor times the city's revenue need calculated in
17.30paragraph (b) plus (2) 630 times the difference between one and the transition factor. For
17.31a city with a population of at least 10,000 but less than 10,500, the "city revenue need"
17.32equals (1) the transition factor times the city's revenue need calculated in paragraph (a)
17.33plus (2) the city's revenue need calculated under the formula in paragraph (b) times the
17.34difference between one and the transition factor. For purposes of this paragraph "transition
18.1factor" is 0.2 percent times the amount that the city's population exceeds the minimum
18.2threshold in either of the first two sentences.
18.3    (d) (e) The city revenue need cannot be less than zero.
18.4    (e) (f) For calendar year 2005 2015 and subsequent years, the city revenue need for
18.5a city, as determined in paragraphs (a) to (d) (e), is multiplied by the ratio of the annual
18.6implicit price deflator for government consumption expenditures and gross investment for
18.7state and local governments as prepared by the United States Department of Commerce,
18.8for the most recently available year to the 2003 2013 implicit price deflator for state
18.9and local government purchases.
18.10EFFECTIVE DATE.This section is effective for aids payable in calendar year
18.112014 and thereafter.

18.12    Sec. 10. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:
18.13    Subd. 42. City jobs base Jobs per capita. (a) "City jobs base" for a city with a
18.14population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of
18.15jobs per capita in the city, and (3) its population. For cities with a population less than
18.165,000, the city jobs base is equal to zero. For a city receiving aid under subdivision 36,
18.17paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of
18.18aid received under that paragraph or $1,000,000. No city's city jobs base may exceed
18.19$4,725,000 under this paragraph.
18.20    (b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
18.21determined in paragraph (a), is multiplied by the ratio of the appropriation under section
18.22477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
18.23that section for aids payable in 2009.
18.24    (c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the
18.25average annual number of employees in the city based on the data from the Quarterly
18.26Census of Employment and Wages, as reported by the Department of Employment and
18.27Economic Development, for the most recent calendar year available as of May 1, 2008
18.28 November 1 of every odd-numbered year, divided by (2) the city's population for the
18.29same calendar year as the employment data. The commissioner of the Department of
18.30Employment and Economic Development shall certify to the city the average annual
18.31number of employees for each city by June 1, 2008 January 1, of every even-numbered
18.32year beginning with January 1, 2014. A city may challenge an estimate under this
18.33paragraph by filing its specific objection, including the names of employers that it feels
18.34may have misreported data, in writing with the commissioner by June 20, 2008 December
18.351 of every odd-numbered year. The commissioner shall make every reasonable effort
19.1to address the specific objection and adjust the data as necessary. The commissioner
19.2shall certify the estimates of the annual employment to the commissioner of revenue by
19.3July 15, 2008 January 1 of all even-numbered years, including any estimates still under
19.4objection. For aids payable in 2014, "jobs per capita" shall be based on the annual number
19.5of employees and population for calendar year 2010 without additional review.
19.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.72014 and thereafter.

19.8    Sec. 11. Minnesota Statutes 2012, section 477A.011, is amended by adding a
19.9subdivision to read:
19.10    Subd. 44. Peak population decline. "Peak population decline" is equal to 100
19.11times the difference between one and the ratio of the city's current population, to the
19.12highest city population reported in a federal census from the 1970 census or later. "Peak
19.13population decline" shall not be less than zero.
19.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.152014 and thereafter.

19.16    Sec. 12. Minnesota Statutes 2012, section 477A.011, is amended by adding a
19.17subdivision to read:
19.18    Subd. 45. Sparsity adjustment. For a city with a population of 10,000 or more, the
19.19sparsity adjustment is 100 for any city with an average population density less than 150
19.20per square mile, according to the most recent federal census, and the sparsity adjustment is
19.21zero for all other cities.
19.22EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.232014 and thereafter.

19.24    Sec. 13. Minnesota Statutes 2012, section 477A.013, subdivision 1, is amended to read:
19.25    Subdivision 1. Towns. In 2002, no town is eligible for a distribution under this
19.26subdivision. In 2014 and thereafter, each town is eligible for a distribution under this
19.27subdivision equal to the product of (i) its agricultural property factor, (ii) its town area
19.28factor, (iii) its population factor, and (iv) 0.0045. As used in this subdivision, the following
19.29terms have the meanings given them:
19.30(1) "agricultural property factor" means the ratio of the adjusted net tax capacity of
19.31agricultural property located in a town, divided by the adjusted net tax capacity of all other
19.32property located in the town. The agricultural property factor cannot exceed eight;
20.1(2) "agricultural property" means property classified under section 273.13, as
20.2homestead and nonhomestead agricultural property, rural vacant land, and noncommercial
20.3seasonal recreational property;
20.4(3) "town area factor" means the most recent estimate of total acreage, not to exceed
20.550,000 acres, located in the township available as of July 1 in the aid calculation year,
20.6estimated or established by:
20.7(i) the United States Bureau of the Census;
20.8(ii) the State Land Management Information Center; or
20.9(iii) the secretary of state; and
20.10(4) "population factor" means the square root of the towns' population.
20.11If the sum of the aids payable to all towns under this subdivision exceeds the limit
20.12under section 477A.03, subdivision 2c, the distribution to each town must be reduced
20.13proportionately so that the total amount of aids distributed under this section does not
20.14exceed the limit in section 477A.03, subdivision 2c.
20.15EFFECTIVE DATE.This section is effective for aids payable in calendar year
20.162014 and thereafter.

20.17    Sec. 14. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:
20.18    Subd. 8. City formula aid. (a) For aids payable in 2014 only, the formula aid for a
20.19city is equal to the sum of (1) its 2013 certified aid and (2) the product of (i) the difference
20.20between its unmet need and its 2013 certified aid and (ii) the aid gap percentage.
20.21    (b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to
20.22the sum of (1) its city jobs base, (2) its small city aid base, and (3) the need increase
20.23percentage multiplied by the average of its unmet need for the most recently available two
20.24years formula aid in the previous year and (2) the product of (i) the difference between
20.25its unmet need and its certified aid in the previous year under subdivision 9, and (ii)
20.26the aid gap percentage.
20.27No city may have a formula aid amount less than zero. The need increase aid gap
20.28 percentage must be the same for all cities.
20.29    The applicable need increase aid gap percentage must be calculated by the
20.30Department of Revenue so that the total of the aid under subdivision 9 equals the total
20.31amount available for aid under section 477A.03. Data used in calculating aids to cities
20.32under sections 477A.011 to 477A.013 shall be the most recently available data as of
20.33January 1 in the year in which the aid is calculated except that the data used to compute "net
20.34levy" in subdivision 9 is the data most recently available at the time of the aid computation.
21.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
21.22014 and thereafter.

21.3    Sec. 15. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:
21.4    Subd. 9. City aid distribution. (a) In calendar year 2013 2014 and thereafter, each
21.5city shall receive an aid distribution equal to the sum of (1) the city formula aid under
21.6subdivision 8, and (2) its city aid base aid adjustment under subdivision 13.
21.7    (b) For aids payable in 2013 and 2014 only, the total aid in the previous year for
21.8any city shall mean the amount of aid it was certified to receive for aids payable in 2012
21.9under this section. For aids payable in 2015 and thereafter, the total aid in the previous
21.10year for any city means the amount of aid it was certified to receive under this section in
21.11the previous payable year.
21.12    (c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
21.13the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
21.14plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
21.15aid for any city with a population of 2,500 or more may not be less than its total aid under
21.16this section in the previous year minus the lesser of $10 multiplied by its population, or ten
21.17percent of its net levy in the year prior to the aid distribution.
21.18    (d) (b) For aids payable in 2014 only, the total aid for a city may not be less than the
21.19amount it was certified to receive in 2013. For aids payable in 2010 2015 and thereafter,
21.20the total aid for a city with a population less than 2,500 must not be less than the amount
21.21it was certified to receive in the previous year minus the lesser of $10 multiplied by its
21.22population, or five percent of its 2003 certified aid amount. For aids payable in 2009 only,
21.23the total aid for a city with a population less than 2,500 must not be less than what it
21.24received under this section in the previous year unless its total aid in calendar year 2008
21.25was aid under section 477A.011, subdivision 36, paragraph (s), in which case its minimum
21.26aid is zero its net levy in the year prior to the aid distribution.
21.27    (e) A city's aid loss under this section may not exceed $300,000 in any year in
21.28which the total city aid appropriation under section 477A.03, subdivision 2a, is equal or
21.29greater than the appropriation under that subdivision in the previous year, unless the
21.30city has an adjustment in its city net tax capacity under the process described in section
21.31469.174, subdivision 28.
21.32    (f) If a city's net tax capacity used in calculating aid under this section has decreased
21.33in any year by more than 25 percent from its net tax capacity in the previous year due to
21.34property becoming tax-exempt Indian land, the city's maximum allowed aid increase
21.35under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
22.1year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
22.2resulting from the property becoming tax exempt.
22.3EFFECTIVE DATE.This section is effective for aids payable in calendar year
22.42014 and thereafter.

22.5    Sec. 16. Minnesota Statutes 2012, section 477A.013, is amended by adding a
22.6subdivision to read:
22.7    Subd. 13. Certified aid adjustments. (a) A city that received an aid base increase
22.8under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall
22.9have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids
22.10payable in 2014 through 2018.
22.11(b) A city that received an aid base increase under section 477A.011, subdivision 36,
22.12paragraph (r), shall have its total aid under subdivision 9 increased by an amount equal to
22.13$160,000 for aids payable in 2014 and thereafter.
22.14(c) A city that received a temporary aid increase under Minnesota Statutes 2012,
22.15section 477A.011, subdivision 36, paragraph (o), shall have its total aid under subdivision
22.169 increased by an amount equal to $1,000,000 for aids payable in 2014 only.

22.17    Sec. 17. Minnesota Statutes 2012, section 477A.015, is amended to read:
22.18477A.015 PAYMENT DATES.
22.19The commissioner of revenue shall make the payments of local government aid to
22.20affected taxing authorities in two installments on July 20 and December 26 annually.
22.21When the commissioner of public safety determines that a local government has
22.22suffered financial hardship due to a natural disaster, the commissioner of public safety
22.23shall notify the commissioner of revenue, who shall make payments of aids under sections
22.24477A.011 to 477A.014, which are otherwise due on December 26, as soon as is practical
22.25after the determination is made but not before July 20.
22.26The commissioner may pay all or part of the payments of aids under sections
22.27477A.011 to 477A.014, which are due on December 26 at any time after August 15 if a
22.28local government requests such payment as being necessary for meeting its cash flow
22.29needs. For aids payable in 2013 only, a city that is located in an area deemed a disaster
22.30area during the month of April 2013, as defined in section 12A.02, subdivision 5, shall
22.31receive its December 26, 2013 payment with its July 20, 2013 payment.
22.32EFFECTIVE DATE.This section is effective for aids payable in calendar year
22.332013 and thereafter.

23.1    Sec. 18. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
23.2    Subd. 2a. Cities. For aids payable in 2013 2014 and thereafter, the total aid paid
23.3under section 477A.013, subdivision 9, is $426,438,012 $507,598,012. The total aid paid
23.4under section 477A.013, subdivision 9, is $509,098,012 for aids payable in 2015. For aids
23.5payable in 2016 and thereafter, the total aid paid under section 477A.013, subdivision
23.69, is $511,598,012.
23.7EFFECTIVE DATE.This section is effective for aids payable in calendar year
23.82014 and thereafter.

23.9    Sec. 19. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read:
23.10    Subd. 2b. Counties. (a) For aids payable in 2013 2014 and thereafter, the total aid
23.11payable under section 477A.0124, subdivision 3, is $80,795,000 $100,795,000. Each
23.12calendar year, $500,000 of this appropriation shall be retained by the commissioner
23.13of revenue to make reimbursements to the commissioner of management and budget
23.14for payments made under section 611.27. For calendar year 2004, the amount shall
23.15be in addition to the payments authorized under section 477A.0124, subdivision 1.
23.16For calendar year 2005 and subsequent years, the amount shall be deducted from the
23.17appropriation under this paragraph. The reimbursements shall be to defray the additional
23.18costs associated with court-ordered counsel under section 611.27. Any retained amounts
23.19not used for reimbursement in a year shall be included in the next distribution of county
23.20need aid that is certified to the county auditors for the purpose of property tax reduction
23.21for the next taxes payable year.
23.22    (b) For aids payable in 2013 2014 and thereafter, the total aid under section
23.23477A.0124, subdivision 4 , is $84,909,575 $104,909,575. The commissioner of
23.24management and budget shall bill the commissioner of revenue shall transfer to the
23.25commissioner of management and budget $207,000 annually for the cost of preparation
23.26of local impact notes as required by section 3.987, not to exceed $207,000 in fiscal year
23.272004 and thereafter and other local government activities. The commissioner of education
23.28shall bill the commissioner of revenue for the cost of preparation of local impact notes for
23.29school districts as required by section 3.987, not to exceed $7,000 in fiscal year 2004 and
23.30thereafter shall transfer to the commissioner of education $7,000 annually for the cost of
23.31preparation of local impact notes for school districts as required by section 3.987. The
23.32commissioner of revenue shall deduct the amounts billed transferred under this paragraph
23.33from the appropriation under this paragraph. The amounts deducted transferred are
23.34appropriated to the commissioner of management and budget and the commissioner of
23.35education for the preparation of local impact notes respectively.
24.1EFFECTIVE DATE.This section is effective for aid payable in 2014 and thereafter.

24.2    Sec. 20. Minnesota Statutes 2012, section 477A.03, is amended by adding a
24.3subdivision to read:
24.4    Subd. 2c. Towns. For aids payable in 2014, the total aids paid under section
24.5477A.013, subdivision 1, is limited to $10,000,000. For aids payable in 2015 and
24.6thereafter, the total aids paid under section 477A.013, subdivision 1, is limited to the
24.7amount certified to be paid in the previous year.
24.8EFFECTIVE DATE.This section is effective for aids payable in calendar year
24.92014 and thereafter.

24.10    Sec. 21. [477A.085] DEBT SERVICE AID; CITY OF MINNEAPOLIS.
24.11On or before November 1, 2016, and the first day of each November thereafter, the
24.12commissioner shall pay to the city of Minneapolis an amount equal to 40 percent of the
24.13city's otherwise required levy to pay its general obligation library referendum bonds for
24.14the following calendar year. The levy excludes any amount to pay bonds, other than
24.15refunding bonds, issued after May 1, 2013. An amount sufficient to pay the aid under this
24.16section is appropriated from the general fund to the commissioner of revenue.

24.17    Sec. 22. [477A.10] NATURAL RESOURCES LAND PAYMENTS IN LIEU;
24.18PURPOSE.
24.19The purposes of sections 477A.11 to 477A.14 are:
24.20(1) to compensate local units of government for the loss of tax base from state
24.21ownership of land and the need to provide services for state land;
24.22(2) to address the disproportionate impact of state land ownership on local units of
24.23government with a large proportion of state land; and
24.24(3) to address the need to manage state lands held in trust for the local taxing districts.

24.25    Sec. 23. Minnesota Statutes 2012, section 477A.11, subdivision 3, is amended to read:
24.26    Subd. 3. Acquired natural resources land. "Acquired natural resources land"
24.27means:
24.28(1) any land, other than wildlife management land, presently administered by the
24.29commissioner in which the state acquired by purchase, condemnation, or gift, a fee title
24.30interest in lands which were previously privately owned; and
24.31(2) lands acquired by the state under chapter 84A that are designated as state parks,
24.32state recreation areas, scientific and natural areas, or wildlife management areas.
25.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.22013 and thereafter.

25.3    Sec. 24. Minnesota Statutes 2012, section 477A.11, subdivision 4, is amended to read:
25.4    Subd. 4. Other natural resources land. "Other natural resources land" means
25.5any other land, other than acquired natural resource land or wildlife management land,
25.6 presently owned in fee title by the state and administered by the commissioner, or
25.7any tax-forfeited land, other than platted lots within a city or those lands described
25.8under subdivision 3, clause (2), which is owned by the state and administered by the
25.9commissioner or by the county in which it is located.
25.10EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.112013 and thereafter.

25.12    Sec. 25. Minnesota Statutes 2012, section 477A.11, is amended by adding a
25.13subdivision to read:
25.14    Subd. 6. Military game refuge. "Military game refuge" means land owned in
25.15fee by another state agency for military purposes and designated as a state game refuge
25.16under section 97A.085.
25.17EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.182013 and thereafter.

25.19    Sec. 26. Minnesota Statutes 2012, section 477A.11, is amended by adding a
25.20subdivision to read:
25.21    Subd. 7. Transportation wetland. "Transportation wetland" means land
25.22administered by the Department of Transportation in which the state acquired, by purchase
25.23from a private owner, a fee title interest in over 500 acres of land within a county to
25.24replace wetland losses from transportation projects.
25.25EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.262013 and thereafter.

25.27    Sec. 27. Minnesota Statutes 2012, section 477A.11, is amended by adding a
25.28subdivision to read:
25.29    Subd. 8. Wildlife management land. "Wildlife management land" means land
25.30administered by the commissioner in which the state acquired, from a private owner by
26.1purchase, condemnation, or gift, a fee interest under the authority granted in chapter 94 or
26.297A for wildlife management purposes and actually used as a wildlife management area.
26.3EFFECTIVE DATE.This section is effective for aids payable in calendar year
26.42013 and thereafter.

26.5    Sec. 28. Minnesota Statutes 2012, section 477A.12, subdivision 1, is amended to read:
26.6    Subdivision 1. Types of land; payments. (a) As an offset for expenses incurred
26.7by counties and towns in support of natural resources lands, The following amounts are
26.8annually appropriated to the commissioner of natural resources from the general fund for
26.9transfer to the commissioner of revenue. The commissioner of revenue shall pay the
26.10transferred funds to counties as required by sections 477A.11 to 477A.14. The amounts,
26.11based on the acreage as of July 1 of each year prior to the payment year, are:
26.12(1) for acquired natural resources land, $5.133 multiplied by the total number of acres
26.13of acquired natural resources land or, at the county's option three-fourths of one percent of
26.14the appraised value of all acquired natural resources land in the county, whichever is greater;
26.15(2) $5.133, multiplied by the total number of acres of transportation wetland or, at
26.16the county's option, three-fourths of one percent of the appraised value of all acquired
26.17natural resources land in the county, whichever is greater;
26.18(3) three-fourths of one percent of the appraised value of all wildlife management
26.19land in the county;
26.20(4) 50 percent of the dollar amount as determined under clause (1), multiplied by
26.21the number of acres of military refuge land in the county;
26.22$1.283 (5) $1.50, multiplied by the number of acres of county-administered other
26.23natural resources land in the county;
26.24(3) $1.283 (6) $5.133, multiplied by the total number of acres of land utilization
26.25project land in the county; and
26.26(4) 64.2 cents (7) $1.50, multiplied by the number of acres of
26.27commissioner-administered other natural resources land located in each the county as of
26.28July 1 of each year prior to the payment year.; and
26.29    (8) without regard to acreage, $300,000 for local assessments under section 84A.55,
26.30subdivision 9.
26.31(b) The amount determined under paragraph (a), clause (1), is payable for land
26.32that is acquired from a private owner and owned by the Department of Transportation
26.33for the purpose of replacing wetland losses caused by transportation projects, but only
26.34if the county contains more than 500 acres of such land at the time the certification is
26.35made under subdivision 2.
27.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
27.22013 and thereafter.

27.3    Sec. 29. Minnesota Statutes 2012, section 477A.12, subdivision 2, is amended to read:
27.4    Subd. 2. Procedure. Lands for which payments in lieu are made pursuant to
27.5section 97A.061, subdivision 3, and Laws 1973, chapter 567, shall not be eligible for
27.6payments under this section. Each county auditor shall certify to the Department of
27.7Natural Resources during July of each year prior to the payment year the number of acres
27.8of county-administered other natural resources land within the county. The Department of
27.9Natural resources may, in addition to the certification of acreage, require descriptive lists
27.10of land so certified. The commissioner of natural resources shall determine and certify to
27.11the commissioner of revenue by March 1 of the payment year:
27.12(1) the number of acres and most recent appraised value of acquired natural
27.13resources land, wildlife management land, and military refuge land within each county;
27.14(2) the number of acres of commissioner-administered natural resources land within
27.15each county;
27.16(3) the number of acres of county-administered other natural resources land within
27.17each county, based on the reports filed by each county auditor with the commissioner
27.18of natural resources; and
27.19(4) the number of acres of land utilization project land within each county.
27.20The commissioner of transportation shall determine and certify to the commissioner
27.21of revenue by March 1 of the payment year the number of acres of land transportation
27.22wetland and the appraised value of the land described in subdivision 1, paragraph (b), but
27.23only if it exceeds 500 acres in a county.
27.24The commissioner of revenue shall determine the distributions provided for in this
27.25section using the number of acres and appraised values certified by the commissioner of
27.26natural resources and the commissioner of transportation by March 1 of the payment year.
27.27EFFECTIVE DATE.This section is effective for aids payable in calendar year
27.282013 and thereafter.

27.29    Sec. 30. Minnesota Statutes 2012, section 477A.12, subdivision 3, is amended to read:
27.30    Subd. 3. Determination of appraised value. For the purposes of this section, the
27.31appraised value of acquired natural resources land is the purchase price for the first five
27.32years after acquisition until the next six-year appraisal required under this subdivision.
27.33The appraised value of acquired natural resources land received as a donation is the value
27.34determined for the commissioner of natural resources by a licensed appraiser, or the
28.1county assessor's estimated market value if no appraisal is done. The appraised value must
28.2be determined by the county assessor every five six years after the land is acquired. All
28.3reappraisals shall be done in the same year as county assessors are required to assess
28.4exempt land under section 273.18.
28.5EFFECTIVE DATE.This section is effective for aids payable in calendar year
28.62013 and thereafter.

28.7    Sec. 31. Minnesota Statutes 2012, section 477A.14, subdivision 1, is amended to read:
28.8    Subdivision 1. General distribution. Except as provided in subdivision 2 or in
28.9section 97A.061, subdivision 5 subdivisions 2 and 3, 40 percent of the total payment to
28.10the county shall be deposited in the county general revenue fund to be used to provide
28.11property tax levy reduction. The remainder shall be distributed by the county in the
28.12following priority:
28.13(a) 64.2 cents, for each acre of county-administered other natural resources land shall
28.14be deposited in a resource development fund to be created within the county treasury for
28.15use in resource development, forest management, game and fish habitat improvement, and
28.16recreational development and maintenance of county-administered other natural resources
28.17land. Any county receiving less than $5,000 annually for the resource development fund
28.18may elect to deposit that amount in the county general revenue fund;
28.19(b) from the funds remaining, within 30 days of receipt of the payment to the county,
28.20the county treasurer shall pay each organized township 51.3 cents for each acre of acquired
28.21natural resources land and each acre of land described in section 477A.12, subdivision 1,
28.22paragraph (b), and 12.8 cents for each acre of other natural resources land and each acre of
28.23land utilization project land located within its boundaries ten percent of the amount received
28.24under section 477A.12, subdivision 1, clauses (1), (2), and (5) to (7). Payments for natural
28.25resources lands not located in an organized township shall be deposited in the county
28.26general revenue fund. Payments to counties and townships pursuant to this paragraph shall
28.27be used to provide property tax levy reduction, except that of the payments for natural
28.28resources lands not located in an organized township, the county may allocate the amount
28.29determined to be necessary for maintenance of roads in unorganized townships. Provided
28.30that, if the total payment to the county pursuant to section 477A.12 is not sufficient to fully
28.31fund the distribution provided for in this clause, the amount available shall be distributed
28.32to each township and the county general revenue fund on a pro rata basis; and
28.33(c) any remaining funds shall be deposited in the county general revenue fund.
28.34Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
28.35excess shall be used to provide property tax levy reduction.
29.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
29.22013 and thereafter.

29.3    Sec. 32. Minnesota Statutes 2012, section 477A.14, is amended by adding a
29.4subdivision to read:
29.5    Subd. 3. Distribution for wildlife management lands and military refuge lands.
29.6(a) The county treasurer shall allocate the payment for wildlife management land and
29.7military game refuge land among the county, towns, and school districts on the same basis
29.8as if the payments were taxes on the land received in the year. Payment of a town's or a
29.9school district's allocation must be made by the county treasurer to the town or school
29.10district within 30 days of receipt of the payment to the county. The county's share of the
29.11payment shall be deposited in the county general revenue fund.
29.12(b) The county treasurer of a county with a population over 39,000, but less than
29.1342,000, in the 1950 federal census shall allocate the payment only among the towns and
29.14school districts on the same basis as if the payments were taxes on the lands received
29.15in the current year.
29.16(c) If a town received a payment in calendar year 2006 or thereafter under this
29.17subdivision, and subsequently incorporated as a city, the city shall continue to receive any
29.18future year's allocations of wildlife land payments that would have been made to the town
29.19had it not incorporated, provided that the payments shall terminate if the governing body
29.20of the city passes an ordinance that prohibits hunting within the boundaries of the city.
29.21EFFECTIVE DATE.This section is effective for aids payable in calendar year
29.222013 and thereafter.

29.23    Sec. 33. Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008,
29.24chapter 154, article 1, section 4, is amended to read:
29.25    Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
29.26PROPERTY TAX REIMBURSEMENT.
29.27    Subdivision 1. Aid appropriation. $600,000 $1,200,000 is appropriated annually
29.28from the general fund to the commissioner of revenue to be used to make payments to
29.29compensate for the loss of property tax revenue related to the trust conversion application
29.30of the Shooting Star Casino. The commissioner shall pay the county of Mahnomen,
29.31$450,000 $900,000; the city of Mahnomen, $80,000 $160,000; and Independent School
29.32District No. 432, Mahnomen, $70,000 $140,000. The payments shall be made on July 20,
29.33of 2008 2013 and each subsequent year.
30.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.22013 and thereafter.

30.3    Sec. 34. INELIGIBILITY; SUSTAINABLE FOREST INCENTIVE PROGRAM.
30.4Lands that no longer qualify as forest land under Minnesota Statutes, section
30.5290C.02, subdivision 6, item (iii), are released from the covenant required under
30.6Minnesota Statutes, section 290C.04.
30.7EFFECTIVE DATE.This section is effective the day following final enactment.

30.8    Sec. 35. REENROLLMENT; SUSTAINABLE FOREST INCENTIVE
30.9PROGRAM.
30.10A person who elected to terminate participation in the sustainable forest incentive
30.11program, as provided in Laws 2011, First Special Session chapter 7, article 6, section 12,
30.12may reenroll lands for which the claimant terminated participation and be eligible for a
30.13payment in October 2013. A person must apply for reenrollment under this section within
30.1460 days after the effective date of this section.
30.15EFFECTIVE DATE.This section is effective the day following final enactment.

30.16    Sec. 36. REPEALER.
30.17(a) Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
30.1836, 39, 40, and 41; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
30.19repealed.
30.20(b) Minnesota Statutes 2012, section 97A.061, and Laws 1973, chapter 567, section
30.217, as amended by Laws 1977, chapter 403, section 12, are repealed on July 1, 2013.
30.22EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.232014 and thereafter.

30.24ARTICLE 3
30.25EDUCATION AIDS AND LEVIES

30.26    Section 1. [124D.862] ACHIEVEMENT AND INTEGRATION REVENUE.
30.27    Subdivision 1. Initial achievement and integration revenue. (a) An eligible
30.28district's initial achievement and integration revenue equals the sum of (1) $350 times
30.29the district's adjusted pupil units for that year times the ratio of the district's enrollment
30.30of protected students for the previous school year to total enrollment for the previous
31.1school year and (2) the greater of zero or 66 percent of the difference between the district's
31.2integration revenue for fiscal year 2013 and the district's integration revenue for fiscal
31.3year 2014 under clause (1).
31.4(b) In each year, 0.3 percent of each district's initial achievement and integration
31.5revenue is transferred to the department for the oversight and accountability activities
31.6required under this section and section 124D.861.
31.7    Subd. 2. Incentive revenue. An eligible school district's maximum incentive
31.8revenue equals $10 per adjusted pupil unit. In order to receive this revenue, a district must
31.9be implementing a voluntary plan to reduce racial and economic enrollment disparities
31.10through intradistrict and interdistrict activities that have been approved as a part of the
31.11district's achievement and integration plan.
31.12    Subd. 3. Achievement and integration revenue. Achievement and integration
31.13revenue equals the sum of initial achievement and integration revenue and incentive
31.14revenue.
31.15    Subd. 4. Achievement and integration aid. For fiscal year 2015 and later,
31.16a district's achievement and integration aid equals 70 percent of its achievement and
31.17integration revenue.
31.18    Subd. 5. Achievement and integration levy. A district's achievement and
31.19integration levy equals its achievement and integration revenue times 30 percent. For
31.20Special School District No. 1, Minneapolis; Independent School District No. 625, St.
31.21Paul; and Independent School District No. 709, Duluth, 100 percent of the levy certified
31.22under this subdivision is shifted into the prior calendar year for purposes of sections
31.23123B.75, subdivision 5, and 127A.441.
31.24    Subd. 6. Revenue uses. (a) At least 80 percent of a district's achievement and
31.25integration revenue received under this section must be used for innovative and integrated
31.26learning environments, school enrollment choices, family engagement activities, and other
31.27approved programs providing direct services to students.
31.28(b) Up to 20 percent of the revenue may be used for professional development and
31.29staff development activities and placement services.
31.30(c) No more than ten percent of the total amount of revenue may be spent on
31.31administrative services.
31.32    Subd. 7. Revenue reserved. Integration revenue received under this section must
31.33be reserved and used only for the programs authorized in subdivision 2.
31.34    Subd. 8. Commissioner authority to withhold revenue. (a) The commissioner
31.35must review the results of each district's integration and achievement plan by August 1 at
31.36the end of the third year of implementing the plan and determine if the district met its goals.
32.1(b) If a district met its goals, it may submit a new three-year plan to the commissioner
32.2for review.
32.3(c) If a district has not met its goals, the commissioner must:
32.4(1) develop a district improvement plan and timeline, in consultation with the
32.5affected district, that identifies strategies and practices designed to meet the district's goals
32.6under this section and section 120B.11; and
32.7(2) use up to 20 percent of the district's integration revenue, until the district's goals
32.8are reached, to implement the improvement plan.
32.9EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 and
32.10later. Subdivision 5 is effective for taxes payable in 2014 only.

32.11    Sec. 2. Minnesota Statutes 2012, section 126C.10, subdivision 1, is amended to read:
32.12    Subdivision 1. General education revenue. (a) For fiscal years 2013 and 2014, the
32.13general education revenue for each district equals the sum of the district's basic revenue,
32.14extended time revenue, gifted and talented revenue, small schools revenue, basic skills
32.15revenue, training and experience revenue, secondary sparsity revenue, elementary sparsity
32.16revenue, transportation sparsity revenue, total operating capital revenue, equity revenue,
32.17alternative teacher compensation revenue, and transition revenue.
32.18(b) For fiscal year 2015 and later, the general education revenue for each district
32.19equals the sum of the district's basic revenue, extended time revenue, gifted and
32.20talented revenue, declining enrollment revenue, location equity revenue, small schools
32.21revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity revenue,
32.22transportation sparsity revenue, total operating capital revenue, equity revenue, pension
32.23adjustment revenue, and transition revenue.

32.24    Sec. 3. Minnesota Statutes 2012, section 126C.10, is amended by adding a subdivision
32.25to read:
32.26    Subd. 2d. Location equity revenue. (a) For a school district with any of its area
32.27located within the seven-county metropolitan area, location equity revenue equals $424
32.28times the adjusted pupil units of the district for that school year.
32.29(b) For all other school districts with more than 2,000 pupils in adjusted average
32.30daily membership for the fiscal year ending in the year before the levy is certified, location
32.31equity revenue equals $212 times the adjusted pupil units of the district for that year.
32.32(c) A district's location equity levy equals its location equity revenue times the lesser
32.33of one or the ratio of its referendum market value per resident pupil unit to $510,000. The
32.34location equity revenue levy must be spread on referendum market value.
33.1(d) A district's location equity aid equals its location equity revenue less its location
33.2equity levy, times the ratio of the actual amount levied to the permitted levy.
33.3(e) A school district may elect not to participate in the location equity revenue
33.4program by a board vote taken prior to September 1 of the fiscal year before the fiscal year
33.5for which the decision not to participate becomes effective. The board resolution must
33.6state which fiscal years the district will not participate. A copy of the board resolution
33.7to not participate must be submitted to the commissioner.
33.8EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
33.9and later.

33.10    Sec. 4. Minnesota Statutes 2012, section 126C.13, subdivision 4, is amended to read:
33.11    Subd. 4. General education aid. (a) For fiscal years 2007 2013 and later 2014 only,
33.12a district's general education aid is the sum of the following amounts:
33.13    (1) general education revenue, excluding equity revenue, total operating capital
33.14revenue, alternative teacher compensation revenue, and transition revenue;
33.15    (2) operating capital aid under section 126C.10, subdivision 13b;
33.16    (3) equity aid under section 126C.10, subdivision 30;
33.17    (4) alternative teacher compensation aid under section 126C.10, subdivision 36;
33.18    (5) transition aid under section 126C.10, subdivision 33;
33.19    (6) shared time aid under section 126C.01, subdivision 7;
33.20    (7) referendum aid under section 126C.17, subdivisions 7 and 7a; and
33.21    (8) online learning aid according to section 124D.096.
33.22(b) For fiscal year 2015 and later, a district's general education aid equals:
33.23(1) general education revenue, excluding operating capital revenue, equity revenue,
33.24location equity revenue, and transition revenue, minus the student achievement levy,
33.25multiplied times the ratio of the actual amount of student achievement levy levied to the
33.26permitted student achievement levy; plus
33.27(2) equity aid under section 126C.10, subdivision 30; plus
33.28(3) transition aid under section 126C.10, subdivision 33; plus
33.29(4) shared time aid under section 126C.10, subdivision 7; plus
33.30(5) referendum aid under section 126C.17, subdivisions 7 and 7a;
33.31(6) online learning aid under section 124D.096; plus
33.32(7) location equity aid according to section 126C.10, subdivision 2d, paragraph (d).

34.1    Sec. 5. Minnesota Statutes 2012, section 126C.17, is amended to read:
34.2126C.17 REFERENDUM REVENUE.
34.3    Subdivision 1. Referendum allowance. (a) For fiscal year 2003 and later, a district's
34.4initial referendum revenue allowance equals the sum of the allowance under section
34.5126C.16, subdivision 2, plus any additional allowance per resident marginal cost pupil
34.6unit authorized under subdivision 9 before May 1, 2001, for fiscal year 2002 and later,
34.7plus the referendum conversion allowance approved under subdivision 13, minus $415.
34.8For districts with more than one referendum authority, the reduction must be computed
34.9separately for each authority. The reduction must be applied first to the referendum
34.10conversion allowance and next to the authority with the earliest expiration date. A
34.11district's initial referendum revenue allowance may not be less than zero.
34.12(b) For fiscal year 2003, a district's referendum revenue allowance equals the initial
34.13referendum allowance plus any additional allowance per resident marginal cost pupil unit
34.14authorized under subdivision 9 between April 30, 2001, and December 30, 2001, for
34.15fiscal year 2003 and later.
34.16(c) For fiscal year 2004 and later, a district's referendum revenue allowance equals
34.17the sum of:
34.18(1) the product of (i) the ratio of the resident marginal cost pupil units the district
34.19would have counted for fiscal year 2004 under Minnesota Statutes 2002, section 126C.05,
34.20to the district's resident marginal cost pupil units for fiscal year 2004, times (ii) the initial
34.21referendum allowance plus any additional allowance per resident marginal cost pupil unit
34.22authorized under subdivision 9 between April 30, 2001, and May 30, 2003, for fiscal
34.23year 2003 and later, plus
34.24(2) any additional allowance per resident marginal cost pupil unit authorized under
34.25subdivision 9 after May 30, 2003, for fiscal year 2005 and later.
34.26(a) A district's initial referendum allowance for fiscal year 2015 equals the result of
34.27the following calculations:
34.28(1) multiply the referendum allowance the district would have received for fiscal
34.29year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 1, based on
34.30elections held before July 1, 2013, by the resident marginal cost pupil units the district
34.31would have counted for fiscal year 2015 under Minnesota Statutes 2012, section 126C.05;
34.32(2) add to the result of clause (1) the adjustment the district would have received
34.33under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and
34.34(c), based on elections held before July 1, 2013;
34.35(3) divide the result of clause (2) by the district's adjusted pupil units for fiscal
34.36year 2015; and
35.1(4) if the result of clause (3) is less than zero, set the allowance to zero.
35.2(b) A district's referendum allowance equals the sum of the district's initial
35.3referendum allowance for fiscal year 2015, plus any additional referendum allowance per
35.4adjusted pupil unit authorized after June 30, 2013, minus (i) the location equity revenue
35.5subtraction, and (ii) any allowances expiring in fiscal year 2016 or later, provided that
35.6the allowance may not be less than zero. For a district with more than one referendum
35.7allowance for fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, the
35.8allowance calculated under paragraph (a) must be divided into components such that the
35.9same percentage of the district's allowance expires at the same time as the old allowances
35.10would have expired under Minnesota Statutes 2012, section 126C.17.
35.11(c) For purposes of this subdivision, a district's location equity revenue subtraction
35.12equals $424 for a district receiving location equity revenue under section 126C.10,
35.13subdivision 2d, paragraph (a), $212 for a district receiving location equity revenue under
35.14section 126C.10, subdivision 2d, paragraph (b), and zero for all other school districts.
35.15    Subd. 2. Referendum allowance limit. (a) Notwithstanding subdivision 1, for fiscal
35.16year 2007 2015 and later, a district's referendum allowance must not exceed the greater of:
35.17(1) the sum of: (i) a district's referendum allowance for fiscal year 1994 times 1.177
35.18times the annual inflationary increase as calculated under paragraph (b) plus (ii) its
35.19referendum conversion allowance for fiscal year 2003, minus (iii) $215;
35.20(2) the greater of (i): 26 percent of the formula allowance or (ii) $1,294 times the
35.21annual inflationary increase as calculated under paragraph (b); or times the greatest of:
35.22(1) $1,845;
35.23(2) the sum of the referendum revenue the district would have received for fiscal
35.24year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 4, based on
35.25elections held before July 1, 2013, and the adjustment the district would have received
35.26under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and
35.27(c), based on elections held before July 1, 2013, divided by the district's adjusted pupil
35.28units for fiscal year 2015; or
35.29(3) the product of the referendum allowance limit the district would have received
35.30for fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 2, and
35.31the resident marginal cost pupil units the district would have received for fiscal year 2015
35.32under Minnesota Statutes 2012, section 126C.05, subdivision 6, plus the adjustment the
35.33district would have received under Minnesota Statutes 2012, section 127A.47, subdivision
35.347, paragraphs (a), (b), and (c), based on elections held before July 1, 2013, divided by
35.35the district's adjusted pupil units for fiscal year 2015; minus $424 for a district receiving
35.36location equity revenue under section 126C.10, subdivision 2d, paragraph (a), minus
36.1$212 for a district receiving location equity revenue under section 126C.10, subdivision
36.22d, paragraph (b), or
36.3(3) (4) for a newly reorganized district created after July 1, 2006 2013, the referendum
36.4revenue authority for each reorganizing district in the year preceding reorganization divided
36.5by its resident marginal cost adjusted pupil units for the year preceding reorganization.
36.6(b) For purposes of this subdivision, for fiscal year 2005 2016 and later, "inflationary
36.7increase" means one plus the percentage change in the Consumer Price Index for urban
36.8consumers, as prepared by the United States Bureau of Labor Standards, for the current
36.9fiscal year to fiscal year 2004 2015. For fiscal years 2009 year 2016 and later, for purposes
36.10of paragraph (a), clause (1) (3), the inflationary increase equals the inflationary increase
36.11for fiscal year 2008 plus one-fourth of the percentage increase in the formula allowance
36.12for that year compared with the formula allowance for fiscal year 2008 2015.
36.13    Subd. 3. Sparsity exception. A district that qualifies for sparsity revenue under
36.14section 126C.10 is not subject to a referendum allowance limit.
36.15    Subd. 4. Total referendum revenue. The total referendum revenue for each district
36.16equals the district's referendum allowance times the resident marginal cost adjusted pupil
36.17units for the school year.
36.18    Subd. 5. Referendum equalization revenue. (a) For fiscal year 2003 and later,
36.19 A district's referendum equalization revenue equals the sum of the first tier referendum
36.20equalization revenue and the second tier referendum equalization revenue, and the third
36.21tier referendum equalization revenue.
36.22(b) A district's first tier referendum equalization revenue equals the district's first
36.23tier referendum equalization allowance times the district's resident marginal cost adjusted
36.24 pupil units for that year.
36.25(c) For fiscal year 2006, a district's first tier referendum equalization allowance
36.26equals the lesser of the district's referendum allowance under subdivision 1 or $500. For
36.27fiscal year 2007, a district's first tier referendum equalization allowance equals the lesser
36.28of the district's referendum allowance under subdivision 1 or $600.
36.29For fiscal year 2008 and later, A district's first tier referendum equalization allowance
36.30equals the lesser of the district's referendum allowance under subdivision 1 or $700 $300.
36.31(d) A district's second tier referendum equalization revenue equals the district's
36.32second tier referendum equalization allowance times the district's resident marginal cost
36.33 adjusted pupil units for that year.
36.34(e) For fiscal year 2006, a district's second tier referendum equalization allowance
36.35equals the lesser of the district's referendum allowance under subdivision 1 or 18.6
36.36percent of the formula allowance, minus the district's first tier referendum equalization
37.1allowance. For fiscal year 2007 and later, A district's second tier referendum equalization
37.2allowance equals the lesser of the district's referendum allowance under subdivision 1
37.3or 26 percent of the formula allowance $760, minus the district's first tier referendum
37.4equalization allowance.
37.5(f) Notwithstanding paragraph (e), the second tier referendum allowance for a
37.6district qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or
37.7elementary sparsity revenue under section 126C.10, subdivision 8, equals the district's
37.8referendum allowance under subdivision 1 minus the district's first tier referendum
37.9equalization allowance. A district's third tier referendum equalization revenue equals the
37.10district's third tier referendum equalization allowance times the district's adjusted pupil
37.11units for that year.
37.12(g) A district's third tier referendum equalization allowance equals the lesser of
37.13the district's referendum allowance under subdivision 1 or 25 percent of the formula
37.14allowance, minus the sum of the district's first tier referendum equalization allowance and
37.15second tier referendum equalization allowance.
37.16(h) Notwithstanding paragraph (g), the third tier referendum allowance for a district
37.17qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or
37.18elementary sparsity revenue under section 126C.10, subdivision 8, equals the district's
37.19referendum allowance under subdivision 1 minus the sum of the district's first tier
37.20referendum equalization allowance and second tier referendum equalization allowance.
37.21    Subd. 6. Referendum equalization levy. (a) For fiscal year 2003 and later,
37.22a district's referendum equalization levy equals the sum of the first tier referendum
37.23equalization levy and the second tier referendum equalization levy, and the third tier
37.24referendum equalization levy.
37.25(b) A district's first tier referendum equalization levy equals the district's first tier
37.26referendum equalization revenue times the lesser of one or the ratio of the district's
37.27referendum market value per resident marginal cost pupil unit to $476,000 $880,000.
37.28(c) A district's second tier referendum equalization levy equals the district's second
37.29tier referendum equalization revenue times the lesser of one or the ratio of the district's
37.30referendum market value per resident marginal cost pupil unit to $270,000 $510,000.
37.31(d) A district's third tier referendum equalization levy equals the district's third
37.32tier referendum equalization revenue times the lesser of one or the ratio of the district's
37.33referendum market value per resident pupil unit to $290,000.
37.34    Subd. 7. Referendum equalization aid. (a) A district's referendum equalization aid
37.35equals the difference between its referendum equalization revenue and levy.
38.1(b) If a district's actual levy for first or, second, or third tier referendum equalization
38.2revenue is less than its maximum levy limit for that tier, aid shall be proportionately
38.3reduced.
38.4(c) Notwithstanding paragraph (a), the referendum equalization aid for a district,
38.5where the referendum equalization aid under paragraph (a) exceeds 90 percent of the
38.6referendum revenue, must not exceed 26 25 percent of the formula allowance times the
38.7district's resident marginal cost adjusted pupil units. A district's referendum levy is
38.8increased by the amount of any reduction in referendum aid under this paragraph.
38.9    Subd. 7a. Referendum tax base replacement aid. For each school district that
38.10had a referendum allowance for fiscal year 2002 exceeding $415, for each separately
38.11authorized referendum levy, the commissioner of revenue, in consultation with the
38.12commissioner of education, shall certify the amount of the referendum levy in taxes
38.13payable year 2001 attributable to the portion of the referendum allowance exceeding $415
38.14levied against property classified as class 2, noncommercial 4c(1), or 4c(4), under section
38.15273.13 , excluding the portion of the tax paid by the portion of class 2a property consisting
38.16of the house, garage, and surrounding one acre of land. The resulting amount must be
38.17used to reduce the district's referendum levy amount otherwise determined, and must be
38.18paid to the district each year that the referendum authority remains in effect, is renewed,
38.19or new referendum authority is approved. The aid payable under this subdivision must
38.20be subtracted from the district's referendum equalization aid under subdivision 7. The
38.21referendum equalization aid after the subtraction must not be less than zero.
38.22    Subd. 7b. Referendum aid guarantee. (a) Notwithstanding subdivision 7, a
38.23district's referendum equalization aid for fiscal year 2015 must not be less than the sum
38.24of the referendum equalization aid the district would have received for fiscal year 2015
38.25under Minnesota Statutes 2012, section 126C.17, subdivision 7, and the adjustment the
38.26district would have received under Minnesota Statutes 2012, section 127A.47, subdivision
38.277, paragraphs (a), (b), and (c).
38.28(b) Notwithstanding subdivision 7, referendum equalization aid for fiscal year 2016
38.29and later, for a district qualifying for additional aid under paragraph (a) for fiscal year
38.302015, must not be less than the product of (1) the district's referendum equalization aid
38.31for fiscal year 2015, times (2) the lesser of one or the ratio of the district's referendum
38.32revenue for that school year to the district's referendum revenue for fiscal year 2015, times
38.33(3) the lesser of one or the ratio of the district's referendum market value used for fiscal
38.34year 2015 referendum equalization calculations to the district's referendum market value
38.35used for that year's referendum equalization calculations.
39.1    Subd. 8. Unequalized referendum levy. Each year, a district may levy an amount
39.2equal to the difference between its total referendum revenue according to subdivision 4
39.3and its referendum equalization revenue according to subdivision 5.
39.4    Subd. 9. Referendum revenue. (a) The revenue authorized by section 126C.10,
39.5subdivision 1
, may be increased in the amount approved by the voters of the district
39.6at a referendum called for the purpose. The referendum may be called by the board.
39.7The referendum must be conducted one or two calendar years before the increased levy
39.8authority, if approved, first becomes payable. Only one election to approve an increase
39.9may be held in a calendar year. Unless the referendum is conducted by mail under
39.10subdivision 11, paragraph (a), the referendum must be held on the first Tuesday after the
39.11first Monday in November. The ballot must state the maximum amount of the increased
39.12revenue per resident marginal cost adjusted pupil unit. The ballot may state a schedule,
39.13determined by the board, of increased revenue per resident marginal cost adjusted pupil
39.14unit that differs from year to year over the number of years for which the increased revenue
39.15is authorized or may state that the amount shall increase annually by the rate of inflation.
39.16For this purpose, the rate of inflation shall be the annual inflationary increase calculated
39.17under subdivision 2, paragraph (b). The ballot may state that existing referendum levy
39.18authority is expiring. In this case, the ballot may also compare the proposed levy authority
39.19to the existing expiring levy authority, and express the proposed increase as the amount, if
39.20any, over the expiring referendum levy authority. The ballot must designate the specific
39.21number of years, not to exceed ten, for which the referendum authorization applies. The
39.22ballot, including a ballot on the question to revoke or reduce the increased revenue amount
39.23under paragraph (c), must abbreviate the term "per resident marginal cost adjusted pupil
39.24unit" as "per pupil." The notice required under section 275.60 may be modified to read, in
39.25cases of renewing existing levies at the same amount per pupil as in the previous year:
39.26"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING
39.27TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS
39.28SCHEDULED TO EXPIRE."
39.29    The ballot may contain a textual portion with the information required in this
39.30subdivision and a question stating substantially the following:
39.31    "Shall the increase in the revenue proposed by (petition to) the board of .........,
39.32School District No. .., be approved?"
39.33    If approved, an amount equal to the approved revenue per resident marginal cost
39.34 adjusted pupil unit times the resident marginal cost adjusted pupil units for the school
39.35year beginning in the year after the levy is certified shall be authorized for certification
40.1for the number of years approved, if applicable, or until revoked or reduced by the voters
40.2of the district at a subsequent referendum.
40.3    (b) The board must prepare and deliver by first class mail at least 15 days but no more
40.4than 30 days before the day of the referendum to each taxpayer a notice of the referendum
40.5and the proposed revenue increase. The board need not mail more than one notice to any
40.6taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be
40.7those shown to be owners on the records of the county auditor or, in any county where
40.8tax statements are mailed by the county treasurer, on the records of the county treasurer.
40.9Every property owner whose name does not appear on the records of the county auditor
40.10or the county treasurer is deemed to have waived this mailed notice unless the owner
40.11has requested in writing that the county auditor or county treasurer, as the case may be,
40.12include the name on the records for this purpose. The notice must project the anticipated
40.13amount of tax increase in annual dollars for typical residential homesteads, agricultural
40.14homesteads, apartments, and commercial-industrial property within the school district.
40.15    The notice for a referendum may state that an existing referendum levy is expiring
40.16and project the anticipated amount of increase over the existing referendum levy in
40.17the first year, if any, in annual dollars for typical residential homesteads, agricultural
40.18homesteads, apartments, and commercial-industrial property within the district.
40.19    The notice must include the following statement: "Passage of this referendum will
40.20result in an increase in your property taxes." However, in cases of renewing existing levies,
40.21the notice may include the following statement: "Passage of this referendum extends an
40.22existing operating referendum at the same amount per pupil as in the previous year."
40.23    (c) A referendum on the question of revoking or reducing the increased revenue
40.24amount authorized pursuant to paragraph (a) may be called by the board. A referendum to
40.25revoke or reduce the revenue amount must state the amount per resident marginal cost
40.26pupil unit by which the authority is to be reduced. Revenue authority approved by the
40.27voters of the district pursuant to paragraph (a) must be available to the school district at
40.28least once before it is subject to a referendum on its revocation or reduction for subsequent
40.29years. Only one revocation or reduction referendum may be held to revoke or reduce
40.30referendum revenue for any specific year and for years thereafter.
40.31    (d) The approval of 50 percent plus one of those voting on the question is required to
40.32pass a referendum authorized by this subdivision.
40.33    (e) At least 15 days before the day of the referendum, the district must submit a
40.34copy of the notice required under paragraph (b) to the commissioner and to the county
40.35auditor of each county in which the district is located. Within 15 days after the results
40.36of the referendum have been certified by the board, or in the case of a recount, the
41.1certification of the results of the recount by the canvassing board, the district must notify
41.2the commissioner of the results of the referendum.
41.3    Subd. 9a. Board-approved referendum allowance. Notwithstanding subdivision
41.49, a school district may convert up to $300 per adjusted pupil unit of referendum authority
41.5from voter approved to board approved by a board vote. A district with less than $300
41.6per adjusted pupil unit of referendum authority may authorize new referendum authority
41.7up to the difference between $300 per adjusted pupil unit and the district's referendum
41.8authority. The board may authorize this levy for up to five years and may subsequently
41.9reauthorize that authority in increments of up to five years.
41.10    Subd. 10. School referendum levy; market value. A school referendum levy must
41.11be levied against the referendum market value of all taxable property as defined in section
41.12126C.01, subdivision 3 . Any referendum levy amount subject to the requirements of this
41.13subdivision must be certified separately to the county auditor under section 275.07.
41.14    Subd. 11. Referendum date. (a) Except for a referendum held under paragraph (b),
41.15any referendum under this section held on a day other than the first Tuesday after the first
41.16Monday in November must be conducted by mail in accordance with section 204B.46.
41.17Notwithstanding subdivision 9, paragraph (b), to the contrary, in the case of a referendum
41.18conducted by mail under this paragraph, the notice required by subdivision 9, paragraph (b),
41.19must be prepared and delivered by first-class mail at least 20 days before the referendum.
41.20(b) In addition to the referenda allowed in subdivision 9, clause (a), the commissioner
41.21may grant authority to a district to hold a referendum on a different day if the district is in
41.22statutory operating debt and has an approved plan or has received an extension from the
41.23department to file a plan to eliminate the statutory operating debt.
41.24(c) The commissioner must approve, deny, or modify each district's request for a
41.25referendum levy on a different day within 60 days of receiving the request from a district.
41.26    Subd. 13. Referendum conversion allowance. A school district that received
41.27supplemental or transition revenue in fiscal year 2002 may convert its supplemental
41.28revenue conversion allowance and transition revenue conversion allowance to additional
41.29referendum allowance under subdivision 1 for fiscal year 2003 and thereafter. A majority
41.30of the school board must approve the conversion at a public meeting before November 1,
41.312001. For a district with other referendum authority, the referendum conversion allowance
41.32approved by the board continues until the portion of the district's other referendum
41.33authority with the earliest expiration date after June 30, 2006, expires. For a district
41.34with no other referendum authority, the referendum conversion allowance approved by
41.35the board continues until June 30, 2012.
42.1EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
42.2and later.

42.3    Sec. 6. OPERATING REFERENDUM FREEZE, FISCAL YEAR 2015.
42.4(a) Notwithstanding Minnesota Statutes, section 126C.17, subdivision 9, a school
42.5district may not authorize an increase to its operating referendum in fiscal year 2015. A
42.6school district may reauthorize an operating referendum that is expiring in fiscal year 2015.
42.7(b) Paragraph (a) shall not apply to a district if, prior to June 30, 2013, the board
42.8adopted a resolution to conduct a referendum in 2013.
42.9(c) Paragraph (a) shall not apply to a district if the district did not authorize an
42.10operating referendum in fiscal year 2014.
42.11(d) Paragraph (a) shall not apply to a district if the district is in statutory operating
42.12debt under Minnesota Statutes, section 123B.81, as of June 30, 2013, and has an approved
42.13plan with the Department of Education.

42.14ARTICLE 4
42.15PROPERTY TAXES

42.16    Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to
42.17read:
42.18    Subd. 3. Evaluation and report. The Board of Water and Soil Resources shall
42.19evaluate performance, financial, and activity information for each local water management
42.20entity. The board shall evaluate the entities' progress in accomplishing their adopted plans
42.21on a regular basis as determined by the board based on budget and operations of the local
42.22water management entity, but not less than once every five ten years. The board shall
42.23maintain a summary of local water management entity performance on the board's Web site.
42.24Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis
42.25of local water management entity performance to the chairs of the house of representatives
42.26and senate committees having jurisdiction over environment and natural resources policy.

42.27    Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read:
42.28103B.335 TAX LEVY AUTHORITY.
42.29    Subdivision 1. Local water planning and management. The governing body of
42.30any county, municipality, or township may levy a tax in an amount required to implement
42.31sections 103B.301 to 103B.355 or a comprehensive watershed management plan as
42.32defined in section 103B.3363.
43.1    Subd. 2. Priority programs; conservation and watershed districts. A county
43.2may levy amounts necessary to pay the reasonable increased costs to soil and water
43.3conservation districts and watershed districts of administering and implementing priority
43.4programs identified in an approved and adopted plan or a comprehensive watershed
43.5management plan as defined in section 103B.3363.

43.6    Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read:
43.7    Subd. 5. Financial assistance. A base grant may be awarded to a county that
43.8provides a match utilizing a water implementation tax or other local source. A water
43.9implementation tax that a county intends to use as a match to the base grant must be
43.10levied at a rate sufficient to generate a minimum amount determined by the board.
43.11The board may award performance-based grants to local units of government that are
43.12responsible for implementing elements of applicable portions of watershed management
43.13plans, comprehensive plans, local water management plans, or comprehensive watershed
43.14management plans, developed or amended, adopted and approved, according to chapter
43.15103B, 103C, or 103D. Upon request by a local government unit, the board may also
43.16award performance-based grants to local units of government to carry out TMDL
43.17implementation plans as provided in chapter 114D, if the TMDL implementation plan has
43.18been incorporated into the local water management plan according to the procedures for
43.19approving comprehensive plans, watershed management plans, local water management
43.20plans, or comprehensive watershed management plans under chapter 103B, 103C, or
43.21103D, or if the TMDL implementation plan has undergone a public review process.
43.22Notwithstanding section 16A.41, the board may award performance-based grants on an
43.23advanced basis. The fee authorized in section 40A.152 may be used as a local match
43.24or as a supplement to state funding to accomplish implementation of comprehensive
43.25plans, watershed management plans, local water management plans, or comprehensive
43.26watershed management plans under chapter 103B, 103C, or 103D.

43.27    Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read:
43.28    Subd. 4. Cost-sharing funds. (a) The state board shall allocate at least 70 percent
43.29of cost-sharing funds to areas with high priority erosion, sedimentation, or water quality
43.30problems or water quantity problems due to altered hydrology. The areas must be selected
43.31based on the statewide priorities established by the state board.
43.32    (b) The allocated funds must be used for conservation practices for high priority
43.33problems identified in the comprehensive and annual work plans of the districts, for
43.34the technical assistance portion of the grant funds to leverage federal or other nonstate
44.1funds, or to address high-priority needs identified in local water management plans or
44.2comprehensive watershed management plans.
44.3    (b) The remaining cost-sharing funds may be allocated to districts as follows:
44.4    (1) for technical and administrative assistance, not more than 20 percent of the
44.5funds; and
44.6    (2) for conservation practices for lower priority erosion, sedimentation, or water
44.7quality problems.

44.8    Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read:
44.9    Subdivision 1. Authority. Each statutory or home rule charter city, town, or
44.10county that has planning and zoning authority under sections 366.10 to 366.19, 394.21
44.11to 394.37, or 462.351 to 462.365 is encouraged to adopt a soil loss ordinance. The soil
44.12loss ordinance must use the soil loss tolerance for each soil series described in the United
44.13States Soil Natural Resources Conservation Service Field Office Technical Guide, or
44.14another method approved by the Board of Water and Soil Resources, to determine the
44.15soil loss limits, but the soil loss limits must be attainable by the best practicable soil
44.16conservation practice. Ordinances adopted by local governments within the metropolitan
44.17area defined in section 473.121 must be consistent with local water management plans
44.18adopted under section 103B.235 a comprehensive plan, local water management plan, or
44.19watershed management plan developed or amended, adopted, and approved according
44.20to chapter 103B, 103C, or 103D.

44.21    Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read:
44.22    Subd. 9. Manufactured homes and park trailers. Manufactured homes and park
44.23trailers shall not be taxed as motor vehicles using the public streets and highways and shall
44.24be exempt from the motor vehicle tax provisions of this chapter. Except as provided in
44.25section 273.125, manufactured homes and park trailers shall be taxed as personal property.
44.26The provisions of Minnesota Statutes 1957, section 272.02 or any other act providing for
44.27tax exemption shall be inapplicable to manufactured homes and park trailers, except
44.28such manufactured homes as are held by a licensed dealer or limited dealer, as defined
44.29in section 327B.04, and exempted as inventory under subdivision 9a. Travel trailers not
44.30conspicuously displaying current registration plates on the property tax assessment date
44.31shall be taxed as manufactured homes if occupied as human dwelling places.
44.32EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
44.33thereafter.

45.1    Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision
45.2to read:
45.3    Subd. 9a. Manufactured home as dealer inventory. Manufactured homes as
45.4defined in section 327.31, subdivision 6, shall be considered as dealer inventory, on the
45.5January 2 assessment date, if the home is:
45.6(1) listed as inventory and held by a licensed or limited dealer;
45.7(2) unoccupied and not available for rent;
45.8(3) connected or not connected to utilities when located in a manufactured home
45.9park; and
45.10(4) connected or not connected to utilities when located at a dealer's sales center.
45.11The exemption under this subdivision is allowable for up to five assessment years after
45.12the date a home is initially claimed as dealer inventory.
45.13EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
45.14thereafter.

45.15    Sec. 8. Minnesota Statutes 2012, section 270.41, subdivision 3, is amended to read:
45.16    Subd. 3. Licenses; refusal or revocation Assessor sanctions; refusal to license.
45.17    (a) The board may (i) refuse to grant or renew, or may suspend or revoke, a license
45.18of an applicant or licensee, or (ii) censure, warn, or fine any licensed assessor, or any
45.19other person employed by an assessment jurisdiction or contracting with an assessment
45.20jurisdiction for the purpose of valuing or classifying property for property tax purposes,
45.21 for any of the following causes or acts:
45.22    (1) failure to complete required training;
45.23    (2) inefficiency or neglect of duty;
45.24    (3) failure to comply with the Code of Conduct and Ethics for Licensed Minnesota
45.25Assessors adopted by the board pursuant to Laws 2005, First Special Session chapter 3,
45.26article 1, section 38;
45.27    (4) conviction of a crime involving moral turpitude; or
45.28(5) failure to faithfully and fully perform his or her duties through malfeasance,
45.29misfeasance, or nonfeasance; or
45.30    (5) (6) any other cause or act that in the board's opinion warrants a refusal to issue
45.31or suspension or revocation of a license or the imposition of a sanction provided under
45.32this subdivision.
45.33(b) When appropriate for the level of infraction, a written warning must be given
45.34to assessors who have no prior identified infractions. The warning must identify the
46.1infraction and, as appropriate, detail future expectations of performance and behavior.
46.2Fines must not exceed $1,000 for the first occurrence and must not exceed $3,000 for each
46.3occurrence thereafter, and suspensions must not exceed one year for each occurrence,
46.4depending in each case upon the severity of the infraction and the level of negligence or
46.5intent. An action by the board to impose a sanction is subject to review in a contested
46.6case hearing under chapter 14.
46.7EFFECTIVE DATE.This section is effective beginning July 1, 2013.

46.8    Sec. 9. Minnesota Statutes 2012, section 270.41, is amended by adding a subdivision
46.9to read:
46.10    Subd. 3a. Report on disciplinary actions. Each odd-numbered year, the board
46.11must publish a report detailing the number and types of disciplinary actions recommended
46.12by the commissioner of revenue under section 273.0645, subdivision 2, and the disposition
46.13of those recommendations by the board. The report must be presented to the house of
46.14representatives and senate committees with jurisdiction over property taxes by February 1
46.15of each odd-numbered year.
46.16EFFECTIVE DATE.This section is effective beginning July 1, 2013.

46.17    Sec. 10. Minnesota Statutes 2012, section 270.45, is amended to read:
46.18270.45 DISPOSITION OF FEES AND FINES.
46.19    All fees and fines so established and collected shall be paid to the commissioner of
46.20management and budget for deposit in the general fund. The expenses of carrying out the
46.21provisions of sections 270.41 to 270.50 shall be paid from appropriations made to the board.
46.22EFFECTIVE DATE.This section is effective beginning July 1, 2013.

46.23    Sec. 11. [270C.9901] ASSESSOR ACCREDITATION.
46.24Every individual who appraises or physically inspects real property for the purpose
46.25of determining its valuation or classification for property tax purposes must obtain
46.26licensure as an accredited Minnesota assessor from the State Board of Assessors by July 1,
46.272019, or within four years of that person having become licensed as a certified Minnesota
46.28assessor, whichever is later.
46.29EFFECTIVE DATE.This section is effective beginning January 1, 2014.

46.30    Sec. 12. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
47.1    Subd. 39. Economic development; public purpose. The holding of property by a
47.2political subdivision of the state for later resale for economic development purposes
47.3shall be considered a public purpose in accordance with subdivision 8 for a period not to
47.4exceed nine years, except that:
47.5(1) for property located in a city of 5,000 20,000 population or under that is located
47.6outside of the metropolitan area as defined in section 473.121, subdivision 2, the period
47.7must not exceed 15 years.; and
47.8(2) for any property that was acquired on or after January 1, 2000, and on or before
47.9December 31, 2010, and is located in a city, the period must not exceed 15 years.
47.10The holding of property by a political subdivision of the state for later resale (1)
47.11which is purchased or held for housing purposes, or (2) which meets the conditions
47.12described in section 469.174, subdivision 10, shall be considered a public purpose in
47.13accordance with subdivision 8.
47.14The governing body of the political subdivision which acquires property which is
47.15subject to this subdivision shall after the purchase of the property certify to the city or
47.16county assessor whether the property is held for economic development purposes or
47.17housing purposes, or whether it meets the conditions of section 469.174, subdivision 10.
47.18If the property is acquired for economic development purposes and buildings or other
47.19improvements are constructed after acquisition of the property, and if more than one-half
47.20of the floor space of the buildings or improvements which is available for lease to or use
47.21by a private individual, corporation, or other entity is leased to or otherwise used by
47.22a private individual, corporation, or other entity the provisions of this subdivision shall
47.23not apply to the property. This subdivision shall not create an exemption from section
47.24272.01, subdivision 2 ; 272.68; 273.19; or 469.040, subdivision 3; or other provision of
47.25law providing for the taxation of or for payments in lieu of taxes for publicly held property
47.26which is leased, loaned, or otherwise made available and used by a private person.
47.27EFFECTIVE DATE.This section is effective for assessment year 2013 and
47.28thereafter and for taxes payable in 2014 and thereafter.

47.29    Sec. 13. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
47.30to read:
47.31    Subd. 98. Certain property owned by an Indian tribe. (a) Property is exempt that:
47.32(1) was classified as 3a under section 273.13, subdivision 24, for taxes payable
47.33in 2013;
47.34(2) is located in a city of the first class with a population greater than 300,000 as of
47.35the 2010 federal census;
48.1(3) was on January 2, 2012, and is for the current assessment owned by a federally
48.2recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota;
48.3and
48.4(4) is used exclusively for tribal purposes or institutions of purely public charity as
48.5defined in subdivision 7.
48.6(b) For purposes of this subdivision, a "tribal purpose" means a public purpose
48.7as defined in subdivision 8 and includes noncommercial tribal government activities.
48.8Property that qualifies for the exemption under this subdivision is limited to no more than
48.9two contiguous parcels and structures that do not exceed in the aggregate 20,000 square
48.10feet. Property acquired for single-family housing, market-rate apartments, agriculture, or
48.11forestry does not qualify for this exemption. The exemption created by this subdivision
48.12expires with taxes payable in 2024.
48.13EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

48.14    Sec. 14. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
48.15to read:
48.16    Subd. 99. Electric generation facility; personal property. (a) Notwithstanding
48.17subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and
48.18other personal property which is part of an electric generation facility that exceeds five
48.19megawatts of installed capacity and meets the requirements of this subdivision is exempt.
48.20At the time of construction, the facility must be:
48.21    (1) designed to utilize natural gas as a primary fuel;
48.22    (2) owned and operated by a municipal power agency as defined in section 453.52,
48.23subdivision 8;
48.24    (3) designed to utilize reciprocating engines paired with generators to produce
48.25electrical power;
48.26    (4) located within the service territory of a municipal power agency's electrical
48.27municipal utility that serves load exclusively in a metropolitan county as defined in
48.28section 473.121, subdivision 4; and
48.29(5) designed to connect directly with a municipality's substation.
48.30    (b) Construction of the facility must be commenced after June 1, 2013, and before
48.31June 1, 2017. Property eligible for this exemption does not include electric transmission
48.32lines and interconnections or gas pipelines and interconnections appurtenant to the
48.33property or the facility.
49.1EFFECTIVE DATE.This section is effective for assessment year 2013, taxes
49.2payable in 2014, and thereafter.

49.3    Sec. 15. Minnesota Statutes 2012, section 273.061, subdivision 2, is amended to read:
49.4    Subd. 2. Term; vacancy. (a) The terms of county assessors appointed under this
49.5section shall be four years. A new term shall begin on January 1 of every fourth year
49.6after 1973. When any vacancy in the office occurs, the board of county commissioners,
49.7within 90 days thereafter, shall fill the same by appointment for the remainder of the term,
49.8following the procedure prescribed in subdivision 1. The term of the county assessor
49.9may be terminated by the board of county commissioners at any time, on charges of
49.10malfeasance, misfeasance, or nonfeasance by the commissioner of revenue. If the board
49.11of county commissioners does not intend to reappoint a county assessor who has been
49.12certified by the state Board of Assessors, the board shall present written notice to the
49.13county assessor not later than 90 days prior to the termination of the assessor's term, that it
49.14does not intend to reappoint the assessor. If written notice is not timely made, the county
49.15assessor will automatically be reappointed by the board of county commissioners.
49.16The commissioner of revenue may recommend to the state Board of Assessors the
49.17nonrenewal, suspension, or revocation of an assessor's license as provided in sections
49.18270.41 to 270.50.
49.19(b) In the event of a vacancy in the office of county assessor, through death,
49.20resignation or other reasons, the deputy (or chief deputy, if more than one) shall perform
49.21the functions of the office. If there is no deputy, the county auditor shall designate a person
49.22to perform the duties of the office until an appointment is made as provided in clause (a).
49.23Such person shall perform the duties of the office for a period not exceeding 90 days
49.24during which the county board must appoint a county assessor. Such 90-day period may,
49.25however, be extended by written approval of the commissioner of revenue.
49.26(c) In the case of the first appointment under paragraph (a) of a county assessor who
49.27is accredited but who does not have senior accreditation, an approval of the appointment
49.28by the commissioner shall be provisional, provided that a county assessor appointed to
49.29a provisional term under this paragraph must reapply to the commissioner at the end of
49.30the provisional term. A provisional term may not exceed two years. The commissioner
49.31shall not approve the appointment for the remainder of the four-year term unless the
49.32assessor has obtained senior accreditation.
49.33EFFECTIVE DATE.This section is effective beginning July 1, 2013.

50.1    Sec. 16. Minnesota Statutes 2012, section 273.0645, is amended to read:
50.2273.0645 COMMISSIONER REVIEW OF LOCAL ASSESSMENT
50.3PRACTICES.
50.4    Subdivision 1. Local assessment practices. The commissioner of revenue must
50.5review the assessment practices in a taxing jurisdiction if requested in writing by a
50.6qualifying number of property owners in that taxing jurisdiction. The request must be
50.7signed by the greater of:
50.8    (1) ten percent of the registered voters who voted in the last general election; or
50.9    (2) five property owners.
50.10    The request must identify the city, town, or county and describe why a review is
50.11sought for that taxing jurisdiction. The commissioner must conduct the review in a
50.12reasonable amount of time and report the findings to the county board of the affected
50.13county, to the affected city council or town board, if the review is for a specific city or
50.14town, and to the property owner designated in the request as the person to receive the
50.15report on behalf of all the property owners who signed the request. The commissioner
50.16must also provide the report electronically to all property owners who signed the request
50.17and provided an e-mail address in order to receive the report electronically.
50.18    Subd. 2. Nonfeasance, misfeasance, and malfeasance. County assessors may file a
50.19written complaint with the commissioner of revenue detailing allegations of nonfeasance,
50.20misfeasance, or malfeasance by a local assessor. After receiving a complaint from a county
50.21assessor, the commissioner must complete an investigation and recommend an appropriate
50.22action to the State Board of Assessors. The commissioner is not required to have a written
50.23complaint from a county assessor in order to conduct an investigation and recommend an
50.24action to the board. Active investigative data relating to the investigation of complaints
50.25against an assessor by the commissioner of revenue are subject to section 13.39.
50.26EFFECTIVE DATE.This section is effective July 1, 2013.

50.27    Sec. 17. Minnesota Statutes 2012, section 273.117, is amended to read:
50.28273.117 CONSERVATION PROPERTY TAX VALUATION.
50.29    The value of real property which is subject to a conservation restriction or easement
50.30may be adjusted shall not be reduced by the assessor if:
50.31    (a) the restriction or easement is for a conservation purpose as defined in section
50.3284.64, subdivision 2 , and is recorded on the property; and
50.33    (b) the property is being used in accordance with the terms of the conservation
50.34restriction or easement.
51.1This section does not apply to (1) conservation restrictions or easements covering
51.2riparian buffers along lakes, rivers, and streams that are used for water quantity or quality
51.3control; or (2) to easements in a county that has adopted, by referendum, a program to
51.4protect farmland and natural areas since 1999.
51.5EFFECTIVE DATE.This section is effective for assessment year 2013 and
51.6thereafter, and for taxes payable in 2014 and thereafter.

51.7    Sec. 18. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
51.8    Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
51.9units and used or held for use by the owner or by the tenants or lessees of the owner
51.10as a residence for rental periods of 30 days or more, excluding property qualifying for
51.11class 4d. Class 4a also includes hospitals licensed under sections 144.50 to 144.56, other
51.12than hospitals exempt under section 272.02, and contiguous property used for hospital
51.13purposes, without regard to whether the property has been platted or subdivided. The
51.14market value of class 4a property has a class rate of 1.25 percent.
51.15    (b) Class 4b includes:
51.16    (1) residential real estate containing less than four units that does not qualify as class
51.174bb, other than seasonal residential recreational property;
51.18    (2) manufactured homes not classified under any other provision;
51.19    (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
51.20farm classified under subdivision 23, paragraph (b) containing two or three units; and
51.21    (4) unimproved property that is classified residential as determined under subdivision
51.2233.
51.23    The market value of class 4b property has a class rate of 1.25 percent.
51.24    (c) Class 4bb includes:
51.25    (1) nonhomestead residential real estate containing one unit, other than seasonal
51.26residential recreational property; and
51.27    (2) a single family dwelling, garage, and surrounding one acre of property on a
51.28nonhomestead farm classified under subdivision 23, paragraph (b).
51.29    Class 4bb property has the same class rates as class 1a property under subdivision 22.
51.30    Property that has been classified as seasonal residential recreational property at
51.31any time during which it has been owned by the current owner or spouse of the current
51.32owner does not qualify for class 4bb.
51.33    (d) Class 4c property includes:
51.34    (1) except as provided in subdivision 22, paragraph (c), real and personal property
51.35devoted to commercial temporary and seasonal residential occupancy for recreation
52.1purposes, for not more than 250 days in the year preceding the year of assessment. For
52.2purposes of this clause, property is devoted to a commercial purpose on a specific day
52.3if any portion of the property is used for residential occupancy, and a fee is charged for
52.4residential occupancy. Class 4c property under this clause must contain three or more
52.5rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
52.6or individual camping site equipped with water and electrical hookups for recreational
52.7vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
52.84c under this clause is also class 4c under this clause regardless of the term of the rental
52.9agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
52.10property to be classified under this clause, either (i) the business located on the property
52.11must provide recreational activities, at least 40 percent of the annual gross lodging receipts
52.12related to the property must be from business conducted during 90 consecutive days,
52.13and either (A) at least 60 percent of all paid bookings by lodging guests during the year
52.14must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
52.15annual gross receipts must be from charges for providing recreational activities, or (ii) the
52.16business must contain 20 or fewer rental units, and must be located in a township or a city
52.17with a population of 2,500 or less located outside the metropolitan area, as defined under
52.18section 473.121, subdivision 2, that contains a portion of a state trail administered by the
52.19Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
52.20more nights shall be counted as two bookings. Class 4c property also includes commercial
52.21use real property used exclusively for recreational purposes in conjunction with other class
52.224c property classified under this clause and devoted to temporary and seasonal residential
52.23occupancy for recreational purposes, up to a total of two acres, provided the property is
52.24not devoted to commercial recreational use for more than 250 days in the year preceding
52.25the year of assessment and is located within two miles of the class 4c property with which
52.26it is used. In order for a property to qualify for classification under this clause, the owner
52.27must submit a declaration to the assessor designating the cabins or units occupied for 250
52.28days or less in the year preceding the year of assessment by January 15 of the assessment
52.29year. Those cabins or units and a proportionate share of the land on which they are located
52.30must be designated class 4c under this clause as otherwise provided. The remainder of the
52.31cabins or units and a proportionate share of the land on which they are located will be
52.32designated as class 3a. The owner of property desiring designation as class 4c property
52.33under this clause must provide guest registers or other records demonstrating that the units
52.34for which class 4c designation is sought were not occupied for more than 250 days in the
52.35year preceding the assessment if so requested. The portion of a property operated as a
52.36(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
53.1nonresidential facility operated on a commercial basis not directly related to temporary and
53.2seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
53.3the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
53.4boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
53.5marina services, launch services, or guide services; or selling bait and fishing tackle;
53.6    (2) qualified property used as a golf course if:
53.7    (i) it is open to the public on a daily fee basis. It may charge membership fees or
53.8dues, but a membership fee may not be required in order to use the property for golfing,
53.9and its green fees for golfing must be comparable to green fees typically charged by
53.10municipal courses; and
53.11    (ii) it meets the requirements of section 273.112, subdivision 3, paragraph (d).
53.12    A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
53.13with the golf course is classified as class 3a property;
53.14    (3) real property up to a maximum of three acres of land owned and used by a
53.15nonprofit community service oriented organization and not used for residential purposes
53.16on either a temporary or permanent basis, provided that:
53.17    (i) the property is not used for a revenue-producing activity for more than six days
53.18in the calendar year preceding the year of assessment; or
53.19    (ii) the organization makes annual charitable contributions and donations at least
53.20equal to the property's previous year's property taxes and the property is allowed to be
53.21used for public and community meetings or events for no charge, as appropriate to the
53.22size of the facility.
53.23    For purposes of this clause:
53.24    (A) "charitable contributions and donations" has the same meaning as lawful
53.25gambling purposes under section 349.12, subdivision 25, excluding those purposes
53.26relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
53.27    (B) "property taxes" excludes the state general tax;
53.28    (C) a "nonprofit community service oriented organization" means any corporation,
53.29society, association, foundation, or institution organized and operated exclusively for
53.30charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
53.31federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
53.32Revenue Code; and
53.33    (D) "revenue-producing activities" shall include but not be limited to property or that
53.34portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
53.35liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
53.36alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
54.1insurance business, or office or other space leased or rented to a lessee who conducts a
54.2for-profit enterprise on the premises.
54.3    Any portion of the property not qualifying under either item (i) or (ii) is class 3a.
54.4The use of the property for social events open exclusively to members and their guests
54.5for periods of less than 24 hours, when an admission is not charged nor any revenues are
54.6received by the organization shall not be considered a revenue-producing activity.
54.7    The organization shall maintain records of its charitable contributions and donations
54.8and of public meetings and events held on the property and make them available upon
54.9request any time to the assessor to ensure eligibility. An organization meeting the
54.10requirement under item (ii) must file an application by May 1 with the assessor for
54.11eligibility for the current year's assessment. The commissioner shall prescribe a uniform
54.12application form and instructions;
54.13    (4) postsecondary student housing of not more than one acre of land that is owned by
54.14a nonprofit corporation organized under chapter 317A and is used exclusively by a student
54.15cooperative, sorority, or fraternity for on-campus housing or housing located within two
54.16miles of the border of a college campus;
54.17    (5)(i) manufactured home parks as defined in section 327.14, subdivision 3,
54.18excluding manufactured home parks described in section 273.124, subdivision 3a, and (ii)
54.19manufactured home parks as defined in section 327.14, subdivision 3, that are described in
54.20section 273.124, subdivision 3a;
54.21    (6) real property that is actively and exclusively devoted to indoor fitness, health,
54.22social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
54.23and is located within the metropolitan area as defined in section 473.121, subdivision 2;
54.24    (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
54.25under section 272.01, subdivision 2, and the land on which it is located, provided that:
54.26    (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
54.27Airports Commission, or group thereof; and
54.28    (ii) the land lease, or any ordinance or signed agreement restricting the use of the
54.29leased premise, prohibits commercial activity performed at the hangar.
54.30    If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
54.31be filed by the new owner with the assessor of the county where the property is located
54.32within 60 days of the sale;
54.33    (8) a privately owned noncommercial aircraft storage hangar not exempt under
54.34section 272.01, subdivision 2, and the land on which it is located, provided that:
54.35    (i) the land abuts a public airport; and
55.1    (ii) the owner of the aircraft storage hangar provides the assessor with a signed
55.2agreement restricting the use of the premises, prohibiting commercial use or activity
55.3performed at the hangar; and
55.4    (9) residential real estate, a portion of which is used by the owner for homestead
55.5purposes, and that is also a place of lodging, if all of the following criteria are met:
55.6    (i) rooms are provided for rent to transient guests that generally stay for periods
55.7of 14 or fewer days;
55.8    (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
55.9in the basic room rate;
55.10    (iii) meals are not provided to the general public except for special events on fewer
55.11than seven days in the calendar year preceding the year of the assessment; and
55.12    (iv) the owner is the operator of the property.
55.13    The market value subject to the 4c classification under this clause is limited to
55.14five rental units. Any rental units on the property in excess of five, must be valued and
55.15assessed as class 3a. The portion of the property used for purposes of a homestead by the
55.16owner must be classified as class 1a property under subdivision 22;
55.17    (10) real property up to a maximum of three acres and operated as a restaurant
55.18as defined under section 157.15, subdivision 12, provided it: (A) is located on a lake
55.19as defined under section 103G.005, subdivision 15, paragraph (a), clause (3); and (B)
55.20is either devoted to commercial purposes for not more than 250 consecutive days, or
55.21receives at least 60 percent of its annual gross receipts from business conducted during
55.22four consecutive months. Gross receipts from the sale of alcoholic beverages must be
55.23included in determining the property's qualification under subitem (B). The property's
55.24primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
55.25sales located on the premises must be excluded. Owners of real property desiring 4c
55.26classification under this clause must submit an annual declaration to the assessor by
55.27February 1 of the current assessment year, based on the property's relevant information for
55.28the preceding assessment year;
55.29(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
55.30as a marina, as defined in section 86A.20, subdivision 5, which is made accessible to
55.31the public and devoted to recreational use for marina services. The marina owner must
55.32annually provide evidence to the assessor that it provides services, including lake or river
55.33access to the public by means of an access ramp or other facility that is either located on
55.34the property of the marina or at a publicly owned site that abuts the property of the marina.
55.35No more than 800 feet of lakeshore may be included in this classification. Buildings used
55.36in conjunction with a marina for marina services, including but not limited to buildings
56.1used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
56.2tackle, are classified as class 3a property; and
56.3(12) real and personal property devoted to noncommercial temporary and seasonal
56.4residential occupancy for recreation purposes.
56.5    Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
56.6parcel of noncommercial seasonal residential recreational property under clause (12)
56.7has the same class rates as class 4bb property, (ii) manufactured home parks assessed
56.8under clause (5), item (i), have the same class rate as class 4b property, and the market
56.9value of manufactured home parks assessed under clause (5), item (ii), has the same class
56.10rate as class 4d property if more than 50 percent of the lots in the park are occupied by
56.11shareholders in the cooperative corporation or association and a class rate of one percent if
56.1250 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
56.13recreational property and marina recreational land as described in clause (11), has a
56.14class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
56.15remaining market value, (iv) the market value of property described in clause (4) has a
56.16class rate of one percent, (v) the market value of property described in clauses (2), (6), and
56.17(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
56.18in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
56.19    (e) Class 4d property is qualifying low-income rental housing certified to the assessor
56.20by the Housing Finance Agency under section 273.128, subdivision 3. If only a portion
56.21of the units in the building qualify as low-income rental housing units as certified under
56.22section 273.128, subdivision 3, only the proportion of qualifying units to the total number
56.23of units in the building qualify for class 4d. The remaining portion of the building shall be
56.24classified by the assessor based upon its use. Class 4d also includes the same proportion of
56.25land as the qualifying low-income rental housing units are to the total units in the building.
56.26For all properties qualifying as class 4d, the market value determined by the assessor must
56.27be based on the normal approach to value using normal unrestricted rents.
56.28    (f) The first tier of market value of class 4d property has a class rate of 0.75 percent.
56.29 The remaining value of class 4d property has a class rate of 0.25 percent. For the purposes
56.30of this paragraph, the "first tier of market value of class 4d property" means the market
56.31value of each housing unit up to the first tier limit. For the purposes of this paragraph, all
56.32class 4d property value must be assigned to individual housing units. The first tier limit is
56.33$100,000 for assessment year 2014. For subsequent years, the limit is adjusted each year
56.34by the average statewide change in estimated market value of property classified as class 4a
56.35and 4d under this section for the previous assessment year, excluding valuation change due
56.36to new construction, rounded to the nearest $1,000, provided, however, that the limit may
57.1never be less than $100,000. Beginning with assessment year 2015, the commissioner of
57.2revenue must certify the limit for each assessment year by November 1 of the previous year.
57.3EFFECTIVE DATE.This section is effective beginning with assessment year 2014.

57.4    Sec. 19. Minnesota Statutes 2012, section 279.01, subdivision 1, is amended to read:
57.5    Subdivision 1. Due dates; penalties. Except as provided in subdivision subdivisions
57.6 3 or 4 to 5, on May 16 or 21 days after the postmark date on the envelope containing the
57.7property tax statement, whichever is later, a penalty accrues and thereafter is charged upon
57.8all unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
57.9penalty is at a rate of two percent on homestead property until May 31 and four percent on
57.10June 1. The penalty on nonhomestead property is at a rate of four percent until May 31 and
57.11eight percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days
57.12after the postmark date on the envelope containing the property tax statements, whichever
57.13is later, on commercial use real property used for seasonal residential recreational purposes
57.14and classified as class 1c or 4c, and on other commercial use real property classified as
57.15class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
57.16class 3a property is earned during the months of May, June, July, and August. In order for
57.17the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
57.18or 21 days after the postmark date on the envelope containing the property tax statement,
57.19whichever is later, without penalty, the owner of the property must attach an affidavit
57.20to the payment attesting to compliance with the income provision of this subdivision.
57.21Thereafter, for both homestead and nonhomestead property, on the first day of each month
57.22beginning July 1, up to and including October 1 following, an additional penalty of one
57.23percent for each month accrues and is charged on all such unpaid taxes provided that if the
57.24due date was extended beyond May 15 as the result of any delay in mailing property tax
57.25statements no additional penalty shall accrue if the tax is paid by the extended due date. If
57.26the tax is not paid by the extended due date, then all penalties that would have accrued if
57.27the due date had been May 15 shall be charged. When the taxes against any tract or lot
57.28exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
57.29date on the envelope containing the property tax statement, whichever is later; and, if so
57.30paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
57.3116 following, without penalty; but, if not so paid, then a penalty of two percent accrues
57.32thereon for homestead property and a penalty of four percent on nonhomestead property.
57.33Thereafter, for homestead property, on the first day of November an additional penalty of
57.34four percent accrues and on the first day of December following, an additional penalty of
57.35two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
58.1property, on the first day of November and December following, an additional penalty of
58.2four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
58.3such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
58.4containing the property tax statement, whichever is later, the same may be paid at any time
58.5prior to October 16, with accrued penalties to the date of payment added, and thereupon
58.6no penalty attaches to the remaining one-half until October 16 following.
58.7    This section applies to payment of personal property taxes assessed against
58.8improvements to leased property, except as provided by section 277.01, subdivision 3.
58.9    A county may provide by resolution that in the case of a property owner that has
58.10multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
58.11installments as provided in this subdivision.
58.12    The county treasurer may accept payments of more or less than the exact amount of
58.13a tax installment due. Payments must be applied first to the oldest installment that is due
58.14but which has not been fully paid. If the accepted payment is less than the amount due,
58.15payments must be applied first to the penalty accrued for the year or the installment being
58.16paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
58.17payment required as a condition for filing an appeal under section 278.03 or any other law,
58.18nor does it affect the order of payment of delinquent taxes under section 280.39.

58.19    Sec. 20. Minnesota Statutes 2012, section 279.01, is amended by adding a subdivision
58.20to read:
58.21    Subd. 5. Federal active service exception. In the case of a homestead property
58.22owned by an individual who is on federal active service, as defined in section 190.05,
58.23subdivision 5c, as a member of the National Guard or a reserve component, a four-month
58.24grace period is granted for complying with the due dates imposed by subdivision 1. During
58.25this period, no late fees or penalties shall accrue against the property. The due date for
58.26property taxes owed under this chapter for an individual covered by this subdivision shall
58.27be September 15 for taxes due on May 15, and February 15 of the following year for taxes
58.28due on October 15. A taxpayer making a payment under this subdivision must accompany
58.29the payment with a signed copy of the taxpayer's orders or form DD214 showing the
58.30dates of active service which clearly indicate that the taxpayer was in active service as a
58.31member of the National Guard or a reserve component on the date the payment was due.
58.32This grace period applies to all homestead property owned by individuals on federal active
58.33service, as herein defined, for all of that property's due dates which fall on a day that is
58.34included in the taxpayer's federal active service.

59.1    Sec. 21. Minnesota Statutes 2012, section 279.02, is amended to read:
59.2279.02 DUTIES OF COUNTY AUDITOR AND TREASURER.
59.3    Subdivision 1. Delinquent property; rates. On the first business day in January, of
59.4each year, the county treasurer shall return the tax lists on hand to the county auditor, who
59.5shall compare the same with the statements receipted for by the treasurer on file in the
59.6auditor's office and each tract or lot of real property against which the taxes, or any part
59.7thereof, remain unpaid, shall be deemed delinquent, and thereupon an additional penalty
59.8of two percent on the amount of the original tax remaining unpaid shall immediately
59.9accrue and thereafter be charged upon all such delinquent taxes; and any auditor who
59.10shall make out and deliver any statement of delinquent taxes without including therein
59.11the penalties imposed by law, and any treasurer who shall receive payment of such taxes
59.12without including in such payment all items as shown on the auditor's statement, shall be
59.13liable to the county for the amounts of any items omitted.
59.14    Subd. 2. Federal active service exception. Notwithstanding subdivision 1, a
59.15homestead property owned by an individual who is on federal active service, as defined
59.16in section 190.05, subdivision 5c, as a member of the National Guard or a reserve
59.17component, shall not be deemed delinquent under this section if the due dates imposed
59.18under section 279.01 fall on a day in which the individual was on federal active service.

59.19    Sec. 22. Minnesota Statutes 2012, section 279.37, subdivision 1a, is amended to read:
59.20    Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property
59.21which was classified class 3a, for the previous year's assessment and had a total market
59.22value of $500,000 or less for that same assessment shall be eligible to be composed into a
59.23confession of judgment with the approval of the county auditor. Property qualifying under
59.24this subdivision shall be subject to the same provisions as provided in this section except
59.25as provided in paragraphs (b) to (d) (f).
59.26    (b) Current year taxes and penalty due at the time the confession of judgment
59.27is entered must be paid.
59.28    (c) The down payment must include all special assessments due in the current tax
59.29year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties,
59.30and interest accrued against the parcel. The balance remaining is payable in four equal
59.31annual installments. A municipality as defined in section 429.011, cities of the first class,
59.32and other special assessment authorities, that have certified special assessments against
59.33any parcel of property, may, through resolution, waive the requirement of payment of all
59.34current and delinquent special assessments at the time the confession is entered. If the
59.35municipality, city, or authority grants the waiver, 100 percent of all current year taxes,
60.1special assessments, and penalties due at the time, along with 20 percent of all delinquent
60.2taxes, special assessments, penalties, interest, and fees must be paid. The balance
60.3remaining shall be subject to and included in the installment plan.
60.4(d) When there are current and delinquent special assessments certified and billed
60.5against a parcel, the assessment authority or municipality as defined in section 429.011
60.6may abate under section 375.192, subdivision 2, all special assessments and the penalty
60.7and interest affiliated with the special assessments, and reassess the special assessments,
60.8penalties, and interest accrued thereon, under section 429.071, subdivision 2. The
60.9municipality shall notify the county auditor of its intent to reassess as a precondition
60.10to the entry of the confession of judgment. Upon the notice to abate and reassess, the
60.11municipality shall, through resolution, notify the county auditor to remove all current
60.12and delinquent special assessments and the accrued penalty and interest on the special
60.13assessments, and the payment of all or a portion of the current and delinquent assessments
60.14shall not be required as part of the down payment due at the time the confession of
60.15judgment is entered in accordance with paragraph (c).
60.16    (d) (e) The amounts entered in judgment bear interest at the rate provided in section
60.17279.03, subdivision 1a , commencing with the date the judgment is entered. The interest
60.18rate is subject to change each year on the unpaid balance in the manner provided in section
60.19279.03, subdivision 1a .
60.20(f) The county auditor may require conditions on properties including, but not
60.21limited to, environmental remediation action plan requirements, restrictions, or covenants,
60.22when considering a request for approval of eligibility for composition into a confession of
60.23judgment for delinquent taxes upon a parcel of property which was classified class 3a for
60.24the previous year's assessment.

60.25    Sec. 23. Minnesota Statutes 2012, section 279.37, subdivision 2, is amended to read:
60.26    Subd. 2. Installment payments. The owner of any such parcel, or any person to
60.27whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
60.28make and file with the county auditor of the county in which the parcel is located a written
60.29offer to pay the current taxes each year before they become delinquent, or to contest the
60.30taxes under Minnesota Statutes 1941, sections 278.01 to 278.13, and agree to confess
60.31judgment for the amount provided, as determined by the county auditor. By filing the
60.32offer, the owner waives all irregularities in connection with the tax proceedings affecting
60.33the parcel and any defense or objection which the owner may have to the proceedings, and
60.34also waives the requirements of any notice of default in the payment of any installment or
60.35interest to become due pursuant to the composite judgment to be so entered. Unless the
61.1property is subject to subdivision 1a, with the offer, the owner shall (i) tender one-tenth of
61.2the amount of the delinquent taxes, costs, penalty, and interest, and shall (ii) tender all
61.3current year taxes and penalty due at the time the confession of judgment is entered. In the
61.4offer, the owner shall agree to pay the balance in nine equal installments, with interest as
61.5provided in section 279.03, payable annually on installments remaining unpaid from time
61.6to time, on or before December 31 of each year following the year in which judgment
61.7was confessed. The offer must be substantially as follows:
61.8"To the court administrator of the district court of ........... county, I, .....................,
61.9am the owner of the following described parcel of real estate located in ....................
61.10county, Minnesota:
61.11.............................. Upon that real estate there are delinquent taxes for the year ........., and
61.12prior years, as follows: (here insert year of delinquency and the total amount of delinquent
61.13taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
61.14the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
61.15any defense or objection which I may have to them, and direct judgment to be entered for
61.16the amount stated above, minus the sum of $............, to be paid with this document, which
61.17is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
61.18I agree to pay the balance of the judgment in nine or four equal, annual installments, with
61.19interest as provided in section 279.03, payable annually, on the installments remaining
61.20unpaid. I agree to pay the installments and interest on or before December 31 of each year
61.21following the year in which this judgment is confessed and current taxes each year before
61.22they become delinquent, or within 30 days after the entry of final judgment in proceedings
61.23to contest the taxes under Minnesota Statutes, sections 278.01 to 278.13.
61.24Dated .............., ......."

61.25    Sec. 24. Minnesota Statutes 2012, section 281.14, is amended to read:
61.26281.14 EXPIRATION OF TIME FOR REDEMPTION.
61.27The time for redemption from any tax sale, whether made to the state or to a private
61.28person, shall not expire until notice of expiration of redemption, as provided in section
61.29281.13 281.17, shall have been given.

61.30    Sec. 25. Minnesota Statutes 2012, section 281.17, is amended to read:
61.31281.17 PERIOD FOR REDEMPTION.
61.32Except for properties for which the period of redemption has been limited under
61.33sections 281.173 and 281.174, the following periods for redemption apply.
62.1The period of redemption for all lands sold to the state at a tax judgment sale shall
62.2be three years from the date of sale to the state of Minnesota if the land is within an
62.3incorporated area unless it is: (a) nonagricultural homesteaded land as defined in section
62.4273.13, subdivision 22; (b) homesteaded agricultural land as defined in section 273.13,
62.5subdivision 23
, paragraph (a); or (c) seasonal residential recreational land as defined in
62.6section 273.13, subdivision 22, paragraph (c), or 25, paragraph (d), clause (1), for which
62.7the period of redemption is five years from the date of sale to the state of Minnesota.
62.8The period of redemption for homesteaded lands as defined in section 273.13,
62.9subdivision 22
, located in a targeted neighborhood as defined in Laws 1987, chapter 386,
62.10article 6, section 4, and sold to the state at a tax judgment sale is three years from the date
62.11of sale. The period of redemption for all lands located in a targeted neighborhood as
62.12defined in Laws 1987, chapter 386, article 6, section 4, except (1) homesteaded lands as
62.13defined in section 273.13, subdivision 22, and (2) for periods of redemption beginning
62.14after June 30, 1991, but before July 1, 1996, lands located in the Loring Park targeted
62.15neighborhood on which a notice of lis pendens has been served, and sold to the state at a
62.16tax judgment sale is one year from the date of sale.
62.17The period of redemption for all real property constituting a mixed municipal solid
62.18waste disposal facility that is a qualified facility under section 115B.39, subdivision 1, is
62.19one year from the date of the sale to the state of Minnesota.
62.20The period of redemption for all other lands sold to the state at a tax judgment
62.21sale shall be five years from the date of sale, except that the period of redemption for
62.22nonhomesteaded agricultural land as defined in section 273.13, subdivision 23, paragraph
62.23(b), shall be two years from the date of sale if at that time that property is owned by a
62.24person who owns one or more parcels of property on which taxes are delinquent, and the
62.25delinquent taxes are more than 25 percent of the prior year's school district levy.

62.26    Sec. 26. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision
62.27to read:
62.28    Subd. 10. Hennepin and Ramsey Counties. For properties located in Hennepin
62.29and Ramsey Counties, the county may impose an additional mortgage registry tax as
62.30defined in sections 383A.80 and 383B.80.
62.31EFFECTIVE DATE.This section is effective for deeds and mortgages
62.32acknowledged on or after July 1, 2013.

62.33    Sec. 27. [287.40] HENNEPIN AND RAMSEY COUNTIES.
63.1    For properties located in Hennepin and Ramsey Counties, the county may impose an
63.2additional deed tax as defined in sections 383A.80 and 383B.80.
63.3EFFECTIVE DATE.This section is effective for deeds and mortgages
63.4acknowledged on or after July 1, 2013.

63.5    Sec. 28. Minnesota Statutes 2012, section 383A.80, subdivision 4, is amended to read:
63.6    Subd. 4. Expiration. The authority to impose the tax under this section expires
63.7January 1, 2013 2028.
63.8EFFECTIVE DATE.This section is effective for all deeds and mortgages
63.9acknowledged on or after July 1, 2013.

63.10    Sec. 29. Minnesota Statutes 2012, section 383B.80, subdivision 4, is amended to read:
63.11    Subd. 4. Expiration. The authority to impose the tax under this section expires
63.12January 1, 2013 2028.
63.13EFFECTIVE DATE.This section is effective for all deeds and mortgages
63.14acknowledged on or after July 1, 2013.

63.15    Sec. 30. Minnesota Statutes 2012, section 428A.101, is amended to read:
63.16428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
63.17GENERAL LAW.
63.18The establishment of a new special service district after June 30, 2013 2028, requires
63.19enactment of a special law authorizing the establishment.
63.20EFFECTIVE DATE.This section is effective the day following final enactment.

63.21    Sec. 31. Minnesota Statutes 2012, section 428A.21, is amended to read:
63.22428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
63.23GENERAL LAW.
63.24The establishment of a new housing improvement area after June 30, 2013 2028,
63.25requires enactment of a special law authorizing the establishment of the area.
63.26EFFECTIVE DATE.This section is effective the day following final enactment.

63.27    Sec. 32. Minnesota Statutes 2012, section 473F.08, subdivision 3a, is amended to read:
64.1    Subd. 3a. Bloomington computation. (a) Beginning in 1987 and each subsequent
64.2year through 1998, the city of Bloomington shall determine the interest payments for that
64.3year for the bonds which have been sold for the highway improvements pursuant to Laws
64.41986, chapter 391, section 2, paragraph (g). Effective for property taxes payable in 1988
64.5through property taxes payable in 1999, after the Hennepin County auditor has computed
64.6the areawide portion of the levy for the city of Bloomington pursuant to subdivision 3,
64.7clause (a), the auditor shall annually add a dollar amount to the city of Bloomington's
64.8areawide portion of the levy equal to the amount which has been certified to the auditor
64.9by the city of Bloomington for the interest payments for that year for the bonds which
64.10were sold for highway improvements. The total areawide portion of the levy for the city
64.11of Bloomington including the additional amount for interest repayment certified pursuant
64.12to this subdivision shall be certified by the Hennepin County auditor to the administrative
64.13auditor pursuant to subdivision 5. The Hennepin County auditor shall distribute to the
64.14city of Bloomington the additional areawide portion of the levy computed pursuant to this
64.15subdivision at the same time that payments are made to the other counties pursuant to
64.16subdivision 7a. For property taxes payable from the year 2009 through 2018 2014, the
64.17Hennepin County auditor shall adjust Bloomington's contribution to the areawide gross tax
64.18capacity upward each year by a value equal to ten percent of the total additional areawide
64.19levy distributed to Bloomington under this subdivision from 1988 to 1999, divided by the
64.20areawide tax rate for taxes payable in the previous year.
64.21(b) For property taxes payable from 2015 through 2018, the administrative auditor
64.22shall increase the areawide net tax capacity each year by an amount equal to ten percent of
64.23the total additional areawide levy distributed to Bloomington under this subdivision from
64.241988 to 1999, divided by the areawide tax rate for taxes payable in the previous year. The
64.25administrative auditor must notify the commissioner of revenue of the amount determined
64.26by multiplying the increase in the areawide net tax capacity by the areawide tax rate
64.27determined under subdivision 5. The commissioner of revenue must pay the amount
64.28determined each payable year to the administrative auditor in two installments on July 10
64.29and November 10, for distribution and settlement as provided in subdivision 7a.
64.30(c) A sum sufficient to meet the obligations under this subdivision is annually
64.31appropriated from the general fund to the commissioner of revenue.
64.32EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.

64.33    Sec. 33. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
64.34article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter
64.35154, article 2, section 30, is amended to read:
65.1    Sec. 3. TAX; PAYMENT OF EXPENSES.
65.2    (a) The tax levied by the hospital district under Minnesota Statutes, section 447.34,
65.3must not be levied at a rate that exceeds the amount authorized to be levied under that
65.4section. The proceeds of the tax may be used for all purposes of the hospital district,
65.5except as provided in paragraph (b).
65.6    (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
65.7solely by the Cook ambulance service and the Orr ambulance service for the purpose of
65.8capital expenditures as it relates to:
65.9    (1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
65.10service and not;
65.11    (2) attached and portable equipment for use in and for the ambulances; and
65.12    (3) parts and replacement parts for maintenance and repair of the ambulances.
65.13The money may not be used for administrative, operation, or salary expenses.
65.14    (c) The part of the levy referred to in paragraph (b) must be administered by the
65.15Cook Hospital and passed on in equal amounts directly to the Cook area ambulance
65.16service board and the city of Orr to be held in trust until funding for a new ambulance is
65.17needed by either the Cook ambulance service or the Orr ambulance service used for the
65.18purposes in paragraph (b).

65.19    Sec. 34. Laws 1999, chapter 243, article 6, section 11, is amended to read:
65.20    Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.
65.21    Subdivision 1. Levy authorized. Notwithstanding other law to the contrary, the
65.22Carlton county board of commissioners may annually levy in and for the unorganized
65.23township territory of Sawyer an amount up to $1,000 annually for cemetery purposes,
65.24beginning with taxes payable in 2000 and ending with taxes payable in 2009.
65.25    Subd. 2. Effective date. This section is effective June 1, 1999, without local
65.26approval.
65.27EFFECTIVE DATE; LOCAL APPROVAL.This section applies to taxes
65.28payable in 2014 and thereafter, and is effective the day after the Carlton County Board
65.29of Commissioners and its chief clerical officer timely complete their compliance with
65.30Minnesota Statutes, section 645.021, subdivisions 2 and 3.

65.31    Sec. 35. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to
65.32read:
66.1EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
66.22009, and is repealed effective for taxes levied in 2013 2018, payable in 2014 2019,
66.3and thereafter.
66.4EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.

66.5    Sec. 36. Laws 2009, chapter 88, article 2, section 46, subdivision 1, is amended to read:
66.6    Subdivision 1. Agreement. The city of Cloquet and Perch Lake Township, by
66.7resolution of each of their governing bodies, may establish the Cloquet Area Fire and
66.8Ambulance Taxing District for the purpose of providing fire and or ambulance services,
66.9or both, throughout the district. In this section, "municipality" means home rule charter
66.10and statutory cities, towns, and Indian tribes. The district may exercise all the powers
66.11relating to fire and ambulance services of the municipalities that receive fire and or
66.12 ambulance services, or both, from the district. Upon application, any other municipality
66.13that is contiguous to a municipality that is a member of the district may join the district
66.14with the agreement of the municipalities that comprise the district at the time of its
66.15application to join.

66.16    Sec. 37. Laws 2009, chapter 88, article 2, section 46, subdivision 3, is amended to read:
66.17    Subd. 3. Tax. The district board may impose a property tax on taxable property in
66.18the district as provided in this subdivision. This The board shall annually determine the
66.19total amount of the levy that is attributable to the cost of providing fire services and the cost
66.20of providing ambulance services within the primary service area. For those municipalities
66.21that only receive ambulance services, the costs for the provision of ambulance services
66.22shall be levied against taxable property within those municipalities at a rate necessary not
66.23to exceed 0.019 percent of the estimated market value. For those municipalities that
66.24receive both fire and ambulance services, the tax shall be imposed at a rate that does not
66.25exceed 0.2835 percent of taxable estimated market value for taxes payable in 2010. The
66.26board shall annually determine the separate amounts of the levy that are attributable to the
66.27cost of providing fire services and the cost of providing ambulance services. Costs for the
66.28provision of ambulance services shall be levied against taxable property within the area of
66.29the district that receive the services. Costs for the provision of fire services shall be levied
66.30against taxable property within the area of the district that receive the services.
66.31When a member municipality opts to receive fire service from the district or an
66.32additional municipality becomes a member of the district, the additional cost of providing
66.33ambulance and fire services to that municipality will community shall be determined by
66.34the board and added to the maximum levy amount.
67.1Each county auditor of a county that contains a municipality subject to the tax under
67.2this section must collect the tax and pay it to the Fire and Ambulance Special Taxing
67.3District. The district may also impose other fees or charges as allowed by law for the
67.4provision of fire and ambulance services.

67.5    Sec. 38. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to
67.6read:
67.7EFFECTIVE DATE.This section is effective for assessment years year 2010 and
67.82011, for taxes payable in 2011 and 2012 thereafter.
67.9EFFECTIVE DATE.This section is effective for assessment year 2012 and
67.10thereafter.

67.11    Sec. 39. MINNEAPOLIS AND ST. PAUL ENTERTAINMENT FACILITIES
67.12COORDINATION STUDY; APPROPRIATION.
67.13    Subdivision 1. Statement of purpose. The legislature finds that the national
67.14economic structure of professional sports financing, as directly or indirectly sanctioned by
67.15federal law, compels state and local governments in smaller metropolitan areas, such as
67.16Minneapolis and St. Paul, to help finance the construction and operation of venues for
67.17professional sports franchises as a condition of hosting these franchises. The burden and
67.18risk associated with providing this assistance justifies authorizing and directing the cities
67.19and any associated private entities to enter into arrangements that attempt to maximize
67.20the combined revenues of these facilities from direct users, including those unrelated to
67.21professional sports, such as, but not limited to, joint booking of concerts and other events,
67.22to minimize the cost and risk to general taxpayers. Any efforts to put in place such joint
67.23marketing, promotion, and scheduling arrangements by the cities or associated private
67.24entities, in the view of the legislature, is a petition for enactment of this or subsequent
67.25enabling legislation under the Noerr-Pennington doctrine or state action under the Parker
67.26antitrust doctrine. This legislation and any resulting arrangements are intended to minimize
67.27the potential burden on general taxpayers of financing and operation of the arenas.
67.28    Subd. 2. Study and report. On or before February 1, 2014, the cities of
67.29Minneapolis and St. Paul, in consultation with representatives of the primary professional
67.30sports team tenant of each arena, shall study and report to the legislature on establishing
67.31a joint governing structure to be responsible for the joint administration, financing, and
67.32operations of the facilities and the possible effects of joint governance on the finances of
67.33each arena and each city. The commissioner of administration, in consultation with the
68.1two cities, shall contract with an independent consultant to conduct all or a portion of the
68.2study. The cities of Minneapolis and St. Paul together shall pay one-half of the cost of the
68.3consultant contract. The commissioner may accept funding from other public entities and
68.4private organizations to pay for the contract. The study must:
68.5    (1) examine the current finances of each arena including past and projected costs and
68.6revenues, projected capital improvements, and the current and projected impact of each
68.7arena on each city's general fund;
68.8    (2) determine the impact of joint governance on the future finances of each city;
68.9    (3) examine joint scheduling, marketing, and promotion of events at the arenas,
68.10either within a joint governance structure or as separate entities; and
68.11    (4) estimate the amount of funding, if any, that would be required to operate and
68.12maintain the arenas under a joint governing structure.
68.13    Subd. 3. Appropriation. Up to $50,000 is appropriated to the commissioner of
68.14administration from the general fund for fiscal year 2014 to pay up to one-half of the costs
68.15of the consultant contract under subdivision 2.
68.16EFFECTIVE DATE.This section is effective the day following final enactment.

68.17    Sec. 40. REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS;
68.18APPROPRIATION.
68.19    Subdivision 1. Reimbursement. The commissioner of revenue shall reimburse
68.20taxing jurisdictions for property tax abatements granted in Hennepin County under Laws
68.212011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits
68.22contained in that section. The reimbursements must be made to each taxing jurisdiction
68.23pursuant to the certification of the Hennepin County auditor.
68.24    Subd. 2. Appropriation. In fiscal year 2014 only, $336,000 is appropriated to the
68.25commissioner of revenue from the general fund to make the payments required in this
68.26section.
68.27EFFECTIVE DATE.This section is effective the day following final enactment.

68.28    Sec. 41. ST. PAUL BALLPARK PROPERTY TAX EXEMPTION; SPECIAL
68.29ASSESSMENT.
68.30Any real or personal property acquired, owned, leased, controlled, used, or occupied
68.31by the city of St. Paul for the primary purpose of providing a ballpark for a minor league
68.32baseball team is declared to be acquired, owned, leased, controlled, used, and occupied for
68.33public, governmental, and municipal purposes, and is exempt from ad valorem taxation
69.1by the state or any political subdivision of the state, provided that the properties are
69.2subject to special assessments levied by a political subdivision for a local improvement in
69.3amounts proportionate to and not exceeding the special benefit received by the properties
69.4from the improvement. In determining the special benefit received by the properties, no
69.5possible use of any of the properties in any manner different from their intended use
69.6for providing a minor league ballpark at the time may be considered. Notwithstanding
69.7Minnesota Statutes, section 272.01, subdivision 2, or 273.19, real or personal property
69.8subject to a lease or use agreement between the city and another person for uses related to
69.9the purposes of the operation of the ballpark and related parking facilities is exempt from
69.10taxation regardless of the length of the lease or use agreement. This section, insofar as it
69.11provides an exemption or special treatment, does not apply to any real property that is
69.12leased for residential, business, or commercial development or other purposes different
69.13from those necessary to the provision and operation of the ballpark.
69.14EFFECTIVE DATE.This section is effective the day after compliance by the
69.15governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
69.16subdivisions 2 and 3.

69.17    Sec. 42. PUBLIC ENTERTAINMENT FACILITY; PROPERTY TAX
69.18EXEMPTION; SPECIAL ASSESSMENT.
69.19Any real or personal property acquired, owned, leased, controlled, used, or occupied
69.20by the city of Minneapolis for the primary purpose of providing an arena for a professional
69.21basketball team is declared to be acquired, owned, leased, controlled, used, and occupied
69.22for public, governmental, and municipal purposes, and is exempt from ad valorem taxation
69.23by the state or any political subdivision of the state, provided that the properties are
69.24subject to special assessments levied by a political subdivision for a local improvement in
69.25amounts proportionate to and not exceeding the special benefit received by the properties
69.26from the improvement. In determining the special benefit received by the properties, no
69.27possible use of any of the properties in any manner different from their intended use for
69.28providing a professional basketball arena at the time may be considered. Notwithstanding
69.29Minnesota Statutes, section 272.01, subdivision 2, or 273.19, real or personal property
69.30subject to a lease or use agreement between the city and another person for uses related to
69.31the purposes of the operation of the arena and related parking facilities is exempt from
69.32taxation regardless of the length of the lease or use agreement. This section, insofar as
69.33it provides an exemption or special treatment, does not apply to any real property that
69.34is leased for residential, business, or commercial development, or for other purposes
69.35different from those necessary to the provision and operation of the arena.
70.1EFFECTIVE DATE.This section is effective the day after compliance by the
70.2governing body of the city of Minneapolis with Minnesota Statutes, section 645.021,
70.3subdivisions 2 and 3.

70.4    Sec. 43. PUBLIC ENTERTAINMENT FACILITY; CONSTRUCTION
70.5MANAGER AT RISK.
70.6(a) For any real or personal property acquired, owned, leased, controlled, used, or
70.7occupied by the city of Minneapolis for the primary purpose of providing an arena for
70.8a professional basketball team, the city of Minneapolis may contract for construction,
70.9materials, supplies, and equipment in accordance with Minnesota Statutes, section
70.10471.345, except that the city may employ or contract with persons, firms, or corporations
70.11to perform one or more or all of the functions of an engineer, architect, construction
70.12manager, or program manager with respect to all or any part of a project to renovate,
70.13refurbish, and remodel the arena under either the traditional design-bid-build plan or
70.14construction manager at risk plan, or a combination thereof.
70.15(b) The city may prepare a request for proposals for one or more of the functions
70.16described in paragraph (a). The request must be published in a newspaper of general
70.17circulation. The city may prequalify offerors by issuing a request for qualifications, in
70.18advance of the request for proposals, and select a short list of responsible offerors to
70.19submit proposals.
70.20(c) As provided in the request for proposals, the city may conduct discussions and
70.21negotiations with responsible offerors in order to determine which proposal is most
70.22advantageous to the city and to negotiate the terms of an agreement. In conducting
70.23discussions, there shall be no disclosure of any information derived from proposals
70.24submitted by competing offerors and the content of all proposals is nonpublic data under
70.25Minnesota Statutes, chapter 13, until such time as a notice to award a contract is given
70.26by the city.
70.27(d) Upon agreement on the guaranteed maximum price, the construction manager
70.28or program manager may enter into contracts with subcontractors for labor, materials,
70.29supplies, and equipment for the renovation project through the process of public bidding,
70.30except that the construction manager or program manager may, with the consent of the city:
70.31(1) narrow the listing of eligible bidders to those that the construction manager
70.32or program manager determines to possess sufficient expertise to perform the intended
70.33functions;
70.34(2) award contracts to the subcontractors that the construction manager or program
70.35manager determines provide the best value under a request for proposals, as described in
71.1Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2), that are not
71.2required to be the lowest responsible bidder; and
71.3(3) for work the construction manager or program manager determines to be
71.4critical to the completion schedule, perform work with its own forces without soliciting
71.5competitive bids or proposals, if the construction manager or program manager provides
71.6evidence of competitive pricing.
71.7EFFECTIVE DATE.This section is effective the day after compliance by the
71.8governing body of the city of Minneapolis with Minnesota Statutes, section 645.021,
71.9subdivisions 2 and 3.

71.10    Sec. 44. EXTENSION OF PROPERTY TAX DUE DATE; COMMERCIAL
71.11SEASONAL RECREATIONAL PROPERTIES.
71.12Notwithstanding the provisions of Minnesota Statutes, section 279.01, subdivision
71.131, for taxes payable in 2013 only, the penalty on first-half property taxes does not accrue
71.14until June 15 on commercial use real property used for seasonal residential recreational
71.15purposes and classified as class 1c or 4c, and on other commercial use real property
71.16classified as class 3a, provided that over 60 percent of the gross income earned by the
71.17enterprise on the class 3a property is earned during the months of May, June, July, and
71.18August. In order for the first half of the tax due on class 3a property to be paid after May
71.1915 and before June 15 without penalty, the owner of the property must attach an affidavit
71.20to the payment attesting to compliance with the income provision of this subdivision.
71.21EFFECTIVE DATE.This section is effective the day following final enactment.

71.22    Sec. 45. REPORT ON CLASS 4D TIER STRUCTURE.
71.23The commissioners of revenue and housing finance shall report to the legislature
71.24by January 31, 2015, on the implementation of a second tier of market value for class 4d
71.25property under Minnesota Statutes, section 273.13, subdivision 25, paragraph (f). The
71.26report shall include the number of class 4d properties subject to the second tier of market
71.27value for taxes payable in 2015 and the tax impact of the application of the second tier
71.28of market value. The report shall also include an analysis of the characteristics of the
71.29properties to which the second tier of market value applies, such as location, building
71.30type, and number of units.
71.31EFFECTIVE DATE.This section is effective July 1, 2013.

72.1    Sec. 46. REPORT AND STUDY ON CERTAIN PROPERTY USED IN
72.2BUSINESS AND PRODUCTION; ASSESSMENT MORATORIUM.
72.3    Subdivision 1. Study and report. (a) In order to facilitate a legislative review of
72.4property tax assessment procedures for facilities used in the production of biofuels, wine,
72.5beer, distilled beverages, and dairy products, and the development of standards and criteria
72.6for determining the taxable status of these facilities, the commissioner of revenue must
72.7conduct a study and report the findings of the study. The study must:
72.8(1) include a detailed survey of counties identifying the components and tax status
72.9of biofuel facilities;
72.10(2) identify the function of components in facilities of the affected industries;
72.11(3) consider the taxability for certain components related to size, function, and use;
72.12(4) develop recommendations for assessment guidelines and policies for facilities of
72.13the affected industries; and
72.14(5) identify possible impacts to state and local taxes resulting from study
72.15recommendations.
72.16(b) The commissioner shall request the involvement and participation of
72.17stakeholders, including the affected industries, the assessment community, and others
72.18identified by the commissioner.
72.19(c) The commissioner shall report the findings to the chairs of the house of
72.20representatives and senate committees with jurisdiction over taxes, agriculture, and
72.21economic development as well as the commissioners of agriculture and employment and
72.22economic development by February 1, 2014.
72.23    Subd. 2. Moratorium on changes in assessment practices. (a) For the 2013 and
72.242014 assessments, assessors must continue to use assessment practices or policies in effect
72.25in that county on January 2, 2012, for determining the taxable status of property used in
72.26the production of biofuels, wine, beer, distilled beverages, or dairy products.
72.27(b) An assessor must not change the taxable status of any existing property described
72.28in paragraph (a) from its status on January 2, 2012, unless the change is due to a change in
72.29the use of property, or to correct an error. For taxable properties, the assessor may change
72.30the estimated market value of the property and add value for any new construction that
72.31would have been taxable under practices and policies in place on January 2, 2012.
72.32(c) This subdivision expires on December 31, 2014. Any changes to the taxable
72.33status of the properties in paragraph (a) resulting from the study will not be effective
72.34until the 2015 assessment.

72.35    Sec. 47. PROPERTY TAX SAVINGS REPORT.
73.1(a) In addition to the certification of its proposed property tax levy under Minnesota
73.2Statutes, section 275.065, each city that has a population over 500 and each county shall
73.3also include the amount of sales and use tax paid, or was estimated to be paid, in 2012.
73.4(b) At the time the notice of the proposed property taxes is mailed as required under
73.5Minnesota Statutes, section 275.065, subdivision 3, the county treasurer shall also include
73.6a separate statement providing a list of sales and use tax certified by the county and cities
73.7within their jurisdiction.
73.8(c) At the public hearing required under Minnesota Statutes, section 275.065,
73.9subdivision 3, the county and city must discuss the estimated savings realized to their
73.10budgets that resulted from the sales tax exemption authorized under Minnesota Statutes,
73.11section 297A.70, subdivision 2, and how those savings will be used for property tax levy
73.12reductions, fee reductions, and other purposes as deemed appropriate.
73.13Reasonable costs of preparing the notice required in this section must be apportioned
73.14between taxing jurisdictions as follows:
73.15(1) one-half is allocated to the county; and
73.16(2) one-half is allocated among the cities.
73.17The amount allocated in clause (2) must be further apportioned among all the cities
73.18in the proportion that the number of parcels in the city bears to the number of parcels in all
73.19the cities that have populations over 500.
73.20EFFECTIVE DATE.This section is effective the day following final enactment,
73.21for taxes levied in 2013 and payable in 2014.

73.22    Sec. 48. LEVY LIMITS FOR TAXES LEVIED IN 2013.
73.23    Subdivision 1. Population. "Population" means the population for the local
73.24governmental unit as established by the last federal census, by a census taken under
73.25section Minnesota Statutes, section 275.14, or by an estimate made by the metropolitan
73.26council or by the state demographer under Minnesota Statutes, section 4A.02, whichever
73.27is most recent as to the stated date of the count or estimate up to and including June 1
73.28of the current levy year.
73.29    Subd. 2. Local government unit. "Local governmental unit" means a county with a
73.30population greater than 5,000, or a statutory or home rule charter city with a population
73.31greater than 2,500.
73.32    Subd. 3. Levy limit base. "Levy limit base" for a local governmental unit for levy
73.33year 2013 means the sum of its certified net tax capacity levy plus the total of aids and
73.34reimbursements that the local governmental unit is certified to receive under Minnesota
73.35Statutes, sections 477A.011 to 477A.014, minus any amounts that would qualify as a
74.1special levy under Minnesota Statutes, section 275.70, subdivision 5, clauses (1) to (4) and
74.2(7), for taxes levied in 2011 or 2012, whichever is greater. The levy limit base must be
74.3increased by three percent.
74.4    Subd. 4. Property tax levy limit. For taxes levied in 2013, the net tax capacity
74.5levy limit for a local governmental unit is equal to its levy limit base determined under
74.6subdivision 3 plus any additional levy authorized under Minnesota Statutes, section
74.7275.73, which is levied against net tax capacity, reduced by the total amount of aids and
74.8reimbursements that the local governmental unit is certified to receive under Minnesota
74.9Statutes, sections 477A.011 to 477A.014. The property tax levy limit for any local
74.10government cannot be less than the greater of its certified net tax capacity levies for taxes
74.11levied in 2011 or 2012.
74.12    Subd. 5. Limit on levies. Notwithstanding any other provision of law or municipal
74.13charter to the contrary which authorize ad valorem taxes in excess of the limits established
74.14by this section, the provisions of this section apply to local governmental units for all
74.15purposes other than those for which special levies under Minnesota Statutes, section
74.16275.70, subdivision 5, clauses (1) to (5) and (7), and special assessments are made.
74.17    Subd. 6. Levies in excess of levy limits. If the levy made by a city or county
74.18exceeds the levy limit provided in this section, except when the excess levy is due to the
74.19rounding of the rate in accordance with Minnesota Statutes, section 275.28, the county
74.20auditor shall only extend the amount of taxes permitted under this section as provided
74.21for in Minnesota Statutes, section 275.16.
74.22    Subd. 7. Calculation and notification. The commissioner of revenue shall make
74.23all necessary calculations for determining levy limits for local governmental units and
74.24notify the affected governmental units of their levy limits directly by September 1, 2013.
74.25The local governmental units shall, upon request, provide the commissioner with any
74.26information needed to make the calculations. The local governmental unit shall report
74.27by September 30, in a manner prescribed by the commissioner, the maximum amount of
74.28taxes it plans to levy for each of the purposes listed under special levies and any additional
74.29levy authorized under Minnesota Statutes, section 275.73, along with any necessary
74.30documentation. The commissioner shall review the proposed special levies and make any
74.31adjustments needed. The commissioner's decision is final. The final allowed special levy
74.32amounts and any levy limit adjustments must be certified back to the local governments by
74.33December 10. In addition, the commissioner of revenue shall notify all county auditors on
74.34or before five working days after December 20 of the sum of the levy limit plus the total of
74.35allowed special levies for each local governmental unit located within their boundaries so
74.36that they may fix the levies as required in Minnesota Statutes, section 275.16. The local
75.1governmental units shall provide the commissioner of revenue with all information that
75.2the commissioner deems necessary to make the calculations provided for in this section.
75.3    Subd. 8. Information necessary to calculate levy limit base. A local governmental
75.4unit must provide the commissioner with the information required to calculate the
75.5amount under subdivision 3, by July 20, 2013. If the information is not received by the
75.6commissioner by that date, or is not deemed sufficient to make the calculation under that
75.7clause, the commissioner has the discretion to set the local governmental unit's levy limit
75.8for all purposes including those purposes for which special levies may be made, equal to
75.9the amount of the local governmental unit's certified levy for the prior year.
75.10EFFECTIVE DATE.This section is effective for taxes levied in 2013, payable
75.11in 2014, only.

75.12    Sec. 49. APPROPRIATION.
75.13$2,000,000 in fiscal year 2014 only is appropriated from the general fund to the
75.14commissioner of revenue for a grant to the city of Moose Lake to reimburse for costs
75.15related to connection of state facilities to the sewer line.
75.16EFFECTIVE DATE.This section is effective July 1, 2013.

75.17ARTICLE 5
75.18SPECIAL TAXES

75.19    Section 1. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read:
75.20    Subdivision 1. Liability imposed. A person who, either singly or jointly with
75.21others, has the control of, supervision of, or responsibility for filing returns or reports,
75.22paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
75.23person who is liable under any other law, is liable for the payment of taxes arising under
75.24chapters 295, 296A, 297A, 297F, and 297G, or sections 256.9658, 290.92, and 297E.02,
75.25and the applicable penalties and interest on those taxes.
75.26EFFECTIVE DATE.This section is effective July 1, 2013.

75.27    Sec. 2. Minnesota Statutes 2012, section 296A.09, subdivision 2, is amended to read:
75.28    Subd. 2. Jet fuel and special fuel tax imposed. There is imposed an excise tax
75.29of the same rate 15 cents per gallon as the aviation gasoline on all jet fuel or special
75.30fuel received, sold, stored, or withdrawn from storage in this state, for use as substitutes
76.1for aviation gasoline and not otherwise taxed as gasoline. Jet fuel is defined in section
76.2296A.01, subdivision 8 .
76.3EFFECTIVE DATE.This section is effective July 1, 2014, and applied to sales
76.4and purchases made on or after that date.

76.5    Sec. 3. Minnesota Statutes 2012, section 296A.17, subdivision 3, is amended to read:
76.6    Subd. 3. Refund on graduated basis. Any person who has directly or indirectly
76.7paid the excise tax on aviation gasoline or special fuel for aircraft use provided for by this
76.8chapter and the airflight property tax under section 270.72, shall, as to all such aviation
76.9gasoline and special fuel received, stored, or withdrawn from storage by the person in
76.10this state in any calendar year and not sold or otherwise disposed of to others, or intended
76.11for sale or other disposition to others, on which such tax has been so paid, be entitled to
76.12the following graduated reductions in such tax for that calendar year, to be obtained by
76.13means of the following refunds:
76.14(1) on each gallon of such aviation gasoline or special fuel up to 50,000 gallons, all
76.15but five cents per gallon;
76.16(2) on each gallon of such aviation gasoline or special fuel above 50,000 gallons and
76.17not more than 150,000 gallons, all but two cents per gallon;
76.18(3) on each gallon of such aviation gasoline or special fuel above 150,000 gallons
76.19and not more than 200,000 gallons, all but one cent per gallon;
76.20(4) on each gallon of such aviation gasoline or special fuel above 200,000, all but
76.21one-half cent per gallon.
76.22EFFECTIVE DATE.This section is effective July 1, 2014, and applied to sales
76.23and purchases made on or after that date.

76.24    Sec. 4. Minnesota Statutes 2012, section 297A.82, subdivision 4, is amended to read:
76.25    Subd. 4. Exemptions. (a) The following transactions are exempt from the tax
76.26imposed in this chapter to the extent provided.
76.27(b) The purchase or use of aircraft previously registered in Minnesota by a
76.28corporation or partnership is exempt if the transfer constitutes a transfer within the
76.29meaning of section 351 or 721 of the Internal Revenue Code.
76.30(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer
76.31of an aircraft for which a commercial use permit has been issued pursuant to section
76.32360.654 is exempt, if the aircraft is resold while the permit is in effect.
77.1(d) Air flight equipment when sold to, or purchased, stored, used, or consumed by
77.2airline companies, as defined in section 270.071, subdivision 4, is exempt. For purposes
77.3of this subdivision, "air flight equipment" includes airplanes and parts necessary for the
77.4repair and maintenance of such air flight equipment, and flight simulators, but does
77.5not include airplanes with a gross weight of less than 30,000 pounds that are used on
77.6intermittent or irregularly timed flights.
77.7(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined
77.8in section 360.511 and approved by the Federal Aviation Administration, and which the
77.9seller delivers to a purchaser outside Minnesota or which, without intermediate use, is
77.10shipped or transported outside Minnesota by the purchaser are exempt, but only if the
77.11purchaser is not a resident of Minnesota and provided that the aircraft is not thereafter
77.12returned to a point within Minnesota, except in the course of interstate commerce or
77.13isolated and occasional use, and will be registered in another state or country upon its
77.14removal from Minnesota. This exemption applies even if the purchaser takes possession of
77.15the aircraft in Minnesota and uses the aircraft in the state exclusively for training purposes
77.16for a period not to exceed ten days prior to removing the aircraft from this state.
77.17(f) The sale or purchase of the following items that relate to aircraft operated under
77.18Federal Aviation Regulations, Parts 91 and 135, and associated installation charges:
77.19equipment and parts necessary for repair and maintenance of aircraft; and equipment
77.20and parts to upgrade and improve aircraft.
77.21EFFECTIVE DATE.This section is effective for sales and purchases made after
77.22June 30, 2013.

77.23    Sec. 5. Minnesota Statutes 2012, section 297A.82, is amended by adding a subdivision
77.24to read:
77.25    Subd. 4a. Deposit in state airports fund. Tax revenue collected from the sale or
77.26purchase of an aircraft taxable under this chapter must be deposited in the state airports
77.27fund, established in section 360.017.
77.28EFFECTIVE DATE.This section is effective July 1, 2013, and applied to sales
77.29and purchases made on or after that date.

77.30    Sec. 6. Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:
77.31    Subd. 3. Cigarette. "Cigarette" means any roll for smoking made wholly or in part
77.32of tobacco, that weighs 4.5 pounds or less per thousand:
78.1(1) the wrapper or cover of which is made of paper or another substance or material
78.2except tobacco; or
78.3(2) wrapped in any substance containing tobacco, however labeled or named, which,
78.4because of its appearance, size, the type of tobacco used in the filler, or its packaging,
78.5pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as
78.6a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does
78.7not have a cellulose acetate or other cigarette-like filter.
78.8EFFECTIVE DATE.This section is effective July 1, 2013.

78.9    Sec. 7. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
78.10to read:
78.11    Subd. 10b. Moist snuff. "Moist snuff" means any finely cut, ground, or powdered
78.12smokeless tobacco that is intended to be placed or dipped in the mouth.
78.13EFFECTIVE DATE.This section is effective January 1, 2014.

78.14    Sec. 8. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
78.15to read:
78.16    Subd. 13a. Premium cigar. "Premium cigar" means any cigar that is
78.17hand-constructed and hand-rolled, has a wrapper that is made entirely from whole tobacco
78.18leaf, has a filler and binder that is made entirely of tobacco, except for adhesives or other
78.19materials used to maintain size, texture, or flavor, and has a wholesale price of no less
78.20than $2.
78.21EFFECTIVE DATE.This section is effective July 1, 2013.

78.22    Sec. 9. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read:
78.23    Subd. 19. Tobacco products. (a) "Tobacco products" means any product
78.24containing, made, or derived from tobacco that is intended for human consumption,
78.25whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by
78.26any other means, or any component, part, or accessory of a tobacco product, including,
78.27but not limited to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut,
78.28crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug
78.29and twist tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings,
78.30cuttings and sweepings of tobacco, and other kinds and forms of tobacco; but does not
78.31include cigarettes as defined in this section. Tobacco products excludes any tobacco
78.32product that has been approved by the United States Food and Drug Administration for
79.1sale as a tobacco cessation product, as a tobacco dependence product, or for other medical
79.2purposes, and is being marketed and sold solely for such an approved purpose.
79.3(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4,
79.4tobacco products includes a premium cigar, as defined in subdivision 13a.
79.5EFFECTIVE DATE.This section is effective July 1, 2013.

79.6    Sec. 10. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
79.7    Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
79.8this state, upon having cigarettes in possession in this state with intent to sell, upon any
79.9person engaged in business as a distributor, and upon the use or storage by consumers, at
79.10the following rates:
79.11(1) on cigarettes weighing not more than three pounds per thousand, 24 141.5 mills
79.12on each such cigarette; and
79.13(2) on cigarettes weighing more than three pounds per thousand, 48 283 mills on
79.14each such cigarette.
79.15EFFECTIVE DATE.This section is effective July 1, 2013.

79.16    Sec. 11. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
79.17to read:
79.18    Subd. 1a. Annual indexing. (a) Each year the commissioner shall adjust the
79.19tax rates under subdivision 1, including any adjustment made in prior years under this
79.20subdivision, by multiplying the mill rates for the current calendar year by an adjustment
79.21factor and rounding the result to the nearest mill. The adjustment factor equals the in-lieu
79.22sales tax rate that applies to the following calendar year divided by the in-lieu sales tax
79.23rate for the current calendar year. For purposes of this subdivision, "in-lieu sales tax rate"
79.24means the tax rate established under section 297F.25, subdivision 1. For purposes of the
79.25calculations under this subdivision to be made in any year in which an increase in the
79.26federal or state excise tax on cigarettes is implemented, the commissioner shall exclude
79.27from the calculated average price for the current year an amount equal to any increase in
79.28the state or federal excise tax rate.
79.29    (b) The commissioner shall publish the resulting rate by November 1 and the rate
79.30applies to sales made on or after January 1 of the following year.
79.31(c) The determination of the commissioner under this subdivision is not a rule and is
79.32not subject to the Administrative Procedure Act in chapter 14.
79.33EFFECTIVE DATE.This section is effective July 1, 2014.

80.1    Sec. 12. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
80.2    Subd. 3. Rates; tobacco products. (a) Except as provided in subdivision 3a, a tax is
80.3imposed upon all tobacco products in this state and upon any person engaged in business
80.4as a distributor, at the rate of 35 95 percent of the wholesale sales price of the tobacco
80.5products. The tax is imposed at the time the distributor:
80.6(1) brings, or causes to be brought, into this state from outside the state tobacco
80.7products for sale;
80.8(2) makes, manufactures, or fabricates tobacco products in this state for sale in
80.9this state; or
80.10(3) ships or transports tobacco products to retailers in this state, to be sold by those
80.11retailers.
80.12(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
80.13pack of 20 cigarettes weighing not more than three pounds per thousand, as established
80.14under subdivision 1, is imposed on each container of moist snuff.
80.15For purposes of this subdivision, a "container" means the smallest consumer-size can,
80.16package, or other container that is marketed or packaged by the manufacturer, distributor,
80.17or retailer for separate sale to a retail purchaser. When more than one container is
80.18packaged together, each container is subject to tax.
80.19EFFECTIVE DATE.This section is effective July 1, 2013, except the minimum
80.20tax under paragraph (b) is effective January 1, 2014.

80.21    Sec. 13. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
80.22to read:
80.23    Subd. 3a. Rates; tobacco. (a) A tax is imposed upon all premium cigars in this state
80.24and upon any person engaged in business as a tobacco product distributor, at the lesser of:
80.25(1) the rate of 95 percent of the wholesale sales price of the premium cigars; or
80.26(2) $3.50 per premium cigar.
80.27(b) The tax imposed under paragraph (a) is imposed at the time the tobacco products
80.28distributor:
80.29(1) brings, or causes to be brought, into this state from outside the state premium
80.30cigars for sale;
80.31(2) makes, manufactures, or fabricates premium cigars in this state for sale in this
80.32state; or
80.33(3) ships or transports premium cigars to retailers in this state, to be sold by those
80.34retailers.
81.1EFFECTIVE DATE.This section is effective July 1, 2013.

81.2    Sec. 14. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
81.3    Subd. 4. Use tax; tobacco products. Except as provided in subdivision 4a, a tax is
81.4imposed upon the use or storage by consumers of tobacco products in this state, and upon
81.5such consumers, at the rate of 35 95 percent of the cost to the consumer of the tobacco
81.6products or the minimum tax under subdivision 3, paragraph (b), whichever is greater.
81.7EFFECTIVE DATE.This section is effective July 1, 2013.

81.8    Sec. 15. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
81.9to read:
81.10    Subd. 4a. Use tax; premium cigars. A tax is imposed upon the use or storage by
81.11consumers of all premium cigars in this state, and upon such consumers, at the lesser of:
81.12(1) the rate of 95 percent of the cost to the consumer of the premium cigars; or
81.13(2) $3.50 per premium cigar.
81.14EFFECTIVE DATE.This section is effective July 1, 2013.

81.15    Sec. 16. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read:
81.16    Subdivision 1. Fee imposed. (a) A fee is imposed upon the sale of nonsettlement
81.17cigarettes in this state, upon having nonsettlement cigarettes in possession in this state
81.18with intent to sell, upon any person engaged in business as a distributor, and upon the use
81.19or storage by consumers of nonsettlement cigarettes. The fee equals a rate of 1.75 2.5
81.20cents per cigarette.
81.21(b) The purpose of this fee is to:
81.22(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that
81.23are comparable to costs attributable to the use of the cigarettes;
81.24(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's
81.25policy of discouraging underage smoking by offering nonsettlement cigarettes at prices
81.26substantially below the cigarettes of other manufacturers; and
81.27(3) fund such other purposes as the legislature determines appropriate.
81.28EFFECTIVE DATE.This section is effective July 1, 2013.

81.29    Sec. 17. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read:
81.30    Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of
81.31cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
82.1state. The tax is equal to 6.5 percent of the combined tax rate under section 297A.62,
82.2multiplied by the weighted average retail price and must be expressed in cents per pack
82.3rounded to the nearest one-tenth of a cent. The weighted average retail price must be
82.4determined annually, with new rates published by November 1, and effective for sales
82.5on or after January 1 of the following year. The weighted average retail price must be
82.6established by surveying cigarette retailers statewide in a manner and time determined by
82.7the commissioner. The commissioner shall make an inflation adjustment in accordance
82.8with the Consumer Price Index for all urban consumers inflation indicator as published in
82.9the most recent state budget forecast. The commissioner shall use the inflation factor for
82.10the calendar year in which the new tax rate takes effect. If the survey indicates that the
82.11average retail price of cigarettes has not increased relative to the average retail price in
82.12the previous year's survey, then the commissioner shall not make an inflation adjustment.
82.13The determination of the commissioner pursuant to this subdivision is not a "rule" and is
82.14not subject to the Administrative Procedure Act contained in chapter 14. For packs of
82.15cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally.
82.16(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
82.17tax calculation of the weighted average retail price for the sales of cigarettes from August
82.181, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average
82.19retail price per pack of 20 cigarettes from the most recent survey by the percentage change
82.20in a weighted average of the presumed legal prices for cigarettes during the year after
82.21completion of that survey, as reported and published by the Department of Commerce
82.22under section 325D.371; (2) subtracting the sales tax included in the retail price; and (3)
82.23adjusting for expected inflation. The rate must be published by May 1 and is effective for
82.24sales after July 31. If the weighted average of the presumed legal prices indicates that the
82.25average retail price of cigarettes has not increased relative to the average retail price in the
82.26most recent survey, then no inflation adjustment must be made. For packs of cigarettes
82.27with other than 20 cigarettes, the tax must be adjusted proportionally.
82.28EFFECTIVE DATE.This section is effective July 1, 2013.

82.29    Sec. 18. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
82.30    Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
82.31is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
82.32beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
82.33take the credit on the 18th day of each month, but the total credit allowed may not exceed
82.34in any fiscal year the lesser of:
82.35    (1) the liability for tax; or
83.1    (2) $115,000.
83.2    For purposes of this subdivision, a "qualified brewer" means a brewer, whether or
83.3not located in this state, manufacturing less than 100,000 250,000 barrels of fermented
83.4malt beverages in the calendar year immediately preceding the calendar year for which
83.5the credit under this subdivision is claimed. In determining the number of barrels, all
83.6brands or labels of a brewer must be combined. All facilities for the manufacture of
83.7fermented malt beverages owned or controlled by the same person, corporation, or other
83.8entity must be treated as a single brewer.
83.9EFFECTIVE DATE.This section is effective for determinations based on calendar
83.10year 2012 production and thereafter.

83.11    Sec. 19. Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:
83.12    Subd. 2. Cigarettes. "Cigarettes" means and includes any roll for smoking, made
83.13wholly or in part of tobacco, irrespective of size and shape and whether or not such
83.14tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover
83.15of which is made of paper or any other substance or material except whole tobacco leaf,
83.16and includes any cigarette as defined in section 297F.01, subdivision 3.
83.17EFFECTIVE DATE.This section is effective July 1, 2013.

83.18    Sec. 20. Minnesota Statutes 2012, section 325F.781, subdivision 1, is amended to read:
83.19    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
83.20have the meanings given, unless the language or context clearly provides otherwise.
83.21(b) "Consumer" means an individual who purchases, receives, or possesses tobacco
83.22products for personal consumption and not for resale.
83.23(c) "Delivery sale" means:
83.24(1) a sale of tobacco products to a consumer in this state when:
83.25(i) the purchaser submits the order for the sale by means of a telephonic or other
83.26method of voice transmission, the mail or any other delivery service, or the Internet or
83.27other online service; or
83.28(ii) the tobacco products are delivered by use of the mail or other delivery service; or
83.29(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i),
83.30regardless of whether the seller is located inside or outside of the state.
83.31A sale of tobacco products to an individual in this state must be treated as a sale to a
83.32consumer, unless the individual is licensed as a distributor or retailer of tobacco products.
84.1(d) "Delivery service" means a person, including the United States Postal Service,
84.2that is engaged in the commercial delivery of letters, packages, or other containers.
84.3(e) "Distributor" means a person, whether located inside or outside of this state,
84.4other than a retailer, who sells or distributes tobacco products in the state. Distributor does
84.5not include a tobacco products manufacturer, export warehouse proprietor, or importer
84.6with a valid permit under United States Code, title 26, section 5712 (1997), if the person
84.7sells or distributes tobacco products in this state only to distributors who hold valid and
84.8current licenses under the laws of a state, or to an export warehouse proprietor or another
84.9manufacturer. Distributor does not include a common or contract carrier that is transporting
84.10tobacco products under a proper bill of lading or freight bill that states the quantity, source,
84.11and destination of tobacco products, or a person who ships tobacco products through this
84.12state by common or contract carrier under a bill of lading or freight bill.
84.13(f) "Retailer" means a person, whether located inside or outside this state, who sells
84.14or distributes tobacco products to a consumer in this state.
84.15(g) "Tobacco products" means:
84.16(1) cigarettes, as defined in section 297F.01, subdivision 3; and
84.17(2) smokeless tobacco as defined in section 325F.76.; and
84.18(3) premium cigars as defined in section 297F.01, subdivision 13a.
84.19EFFECTIVE DATE.This section is effective July 1, 2013.

84.20    Sec. 21. Minnesota Statutes 2012, section 349.166, subdivision 1, is amended to read:
84.21    Subdivision 1. Exclusions. (a) Bingo, with the exception of linked bingo games, may
84.22be conducted without a license and without complying with sections 349.168, subdivisions
84.231 and 2; 349.17, subdivisions 4 and 5; 349.18, subdivision 1; and 349.19, if it is conducted:
84.24(1) by an organization in connection with a county fair, the state fair, or a civic
84.25celebration and is not conducted for more than 12 consecutive days and is limited to no more
84.26than four separate applications for activities applied for and approved in a calendar year; or
84.27(2) by an organization that conducts bingo on four or fewer days in a calendar year.
84.28An organization that holds a license to conduct lawful gambling under this chapter
84.29may not conduct bingo under this subdivision.
84.30(b) Bingo may be conducted within a nursing home or a senior citizen housing
84.31project or by a senior citizen organization if the prizes for a single bingo game do not
84.32exceed $10, total prizes awarded at a single bingo occasion do not exceed $200, no more
84.33than two bingo occasions are held by the organization or at the facility each week, only
84.34members of the organization or residents of the nursing home or housing project are
84.35allowed to play in a bingo game, no compensation is paid for any persons who conduct the
85.1bingo, and a manager is appointed to supervise the bingo. Bingo conducted under this
85.2paragraph is exempt from sections 349.11 to 349.23, and the board may not require an
85.3organization that conducts bingo under this paragraph, or the manager who supervises the
85.4bingo, to register or file a report with the board. The gross receipts from bingo conducted
85.5under the limitations of this subdivision are exempt from taxation under chapter 297A.
85.6(c) Raffles may be conducted by an organization without registering with the board
85.7if the value of all raffle prizes awarded by the organization in a calendar year does not
85.8exceed $1,500 or, if the organization is a 501(c)(3) organization, if the value of all raffle
85.9prizes awarded by the organization at one event in a calendar year does not exceed $5,000.
85.10(d) Except as provided in paragraph (b), the organization must maintain all required
85.11records of excluded gambling activity for 3-1/2 years.
85.12EFFECTIVE DATE.This section is effective July 1, 2013.

85.13    Sec. 22. Minnesota Statutes 2012, section 360.531, is amended to read:
85.14360.531 TAXATION.
85.15    Subdivision 1. In lieu tax. All aircraft using the air space overlying the state of
85.16Minnesota or the airports thereof, except as set forth in section 360.55, shall be taxed in
85.17lieu of all other taxes thereon, on the basis and at the rate for the period January 1, 1966, to
85.18June 30, 1967, and for each fiscal year as follows.
85.19    Subd. 2. Rate. The tax shall be at the rate of one percent of value; provided that
85.20the minimum tax on an aircraft subject to the provisions of sections 360.511 to 360.67
85.21 shall not be less than 25 percent of the tax on said aircraft computed on its base price or
85.22$50 whichever is the higher. as follows:
85.23
Base Price
Tax
85.24
Under $499,999
$100
85.25
$500,000 to $999,999
$200
85.26
$1,000,000 to $2,499,999
$2,000
85.27
$2,500,000 to $4,999,999
$4,000
85.28
$5,000,000 to $7,499,999
$7,500
85.29
$7,500,000 to $9,999,999
$10,000
85.30
$10,000,000 to $12,499,999
$12,500
85.31
$12,500,000 to $14,999,999
$15,000
85.32
$15,000,000 to $17,499,999
$17,500
85.33
$17,500,000 to $19,999,999
$20,000
85.34
$20,000,000 to $22,499,999
$22,500
85.35
$22,500,000 to $24,999,999
$25,000
85.36
$25,000,000 to $27,499,999
$27,500
85.37
$27,500,000 to $29,999,999
$30,000
86.1
$30,000,000 to $39,999,999
$50,000
86.2
$40,000,000 and over
$75,000
86.3    Subd. 3. First year of life. "First year of life" means the year the aircraft was
86.4manufactured.
86.5    Subd. 4. Base price for taxation. For the purpose of fixing a base price for taxation
86.6from which depreciation in value at a fixed percent per annum can be counted, such , the
86.7base price is defined as follows:
86.8(a) The base price for taxation of an aircraft shall be the manufacturer's list price.
86.9(b) The commissioner shall have authority to fix the base value for taxation purposes
86.10of any aircraft of which no such similar or corresponding model has been manufactured,
86.11and of any rebuilt or foreign aircraft, any aircraft on which a record of the list price is not
86.12available, or any military aircraft converted for civilian use, using as a basis for such
86.13valuation the list price of aircraft with comparable performance characteristics, and taking
86.14into consideration the age and condition of the aircraft.
86.15    Subd. 5. Similarity of corresponding model. Models shall be deemed similar if
86.16substantially alike and of the same make. Models shall be deemed to be corresponding
86.17models for the purpose of taxation under sections 360.54 to 360.67 if of the same make
86.18and having approximately the same weight and type of frame and the same style and
86.19size of motor.
86.20    Subd. 6. Depreciation. After the first year of aircraft life the base value for taxation
86.21purposes shall be reduced as follows: ten percent the second year, and 15 percent the third
86.22and each succeeding year thereafter, but in no event shall such tax be reduced below
86.23the minimum.
86.24    Subd. 7. Prorating tax. When an aircraft first becomes subject to taxation during the
86.25period for which the tax is to be paid, the tax on it shall be for the remainder of that period,
86.26prorated on a monthly basis of 1/12 of the annual tax for each calendar month counting the
86.27month during which it becomes subject to the tax as the first month of such period.
86.28    Subd. 8. Tax, fiscal year. Every aircraft subject to the provisions of sections
86.29360.511 to 360.67 which has at any time since April 19, 1945, used the air space overlying
86.30the state of Minnesota or the airports thereof shall be taxed for the period from January 1,
86.311966, through June 30, 1967, and for each fiscal year thereafter in which it is so used. Any
86.32aircraft which does not use the air space overlying the state of Minnesota or the airports
86.33thereof at any time during the period of January 1, 1966, to and including June 30, 1967,
86.34or at any time during any fiscal year thereafter shall not be subject to the tax provided by
86.35sections 360.511 to 360.67 for such period. Rebuilt aircraft shall be subject to the tax
87.1provided by sections 360.511 to 360.67 for that portion of the aforesaid periods remaining
87.2after the aircraft has been rebuilt, prorated on a monthly basis.
87.3    Subd. 9. Assessed as personal property in certain cases. Aircraft subject to
87.4taxation under the provisions of sections 360.54 to 360.67 shall not be assessed as personal
87.5property and shall be subject to no tax except as provided for by these sections. Aircraft
87.6not subject to taxation as provided in these sections, but subject to taxation as personal
87.7property within the state of Minnesota shall be assessed and valued at 33-1/3 percent of
87.8the market value thereof and taxed at the rate and in the manner provided by law for the
87.9taxation of ordinary personal property. If the person against whom any tax has been levied
87.10on the ad valorem basis because of any aircraft shall, during the calendar year for which
87.11such ad valorem tax is levied, be also taxed under provisions of these sections, then and in
87.12that event, upon proper showing, the commissioner of revenue shall grant to the person
87.13against whom said ad valorem tax was levied, such reduction or abatement of net tax
87.14capacity or taxes as was occasioned by the so-called ad valorem tax imposed. If the ad
87.15valorem tax upon any aircraft has been assessed against a dealer in new and used aircraft,
87.16and the tax imposed by these sections for the required period is thereafter paid by the
87.17owner, then and in that event, upon proper showing, the commissioner of revenue, upon
87.18the application of said dealer, shall grant to such dealer against whom said ad valorem tax
87.19was levied such reduction or abatement of net tax capacity or taxes as was occasioned
87.20by the so-called ad valorem tax imposed.
87.21EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
87.22tax due on or after that date.

87.23    Sec. 23. Minnesota Statutes 2012, section 360.66, is amended to read:
87.24360.66 STATE AIRPORTS FUND.
87.25    Subdivision 1. Tax credited to fund. The proceeds of the tax imposed on aircraft
87.26under sections 360.54 360.531 to 360.67 and all fees and penalties provided for therein
87.27shall be collected by the commissioner and paid into the state treasury and credited to the
87.28state airports fund created by other statutes of this state.
87.29    Subd. 2. Reimbursement for expenses. There shall be transferred by the
87.30commissioner of management and budget each year from the state airports fund to the
87.31general fund in the state treasury the amount expended from the latter fund for expenses of
87.32administering the provisions of sections 360.54 360.531 to 360.67.
87.33EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
87.34tax due on or after that date.

88.1    Sec. 24. REPORT.
88.2On or before June 30, 2016, and every four years thereafter, the commissioner of
88.3transportation, in consultation with the commissioner of revenue, shall prepare and submit
88.4to the chairs and ranking minority members of the senate and house of representatives
88.5committees with jurisdiction over transportation policy and budget, a report that identifies
88.6the amount and sources of annual revenues attributable to each type of aviation tax, along
88.7with annual expenditures from the state airports fund, and any other transfers out of the
88.8fund, during the previous four years. The report must include draft legislation for any
88.9recommended statutory changes to ensure the future adequacy of the state airports fund.
88.10EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.11tax due on or after that date.

88.12    Sec. 25. FLOOR STOCKS TAX.
88.13    Subdivision 1. Cigarettes. (a) A floor stocks tax is imposed on every person
88.14engaged in the business in this state as a distributor, retailer, subjobber, vendor,
88.15manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and
88.16unaffixed stamps in the person's possession or under the person's control at 12:01 a.m.
88.17on July 1, 2013. The tax is imposed at the rate of 80 mills on each cigarette plus the
88.18additional cigarette sales tax determined by an adjustment to the weighted average retail
88.19price which reflects the price including the increased tax.
88.20(b) Each distributor, on or before July 11, 2013, shall file a return with the
88.21commissioner of revenue, in the form the commissioner prescribes, showing the stamped
88.22cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount
88.23of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor,
88.24manufacturer, or manufacturer's representative, on or before July 11, 2013, shall file
88.25a return with the commissioner, in the form the commissioner prescribes, showing the
88.26cigarettes on hand at 12:01 a.m. on July 1, 2013, and the amount of tax due on the
88.27cigarettes. The tax imposed by this section is due and payable on or before September 4,
88.282013, and after that date bears interest at the rate of one percent per month.
88.29    Subd. 2. Audit and enforcement. The tax imposed by this section is subject to
88.30the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and
88.31collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner
88.32of revenue may require a distributor to receive and maintain copies of floor stocks fee
88.33returns filed by all persons requesting a credit for returned cigarettes.
88.34    Subd. 3. Deposit of proceeds. (a) The commissioner of revenue shall deposit
88.35$26,500,000 of the revenues from the tax under this section in the state treasury and credit
89.1them to the general reserve account established under Minnesota Statutes 297E.021,
89.2subdivision 4.
89.3(b) The commissioner of revenue shall deposit any revenue remaining after the
89.4transfer under paragraph (a) to the general fund.
89.5EFFECTIVE DATE.This section is effective July 1, 2013.

89.6    Sec. 26. INTERIM SALES TAX RATE.
89.7Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the
89.8commissioner shall adjust the weighted average retail price in section 297F.25, subdivision
89.91, on July 1, 2013, to reflect the price changes under this act. This weighted average
89.10shall be used to compute cigarette sales tax under Minnesota Statutes, section 297F.25,
89.11subdivision 1, until December 31, 2013, when the commissioner shall resume annual
89.12adjustments to the weighted average sales price. The commissioner's determination of
89.13the adjustment that takes effect on January 1, 2014, must be limited to the change in the
89.14weighted average retail price that occurs during calendar year 2013 but after July 15, 2013.
89.15EFFECTIVE DATE.This section is effective July 1, 2013.

89.16    Sec. 27. TOBACCO TAX COLLECTION REPORT.
89.17    Subdivision 1. Report to legislature. (a) The commissioner of revenue shall report
89.18to the 2014 legislature on the tobacco tax collection system, including recommendations
89.19to improve compliance under the excise tax for both cigarettes and other tobacco products.
89.20The purpose of the report is to provide information and guidance to the legislature on
89.21improvements to the tobacco tax collection system to:
89.22(1) provide a unified system of collecting both the cigarette and other tobacco
89.23taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of
89.24tax collection;
89.25(2) discourage tax evasion; and
89.26(3) help to prevent illegal sale of tobacco products, which may make these products
89.27more accessible to youth.
89.28(b) In the report, the commissioner shall:
89.29(1) provide a detailed review of the present excise tax collection and compliance
89.30system as it applies to both cigarettes and other tobacco products. This must include
89.31an assessment of the levels of compliance for each category of products and the effect
89.32of the stamping requirement on compliance for each category of products and the effect
90.1of the stamping requirement on compliance rates for cigarettes relative to other tobacco
90.2products. It also must identify any weaknesses in the system;
90.3(2) survey the methods of collection and enforcement used by other states or nations,
90.4including identifying and discussing emerging best practices that ensure tracking of both
90.5cigarettes and other tobacco products and result in the highest rates of tax collection and
90.6compliance. These best practices must consider high-technology alternatives, such as use
90.7of bar codes, radio-frequency identification tags, or similar mechanisms for tracking
90.8compliance;
90.9(3) evaluate the adequacy and effectiveness of the existing penalties and other
90.10sanctions for noncompliance;
90.11(4) evaluate the adequacy of the resources allocated by the state to enforce the
90.12tobacco tax and prevention laws; and
90.13(5) make recommendations on implementation of a comprehensive tobacco tax
90.14collection system for Minnesota that can be implemented by January 1, 2014, including:
90.15(i) recommendations on the specific steps needed to institute and implement the new
90.16system, including estimates of the state's costs of doing so and any additional personnel
90.17requirements;
90.18(ii) recommendations on methods to recover the cost of implementing the system
90.19from the industry;
90.20(iii) evaluation of the extent to which the proposed system is sufficiently flexible
90.21and adaptable to adjust to modifications in the construction, packaging, formatting, and
90.22marketing of tobacco products by the industry; and
90.23(iv) recommendations to modify existing penalties or to impose new penalties or
90.24other sanctions to ensure compliance with the system.
90.25    Subd. 2. Due date. The report required by subdivision 1 is due February 15, 2014.
90.26    Subd. 3. Procedure. The report required under this section must be made in the
90.27manner provided under Minnesota Statutes, section 3.195. In addition, copies must be
90.28provided to the chairs and ranking minority members of the legislative committees and
90.29divisions with jurisdiction over taxation.
90.30    Subd. 4. Appropriation. (a) $100,000 is appropriated from the general fund to the
90.31commissioner of revenue for fiscal year 2014 for the cost of preparing the report under
90.32subdivision 1.
90.33(b) The appropriation under this subdivision is a onetime appropriation and is not
90.34included in the base budget.
91.1EFFECTIVE DATE.This section is effective the day following final enactment.

91.2    Sec. 28. REPEALER.
91.3Minnesota Statutes 2012, sections 16A.725; and 256.9658, are repealed.
91.4EFFECTIVE DATE.This section is effective July 1, 2013.

91.5ARTICLE 6
91.6INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

91.7    Section 1. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to
91.8read:
91.9    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
91.10have the meanings given.
91.11(b) "Qualified small business" means a business that has been certified by the
91.12commissioner under subdivision 2.
91.13(c) "Qualified investor" means an investor who has been certified by the
91.14commissioner under subdivision 3.
91.15(d) "Qualified fund" means a pooled angel investment network fund that has been
91.16certified by the commissioner under subdivision 4.
91.17(e) "Qualified investment" means a cash investment in a qualified small business
91.18of a minimum of:
91.19(1) $10,000 in a calendar year by a qualified investor; or
91.20(2) $30,000 in a calendar year by a qualified fund.
91.21A qualified investment must be made in exchange for common stock, a partnership
91.22or membership interest, preferred stock, debt with mandatory conversion to equity, or an
91.23equivalent ownership interest as determined by the commissioner.
91.24(f) "Family" means a family member within the meaning of the Internal Revenue
91.25Code, section 267(c)(4).
91.26(g) "Pass-through entity" means a corporation that for the applicable taxable year is
91.27treated as an S corporation or a general partnership, limited partnership, limited liability
91.28partnership, trust, or limited liability company and which for the applicable taxable year is
91.29not taxed as a corporation under chapter 290.
91.30(h) "Intern" means a student of an accredited institution of higher education, or a
91.31former student who has graduated in the past six months from an accredited institution
91.32of higher education, who is employed by a qualified small business in a nonpermanent
92.1position for a duration of nine months or less that provides training and experience in the
92.2primary business activity of the business.
92.3(i) "Liquidation event" means a conversion of qualified investment for cash, cash
92.4and other consideration, or any other form of equity or debt interest.
92.5EFFECTIVE DATE.This section is effective for qualified small businesses
92.6certified after June 30, 2013.

92.7    Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read:
92.8    Subd. 2. Certification of qualified small businesses. (a) Businesses may apply
92.9to the commissioner for certification as a qualified small business for a calendar year.
92.10The application must be in the form and be made under the procedures specified by the
92.11commissioner, accompanied by an application fee of $150. Application fees are deposited
92.12in the small business investment tax credit administration account in the special revenue
92.13fund. The application for certification for 2010 must be made available on the department's
92.14Web site by August 1, 2010. Applications for subsequent years' certification must be made
92.15available on the department's Web site by November 1 of the preceding year.
92.16(b) Within 30 days of receiving an application for certification under this subdivision,
92.17the commissioner must either certify the business as satisfying the conditions required of a
92.18qualified small business, request additional information from the business, or reject the
92.19application for certification. If the commissioner requests additional information from the
92.20business, the commissioner must either certify the business or reject the application within
92.2130 days of receiving the additional information. If the commissioner neither certifies the
92.22business nor rejects the application within 30 days of receiving the original application or
92.23within 30 days of receiving the additional information requested, whichever is later, then
92.24the application is deemed rejected, and the commissioner must refund the $150 application
92.25fee. A business that applies for certification and is rejected may reapply.
92.26(c) To receive certification, a business must satisfy all of the following conditions:
92.27(1) the business has its headquarters in Minnesota;
92.28(2) at least 51 percent of the business's employees are employed in Minnesota, and
92.2951 percent of the business's total payroll is paid or incurred in the state;
92.30(3) the business is engaged in, or is committed to engage in, innovation in Minnesota
92.31in one of the following as its primary business activity:
92.32(i) using proprietary technology to add value to a product, process, or service in a
92.33qualified high-technology field;
92.34(ii) researching or developing a proprietary product, process, or service in a qualified
92.35high-technology field; or
93.1(iii) researching, developing, or producing a new proprietary technology for use in
93.2the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
93.3(4) other than the activities specifically listed in clause (3), the business is not
93.4engaged in real estate development, insurance, banking, lending, lobbying, political
93.5consulting, information technology consulting, wholesale or retail trade, leisure,
93.6hospitality, transportation, construction, ethanol production from corn, or professional
93.7services provided by attorneys, accountants, business consultants, physicians, or health
93.8care consultants;
93.9(5) the business has fewer than 25 employees;
93.10(6) the business must pay its employees annual wages of at least 175 percent of the
93.11federal poverty guideline for the year for a family of four and must pay its interns annual
93.12wages of at least 175 percent of the federal minimum wage used for federally covered
93.13employers, except that this requirement must be reduced proportionately for employees
93.14and interns who work less than full-time, and does not apply to an executive, officer, or
93.15member of the board of the business, or to any employee who owns, controls, or holds
93.16power to vote more than 20 percent of the outstanding securities of the business;
93.17(7) the business has (i) not been in operation for more than ten years, or (ii) the
93.18business has not been in operation for more than 20 years if the business is engaged
93.19in the research, development, or production of medical devices or pharmaceuticals for
93.20which United States Food and Drug Administration approval is required for use in the
93.21treatment or diagnosis of a disease or condition;
93.22(8) the business has not previously received private equity investments of more
93.23than $4,000,000; and
93.24    (9) the business is not an entity disqualified under section 80A.50, paragraph (b),
93.25clause (3).; and
93.26(10) the business has not issued securities that are traded on a public exchange.
93.27(d) In applying the limit under paragraph (c), clause (5), the employees in all members
93.28of the unitary business, as defined in section 290.17, subdivision 4, must be included.
93.29(e) In order for a qualified investment in a business to be eligible for tax credits,:
93.30(1) the business must have applied for and received certification for the calendar
93.31year in which the investment was made prior to the date on which the qualified investment
93.32was made.;
93.33(2) the business must not have issued securities that are traded on a public exchange;
93.34(3) the business must not issue securities that are traded on a public exchange within
93.35180 days after the date on which the qualified investment was made; and
94.1(4) the business must not have a liquidation event within 180 days after the date on
94.2which the qualified investment was made.
94.3(f) The commissioner must maintain a list of businesses certified under this
94.4subdivision for the calendar year and make the list accessible to the public on the
94.5department's Web site.
94.6(g) For purposes of this subdivision, the following terms have the meanings given:
94.7(1) "qualified high-technology field" includes aerospace, agricultural processing,
94.8renewable energy, energy efficiency and conservation, environmental engineering, food
94.9technology, cellulosic ethanol, information technology, materials science technology,
94.10nanotechnology, telecommunications, biotechnology, medical device products,
94.11pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar
94.12fields; and
94.13(2) "proprietary technology" means the technical innovations that are unique and
94.14legally owned or licensed by a business and includes, without limitation, those innovations
94.15that are patented, patent pending, a subject of trade secrets, or copyrighted.
94.16EFFECTIVE DATE.This section is effective for qualified small businesses
94.17certified after June 30, 2013, except the amendments to paragraph (c), clause (7), are
94.18effective the day following final enactment.

94.19    Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 8, is amended to read:
94.20    Subd. 8. Data privacy. (a) Data contained in an application submitted to the
94.21commissioner under subdivision 2, 3, or 4 are nonpublic data, or private data on
94.22individuals, as defined in section 13.02, subdivision 9 or 12, except that the following
94.23data items are public:
94.24(1) the name, mailing address, telephone number, e-mail address, contact person's
94.25name, and industry type of a qualified small business upon approval of the application
94.26and certification by the commissioner under subdivision 2;
94.27(2) the name of a qualified investor upon approval of the application and certification
94.28by the commissioner under subdivision 3;
94.29(3) the name of a qualified fund upon approval of the application and certification
94.30by the commissioner under subdivision 4;
94.31(4) for credit certificates issued under subdivision 5, the amount of the credit
94.32certificate issued, amount of the qualifying investment, the name of the qualifying investor
94.33or qualifying fund that received the certificate, and the name of the qualifying small
94.34business in which the qualifying investment was made;
95.1(5) for credits revoked under subdivision 7, paragraph (a), the amount revoked and
95.2the name of the qualified investor or qualified fund; and
95.3(6) for credits revoked under subdivision 7, paragraphs (b) and (c), the amount
95.4revoked and the name of the qualified small business.
95.5(b) The following data, including data classified as nonpublic or private, must be
95.6provided to the consultant for use in conducting the program evaluation under subdivision
95.710:
95.8(1) the commissioner of employment and economic development shall provide data
95.9contained in an application for certification received from a qualified small business,
95.10qualified investor, or qualified fund, and any annual reporting information received on a
95.11qualified small business, qualified investor, or qualified fund; and
95.12(2) the commissioner of revenue shall provide data contained in any applicable tax
95.13returns of a qualified small business, qualified investor, or qualified fund.
95.14EFFECTIVE DATE.This section is effective the day following final enactment.

95.15    Sec. 4. [136A.129] GREATER MINNESOTA INTERNSHIP PROGRAM.
95.16    Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
95.17this subdivision have the meanings given to them.
95.18(b) "Eligible employer" means a taxpayer under section 290.01 with employees
95.19located in greater Minnesota.
95.20(c) "Eligible institution" means a Minnesota public postsecondary institution or a
95.21Minnesota private, nonprofit, baccalaureate degree-granting college or university.
95.22(d) "Eligible student" means a student enrolled in an eligible institution who has
95.23completed one-half of the credits necessary for the respective degree or certification.
95.24(e) "Greater Minnesota" means the area of the state outside of the counties of Anoka,
95.25Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and
95.26Wright.
95.27    Subd. 2. Program established. The Office of Higher Education shall administer
95.28a greater Minnesota internship program through eligible institutions to provide credit at
95.29the eligible institution for internships and tax credits for eligible employers who hire
95.30interns for employment in greater Minnesota.
95.31    Subd. 3. Program components. (a) An intern must be an eligible student who has
95.32been admitted to a major program that is related to the intern experience as determined
95.33by the eligible institution.
95.34(b) To participate in the program, an eligible institution must:
96.1(1) enter into written agreements with eligible employers to provide internships that
96.2are at least 12 weeks long and located in greater Minnesota;
96.3(2) determine that the work experience of the internship is related to the eligible
96.4student's course of study; and
96.5(3) provide academic credit for the successful completion of the internship or ensure
96.6that it fulfills requirements necessary to complete a vocational technical education program.
96.7(c) To participate in the program, an eligible employer must enter into a written
96.8agreement with an eligible institution specifying that the intern:
96.9(1) would not have been hired without the tax credit described in subdivision 4;
96.10(2) did not work for the employer in the same or a similar job prior to entering
96.11the agreement;
96.12(3) does not replace an existing employee;
96.13(4) has not previously participated in the program;
96.14(5) will be employed at a location in greater Minnesota;
96.15(6) will be paid at least minimum wage for a minimum of 16 hours per week for a
96.16period of at least 12 weeks; and
96.17(7) will be supervised and evaluated by the employer.
96.18(d) The written agreement between the eligible institution and the eligible employer
96.19must certify a credit amount to the employer, not to exceed $2,000 per intern. The total
96.20dollar amount of credits that an eligible institution certifies to eligible employers in a
96.21calendar year may not exceed the amount of its allocation under subdivision 4.
96.22(e) Participating eligible institutions and eligible employers must report annually to
96.23the office. The report must include at least the following:
96.24(1) the number of interns hired;
96.25(2) the number of hours and weeks worked by interns; and
96.26(3) the compensation paid to interns.
96.27(f) An internship required to complete an academic program does not qualify for the
96.28greater Minnesota internship program under this section.
96.29    Subd. 4. Tax credit allowed. An employer is entitled to a tax credit as provided in
96.30section 290.06, subdivision 36. The total amount of credits allocated in a calendar year
96.31must not exceed $2,000,000. The office shall determine relevant criteria to allocate the
96.32tax credits including the geographic distribution of credits to work locations outside the
96.33metropolitan area, and shall allocate credits to eligible institutions that meet the criteria on
96.34a first come, first served basis. Any credits allocated to an institution but not used may be
96.35reallocated to eligible institutions. The office shall allocate a portion of the administrative
97.1fee under section 290.06, subdivision 36, to participating eligible institutions for their
97.2administrative costs.
97.3    Subd. 5. Reports to the legislature. (a) By February 1, 2015, the office and the
97.4Department of Revenue shall report to the legislature on the greater Minnesota internship
97.5program. The report must include at least the following:
97.6(1) the number and dollar amount of credits allowed;
97.7(2) the number of interns employed under the program; and
97.8(3) the cost of administering the program.
97.9(b) By February 1, 2016, the office and the Department of Revenue shall report to the
97.10legislature with an analysis of the effectiveness of the program in stimulating businesses
97.11to hire interns and in assisting participating interns in finding permanent career positions.
97.12This report must include the number of students who participated in the program who
97.13were subsequently employed full-time by the employer.
97.14EFFECTIVE DATE.This section is effective for taxable years beginning after
97.15December 31, 2013.

97.16    Sec. 5. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read:
97.17    Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
97.18tax under section 290.014, subdivision 5, must file a return, except that a foreign operating
97.19corporation as defined in section 290.01, subdivision 6b, is not required to file a return.
97.20(b) Members of a unitary business that are required to file a combined report on one
97.21return must designate a member of the unitary business to be responsible for tax matters,
97.22including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
97.23or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
97.24taxes lawfully due. The designated member must be a member of the unitary business that
97.25is filing the single combined report and either:
97.26(1) a corporation that is subject to the taxes imposed by chapter 290; or
97.27(2) a corporation that is not subject to the taxes imposed by chapter 290:
97.28(i) Such corporation consents by filing the return as a designated member under this
97.29clause to remit taxes, penalties, interest, or additions to tax due from the members of the
97.30unitary business subject to tax, and receive refunds or other payments on behalf of other
97.31members of the unitary business. The member designated under this clause is a "taxpayer"
97.32for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
97.33on the unitary business under this chapter and chapter 290.
98.1(ii) If the state does not otherwise have the jurisdiction to tax the member designated
98.2under this clause, consenting to be the designated member does not create the jurisdiction
98.3to impose tax on the designated member, other than as described in item (i).
98.4(iii) The member designated under this clause must apply for a business tax account
98.5identification number.
98.6(c) The commissioner shall adopt rules for the filing of one return on behalf of the
98.7members of an affiliated group of corporations that are required to file a combined report.
98.8All members of an affiliated group that are required to file a combined report must file one
98.9return on behalf of the members of the group under rules adopted by the commissioner.
98.10(d) If a corporation claims on a return that it has paid tax in excess of the amount of
98.11taxes lawfully due, that corporation must include on that return information necessary for
98.12payment of the tax in excess of the amount lawfully due by electronic means.
98.13EFFECTIVE DATE.This section is effective for taxable years beginning after
98.14December 31, 2012.

98.15    Sec. 6. Minnesota Statutes 2012, section 290.01, subdivision 19, as amended by Laws
98.162013, chapter 3, section 3, is amended to read:
98.17    Subd. 19. Net income. The term "net income" means the federal taxable income,
98.18as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
98.19date named in this subdivision, incorporating the federal effective dates of changes to the
98.20Internal Revenue Code and any elections made by the taxpayer in accordance with the
98.21Internal Revenue Code in determining federal taxable income for federal income tax
98.22purposes, and with the modifications provided in subdivisions 19a to 19f.
98.23    In the case of a regulated investment company or a fund thereof, as defined in section
98.24851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
98.25company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
98.26except that:
98.27    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
98.28Revenue Code does not apply;
98.29    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
98.30Revenue Code must be applied by allowing a deduction for capital gain dividends and
98.31exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
98.32Revenue Code; and
98.33    (3) the deduction for dividends paid must also be applied in the amount of any
98.34undistributed capital gains which the regulated investment company elects to have treated
98.35as provided in section 852(b)(3)(D) of the Internal Revenue Code.
99.1    The net income of a real estate investment trust as defined and limited by section
99.2856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
99.3taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
99.4    The net income of a designated settlement fund as defined in section 468B(d) of
99.5the Internal Revenue Code means the gross income as defined in section 468B(b) of the
99.6Internal Revenue Code.
99.7    The Internal Revenue Code of 1986, as amended through April 14, 2011, shall be in
99.8effect for taxable years beginning after December 31, 1996, and before January 1, 2012,
99.9and for taxable years beginning after December 31, 2012. The Internal Revenue Code of
99.101986, as amended through January 3, 2013, is in effect for taxable years beginning after
99.11December 31, 2011, and before January 1, 2013.
99.12The provisions of sections 315 and 331 of the American Taxpayer Relief Act of
99.132012, Public Law 112-240, extension of increased expensing limitations and treatment
99.14of certain real property as section 179 property and extension and modification of bonus
99.15depreciation, are effective at the same time they become effective for federal purposes.
99.16    Except as otherwise provided, references to the Internal Revenue Code in
99.17subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
99.18the applicable year.
99.19EFFECTIVE DATE.This section is effective for taxable years beginning after
99.20December 31, 2012.

99.21    Sec. 7. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
99.22    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
99.23and trusts, there shall be subtracted from federal taxable income:
99.24    (1) net interest income on obligations of any authority, commission, or
99.25instrumentality of the United States to the extent includable in taxable income for federal
99.26income tax purposes but exempt from state income tax under the laws of the United States;
99.27    (2) if included in federal taxable income, the amount of any overpayment of income
99.28tax to Minnesota or to any other state, for any previous taxable year, whether the amount
99.29is received as a refund or as a credit to another taxable year's income tax liability;
99.30    (3) the amount paid to others, less the amount used to claim the credit allowed under
99.31section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
99.32to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
99.33transportation of each qualifying child in attending an elementary or secondary school
99.34situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
99.35resident of this state may legally fulfill the state's compulsory attendance laws, which
100.1is not operated for profit, and which adheres to the provisions of the Civil Rights Act
100.2of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
100.3tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
100.4"textbooks" includes books and other instructional materials and equipment purchased
100.5or leased for use in elementary and secondary schools in teaching only those subjects
100.6legally and commonly taught in public elementary and secondary schools in this state.
100.7Equipment expenses qualifying for deduction includes expenses as defined and limited in
100.8section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
100.9books and materials used in the teaching of religious tenets, doctrines, or worship, the
100.10purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
100.11or materials for, or transportation to, extracurricular activities including sporting events,
100.12musical or dramatic events, speech activities, driver's education, or similar programs. No
100.13deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
100.14the qualifying child's vehicle to provide such transportation for a qualifying child. For
100.15purposes of the subtraction provided by this clause, "qualifying child" has the meaning
100.16given in section 32(c)(3) of the Internal Revenue Code;
100.17    (4) income as provided under section 290.0802;
100.18    (5) to the extent included in federal adjusted gross income, income realized on
100.19disposition of property exempt from tax under section 290.491;
100.20    (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
100.21of the Internal Revenue Code in determining federal taxable income by an individual
100.22who does not itemize deductions for federal income tax purposes for the taxable year, an
100.23amount equal to 50 percent of the excess of charitable contributions over $500 allowable
100.24as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
100.25under the provisions of Public Law 109-1 and Public Law 111-126;
100.26    (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
100.27qualify for a credit under section 290.06, subdivision 22, an amount equal to the carryover
100.28of subnational foreign taxes for the taxable year, but not to exceed the total subnational
100.29foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
100.30"federal foreign tax credit" means the credit allowed under section 27 of the Internal
100.31Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
100.32under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
100.33the extent they exceed the federal foreign tax credit;
100.34    (8) in each of the five tax years immediately following the tax year in which an
100.35addition is required under subdivision 19a, clause (7), or 19c, clause (15) (12), in the case
100.36of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
101.1delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
101.2of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
101.3clause (15) (12), in the case of a shareholder of an S corporation, minus the positive value
101.4of any net operating loss under section 172 of the Internal Revenue Code generated for the
101.5tax year of the addition. The resulting delayed depreciation cannot be less than zero;
101.6    (9) job opportunity building zone income as provided under section 469.316;
101.7    (10) to the extent included in federal taxable income, the amount of compensation
101.8paid to members of the Minnesota National Guard or other reserve components of the
101.9United States military for active service, excluding compensation for services performed
101.10under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
101.11service" means (i) state active service as defined in section 190.05, subdivision 5a, clause
101.12(1); or (ii) federally funded state active service as defined in section 190.05, subdivision
101.135b
, but "active service" excludes service performed in accordance with section 190.08,
101.14subdivision 3
;
101.15    (11) to the extent included in federal taxable income, the amount of compensation
101.16paid to Minnesota residents who are members of the armed forces of the United States
101.17or United Nations for active duty performed under United States Code, title 10; or the
101.18authority of the United Nations;
101.19    (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
101.20qualified donor's donation, while living, of one or more of the qualified donor's organs
101.21to another person for human organ transplantation. For purposes of this clause, "organ"
101.22means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
101.23"human organ transplantation" means the medical procedure by which transfer of a human
101.24organ is made from the body of one person to the body of another person; "qualified
101.25expenses" means unreimbursed expenses for both the individual and the qualified donor
101.26for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
101.27may be subtracted under this clause only once; and "qualified donor" means the individual
101.28or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
101.29individual may claim the subtraction in this clause for each instance of organ donation for
101.30transplantation during the taxable year in which the qualified expenses occur;
101.31    (13) in each of the five tax years immediately following the tax year in which an
101.32addition is required under subdivision 19a, clause (8), or 19c, clause (16) (13), in the case
101.33of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of
101.34the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause (16)
101.35 (13), in the case of a shareholder of a corporation that is an S corporation, minus the
101.36positive value of any net operating loss under section 172 of the Internal Revenue Code
102.1generated for the tax year of the addition. If the net operating loss exceeds the addition for
102.2the tax year, a subtraction is not allowed under this clause;
102.3    (14) to the extent included in the federal taxable income of a nonresident of
102.4Minnesota, compensation paid to a service member as defined in United States Code, title
102.510, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
102.6Act, Public Law 108-189, section 101(2);
102.7    (15) to the extent included in federal taxable income, the amount of national service
102.8educational awards received from the National Service Trust under United States Code,
102.9title 42, sections 12601 to 12604, for service in an approved Americorps National Service
102.10program;
102.11(16) to the extent included in federal taxable income, discharge of indebtedness
102.12income resulting from reacquisition of business indebtedness included in federal taxable
102.13income under section 108(i) of the Internal Revenue Code. This subtraction applies only
102.14to the extent that the income was included in net income in a prior year as a result of the
102.15addition under section 290.01, subdivision 19a, clause (16); and
102.16(17) the amount of the net operating loss allowed under section 290.095, subdivision
102.1711
, paragraph (c); and
102.18(18) the amount of expenses not allowed for federal income tax purposes due
102.19to claiming the railroad track maintenance credit under section 45G(a) of the Internal
102.20Revenue Code.
102.21EFFECTIVE DATE.This section is effective for taxable years beginning after
102.22December 31, 2012.

102.23    Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
102.24    Subd. 19c. Corporations; additions to federal taxable income. For corporations,
102.25there shall be added to federal taxable income:
102.26    (1) the amount of any deduction taken for federal income tax purposes for income,
102.27excise, or franchise taxes based on net income or related minimum taxes, including but not
102.28limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
102.29another state, a political subdivision of another state, the District of Columbia, or any
102.30foreign country or possession of the United States;
102.31    (2) interest not subject to federal tax upon obligations of: the United States, its
102.32possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
102.33state, any of its political or governmental subdivisions, any of its municipalities, or any
102.34of its governmental agencies or instrumentalities; the District of Columbia; or Indian
102.35tribal governments;
103.1    (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
103.2Revenue Code;
103.3    (4) the amount of any net operating loss deduction taken for federal income tax
103.4purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
103.5deduction under section 810 of the Internal Revenue Code;
103.6    (5) the amount of any special deductions taken for federal income tax purposes
103.7under sections 241 to 247 and 965 of the Internal Revenue Code;
103.8    (6) losses from the business of mining, as defined in section 290.05, subdivision 1,
103.9clause (a), that are not subject to Minnesota income tax;
103.10    (7) the amount of any capital losses deducted for federal income tax purposes under
103.11sections 1211 and 1212 of the Internal Revenue Code;
103.12    (8) the exempt foreign trade income of a foreign sales corporation under sections
103.13921(a) and 291 of the Internal Revenue Code;
103.14    (9) (8) the amount of percentage depletion deducted under sections 611 through
103.15614 and 291 of the Internal Revenue Code;
103.16    (10) (9) for certified pollution control facilities placed in service in a taxable year
103.17beginning before December 31, 1986, and for which amortization deductions were elected
103.18under section 169 of the Internal Revenue Code of 1954, as amended through December
103.1931, 1985, the amount of the amortization deduction allowed in computing federal taxable
103.20income for those facilities;
103.21    (11) the amount of any deemed dividend from a foreign operating corporation
103.22determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
103.23shall be reduced by the amount of the addition to income required by clauses (20), (21),
103.24(22), and (23);
103.25    (12) (10) the amount of a partner's pro rata share of net income which does not flow
103.26through to the partner because the partnership elected to pay the tax on the income under
103.27section 6242(a)(2) of the Internal Revenue Code;
103.28    (13) the amount of net income excluded under section 114 of the Internal Revenue
103.29Code;
103.30    (14) (11) any increase in subpart F income, as defined in section 952(a) of the
103.31Internal Revenue Code, for the taxable year when subpart F income is calculated without
103.32regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
103.33    (15) (12) 80 percent of the depreciation deduction allowed under section
103.34168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
103.35the taxpayer has an activity that in the taxable year generates a deduction for depreciation
103.36under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
104.1year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
104.2allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
104.3of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
104.4over the amount of the loss from the activity that is not allowed in the taxable year. In
104.5succeeding taxable years when the losses not allowed in the taxable year are allowed, the
104.6depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
104.7    (16) (13) 80 percent of the amount by which the deduction allowed by section 179 of
104.8the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
104.9Revenue Code of 1986, as amended through December 31, 2003;
104.10    (17) (14) to the extent deducted in computing federal taxable income, the amount of
104.11the deduction allowable under section 199 of the Internal Revenue Code;
104.12    (18) for taxable years beginning before January 1, 2013, the exclusion allowed under
104.13section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
104.14    (19) (15) the amount of expenses disallowed under section 290.10, subdivision 2; and
104.15    (20) an amount equal to the interest and intangible expenses, losses, and costs paid,
104.16accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
104.17of a corporation that is a member of the taxpayer's unitary business group that qualifies
104.18as a foreign operating corporation. For purposes of this clause, intangible expenses and
104.19costs include:
104.20    (i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
104.21use, maintenance or management, ownership, sale, exchange, or any other disposition of
104.22intangible property;
104.23    (ii) losses incurred, directly or indirectly, from factoring transactions or discounting
104.24transactions;
104.25    (iii) royalty, patent, technical, and copyright fees;
104.26    (iv) licensing fees; and
104.27    (v) other similar expenses and costs.
104.28For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
104.29applications, trade names, trademarks, service marks, copyrights, mask works, trade
104.30secrets, and similar types of intangible assets.
104.31This clause does not apply to any item of interest or intangible expenses or costs paid,
104.32accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
104.33to such item of income to the extent that the income to the foreign operating corporation
104.34is income from sources without the United States as defined in subtitle A, chapter 1,
104.35subchapter N, part 1, of the Internal Revenue Code;
105.1    (21) except as already included in the taxpayer's taxable income pursuant to clause
105.2(20), any interest income and income generated from intangible property received or
105.3accrued by a foreign operating corporation that is a member of the taxpayer's unitary
105.4group. For purposes of this clause, income generated from intangible property includes:
105.5    (i) income related to the direct or indirect acquisition, use, maintenance or
105.6management, ownership, sale, exchange, or any other disposition of intangible property;
105.7    (ii) income from factoring transactions or discounting transactions;
105.8    (iii) royalty, patent, technical, and copyright fees;
105.9    (iv) licensing fees; and
105.10    (v) other similar income.
105.11For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
105.12applications, trade names, trademarks, service marks, copyrights, mask works, trade
105.13secrets, and similar types of intangible assets.
105.14This clause does not apply to any item of interest or intangible income received or accrued
105.15by a foreign operating corporation with respect to such item of income to the extent that
105.16the income is income from sources without the United States as defined in subtitle A,
105.17chapter 1, subchapter N, part 1, of the Internal Revenue Code;
105.18    (22) the dividends attributable to the income of a foreign operating corporation that
105.19is a member of the taxpayer's unitary group in an amount that is equal to the dividends
105.20paid deduction of a real estate investment trust under section 561(a) of the Internal
105.21Revenue Code for amounts paid or accrued by the real estate investment trust to the
105.22foreign operating corporation;
105.23    (23) the income of a foreign operating corporation that is a member of the taxpayer's
105.24unitary group in an amount that is equal to gains derived from the sale of real or personal
105.25property located in the United States;
105.26    (24) for taxable years beginning before January 1, 2010, the additional amount
105.27allowed as a deduction for donation of computer technology and equipment under section
105.28170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
105.29(25) (16) discharge of indebtedness income resulting from reacquisition of business
105.30indebtedness and deferred under section 108(i) of the Internal Revenue Code.
105.31EFFECTIVE DATE.This section is effective for taxable years beginning after
105.32December 31, 2012.

105.33    Sec. 9. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
106.1    Subd. 19d. Corporations; modifications decreasing federal taxable income. For
106.2corporations, there shall be subtracted from federal taxable income after the increases
106.3provided in subdivision 19c:
106.4    (1) the amount of foreign dividend gross-up added to gross income for federal
106.5income tax purposes under section 78 of the Internal Revenue Code;
106.6    (2) the amount of salary expense not allowed for federal income tax purposes due to
106.7claiming the work opportunity credit under section 51 of the Internal Revenue Code;
106.8    (3) any dividend (not including any distribution in liquidation) paid within the
106.9taxable year by a national or state bank to the United States, or to any instrumentality of
106.10the United States exempt from federal income taxes, on the preferred stock of the bank
106.11owned by the United States or the instrumentality;
106.12    (4) amounts disallowed for intangible drilling costs due to differences between
106.13this chapter and the Internal Revenue Code in taxable years beginning before January
106.141, 1987, as follows:
106.15    (i) to the extent the disallowed costs are represented by physical property, an amount
106.16equal to the allowance for depreciation under Minnesota Statutes 1986, section 290.09,
106.17subdivision 7
, subject to the modifications contained in subdivision 19e; and
106.18    (ii) to the extent the disallowed costs are not represented by physical property, an
106.19amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
106.20290.09, subdivision 8 ;
106.21    (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
106.22Internal Revenue Code, except that:
106.23    (i) for capital losses incurred in taxable years beginning after December 31, 1986,
106.24capital loss carrybacks shall not be allowed;
106.25    (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
106.26a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
106.27allowed;
106.28    (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
106.29capital loss carryback to each of the three taxable years preceding the loss year, subject to
106.30the provisions of Minnesota Statutes 1986, section 290.16, shall be allowed; and
106.31    (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
106.32a capital loss carryover to each of the five taxable years succeeding the loss year to the
106.33extent such loss was not used in a prior taxable year and subject to the provisions of
106.34Minnesota Statutes 1986, section 290.16, shall be allowed;
106.35    (6) an amount for interest and expenses relating to income not taxable for federal
106.36income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
107.1expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
107.2291 of the Internal Revenue Code in computing federal taxable income;
107.3    (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
107.4which percentage depletion was disallowed pursuant to subdivision 19c, clause (9) (8), a
107.5reasonable allowance for depletion based on actual cost. In the case of leases the deduction
107.6must be apportioned between the lessor and lessee in accordance with rules prescribed
107.7by the commissioner. In the case of property held in trust, the allowable deduction must
107.8be apportioned between the income beneficiaries and the trustee in accordance with the
107.9pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
107.10of the trust's income allocable to each;
107.11    (8) for certified pollution control facilities placed in service in a taxable year
107.12beginning before December 31, 1986, and for which amortization deductions were elected
107.13under section 169 of the Internal Revenue Code of 1954, as amended through December
107.1431, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
107.151986, section 290.09, subdivision 7;
107.16    (9) amounts included in federal taxable income that are due to refunds of income,
107.17excise, or franchise taxes based on net income or related minimum taxes paid by the
107.18corporation to Minnesota, another state, a political subdivision of another state, the
107.19District of Columbia, or a foreign country or possession of the United States to the extent
107.20that the taxes were added to federal taxable income under section 290.01, subdivision 19c,
107.21clause (1), in a prior taxable year;
107.22    (10) 80 percent of royalties, fees, or other like income accrued or received from a
107.23foreign operating corporation or a foreign corporation which is part of the same unitary
107.24business as the receiving corporation, unless the income resulting from such payments or
107.25accruals is income from sources within the United States as defined in subtitle A, chapter
107.261, subchapter N, part 1, of the Internal Revenue Code;
107.27    (11) (10) income or gains from the business of mining as defined in section 290.05,
107.28subdivision 1
, clause (a), that are not subject to Minnesota franchise tax;
107.29    (12) (11) the amount of disability access expenditures in the taxable year which are not
107.30allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
107.31    (13) (12) the amount of qualified research expenses not allowed for federal income
107.32tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
107.33that the amount exceeds the amount of the credit allowed under section 290.068;
107.34    (14) (13) the amount of salary expenses not allowed for federal income tax purposes
107.35due to claiming the Indian employment credit under section 45A(a) of the Internal
107.36Revenue Code;
108.1    (15) for a corporation whose foreign sales corporation, as defined in section 922
108.2of the Internal Revenue Code, constituted a foreign operating corporation during any
108.3taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
108.4claiming the deduction under section 290.21, subdivision 4, for income received from
108.5the foreign operating corporation, an amount equal to 1.23 multiplied by the amount of
108.6income excluded under section 114 of the Internal Revenue Code, provided the income is
108.7not income of a foreign operating company;
108.8    (16) (14) any decrease in subpart F income, as defined in section 952(a) of the
108.9Internal Revenue Code, for the taxable year when subpart F income is calculated without
108.10regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
108.11    (17) (15) in each of the five tax years immediately following the tax year in which an
108.12addition is required under subdivision 19c, clause (15) (12), an amount equal to one-fifth
108.13of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
108.14amount of the addition made by the taxpayer under subdivision 19c, clause (15) (12). The
108.15resulting delayed depreciation cannot be less than zero;
108.16    (18) (16) in each of the five tax years immediately following the tax year in which an
108.17addition is required under subdivision 19c, clause (16) (13), an amount equal to one-fifth
108.18of the amount of the addition; and
108.19(19) (17) to the extent included in federal taxable income, discharge of indebtedness
108.20income resulting from reacquisition of business indebtedness included in federal taxable
108.21income under section 108(i) of the Internal Revenue Code. This subtraction applies only
108.22to the extent that the income was included in net income in a prior year as a result of the
108.23addition under section 290.01, subdivision 19c, clause (25). (16); and
108.24(18) the amount of expenses not allowed for federal income tax purposes due
108.25to claiming the railroad track maintenance credit under section 45G(a) of the Internal
108.26Revenue Code.
108.27EFFECTIVE DATE.This section is effective for taxable years beginning after
108.28December 31, 2012.

108.29    Sec. 10. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read:
108.30    Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
108.31taxes imposed by this chapter upon married individuals filing joint returns and surviving
108.32spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
108.33applying to their taxable net income the following schedule of rates:
108.34    (1) On the first $25,680 $35,480, 5.35 percent;
108.35    (2) On all over $25,680 $35,480, but not over $102,030 $140,960, 7.05 percent;
109.1    (3) On all over $102,030 $140,960, but not over $250,000, 7.85 percent.;
109.2(4) On all over $250,000, 9.85 percent.
109.3    Married individuals filing separate returns, estates, and trusts must compute their
109.4income tax by applying the above rates to their taxable income, except that the income
109.5brackets will be one-half of the above amounts.
109.6    (b) The income taxes imposed by this chapter upon unmarried individuals must be
109.7computed by applying to taxable net income the following schedule of rates:
109.8    (1) On the first $17,570 $24,270, 5.35 percent;
109.9    (2) On all over $17,570 $24,270, but not over $57,710 $79,730, 7.05 percent;
109.10    (3) On all over $57,710 $79,730, but not over $150,000, 7.85 percent.;
109.11(4) On all over $150,000, 9.85 percent.
109.12    (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
109.13as a head of household as defined in section 2(b) of the Internal Revenue Code must be
109.14computed by applying to taxable net income the following schedule of rates:
109.15    (1) On the first $21,630 $29,880, 5.35 percent;
109.16    (2) On all over $21,630 $29,880, but not over $86,910 $120,070, 7.05 percent;
109.17    (3) On all over $86,910 $120,070, but not over $200,000, 7.85 percent.;
109.18(4) On all over $200,000, 9.85 percent.
109.19    (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
109.20tax of any individual taxpayer whose taxable net income for the taxable year is less than
109.21an amount determined by the commissioner must be computed in accordance with tables
109.22prepared and issued by the commissioner of revenue based on income brackets of not
109.23more than $100. The amount of tax for each bracket shall be computed at the rates set
109.24forth in this subdivision, provided that the commissioner may disregard a fractional part of
109.25a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
109.26    (e) An individual who is not a Minnesota resident for the entire year must compute
109.27the individual's Minnesota income tax as provided in this subdivision. After the
109.28application of the nonrefundable credits provided in this chapter, the tax liability must
109.29then be multiplied by a fraction in which:
109.30    (1) the numerator is the individual's Minnesota source federal adjusted gross income
109.31as defined in section 62 of the Internal Revenue Code and increased by the additions
109.32required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12),
109.33(13), and (16) to (18), and reduced by the Minnesota assignable portion of the subtraction
109.34for United States government interest under section 290.01, subdivision 19b, clause
109.35(1), and the subtractions under section 290.01, subdivision 19b, clauses (8), (9), (13),
110.1(14), (16), and (17), after applying the allocation and assignability provisions of section
110.2290.081 , clause (a), or 290.17; and
110.3    (2) the denominator is the individual's federal adjusted gross income as defined in
110.4section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
110.5section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to
110.6(18), and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
110.7(8), (9), (13), (14), (16), and (17).
110.8EFFECTIVE DATE.This section is effective for taxable years beginning after
110.9December 31, 2012.

110.10    Sec. 11. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read:
110.11    Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after
110.12December 31, 2000 2013, the minimum and maximum dollar amounts for each rate
110.13bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
110.14percentage determined under paragraph (b). For the purpose of making the adjustment as
110.15provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
110.16rate brackets as they existed for taxable years beginning after December 31, 1999 2012,
110.17and before January 1, 2001 2014. The rate applicable to any rate bracket must not be
110.18changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
110.19in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
110.20amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
110.21(b) The commissioner shall adjust the rate brackets and by the percentage determined
110.22pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
110.23section 1(f)(3)(B) the word "1999" "2012" shall be substituted for the word "1992." For
110.242001 2014, the commissioner shall then determine the percent change from the 12 months
110.25ending on August 31, 1999 2012, to the 12 months ending on August 31, 2000 2013, and
110.26in each subsequent year, from the 12 months ending on August 31, 1999 2012, to the 12
110.27months ending on August 31 of the year preceding the taxable year. The determination of
110.28the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
110.29not be subject to the Administrative Procedure Act contained in chapter 14.
110.30No later than December 15 of each year, the commissioner shall announce the
110.31specific percentage that will be used to adjust the tax rate brackets.
110.32EFFECTIVE DATE.This section is effective for taxable years beginning after
110.33December 31, 2012.

111.1    Sec. 12. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
111.2to read:
111.3    Subd. 36. Greater Minnesota internship credit. (a) A taxpayer who is an eligible
111.4employer may take a credit against the tax due under this chapter equal to the lesser of:
111.5(1) 40 percent of the compensation paid to an intern qualifying under the program
111.6established under section 136A.129, but not to exceed $2,000 per intern; or
111.7(2) the amount certified to the taxpayer by an eligible institution out of the
111.8institution's allocation of credits for the calendar year, as provided in section 136A.129.
111.9(b) Credits allowed to a partnership, a limited liability company taxed as a
111.10partnership, an S corporation, or multiple owners of property are passed through to the
111.11partners, members, shareholders, or owners, respectively, pro rata to each partner, member,
111.12shareholder, or owner based on their share of the entity's income for the taxable year.
111.13(c) If the amount of credit which the taxpayer is eligible to receive under this
111.14subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
111.15revenue shall refund the excess to the taxpayer.
111.16(d) An amount necessary to pay claims for refund provided in this subdivision is
111.17appropriated from the general fund to the commissioner of revenue.
111.18(e) An amount equal to one percent of the total amount of the credits authorized
111.19under section 136A.129, subdivision 4, for an administrative fee for the Office of Higher
111.20Education and participating eligible institutions is appropriated from the general fund to
111.21the commissioner of revenue, for a transfer to the Office of Higher Education.
111.22(f) For purposes of this subdivision, the terms "eligible employer" and "eligible
111.23institution" have the meanings given in section 136A.129.
111.24EFFECTIVE DATE.This section is effective for taxable years beginning after
111.25December 31, 2013.

111.26    Sec. 13. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read:
111.27    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
111.28the meanings given.
111.29    (b) "Designated area" means a:
111.30    (1) combat zone designated by Executive Order from the President of the United
111.31States;
111.32    (2) qualified hazardous duty area, designated in Public Law; or
111.33    (3) location certified by the U. S. Department of Defense as eligible for combat zone
111.34tax benefits due to the location's direct support of military operations.
112.1    (c) "Active military service" means active duty service in any of the United States
112.2armed forces, the National Guard, or reserves.
112.3    (d) "Qualified individual" means an individual who has:
112.4    (1) either (i) met one of the following criteria:
112.5    (i) has served at least 20 years in the military or;
112.6    (ii) has a service-connected disability rating of 100 percent for a total and permanent
112.7disability; or
112.8    (iii) has been determined by the military to be eligible for compensation from a
112.9pension or other retirement pay from the federal government for service in the military,
112.10as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455,
112.11or 12733; and
112.12    (2) separated from military service before the end of the taxable year.
112.13    (e) "Adjusted gross income" has the meaning given in section 61 of the Internal
112.14Revenue Code.
112.15EFFECTIVE DATE.This section is effective for taxable years beginning after
112.16December 31, 2012.

112.17    Sec. 14. Minnesota Statutes 2012, section 290.068, subdivision 3, is amended to read:
112.18    Subd. 3. Limitation; carryover. (a)(1) The credit for a taxable year beginning
112.19before January 1, 2010, and after December 31, 2012, shall not exceed the liability for tax.
112.20"Liability for tax" for purposes of this section means the sum of the tax imposed under
112.21section 290.06, subdivision subdivisions 1 and 2c, for the taxable year reduced by the sum
112.22of the nonrefundable credits allowed under this chapter, on all of the entities required to
112.23be included on the combined report of the unitary business. If the amount of the credit
112.24allowed exceeds the liability for tax of the taxpayer, but is allowed as a result of the
112.25liability for tax of other members of the unitary group for the taxable year, the taxpayer
112.26must allocate the excess as a research credit to another member of the unitary group.
112.27    (2) In the case of a corporation which is a partner in a partnership, the credit allowed
112.28for the taxable year shall not exceed the lesser of the amount determined under clause (1)
112.29for the taxable year or an amount (separately computed with respect to the corporation's
112.30interest in the trade or business or entity) equal to the amount of tax attributable to that
112.31portion of taxable income which is allocable or apportionable to the corporation's interest
112.32in the trade or business or entity.
112.33    (b) If the amount of the credit determined under this section for any taxable year
112.34exceeds the limitation under clause (a) including amounts allocated to other members
112.35of the unitary group, the excess shall be a research credit carryover to each of the 15
113.1succeeding taxable years. The entire amount of the excess unused credit for the taxable
113.2year shall be carried first to the earliest of the taxable years to which the credit may be
113.3carried and then to each successive year to which the credit may be carried. The amount
113.4of the unused credit which may be added under this clause shall not exceed the taxpayer's
113.5liability for tax less the research credit for the taxable year.
113.6EFFECTIVE DATE.This section is effective for taxable years beginning after
113.7December 31, 2012.

113.8    Sec. 15. Minnesota Statutes 2012, section 290.068, subdivision 6a, is amended to read:
113.9    Subd. 6a. Credit to be refundable. If the amount of credit allowed in this section
113.10for qualified research expenses incurred in taxable years beginning after December 31,
113.112009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter,
113.12the commissioner shall refund the excess amount. The credit allowed for qualified research
113.13expenses incurred in taxable years beginning after December 31, 2009, and before January
113.141, 2013, must be used before any research credit earned under subdivision 3.
113.15EFFECTIVE DATE.This section is effective for taxable years beginning after
113.16December 31, 2012.

113.17    Sec. 16. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read:
113.18    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
113.19have the meanings given.
113.20(b) "Account" means the historic credit administration account in the special
113.21revenue fund.
113.22(c) "Office" means the State Historic Preservation Office of the Minnesota Historical
113.23Society.
113.24(d) "Project" means rehabilitation of a certified historic structure, as defined in
113.25section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is
113.26allowed a federal credit under section 47(a)(2) of the Internal Revenue Code.
113.27(e) "Society" means the Minnesota Historical Society.
113.28(f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal
113.29Revenue Code.
113.30(g) "Placed in service" has the meaning used in section 47 of the Internal Revenue
113.31Code.
113.32(h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of
113.33the Internal Revenue Code.
114.1EFFECTIVE DATE.This section is effective the day following final enactment.

114.2    Sec. 17. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read:
114.3    Subd. 3. Applications; allocations. (a) To qualify for a credit or grant under this
114.4section, the developer of a project must apply to the office before the rehabilitation begins.
114.5The application must contain the information and be in the form prescribed by the office.
114.6The office may collect a fee for application of up to $5,000 0.5 percent of qualified
114.7rehabilitation expenditures, up to $40,000, based on estimated qualified rehabilitation
114.8expenses expenditures, to offset costs associated with personnel and administrative
114.9expenses related to administering the credit and preparing the economic impact report
114.10in subdivision 9. Application fees are deposited in the account. The application must
114.11indicate if the application is for a credit or a grant in lieu of the credit or a combination of
114.12the two and designate the taxpayer qualifying for the credit or the recipient of the grant.
114.13    (b) Upon approving an application for credit, the office shall issue allocation
114.14certificates that:
114.15    (1) verify eligibility for the credit or grant;
114.16    (2) state the amount of credit or grant anticipated with the project, with the credit
114.17amount equal to 100 percent and the grant amount equal to 90 percent of the federal
114.18credit anticipated in the application;
114.19    (3) state that the credit or grant allowed may increase or decrease if the federal
114.20credit the project receives at the time it is placed in service is different than the amount
114.21anticipated at the time the allocation certificate is issued; and
114.22    (4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer
114.23or grant recipient is entitled to receive the credit or grant at the time the project is placed
114.24in service, provided that date is within three calendar years following the issuance of
114.25the allocation certificate.
114.26    (c) The office, in consultation with the commissioner of revenue, shall determine
114.27if the project is eligible for a credit or a grant under this section and must notify the
114.28developer in writing of its determination. Eligibility for the credit is subject to review
114.29and audit by the commissioner of revenue.
114.30    (d) The federal credit recapture and repayment requirements under section 50 of the
114.31Internal Revenue Code do not apply to the credit allowed under this section.
114.32(e) Any decision of the office under paragraph (c) may be challenged as a contested
114.33case under chapter 14. The contested case proceeding must be initiated within 45 days of
114.34the date of written notification by the office.
115.1EFFECTIVE DATE.This section is effective the day following final enactment
115.2and the change in paragraph (a) applies to applications first received on or after the day
115.3following final enactment.

115.4    Sec. 18. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read:
115.5    Subd. 4. Credit certificates; grants. (a)(1) The developer of a project for which the
115.6office has issued an allocation certificate must notify the office when the project is placed
115.7in service. Upon verifying that the project has been placed in service, and was allowed a
115.8federal credit, the office must issue a credit certificate to the taxpayer designated in the
115.9application or must issue a grant to the recipient designated in the application. The credit
115.10certificate must state the amount of the credit.
115.11    (2) The credit amount equals the federal credit allowed for the project.
115.12    (3) The grant amount equals 90 percent of the federal credit allowed for the project.
115.13    (b) The recipient of a credit certificate may assign the certificate to another taxpayer,
115.14which is then allowed the credit under this section or section 297I.20, subdivision 3. An
115.15assignment is not valid unless the assignee notifies the commissioner within 30 days of the
115.16date that the assignment is made. The commissioner shall prescribe the forms necessary
115.17for notifying the commissioner of the assignment of a credit certificate and for claiming
115.18a credit by assignment.
115.19    (c) Credits passed through to partners, members, shareholders, or owners pursuant to
115.20subdivision 5 are not an assignment of a credit certificate under this subdivision.
115.21    (d) A grant agreement between the office and the recipient of a grant may allow the
115.22grant to be issued to another individual or entity.
115.23EFFECTIVE DATE.This section is effective the day following final enactment.

115.24    Sec. 19. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read:
115.25    Subd. 5. Partnerships; multiple owners. Credits granted to a partnership, a limited
115.26liability company taxed as a partnership, S corporation, or multiple owners of property
115.27are passed through to the partners, members, shareholders, or owners, respectively, pro
115.28rata to each partner, member, shareholder, or owner based on their share of the entity's
115.29assets or as specially allocated in their organizational documents or any other executed
115.30agreement, as of the last day of the taxable year.
115.31EFFECTIVE DATE.This section is effective the day following final enactment.

115.32    Sec. 20. Minnesota Statutes 2012, section 290.0681, subdivision 10, is amended to read:
116.1    Subd. 10. Sunset. This section expires after fiscal year 2015 2021, except that
116.2the office's authority to issue credit certificates under subdivision 4 based on allocation
116.3certificates that were issued before fiscal year 2016 2022 remains in effect through 2018
116.4 2024, and the reporting requirements in subdivision 9 remain in effect through the year
116.5following the year in which all allocation certificates have either been canceled or resulted
116.6in issuance of credit certificates, or 2019 2025, whichever is earlier.
116.7EFFECTIVE DATE.This section is effective the day following final enactment.

116.8    Sec. 21. Minnesota Statutes 2012, section 290.091, subdivision 1, is amended to read:
116.9    Subdivision 1. Imposition of tax. In addition to all other taxes imposed by this
116.10chapter a tax is imposed on individuals, estates, and trusts equal to the excess (if any) of
116.11(a) an amount equal to 6.4 6.75 percent of alternative minimum taxable income after
116.12subtracting the exemption amount, over
116.13(b) the regular tax for the taxable year.
116.14EFFECTIVE DATE.This section is effective for taxable years beginning after
116.15December 31, 2012.

116.16    Sec. 22. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read:
116.17    Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
116.18terms have the meanings given:
116.19    (a) "Alternative minimum taxable income" means the sum of the following for
116.20the taxable year:
116.21    (1) the taxpayer's federal alternative minimum taxable income as defined in section
116.2255(b)(2) of the Internal Revenue Code;
116.23    (2) the taxpayer's itemized deductions allowed in computing federal alternative
116.24minimum taxable income, but excluding:
116.25    (i) the charitable contribution deduction under section 170 of the Internal Revenue
116.26Code;
116.27    (ii) the medical expense deduction;
116.28    (iii) the casualty, theft, and disaster loss deduction; and
116.29    (iv) the impairment-related work expenses of a disabled person;
116.30    (3) for depletion allowances computed under section 613A(c) of the Internal
116.31Revenue Code, with respect to each property (as defined in section 614 of the Internal
116.32Revenue Code), to the extent not included in federal alternative minimum taxable income,
116.33the excess of the deduction for depletion allowable under section 611 of the Internal
117.1Revenue Code for the taxable year over the adjusted basis of the property at the end of the
117.2taxable year (determined without regard to the depletion deduction for the taxable year);
117.3    (4) to the extent not included in federal alternative minimum taxable income, the
117.4amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
117.5Internal Revenue Code determined without regard to subparagraph (E);
117.6    (5) to the extent not included in federal alternative minimum taxable income, the
117.7amount of interest income as provided by section 290.01, subdivision 19a, clause (1); and
117.8    (6) the amount of addition required by section 290.01, subdivision 19a, clauses (7)
117.9to (9), (12), (13), and (16) to (18);
117.10    less the sum of the amounts determined under the following:
117.11    (1) interest income as defined in section 290.01, subdivision 19b, clause (1);
117.12    (2) an overpayment of state income tax as provided by section 290.01, subdivision
117.1319b
, clause (2), to the extent included in federal alternative minimum taxable income;
117.14    (3) the amount of investment interest paid or accrued within the taxable year on
117.15indebtedness to the extent that the amount does not exceed net investment income, as
117.16defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
117.17amounts deducted in computing federal adjusted gross income;
117.18    (4) amounts subtracted from federal taxable income as provided by section 290.01,
117.19subdivision 19b
, clauses (6), (8) to (14), and (16); and
117.20(5) the amount of the net operating loss allowed under section 290.095, subdivision
117.2111
, paragraph (c).
117.22    In the case of an estate or trust, alternative minimum taxable income must be
117.23computed as provided in section 59(c) of the Internal Revenue Code.
117.24    (b) "Investment interest" means investment interest as defined in section 163(d)(3)
117.25of the Internal Revenue Code.
117.26    (c) "Net minimum tax" means the minimum tax imposed by this section.
117.27    (d) "Regular tax" means the tax that would be imposed under this chapter (without
117.28regard to this section and section 290.032), reduced by the sum of the nonrefundable
117.29credits allowed under this chapter.
117.30    (e) "Tentative minimum tax" equals 6.4 6.75 percent of alternative minimum taxable
117.31income after subtracting the exemption amount determined under subdivision 3.
117.32EFFECTIVE DATE.This section is effective for taxable years beginning after
117.33December 31, 2012.

117.34    Sec. 23. Minnesota Statutes 2012, section 290.091, subdivision 6, is amended to read:
118.1    Subd. 6. Credit for prior years' liability. (a) A credit is allowed against the tax
118.2imposed by this chapter on individuals, trusts, and estates equal to the minimum tax
118.3credit for the taxable year. The minimum tax credit equals the adjusted net minimum
118.4tax for taxable years beginning after December 31, 1988, reduced by the minimum tax
118.5credits allowed in a prior taxable year. The credit may not exceed the excess (if any) for
118.6the taxable year of
118.7(1) the regular tax, over
118.8(2) the greater of (i) the tentative alternative minimum tax, or (ii) zero.
118.9(b) The adjusted net minimum tax for a taxable year equals the lesser of the net
118.10minimum tax or the excess (if any) of
118.11(1) the tentative minimum tax, over
118.12(2) 6.4 6.75 percent of the sum of
118.13(i) adjusted gross income as defined in section 62 of the Internal Revenue Code,
118.14(ii) interest income as defined in section 290.01, subdivision 19a, clause (1),
118.15(iii) interest on specified private activity bonds, as defined in section 57(a)(5) of the
118.16Internal Revenue Code, to the extent not included under clause (ii),
118.17(iv) depletion as defined in section 57(a)(1), determined without regard to the last
118.18sentence of paragraph (1), of the Internal Revenue Code, less
118.19(v) the deductions allowed in computing alternative minimum taxable income
118.20provided in subdivision 2, paragraph (a), clause (2) of the first series of clauses and clauses
118.21(1), (2), and (3) of the second series of clauses, and
118.22(vi) the exemption amount determined under subdivision 3.
118.23In the case of an individual who is not a Minnesota resident for the entire year,
118.24adjusted net minimum tax must be multiplied by the fraction defined in section 290.06,
118.25subdivision 2c
, paragraph (e). In the case of a trust or estate, adjusted net minimum tax
118.26must be multiplied by the fraction defined under subdivision 4, paragraph (b).
118.27EFFECTIVE DATE.This section is effective for taxable years beginning after
118.28December 31, 2012.

118.29    Sec. 24. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
118.30    Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
118.31income" is Minnesota net income as defined in section 290.01, subdivision 19, and
118.32includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
118.33(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
118.34Minnesota tax return, the minimum tax must be computed on a separate company basis.
119.1If a corporation is part of a tax group filing a unitary return, the minimum tax must be
119.2computed on a unitary basis. The following adjustments must be made.
119.3(1) For purposes of the depreciation adjustments under section 56(a)(1) and
119.456(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
119.5service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
119.6income tax purposes, including any modification made in a taxable year under section
119.7290.01, subdivision 19e , or Minnesota Statutes 1986, section 290.09, subdivision 7,
119.8paragraph (c).
119.9For taxable years beginning after December 31, 2000, the amount of any remaining
119.10modification made under section 290.01, subdivision 19e, or Minnesota Statutes 1986,
119.11section 290.09, subdivision 7, paragraph (c), not previously deducted is a depreciation
119.12allowance in the first taxable year after December 31, 2000.
119.13(2) The portion of the depreciation deduction allowed for federal income tax
119.14purposes under section 168(k) of the Internal Revenue Code that is required as an addition
119.15under section 290.01, subdivision 19c, clause (15) (12), is disallowed in determining
119.16alternative minimum taxable income.
119.17(3) The subtraction for depreciation allowed under section 290.01, subdivision
119.1819d
, clause (17) (15), is allowed as a depreciation deduction in determining alternative
119.19minimum taxable income.
119.20(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
119.21of the Internal Revenue Code does not apply.
119.22(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
119.23Revenue Code does not apply.
119.24(6) The special rule for dividends from section 936 companies under section
119.2556(g)(4)(C)(iii) does not apply.
119.26(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal
119.27Revenue Code does not apply.
119.28(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the
119.29Internal Revenue Code must be calculated without regard to subparagraph (E) and the
119.30subtraction under section 290.01, subdivision 19d, clause (4).
119.31(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the
119.32Internal Revenue Code does not apply.
119.33(10) (9) The tax preference for charitable contributions of appreciated property
119.34under section 57(a)(6) of the Internal Revenue Code does not apply.
119.35(11) (10) For purposes of calculating the tax preference for accelerated depreciation
119.36or amortization on certain property placed in service before January 1, 1987, under section
120.157(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
120.2deduction allowed under section 290.01, subdivision 19e.
120.3For taxable years beginning after December 31, 2000, the amount of any remaining
120.4modification made under section 290.01, subdivision 19e, not previously deducted is a
120.5depreciation or amortization allowance in the first taxable year after December 31, 2004.
120.6(12) (11) For purposes of calculating the adjustment for adjusted current earnings
120.7in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
120.8income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
120.9minimum taxable income as defined in this subdivision, determined without regard to the
120.10adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
120.11(13) (12) For purposes of determining the amount of adjusted current earnings under
120.12section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
120.1356(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
120.14gross-up subtracted as provided in section 290.01, subdivision 19d, clause (1), or (ii) the
120.15amount of refunds of income, excise, or franchise taxes subtracted as provided in section
120.16290.01, subdivision 19d , clause (9), or (iii) the amount of royalties, fees or other like
120.17income subtracted as provided in section 290.01, subdivision 19d, clause (10).
120.18(14) (13) Alternative minimum taxable income excludes the income from operating
120.19in a job opportunity building zone as provided under section 469.317.
120.20(15) (14) Alternative minimum taxable income excludes the income from operating
120.21in a biotechnology and health sciences industry zone as provided under section 469.337.
120.22Items of tax preference must not be reduced below zero as a result of the
120.23modifications in this subdivision.
120.24EFFECTIVE DATE.This section is effective for taxable years beginning after
120.25December 31, 2012.

120.26    Sec. 25. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read:
120.27    Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without
120.28regard to this section, the franchise tax imposed on a corporation required to file under
120.29section 289A.08, subdivision 3, other than a corporation treated as an "S" corporation
120.30under section 290.9725 for the taxable year includes a tax equal to the following amounts:
120.31
120.32
If the sum of the corporation's Minnesota
property, payrolls, and sales or receipts is:
the tax equals:
120.33
less than
$
500,000
$
0
120.34
$
500,000
to
$
999,999
$
100
120.35
$
1,000,000
to
$
4,999,999
$
300
121.1
$
5,000,000
to
$
9,999,999
$
1,000
121.2
$
10,000,000
to
$
19,999,999
$
2,000
121.3
$
20,000,000
or
more
$
5,000
121.4
less than
$
930,000
$
0
121.5
$
930,000
to
$
1,869,999
$
190
121.6
$
1,870,000
to
$
9,339,999
$
560
121.7
$
9,340,000
to
$
18,679,999
$
1,870
121.8
$
18,680,000
to
$
37,359,999
$
3,740
121.9
$
37,360,000
or
more
$
9,340
121.10    (b) A tax is imposed for each taxable year on a corporation required to file a return
121.11under section 289A.12, subdivision 3, that is treated as an "S" corporation under section
121.12290.9725 and on a partnership required to file a return under section 289A.12, subdivision
121.133
, other than a partnership that derives over 80 percent of its income from farming. The
121.14tax imposed under this paragraph is due on or before the due date of the return for the
121.15taxpayer due under section 289A.18, subdivision 1. The commissioner shall prescribe
121.16the return to be used for payment of this tax. The tax under this paragraph is equal to
121.17the following amounts:
121.18
121.19
121.20
121.21
If the sum of the S corporation's
or partnership's Minnesota
property, payrolls, and sales or
receipts is:
the tax equals:
121.22
less than
$
500,000
$
0
121.23
$
500,000
to
$
999,999
$
100
121.24
$
1,000,000
to
$
4,999,999
$
300
121.25
$
5,000,000
to
$
9,999,999
$
1,000
121.26
$
10,000,000
to
$
19,999,999
$
2,000
121.27
$
20,000,000
or
more
$
5,000
121.28
less than
$
930,000
$
0
121.29
$
930,000
to
$
1,869,999
$
190
121.30
$
1,870,000
to
$
9,339,999
$
560
121.31
$
9,340,000
to
$
18,679,999
$
1,870
121.32
$
18,680,000
to
$
37,359,999
$
3,740
121.33
$
37,360,000
or
more
$
9,340
121.34    (c) The commissioner shall adjust the dollar amounts of both the tax and the property,
121.35payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage
121.36determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
121.37that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For
121.382014, the commissioner shall determine the percentage change from the 12 months ending
121.39on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent
121.40year, from the 12 months ending on August 31, 2012, to the 12 months ending on August
122.131 of the year preceding the taxable year. The determination of the commissioner pursuant
122.2to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in
122.3chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and
122.4the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts
122.5that end in $5, the amount is rounded up to the nearest $10 amount and for the threshold
122.6amounts that end in $5,000, the amount is rounded up to the nearest $10,000.
122.7EFFECTIVE DATE.This section is effective for taxable years beginning after
122.8December 31, 2012.

122.9    Sec. 26. Minnesota Statutes 2012, section 290.095, subdivision 2, is amended to read:
122.10    Subd. 2. Defined and limited. (a) The term "net operating loss" as used in this
122.11section shall mean a net operating loss as defined in section 172(c) of the Internal Revenue
122.12Code, with the modifications specified in subdivision 4. The deductions provided in
122.13section 290.21 and the modification provided in section 290.01, subdivision 19d, clause
122.14(10), cannot be used in the determination of a net operating loss.
122.15(b) The term "net operating loss deduction" as used in this section means the
122.16aggregate of the net operating loss carryovers to the taxable year, computed in accordance
122.17with subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating
122.18to the carryback of net operating losses, do not apply.
122.19EFFECTIVE DATE.This section is effective for taxable years beginning after
122.20December 31, 2012.

122.21    Sec. 27. Minnesota Statutes 2012, section 290.10, subdivision 1, is amended to read:
122.22    Subdivision 1. Expenses, interest, and taxes. Except as provided in section 290.17,
122.23subdivision 4
, paragraph (i), In computing the net income of a taxpayer no deduction shall
122.24in any case be allowed for expenses, interest and taxes connected with or allocable against
122.25the production or receipt of all income not included in the measure of the tax imposed by
122.26this chapter, except that for corporations engaged in the business of mining or producing
122.27iron ore, the mining of which is subject to the occupation tax imposed by section 298.01,
122.28subdivision 4
, this shall not prevent the deduction of expenses and other items to the extent
122.29that the expenses and other items are allowable under this chapter and are not deductible,
122.30capitalizable, retainable in basis, or taken into account by allowance or otherwise in
122.31computing the occupation tax and do not exceed the amounts taken for federal income tax
122.32purposes for that year. Occupation taxes imposed under chapter 298, royalty taxes imposed
122.33under chapter 299, or depletion expenses may not be deducted under this subdivision.

123.1    Sec. 28. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
123.2    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
123.3within this state or partly within and partly without this state is part of a unitary business,
123.4the entire income of the unitary business is subject to apportionment pursuant to section
123.5290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
123.6business is considered to be derived from any particular source and none may be allocated
123.7to a particular place except as provided by the applicable apportionment formula. The
123.8provisions of this subdivision do not apply to business income subject to subdivision 5,
123.9income of an insurance company, or income of an investment company determined under
123.10section 290.36.
123.11(b) The term "unitary business" means business activities or operations which
123.12result in a flow of value between them. The term may be applied within a single legal
123.13entity or between multiple entities and without regard to whether each entity is a sole
123.14proprietorship, a corporation, a partnership or a trust.
123.15(c) Unity is presumed whenever there is unity of ownership, operation, and use,
123.16evidenced by centralized management or executive force, centralized purchasing,
123.17advertising, accounting, or other controlled interaction, but the absence of these
123.18centralized activities will not necessarily evidence a nonunitary business. Unity is also
123.19presumed when business activities or operations are of mutual benefit, dependent upon or
123.20contributory to one another, either individually or as a group.
123.21(d) Where a business operation conducted in Minnesota is owned by a business
123.22entity that carries on business activity outside the state different in kind from that
123.23conducted within this state, and the other business is conducted entirely outside the state, it
123.24is presumed that the two business operations are unitary in nature, interrelated, connected,
123.25and interdependent unless it can be shown to the contrary.
123.26(e) Unity of ownership is not deemed to does not exist when a corporation is two or
123.27more corporations are involved unless that corporation is a member of a group of two or
123.28more business entities and more than 50 percent of the voting stock of each member of
123.29the group corporation is directly or indirectly owned by a common owner or by common
123.30owners, either corporate or noncorporate, or by one or more of the member corporations
123.31of the group. For this purpose, the term "voting stock" shall include membership interests
123.32of mutual insurance holding companies formed under section 66A.40.
123.33(f) The net income and apportionment factors under section 290.191 or 290.20 of
123.34foreign corporations and other foreign entities which are part of a unitary business shall
123.35not be included in the net income or the apportionment factors of the unitary business;
123.36except that the income and apportionment factors of a foreign entity, other than an entity
124.1treated as a C corporation for federal income tax purposes, that are included in the federal
124.2taxable income, as defined in section 63 of the Internal Revenue Code as amended through
124.3the date named in section 290.01, subdivision 19, of a domestic corporation, domestic
124.4entity, or individual must be included in determining net income and the factors to be used
124.5in the apportionment of net income pursuant to section 290.191 or 290.20. A foreign
124.6corporation or other foreign entity which is not included on a combined report and which
124.7is required to file a return under this chapter shall file on a separate return basis. The net
124.8income and apportionment factors under section 290.191 or 290.20 of foreign operating
124.9corporations shall not be included in the net income or the apportionment factors of the
124.10unitary business except as provided in paragraph (g).
124.11(g) The adjusted net income of a foreign operating corporation shall be deemed to
124.12be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
124.13proportion to each shareholder's ownership, with which such corporation is engaged in
124.14a unitary business. Such deemed dividend shall be treated as a dividend under section
124.15290.21, subdivision 4.
124.16Dividends actually paid by a foreign operating corporation to a corporate shareholder
124.17which is a member of the same unitary business as the foreign operating corporation shall
124.18be eliminated from the net income of the unitary business in preparing a combined report
124.19for the unitary business. The adjusted net income of a foreign operating corporation
124.20shall be its net income adjusted as follows:
124.21(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
124.22Rico, or a United States possession or political subdivision of any of the foregoing shall
124.23be a deduction; and
124.24(2) the subtraction from federal taxable income for payments received from foreign
124.25corporations or foreign operating corporations under section 290.01, subdivision 19d,
124.26clause (10), shall not be allowed.
124.27If a foreign operating corporation incurs a net loss, neither income nor deduction from
124.28that corporation shall be included in determining the net income of the unitary business.
124.29(h) (g) For purposes of determining the net income of a unitary business and the
124.30factors to be used in the apportionment of net income pursuant to section 290.191 or
124.31290.20 , there must be included only the income and apportionment factors of domestic
124.32corporations or other domestic entities other than foreign operating corporations that are
124.33determined to be part of the unitary business pursuant to this subdivision, notwithstanding
124.34that foreign corporations or other foreign entities might be included in the unitary
124.35business; except that the income and apportionment factors of a foreign entity, other than
124.36an entity treated as a C corporation for federal income tax purposes, that is included in the
125.1federal taxable income, as defined in section 63 of the Internal Revenue Code as amended
125.2through the date named in section 290.01, subdivision 19, of a domestic corporation,
125.3domestic entity, or individual must be included in determining net income and the factors
125.4to be used in the apportionment of net income pursuant to section 290.191 or 290.20.
125.5(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter
125.6that are connected with or allocable against dividends, deemed dividends described
125.7in paragraph (g), or royalties, fees, or other like income described in section 290.01,
125.8subdivision 19d
, clause (10), shall not be disallowed.
125.9(j) (h) Each corporation or other entity, except a sole proprietorship, that is part of
125.10a unitary business must file combined reports as the commissioner determines. On the
125.11reports, all intercompany transactions between entities included pursuant to paragraph (h)
125.12 (g) must be eliminated and the entire net income of the unitary business determined in
125.13accordance with this subdivision is apportioned among the entities by using each entity's
125.14Minnesota factors for apportionment purposes in the numerators of the apportionment
125.15formula and the total factors for apportionment purposes of all entities included pursuant
125.16to paragraph (h) (g) in the denominators of the apportionment formula. Except as
125.17otherwise provided by paragraph (f), all sales of the unitary business made within this
125.18state pursuant to section 290.191 or 290.20 must be included on the combined report of a
125.19corporation or other entity that is a member of the unitary business and is subject to the
125.20jurisdiction of this state to impose tax under this chapter.
125.21(k) (i) If a corporation has been divested from a unitary business and is included in a
125.22combined report for a fractional part of the common accounting period of the combined
125.23report:
125.24(1) its income includable in the combined report is its income incurred for that part
125.25of the year determined by proration or separate accounting; and
125.26(2) its sales, property, and payroll included in the apportionment formula must
125.27be prorated or accounted for separately.
125.28EFFECTIVE DATE.This section is effective for taxable years beginning after
125.29December 31, 2012.

125.30    Sec. 29. Minnesota Statutes 2012, section 290.191, subdivision 5, is amended to read:
125.31    Subd. 5. Determination of sales factor. For purposes of this section, the following
125.32rules apply in determining the sales factor.
125.33    (a) The sales factor includes all sales, gross earnings, or receipts received in the
125.34ordinary course of the business, except that the following types of income are not included
125.35in the sales factor:
126.1    (1) interest;
126.2    (2) dividends;
126.3    (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
126.4    (4) sales of property used in the trade or business, except sales of leased property of
126.5a type which is regularly sold as well as leased; and
126.6    (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
126.7Code or sales of stock; and.
126.8    (6) royalties, fees, or other like income of a type which qualify for a subtraction from
126.9federal taxable income under section 290.01, subdivision 19d, clause (10).
126.10    (b) Sales of tangible personal property are made within this state if the property is
126.11received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
126.12regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
126.13of the property.
126.14    (c) Tangible personal property delivered to a common or contract carrier or foreign
126.15vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
126.16regardless of f.o.b. point or other conditions of the sale.
126.17    (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
126.18fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
126.19licensed by a state or political subdivision to resell this property only within the state of
126.20ultimate destination, the sale is made in that state.
126.21    (e) Sales made by or through a corporation that is qualified as a domestic
126.22international sales corporation under section 992 of the Internal Revenue Code are not
126.23considered to have been made within this state.
126.24    (f) Sales, rents, royalties, and other income in connection with real property is
126.25attributed to the state in which the property is located.
126.26    (g) Receipts from the lease or rental of tangible personal property, including finance
126.27leases and true leases, must be attributed to this state if the property is located in this
126.28state and to other states if the property is not located in this state. Receipts from the
126.29lease or rental of moving property including, but not limited to, motor vehicles, rolling
126.30stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
126.31factor to the extent that the property is used in this state. The extent of the use of moving
126.32property is determined as follows:
126.33    (1) A motor vehicle is used wholly in the state in which it is registered.
126.34    (2) The extent that rolling stock is used in this state is determined by multiplying
126.35the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
127.1which is the miles traveled within this state by the leased or rented rolling stock and the
127.2denominator of which is the total miles traveled by the leased or rented rolling stock.
127.3    (3) The extent that an aircraft is used in this state is determined by multiplying the
127.4receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
127.5the number of landings of the aircraft in this state and the denominator of which is the
127.6total number of landings of the aircraft.
127.7    (4) The extent that a vessel, mobile equipment, or other mobile property is used in
127.8the state is determined by multiplying the receipts from the lease or rental of the property
127.9by a fraction, the numerator of which is the number of days during the taxable year the
127.10property was in this state and the denominator of which is the total days in the taxable year.
127.11    (h) Royalties and other income not described in paragraph (a), clause (6), received
127.12for the use of or for the privilege of using intangible property, including patents,
127.13know-how, formulas, designs, processes, patterns, copyrights, trade names, service names,
127.14franchises, licenses, contracts, customer lists, or similar items, must be attributed to the
127.15state in which the property is used by the purchaser. If the property is used in more
127.16than one state, the royalties or other income must be apportioned to this state pro rata
127.17according to the portion of use in this state. If the portion of use in this state cannot be
127.18determined, the royalties or other income must be excluded from both the numerator
127.19and the denominator. Intangible property is used in this state if the purchaser uses the
127.20intangible property or the rights therein in the regular course of its business operations in
127.21this state, regardless of the location of the purchaser's customers.
127.22    (i) Sales of intangible property are made within the state in which the property is
127.23used by the purchaser. If the property is used in more than one state, the sales must be
127.24apportioned to this state pro rata according to the portion of use in this state. If the
127.25portion of use in this state cannot be determined, the sale must be excluded from both the
127.26numerator and the denominator of the sales factor. Intangible property is used in this
127.27state if the purchaser used the intangible property in the regular course of its business
127.28operations in this state.
127.29    (j) Receipts from the performance of services must be attributed to the state where
127.30the services are received. For the purposes of this section, receipts from the performance
127.31of services provided to a corporation, partnership, or trust may only be attributed to a state
127.32where it has a fixed place of doing business. If the state where the services are received is
127.33not readily determinable or is a state where the corporation, partnership, or trust receiving
127.34the service does not have a fixed place of doing business, the services shall be deemed
127.35to be received at the location of the office of the customer from which the services were
127.36ordered in the regular course of the customer's trade or business. If the ordering office
128.1cannot be determined, the services shall be deemed to be received at the office of the
128.2customer to which the services are billed.
128.3    (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
128.4from management, distribution, or administrative services performed by a corporation
128.5or trust for a fund of a corporation or trust regulated under United States Code, title 15,
128.6sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
128.7the fund resides. Under this paragraph, receipts for services attributed to shareholders are
128.8determined on the basis of the ratio of: (1) the average of the outstanding shares in the
128.9fund owned by shareholders residing within Minnesota at the beginning and end of each
128.10year; and (2) the average of the total number of outstanding shares in the fund at the
128.11beginning and end of each year. Residence of the shareholder, in the case of an individual,
128.12is determined by the mailing address furnished by the shareholder to the fund. Residence
128.13of the shareholder, when the shares are held by an insurance company as a depositor for
128.14the insurance company policyholders, is the mailing address of the policyholders. In
128.15the case of an insurance company holding the shares as a depositor for the insurance
128.16company policyholders, if the mailing address of the policyholders cannot be determined
128.17by the taxpayer, the receipts must be excluded from both the numerator and denominator.
128.18Residence of other shareholders is the mailing address of the shareholder.
128.19EFFECTIVE DATE.This section is effective for taxable years beginning after
128.20December 31, 2012.

128.21    Sec. 30. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
128.22    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
128.23of dividends received by a corporation during the taxable year from another corporation,
128.24in which the recipient owns 20 percent or more of the stock, by vote and value, not
128.25including stock described in section 1504(a)(4) of the Internal Revenue Code when the
128.26corporate stock with respect to which dividends are paid does not constitute the stock in
128.27trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
128.28constitute property held by the taxpayer primarily for sale to customers in the ordinary
128.29course of the taxpayer's trade or business, or when the trade or business of the taxpayer
128.30does not consist principally of the holding of the stocks and the collection of the income
128.31and gains therefrom; and
128.32    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
128.33an affiliated company transferred in an overall plan of reorganization and the dividend
128.34is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
128.35amended through December 31, 1989;
129.1    (ii) the remaining 20 percent of dividends if the dividends are received from a
129.2corporation which is subject to tax under section 290.36 and which is a member of an
129.3affiliated group of corporations as defined by the Internal Revenue Code and the dividend
129.4is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
129.5amended through December 31, 1989, or is deducted under an election under section
129.6243(b) of the Internal Revenue Code; or
129.7    (iii) the remaining 20 percent of the dividends if the dividends are received from a
129.8property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
129.9member of an affiliated group of corporations as defined by the Internal Revenue Code
129.10and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
129.111.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
129.12under an election under section 243(b) of the Internal Revenue Code.
129.13    (b) Seventy percent of dividends received by a corporation during the taxable year
129.14from another corporation in which the recipient owns less than 20 percent of the stock,
129.15by vote or value, not including stock described in section 1504(a)(4) of the Internal
129.16Revenue Code when the corporate stock with respect to which dividends are paid does not
129.17constitute the stock in trade of the taxpayer, or does not constitute property held by the
129.18taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
129.19business, or when the trade or business of the taxpayer does not consist principally of the
129.20holding of the stocks and the collection of income and gain therefrom.
129.21    (c) The dividend deduction provided in this subdivision shall be allowed only with
129.22respect to dividends that are included in a corporation's Minnesota taxable net income
129.23for the taxable year.
129.24    The dividend deduction provided in this subdivision does not apply to a dividend
129.25from a corporation which, for the taxable year of the corporation in which the distribution
129.26is made or for the next preceding taxable year of the corporation, is a corporation exempt
129.27from tax under section 501 of the Internal Revenue Code.
129.28The dividend deduction provided in this subdivision does not apply to a dividend
129.29received from a real estate investment trust as defined in section 856 of the Internal
129.30Revenue Code.
129.31    The dividend deduction provided in this subdivision applies to the amount of
129.32regulated investment company dividends only to the extent determined under section
129.33854(b) of the Internal Revenue Code.
129.34    The dividend deduction provided in this subdivision shall not be allowed with
129.35respect to any dividend for which a deduction is not allowed under the provisions of
129.36section 246(c) of the Internal Revenue Code.
130.1    (d) If dividends received by a corporation that does not have nexus with Minnesota
130.2under the provisions of Public Law 86-272 are included as income on the return of
130.3an affiliated corporation permitted or required to file a combined report under section
130.4290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
130.5determination as to whether the trade or business of the corporation consists principally
130.6of the holding of stocks and the collection of income and gains therefrom shall be made
130.7with reference to the trade or business of the affiliated corporation having a nexus with
130.8Minnesota.
130.9    (e) The deduction provided by this subdivision does not apply if the dividends are
130.10paid by a FSC as defined in section 922 of the Internal Revenue Code.
130.11    (f) If one or more of the members of the unitary group whose income is included on
130.12the combined report received a dividend, the deduction under this subdivision for each
130.13member of the unitary business required to file a return under this chapter is the product
130.14of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
130.15allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
130.16income apportionable to this state for the taxable year under section 290.191 or 290.20.
130.17EFFECTIVE DATE.This section is effective for taxable years beginning after
130.18December 31, 2012.

130.19    Sec. 31. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read:
130.20    Subd. 3b. Deductions. (a) For purposes of determining taxable income under
130.21subdivision 3, the deductions from gross income include only those expenses necessary
130.22to convert raw ores to marketable quality. Such expenses include costs associated with
130.23refinement but do not include expenses such as transportation, stockpiling, marketing, or
130.24marine insurance that are incurred after marketable ores are produced, unless the expenses
130.25are included in gross income. The allowable deductions from a mine or plant that mines
130.26and produces more than one mineral, metal, or energy resource must be determined
130.27separately for the purposes of computing the deduction in section 290.01, subdivision 19c,
130.28clause (9) (8). These deductions may be combined on one occupation tax return to arrive
130.29at the deduction from gross income for all production.
130.30(b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d,
130.31clauses (7) and (11) (10), are not used to determine taxable income.

130.32    Sec. 32. Laws 2010, chapter 216, section 11, the effective date, is amended to read:
131.1EFFECTIVE DATE.This section is effective for taxable years beginning
131.2after December 31, 2009, for certified historic structures for which qualified costs of
131.3rehabilitation are first paid under construction contracts entered into after May 1, 2010
131.4 rehabilitation expenditures are first paid by the developer or taxpayer after May 1, 2010,
131.5for rehabilitation that occurs after May 1, 2010, provided that the application under
131.6subdivision 3 is submitted before the project is placed in service.
131.7EFFECTIVE DATE.This section is effective the day following final enactment
131.8and applies retroactively for taxable years beginning after December 31, 2009, and for
131.9certified historic structures placed in service after May 1, 2010, but the office may not
131.10issue certificates allowed under the change to this section until July 1, 2013.

131.11    Sec. 33. ESTIMATED TAXES; EXCEPTIONS.
131.12No addition to tax, penalties, or interest may be made under Minnesota Statutes,
131.13section 289A.25, for any period before September 15, 2013, with respect to an
131.14underpayment of estimated tax, to the extent that the underpayment was created or
131.15increased by the increase in income tax rates under this article.
131.16EFFECTIVE DATE.This section is effective for taxable years beginning after
131.17December 31, 2012.

131.18    Sec. 34. REPEALER.
131.19Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a;
131.20and 290.0921, subdivision 7, are repealed.
131.21EFFECTIVE DATE.This section is effective for taxable years beginning after
131.22December 31, 2012.

131.23ARTICLE 7
131.24ESTATE AND GIFT TAXES

131.25    Section 1. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
131.26    Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
131.27stated otherwise, "Minnesota tax laws" means:
131.28    (1) the taxes, refunds, and fees administered by or paid to the commissioner under
131.29chapters 115B, 289A (except taxes imposed under sections 298.01, 298.015, and 298.24),
131.30290, 290A, 291, 292, 295, 297A, 297B, and 297H, or any similar Indian tribal tax
131.31administered by the commissioner pursuant to any tax agreement between the state and
132.1the Indian tribal government, and includes any laws for the assessment, collection, and
132.2enforcement of those taxes, refunds, and fees; and
132.3    (2) section 273.1315.
132.4EFFECTIVE DATE.This section is effective for gifts made after December 31,
132.52012.

132.6    Sec. 2. Minnesota Statutes 2012, section 270B.03, subdivision 1, is amended to read:
132.7    Subdivision 1. Who may inspect. Returns and return information must, on request,
132.8be made open to inspection by or disclosure to the data subject. The request must be made
132.9in writing or in accordance with written procedures of the chief disclosure officer of the
132.10department that have been approved by the commissioner to establish the identification
132.11of the person making the request as the data subject. For purposes of this chapter, the
132.12following are the data subject:
132.13(1) in the case of an individual return, that individual;
132.14(2) in the case of an income tax return filed jointly, either of the individuals with
132.15respect to whom the return is filed;
132.16(3) in the case of a return filed by a business entity, an officer of a corporation,
132.17a shareholder owning more than one percent of the stock, or any shareholder of an S
132.18corporation; a general partner in a partnership; the owner of a sole proprietorship; a
132.19member or manager of a limited liability company; a participant in a joint venture; the
132.20individual who signed the return on behalf of the business entity; or an employee who is
132.21responsible for handling the tax matters of the business entity, such as the tax manager,
132.22bookkeeper, or managing agent;
132.23(4) in the case of an estate return:
132.24(i) the personal representative or trustee of the estate; and
132.25(ii) any beneficiary of the estate as shown on the federal estate tax return;
132.26(5) in the case of a trust return:
132.27(i) the trustee or trustees, jointly or separately; and
132.28(ii) any beneficiary of the trust as shown in the trust instrument;
132.29(6) if liability has been assessed to a transferee under section 270C.58, subdivision
132.301
, the transferee is the data subject with regard to the returns and return information
132.31relating to the assessed liability;
132.32(7) in the case of an Indian tribal government or an Indian tribal government-owned
132.33entity,
132.34(i) the chair of the tribal government, or
132.35(ii) any person authorized by the tribal government; and
133.1(8) in the case of a successor as defined in section 270C.57, subdivision 1, paragraph
133.2(b), the successor is the data subject and information may be disclosed as provided by
133.3section 270C.57, subdivision 4.; and
133.4(9) in the case of a gift return, the donor.
133.5EFFECTIVE DATE.This section is effective the day following final enactment.

133.6    Sec. 3. Minnesota Statutes 2012, section 289A.10, subdivision 1, is amended to read:
133.7    Subdivision 1. Return required. In the case of a decedent who has an interest in
133.8property with a situs in Minnesota, the personal representative must submit a Minnesota
133.9estate tax return to the commissioner, on a form prescribed by the commissioner, if:
133.10(1) a federal estate tax return is required to be filed; or
133.11(2) the sum of the federal gross estate and federal adjusted taxable gifts made within
133.12three years of the date of the decedent's death exceeds $1,000,000.
133.13The return must contain a computation of the Minnesota estate tax due. The return
133.14must be signed by the personal representative.
133.15EFFECTIVE DATE.This section is effective for estates of decedents dying after
133.16December 31, 2012.

133.17    Sec. 4. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
133.18    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
133.19terms used in this chapter shall have the following meanings:
133.20    (1) "Commissioner" means the commissioner of revenue or any person to whom the
133.21commissioner has delegated functions under this chapter.
133.22    (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
133.23and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
133.24    (3) "Internal Revenue Code" means the United States Internal Revenue Code of
133.251986, as amended through April 14, 2011 January 3, 2013, but without regard to the
133.26provisions of sections 501 and 901 of Public Law 107-16, as amended by Public Law
133.27111-312, and section 301(c) of Public Law 111-312 section 2011, paragraph (f), of the
133.28Internal Revenue Code.
133.29    (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
133.30defined by section 2011(b)(3) of the Internal Revenue Code, plus
133.31(i) the amount of deduction for state death taxes allowed under section 2058 of the
133.32Internal Revenue Code;
134.1(ii) the amount of taxable gifts, as defined in section 292.16, and made by the
134.2decedent within three years of the decedent's date of death; less
134.3(ii) (iii)(A) the value of qualified small business property under section 291.03,
134.4subdivision 9
, and the value of qualified farm property under section 291.03, subdivision
134.510
, or (B) $4,000,000, whichever is less.
134.6    (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
134.7excluding therefrom any property included therein which has its situs outside Minnesota,
134.8and (b) including therein any property omitted from the federal gross estate which is
134.9includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
134.10authorities.
134.11    (6) "Nonresident decedent" means an individual whose domicile at the time of
134.12death was not in Minnesota.
134.13    (7) "Personal representative" means the executor, administrator or other person
134.14appointed by the court to administer and dispose of the property of the decedent. If there
134.15is no executor, administrator or other person appointed, qualified, and acting within this
134.16state, then any person in actual or constructive possession of any property having a situs in
134.17this state which is included in the federal gross estate of the decedent shall be deemed
134.18to be a personal representative to the extent of the property and the Minnesota estate tax
134.19due with respect to the property.
134.20    (8) "Resident decedent" means an individual whose domicile at the time of death
134.21was in Minnesota.
134.22    (9) "Situs of property" means, with respect to:
134.23    (i) real property, the state or country in which it is located; with respect to
134.24    (ii) tangible personal property, the state or country in which it was normally kept or
134.25located at the time of the decedent's death or for a gift of tangible personal property within
134.26three years of death, the state or country in which it was normally kept or located when
134.27the gift was executed; and with respect to
134.28    (iii) intangible personal property, the state or country in which the decedent was
134.29domiciled at death or for a gift of intangible personal property within three years of death,
134.30the state or country in which the decedent was domiciled when the gift was executed.
134.31    For a nonresident decedent with an ownership interest in a pass-through entity
134.32with assets that include real or tangible personal property, situs of the real or tangible
134.33personal property is determined as if the pass-through entity does not exist and the real
134.34or tangible personal property is personally owned by the decedent. If the pass-through
134.35entity is owned by a person or persons in addition to the decedent, ownership of the
135.1property is attributed to the decedent in proportion to the decedent's capital ownership
135.2share of the pass-through entity.
135.3(10) "Pass-through entity" includes the following:
135.4(i) an entity electing S corporation status under section 1362 of the Internal Revenue
135.5Code;
135.6(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
135.7(iii) a single-member limited liability company or similar entity, regardless of
135.8whether it is taxed as an association or is disregarded for federal income tax purposes
135.9under Code of Federal Regulations, title 26, section 301.7701-3; or
135.10(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
135.11EFFECTIVE DATE.This section is effective for decedents dying after December
135.1231, 2012.

135.13    Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
135.14    Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
135.15proportion of the maximum credit for state death taxes computed under section 2011 of
135.16the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
135.17adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
135.18gross estate. The tax is reduced by:
135.19    (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
135.20Minnesota adjusted taxable estate and not subtracted as qualified farm or small business
135.21property; and
135.22    (2) any credit allowed under subdivision 1c.
135.23    (b) The tax determined under this subdivision must not be greater than the sum of
135.24the following amounts multiplied by a fraction, the numerator of which is the Minnesota
135.25gross estate and the denominator of which is the federal gross estate:
135.26    (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
135.27multiplied by the sum of:
135.28    (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
135.29    (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
135.30Code; less
135.31(iii) the lesser of (A) the sum of the value of qualified small business property
135.32under subdivision 9, and the value of qualified farm property under subdivision 10, or
135.33(B) $4,000,000; less
135.34    (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
135.35Code; and less
136.1    (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
136.2    (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
136.3Revenue Code of 1986, as amended through December 31, 2000.
136.4EFFECTIVE DATE.This section is effective for decedents dying after December
136.531, 2012.

136.6    Sec. 6. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision
136.7to read:
136.8    Subd. 1c. Nonresident decedent tax credit. (a) The estate of a nonresident
136.9decedent that is subject to tax under this chapter on the value of Minnesota situs property
136.10held in a pass-through entity is allowed a credit against the tax due under this section
136.11equal to the lesser of:
136.12(1) the amount of estate or inheritance tax paid to another state that is attributable to
136.13the Minnesota situs property held in the pass-through entity; or
136.14(2) the amount of tax paid under this section attributable to the Minnesota situs
136.15property held in the pass-through entity.
136.16(b) The amount of tax attributable to the Minnesota situs property held in the
136.17pass-through entity must be determined by the increase in the estate or inheritance tax that
136.18results from including the market value of the property in the estate or treating the value
136.19as a taxable inheritance to the recipient of the property.
136.20EFFECTIVE DATE.This section is effective for decedents dying after December
136.2131, 2012.

136.22    Sec. 7. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
136.23    Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
136.24meanings given in this subdivision.
136.25(b) "Family member" means a family member as defined in section 2032A(e)(2) of
136.26the Internal Revenue Code, or a trust whose present beneficiaries are all family members
136.27as defined in section 2032A(e)(2) of the Internal Revenue Code.
136.28(c) "Qualified heir" means a family member who acquired qualified property from
136.29 upon the death of the decedent and satisfies the requirement under subdivision 9, clause
136.30(6) (7), or subdivision 10, clause (4) (5), for the property.
136.31(d) "Qualified property" means qualified small business property under subdivision
136.329 and qualified farm property under subdivision 10.
137.1EFFECTIVE DATE.This section is effective retroactively for estates of decedents
137.2dying after June 30, 2011.

137.3    Sec. 8. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read:
137.4    Subd. 9. Qualified small business property. Property satisfying all of the following
137.5requirements is qualified small business property:
137.6(1) The value of the property was included in the federal adjusted taxable estate.
137.7(2) The property consists of the assets of a trade or business or shares of stock or
137.8other ownership interests in a corporation or other entity engaged in a trade or business.
137.9The decedent or the decedent's spouse must have materially participated in the trade or
137.10business within the meaning of section 469 of the Internal Revenue Code during the
137.11taxable year that ended before the date of the decedent's death. Shares of stock in a
137.12corporation or an ownership interest in another type of entity do not qualify under this
137.13subdivision if the shares or ownership interests are traded on a public stock exchange at
137.14any time during the three-year period ending on the decedent's date of death. For purposes
137.15of this subdivision, an ownership interest includes the interest the decedent is deemed to
137.16own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
137.17(3) During the taxable year that ended before the decedent's death, the trade or
137.18business must not have been a passive activity within the meaning of section 469(c) of the
137.19Internal Revenue Code, and the decedent or the decedent's spouse must have materially
137.20participated in the trade or business within the meaning of section 469(h) of the Internal
137.21Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other
137.22provision provided by United States Treasury Department regulation that substitutes
137.23material participation in prior taxable years for material participation in the taxable year
137.24that ended before the decedent's death.
137.25(4) The gross annual sales of the trade or business were $10,000,000 or less for the
137.26last taxable year that ended before the date of the death of the decedent.
137.27(4) (5) The property does not consist of cash or, cash equivalents, publicly traded
137.28securities, or assets not used in the operation of the trade or business. For property
137.29consisting of shares of stock or other ownership interests in an entity, the amount value of
137.30cash or, cash equivalents, publicly traded securities, or assets not used in the operation of
137.31the trade or business held by the corporation or other entity must be deducted from the
137.32value of the property qualifying under this subdivision in proportion to the decedent's
137.33share of ownership of the entity on the date of death.
137.34(5) (6) The decedent continuously owned the property, including property the
137.35decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue
138.1Code, for the three-year period ending on the date of death of the decedent. In the case of
138.2a sole proprietor, if the property replaced similar property within the three-year period,
138.3the replacement property will be treated as having been owned for the three-year period
138.4ending on the date of death of the decedent.
138.5(6) A family member continuously uses the property in the operation of the trade or
138.6business for three years following the date of death of the decedent.
138.7(7) For three years following the date of death of the decedent, the trade or business
138.8is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code,
138.9and a family member materially participates in the operation of the trade or business within
138.10the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3)
138.11of the Internal Revenue Code and any other provision provided by United States Treasury
138.12Department regulation that substitutes material participation in prior taxable years for
138.13material participation in the three years following the date of death of the decedent.
138.14(8) The estate and the qualified heir elect to treat the property as qualified small
138.15business property and agree, in the form prescribed by the commissioner, to pay the
138.16recapture tax under subdivision 11, if applicable.
138.17EFFECTIVE DATE.This section is effective retroactively for estates of decedents
138.18dying after June 30, 2011.

138.19    Sec. 9. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read:
138.20    Subd. 10. Qualified farm property. Property satisfying all of the following
138.21requirements is qualified farm property:
138.22(1) The value of the property was included in the federal adjusted taxable estate.
138.23(2) The property consists of a farm meeting the requirements of agricultural land and
138.24is owned by a person or entity that is either not subject to or is in compliance with section
138.25500.24 , and was classified for property tax purposes as the homestead of the decedent
138.26or the decedent's spouse or both under section 273.124, and as class 2a property under
138.27section 273.13, subdivision 23.
138.28(3) For property taxes payable in the taxable year of the decedent's death, the
138.29property is classified as class 2a property under section 273.13, subdivision 23, and is
138.30classified as agricultural homestead, agricultural relative homestead, or special agricultural
138.31homestead under section 273.124.
138.32(4) The decedent continuously owned the property, including property the decedent
138.33is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for
138.34the three-year period ending on the date of death of the decedent either by ownership of
139.1the agricultural land or pursuant to holding an interest in an entity that is not subject to
139.2or is in compliance with section 500.24.
139.3(4) A family member continuously uses the property in the operation of the trade or
139.4business (5) The property is classified for property tax purposes as class 2a property under
139.5section 273.13, subdivision 23, for three years following the date of death of the decedent.
139.6(5) (6) The estate and the qualified heir elect to treat the property as qualified farm
139.7property and agree, in a form prescribed by the commissioner, to pay the recapture tax
139.8under subdivision 11, if applicable.
139.9EFFECTIVE DATE.This section is effective retroactively for estates of decedents
139.10dying after June 30, 2011.

139.11    Sec. 10. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read:
139.12    Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
139.13before the death of the qualified heir, the qualified heir disposes of any interest in the
139.14qualified property, other than by a disposition to a family member, or a family member
139.15ceases to use the qualified property which was acquired or passed from the decedent
139.16 satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional
139.17estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
139.18replaces qualified small business property excluded under subdivision 9 with similar
139.19property, then the qualified heir will not be treated as having disposed of an interest in the
139.20qualified property.
139.21(b) The amount of the additional tax equals the amount of the exclusion claimed by
139.22the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
139.23(c) The additional tax under this subdivision is due on the day which is six months
139.24after the date of the disposition or cessation in paragraph (a).
139.25EFFECTIVE DATE.This section is effective retroactively for estates of decedents
139.26dying after June 30, 2011.

139.27    Sec. 11. [292.16] DEFINITIONS.
139.28(a) For purposes of this chapter, the following definitions apply.
139.29(b) The definitions of terms defined in section 291.005 apply.
139.30(c) "Resident" has the meaning given in section 290.01, subdivision 7, paragraph (a).
139.31(d) "Taxable gifts" means:
139.32(1) the transfers by gift which are included in taxable gifts for federal gift tax
139.33purposes under the following sections of the Internal Revenue Code:
140.1(i) section 2503;
140.2(ii) sections 2511 to 2514; and
140.3(iii) sections 2516 to 2519; less
140.4(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
140.5EFFECTIVE DATE.This section is effective for taxable gifts made after June
140.630, 2013.

140.7    Sec. 12. [292.17] GIFT TAX.
140.8    Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
140.9by any individual resident or nonresident in an amount equal to ten percent of the amount
140.10of the taxable gift.
140.11(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
140.12the donee of any gift is personally liable for the tax to the extent of the value of the gift.
140.13    Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
140.14section equal to $100,000. This credit applies to the cumulative amount of taxable gifts
140.15made by the donor during the donor's lifetime.
140.16    Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of:
140.17(1) real property located outside of this state;
140.18(2) tangible personal property that was normally kept at a location outside of the
140.19state on the date the gift was executed; and
140.20(3) intangible personal property made by an individual who is not a resident at
140.21the time the gift was executed.
140.22EFFECTIVE DATE.This section is effective for taxable gifts made after June
140.2330, 2013.

140.24    Sec. 13. [292.18] RETURNS.
140.25(a) Any individual who makes a taxable gift during the taxable year shall file a gift
140.26tax return in the form and manner prescribed by the commissioner.
140.27(b) If the donor dies before filing the return, the executor of the donor's will or
140.28the administrator of the donor's estate shall file the return. If the donor becomes legally
140.29incompetent before filing the return, the guardian or conservator shall file the return.
140.30(c) The return must include:
140.31(1) each gift made during the calendar year which is to be included in computing the
140.32taxable gifts;
141.1(2) the deductions claimed and allowable under section 292.16, paragraph (d),
141.2clause (2);
141.3(3) a description of the gift, and the donee's name, address, and Social Security
141.4number;
141.5(4) the fair market value of gifts not made in money; and
141.6(5) any other information the commissioner requires to administer the gift tax.
141.7EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.830, 2013.

141.9    Sec. 14. [292.19] FILING REQUIREMENTS.
141.10Gift tax returns must be filed by the April 15 following the close of the calendar
141.11year, except if a gift is made during the calendar year in which the donor dies, the return
141.12for the donor must be filed by the last date, including extensions, for filing the gift tax
141.13return for federal gift tax purposes for the donor.
141.14EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.1530, 2013.

141.16    Sec. 15. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
141.17The commissioner may require the donor or the donee to show the property subject to
141.18the tax under section 292.17 to the commissioner upon demand and may employ a suitable
141.19person to appraise the property. The donor shall submit a declaration, in a form prescribed
141.20by the commissioner and including any certification required by the commissioner, that the
141.21property shown by the donor on the gift tax return includes all of the property transferred by
141.22gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).
141.23EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.2430, 2013.

141.25    Sec. 16. [292.21] ADMINISTRATIVE PROVISIONS.
141.26    Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
141.27section 292.17 is due and payable to the commissioner by the April 15 following the close
141.28of the calendar year during which the gift was made. The return required under section
141.29292.19 must be included with the payment. If a taxable gift is made during the calendar
141.30year in which the donor dies, the due date is the last date, including extensions, for filing
141.31the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
141.32tax due within the time specified under this section, a penalty applies equal to ten percent
142.1of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
142.2bear interest at the rate under section 270C.40 from the due date of the return.
142.3    Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
142.4filing a gift tax return, if a written request is filed with a tentative return accompanied by a
142.5payment of the tax, which is estimated in the tentative return, on or before the last day for
142.6filing the return. Any person to whom an extension is granted must pay, in addition to the
142.7tax, interest at the rate under section 270C.40 from the date on which the tax would have
142.8been due without the extension.
142.9    Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
142.10for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
142.11calendar year, is changed or corrected by the Internal Revenue Service or other officer
142.12of the United States or other competent authority, the taxpayer shall report the change or
142.13correction in federal taxable gifts within 180 days after the final determination of the change
142.14or correction, and concede the accuracy of the determination or provide a letter detailing
142.15how the federal determination is incorrect or does not change the Minnesota gift tax. Any
142.16taxpayer filing an amended federal gift tax return shall also file within 180 days an amended
142.17return under this chapter and shall include any information the commissioner requires. The
142.18time for filing the report or amended return may be extended by the commissioner upon due
142.19cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination,
142.20the commissioner finds that the taxpayer is liable for the payment of an additional tax, the
142.21commissioner shall, within a reasonable time from the receipt of the report or amended
142.22return, notify the taxpayer of the amount of additional tax, together with interest computed
142.23at the rate under section 270C.40 from the date when the original tax was due and payable.
142.24Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the
142.25amount of the additional tax and interest. If, upon examination of the report or amended
142.26return and related information, the commissioner finds that the taxpayer has overpaid the
142.27tax due the state, the commissioner shall refund the overpayment to the taxpayer.
142.28    Subd. 4. Application of federal rules. In administering the tax under this chapter,
142.29the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
142.30Revenue Code. The words "secretary or his delegate," as used in those sections of the
142.31Internal Revenue Code, mean the commissioner.
142.32EFFECTIVE DATE.This section is effective for taxable gifts made after June
142.3330, 2013.

143.1ARTICLE 8
143.2SALES AND USE TAXES; LOCAL SALES TAXES

143.3    Section 1. [116J.3738] QUALIFIED EXPANSIONS OF GREATER MINNESOTA
143.4BUSINESSES.
143.5    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
143.6have the meanings given unless the context clearly indicates otherwise.
143.7(b) "Agricultural processing facility" means one or more facilities or operations
143.8that transform, package, sort, or grade livestock or livestock products, agricultural
143.9commodities, or plants or plant products into goods that are used for intermediate or final
143.10consumption including goods for nonfood use, and surrounding property.
143.11(c) "Business" means an individual, corporation, partnership, limited liability
143.12company, association, or any other entity engaged in operating a trade or business located
143.13in greater Minnesota.
143.14(d) "City" means a statutory or home rule charter city.
143.15(e) "Greater Minnesota" means the area of the state that excludes the metropolitan
143.16area, as defined in section 473.121, subdivision 2.
143.17(f) "Qualified business" means a business that satisfies the requirements of subdivision
143.182, has been certified under subdivision 3, and has not been terminated under subdivision 5.
143.19    Subd. 2. Qualified business. (a) A business is a qualified business if it satisfies the
143.20requirement of this paragraph and is not disqualified under the provisions of paragraph
143.21(b). To qualify, the business must:
143.22(1) have operated its trade or business in a city or cities in greater Minnesota for at
143.23least one year before applying under subdivision 3;
143.24(2) pay or agree to pay in the future each employee compensation, including benefits
143.25not mandated by law, that on an annualized basis equal at least 120 percent of the federal
143.26poverty level for a family of four;
143.27(3) plan and agree to expand its employment in one or more cities in greater Minnesota
143.28by the minimum number of employees required under subdivision 3, paragraph (c); and
143.29(4) received certification from the commissioner under subdivision 3 that it is a
143.30qualified business.
143.31(b) A business is not a qualified business if it is either:
143.32(1) primarily engaged in making retail sales to purchasers who are physically present
143.33at the business's location or locations in greater Minnesota; or
143.34(2) a public utility, as defined in section 336B.01.
144.1(c) The requirements in paragraph (a) that the business' operations and expansion be
144.2located in a city do not apply to an agricultural processing facility.
144.3    Subd. 3. Certification of qualified business. (a) A business may apply to the
144.4commissioner for certification as a qualified business under this section. The commissioner
144.5shall specify the form of the application, the manner and times for applying, and the
144.6information required to be included in the application. The commissioner may impose an
144.7application fee in an amount sufficient to defray the commissioner's cost of processing
144.8certifications. A business must file a copy of its application with the chief clerical officer
144.9of the city at the same time it applies to the commissioner. For an agricultural processing
144.10facility located outside the boundaries of a city, the business must file a copy of the
144.11application with the county auditor.
144.12(b) The commissioner shall certify each business as a qualified business that:
144.13(1) satisfies the requirements of subdivision 2;
144.14(2) the commissioner determines would not expand its operations in greater
144.15Minnesota without the tax incentives available under subdivision 4; and
144.16(3) enters a business subsidy agreement with the commissioner that pledges to
144.17satisfy the minimum expansion requirements of paragraph (c) within three years or less
144.18following execution of the agreement.
144.19The commissioner must act on an application within 60 days after its filing. Failure
144.20by the commissioner to take action within the 60-day period is deemed approval of the
144.21application.
144.22(c) The following minimum expansion requirements apply, based on the number of
144.23employees of the business at locations in greater Minnesota:
144.24(1) a business that employees 50 or fewer full-time equivalent employees in greater
144.25Minnesota when the agreement is executed must increase its employment by five or more
144.26full-time equivalent employees;
144.27(2) a business that employees more than 50 but fewer than 200 full-time equivalent
144.28employees in greater Minnesota when the agreement is executed must increase the number
144.29of its full-time equivalent employees in greater Minnesota by at least ten percent; or
144.30(3) a business that employees 200 or more full-time equivalent employees in greater
144.31Minnesota when the agreement is executed must increase its employment by at least 21
144.32full-time equivalent employees.
144.33(d) The city, or a county for an agricultural processing facility located outside the
144.34boundaries of a city, in which the business proposes to expand its operations may file
144.35comments supporting or opposing the application with the commissioner. The comments
144.36must be filed within 30 days after receipt by the city of the application and may include a
145.1notice of any contribution the city or county intends to make to encourage or support the
145.2business expansion, such as the use of tax increment financing, property tax abatement,
145.3additional city or county services, or other financial assistance.
145.4(e) Certification of a qualified business is effective for the 12-year period beginning
145.5on the first day of the calendar month immediately following execution of the business
145.6subsidy agreement.
145.7    Subd. 4. Available tax incentives. A qualified business is entitled to a sales tax
145.8exemption, as provided in section 297A.68, subdivision 49, for purchases made during the
145.9period the business was certified as a qualified business under this section.
145.10    Subd. 5. Termination of status as a qualified business. (a) The commissioner shall
145.11put in place a system for monitoring and ensuring that each certified business meets within
145.12three years or less the minimum expansion requirement in its business subsidy agreement
145.13and continues to satisfy those requirements for the rest of the duration of the certification
145.14under subdivision 3. This system must include regular reporting by the business to the
145.15commissioner of its baseline and current employment levels and any other information
145.16the commissioner determines may be useful to ensure compliance and for legislative
145.17evaluation of the effectiveness of the tax incentives.
145.18(b) A business ceases to be a qualified business and to qualify for the sales tax
145.19exemption under section 297A.68, subdivision 49, under this subdivision upon the earlier
145.20of the following dates:
145.21(1) the end of the duration of its designation under subdivision 3, paragraph (e),
145.22effective as provided under this subdivision or other provision of law for the tax incentive;
145.23or
145.24(2) the date the commissioner finds that the business has breached its business
145.25subsidy agreement and failed to satisfy the minimum expansion required by subdivision 3
145.26and its agreement.
145.27(c) A business may contest the commissioner's finding that it breached its business
145.28subsidy agreement under paragraph (b), clause (2), under the contested case procedures in
145.29the Administrative Procedure Act, chapter 14.
145.30(d) The commissioner, after consulting with the commissioner of revenue, may
145.31waive a breach of the business subsidy agreement and permit continued receipt of tax
145.32incentives, if the commissioner determines that termination of the tax incentives is not in
145.33the best interest of the state or the local government units and the business' breach of the
145.34agreement is a result of circumstances beyond its control including, but not limited to:
145.35(1) a natural disaster;
145.36(2) unforeseen industry trends;
146.1(3) a decline in economic activity in the overall or greater Minnesota economy; or
146.2(4) loss of a major supplier or customer of the business.
146.3EFFECTIVE DATE.This section is effective the day following final enactment.

146.4    Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
146.5    Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
146.6to, each of the transactions listed in this subdivision. In applying the provisions of this
146.7chapter, the terms "tangible personal property" and "retail sale" include the taxable
146.8services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision
146.9of these taxable services, unless specifically provided otherwise. Services performed by
146.10an employee for an employer are not taxable. Services performed by a partnership or
146.11association for another partnership or association are not taxable if one of the entities owns
146.12or controls more than 80 percent of the voting power of the equity interest in the other
146.13entity. Services performed between members of an affiliated group of corporations are not
146.14taxable. For purposes of the preceding sentence, "affiliated group of corporations" means
146.15those entities that would be classified as members of an affiliated group as defined under
146.16United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).
146.17    (b) Sale and purchase include:
146.18    (1) any transfer of title or possession, or both, of tangible personal property, whether
146.19absolutely or conditionally, for a consideration in money or by exchange or barter; and
146.20    (2) the leasing of or the granting of a license to use or consume, for a consideration
146.21in money or by exchange or barter, tangible personal property, other than a manufactured
146.22home used for residential purposes for a continuous period of 30 days or more.
146.23    (c) Sale and purchase include the production, fabrication, printing, or processing of
146.24tangible personal property for a consideration for consumers who furnish either directly or
146.25indirectly the materials used in the production, fabrication, printing, or processing.
146.26    (d) Sale and purchase include the preparing for a consideration of food.
146.27Notwithstanding section 297A.67, subdivision 2, taxable food includes, but is not limited
146.28to, the following:
146.29    (1) prepared food sold by the retailer;
146.30    (2) soft drinks;
146.31    (3) candy;
146.32    (4) dietary supplements; and
146.33    (5) all food sold through vending machines.
146.34    (e) A sale and a purchase includes the furnishing for a consideration of electricity,
146.35gas, water, or steam for use or consumption within this state.
147.1    (f) A sale and a purchase includes
147.2     the transfer for a consideration of prewritten computer software whether delivered
147.3electronically, by load and leave, or otherwise.
147.4    (g) A sale and a purchase includes the furnishing for a consideration of the following
147.5services:
147.6    (1) the privilege of admission to places of amusement, recreational areas, or athletic
147.7events, and the making available of amusement devices, tanning facilities, reducing
147.8salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
147.9    (2) lodging and related services by a hotel, rooming house, resort, campground,
147.10motel, or trailer camp, including furnishing the guest of the facility with access to
147.11telecommunication services, and the granting of any similar license to use real property in
147.12a specific facility, other than the renting or leasing of it for a continuous period of 30 days
147.13or more under an enforceable written agreement that may not be terminated without prior
147.14notice and including accommodations intermediary services provided in connection with
147.15other services provided under this clause;
147.16    (3) nonresidential parking services, whether on a contractual, hourly, or other
147.17periodic basis, except for parking at a meter;
147.18    (4) the granting of membership in a club, association, or other organization if:
147.19    (i) the club, association, or other organization makes available for the use of its
147.20members sports and athletic facilities, without regard to whether a separate charge is
147.21assessed for use of the facilities; and
147.22    (ii) use of the sports and athletic facility is not made available to the general public
147.23on the same basis as it is made available to members.
147.24Granting of membership means both onetime initiation fees and periodic membership
147.25dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
147.26squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
147.27swimming pools; and other similar athletic or sports facilities;
147.28    (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
147.29material used in road construction; and delivery of concrete block by a third party if the
147.30delivery would be subject to the sales tax if provided by the seller of the concrete block.
147.31For purposes of this clause, "road construction" means construction of:
147.32    (i) public roads;
147.33    (ii) cartways; and
147.34    (iii) private roads in townships located outside of the seven-county metropolitan area
147.35up to the point of the emergency response location sign; and
147.36    (6) services as provided in this clause:
148.1    (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
148.2and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
148.3drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
148.4include services provided by coin operated facilities operated by the customer;
148.5    (ii) motor vehicle washing, waxing, and cleaning services, including services
148.6provided by coin operated facilities operated by the customer, and rustproofing,
148.7undercoating, and towing of motor vehicles;
148.8    (iii) building and residential cleaning, maintenance, and disinfecting services and
148.9pest control and exterminating services;
148.10    (iv) detective, security, burglar, fire alarm, and armored car services; but not
148.11including services performed within the jurisdiction they serve by off-duty licensed peace
148.12officers as defined in section 626.84, subdivision 1, or services provided by a nonprofit
148.13organization or any organization at the direction of a county for monitoring and electronic
148.14surveillance of persons placed on in-home detention pursuant to court order or under the
148.15direction of the Minnesota Department of Corrections;
148.16    (v) pet grooming services;
148.17    (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
148.18and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
148.19plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
148.20clearing contract as defined in section 297A.68, subdivision 40; and tree trimming for
148.21public utility lines. Services performed under a construction contract for the installation of
148.22shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
148.23    (vii) massages, except when provided by a licensed health care facility or
148.24professional or upon written referral from a licensed health care facility or professional for
148.25treatment of illness, injury, or disease; and
148.26    (viii) the furnishing of lodging, board, and care services for animals in kennels and
148.27other similar arrangements, but excluding veterinary and horse boarding services.
148.28    In applying the provisions of this chapter, the terms "tangible personal property"
148.29and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
148.30and the provision of these taxable services, unless specifically provided otherwise.
148.31Services performed by an employee for an employer are not taxable. Services performed
148.32by a partnership or association for another partnership or association are not taxable if
148.33one of the entities owns or controls more than 80 percent of the voting power of the
148.34equity interest in the other entity. Services performed between members of an affiliated
148.35group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
148.36group of corporations" means those entities that would be classified as members of an
149.1affiliated group as defined under United States Code, title 26, section 1504, disregarding
149.2the exclusions in section 1504(b).
149.3    For purposes of clause (5), "road construction" means construction of (1) public
149.4roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
149.5metropolitan area up to the point of the emergency response location sign.
149.6    (h) A sale and a purchase includes the furnishing for a consideration of tangible
149.7personal property or taxable services by the United States or any of its agencies or
149.8instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
149.9subdivisions.
149.10    (i) A sale and a purchase includes the furnishing for a consideration of
149.11telecommunications services, ancillary services associated with telecommunication
149.12services, cable and pay television services, and direct satellite services. Telecommunication
149.13services include, but are not limited to, the following services, as defined in section
149.14297A.669 : air-to-ground radiotelephone service, mobile telecommunication service,
149.15postpaid calling service, prepaid calling service, prepaid wireless calling service, and
149.16private communication services. The services in this paragraph are taxed to the extent
149.17allowed under federal law.
149.18    (j) A sale and a purchase includes the furnishing for a consideration of installation if
149.19the installation charges would be subject to the sales tax if the installation were provided
149.20by the seller of the item being installed.
149.21    (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
149.22to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
149.23the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
149.2459B.02, subdivision 11.
149.25    (l) A sale and a purchase includes furnishing for a consideration of specified digital
149.26products or other digital products or granting the right for a consideration to use specified
149.27digital products or other digital products on a temporary or permanent basis and regardless
149.28of whether the purchaser is required to make continued payments for such right. Wherever
149.29the term "tangible personal property" is used in this chapter, other than in subdivisions 10
149.30and 38, the provisions also apply to specified digital products, or other digital products,
149.31unless specifically provided otherwise or the context indicates otherwise.
149.32(m) A sale and purchase includes the furnishing for consideration of the following
149.33services:
149.34(1) repairing and maintaining electronic and precision equipment, which service can
149.35be deducted as a business expense under the Internal Revenue Code. This includes, but
149.36is not limited to, repair or maintenance of electronic devices, computers and computer
150.1peripherals, monitors, computer terminals, storage devices, and CD-ROM drives; other
150.2office equipment such as photocopying machines, printers, and facsimile machines;
150.3televisions, stereos, sound systems, video or digital recorders and players; two-way radios
150.4and other communications equipment; radar and sonar equipment, scientific instruments,
150.5microscopes, and medical equipment;
150.6(2) repairing and maintaining commercial and industrial machinery and equipment.
150.7For purposes of this subdivision, the following items are not commercial or industrial
150.8machinery and equipment: (i) motor vehicles; (ii) furniture and fixtures; (iii) ships; (iv)
150.9railroad stock; and (v) aircraft; and
150.10(3) warehousing or storage services for tangible personal property, excluding:
150.11(i) agricultural products;
150.12(ii) refrigerated storage;
150.13(iii) electronic data; and
150.14(iv) self-storage services and storage of motor vehicles, recreational vehicles, and
150.15boats, not eligible to be deducted as a business expense under the Internal Revenue Code.
150.16EFFECTIVE DATE.This section is effective for sales and purchases made after
150.17June 30, 2013, except that paragraph (m), clause (3), is effective for sales and purchases
150.18made after March 31, 2014.

150.19    Sec. 3. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
150.20    Subd. 4. Retail sale. (a) A "retail sale" means:
150.21    (1) any sale, lease, or rental of tangible personal property for any purpose, other than
150.22resale, sublease, or subrent of items by the purchaser in the normal course of business
150.23as defined in subdivision 21; and
150.24    (2) any sale of a service enumerated in subdivision 3, for any purpose other than
150.25resale by the purchaser in the normal course of business as defined in subdivision 21.
150.26    (b) A sale of property used by the owner only by leasing it to others or by holding it
150.27in an effort to lease it, and put to no use by the owner other than resale after the lease or
150.28effort to lease, is a sale of property for resale.
150.29    (c) A sale of master computer software that is purchased and used to make copies for
150.30sale or lease is a sale of property for resale.
150.31    (d) A sale of building materials, supplies, and equipment to owners, contractors,
150.32subcontractors, or builders for the erection of buildings or the alteration, repair, or
150.33improvement of real property is a retail sale in whatever quantity sold, whether the sale is
150.34for purposes of resale in the form of real property or otherwise.
151.1    (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
151.2for installation of the floor covering is a retail sale and not a sale for resale since a sale of
151.3floor covering which includes installation is a contract for the improvement of real property.
151.4    (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
151.5for installation of the items is a retail sale and not a sale for resale since a sale of
151.6shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
151.7the improvement of real property.
151.8    (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
151.9is not considered a sale of property for resale.
151.10    (h) A sale of tangible personal property utilized or employed in the furnishing or
151.11providing of services under subdivision 3, paragraph (g), clause (1), including, but not
151.12limited to, property given as promotional items, is a retail sale and is not considered a
151.13sale of property for resale.
151.14    (i) A sale of tangible personal property used in conducting lawful gambling under
151.15chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
151.16given as promotional items, is a retail sale and is not considered a sale of property for resale.
151.17    (j) a sale of machines, equipment, or devices that are used to furnish, provide, or
151.18dispense goods or services, including, but not limited to, coin-operated devices, is a retail
151.19sale and is not considered a sale of property for resale.
151.20    (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
151.21payment becomes due under the terms of the agreement or the trade practices of the
151.22lessor or (2) in the case of a lease of a motor vehicle, as defined in section 297B.01,
151.23subdivision 11
, but excluding vehicles with a manufacturer's gross vehicle weight rating
151.24greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
151.25the lease is executed.
151.26    (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
151.27title or possession of the tangible personal property.
151.28    (m) A sale of a bundled transaction in which one or more of the products included
151.29in the bundle is a taxable product is a retail sale, except that if one of the products
151.30is a telecommunication service, ancillary service, Internet access, or audio or video
151.31programming service, and the seller has maintained books and records identifying through
151.32reasonable and verifiable standards the portions of the price that are attributable to the
151.33distinct and separately identifiable products, then the products are not considered part of a
151.34bundled transaction. For purposes of this paragraph:
152.1    (1) the books and records maintained by the seller must be maintained in the regular
152.2course of business, and do not include books and records created and maintained by the
152.3seller primarily for tax purposes;
152.4    (2) books and records maintained in the regular course of business include, but are
152.5not limited to, financial statements, general ledgers, invoicing and billing systems and
152.6reports, and reports for regulatory tariffs and other regulatory matters; and
152.7    (3) books and records are maintained primarily for tax purposes when the books
152.8and records identify taxable and nontaxable portions of the price, but the seller maintains
152.9other books and records that identify different prices attributable to the distinct products
152.10included in the same bundled transaction.
152.11    (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
152.12body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
152.13retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
152.14motor vehicle repair paint and motor vehicle repair materials for resale must either:
152.15    (1) separately state each item of paint and each item of materials, and the sales price
152.16of each, on the invoice to the purchaser; or
152.17    (2) in order to calculate the sales price of the paint and materials, use a method
152.18which estimates the amount and monetary value of the paint and materials used in
152.19the repair of the motor vehicle by multiplying the number of labor hours by a rate of
152.20consideration for the paint and materials used in the repair of the motor vehicle following
152.21industry standard practices that fairly calculate the gross receipts from the retail sale of
152.22the motor vehicle repair paint and motor vehicle repair materials. An industry standard
152.23practice fairly calculates the gross receipts if the sales price of the paint and materials used
152.24or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
152.25by the motor vehicle repair or body shop business. Under this clause, the invoice must
152.26either separately state the "paint and materials" as a single taxable item, or separately state
152.27"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
152.28wholesale transactions at an auto auction facility.
152.29    (o) A sale of specified digital products or other digital products to an end user with
152.30or without rights of permanent use and regardless of whether rights of use are conditioned
152.31upon payment by the purchaser is a retail sale. When a digital code has been purchased that
152.32relates to specified digital products or other digital products, the subsequent receipt of or
152.33access to the related specified digital products or other digital products is not a retail sale.
152.34    (p) A payment made to a cooperative electric association or public utility as a
152.35contribution in aid of construction is a contract for improvement to real property and
152.36is not a retail sale.
153.1EFFECTIVE DATE.This section is effective for sales and purchases made after
153.2June 30, 2013.

153.3    Sec. 4. Minnesota Statutes 2012, section 297A.61, subdivision 10, is amended to read:
153.4    Subd. 10. Tangible personal property. (a) "Tangible personal property" means
153.5personal property that can be seen, weighed, measured, felt, or touched, or that is in any
153.6other manner perceptible to the senses. "Tangible personal property" includes, but is not
153.7limited to, electricity, water, gas, steam, and prewritten computer software.
153.8    (b) Tangible personal property does not include:
153.9    (1) large ponderous machinery and equipment used in a business or production
153.10activity which at common law would be considered to be real property;
153.11    (2) property which is subject to an ad valorem property tax;
153.12    (3) property described in section 272.02, subdivision 9, clauses (a) to (d); and
153.13    (4) property described in section 272.03, subdivision 2, clauses (3) and (5).; and
153.14(5) specified digital products, or other digital products, transferred electronically.
153.15EFFECTIVE DATE.This section is effective for sales and purchases made after
153.16June 30, 2013.

153.17    Sec. 5. Minnesota Statutes 2012, section 297A.61, subdivision 25, is amended to read:
153.18    Subd. 25. Cable Pay television service. "Cable Pay television service" means
153.19the transmission of video, audio, or other programming service to purchasers, and the
153.20subscriber interaction, if any, required for the selection or use of the programming service,
153.21regardless of whether the programming is transmitted over facilities owned or operated
153.22by the cable service provider or over facilities owned or operated by one or more dealers
153.23of communications services. The term includes point-to-multipoint distribution direct to
153.24home satellite services by which programming is transmitted or broadcast by microwave
153.25or other equipment directly to the subscriber's premises, or any similar or comparable
153.26method of service. The term includes basic, extended, premium, all programming services,
153.27including subscriptions, digital video recorders, pay-per-view, digital, and music services.
153.28EFFECTIVE DATE.This section is effective for sales and purchases made after
153.29June 30, 2013.

153.30    Sec. 6. Minnesota Statutes 2012, section 297A.61, subdivision 38, is amended to read:
153.31    Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale
153.32of two or more products when the products are otherwise distinct and identifiable, and
154.1the products are sold for one nonitemized price. As used in this subdivision, "product"
154.2includes tangible personal property, services, intangibles, and digital goods, including
154.3specified digital products or other digital products, but does not include real property or
154.4services to real property. A bundled transaction does not include the sale of any products
154.5in which the sales price varies, or is negotiable, based on the selection by the purchaser of
154.6the products included in the transaction.
154.7    (b) For purposes of this subdivision, "distinct and identifiable" products does not
154.8include:
154.9    (1) packaging and other materials, such as containers, boxes, sacks, bags, and
154.10bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
154.11products and are incidental or immaterial to the retail sale. Examples of packaging that are
154.12incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
154.13and express delivery envelopes and boxes;
154.14    (2) a promotional product provided free of charge with the required purchase of
154.15another product. A promotional product is provided free of charge if the sales price of
154.16another product, which is required to be purchased in order to receive the promotional
154.17product, does not vary depending on the inclusion of the promotional product; and
154.18    (3) items included in the definition of sales price.
154.19    (c) For purposes of this subdivision, the term "one nonitemized price" does not
154.20include a price that is separately identified by product on binding sales or other supporting
154.21sales-related documentation made available to the customer in paper or electronic form
154.22including but not limited to an invoice, bill of sale, receipt, contract, service agreement,
154.23lease agreement, periodic notice of rates and services, rate card, or price list.
154.24    (d) A transaction that otherwise meets the definition of a bundled transaction is
154.25not a bundled transaction if it is:
154.26    (1) the retail sale of tangible personal property and a service and the tangible
154.27personal property is essential to the use of the service, and is provided exclusively in
154.28connection with the service, and the true object of the transaction is the service;
154.29    (2) the retail sale of services if one service is provided that is essential to the use or
154.30receipt of a second service and the first service is provided exclusively in connection with
154.31the second service and the true object of the transaction is the second service;
154.32    (3) a transaction that includes taxable products and nontaxable products and the
154.33purchase price or sales price of the taxable products is de minimis; or
154.34    (4) the retail sale of exempt tangible personal property and taxable tangible personal
154.35property if:
155.1    (i) the transaction includes food and food ingredients, drugs, durable medical
155.2equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
155.3or medical supplies; and
155.4    (ii) the seller's purchase price or sales price of the taxable tangible personal property is
155.550 percent or less of the total purchase price or sales price of the bundled tangible personal
155.6property. Sellers must not use a combination of the purchase price and sales price of the
155.7tangible personal property when making the 50 percent determination for a transaction.
155.8    (e) For purposes of this subdivision, "purchase price" means the measure subject to
155.9use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
155.10price or sales price of the taxable products is ten percent or less of the total purchase
155.11price or sales price of the bundled products. Sellers shall use either the purchase price
155.12or the sales price of the products to determine if the taxable products are de minimis.
155.13Sellers must not use a combination of the purchase price and sales price of the products
155.14to determine if the taxable products are de minimis. Sellers shall use the full term of a
155.15service contract to determine if the taxable products are de minimis.
155.16EFFECTIVE DATE.This section is effective for sales and purchases made after
155.17June 30, 2013.

155.18    Sec. 7. Minnesota Statutes 2012, section 297A.61, subdivision 45, is amended to read:
155.19    Subd. 45. Ring tone. "Ring tone" means a digitized sound file that is downloaded
155.20onto a device and that may be used to alert the customer of a telecommunication service
155.21 with respect to a communication. A ring tone does not include ring back tones or other
155.22digital audio files that are not stored on the purchaser's communication device.
155.23EFFECTIVE DATE.This section is effective for sales and purchases made after
155.24June 30, 2013.

155.25    Sec. 8. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
155.26to read:
155.27    Subd. 49. Motor vehicle repair paint and motor vehicle repair materials. "Motor
155.28vehicle repair paint" means a substance composed of solid matter suspended in a liquid
155.29medium and applied as a protective or decorative coating to the surface of a motor vehicle in
155.30order to restore the motor vehicle to its original condition, and includes primer, body paint,
155.31clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01.
155.32"Motor vehicle repair materials" means items, other than motor vehicle repair paint
155.33or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in
156.1repairing the motor vehicle at retail, and include abrasives, battery water, body filler or
156.2putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing
156.3compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape,
156.4oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads,
156.5sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor
156.6vehicle repair materials do not include items that are not used directly on the motor vehicle,
156.7such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
156.8used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.
156.9EFFECTIVE DATE.This section is effective for sales and purchases made after
156.10June 30, 2013.

156.11    Sec. 9. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
156.12to read:
156.13    Subd. 50. Digital audio works. "Digital audio works" means works that result from
156.14a fixation of a series of musical, spoken, or other sounds, that are transferred electronically.
156.15Digital audio works includes such items as the following which may either be prerecorded
156.16or live: songs, music, readings of books or other written materials, speeches, ring tones, or
156.17other sound recordings. Digital audio works does not include audio greeting cards sent by
156.18electronic mail. Unless the context provides otherwise, in this chapter digital audio works
156.19includes the digital code, or a subscription to or access to a digital code, for receiving,
156.20accessing, or otherwise obtaining digital audio works.
156.21EFFECTIVE DATE.This section is effective for sales and purchases made after
156.22June 30, 2013.

156.23    Sec. 10. Minnesota Statutes 2012, section 297A.61, is amended by adding a
156.24subdivision to read:
156.25    Subd. 51. Digital audiovisual works. "Digital audiovisual works" means a series
156.26of related images which, when shown in succession, impart an impression of motion,
156.27together with accompanying sounds, if any, that are transferred electronically. Digital
156.28audiovisual works includes such items as motion pictures, movies, musical videos, news
156.29and entertainment, and live events. Digital audiovisual works does not include video
156.30greeting cards sent by electronic mail. Unless the context provides otherwise, in this
156.31chapter digital audiovisual works includes the digital code, or a subscription to or access to
156.32a digital code, for receiving, accessing, or otherwise obtaining digital audiovisual works.
157.1EFFECTIVE DATE.This section is effective for sales and purchases made after
157.2June 30, 2013.

157.3    Sec. 11. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.4subdivision to read:
157.5    Subd. 52. Digital books. "Digital books" means any literary works, other than
157.6digital audiovisual works or digital audio works, expressed in words, numbers, or other
157.7verbal or numerical symbols or indicia so long as the product is generally recognized in
157.8the ordinary and usual sense as a "book." It includes works of fiction and nonfiction and
157.9short stories. It does not include periodicals, magazines, newspapers, or other news or
157.10information products, chat rooms, or weblogs. Unless the context provides otherwise, in
157.11this chapter digital books includes the digital code, or a subscription to or access to a
157.12digital code, for receiving, accessing, or otherwise obtaining digital books.
157.13EFFECTIVE DATE.This section is effective for sales and purchases made after
157.14June 30, 2013.

157.15    Sec. 12. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.16subdivision to read:
157.17    Subd. 53. Digital code. "Digital code" means a code which provides a purchaser
157.18with a right to obtain one or more specified digital products or other digital products.
157.19A digital code may be transferred electronically, such as through electronic mail, or it
157.20may be transferred on a tangible medium, such as on a plastic card, a piece of paper or
157.21invoice, or imprinted on another product. A digital code is not a code that represents a
157.22stored monetary value that is deducted from a total as it is used by the purchaser, and it
157.23is not a code that represents a redeemable card, gift card, or gift certificate that entitles
157.24the holder to select a digital product of an indicated cash value. The end user of a digital
157.25code is any purchaser except one who receives the contractual right to redistribute a digital
157.26product which is the subject of the transaction.
157.27EFFECTIVE DATE.This section is effective for sales and purchases made after
157.28June 30, 2013.

157.29    Sec. 13. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.30subdivision to read:
157.31    Subd. 54. Other digital products. "Other digital products" means the following
157.32items when transferred electronically:
158.1(1) greeting cards; and
158.2(2) online video or electronic games.
158.3EFFECTIVE DATE.This section is effective for sales and purchases made after
158.4June 30, 2013.

158.5    Sec. 14. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.6subdivision to read:
158.7    Subd. 55. Specified digital products. "Specified digital products" means digital
158.8audio works, digital audiovisual works, and digital books that are transferred electronically
158.9to a customer.
158.10EFFECTIVE DATE.This section is effective for sales and purchases made after
158.11June 30, 2013.

158.12    Sec. 15. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.13subdivision to read:
158.14    Subd. 56. Transferred electronically. "Transferred electronically" means obtained
158.15by the purchaser by means other than tangible storage media. For purposes of this
158.16subdivision, it is not necessary that a copy of the product be physically transferred to
158.17the purchaser. A product will be considered to have been transferred electronically to a
158.18purchaser if the purchaser has access to the product.
158.19EFFECTIVE DATE.This section is effective for sales and purchases made after
158.20June 30, 2013.

158.21    Sec. 16. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.22subdivision to read:
158.23    Subd. 58. Self-storage service. "Self-storage service" means a storage service that
158.24provides secure areas, such as rooms, units, compartments or containers, whether accessible
158.25from outside or from within a building, that are designated for the use of a purchaser,
158.26where the purchaser retains the care custody and control of their property, including
158.27self-storage units, mini-storage units, and areas by any other name to which the purchaser
158.28retains either unlimited free access or free access within reasonable business hours or upon
158.29reasonable notice to the service provider to add or remove property, but does not mean the
158.30rental of an entire building, such as a warehouse. Self-storage service does not include
158.31general warehousing and storage services where the warehouse typically handles, stores,
159.1and retrieves a purchaser's property using the warehouse's staff and equipment, and does
159.2not allow the purchaser free access to the storage space and does not include bailments.
159.3EFFECTIVE DATE.This section is effective July 1, 2013.

159.4    Sec. 17. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
159.5    Subdivision 1. Tax imposed. A tax is imposed on the lease or rental in this state
159.6for not more than 28 days of a passenger automobile as defined in section 168.002,
159.7subdivision 24
, a van as defined in section 168.002, subdivision 40, or a pickup truck as
159.8defined in section 168.002, subdivision 26. The rate of tax is 6.2 9.2 percent of the sales
159.9price. The tax applies whether or not the vehicle is licensed in the state.
159.10EFFECTIVE DATE.This section is effective for sales and purchases made after
159.11June 30, 2013.

159.12    Sec. 18. Minnesota Statutes 2012, section 297A.66, subdivision 3, is amended to read:
159.13    Subd. 3. Retailer not maintaining place of business in this state. (a) To the extent
159.14allowed by the United States Constitution and the laws of the United States in accordance
159.15with the terms and conditions of federal remote seller law, a retailer making retail sales
159.16from outside this state to a destination within this state and not maintaining a place of
159.17business in this state shall collect sales and use taxes and remit them to the commissioner
159.18under section 297A.77,.
159.19(b) To the extent allowed by the United States Constitution and the laws of the
159.20United States, a retailer making retail sales from outside this state to a destination within
159.21this state and not maintaining a place of business in this state shall collect sales and use
159.22taxes and remit them to the commissioner under section 297A.77, if the retailer engages in
159.23the regular or systematic soliciting of sales from potential customers in this state by:
159.24(1) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers, or
159.25other written solicitations of business to customers in this state;
159.26(2) display of advertisements on billboards or other outdoor advertising in this state;
159.27(3) advertisements in newspapers published in this state;
159.28(4) advertisements in trade journals or other periodicals the circulation of which is
159.29primarily within this state;
159.30(5) advertisements in a Minnesota edition of a national or regional publication or
159.31a limited regional edition in which this state is included as part of a broader regional or
159.32national publication which are not placed in other geographically defined editions of the
159.33same issue of the same publication;
160.1(6) advertisements in regional or national publications in an edition which is not
160.2by its contents geographically targeted to Minnesota but which is sold over the counter
160.3in Minnesota or by subscription to Minnesota residents;
160.4(7) advertisements broadcast on a radio or television station located in Minnesota; or
160.5(8) any other solicitation by telegraphy, telephone, computer database, cable, optic,
160.6microwave, or other communication system.
160.7This paragraph (a) must be construed without regard to the state from which
160.8distribution of the materials originated or in which they were prepared.
160.9(b) The location within or without this state of independent vendors that provide
160.10products or services to the retailer in connection with its solicitation of customers within this
160.11state, including such products and services as creation of copy, printing, distribution, and
160.12recording, is not considered in determining whether the retailer is required to collect tax.
160.13(c) A retailer not maintaining a place of business in this state is presumed, subject to
160.14rebuttal, to be engaged in regular solicitation within this state if it engages in any of the
160.15activities in paragraph (a) and:
160.16(1) makes 100 or more retail sales from outside this state to destinations in this state
160.17during a period of 12 consecutive months; or
160.18(2) makes ten or more retail sales totaling more than $100,000 from outside this state
160.19to destinations in this state during a period of 12 consecutive months.
160.20EFFECTIVE DATE.This section is effective the day after final enactment.

160.21    Sec. 19. Minnesota Statutes 2012, section 297A.66, is amended by adding a
160.22subdivision to read:
160.23    Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
160.24means a person, whether an independent contractor or other representative, who directly
160.25or indirectly solicits business for the retailer.
160.26(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
160.27with a resident under which the resident, for a commission or other substantially similar
160.28consideration, directly or indirectly refers potential customers, whether by a link on an
160.29Internet Web site, or otherwise, to the seller. This paragraph only applies if the total gross
160.30receipts are at least $10,000 in the 12-month period ending on the last day of the most recent
160.31calendar quarter before the calendar quarter in which the sale is made. For purposes of this
160.32paragraph, gross receipts means receipts from sales to customers located in the state who
160.33were referred to the retailer by all residents with this type of agreement with the retailer.
160.34(c) The presumption under paragraph (b) may be rebutted by proof that the resident
160.35with whom the seller has an agreement did not engage in any solicitation in the state
161.1on behalf of the retailer that would satisfy the nexus requirement of the United States
161.2Constitution during the 12-month period in question. Nothing in this section shall be
161.3construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
161.4representative for purposes of subdivision 1, paragraph (a).
161.5(d) For purposes of this paragraph, "resident" includes an individual who is a
161.6resident of this state, as defined in section 290.01, or a business that owns tangible
161.7personal property located in this state or has one or more employees providing services for
161.8the business in this state.
161.9(e) This subdivision does not apply to chapter 290 and does not expand or contract
161.10the jurisdiction to tax a trade or business under chapter 290.
161.11EFFECTIVE DATE.This section is effective for sales and purchases made after
161.12June 30, 2013.

161.13    Sec. 20. Minnesota Statutes 2012, section 297A.665, is amended to read:
161.14297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
161.15    (a) For the purpose of the proper administration of this chapter and to prevent
161.16evasion of the tax, until the contrary is established, it is presumed that:
161.17    (1) all gross receipts are subject to the tax; and
161.18    (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
161.19in Minnesota.
161.20    (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
161.21However, a seller is relieved of liability if:
161.22    (1) the seller obtains a fully completed exemption certificate or all the relevant
161.23information required by section 297A.72, subdivision 2, at the time of the sale or within
161.2490 days after the date of the sale; or
161.25    (2) if the seller has not obtained a fully completed exemption certificate or all the
161.26relevant information required by section 297A.72, subdivision 2, within the time provided
161.27in clause (1), within 120 days after a request for substantiation by the commissioner,
161.28the seller either:
161.29    (i) obtains in good faith a fully completed exemption certificate or all the relevant
161.30information required by section 297A.72, subdivision 2, from the purchaser; or
161.31    (ii) proves by other means that the transaction was not subject to tax;
161.32    (3) in the case of drop shipment sales, a seller engaged in drop shipping may claim a
161.33resale exemption based on an exemption certificate provided by its customer or reseller,
161.34or any other acceptable information available to the seller engaged in drop shipping
162.1evidencing qualification for a resale exemption, regardless of whether the customer or
162.2reseller is registered to collect and remit sales and use tax in the state.
162.3    (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
162.4    (1) fraudulently fails to collect the tax; or
162.5    (2) solicits purchasers to participate in the unlawful claim of an exemption.
162.6    (d) A certified service provider, as defined in section 297A.995, subdivision 2, is
162.7relieved of liability under this section to the extent a seller who is its client is relieved of
162.8liability.
162.9    (e) A purchaser of tangible personal property or any items listed in section 297A.63
162.10that are shipped or brought to Minnesota by the purchaser has the burden of proving that the
162.11property was not purchased from a retailer for storage, use, or consumption in Minnesota.
162.12    (f) If a seller claims that certain sales are exempt and does not provide the certificate,
162.13information, or proof required by paragraph (b), clause (2), within 120 days after the date
162.14of the commissioner's request for substantiation, then the exemptions claimed by the seller
162.15that required substantiation are disallowed.
162.16EFFECTIVE DATE.This section is effective for sales and purchases made after
162.17June 30, 2013.

162.18    Sec. 21. Minnesota Statutes 2012, section 297A.668, is amended by adding a
162.19subdivision to read:
162.20    Subd. 6a. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
162.212 and 3, a business purchaser that has not received authorization to pay the tax directly to
162.22the commissioner may use an exemption certificate indicating multiple points of use if:
162.23(1) the purchaser knows at the time of its purchase of a digital good, computer
162.24software delivered electronically, or a service that the good or service will be concurrently
162.25available for use in more than one taxing jurisdiction; and
162.26(2) the purchaser delivers to the seller the exemption certificate indicating multiple
162.27points of use at the time of purchase.
162.28(b) Upon receipt of the fully completed exemption certificate indicating multiple
162.29points of use, the seller is relieved of the obligation to collect, pay, or remit the applicable
162.30tax and the purchaser is obligated to collect, pay, or remit the applicable tax on a direct
162.31pay basis. The provisions of section 297A.665 apply to this paragraph.
162.32(c) The purchaser delivering the exemption certificate indicating multiple points
162.33of use may use any reasonable but consistent and uniform method of apportionment
162.34that is supported by the purchaser's business records as they exist at the time of the
162.35consummation of the sale.
163.1(d) The purchaser shall provide the exemption certificate indicating multiple points
163.2of use to the seller at the time of purchase.
163.3(e) A purchaser that has received authorization to pay the tax directly to the
163.4commissioner is not required to deliver to the seller an exemption certificate indicating
163.5multiple points of use. A purchaser that has received authorization to pay the tax directly
163.6to the commissioner shall follow the provisions of paragraph (c) in apportioning the tax
163.7due on a digital good, computer software delivered electronically, or a service that will be
163.8concurrently available for use in more than one taxing jurisdiction.
163.9EFFECTIVE DATE.This section is effective for sales and purchases made after
163.10June 30, 2013.

163.11    Sec. 22. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
163.12    Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
163.13devices for human use are exempt:
163.14    (1) drugs, including over-the-counter drugs;
163.15    (2) single-use finger-pricking devices for the extraction of blood and other single-use
163.16devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
163.17diabetes;
163.18    (3) insulin and medical oxygen for human use, regardless of whether prescribed
163.19or sold over the counter;
163.20    (4) prosthetic devices;
163.21    (5) durable medical equipment for home use only;
163.22    (6) mobility enhancing equipment;
163.23    (7) prescription corrective eyeglasses; and
163.24    (8) kidney dialysis equipment, including repair and replacement parts.
163.25(b) Items purchased in transactions covered by:
163.26(1) Medicare as defined under title XVIII of the Social Security Act, United States
163.27Code, title 42, section 1395, et seq.; or
163.28(2) Medicaid as defined under title XIX of the Social Security Act, United States
163.29Code, title 42, section 1396, et seq.
163.30    (b) (c) For purposes of this subdivision:
163.31    (1) "Drug" means a compound, substance, or preparation, and any component of
163.32a compound, substance, or preparation, other than food and food ingredients, dietary
163.33supplements, or alcoholic beverages that is:
164.1    (i) recognized in the official United States Pharmacopoeia, official Homeopathic
164.2Pharmacopoeia of the United States, or official National Formulary, and supplement
164.3to any of them;
164.4    (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
164.5of disease; or
164.6    (iii) intended to affect the structure or any function of the body.
164.7    (2) "Durable medical equipment" means equipment, including repair and
164.8replacement parts, including single-patient use items, but not including mobility enhancing
164.9equipment, that:
164.10    (i) can withstand repeated use;
164.11    (ii) is primarily and customarily used to serve a medical purpose;
164.12    (iii) generally is not useful to a person in the absence of illness or injury; and
164.13    (iv) is not worn in or on the body.
164.14    For purposes of this clause, "repair and replacement parts" includes all components
164.15or attachments used in conjunction with the durable medical equipment, but does not
164.16include including repair and replacement parts which are for single patient use only.
164.17    (3) "Mobility enhancing equipment" means equipment, including repair and
164.18replacement parts, but not including durable medical equipment, that:
164.19    (i) is primarily and customarily used to provide or increase the ability to move from
164.20one place to another and that is appropriate for use either in a home or a motor vehicle;
164.21    (ii) is not generally used by persons with normal mobility; and
164.22    (iii) does not include any motor vehicle or equipment on a motor vehicle normally
164.23provided by a motor vehicle manufacturer.
164.24    (4) "Over-the-counter drug" means a drug that contains a label that identifies the
164.25product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
164.26label must include a "drug facts" panel or a statement of the active ingredients with a list of
164.27those ingredients contained in the compound, substance, or preparation. Over-the-counter
164.28drugs do not include grooming and hygiene products, regardless of whether they otherwise
164.29meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
164.30shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
164.31    (5) "Prescribed" and "prescription" means a direction in the form of an order,
164.32formula, or recipe issued in any form of oral, written, electronic, or other means of
164.33transmission by a duly licensed health care professional.
164.34    (6) "Prosthetic device" means a replacement, corrective, or supportive device,
164.35including repair and replacement parts, worn on or in the body to:
164.36    (i) artificially replace a missing portion of the body;
165.1    (ii) prevent or correct physical deformity or malfunction; or
165.2    (iii) support a weak or deformed portion of the body.
165.3Prosthetic device does not include corrective eyeglasses.
165.4    (7) "Kidney dialysis equipment" means equipment that:
165.5    (i) is used to remove waste products that build up in the blood when the kidneys are
165.6not able to do so on their own; and
165.7    (ii) can withstand repeated use, including multiple use by a single patient,
165.8notwithstanding the provisions of clause (2).
165.9(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of
165.10the item purchased in the transaction is paid for or reimbursed by the federal government
165.11or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private
165.12insurance company administering the Medicare or Medicaid program on behalf of the
165.13federal government or the state of Minnesota, or by a managed care organization for the
165.14benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu
165.15of conventional Medicare or Medicaid coverage pursuant to agreement with the federal
165.16government or the state of Minnesota.
165.17EFFECTIVE DATE.This section is effective for sales and purchases made after
165.18June 30, 2013.

165.19    Sec. 23. Minnesota Statutes 2012, section 297A.67, is amended by adding a
165.20subdivision to read:
165.21    Subd. 7a. Accessories and supplies. Accessories and supplies required for the
165.22effective use of durable medical equipment for home use only or purchased in a transaction
165.23covered by medicare or Medicaid, that are not already exempt under section 297A.67,
165.24subdivision 7, are exempt. Accessories and supplies for the effective use of a prosthetic
165.25device that are not already exempt under section 297A.67, subdivision 7, are exempt.
165.26For purposes of this subdivision "durable medical equipment," "prosthetic device,"
165.27"Medicare," and "Medicaid" have the definitions given in section 297A.67, subdivision 7.
165.28EFFECTIVE DATE.This section is effective for sales and purchases made after
165.29June 30, 2013.

165.30    Sec. 24. Minnesota Statutes 2012, section 297A.67, subdivision 13, is amended to read:
165.31    Subd. 13. Textbooks. Textbooks, including digital books, that are prescribed for use
165.32in conjunction with a course of study in a school, college, university, and private career
165.33school to students who are regularly enrolled at such institutions are exempt. For purposes
166.1of this subdivision (1) a "school" is as defined in section 120A.22, subdivision 4; and (2)
166.2"private career school" means a school licensed under section 141.25.
166.3EFFECTIVE DATE.This section is effective for sales and purchases made after
166.4June 30, 2013.

166.5    Sec. 25. Minnesota Statutes 2012, section 297A.68, subdivision 2, is amended to read:
166.6    Subd. 2. Materials consumed in industrial production. (a) Materials stored, used,
166.7or consumed in industrial production of tangible personal property intended to be sold
166.8ultimately at retail, are exempt, whether or not the item so used becomes an ingredient
166.9or constituent part of the property produced. Materials that qualify for this exemption
166.10include, but are not limited to, the following:
166.11(1) chemicals, including chemicals used for cleaning food processing machinery
166.12and equipment;
166.13(2) materials, including chemicals, fuels, and electricity purchased by persons
166.14engaged in industrial production to treat waste generated as a result of the production
166.15process;
166.16(3) fuels, electricity, gas, and steam used or consumed in the production process,
166.17except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt
166.18if (i) it is in excess of the average climate control or lighting for the production area, and
166.19(ii) it is necessary to produce that particular product;
166.20(4) petroleum products and lubricants;
166.21(5) packaging materials, including returnable containers used in packaging food
166.22and beverage products;
166.23(6) accessory tools, equipment, and other items that are separate detachable units
166.24with an ordinary useful life of less than 12 months used in producing a direct effect upon
166.25the product; and
166.26(7) the following materials, tools, and equipment used in metal-casting: crucibles,
166.27thermocouple protection sheaths and tubes, stalk tubes, refractory materials, molten metal
166.28filters and filter boxes, degassing lances, and base blocks.
166.29(b) This exemption does not include:
166.30(1) machinery, equipment, implements, tools, accessories, appliances, contrivances
166.31and furniture and fixtures, except those listed in paragraph (a), clause (6); and
166.32(2) petroleum and special fuels used in producing or generating power for propelling
166.33ready-mixed concrete trucks on the public highways of this state.
166.34(c) Industrial production includes, but is not limited to, research, development,
166.35design or production of any tangible personal property, manufacturing, processing (other
167.1than by restaurants and consumers) of agricultural products (whether vegetable or animal),
167.2commercial fishing, refining, smelting, reducing, brewing, distilling, printing, mining,
167.3quarrying, lumbering, generating electricity, the production of road building materials,
167.4and the research, development, design, or production of computer software. Industrial
167.5production does not include painting, cleaning, repairing or similar processing of property
167.6except as part of the original manufacturing process.
167.7(d) Industrial production does not include:
167.8(1) the furnishing of services listed in section 297A.61, subdivision 3, paragraph (g),
167.9clause (6), items (i) to (vi) and (viii), or paragraph (m); or
167.10(2) the transportation, transmission, or distribution of petroleum, liquefied gas,
167.11natural gas, water, or steam, in, by, or through pipes, lines, tanks, mains, or other means of
167.12transporting those products. For purposes of this paragraph, "transportation, transmission,
167.13or distribution" does not include blending of petroleum or biodiesel fuel as defined
167.14in section 239.77.
167.15EFFECTIVE DATE.This section is effective for sales and purchases made after
167.16June 30, 2013.

167.17    Sec. 26. Minnesota Statutes 2012, section 297A.68, subdivision 5, is amended to read:
167.18    Subd. 5. Capital equipment. (a) Capital equipment is exempt. The tax must be
167.19imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and
167.20then refunded in the manner provided in section 297A.75.
167.21"Capital equipment" means machinery and equipment purchased or leased, and used
167.22in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining,
167.23or refining tangible personal property to be sold ultimately at retail if the machinery and
167.24equipment are essential to the integrated production process of manufacturing, fabricating,
167.25mining, or refining. Capital equipment also includes machinery and equipment
167.26used primarily to electronically transmit results retrieved by a customer of an online
167.27computerized data retrieval system.
167.28(b) Capital equipment includes, but is not limited to:
167.29(1) machinery and equipment used to operate, control, or regulate the production
167.30equipment;
167.31(2) machinery and equipment used for research and development, design, quality
167.32control, and testing activities;
167.33(3) environmental control devices that are used to maintain conditions such as
167.34temperature, humidity, light, or air pressure when those conditions are essential to and are
167.35part of the production process;
168.1(4) materials and supplies used to construct and install machinery or equipment;
168.2(5) repair and replacement parts, including accessories, whether purchased as spare
168.3parts, repair parts, or as upgrades or modifications to machinery or equipment;
168.4(6) materials used for foundations that support machinery or equipment;
168.5(7) materials used to construct and install special purpose buildings used in the
168.6production process;
168.7(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed
168.8as part of the delivery process regardless if mounted on a chassis, repair parts for
168.9ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
168.10(9) machinery or equipment used for research, development, design, or production
168.11of computer software.
168.12(c) Capital equipment does not include the following:
168.13(1) motor vehicles taxed under chapter 297B;
168.14(2) machinery or equipment used to receive or store raw materials;
168.15(3) building materials, except for materials included in paragraph (b), clauses (6)
168.16and (7);
168.17(4) machinery or equipment used for nonproduction purposes, including, but not
168.18limited to, the following: plant security, fire prevention, first aid, and hospital stations;
168.19support operations or administration; pollution control; and plant cleaning, disposal of
168.20scrap and waste, plant communications, space heating, cooling, lighting, or safety;
168.21(5) farm machinery and aquaculture production equipment as defined by section
168.22297A.61 , subdivisions 12 and 13;
168.23(6) machinery or equipment purchased and installed by a contractor as part of an
168.24improvement to real property;
168.25(7) machinery and equipment used by restaurants in the furnishing, preparing, or
168.26serving of prepared foods as defined in section 297A.61, subdivision 31;
168.27(8) machinery and equipment used to furnish the services listed in section 297A.61,
168.28subdivision 3
, paragraph (g), clause (6), items (i) to (vi) and (viii);
168.29(9) machinery or equipment used in the transportation, transmission, or distribution
168.30of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines,
168.31tanks, mains, or other means of transporting those products. This clause does not apply to
168.32machinery or equipment used to blend petroleum or biodiesel fuel as defined in section
168.33239.77 ; or
168.34(10) any other item that is not essential to the integrated process of manufacturing,
168.35fabricating, mining, or refining.
168.36(d) For purposes of this subdivision:
169.1(1) "Equipment" means independent devices or tools separate from machinery but
169.2essential to an integrated production process, including computers and computer software,
169.3used in operating, controlling, or regulating machinery and equipment; and any subunit or
169.4assembly comprising a component of any machinery or accessory or attachment parts of
169.5machinery, such as tools, dies, jigs, patterns, and molds.
169.6(2) "Fabricating" means to make, build, create, produce, or assemble components or
169.7property to work in a new or different manner.
169.8(3) "Integrated production process" means a process or series of operations through
169.9which tangible personal property is manufactured, fabricated, mined, or refined. For
169.10purposes of this clause, (i) manufacturing begins with the removal of raw materials
169.11from inventory and ends when the last process prior to loading for shipment has been
169.12completed; (ii) fabricating begins with the removal from storage or inventory of the
169.13property to be assembled, processed, altered, or modified and ends with the creation
169.14or production of the new or changed product; (iii) mining begins with the removal of
169.15overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and
169.16ends when the last process before stockpiling is completed; and (iv) refining begins with
169.17the removal from inventory or storage of a natural resource and ends with the conversion
169.18of the item to its completed form.
169.19(4) "Machinery" means mechanical, electronic, or electrical devices, including
169.20computers and computer software, that are purchased or constructed to be used for the
169.21activities set forth in paragraph (a), beginning with the removal of raw materials from
169.22inventory through completion of the product, including packaging of the product.
169.23(5) "Machinery and equipment used for pollution control" means machinery and
169.24equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
169.25described in paragraph (a).
169.26(6) "Manufacturing" means an operation or series of operations where raw materials
169.27are changed in form, composition, or condition by machinery and equipment and which
169.28results in the production of a new article of tangible personal property. For purposes of
169.29this subdivision, "manufacturing" includes the generation of electricity or steam to be
169.30sold at retail.
169.31(7) "Mining" means the extraction of minerals, ores, stone, or peat.
169.32(8) "Online data retrieval system" means a system whose cumulation of information
169.33is equally available and accessible to all its customers.
169.34(9) "Primarily" means machinery and equipment used 50 percent or more of the time
169.35in an activity described in paragraph (a).
170.1(10) "Refining" means the process of converting a natural resource to an intermediate
170.2or finished product, including the treatment of water to be sold at retail.
170.3(11) This subdivision does not apply to telecommunications equipment as
170.4provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit
170.5for telecommunications services.
170.6EFFECTIVE DATE.This section is effective for sales and purchases made after
170.7August 31, 2014.

170.8    Sec. 27. Minnesota Statutes 2012, section 297A.68, subdivision 42, is amended to read:
170.9    Subd. 42. Qualified data centers. (a) Purchases of enterprise information
170.10technology equipment and computer software for use in a qualified data center, or a
170.11qualified refurbished data center, are exempt. The tax on purchases exempt under this
170.12paragraph must be imposed and collected as if the rate under section 297A.62, subdivision
170.131
, applied, and then refunded after June 30, 2013, in the manner provided in section
170.14297A.75 . This exemption includes enterprise information technology equipment and
170.15computer software purchased to replace or upgrade enterprise information technology
170.16equipment and computer software in a qualified data center, or a qualified refurbished
170.17data center.
170.18(b) Electricity used or consumed in the operation of a qualified data center is exempt.
170.19(c) For purposes of this subdivision, "qualified data center, or a qualified refurbished
170.20data center," means a facility in Minnesota:
170.21(1) that is comprised of one or more buildings that consist in the aggregate of at least
170.2230,000 25,000 square feet, and that are located on a single parcel or on contiguous parcels,
170.23where the total cost of construction or refurbishment, investment in enterprise information
170.24technology equipment, and computer software is at least $50,000,000 $30,000,000 within
170.25a 24 48-month period;
170.26(2) that is constructed or substantially refurbished after June 30, 2012, where
170.27"substantially refurbished" means that at least 30,000 25,000 square feet have been rebuilt
170.28or modified; and, including:
170.29(i) installation of enterprise information technology equipment, environmental
170.30control, computer software, and energy efficiency improvements; and
170.31(ii) building improvements; and
170.32(3) that is used to house enterprise information technology equipment, where the
170.33facility has the following characteristics:
170.34(i) uninterruptible power supplies, generator backup power, or both;
170.35(ii) sophisticated fire suppression and prevention systems; and
171.1(iii) enhanced security. A facility will be considered to have enhanced security if it
171.2has restricted access to the facility to selected personnel; permanent security guards; video
171.3camera surveillance; an electronic system requiring pass codes, keycards, or biometric
171.4scans, such as hand scans and retinal or fingerprint recognition; or similar security features.
171.5In determining whether the facility has the required square footage, the square
171.6footage of the following spaces shall be included if the spaces support the operation
171.7of enterprise information technology equipment: office space, meeting space, and
171.8mechanical and other support facilities. For purposes of this subdivision, "computer
171.9software" includes, but is not limited to, software utilized or loaded at the qualified data
171.10center, including maintenance, licensing, and software customization.
171.11(d) For purposes of this subdivision, a "qualified refurbished data center" means an
171.12existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but
171.13that is comprised of one or more buildings that consist in the aggregate of at least 25,000
171.14square feet, and that are located on a single parcel or contiguous parcels, where the total
171.15cost of construction or refurbishment, investment in enterprise information technology
171.16equipment, and computer software is at least $50,000,000 within a 24-month period.
171.17(d) (e) For purposes of this subdivision, "enterprise information technology
171.18equipment" means computers and equipment supporting computing, networking, or data
171.19storage, including servers and routers. It includes, but is not limited to: cooling systems,
171.20cooling towers, and other temperature control infrastructure; power infrastructure for
171.21transformation, distribution, or management of electricity used for the maintenance
171.22and operation of a qualified data center, including but not limited to exterior dedicated
171.23business-owned substations, backup power generation systems, battery systems, and
171.24related infrastructure; and racking systems, cabling, and trays, which are necessary for
171.25the maintenance and operation of the qualified data center.
171.26(e) (f) A qualified data center may claim the exemptions in this subdivision for
171.27purchases made either within 20 years of the date of its first purchase qualifying for the
171.28exemption under paragraph (a), or by June 30, 2042, whichever is earlier.
171.29(f) (g) The purpose of this exemption is to create jobs in the construction and data
171.30center industries.
171.31(g) (h) This subdivision is effective for sales and purchases made after June 30,
171.322012, and before July 1, 2042.
171.33EFFECTIVE DATE.This section is effective for sales and purchases made after
171.34June 30, 2013.

172.1    Sec. 28. Minnesota Statutes 2012, section 297A.68, is amended by adding a
172.2subdivision to read:
172.3    Subd. 49. Greater Minnesota business expansions. (a) Purchases and use of
172.4tangible personal property or taxable services by a qualified business, as defined in section
172.5116J.3738, are exempt if:
172.6(1) the business subsidy agreement provides that the exemption under this
172.7subdivision applies;
172.8(2) the property or services are primarily used or consumed in greater Minnesota; and
172.9(3) the purchase was made and delivery received during the duration of the
172.10certification of the business as a qualified business under section 116J.3738.
172.11(b) Purchase and use of construction materials and supplies used or consumed in,
172.12and equipment incorporated into, the construction of improvements to real property in
172.13greater Minnesota are exempt if the improvements after completion of construction are
172.14to be used in the conduct of the trade or business of the qualified business, as defined in
172.15section 116J.3738. This exemption applies regardless of whether the purchases are made
172.16by the business or a contractor.
172.17(c) The exemptions under this subdivision apply to a local sales and use tax.
172.18(d) The tax on purchases imposed under this subdivision must be imposed and
172.19collected as if the rate under section 297A.62 applied, and then refunded in the manner
172.20provided in section 297A.75. No more than $7,000,000 may be refunded in a fiscal year
172.21for all purchases under this subdivision. Refunds must be allocated on a first come, first
172.22served basis. If more than $7,000,000 of eligible claims are made in a fiscal year, claims
172.23by qualified businesses carryover to the next fiscal year, and the commissioner must first
172.24allocate refunds to qualified businesses eligible for a refund in the preceding fiscal year.
172.25Any portion of the balance of funds allocated for refunds under this paragraph does not
172.26cancel and shall be carried forward to and available for refunds in subsequent fiscal years.
172.27EFFECTIVE DATE.This section is effective for sales and purchases made after
172.28June 30, 2014.

172.29    Sec. 29. Minnesota Statutes 2012, section 297A.70, subdivision 2, is amended to read:
172.30    Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
172.31to the following governments and political subdivisions, or to the listed agencies or
172.32instrumentalities of governments and political subdivisions, are exempt:
172.33(1) the United States and its agencies and instrumentalities;
172.34(2) school districts, local governments, the University of Minnesota, state universities,
172.35community colleges, technical colleges, state academies, the Perpich Minnesota Center for
173.1Arts Education, and an instrumentality of a political subdivision that is accredited as an
173.2optional/special function school by the North Central Association of Colleges and Schools;
173.3(3) hospitals and nursing homes owned and operated by political subdivisions of
173.4the state of tangible personal property and taxable services used at or by hospitals and
173.5nursing homes;
173.6(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
173.7operations provided for in section 473.4051;
173.8(5) other states or political subdivisions of other states, if the sale would be exempt
173.9from taxation if it occurred in that state; and
173.10(6) public libraries, public library systems, multicounty, multitype library systems as
173.11defined in section 134.001, county law libraries under chapter 134A, state agency libraries,
173.12the state library under section 480.09, and the Legislative Reference Library; and.
173.13(7) towns.
173.14(b) This exemption does not apply to the sales of the following products and services:
173.15(1) building, construction, or reconstruction materials purchased by a contractor
173.16or a subcontractor as a part of a lump-sum contract or similar type of contract with a
173.17guaranteed maximum price covering both labor and materials for use in the construction,
173.18alteration, or repair of a building or facility;
173.19(2) construction materials purchased by tax exempt entities or their contractors to
173.20be used in constructing buildings or facilities which will not be used principally by the
173.21tax exempt entities;
173.22(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11,
173.23except for leases entered into by the United States or its agencies or instrumentalities;
173.24(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
173.25(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
173.26297A.67, subdivision 2 , except for lodging, prepared food, candy, soft drinks, and alcoholic
173.27beverages purchased directly by the United States or its agencies or instrumentalities; or
173.28(5) goods or services purchased by a town local government as inputs to goods and
173.29services that are generally provided by a private business and the purchases would be
173.30taxable if made by a private business engaged in the same activity.
173.31(c) As used in this subdivision, "school districts" means public school entities and
173.32districts of every kind and nature organized under the laws of the state of Minnesota, and
173.33any instrumentality of a school district, as defined in section 471.59.
173.34(d) As used in this subdivision, "local governments" means cities, counties, and
173.35townships.
174.1(d) (e) As used in this subdivision, "goods or services generally provided by a private
174.2business" include, but are not limited to, goods or services provided by liquor stores, gas
174.3and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
174.4and laundromats. "Goods or services generally provided by a private business" do not
174.5include housing services, sewer and water services, wastewater treatment, ambulance and
174.6other public safety services, correctional services, chore or homemaking services provided
174.7to elderly or disabled individuals, or road and street maintenance or lighting.
174.8EFFECTIVE DATE.This section is effective for sales and purchases made after
174.9December 31, 2013.

174.10    Sec. 30. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
174.11    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
174.12(b), to the following "nonprofit organizations" are exempt:
174.13(1) a corporation, society, association, foundation, or institution organized and
174.14operated exclusively for charitable, religious, or educational purposes if the item
174.15purchased is used in the performance of charitable, religious, or educational functions; and
174.16(2) any senior citizen group or association of groups that:
174.17(i) in general limits membership to persons who are either age 55 or older, or
174.18physically disabled;
174.19(ii) is organized and operated exclusively for pleasure, recreation, and other
174.20nonprofit purposes, not including housing, no part of the net earnings of which inures to
174.21the benefit of any private shareholders; and
174.22(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
174.23For purposes of this subdivision, charitable purpose includes the maintenance of a
174.24cemetery owned by a religious organization.
174.25(b) This exemption does not apply to the following sales:
174.26(1) building, construction, or reconstruction materials purchased by a contractor
174.27or a subcontractor as a part of a lump-sum contract or similar type of contract with a
174.28guaranteed maximum price covering both labor and materials for use in the construction,
174.29alteration, or repair of a building or facility;
174.30(2) construction materials purchased by tax-exempt entities or their contractors to
174.31be used in constructing buildings or facilities that will not be used principally by the
174.32tax-exempt entities; and
174.33(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
174.34(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
175.1297A.67, subdivision 2 , except wine purchased by an established religious organization
175.2for sacramental purposes or as allowed under subdivision 9a; and
175.3(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
175.4as provided in paragraph (c).
175.5(c) This exemption applies to the leasing of a motor vehicle as defined in section
175.6297B.01, subdivision 11 , only if the vehicle is:
175.7(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
175.8passenger automobile, as defined in section 168.002, if the automobile is designed and
175.9used for carrying more than nine persons including the driver; and
175.10(2) intended to be used primarily to transport tangible personal property or
175.11individuals, other than employees, to whom the organization provides service in
175.12performing its charitable, religious, or educational purpose.
175.13(d) A limited liability company also qualifies for exemption under this subdivision if
175.14(1) it consists of a sole member that would qualify for the exemption, and (2) the items
175.15purchased qualify for the exemption.
175.16EFFECTIVE DATE.This section is effective retroactively for sales and purchases
175.17made after June 30, 2012.

175.18    Sec. 31. Minnesota Statutes 2012, section 297A.70, subdivision 5, is amended to read:
175.19    Subd. 5. Veterans groups. Sales to an organization of military service veterans or
175.20an auxiliary unit of an organization of military service veterans are exempt if:
175.21(1) the organization or auxiliary unit is organized within the state of Minnesota
175.22and is exempt from federal taxation under section 501(c), clause (19), of the Internal
175.23Revenue Code; and
175.24(2) the tangible personal property is or services are for charitable, civic, educational,
175.25or nonprofit uses and not for social, recreational, pleasure, or profit uses.
175.26EFFECTIVE DATE.This section is effective for sales and purchases made after
175.27June 30, 2013.

175.28    Sec. 32. Minnesota Statutes 2012, section 297A.70, subdivision 7, is amended to read:
175.29    Subd. 7. Hospitals and, outpatient surgical centers, and critical access dental
175.30providers. (a) Sales, except for those listed in paragraph (c) (d), to a hospital are exempt,
175.31if the items purchased are used in providing hospital services. For purposes of this
175.32subdivision, "hospital" means a hospital organized and operated for charitable purposes
175.33within the meaning of section 501(c)(3) of the Internal Revenue Code, and licensed under
176.1chapter 144 or by any other jurisdiction, and "hospital services" are services authorized or
176.2required to be performed by a "hospital" under chapter 144.
176.3    (b) Sales, except for those listed in paragraph (c) (d), to an outpatient surgical center
176.4are exempt, if the items purchased are used in providing outpatient surgical services. For
176.5purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
176.6center organized and operated for charitable purposes within the meaning of section
176.7501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
176.8jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
176.9(1) services authorized or required to be performed by an outpatient surgical center under
176.10chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
176.11health services furnished to a person whose medical condition is sufficiently acute to
176.12require treatment unavailable through, or inappropriate to be provided by, a clinic or
176.13physician's office, but not so acute as to require treatment in a hospital emergency room.
176.14    (c) Sales, except for those listed in paragraph (d), to a critical access dental provider
176.15are exempt, if the items purchased are used in providing critical access dental care
176.16services. For the purposes of this subdivision, "critical access dental provider" means a
176.17dentist or dental clinic that qualifies under section 256B.76, subdivision 4, paragraph (b)
176.18and, in the previous calendar year, had no more than 15 percent of its patients covered by
176.19private dental insurance.
176.20    (d) This exemption does not apply to the following products and services:
176.21    (1) purchases made by a clinic, physician's office, or any other medical facility not
176.22operating as a hospital or, outpatient surgical center, or critical access dental provider,
176.23even though the clinic, office, or facility may be owned and operated by a hospital or,
176.24 outpatient surgical center, or critical access dental provider;
176.25    (2) sales under section 297A.61, subdivision 3, paragraph (g), clause (2), and
176.26prepared food, candy, and soft drinks;
176.27    (3) building and construction materials used in constructing buildings or facilities
176.28that will not be used principally by the hospital or, outpatient surgical center, or critical
176.29access dental provider;
176.30    (4) building, construction, or reconstruction materials purchased by a contractor or a
176.31subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
176.32maximum price covering both labor and materials for use in the construction, alteration, or
176.33repair of a hospital or, outpatient surgical center, or critical access dental provider; or
176.34    (5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11.
177.1    (d) (e) A limited liability company also qualifies for exemption under this
177.2subdivision if (1) it consists of a sole member that would qualify for the exemption, and
177.3(2) the items purchased qualify for the exemption.
177.4    (e) (f) An entity that contains both a hospital and a nonprofit unit may claim this
177.5exemption on purchases made for both the hospital and nonprofit unit provided that:
177.6    (1) the nonprofit unit would have qualified for exemption under subdivision 4; and
177.7    (2) the items purchased would have qualified for the exemption.
177.8EFFECTIVE DATE.This section is effective retroactively for sales and purchases
177.9made after June 30, 2007. Purchasers may apply for a refund of tax paid for qualifying
177.10purchases under this subdivision made after June 30, 2007, and before July 1, 2013, in the
177.11manner provided in Minnesota Statutes, section 297A.75. Notwithstanding limitations
177.12on claims for refunds under Minnesota Statutes, section 297A.40, claims may be filed
177.13with the commissioner until June 30, 2014.

177.14    Sec. 33. Minnesota Statutes 2012, section 297A.70, is amended by adding a
177.15subdivision to read:
177.16    Subd. 9a. Established religious orders. (a) Sales of lodging, prepared food, candy,
177.17soft drinks, and alcoholic beverages at noncatered events between an established religious
177.18order and an affiliated institution of higher education are exempt.
177.19(b) For purposes of this subdivision, "established religious order" means an
177.20organization directly or indirectly under the control or supervision of a church or
177.21convention or association of churches, where members of the organization:
177.22(1) normally live together as part of a community;
177.23(2) make long-term commitments to live under a strict set of moral and spiritual
177.24rules; and
177.25(3) work or engage full time in a combination of prayer, religious study, church
177.26reform or renewal, or other religious, educational, or charitable goals of the organization.
177.27(c) For purposes of this subdivision, an institution of higher education is "affiliated"
177.28with an established religious order if members of the religious order are represented
177.29on the governing board of the institution of higher education and the two organization
177.30share campus space and common facilities.
177.31EFFECTIVE DATE.This section is effective retroactively for sales and purchases
177.32made after June 30, 2012.

177.33    Sec. 34. Minnesota Statutes 2012, section 297A.70, subdivision 13, is amended to read:
178.1    Subd. 13. Fund-raising sales by or for nonprofit groups. (a) The following
178.2sales by the specified organizations for fund-raising purposes are exempt, subject to the
178.3limitations listed in paragraph (b):
178.4(1) all sales made by a nonprofit organization that exists solely for the purpose of
178.5providing educational or social activities for young people primarily age 18 and under;
178.6(2) all sales made by an organization that is a senior citizen group or association of
178.7groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
178.8and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii)
178.9no part of its net earnings inures to the benefit of any private shareholders;
178.10(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if
178.11the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization
178.12under section 501(c)(3) of the Internal Revenue Code; and
178.13(4) sales of candy sold for fund-raising purposes by a nonprofit organization that
178.14provides educational and social activities primarily for young people age 18 and under.
178.15(b) The exemptions listed in paragraph (a) are limited in the following manner:
178.16(1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross
178.17annual receipts of the organization from fund-raising do not exceed $10,000; and
178.18(2) the exemption under paragraph (a), clause (1), does not apply if the sales are
178.19derived from admission charges or from activities for which the money must be deposited
178.20with the school district treasurer under section 123B.49, subdivision 2, or be recorded in
178.21the same manner as other revenues or expenditures of the school district under section
178.22123B.49, subdivision 4 .
178.23(c) Sales of tangible personal property and services are exempt if the entire proceeds,
178.24less the necessary expenses for obtaining the property or services, will be contributed to
178.25a registered combined charitable organization described in section 43A.50, to be used
178.26exclusively for charitable, religious, or educational purposes, and the registered combined
178.27charitable organization has given its written permission for the sale. Sales that occur over
178.28a period of more than 24 days per year are not exempt under this paragraph.
178.29(d) For purposes of this subdivision, a club, association, or other organization of
178.30elementary or secondary school students organized for the purpose of carrying on sports,
178.31educational, or other extracurricular activities is a separate organization from the school
178.32district or school for purposes of applying the $10,000 limit.
178.33EFFECTIVE DATE.This section is effective for sales and purchases made after
178.34June 30, 2013.

178.35    Sec. 35. Minnesota Statutes 2012, section 297A.70, subdivision 14, is amended to read:
179.1    Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of
179.2tangible personal property or services at, and admission charges for fund-raising events
179.3sponsored by, a nonprofit organization are exempt if:
179.4(1) all gross receipts are recorded as such, in accordance with generally accepted
179.5accounting practices, on the books of the nonprofit organization; and
179.6(2) the entire proceeds, less the necessary expenses for the event, will be used solely
179.7and exclusively for charitable, religious, or educational purposes. Exempt sales include
179.8the sale of prepared food, candy, and soft drinks at the fund-raising event.
179.9(b) This exemption is limited in the following manner:
179.10(1) it does not apply to admission charges for events involving bingo or other
179.11gambling activities or to charges for use of amusement devices involving bingo or other
179.12gambling activities;
179.13(2) all gross receipts are taxable if the profits are not used solely and exclusively for
179.14charitable, religious, or educational purposes;
179.15(3) it does not apply unless the organization keeps a separate accounting record,
179.16including receipts and disbursements from each fund-raising event that documents all
179.17deductions from gross receipts with receipts and other records;
179.18(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
179.19the active or passive agent of a person that is not a nonprofit corporation;
179.20(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;
179.21(6) it does not apply to fund-raising events conducted on premises leased for more
179.22than five days but less than 30 days; and
179.23(7) it does not apply if the risk of the event is not borne by the nonprofit organization
179.24and the benefit to the nonprofit organization is less than the total amount of the state and
179.25local tax revenues forgone by this exemption.
179.26(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
179.27government, corporation, society, association, foundation, or institution organized and
179.28operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
179.29veterans' purposes, no part of the net earnings of which inures to the benefit of a private
179.30individual.
179.31EFFECTIVE DATE.This section is effective for sales and purchases made after
179.32June 30, 2013.

179.33    Sec. 36. Minnesota Statutes 2012, section 297A.70, is amended by adding a
179.34subdivision to read:
180.1    Subd. 18. Nursing homes and boarding care homes. (a) All sales, except those
180.2listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding
180.3care home certified as a nursing facility under title 19 of the Social Security Act are
180.4exempt if the facility:
180.5(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the
180.6Internal Revenue Code; and
180.7(2) is certified to participate in the medical assistance program under title 19 of the
180.8Social Security Act, or certifies to the commissioner that it does not discharge residents
180.9due to the inability to pay.
180.10(b) This exemption does not apply to the following sales:
180.11(1) building, construction, or reconstruction materials purchased by a contractor
180.12or a subcontractor as a part of a lump-sum contract or similar type of contract with a
180.13guaranteed maximum price covering both labor and materials for use in the construction,
180.14alteration, or repair of a building or facility;
180.15(2) construction materials purchased by tax-exempt entities or their contractors to
180.16be used in constructing buildings or facilities that will not be used principally by the
180.17tax-exempt entities;
180.18(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
180.19(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
180.20297A.67, subdivision 2; and
180.21(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
180.22as provided in paragraph (c).
180.23(c) This exemption applies to the leasing of a motor vehicle as defined in section
180.24297B.01, subdivision 11, only if the vehicle is:
180.25(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a
180.26passenger automobile, as defined in section 168.002, if the automobile is designed and
180.27used for carrying more than nine persons including the driver; and
180.28(2) intended to be used primarily to transport tangible personal property or residents
180.29of the nursing home or boarding care home.
180.30EFFECTIVE DATE.This section is effective for sales and purchases made after
180.31June 30, 2013.

180.32    Sec. 37. Minnesota Statutes 2012, section 297A.71, is amended by adding a
180.33subdivision to read:
180.34    Subd. 45. Biopharmaceutical manufacturing facility. (a) Materials and
180.35supplies used or consumed in, capital equipment incorporated into, and privately
181.1owned infrastructure in support of the construction, improvement, or expansion of a
181.2biopharmaceutical manufacturing facility in the state are exempt if the following criteria
181.3are met:
181.4(1) the facility is used for the manufacturing of biologics;
181.5(2) the total capital investment made at the facility exceeds $50,000,000; and
181.6(3) the facility creates and maintains at least 190 full-time equivalent positions at the
181.7facility. These positions must be new jobs in Minnesota and not the result of relocating
181.8jobs that currently exist in Minnesota.
181.9(b) The tax must be imposed and collected as if the rate under section 297A.62
181.10applied, and refunded in the manner provided in section 297A.75.
181.11(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
181.12facility must:
181.13(1) initially apply to the Department of Employment and Economic Development
181.14for certification no later than one year from the final completion date of construction,
181.15improvement, or expansion of the facility; and
181.16(2) for each year that the owner of the biopharmaceutical manufacturing facility
181.17applies for a refund, the owner must have received written certification from the
181.18Department of Employment and Economic Development that the facility has met the
181.19criteria of paragraph (a).
181.20(d) The refund is to be paid annually at a rate of 25 percent of the total allowable
181.21refund payable to date, with the commissioner making annual payments of the remaining
181.22refund until all of the refund has been paid.
181.23(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
181.24interchangeable and mean medical drugs or medicinal preparations produced using
181.25technology that uses biological systems, living organisms or derivatives of living
181.26organisms, to make or modify products or processes for specific use. The medical drugs or
181.27medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
181.28and vaccines.
181.29EFFECTIVE DATE.This section is effective retroactively to capital investments
181.30made and jobs created after December 31, 2012, and effective retroactively for sales and
181.31purchases made after December 31, 2012, and before July 1, 2019.

181.32    Sec. 38. Minnesota Statutes 2012, section 297A.71, is amended by adding a
181.33subdivision to read:
181.34    Subd. 46. Research and development facility. Materials and supplies used or
181.35consumed in, and equipment incorporated into, the construction or improvement of a
182.1research and development facility that has laboratory space of at least 400,000 square feet
182.2and utilizes both high-intensity and low-intensity laboratories, provided that the project
182.3has a total construction cost of at least $140,000,000 within a 24-month period. The tax on
182.4purchases imposed under this subdivision must be imposed and collected as if the rate under
182.5section 297A.62 applied and then refunded in the manner provided in section 297A.75.
182.6EFFECTIVE DATE.This section is effective for sales and purchases made after
182.7June 30, 2013, and before September 1, 2015.

182.8    Sec. 39. Minnesota Statutes 2012, section 297A.71, is amended by adding a
182.9subdivision to read:
182.10    Subd. 47. Industrial measurement manufacturing and controls facility. (a)
182.11Materials and supplies used or consumed in, capital equipment incorporated into,
182.12fixtures installed in, and privately owned infrastructure in support of the construction,
182.13improvement, or expansion of an industrial measurement manufacturing and controls
182.14facility are exempt if:
182.15(1) the total capital investment made at the facility is at least $60,000,000;
182.16(2) the facility employs at least 250 full-time equivalent employees that are not
182.17employees currently employed by the company in the state; and
182.18(3) the Department of Employment and Economic Development determines that
182.19the expansion, remodeling, or improvement of the facility has a significant impact on
182.20the state economy.
182.21(b) The tax must be imposed and collected as if the rate under section 297A.62
182.22applied and refunded in the manner provided in section 297A.75, only after the following
182.23criteria are met:
182.24(1) a refund may not be issued until the owner of the facility has received
182.25certification from the Department of Employment and Economic Development that the
182.26company meets the requirements in paragraph (a); and
182.27(2) to receive the refund, the owner of the industrial measurement manufacturing
182.28and controls facility must initially apply to the Department of Employment and Economic
182.29Development for certification no later than one year from the final completion date of
182.30construction, improvement, or expansion of the industrial measurement manufacturing
182.31and controls facility.
182.32EFFECTIVE DATE.This section is effective for sales and purchases made after
182.33June 30, 2013, and before December 31, 2015.

183.1    Sec. 40. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
183.2    Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
183.3following exempt items must be imposed and collected as if the sale were taxable and the
183.4rate under section 297A.62, subdivision 1, applied. The exempt items include:
183.5    (1) capital equipment exempt under section 297A.68, subdivision 5;
183.6    (2) (1) building materials for an agricultural processing facility exempt under section
183.7297A.71, subdivision 13 ;
183.8    (3) (2) building materials for mineral production facilities exempt under section
183.9297A.71, subdivision 14 ;
183.10    (4) (3) building materials for correctional facilities under section 297A.71,
183.11subdivision 3
;
183.12    (5) (4) building materials used in a residence for disabled veterans exempt under
183.13section 297A.71, subdivision 11;
183.14    (6) (5) elevators and building materials exempt under section 297A.71, subdivision
183.1512
;
183.16    (7) (6) building materials for the Long Lake Conservation Center exempt under
183.17section 297A.71, subdivision 17;
183.18    (8) (7) materials and supplies for qualified low-income housing under section
183.19297A.71, subdivision 23 ;
183.20    (9) (8) materials, supplies, and equipment for municipal electric utility facilities
183.21under section 297A.71, subdivision 35;
183.22    (10) (9) equipment and materials used for the generation, transmission, and
183.23distribution of electrical energy and an aerial camera package exempt under section
183.24297A.68 , subdivision 37;
183.25    (11) (10) commuter rail vehicle and repair parts under section 297A.70, subdivision
183.263, paragraph (a), clause (10);
183.27    (12) (11) materials, supplies, and equipment for construction or improvement of
183.28projects and facilities under section 297A.71, subdivision 40;
183.29(13) (12) materials, supplies, and equipment for construction or improvement of a
183.30meat processing facility exempt under section 297A.71, subdivision 41;
183.31(14) (13) materials, supplies, and equipment for construction, improvement, or
183.32expansion of:
183.33(i) an aerospace defense manufacturing facility exempt under section 297A.71,
183.34subdivision 42;
183.35(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71,
183.36subdivision 45;
184.1(iii) a research and development facility exempt under section 297A.71, subdivision
184.24b; and
184.3(iv) an industrial measurement manufacturing and controls facility exempt under
184.4section 297A.71, subdivision 47;
184.5(15) (14) enterprise information technology equipment and computer software for
184.6use in a qualified data center exempt under section 297A.68, subdivision 42; and
184.7(16) (15) materials, supplies, and equipment for qualifying capital projects under
184.8section 297A.71, subdivision 44;
184.9(16) items purchased for use in providing critical access dental services exempt
184.10under section 297A.70, subdivision 7, paragraph (c); and
184.11(17) items and services purchased under a business subsidy agreement for use or
184.12consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 49.
184.13EFFECTIVE DATE.The change to clause (1) is effective for sales and purchases
184.14made after August 31, 2014. The changes in clauses (13), (16), and (17), are effective the
184.15day following final enactment.

184.16    Sec. 41. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
184.17    Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
184.18commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
184.19must be paid to the applicant. Only the following persons may apply for the refund:
184.20    (1) for subdivision 1, clauses (1) to (3), (2), and (16), the applicant must be the
184.21purchaser;
184.22    (2) for subdivision 1, clauses (4) (3) and (7) (6), the applicant must be the
184.23governmental subdivision;
184.24    (3) for subdivision 1, clause (5) (4), the applicant must be the recipient of the
184.25benefits provided in United States Code, title 38, chapter 21;
184.26    (4) for subdivision 1, clause (6) (5), the applicant must be the owner of the
184.27homestead property;
184.28    (5) for subdivision 1, clause (8) (7), the owner of the qualified low-income housing
184.29project;
184.30    (6) for subdivision 1, clause (9) (8), the applicant must be a municipal electric utility
184.31or a joint venture of municipal electric utilities;
184.32    (7) for subdivision 1, clauses (10), (9), (12), (13), (14), and (15) and (17), the owner
184.33of the qualifying business; and
184.34    (8) for subdivision 1, clauses (10), (11), (12), and (16) (15), the applicant must be
184.35the governmental entity that owns or contracts for the project or facility.
185.1EFFECTIVE DATE.This section is effective the day following final enactment.

185.2    Sec. 42. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
185.3    Subd. 3. Application. (a) The application must include sufficient information
185.4to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
185.5subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), (10), (11),
185.6(12), (13), (14), clauses (3) to (15), or (16) (17), the contractor, subcontractor, or builder
185.7must furnish to the refund applicant a statement including the cost of the exempt items and
185.8the taxes paid on the items unless otherwise specifically provided by this subdivision. The
185.9provisions of sections 289A.40 and 289A.50 apply to refunds under this section.
185.10    (b) An applicant may not file more than two applications per calendar year for
185.11refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.
185.12    (c) Total refunds for purchases of items in section 297A.71, subdivision 40, must not
185.13exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
185.14of items in sections 297A.70, subdivision 3, paragraph (a), clause (11), and 297A.71,
185.15subdivision 40, must not be filed until after June 30, 2009.
185.16EFFECTIVE DATE.This section is effective the day following final enactment.

185.17    Sec. 43. Minnesota Statutes 2012, section 297A.99, subdivision 1, is amended to read:
185.18    Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
185.19impose a general sales tax (1) under section 297A.992, (2) under section 297A.993, (3) if
185.20permitted by special law, or (4) if the political subdivision enacted and imposed the tax
185.21before January 1, 1982, and its predecessor provision.
185.22    (b) This section governs the imposition of a general sales tax by the political
185.23subdivision. The provisions of this section preempt the provisions of any special law:
185.24    (1) enacted before June 2, 1997, or
185.25    (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
185.26provision from this section's rules by reference.
185.27    (c) This section does not apply to or preempt a sales tax on motor vehicles or a
185.28special excise tax on motor vehicles.
185.29(d) A political subdivision may not advertise or expend funds for the promotion of a
185.30referendum to support imposing a local option sales tax.
185.31(e) Notwithstanding paragraph (d), a political subdivision may only expend funds to:
185.32(1) conduct the referendum.;
185.33(2) disseminate information included in the resolution adopted under subdivision 2;
186.1(3) provide notice of, and conduct public forums at which proponents and opponents
186.2on the merits of the referendum are given equal time to express their opinions on the
186.3merits of the referendum;
186.4(4) provide facts and data on the impact of the proposed sales tax on consumer
186.5purchases; and
186.6(5) provide facts and data related to the programs and projects to be funded with
186.7the sales tax.
186.8EFFECTIVE DATE.This section is effective the day following final enactment.

186.9    Sec. 44. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
186.10Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section
186.1130, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First
186.12Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4,
186.13section 15, is amended to read:
186.14    Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision
186.151 may only be used by the city to pay the cost of collecting the tax, and, except as provided in
186.16paragraph (e), to pay for the following projects or to secure or pay any principal, premium,
186.17or interest on bonds issued in accordance with subdivision 3 for the following projects.
186.18    (a) To pay all or a portion of the capital expenses of construction, equipment and
186.19acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
186.20including the demolition of the existing arena and the construction and equipping of a
186.21new arena.
186.22    (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
186.23spent for:
186.24    (1) capital projects to further residential, cultural, commercial, and economic
186.25development in both downtown St. Paul and St. Paul neighborhoods; and
186.26    (2) capital and operating expenses of cultural organizations in the city, provided
186.27that the amount spent under this clause must equal ten percent of the total amount spent
186.28under this paragraph in any year.
186.29    (c) The amount apportioned under paragraph (b) shall be no less than 60 percent
186.30of the revenues derived from the tax each year, except to the extent that a portion of that
186.31amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
186.32prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
186.331998, but only if the city council determines that 40 percent of the revenues derived from
186.34the tax together with other revenues pledged to the payment of the bonds, including the
186.35proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.
187.1    (d) If in any year more than 40 percent of the revenue derived from the tax authorized
187.2by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
187.3paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
187.4that exceeds 40 percent of the revenue must be determined for that year. In any year when
187.540 percent of the revenue produced by the sales tax exceeds the amount required to pay
187.6debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
187.7amount of the excess must be made available for capital projects to further residential,
187.8cultural, commercial, and economic development in the neighborhoods and downtown
187.9until the cumulative amounts determined for all years under the preceding sentence have
187.10been made available under this sentence. The amount made available as reimbursement in
187.11the preceding sentence is not included in the 60 percent determined under paragraph (c).
187.12    (e) In each of calendar years 2006 to 2014, revenue not to exceed $3,500,000 may be
187.13used to pay the principal of bonds issued for capital projects of the city. After December
187.1431, 2014, revenue from the tax imposed under subdivision 1 may not be used for this
187.15purpose. If the amount necessary to meet obligations under paragraphs (a) and (d) are less
187.16than 40 percent of the revenue from the tax in any year, the city may place the difference
187.17between 40 percent of the revenue and the amounts allocated under paragraphs (a) and (d)
187.18in an economic development fund to be used for any economic development purposes.
187.19    (f) By January 15 of each year, the mayor and the city council must report to the
187.20legislature on the use of sales tax revenues during the preceding one-year period.
187.21EFFECTIVE DATE.This section is effective the day after compliance by the
187.22governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
187.23subdivisions 2 and 3.

187.24    Sec. 45. Laws 1993, chapter 375, article 9, section 46, subdivision 5, as amended by
187.25Laws 1998, chapter 389, article 8, section 32, is amended to read:
187.26    Subd. 5. Expiration of taxing authority. The authority granted by subdivision 1 to
187.27the city to impose a sales tax shall expire on December 31, 2030 2042, or at an earlier
187.28time as the city shall, by ordinance, determine. Any funds remaining after completion of
187.29projects approved under subdivision 2, paragraph (a) and retirement or redemption of any
187.30bonds or other obligations may be placed in the general fund of the city.
187.31EFFECTIVE DATE.This section is effective the day after compliance by the
187.32governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
187.33subdivisions 2 and 3.

188.1    Sec. 46. Laws 2002, chapter 377, article 3, section 25, as amended by Laws 2009,
188.2chapter 88, article 4, section 19, and Laws 2010, chapter 389, article 5, section 3, is
188.3amended to read:
188.4    Sec. 25. ROCHESTER LODGING TAX.
188.5    Subdivision 1. Authorization. Notwithstanding Minnesota Statutes, section
188.6469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
188.7tax of one percent on the gross receipts from the furnishing for consideration of lodging at
188.8a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
188.9for a continuous period of 30 days or more.
188.10    Subd. 1a. Authorization. Notwithstanding Minnesota Statutes, section 469.190 or
188.11477A.016 , or any other law, and in addition to the tax authorized by subdivision 1, the city
188.12of Rochester may impose an additional tax of one three percent on the gross receipts from
188.13the furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
188.14resort, other than the renting or leasing of it for a continuous period of 30 days or more only
188.15upon the approval of the city governing body of a total financial package for the project.
188.16    Subd. 2. Disposition of proceeds. (a) The gross proceeds from the tax imposed
188.17under subdivision 1 must be used by the city to fund a local convention or tourism bureau
188.18for the purpose of marketing and promoting the city as a tourist or convention center.
188.19(b) The gross proceeds from the one three percent tax imposed under subdivision
188.201a shall be used to pay for (1) design, construction, renovation, improvement, and
188.21expansion of the Mayo Civic Center Complex and related infrastructure, including but not
188.22limited to, skyway access, lighting, parking, or landscaping; and (2) for payment of any
188.23principal, interest, or premium on bonds issued to finance the construction, renovation,
188.24improvement, and expansion of the Mayo Civic Center Complex.
188.25    Subd. 2a. Bonds. The city of Rochester may issue, without an election, general
188.26obligation bonds of the city, in one or more series, in the aggregate principal amount not to
188.27exceed $43,500,000 $50,000,000, to pay for capital and administrative costs for the design,
188.28construction, renovation, improvement, and expansion of the Mayo Civic Center Complex,
188.29and related infrastructure, including but not limited to, skyway, access, lighting, parking,
188.30and landscaping. The city may pledge the lodging tax authorized by subdivision 1a and the
188.31food and beverage tax authorized under Laws 2009, chapter 88, article 4, section 23, to the
188.32payment of the bonds. The debt represented by the bonds is not included in computing any
188.33debt limitations applicable to the city, and the levy of taxes required by Minnesota Statutes,
188.34section 475.61, to pay the principal of and interest on the bonds is not subject to any levy
188.35limitation or included in computing or applying any levy limitation applicable to the city.
189.1    Subd. 3. Expiration of taxing authority. The authority of the city to impose a tax
189.2under subdivision 1a shall expire when the principal and interest on any bonds or other
189.3obligations issued prior to December 31, 2014, to finance the construction, renovation,
189.4improvement, and expansion of the Mayo Civic Center Complex and related skyway
189.5access, lighting, parking, or landscaping have been paid, including any bonds issued to
189.6refund such bonds, or at an earlier time as the city shall, by ordinance, determine. Any
189.7funds remaining after completion of the project and retirement or redemption of the bonds
189.8shall be placed in the general fund of the city. The city may, by ordinance, repeal the
189.9tax provided that:
189.10(1) the revenues raised before the repeal are sufficient to meet all bond or other
189.11obligations backed by revenues of the tax; and
189.12(2) the repeal date meets the requirements of section 297A.99, subdivision 12.
189.13EFFECTIVE DATE.This section is effective the day after the governing body of
189.14the city of Rochester and its chief fiscal officer comply with Minnesota Statutes, section
189.15645.021, subdivisions 2 and 3.

189.16    Sec. 47. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
189.172, is amended to read:
189.18    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by
189.19subdivision 1 by the city of St. Cloud must be used for the cost of collecting and
189.20administering the tax and to pay all or part of the capital or administrative costs of the
189.21development, acquisition, construction, improvement, and securing and paying debt
189.22service on bonds or other obligations issued to finance the following regional projects as
189.23approved by the voters and specifically detailed in the referendum authorizing the tax or
189.24extending the tax:
189.25    (1) St. Cloud Regional Airport;
189.26    (2) regional transportation improvements;
189.27    (3) regional community and aquatics centers;
189.28    (4) regional public libraries; and
189.29    (5) acquisition and improvement of regional park land and open space.
189.30    (b) Revenues received from the tax authorized by subdivision 1 by the cities of St.
189.31Joseph, Waite Park, Sartell, Sauk Rapids, and St. Augusta must be used for the cost of
189.32collecting and administering the tax and to pay all or part of the capital or administrative
189.33costs of the development, acquisition, construction, improvement, and securing and paying
189.34debt service on bonds or other obligations issued to fund the projects specifically approved
189.35by the voters at the referendum authorizing the tax or extending the tax. The portion of
190.1revenues from the city going to fund the regional airport or regional library located in the
190.2city of St. Cloud will be as required under the applicable joint powers agreement.
190.3    (c) The use of revenues received from the taxes authorized in subdivision 1 for
190.4projects allowed under paragraphs (a) and (b) are limited to the amount authorized for
190.5each project under the enabling referendum.
190.6EFFECTIVE DATE.This section is effective for the city that approves them the
190.7day after compliance by the governing body of each city with Minnesota Statutes, section
190.8645.021, subdivision 3.

190.9    Sec. 48. Laws 2005, First Special Session chapter 3, article 5, section 37, subdivision
190.104, is amended to read:
190.11    Subd. 4. Termination of tax. The tax imposed in the cities of St. Joseph, St.
190.12Cloud, St. Augusta, Sartell, Sauk Rapids, and Waite Park under subdivision 1 expires
190.13when the city council determines that sufficient funds have been collected from the tax
190.14to retire or redeem the bonds and obligations authorized under subdivision 2, paragraph
190.15(a), but no later than December 31, 2018. Notwithstanding Minnesota Statutes, section
190.16297A.99, subdivision 3, paragraphs (a), (c), and (d), a city may extend the tax imposed
190.17under subdivision 1 through December 31, 2038, if approved by voters of the city no later
190.18than November 7, 2017, at either a general election or at a special election held on a first
190.19Tuesday after a first Monday in November.
190.20EFFECTIVE DATE.This section is effective for the city that approves them the
190.21day after compliance by the governing body of each city with Minnesota Statutes, section
190.22645.021, subdivision 3.

190.23    Sec. 49. Laws 2008, chapter 366, article 7, section 19, subdivision 3, as amended by
190.24Laws 2011, First Special Session chapter 7, article 4, section 8, is amended to read:
190.25