Minnesota Legislature
HF 677
Conference Committee Report - 88th Legislature (2013 - 2014) Posted on 05/19/2013 07:14pm
KEY: stricken = removed, old language.
underscored = added, new language.
1.1CONFERENCE COMMITTEE REPORT ON H. F. No. 677
1.3 relating to financing of state and local government; making changes to individual
1.4income, corporate franchise, property, sales and use, estate, mineral, liquor,
1.5tobacco, aggregate materials, local, and other taxes and tax-related provisions;
1.6restoring the school district current year aid payment shift percentage to 90;
1.7conforming to federal section 179 expensing allowances; imposing an income
1.8surcharge; allowing an up-front exemption for capital equipment; modifying
1.9the definition of income for the property tax refund; decreasing the threshold
1.10percentage for the homestead credit refund for homeowners and the property
1.11tax refund for renters; increasing the maximum refunds for renters; changing
1.12property tax aids and credits; imposing an insurance surcharge; modifying
1.13pension aids; providing pension funding; changing provisions of the Sustainable
1.14Forest Incentive Act; modifying definitions for property taxes; providing
1.15exemptions; creating joint entertainment facilities coordination; imposing a
1.16sports memorabilia gross receipts tax; changing tax rates on tobacco and liquor;
1.17providing reimbursement for certain property tax abatement; modifying the small
1.18business investment tax credit; expanding the definition of domestic corporation
1.19to include foreign corporations incorporated in or doing business in tax havens;
1.20making changes to additions and subtractions from federal taxable income;
1.21changing rates for individuals, estates, and trusts; providing for charitable
1.22contributions and veterans jobs tax credits; modifying estate tax exclusions for
1.23qualifying small business and farm property; imposing a gift tax; expanding
1.24the sales tax to include suite and box seat rentals; modifying the definition
1.25of sales and purchase; changing the tax rate and modifying provisions for the
1.26rental motor vehicle tax; modifying nexus provisions; providing for multiple
1.27points of use certificates; modifying exemptions; authorizing local sales taxes;
1.28authorizing economic development powers; providing authority, organization,
1.29powers, and duties for development of a Destination Medical Center; authorizing
1.30state infrastructure aid; imposing a tax on extraction and processing of fracturing
1.31sand; providing a taconite production tax grant for water supply improvements;
1.32authorizing taconite production tax bonds for grants to school districts; modifying
1.33and providing provisions for public finance; modifying the definition of market
1.34value for tax, debt, and other purposes; requiring labor peace agreements on
1.35certain qualifying projects; making conforming, policy, and technical changes to
1.36tax provisions; requiring studies and reports; appropriating money;amending
1.37Minnesota Statutes 2012, sections 16A.152, subdivision 2; 16A.46; 38.18;
1.3840A.15, subdivision 2; 69.011, subdivision 1; 69.021, subdivisions 7, 8, by
1.39adding a subdivision; 88.51, subdivision 3; 103B.102, subdivision 3; 103B.245,
1.40subdivision 3; 103B.251, subdivision 8; 103B.335; 103B.3369, subdivision 5;
1.41103B.635, subdivision 2; 103B.691, subdivision 2; 103C.501, subdivision 4;
1.42103D.905, subdivisions 2, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions
1.431, 2, 8; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, subdivision
2.15; 123A.455, subdivision 1; 123B.75, subdivision 5; 126C.48, subdivision 8;
2.2127A.45, subdivision 2; 127A.48, subdivision 1; 138.053; 144F.01, subdivision
2.34; 162.07, subdivisions 3, 4; 163.04, subdivision 3; 163.051; 163.06, subdivision
2.46; 165.10, subdivision 1; 168.012, subdivision 9, by adding a subdivision;
2.5216C.436, subdivision 7; 237.52, subdivision 3, by adding a subdivision;
2.6270.077; 270.41, subdivision 5; 270B.01, subdivision 8; 270B.12, subdivision
2.74; 270C.34, subdivision 1; 270C.38, subdivision 1; 270C.42, subdivision 2;
2.8270C.56, subdivision 1; 271.06, by adding a subdivision; 272.01, subdivision 2;
2.9272.02, subdivisions 39, 97, by adding subdivisions; 272.03, subdivision 9, by
2.10adding subdivisions; 273.032; 273.11, subdivision 1, by adding a subdivision;
2.11273.114, subdivision 6; 273.124, subdivisions 3a, 13; 273.13, subdivisions
2.1221b, 23, 25; 273.1398, subdivisions 3, 4; 273.19, subdivision 1; 273.372,
2.13subdivision 4; 273.39; 275.011, subdivision 1; 275.077, subdivision 2; 275.71,
2.14subdivision 4; 276.04, subdivision 2; 276A.01, subdivisions 10, 12, 13, 15;
2.15276A.06, subdivision 10; 279.01, subdivision 1, by adding a subdivision; 279.02;
2.16279.06, subdivision 1; 287.05, by adding a subdivision; 287.08; 287.20, by
2.17adding a subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.02,
2.18subdivision 7; 289A.08, subdivisions 1, 3, 7; 289A.10, subdivision 1, by adding
2.19a subdivision; 289A.12, subdivision 14, by adding a subdivision; 289A.18, by
2.20adding a subdivision; 289A.20, subdivisions 3, 4, by adding a subdivision;
2.21289A.26, subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 289A.60, subdivision
2.224; 290.01, subdivisions 5, 19, as amended, 19a, 19b, 19c, 19d, 31, as amended,
2.23by adding subdivisions; 290.06, subdivisions 2c, 2d, by adding subdivisions;
2.24290.067, subdivisions 1, 2a; 290.0671, subdivision 1; 290.0675, subdivision 1;
2.25290.0677, subdivision 2; 290.068, subdivisions 3, 6a; 290.0681, subdivisions 1,
2.263, 4, 5; 290.091, subdivision 2; 290.0921, subdivision 3; 290.0922, subdivision 1;
2.27290.17, subdivision 4; 290.21, subdivision 4; 290.9705, subdivision 1; 290A.03,
2.28subdivisions 3, 15, as amended; 290A.04, subdivisions 2, 2a, 4; 290B.04,
2.29subdivision 2; 290C.02, subdivision 6; 290C.05; 290C.07; 291.005, subdivision
2.301; 291.03, subdivisions 1, 8, 9, 10, 11, by adding a subdivision; 296A.01,
2.31subdivision 19, by adding a subdivision; 296A.22, subdivisions 1, 3; 297A.61,
2.32subdivisions 3, 4, by adding a subdivision; 297A.64, subdivisions 1, 2; 297A.66,
2.33by adding a subdivision; 297A.665; 297A.668, by adding a subdivision;
2.34297A.67, subdivision 7; 297A.68, subdivision 5; 297A.70, subdivisions 4, 8, by
2.35adding subdivisions; 297A.71, by adding subdivisions; 297A.75, subdivisions 1,
2.362, 3; 297A.815, subdivision 3; 297A.993, subdivisions 1, 2; 297B.11; 297E.021,
2.37subdivision 2; 297E.14, subdivision 7; 297F.01, subdivisions 3, 19, 23, by
2.38adding a subdivision; 297F.05, subdivisions 1, 3, 4, by adding a subdivision;
2.39297F.09, subdivision 9; 297F.18, subdivision 7; 297F.24, subdivision 1; 297F.25,
2.40subdivision 1; 297G.03, subdivision 1, by adding a subdivision; 297G.04;
2.41297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05, subdivisions 7, 11, 12;
2.42297I.30, subdivisions 1, 2; 297I.80, subdivision 1; 298.01, subdivisions 3, 3b,
2.434; 298.018; 298.227, as amended; 298.24, subdivision 1; 298.28, subdivisions
2.444, 6, 10; 298.75, subdivision 2; 325D.32, subdivision 2; 353G.08, subdivision
2.452; 365.025, subdivision 4; 366.095, subdivision 1; 366.27; 368.01, subdivision
2.4623; 368.47; 370.01; 373.01, subdivisions 1, 3; 373.40, subdivisions 1, 2, 4;
2.47375.167, subdivision 1; 375.18, subdivision 3; 375.555; 383B.152; 383B.245;
2.48383B.73, subdivision 1; 383D.41, by adding a subdivision; 383E.20; 383E.23;
2.49385.31; 394.36, subdivision 1; 398A.04, subdivision 8; 401.05, subdivision 3;
2.50403.02, subdivision 21, by adding subdivisions; 403.06, subdivision 1a; 403.11,
2.51subdivision 1, by adding a subdivision; 410.32; 412.221, subdivision 2; 412.301;
2.52428A.02, subdivision 1; 430.102, subdivision 2; 447.10; 450.19; 450.25;
2.53458A.10; 458A.31, subdivision 1; 465.04; 469.033, subdivision 6; 469.034,
2.54subdivision 2; 469.053, subdivisions 4, 4a, 6; 469.071, subdivision 5; 469.107,
2.55subdivision 1; 469.169, by adding a subdivision; 469.176, subdivisions 4c, 4g,
2.566; 469.177, by adding a subdivision; 469.180, subdivision 2; 469.187; 469.190,
2.57subdivision 7, by adding a subdivision; 469.206; 469.319, subdivision 4; 469.340,
2.58subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325, subdivision
3.12; 473.39, by adding a subdivision; 473.629; 473.661, subdivision 3; 473.667,
3.2subdivision 9; 473.671; 473.711, subdivision 2a; 473F.02, subdivisions 12, 14,
3.315, 23; 473F.08, subdivision 10, by adding a subdivision; 474A.04, subdivision
3.41a; 474A.062; 474A.091, subdivision 3a; 475.521, subdivisions 1, 2, 4; 475.53,
3.5subdivisions 1, 3, 4; 475.58, subdivisions 2, 3b; 475.73, subdivision 1; 477A.011,
3.6subdivisions 20, 30, 32, 34, 42, by adding subdivisions; 477A.0124, subdivision
3.72; 477A.013, subdivisions 8, 9, by adding a subdivision; 477A.015; 477A.03,
3.8subdivisions 2a, 2b, by adding a subdivision; 641.23; 641.24; 645.44, by adding
3.9a subdivision; Laws 1971, chapter 773, section 1, subdivision 2, as amended;
3.10Laws 1988, chapter 645, section 3, as amended; Laws 1993, chapter 375, article
3.119, section 46, subdivisions 2, as amended, 5, as amended; Laws 1998, chapter
3.12389, article 8, section 43, subdivisions 1, 3, as amended, 5, as amended; Laws
3.131999, chapter 243, article 6, section 11; Laws 2002, chapter 377, article 3, section
3.1425, as amended; Laws 2005, First Special Session chapter 3, article 5, section
3.1537, subdivisions 2, 4; Laws 2008, chapter 366, article 5, sections 26; 33; 34, as
3.16amended; article 7, section 19, subdivision 3, as amended; Laws 2010, chapter
3.17216, section 55; Laws 2010, chapter 389, article 1, section 12; article 5, section 6,
3.18subdivisions 4, 6; Laws 2010, First Special Session chapter 1, article 13, section 4,
3.19subdivision 1, as amended; proposing coding for new law in Minnesota Statutes,
3.20chapters 116C; 287; 290; 290A; 292; 295; 297I; 403; 435; 469; proposing coding
3.21for new law as Minnesota Statutes, chapter 297J; repealing Minnesota Statutes
3.222012, sections 16A.725; 256.9658; 272.69; 273.11, subdivisions 1a, 22; 276A.01,
3.23subdivision 11; 289A.60, subdivision 31; 290.01, subdivision 6b; 290.06,
3.24subdivision 22a; 290.0672; 290.0921, subdivision 7; 383A.80, subdivision 4;
3.25383B.80, subdivision 4; 428A.101; 428A.21; 473F.02, subdivision 13; 477A.011,
3.26subdivisions 2a, 19, 21, 29, 31, 32, 33, 36, 39, 40, 41, 42; 477A.013, subdivisions
3.2711, 12; 477A.0133; 477A.0134; Laws 2006, chapter 259, article 11, section 3, as
3.28amended; Laws 2009, chapter 88, article 4, section 23, as amended.
3.29May 19, 2013
3.30The Honorable Paul Thissen
3.31Speaker of the House of Representatives
3.32The Honorable Sandra L. Pappas
3.33President of the Senate
3.34We, the undersigned conferees for H. F. No. 677 report that we have agreed upon the
3.35items in dispute and recommend as follows:
3.36That the Senate recede from its amendments and that H. F. No. 677 be further
3.37amended as follows:
3.38Delete everything after the enacting clause and insert:
3.41 Section 1. Minnesota Statutes 2012, section 290A.03, subdivision 3, is amended to read:
3.42 Subd. 3. Income. (1) "Income" means the sum of the following:
3.43 (a) federal adjusted gross income as defined in the Internal Revenue Code; and
3.44 (b) the sum of the following amounts to the extent not included in clause (a):
3.45 (i) all nontaxable income;
4.1 (ii) the amount of a passive activity loss that is not disallowed as a result of section
4.2469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
4.3loss carryover allowed under section 469(b) of the Internal Revenue Code;
4.4 (iii) an amount equal to the total of any discharge of qualified farm indebtedness
4.5of a solvent individual excluded from gross income under section 108(g) of the Internal
4.6Revenue Code;
4.7 (iv) cash public assistance and relief;
4.8 (v) any pension or annuity (including railroad retirement benefits, all payments
4.9received under the federal Social Security Act, Supplemental Security Income, and
4.10veterans benefits), which was not exclusively funded by the claimant or spouse, or which
4.11was funded exclusively by the claimant or spouse and which funding payments were
4.12excluded from federal adjusted gross income in the years when the payments were made;
4.13 (vi) interest received from the federal or a state government or any instrumentality
4.14or political subdivision thereof;
4.15 (vii) workers' compensation;
4.16 (viii) nontaxable strike benefits;
4.17 (ix) the gross amounts of payments received in the nature of disability income or
4.18sick pay as a result of accident, sickness, or other disability, whether funded through
4.19insurance or otherwise;
4.20 (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
4.211986, as amended through December 31, 1995;
4.22 (xi) contributions made by the claimant to an individual retirement account,
4.23including a qualified voluntary employee contribution; simplified employee pension plan;
4.24self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
4.25of the Internal Revenue Code; or deferred compensation plan under section 457 of the
4.26Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base
4.27amount for the claimant and spouse;
4.28 (xii) to the extent not included in federal adjusted gross income, distributions received
4.29by the claimant or spouse from a traditional or Roth style retirement account or plan;
4.30 (xiii) nontaxable scholarship or fellowship grants;
4.31(xiii) (xiv) the amount of deduction allowed under section 199 of the Internal
4.32Revenue Code;
4.33(xiv) (xv) the amount of deduction allowed under section 220 or 223 of the Internal
4.34Revenue Code;
5.1(xv) (xvi) the amount of deducted for tuition expenses required to be added to
5.2income under section
290.01, subdivision 19a, clause (12); under section 222 of the
5.3Internal Revenue Code; and
5.4(xvi) (xvii) the amount deducted for certain expenses of elementary and secondary
5.5school teachers under section 62(a)(2)(D) of the Internal Revenue Code; and.
5.6(xvii) unemployment compensation.
5.7 In the case of an individual who files an income tax return on a fiscal year basis, the
5.8term "federal adjusted gross income" shall mean federal adjusted gross income reflected
5.9in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
5.10reduced by the amount of a net operating loss carryback or carryforward or a capital loss
5.11carryback or carryforward allowed for the year.
5.12 (2) "Income" does not include:
5.13 (a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
5.14 (b) amounts of any pension or annuity which was exclusively funded by the claimant
5.15or spouse and which funding payments were not excluded from federal adjusted gross
5.16income in the years when the payments were made;
5.17 (c) to the extent included in federal adjusted gross income, amounts contributed by
5.18the claimant or spouse to a traditional or Roth style retirement account or plan, but not
5.19to exceed the retirement base amount reduced by the amount of contributions excluded
5.20from federal adjusted gross income, but not less than zero;
5.21 (d) surplus food or other relief in kind supplied by a governmental agency;
5.22(d) (e) relief granted under this chapter;
5.23(e) (f) child support payments received under a temporary or final decree of
5.24dissolution or legal separation; or
5.25(f) (g) restitution payments received by eligible individuals and excludable interest
5.26as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
5.272001, Public Law 107-16.
5.28 (3) The sum of the following amounts may be subtracted from income:
5.29 (a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
5.30 (b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
5.31 (c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
5.32 (d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
5.33 (e) for the claimant's fifth dependent, the exemption amount; and
5.34 (f) if the claimant or claimant's spouse was disabled or attained the age of 65
5.35on or before December 31 of the year for which the taxes were levied or rent paid, the
5.36exemption amount.
6.1 For purposes of this subdivision, the "exemption amount" means the exemption
6.2amount under section 151(d) of the Internal Revenue Code for the taxable year for which
6.3the income is reported; "retirement base amount" means the deductible amount for the
6.4taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal
6.5Revenue Code, adjusted for inflation as provided in section 219(b)(5)(D) of the Internal
6.6Revenue Code, without regard to whether the claimant or spouse claimed a deduction;
6.7and "traditional or Roth style retirement account or plan" means retirement plans under
6.8sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.
6.9EFFECTIVE DATE.This section is effective beginning with refunds based on
6.10property taxes payable in 2014 and rent paid in 2013.
6.11 Sec. 2. Minnesota Statutes 2012, section 290A.04, subdivision 2, is amended to read:
6.12 Subd. 2. Homeowners; homestead credit refund. A claimant whose property
6.13taxes payable are in excess of the percentage of the household income stated below shall
6.14pay an amount equal to the percent of income shown for the appropriate household
6.15income level along with the percent to be paid by the claimant of the remaining amount
6.16of property taxes payable. The state refund equals the amount of property taxes payable
6.17that remain, up to the state refund amount shown below.
7.35 The payment made to a claimant shall be the amount of the state refund calculated
7.36under this subdivision. No payment is allowed if the claimant's household income is
7.37$100,780 $105,500 or more.
7.38EFFECTIVE DATE.This section is effective for refund claims based on taxes
7.39payable in 2014 and thereafter.
7.40 Sec. 3. Minnesota Statutes 2012, section 290A.04, subdivision 2a, is amended to read:
8.1 Subd. 2a. Renters. A claimant whose rent constituting property taxes exceeds the
8.2percentage of the household income stated below must pay an amount equal to the percent
8.3of income shown for the appropriate household income level along with the percent to
8.4be paid by the claimant of the remaining amount of rent constituting property taxes. The
8.5state refund equals the amount of rent constituting property taxes that remain, up to the
8.6maximum state refund amount shown below.
9.19 The payment made to a claimant is the amount of the state refund calculated under
9.20this subdivision. No payment is allowed if the claimant's household income is$41,820
9.21 $57,170 or more.
9.22EFFECTIVE DATE.This section is effective for claims based on rent paid in
9.232013 and following years.
9.24 Sec. 4. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read:
9.25 Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in
9.26calendar year 2002, the commissioner shall annually adjust the dollar amounts of the
9.27income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation.
9.28The commissioner shall make the inflation adjustments in accordance with section 1(f) of
9.29the Internal Revenue Code, except that for purposes of this subdivision the percentage
9.30increase shall be determined as provided in this subdivision.
9.31 (b) In adjusting the dollar amounts of the income thresholds and the maximum
9.32refunds under subdivision 2 for inflation, the percentage increase shall be determined
9.33from the year ending on June 30,2011 2013, to the year ending on June 30 of the year
9.34preceding that in which the refund is payable.
9.35 (c) In adjusting the dollar amounts of the income thresholds and the maximum
9.36refunds under subdivision 2a for inflation, the percentage increase shall be determined
10.1from the year ending on June 30,2000 2013, to the year ending on June 30 of the year
10.2preceding that in which the refund is payable.
10.3 (d) The commissioner shall use the appropriate percentage increase to annually
10.4adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for
10.5inflation without regard to whether or not the income tax brackets are adjusted for inflation
10.6in that year. The commissioner shall round the thresholds and the maximum amounts,
10.7as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
10.8round it up to the next $10 amount.
10.9 (e) The commissioner shall annually announce the adjusted refund schedule at the
10.10same time provided under section290.06 . The determination of the commissioner under
10.11this subdivision is not a rule under the Administrative Procedure Act.
10.12EFFECTIVE DATE.This section is effective for refund claims based on taxes
10.13payable in 2014 and rent paid in 2013 and following years.
10.14 Sec. 5. [290A.28] NOTIFICATION OF POTENTIAL ELIGIBILITY.
10.15 Subdivision 1. Notification of eligibility. (a) By September 1, 2014, the
10.16commissioner shall notify, in writing or electronically, individual homeowners whom the
10.17commissioner determines may be eligible for a homestead credit refund under this chapter
10.18for that property taxes payable year as provided in this section. In determining whether
10.19to notify a homeowner, the commissioner shall consider the property tax information
10.20available to the commissioner under paragraph (b) for the homeowner and must estimate
10.21the homeowner's household income using the most recent income information available to
10.22the commissioner from filing under this chapter for the prior year, under chapter 290 for
10.23the current or prior year, and any other income information available to the commissioner.
10.24For each homeowner, the commissioner must estimate the homestead credit refund
10.25amount under the schedule in section 290A.04, subdivision 2, using the homeowner's
10.26property tax amount and estimated household income. If the estimated homestead credit
10.27refund is at least $1,000, the commissioner must notify the homeowner of potential
10.28eligibility for the homestead credit refund. The notification must include information
10.29on how to file for the homestead credit refund. The notification requirement under this
10.30section does not apply to a homeowner who has already filed for the homestead credit
10.31refund for the current or prior year.
10.32 (b) By May 15, 2014, each county auditor shall transmit to the commissioner
10.33of revenue the following information for each property classified as a residential or
10.34agricultural homestead under section 273.13, subdivision 22 or 23:
10.35 (1) the property taxes payable;
11.1 (2) the name and address of the owner;
11.2 (3) the Social Security number or numbers of the owners; and
11.3 (4) any other information the commissioner deems necessary or useful to carry
11.4out the provisions of this section.
11.5The information must be provided in the form and manner prescribed by the commissioner.
11.6 Subd. 2. Reports. (a) By March 15, 2015, the commissioner must provide a written
11.7report to the chairs and ranking minority members of the legislative committees with
11.8jurisdiction over taxes, in compliance with sections 3.195 and 3.197. The report must
11.9provide information on the number and dollar amount of homeowner property tax refund
11.10claims based on taxes payable in 2014, including:
11.11 (1) the number and dollar amount of claims projected for homestead credit refunds
11.12based on taxes payable in 2014 prior to enactment of the notification requirement in
11.13this section;
11.14 (2) the number of notifications issued as provided in this section, including the
11.15number issued by county;
11.16 (3) preliminary information on the number and dollar amount of claims for
11.17homestead credit refunds based on taxes payable in 2014; and
11.18 (4) a description of any outreach efforts undertaken by the commissioner for
11.19homestead credit refunds based on taxes payable in 2014, in addition to the notification
11.20required in this section.
11.21 (b) By February 1, 2016, the commissioner must provide a written report to the chairs
11.22and ranking minority members of the legislative committees with jurisdiction over taxes,
11.23in compliance with sections 3.195 and 3.197. The report must include the information
11.24required in paragraph (a) and must also include final information on the number and dollar
11.25amount of claims for homestead credit refunds based on taxes payable in 2014.
11.26EFFECTIVE DATE.This section is effective for refund claims based on property
11.27taxes payable in 2014.
11.30 Section 1. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
11.31 Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
11.32class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
11.33is located in a border city that has an enterprise zone, as defined in section469.166 ; (2)
11.34the property is located in a city with a population greater than 2,500 and less than 35,000
11.35according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
12.1immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
12.2in the other state has a population of greater than 5,000 and less than 75,000 according to
12.3the 1980 decennial census.
12.4 (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
12.5property to2.3 1.9 percent of the property's market value and (ii) the tax on class 3a
12.6property to2.3 1.9 percent of market value.
12.7 (c) The county auditor shall annually certify the costs of the credits to the
12.8Department of Revenue. The department shall reimburse local governments for the
12.9property taxes forgone as the result of the credits in proportion to their total levies.
12.10EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.
12.11 Sec. 2. Minnesota Statutes 2012, section 290C.02, subdivision 6, is amended to read:
12.12 Subd. 6. Forest land. "Forest land" means land containing a minimum of 20
12.13contiguous acres for which the owner has implemented a forest management plan that was
12.14prepared or updated within the past ten years by an approved plan writer. For purposes of
12.15this subdivision, acres are considered to be contiguous even if they are separated by a road,
12.16waterway, railroad track, or other similar intervening property. At least 50 percent of the
12.17contiguous acreage must meet the definition of forest land in section88.01, subdivision
12.187 . For the purposes of sections
290C.01 to
290C.11 , forest land does not include (i)
12.19land used for residential or agricultural purposes, (ii) land enrolled in the reinvest in
12.20Minnesota program, a state or federal conservation reserve or easement reserve program
12.21under sections103F.501 to
103F.531 , the Minnesota agricultural property tax law under
12.22section273.111 , or land subject to agricultural land preservation controls or restrictions
12.23as defined in section40A.02 or under the Metropolitan Agricultural Preserves Act under
12.24chapter 473H,or (iii) land exceeding 60,000 acres that is subject to a single conservation
12.25easement funded under section 97A.056 or a comparable permanent easement conveyed
12.26to a governmental or nonprofit entity; (iv) any land that becomes subject to a conservation
12.27easement funded under section 97A.056 or a comparable permanent easement conveyed
12.28to a governmental or nonprofit entity after May 30, 2013; or (v) land improved with a
12.29structure, pavement, sewer, campsite, or any road, other than a township road, used for
12.30purposes not prescribed in the forest management plan.
12.31EFFECTIVE DATE.This section is effective for certifications and applications
12.32due in 2013 and thereafter.
12.33 Sec. 3. Minnesota Statutes 2012, section 290C.03, is amended to read:
13.1290C.03 ELIGIBILITY REQUIREMENTS.
13.2(a) Land may be enrolled in the sustainable forest incentive program under this
13.3chapter if all of the following conditions are met:
13.4(1) the land consists of at least 20 contiguous acres and at least 50 percent of the
13.5land must meet the definition of forest land in section88.01, subdivision 7 , during the
13.6enrollment;
13.7(2) a forest management plan for the land must be prepared by an approved plan
13.8writer and implemented during the period in which the land is enrolled;
13.9(3) timber harvesting and forest management guidelines must be used in conjunction
13.10with any timber harvesting or forest management activities conducted on the land during
13.11the period in which the land is enrolled;
13.12(4) the land must be enrolled for a minimum of eight years;
13.13(5) there are no delinquent property taxes on the land; and
13.14(6) claimants enrolling more than 1,920 acres in the sustainable forest incentive
13.15program must allow year-round, nonmotorized access to fish and wildlife resources and
13.16motorized access on established and maintained roads and trails, unless the road or trail is
13.17temporarily closed for safety, natural resource, or road damage reasons on enrolled land
13.18except within one-fourth mile of a permanent dwelling or during periods of high fire
13.19hazard as determined by the commissioner of natural resources.
13.20(b) Claimants required to allow access under paragraph (a), clause (6), do not by
13.21that action:
13.22(1) extend any assurance that the land is safe for any purpose;
13.23(2) confer upon the person the legal status of an invitee or licensee to whom a duty
13.24of care is owed; or
13.25(3) assume responsibility for or incur liability for any injury to the person or property
13.26caused by an act or omission of the person.
13.27EFFECTIVE DATE.This section is effective for calculations made in 2013 and
13.28thereafter.
13.29 Sec. 4. Minnesota Statutes 2012, section 290C.055, is amended to read:
13.30290C.055 LENGTH OF COVENANT.
13.31(a) The covenant remains in effect for a minimum of eight years. If land is removed
13.32from the program before it has been enrolled for four years, the covenant remains in
13.33effect for eight years from the date recorded.
14.1(b) If land that has been enrolled for four years or more is removed from the program
14.2for any reason, there is a waiting period before the covenant terminates. The covenant
14.3terminates on January 1 of the fifth calendar year that begins after the date that:
14.4(1) the commissioner receives notification from the claimant that the claimant wishes
14.5to remove the land from the program under section290C.10 ; or
14.6(2) the date that the land is removed from the program under section290C.11 .
14.7(c) Notwithstanding the other provisions of this section, the covenant is terminated:
14.8(1) at the same time that the land is removed from the program due to acquisition of
14.9title or possession for a public purpose under section290C.10 ; or
14.10(2) at the request of the claimant after a reduction in payments due to changes in the
14.11payment formula under section 290C.07.
14.12EFFECTIVE DATE.This section is effective for calculations made in 2013 and
14.13thereafter.
14.14 Sec. 5. Minnesota Statutes 2012, section 290C.07, is amended to read:
14.15290C.07 CALCULATION OF INCENTIVE PAYMENT.
14.16(a) An approved claimant under the sustainable forest incentive program is eligible
14.17to receive an annual payment. The payment shall equal $7 per acre for each acre enrolled
14.18in the sustainable forest incentive program.
14.19(b) The annual payment for each Social Security number or state or federal business
14.20tax identification number must not exceed $100,000.
14.21EFFECTIVE DATE.This section is effective for calculations made in 2013 and
14.22thereafter.
14.23 Sec. 6. [423A.022] POLICE AND FIREFIGHTER RETIREMENT
14.24SUPPLEMENTAL STATE AID.
14.25 Subdivision 1. Supplemental state aid. Annually, the commissioner of revenue
14.26shall allocate police and firefighter retirement supplemental state aid appropriated under
14.27subdivision 6 as provided in subdivision 2 and paid as provided in subdivision 4.
14.28 Subd. 2. Allocation. Of the total amount appropriated as supplemental state aid:
14.29 (1) 58.065 percent must be paid to the executive director of the Public Employees
14.30Retirement Association for deposit in the public employees police and fire retirement fund
14.31established by section 353.65, subdivision 1;
14.32 (2) 35.484 percent must be paid to municipalities other than municipalities solely
14.33employing firefighters with retirement coverage provided by the public employees police
15.1and fire retirement plan which qualified to receive fire state aid in that calendar year,
15.2allocated in proportion to the most recent amount of fire state aid paid under section
15.369.021, subdivision 7, for the municipality bears to the most recent total fire state aid
15.4for all municipalities other than the municipalities solely employing firefighters with
15.5retirement coverage provided by the public employees police and fire retirement plan
15.6paid under section 69.021, subdivision 7, with the allocated amount for fire departments
15.7participating in the voluntary statewide lump-sum volunteer firefighter retirement plan
15.8paid to the executive director of the Public Employees Retirement Association for deposit
15.9in the fund established by section 353G.02, subdivision 3, and credited to the respective
15.10account and with the balance paid to the treasurer of each municipality for transmittal
15.11within 30 days of receipt to the treasurer of the applicable volunteer firefighter relief
15.12association for deposit in its special fund; and
15.13 (3) 6.452 percent must be paid to the executive director of the Minnesota State
15.14Retirement System for deposit in the state patrol retirement fund.
15.15 Subd. 3. Reporting; definitions. (a) On or before September 1, annually, the
15.16executive director of the Public Employees Retirement Association shall report to the
15.17commissioner of revenue the following:
15.18 (1) the municipalities which employ firefighters with retirement coverage by the
15.19public employees police and fire retirement plan;
15.20 (2) the number of firefighters with public employees police and fire retirement plan
15.21coverage employed by each municipality;
15.22 (3) the fire departments covered by the voluntary statewide lump-sum volunteer
15.23firefighter retirement plan; and
15.24 (4) any other information requested by the commissioner to administer the police
15.25and firefighter retirement supplemental state aid program.
15.26 (b) For this subdivision, (i) the number of firefighters employed by a municipality
15.27who have public employees police and fire retirement plan coverage means the number
15.28of firefighters with public employees police and fire retirement plan coverage that were
15.29employed by the municipality for not less than 30 hours per week for a minimum of six
15.30months prior to December 31 preceding the date of the payment under this section and, if
15.31the person was employed for less than the full year, prorated to the number of full months
15.32employed; and (ii) the number of active police officers certified for police state aid receipt
15.33under section 69.011, subdivisions 2 and 2b, means, for each municipality, the number of
15.34police officers meeting the definition of peace officer in section 69.011, subdivision 1,
15.35counted as provided and limited by section 69.011, subdivisions 2 and 2b.
16.1 Subd. 4. Payments; conditions prerequisite. (a) The payments under this section
16.2must be made on October 1 each year, with interest at one percent for each month, or
16.3portion of a month, that the amount remains unpaid after October 1. Any necessary
16.4adjustments must be made to subsequent payments.
16.5 (b) The provisions of sections 69.011 to 69.051 that prevent municipalities and relief
16.6associations from being eligible for, or receiving fire state aid under sections 69.011 to
16.769.051 until the applicable financial reporting requirements have been complied with,
16.8apply to the amounts payable to municipalities and relief associations under this section.
16.9 Subd. 5. Aid termination. The aid program under this section ends on the
16.10December 1 next following the actuarial valuation date on which the assets of the
16.11retirement plan on a market value basis equals or exceeds 90 percent of the total
16.12actuarial accrued liabilities of the retirement plan as disclosed in an actuarial valuation
16.13prepared under section 356.215 and the Standards for Actuarial Work promulgated by the
16.14Legislative Commission on Pensions and Retirement, for the State Patrol retirement plan
16.15or the public employees police and fire retirement plan, whichever occurs last.
16.16 Subd. 6. Appropriation. $15,500,000 is appropriated annually to the commissioner
16.17of revenue for this aid program.
16.18EFFECTIVE DATE.This section is effective beginning in the fiscal year beginning
16.19July 1, 2013.
16.20 Sec. 7. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to read:
16.21 Subd. 30. Pre-1940 housing percentage. (a) Except as provided in paragraph (b),
16.22"pre-1940 housing percentage" for a city is 100 times the most recentfederal census count
16.23by the United States Bureau of the Census of all housing units in the city built before
16.241940, divided by the total number of all housing units in the city. Housing units includes
16.25both occupied and vacant housing units as defined by the federal census. For aids payable
16.26in 2014, "pre-1940 housing percentage" shall be based on 2010 housing data.
16.27 (b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal
16.28to 100 times the 1990 federal census count of all housing units in the city built before
16.291940, divided by the most recent count by the United States Bureau of the Census of all
16.30housing units in the city. Housing units includes both occupied and vacant housing units
16.31as defined by the federal census.
16.32EFFECTIVE DATE.This section is effective for aids payable in calendar year
16.332014 and thereafter.
17.1 Sec. 8. Minnesota Statutes 2012, section 477A.011, is amended by adding a
17.2subdivision to read:
17.3 Subd. 30a. Percent of housing built between 1940 and 1970. "Percent of housing
17.4built between 1940 and 1970" is equal to 100 times the most recent count by the United
17.5States Bureau of the Census of all housing units in the city built after 1939 but before
17.61970, divided by the total number of all housing units in the city. Housing units includes
17.7both occupied and vacant housing units as defined by the federal census. For aids payable
17.8in 2014, "percent of housing built between 1940 and 1970" shall be based on 2010
17.9housing data.
17.10EFFECTIVE DATE.This section is effective for aids payable in calendar year
17.112014 and thereafter.
17.12 Sec. 9. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:
17.13 Subd. 34. City revenue need. (a) For a city with a population equal to or greater
17.14than2,500 10,000, "city revenue need" is the greater of 285 or 1.15 times the sum of (1)
17.155.0734098 4.59 times the pre-1940 housing percentage; plus (2) 19.141678 times the
17.16population decline percentage 0.622 times the percent of housing built between 1940 and
17.171970; plus (3)2504.06334 times the road accidents factor 169.415 times the jobs per
17.18capita; plus (4)355.0547; minus (5) the metropolitan area factor; minus (6) 49.10638
17.19times the household size the sparsity adjustment; plus (5) 307.664.
17.20 (b) For a city with a population equal to or greater than 2,500 and less than 10,000,
17.21"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940
17.22housing percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak
17.23population decline.
17.24(b) (c) For a city with a population less than 2,500, "city revenue need" is the sum of
17.25(1) 2.387 times the pre-1940 housing percentage; plus (2) 2.67591 times the commercial
17.26industrial percentage; plus (3) 3.16042 times the population decline percentage; plus (4)
17.271.206 times the transformed population; minus (5) 62.772 410 plus 0.367 times the city's
17.28population over 100. The city revenue need under this paragraph shall not exceed 630.
17.29(c) (d) For a city with a population of at least 2,500 or more and a population in one
17.30of the most recently available five years that was less than 2,500, "city revenue need"
17.31is the sum of (1) its city revenue need calculated under paragraph (a) multiplied by its
17.32transition factor; plus (2) its city revenue need calculated under the formula in paragraph
17.33(b) multiplied by the difference between one and its transition factor. For purposes of this
17.34paragraph, a city's "transition factor" is equal to 0.2 multiplied by the number of years that
17.35the city's population estimate has been 2,500 or more. This provision only applies for aids
18.1payable in calendar years 2006 to 2008 to cities with a 2002 population of less than 2,500.
18.2It applies to any city for aids payable in 2009 and thereafter but less than 3,000, the "city
18.3revenue need" equals (1) the transition factor times the city's revenue need calculated in
18.4paragraph (b) plus (2) 630 times the difference between one and the transition factor. For
18.5a city with a population of at least 10,000 but less than 10,500, the "city revenue need"
18.6equals (1) the transition factor times the city's revenue need calculated in paragraph (a)
18.7plus (2) the city's revenue need calculated under the formula in paragraph (b) times the
18.8difference between one and the transition factor. For purposes of this paragraph "transition
18.9factor" is 0.2 percent times the amount that the city's population exceeds the minimum
18.10threshold in either of the first two sentences.
18.11(d) (e) The city revenue need cannot be less than zero.
18.12(e) (f) For calendar year 2005 2015 and subsequent years, the city revenue need for
18.13a city, as determined in paragraphs (a) to(d) (e), is multiplied by the ratio of the annual
18.14implicit price deflator for government consumption expenditures and gross investment for
18.15state and local governments as prepared by the United States Department of Commerce,
18.16for the most recently available year to the2003 2013 implicit price deflator for state
18.17and local government purchases.
18.18EFFECTIVE DATE.This section is effective for aids payable in calendar year
18.192014 and thereafter.
18.20 Sec. 10. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:
18.21 Subd. 42.City jobs base Jobs per capita. (a) "City jobs base" for a city with a
18.22population of 5,000 or more is equal to the product of (1) $25.20, (2) the number of
18.23jobs per capita in the city, and (3) its population. For cities with a population less than
18.245,000, the city jobs base is equal to zero. For a city receiving aid under
subdivision 36,
18.25paragraph (k), its city jobs base is reduced by the lesser of 36 percent of the amount of
18.26aid received under that paragraph or $1,000,000. No city's city jobs base may exceed
18.27$4,725,000 under this paragraph.
18.28(b) For calendar year 2010 and subsequent years, the city jobs base for a city, as
18.29determined in paragraph (a), is multiplied by the ratio of the appropriation under section
18.30477A.03, subdivision 2a, for the year in which the aid is paid to the appropriation under
18.31that section for aids payable in 2009.
18.32(c) For purposes of this subdivision, "Jobs per capita in the city" means (1) the
18.33average annual number of employees in the city based on the data from the Quarterly
18.34Census of Employment and Wages, as reported by the Department of Employment and
18.35Economic Development, for the most recent calendar year availableas of May 1, 2008
19.1 November 1 of every odd-numbered year, divided by (2) the city's population for the
19.2same calendar year as the employment data. The commissioner of the Department of
19.3Employment and Economic Development shall certify to the city the average annual
19.4number of employees for each city byJune 1, 2008 January 1, of every even-numbered
19.5year beginning with January 1, 2014. A city may challenge an estimate under this
19.6paragraph by filing its specific objection, including the names of employers that it feels
19.7may have misreported data, in writing with the commissioner byJune 20, 2008 December
19.81 of every odd-numbered year. The commissioner shall make every reasonable effort
19.9to address the specific objection and adjust the data as necessary. The commissioner
19.10shall certify the estimates of the annual employment to the commissioner of revenue by
19.11July 15, 2008 January 1 of all even-numbered years, including any estimates still under
19.12objection. For aids payable in 2014, "jobs per capita" shall be based on the annual number
19.13of employees and population for calendar year 2010 without additional review.
19.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.152014 and thereafter.
19.16 Sec. 11. Minnesota Statutes 2012, section 477A.011, is amended by adding a
19.17subdivision to read:
19.18 Subd. 44. Peak population decline. "Peak population decline" is equal to 100
19.19times the difference between one and the ratio of the city's current population, to the
19.20highest city population reported in a federal census from the 1970 census or later. "Peak
19.21population decline" shall not be less than zero.
19.22EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.232014 and thereafter.
19.24 Sec. 12. Minnesota Statutes 2012, section 477A.011, is amended by adding a
19.25subdivision to read:
19.26 Subd. 45. Sparsity adjustment. For a city with a population of 10,000 or more, the
19.27sparsity adjustment is 100 for any city with an average population density less than 150
19.28per square mile, according to the most recent federal census, and the sparsity adjustment is
19.29zero for all other cities.
19.30EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.312014 and thereafter.
19.32 Sec. 13. Minnesota Statutes 2012, section 477A.013, subdivision 1, is amended to read:
20.1 Subdivision 1. Towns.In 2002, no town is eligible for a distribution under this
20.2subdivision. In 2014 and thereafter, each town is eligible for a distribution under this
20.3subdivision equal to the product of (i) its agricultural property factor, (ii) its town area
20.4factor, (iii) its population factor, and (iv) 0.0045. As used in this subdivision, the following
20.5terms have the meanings given them:
20.6(1) "agricultural property factor" means the ratio of the adjusted net tax capacity of
20.7agricultural property located in a town, divided by the adjusted net tax capacity of all other
20.8property located in the town. The agricultural property factor cannot exceed eight;
20.9(2) "agricultural property" means property classified under section 273.13, as
20.10homestead and nonhomestead agricultural property, rural vacant land, and noncommercial
20.11seasonal recreational property;
20.12(3) "town area factor" means the most recent estimate of total acreage, not to exceed
20.1350,000 acres, located in the township available as of July 1 in the aid calculation year,
20.14estimated or established by:
20.15(i) the United States Bureau of the Census;
20.16(ii) the State Land Management Information Center; or
20.17(iii) the secretary of state; and
20.18(4) "population factor" means the square root of the towns' population.
20.19If the sum of the aids payable to all towns under this subdivision exceeds the limit
20.20under section 477A.03, subdivision 2c, the distribution to each town must be reduced
20.21proportionately so that the total amount of aids distributed under this section does not
20.22exceed the limit in section 477A.03, subdivision 2c.
20.23EFFECTIVE DATE.This section is effective for aids payable in calendar year
20.242014 and thereafter.
20.25 Sec. 14. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:
20.26 Subd. 8. City formula aid. (a) For aids payable in 2014 only, the formula aid for a
20.27city is equal to the sum of (1) its 2013 certified aid and (2) the product of (i) the difference
20.28between its unmet need and its 2013 certified aid and (ii) the aid gap percentage.
20.29 (b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to
20.30the sum of (1) itscity jobs base, (2) its small city aid base, and (3) the need increase
20.31percentage multiplied by the average of its unmet need for the most recently available two
20.32years formula aid in the previous year and (2) the product of (i) the difference between
20.33its unmet need and its certified aid in the previous year under subdivision 9, and (ii)
20.34the aid gap percentage.
21.1No city may have a formula aid amount less than zero. Theneed increase aid gap
21.2 percentage must be the same for all cities.
21.3 The applicableneed increase aid gap percentage must be calculated by the
21.4Department of Revenue so that the total of the aid under subdivision 9 equals the total
21.5amount available for aid under section477A.03 . Data used in calculating aids to cities
21.6under sections477A.011 to
477A.013 shall be the most recently available data as of
21.7January 1 in the year in which the aid is calculatedexcept that the data used to compute "net
21.8levy" in subdivision 9 is the data most recently available at the time of the aid computation.
21.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
21.102014 and thereafter.
21.11 Sec. 15. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:
21.12 Subd. 9. City aid distribution. (a) In calendar year2013 2014 and thereafter, each
21.13city shall receive an aid distribution equal to the sum of (1) the city formula aid under
21.14subdivision 8, and (2) itscity aid base aid adjustment under subdivision 13.
21.15(b) For aids payable in 2013 and 2014 only, the total aid in the previous year for
21.16any city shall mean the amount of aid it was certified to receive for aids payable in 2012
21.17under this section. For aids payable in 2015 and thereafter, the total aid in the previous
21.18year for any city means the amount of aid it was certified to receive under this section in
21.19the previous payable year.
21.20(c) For aids payable in 2010 and thereafter, the total aid for any city shall not exceed
21.21the sum of (1) ten percent of the city's net levy for the year prior to the aid distribution
21.22plus (2) its total aid in the previous year. For aids payable in 2009 and thereafter, the total
21.23aid for any city with a population of 2,500 or more may not be less than its total aid under
21.24this section in the previous year minus the lesser of $10 multiplied by its population, or ten
21.25percent of its net levy in the year prior to the aid distribution.
21.26(d) (b) For aids payable in 2014 only, the total aid for a city may not be less than the
21.27amount it was certified to receive in 2013. For aids payable in2010 2015 and thereafter,
21.28the total aid for a citywith a population less than 2,500 must not be less than the amount
21.29it was certified to receive in the previous year minus the lesser of $10 multiplied by its
21.30population, or five percent ofits 2003 certified aid amount. For aids payable in 2009 only,
21.31the total aid for a city with a population less than 2,500 must not be less than what it
21.32received under this section in the previous year unless its total aid in calendar year 2008
21.33was aid under section
477A.011, subdivision 36, paragraph (s), in which case its minimum
21.34aid is zero its net levy in the year prior to the aid distribution.
22.1(e) A city's aid loss under this section may not exceed $300,000 in any year in
22.2which the total city aid appropriation under section
477A.03, subdivision 2a, is equal or
22.3greater than the appropriation under that subdivision in the previous year, unless the
22.4city has an adjustment in its city net tax capacity under the process described in section
22.5469.174, subdivision 28.
22.6(f) If a city's net tax capacity used in calculating aid under this section has decreased
22.7in any year by more than 25 percent from its net tax capacity in the previous year due to
22.8property becoming tax-exempt Indian land, the city's maximum allowed aid increase
22.9under paragraph (c) shall be increased by an amount equal to (1) the city's tax rate in the
22.10year of the aid calculation, multiplied by (2) the amount of its net tax capacity decrease
22.11resulting from the property becoming tax exempt.
22.12EFFECTIVE DATE.This section is effective for aids payable in calendar year
22.132014 and thereafter.
22.14 Sec. 16. Minnesota Statutes 2012, section 477A.013, is amended by adding a
22.15subdivision to read:
22.16 Subd. 13. Certified aid adjustments. (a) A city that received an aid base increase
22.17under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall
22.18have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids
22.19payable in 2014 through 2018.
22.20(b) A city that received an aid base increase under section 477A.011, subdivision 36,
22.21paragraph (r), shall have its total aid under subdivision 9 increased by an amount equal to
22.22$160,000 for aids payable in 2014 and thereafter.
22.23(c) A city that received a temporary aid increase under Minnesota Statutes 2012,
22.24section 477A.011, subdivision 36, paragraph (o), shall have its total aid under subdivision
22.259 increased by an amount equal to $1,000,000 for aids payable in 2014 only.
22.26 Sec. 17. Minnesota Statutes 2012, section 477A.015, is amended to read:
22.27477A.015 PAYMENT DATES.
22.28The commissioner of revenue shall make the payments of local government aid to
22.29affected taxing authorities in two installments on July 20 and December 26 annually.
22.30When the commissioner of public safety determines that a local government has
22.31suffered financial hardship due to a natural disaster, the commissioner of public safety
22.32shall notify the commissioner of revenue, who shall make payments of aids under sections
23.1477A.011
to
477A.014 , which are otherwise due on December 26, as soon as is practical
23.2after the determination is made but not before July 20.
23.3The commissioner may pay all or part of the payments of aids under sections
23.4477A.011
to
477A.014 , which are due on December 26 at any time after August 15 if a
23.5local government requests such payment as being necessary for meeting its cash flow
23.6needs. For aids payable in 2013 only, a city that is located in an area deemed a disaster
23.7area during the month of April 2013, as defined in section 12A.02, subdivision 5, shall
23.8receive its December 26, 2013 payment with its July 20, 2013 payment.
23.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
23.102013 and thereafter.
23.11 Sec. 18. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
23.12 Subd. 2a. Cities. For aids payable in2013 2014 and thereafter, the total aid paid
23.13under section477A.013, subdivision 9 , is $426,438,012 $507,598,012. The total aid paid
23.14under section 477A.013, subdivision 9, is $509,098,012 for aids payable in 2015. For aids
23.15payable in 2016 and thereafter, the total aid paid under section 477A.013, subdivision
23.169, is $511,598,012.
23.17EFFECTIVE DATE.This section is effective for aids payable in calendar year
23.182014 and thereafter.
23.19 Sec. 19. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read:
23.20 Subd. 2b. Counties. (a) For aids payable in2013 2014 and thereafter, the total aid
23.21payable under section477A.0124, subdivision 3 , is $80,795,000 $100,795,000. Each
23.22calendar year, $500,000 of this appropriation shall be retained by the commissioner
23.23of revenue to make reimbursements to the commissioner of management and budget
23.24for payments made under section611.27 . For calendar year 2004, the amount shall
23.25be in addition to the payments authorized under section
477A.0124, subdivision 1.
23.26For calendar year 2005 and subsequent years, the amount shall be deducted from the
23.27appropriation under this paragraph. The reimbursements shall be to defray the additional
23.28costs associated with court-ordered counsel under section611.27 . Any retained amounts
23.29not used for reimbursement in a year shall be included in the next distribution of county
23.30need aid that is certified to the county auditors for the purpose of property tax reduction
23.31for the next taxes payable year.
23.32 (b) For aids payable in2013 2014 and thereafter, the total aid under section
23.33477A.0124, subdivision 4
, is $84,909,575 $104,909,575. The commissioner of
24.1management and budget shall bill the commissioner of revenue shall transfer to the
24.2commissioner of management and budget $207,000 annually for the cost of preparation
24.3of local impact notes as required by section3.987 , not to exceed $207,000 in fiscal year
24.42004 and thereafter and other local government activities. The commissioner of education
24.5shall bill the commissioner of revenue for the cost of preparation of local impact notes for
24.6school districts as required by section
3.987, not to exceed $7,000 in fiscal year 2004 and
24.7thereafter shall transfer to the commissioner of education $7,000 annually for the cost of
24.8preparation of local impact notes for school districts as required by section 3.987. The
24.9commissioner of revenue shall deduct the amountsbilled transferred under this paragraph
24.10from the appropriation under this paragraph. The amountsdeducted transferred are
24.11appropriated to the commissioner of management and budget and the commissioner of
24.12educationfor the preparation of local impact notes respectively.
24.13EFFECTIVE DATE.This section is effective for aid payable in 2014 and thereafter.
24.14 Sec. 20. Minnesota Statutes 2012, section 477A.03, is amended by adding a
24.15subdivision to read:
24.16 Subd. 2c. Towns. For aids payable in 2014, the total aids paid under section
24.17477A.013, subdivision 1, is limited to $10,000,000. For aids payable in 2015 and
24.18thereafter, the total aids paid under section 477A.013, subdivision 1, is limited to the
24.19amount certified to be paid in the previous year.
24.20EFFECTIVE DATE.This section is effective for aids payable in calendar year
24.212014 and thereafter.
24.22 Sec. 21. [477A.085] DEBT SERVICE AID; CITY OF MINNEAPOLIS.
24.23On or before November 1, 2016, and the first day of each November thereafter, the
24.24commissioner shall pay to the city of Minneapolis an amount equal to 40 percent of the
24.25city's otherwise required levy to pay its general obligation library referendum bonds for
24.26the following calendar year. The levy excludes any amount to pay bonds, other than
24.27refunding bonds, issued after May 1, 2013. An amount sufficient to pay the aid under this
24.28section is appropriated from the general fund to the commissioner of revenue.
24.29 Sec. 22. [477A.10] NATURAL RESOURCES LAND PAYMENTS IN LIEU;
24.30PURPOSE.
24.31The purposes of sections 477A.11 to 477A.14 are:
25.1(1) to compensate local units of government for the loss of tax base from state
25.2ownership of land and the need to provide services for state land;
25.3(2) to address the disproportionate impact of state land ownership on local units of
25.4government with a large proportion of state land; and
25.5(3) to address the need to manage state lands held in trust for the local taxing districts.
25.6 Sec. 23. Minnesota Statutes 2012, section 477A.11, subdivision 3, is amended to read:
25.7 Subd. 3. Acquired natural resources land. "Acquired natural resources land"
25.8means:
25.9(1)any land, other than wildlife management land, presently administered by the
25.10commissioner in which the state acquired by purchase, condemnation, or gift, a fee title
25.11interest in lands which were previously privately owned; and
25.12(2) lands acquired by the state under chapter 84A that are designated as state parks,
25.13state recreation areas, scientific and natural areas, or wildlife management areas.
25.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.152013 and thereafter.
25.16 Sec. 24. Minnesota Statutes 2012, section 477A.11, subdivision 4, is amended to read:
25.17 Subd. 4. Other natural resources land. "Other natural resources land" means
25.18anyother land, other than acquired natural resource land or wildlife management land,
25.19 presently owned in fee title by the state and administered by the commissioner, or
25.20any tax-forfeited land, other than platted lots within a city or those lands described
25.21under subdivision 3, clause (2), which is owned by the state and administered by the
25.22commissioner or by the county in which it is located.
25.23EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.242013 and thereafter.
25.25 Sec. 25. Minnesota Statutes 2012, section 477A.11, is amended by adding a
25.26subdivision to read:
25.27 Subd. 6. Military game refuge. "Military game refuge" means land owned in
25.28fee by another state agency for military purposes and designated as a state game refuge
25.29under section 97A.085.
25.30EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.312013 and thereafter.
26.1 Sec. 26. Minnesota Statutes 2012, section 477A.11, is amended by adding a
26.2subdivision to read:
26.3 Subd. 7. Transportation wetland. "Transportation wetland" means land
26.4administered by the Department of Transportation in which the state acquired, by purchase
26.5from a private owner, a fee title interest in over 500 acres of land within a county to
26.6replace wetland losses from transportation projects.
26.7EFFECTIVE DATE.This section is effective for aids payable in calendar year
26.82013 and thereafter.
26.9 Sec. 27. Minnesota Statutes 2012, section 477A.11, is amended by adding a
26.10subdivision to read:
26.11 Subd. 8. Wildlife management land. "Wildlife management land" means land
26.12administered by the commissioner in which the state acquired, from a private owner by
26.13purchase, condemnation, or gift, a fee interest under the authority granted in chapter 94 or
26.1497A for wildlife management purposes and actually used as a wildlife management area.
26.15EFFECTIVE DATE.This section is effective for aids payable in calendar year
26.162013 and thereafter.
26.17 Sec. 28. Minnesota Statutes 2012, section 477A.12, subdivision 1, is amended to read:
26.18 Subdivision 1. Types of land; payments.(a) As an offset for expenses incurred
26.19by counties and towns in support of natural resources lands, The following amounts are
26.20annually appropriated to the commissioner of natural resources from the general fund for
26.21transfer to the commissioner of revenue. The commissioner of revenue shall pay the
26.22transferred funds to counties as required by sections477A.11 to
477A.14 . The amounts,
26.23based on the acreage as of July 1 of each year prior to the payment year, are:
26.24(1)for acquired natural resources land, $5.133 multiplied by the total number of acres
26.25of acquired natural resources land or, at the county's option three-fourths of one percent of
26.26the appraised value of all acquired natural resources land in the county, whichever is greater;
26.27(2) $5.133, multiplied by the total number of acres of transportation wetland or, at
26.28the county's option, three-fourths of one percent of the appraised value of all acquired
26.29natural resources land in the county, whichever is greater;
26.30(3) three-fourths of one percent of the appraised value of all wildlife management
26.31land in the county;
26.32(4) 50 percent of the dollar amount as determined under clause (1), multiplied by
26.33the number of acres of military refuge land in the county;
27.1$1.283 (5) $1.50, multiplied by the number of acres of county-administered other
27.2natural resources land in the county;
27.3(3) $1.283 (6) $5.133, multiplied by the total number of acres of land utilization
27.4project land in the county;and
27.5(4) 64.2 cents (7) $1.50, multiplied by the number of acres of
27.6commissioner-administered other natural resources landlocated in each the county as of
27.7July 1 of each year prior to the payment year.; and
27.8 (8) without regard to acreage, $300,000 for local assessments under section 84A.55,
27.9subdivision 9.
27.10(b) The amount determined under paragraph (a), clause (1), is payable for land
27.11that is acquired from a private owner and owned by the Department of Transportation
27.12for the purpose of replacing wetland losses caused by transportation projects, but only
27.13if the county contains more than 500 acres of such land at the time the certification is
27.14made under subdivision 2.
27.15EFFECTIVE DATE.This section is effective for aids payable in calendar year
27.162013 and thereafter.
27.17 Sec. 29. Minnesota Statutes 2012, section 477A.12, subdivision 2, is amended to read:
27.18 Subd. 2. Procedure.Lands for which payments in lieu are made pursuant to
27.19section
97A.061, subdivision 3, and Laws 1973, chapter 567, shall not be eligible for
27.20payments under this section. Each county auditor shall certify to the Department of
27.21Natural Resources during July of each year prior to the payment year the number of acres
27.22of county-administered other natural resources land within the county. The Department of
27.23Natural resources may, in addition to the certification of acreage, require descriptive lists
27.24of land so certified. The commissioner of natural resources shall determine and certify to
27.25the commissioner of revenue by March 1 of the payment year:
27.26(1) the number of acres and most recent appraised value of acquired natural
27.27resources land, wildlife management land, and military refuge land within each county;
27.28(2) the number of acres of commissioner-administered natural resources land within
27.29each county;
27.30(3) the number of acres of county-administered other natural resources land within
27.31each county, based on the reports filed by each county auditor with the commissioner
27.32of natural resources; and
27.33(4) the number of acres of land utilization project land within each county.
27.34The commissioner of transportation shall determine and certify to the commissioner
27.35of revenue by March 1 of the payment year the number of acres ofland transportation
28.1wetland and the appraised value of the landdescribed in subdivision 1, paragraph (b), but
28.2only if it exceeds 500 acres in a county.
28.3The commissioner of revenue shall determine the distributions provided for in this
28.4section using the number of acres and appraised values certified by the commissioner of
28.5natural resources and the commissioner of transportation by March 1 of the payment year.
28.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
28.72013 and thereafter.
28.8 Sec. 30. Minnesota Statutes 2012, section 477A.12, subdivision 3, is amended to read:
28.9 Subd. 3. Determination of appraised value. For the purposes of this section, the
28.10appraised value of acquired natural resources land is the purchase pricefor the first five
28.11years after acquisition until the next six-year appraisal required under this subdivision.
28.12The appraised value of acquired natural resources land received as a donation is the value
28.13determined for the commissioner of natural resources by a licensed appraiser, or the
28.14county assessor's estimated market value if no appraisal is done. The appraised value must
28.15be determined by the county assessor everyfive six years after the land is acquired. All
28.16reappraisals shall be done in the same year as county assessors are required to assess
28.17exempt land under section 273.18.
28.18EFFECTIVE DATE.This section is effective for aids payable in calendar year
28.192013 and thereafter.
28.20 Sec. 31. Minnesota Statutes 2012, section 477A.14, subdivision 1, is amended to read:
28.21 Subdivision 1. General distribution. Except as provided insubdivision 2 or in
28.22section
97A.061, subdivision 5
28.23the county shall be deposited in the county general revenue fund to be used to provide
28.24property tax levy reduction. The remainder shall be distributed by the county in the
28.25following priority:
28.26(a) 64.2 cents, for each acre of county-administered other natural resources land shall
28.27be deposited in a resource development fund to be created within the county treasury for
28.28use in resource development, forest management, game and fish habitat improvement, and
28.29recreational development and maintenance of county-administered other natural resources
28.30land. Any county receiving less than $5,000 annually for the resource development fund
28.31may elect to deposit that amount in the county general revenue fund;
28.32(b) from the funds remaining, within 30 days of receipt of the payment to the county,
28.33the county treasurer shall pay each organized township51.3 cents for each acre of acquired
29.1natural resources land and each acre of land described in section
477A.12, subdivision 1,
29.2paragraph (b), and 12.8 cents for each acre of other natural resources land and each acre of
29.3land utilization project land located within its boundaries ten percent of the amount received
29.4under section 477A.12, subdivision 1, clauses (1), (2), and (5) to (7). Payments for natural
29.5resources lands not located in an organized township shall be deposited in the county
29.6general revenue fund. Payments to counties and townships pursuant to this paragraph shall
29.7be used to provide property tax levy reduction, except that of the payments for natural
29.8resources lands not located in an organized township, the county may allocate the amount
29.9determined to be necessary for maintenance of roads in unorganized townships. Provided
29.10that, if the total payment to the county pursuant to section477A.12 is not sufficient to fully
29.11fund the distribution provided for in this clause, the amount available shall be distributed
29.12to each township and the county general revenue fund on a pro rata basis; and
29.13(c) any remaining funds shall be deposited in the county general revenue fund.
29.14Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
29.15excess shall be used to provide property tax levy reduction.
29.16EFFECTIVE DATE.This section is effective for aids payable in calendar year
29.172013 and thereafter.
29.18 Sec. 32. Minnesota Statutes 2012, section 477A.14, is amended by adding a
29.19subdivision to read:
29.20 Subd. 3. Distribution for wildlife management lands and military refuge lands.
29.21(a) The county treasurer shall allocate the payment for wildlife management land and
29.22military game refuge land among the county, towns, and school districts on the same basis
29.23as if the payments were taxes on the land received in the year. Payment of a town's or a
29.24school district's allocation must be made by the county treasurer to the town or school
29.25district within 30 days of receipt of the payment to the county. The county's share of the
29.26payment shall be deposited in the county general revenue fund.
29.27(b) The county treasurer of a county with a population over 39,000, but less than
29.2842,000, in the 1950 federal census shall allocate the payment only among the towns and
29.29school districts on the same basis as if the payments were taxes on the lands received
29.30in the current year.
29.31(c) If a town received a payment in calendar year 2006 or thereafter under this
29.32subdivision, and subsequently incorporated as a city, the city shall continue to receive any
29.33future year's allocations of wildlife land payments that would have been made to the town
29.34had it not incorporated, provided that the payments shall terminate if the governing body
29.35of the city passes an ordinance that prohibits hunting within the boundaries of the city.
30.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.22013 and thereafter.
30.3 Sec. 33. Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008,
30.4chapter 154, article 1, section 4, is amended to read:
30.5 Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
30.6PROPERTY TAX REIMBURSEMENT.
30.7 Subdivision 1. Aid appropriation.$600,000 $1,200,000 is appropriated annually
30.8from the general fund to the commissioner of revenue to be used to make payments to
30.9compensate for the loss of property tax revenue related to the trust conversion application
30.10of the Shooting Star Casino. The commissioner shall pay the county of Mahnomen,
30.11$450,000 $900,000; the city of Mahnomen, $80,000 $160,000; and Independent School
30.12District No. 432, Mahnomen,$70,000 $140,000. The payments shall be made on July 20,
30.13of2008 2013 and each subsequent year.
30.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.152013 and thereafter.
30.16 Sec. 34. INELIGIBILITY; SUSTAINABLE FOREST INCENTIVE PROGRAM.
30.17Lands that no longer qualify as forest land under Minnesota Statutes, section
30.18290C.02, subdivision 6, item (iii), are released from the covenant required under
30.19Minnesota Statutes, section 290C.04.
30.20EFFECTIVE DATE.This section is effective the day following final enactment.
30.21 Sec. 35. REENROLLMENT; SUSTAINABLE FOREST INCENTIVE
30.22PROGRAM.
30.23A person who elected to terminate participation in the sustainable forest incentive
30.24program, as provided in Laws 2011, First Special Session chapter 7, article 6, section 12,
30.25may reenroll lands for which the claimant terminated participation and be eligible for a
30.26payment in October 2013. A person must apply for reenrollment under this section within
30.2760 days after the effective date of this section.
30.28EFFECTIVE DATE.This section is effective the day following final enactment.
30.29 Sec. 36. REPEALER.
31.1(a) Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
31.236, 39, 40, and 41; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
31.3repealed.
31.4(b) Minnesota Statutes 2012, section 97A.061, and Laws 1973, chapter 567, section
31.57, as amended by Laws 1977, chapter 403, section 12, are repealed on July 1, 2013.
31.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
31.72014 and thereafter.
31.10 Section 1. [124D.862] ACHIEVEMENT AND INTEGRATION REVENUE.
31.11 Subdivision 1. Initial achievement and integration revenue. (a) An eligible
31.12district's initial achievement and integration revenue equals the sum of (1) $350 times
31.13the district's adjusted pupil units for that year times the ratio of the district's enrollment
31.14of protected students for the previous school year to total enrollment for the previous
31.15school year and (2) the greater of zero or 66 percent of the difference between the district's
31.16integration revenue for fiscal year 2013 and the district's integration revenue for fiscal
31.17year 2014 under clause (1).
31.18(b) In each year, 0.3 percent of each district's initial achievement and integration
31.19revenue is transferred to the department for the oversight and accountability activities
31.20required under this section and section 124D.861.
31.21 Subd. 2. Incentive revenue. An eligible school district's maximum incentive
31.22revenue equals $10 per adjusted pupil unit. In order to receive this revenue, a district must
31.23be implementing a voluntary plan to reduce racial and economic enrollment disparities
31.24through intradistrict and interdistrict activities that have been approved as a part of the
31.25district's achievement and integration plan.
31.26 Subd. 3. Achievement and integration revenue. Achievement and integration
31.27revenue equals the sum of initial achievement and integration revenue and incentive
31.28revenue.
31.29 Subd. 4. Achievement and integration aid. For fiscal year 2015 and later,
31.30a district's achievement and integration aid equals 70 percent of its achievement and
31.31integration revenue.
31.32 Subd. 5. Achievement and integration levy. A district's achievement and
31.33integration levy equals its achievement and integration revenue times 30 percent. For
31.34Special School District No. 1, Minneapolis; Independent School District No. 625, St.
31.35Paul; and Independent School District No. 709, Duluth, 100 percent of the levy certified
32.1under this subdivision is shifted into the prior calendar year for purposes of sections
32.2123B.75, subdivision 5, and 127A.441.
32.3 Subd. 6. Revenue uses. (a) At least 80 percent of a district's achievement and
32.4integration revenue received under this section must be used for innovative and integrated
32.5learning environments, school enrollment choices, family engagement activities, and other
32.6approved programs providing direct services to students.
32.7(b) Up to 20 percent of the revenue may be used for professional development and
32.8staff development activities and placement services.
32.9(c) No more than ten percent of the total amount of revenue may be spent on
32.10administrative services.
32.11 Subd. 7. Revenue reserved. Integration revenue received under this section must
32.12be reserved and used only for the programs authorized in subdivision 2.
32.13 Subd. 8. Commissioner authority to withhold revenue. (a) The commissioner
32.14must review the results of each district's integration and achievement plan by August 1 at
32.15the end of the third year of implementing the plan and determine if the district met its goals.
32.16(b) If a district met its goals, it may submit a new three-year plan to the commissioner
32.17for review.
32.18(c) If a district has not met its goals, the commissioner must:
32.19(1) develop a district improvement plan and timeline, in consultation with the
32.20affected district, that identifies strategies and practices designed to meet the district's goals
32.21under this section and section 120B.11; and
32.22(2) use up to 20 percent of the district's integration revenue, until the district's goals
32.23are reached, to implement the improvement plan.
32.24EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 and
32.25later. Subdivision 5 is effective for taxes payable in 2014 only.
32.26 Sec. 2. Minnesota Statutes 2012, section 126C.10, subdivision 1, is amended to read:
32.27 Subdivision 1. General education revenue. (a) For fiscal years 2013 and 2014, the
32.28general education revenue for each district equals the sum of the district's basic revenue,
32.29extended time revenue, gifted and talented revenue, small schools revenue, basic skills
32.30revenue,training and experience revenue, secondary sparsity revenue, elementary sparsity
32.31revenue, transportation sparsity revenue, total operating capital revenue, equity revenue,
32.32alternative teacher compensation revenue, and transition revenue.
32.33(b) For fiscal year 2015 and later, the general education revenue for each district
32.34equals the sum of the district's basic revenue, extended time revenue, gifted and
32.35talented revenue, declining enrollment revenue, location equity revenue, small schools
33.1revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity revenue,
33.2transportation sparsity revenue, total operating capital revenue, equity revenue, pension
33.3adjustment revenue, and transition revenue.
33.4 Sec. 3. Minnesota Statutes 2012, section 126C.10, is amended by adding a subdivision
33.5to read:
33.6 Subd. 2d. Location equity revenue. (a) For a school district with any of its area
33.7located within the seven-county metropolitan area, location equity revenue equals $424
33.8times the adjusted pupil units of the district for that school year.
33.9(b) For all other school districts with more than 2,000 pupils in adjusted average
33.10daily membership for the fiscal year ending in the year before the levy is certified, location
33.11equity revenue equals $212 times the adjusted pupil units of the district for that year.
33.12(c) A district's location equity levy equals its location equity revenue times the lesser
33.13of one or the ratio of its referendum market value per resident pupil unit to $510,000. The
33.14location equity revenue levy must be spread on referendum market value.
33.15(d) A district's location equity aid equals its location equity revenue less its location
33.16equity levy, times the ratio of the actual amount levied to the permitted levy.
33.17(e) A school district may elect not to participate in the location equity revenue
33.18program by a board vote taken prior to September 1 of the fiscal year before the fiscal year
33.19for which the decision not to participate becomes effective. The board resolution must
33.20state which fiscal years the district will not participate. A copy of the board resolution
33.21to not participate must be submitted to the commissioner.
33.22EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
33.23and later.
33.24 Sec. 4. Minnesota Statutes 2012, section 126C.13, subdivision 4, is amended to read:
33.25 Subd. 4. General education aid. (a) For fiscal years2007 2013 and later 2014 only,
33.26a district's general education aid is the sum of the following amounts:
33.27 (1) general education revenue, excluding equity revenue, total operating capital
33.28revenue, alternative teacher compensation revenue, and transition revenue;
33.29 (2) operating capital aid under section126C.10, subdivision 13b ;
33.30 (3) equity aid under section126C.10, subdivision 30 ;
33.31 (4) alternative teacher compensation aid under section126C.10, subdivision 36 ;
33.32 (5) transition aid under section126C.10, subdivision 33 ;
33.33 (6) shared time aid under section126C.01, subdivision 7 ;
33.34 (7) referendum aid under section126C.17 , subdivisions 7 and 7a; and
34.1 (8) online learning aid according to section124D.096 .
34.2(b) For fiscal year 2015 and later, a district's general education aid equals:
34.3(1) general education revenue, excluding operating capital revenue, equity revenue,
34.4location equity revenue, and transition revenue, minus the student achievement levy,
34.5multiplied times the ratio of the actual amount of student achievement levy levied to the
34.6permitted student achievement levy; plus
34.7(2) equity aid under section 126C.10, subdivision 30; plus
34.8(3) transition aid under section 126C.10, subdivision 33; plus
34.9(4) shared time aid under section 126C.10, subdivision 7; plus
34.10(5) referendum aid under section 126C.17, subdivisions 7 and 7a;
34.11(6) online learning aid under section 124D.096; plus
34.12(7) location equity aid according to section 126C.10, subdivision 2d, paragraph (d).
34.13 Sec. 5. Minnesota Statutes 2012, section 126C.17, is amended to read:
34.14126C.17 REFERENDUM REVENUE.
34.15 Subdivision 1. Referendum allowance.(a) For fiscal year 2003 and later, a district's
34.16initial referendum revenue allowance equals the sum of the allowance under section
34.17126C.16, subdivision 2, plus any additional allowance per resident marginal cost pupil
34.18unit authorized under subdivision 9 before May 1, 2001, for fiscal year 2002 and later,
34.19plus the referendum conversion allowance approved under subdivision 13, minus $415.
34.20For districts with more than one referendum authority, the reduction must be computed
34.21separately for each authority. The reduction must be applied first to the referendum
34.22conversion allowance and next to the authority with the earliest expiration date. A
34.23district's initial referendum revenue allowance may not be less than zero.
34.24(b) For fiscal year 2003, a district's referendum revenue allowance equals the initial
34.25referendum allowance plus any additional allowance per resident marginal cost pupil unit
34.26authorized under subdivision 9 between April 30, 2001, and December 30, 2001, for
34.27fiscal year 2003 and later.
34.28(c) For fiscal year 2004 and later, a district's referendum revenue allowance equals
34.29the sum of:
34.30(1) the product of (i) the ratio of the resident marginal cost pupil units the district
34.31would have counted for fiscal year 2004 under Minnesota Statutes 2002, section
126C.05,
34.32to the district's resident marginal cost pupil units for fiscal year 2004, times (ii) the initial
34.33referendum allowance plus any additional allowance per resident marginal cost pupil unit
34.34authorized under subdivision 9 between April 30, 2001, and May 30, 2003, for fiscal
34.35year 2003 and later, plus
35.1(2) any additional allowance per resident marginal cost pupil unit authorized under
35.2subdivision 9 after May 30, 2003, for fiscal year 2005 and later.
35.3(a) A district's initial referendum allowance for fiscal year 2015 equals the result of
35.4the following calculations:
35.5(1) multiply the referendum allowance the district would have received for fiscal
35.6year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 1, based on
35.7elections held before July 1, 2013, by the resident marginal cost pupil units the district
35.8would have counted for fiscal year 2015 under Minnesota Statutes 2012, section 126C.05;
35.9(2) add to the result of clause (1) the adjustment the district would have received
35.10under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and
35.11(c), based on elections held before July 1, 2013;
35.12(3) divide the result of clause (2) by the district's adjusted pupil units for fiscal
35.13year 2015; and
35.14(4) if the result of clause (3) is less than zero, set the allowance to zero.
35.15(b) A district's referendum allowance equals the sum of the district's initial
35.16referendum allowance for fiscal year 2015, plus any additional referendum allowance per
35.17adjusted pupil unit authorized after June 30, 2013, minus (i) the location equity revenue
35.18subtraction, and (ii) any allowances expiring in fiscal year 2016 or later, provided that
35.19the allowance may not be less than zero. For a district with more than one referendum
35.20allowance for fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, the
35.21allowance calculated under paragraph (a) must be divided into components such that the
35.22same percentage of the district's allowance expires at the same time as the old allowances
35.23would have expired under Minnesota Statutes 2012, section 126C.17.
35.24(c) For purposes of this subdivision, a district's location equity revenue subtraction
35.25equals $424 for a district receiving location equity revenue under section 126C.10,
35.26subdivision 2d, paragraph (a), $212 for a district receiving location equity revenue under
35.27section 126C.10, subdivision 2d, paragraph (b), and zero for all other school districts.
35.28 Subd. 2. Referendum allowance limit. (a) Notwithstanding subdivision 1, for fiscal
35.29year2007 2015 and later, a district's referendum allowance must not exceed the greater of:
35.30(1) the sum of: (i) a district's referendum allowance for fiscal year 1994 times 1.177
35.31times the annual inflationary increase as calculated under paragraph (b) plus (ii) its
35.32referendum conversion allowance for fiscal year 2003, minus (iii) $215;
35.33(2) the greater of (i): 26 percent of the formula allowance or (ii) $1,294 times the
35.34annual inflationary increase as calculated under paragraph (b); or times the greatest of:
35.35(1) $1,845;
36.1(2) the sum of the referendum revenue the district would have received for fiscal
36.2year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 4, based on
36.3elections held before July 1, 2013, and the adjustment the district would have received
36.4under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and
36.5(c), based on elections held before July 1, 2013, divided by the district's adjusted pupil
36.6units for fiscal year 2015; or
36.7(3) the product of the referendum allowance limit the district would have received
36.8for fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 2, and
36.9the resident marginal cost pupil units the district would have received for fiscal year 2015
36.10under Minnesota Statutes 2012, section 126C.05, subdivision 6, plus the adjustment the
36.11district would have received under Minnesota Statutes 2012, section 127A.47, subdivision
36.127, paragraphs (a), (b), and (c), based on elections held before July 1, 2013, divided by
36.13the district's adjusted pupil units for fiscal year 2015; minus $424 for a district receiving
36.14location equity revenue under section 126C.10, subdivision 2d, paragraph (a), minus
36.15$212 for a district receiving location equity revenue under section 126C.10, subdivision
36.162d, paragraph (b), or
36.17(3) (4) for a newly reorganized district created after July 1, 2006 2013, the referendum
36.18revenue authority for each reorganizing district in the year preceding reorganization divided
36.19by itsresident marginal cost adjusted pupil units for the year preceding reorganization.
36.20(b) For purposes of this subdivision, for fiscal year2005 2016 and later, "inflationary
36.21increase" means one plus the percentage change in the Consumer Price Index for urban
36.22consumers, as prepared by the United States Bureau of Labor Standards, for the current
36.23fiscal year to fiscal year2004 2015. For fiscal years 2009 year 2016 and later, for purposes
36.24of paragraph (a), clause(1) (3), the inflationary increase equals the inflationary increase
36.25for fiscal year 2008 plus one-fourth of the percentage increase in the formula allowance
36.26for that year compared with the formula allowance for fiscal year2008 2015.
36.27 Subd. 3. Sparsity exception. A district that qualifies for sparsity revenue under
36.28section126C.10 is not subject to a referendum allowance limit.
36.29 Subd. 4. Total referendum revenue. The total referendum revenue for each district
36.30equals the district's referendum allowance times theresident marginal cost adjusted pupil
36.31units for the school year.
36.32 Subd. 5. Referendum equalization revenue. (a)For fiscal year 2003 and later,
36.33 A district's referendum equalization revenue equals the sum of the first tier referendum
36.34equalization revenue and the second tier referendum equalization revenue, and the third
36.35tier referendum equalization revenue.
37.1(b) A district's first tier referendum equalization revenue equals the district's first
37.2tier referendum equalization allowance times the district'sresident marginal cost adjusted
37.3 pupil units for that year.
37.4(c)For fiscal year 2006, a district's first tier referendum equalization allowance
37.5equals the lesser of the district's referendum allowance under subdivision 1 or $500. For
37.6fiscal year 2007, a district's first tier referendum equalization allowance equals the lesser
37.7of the district's referendum allowance under subdivision 1 or $600.
37.8For fiscal year 2008 and later, A district's first tier referendum equalization allowance
37.9equals the lesser of the district's referendum allowance under subdivision 1 or$700 $300.
37.10(d) A district's second tier referendum equalization revenue equals the district's
37.11second tier referendum equalization allowance times the district'sresident marginal cost
37.12 adjusted pupil units for that year.
37.13(e)For fiscal year 2006, a district's second tier referendum equalization allowance
37.14equals the lesser of the district's referendum allowance under subdivision 1 or 18.6
37.15percent of the formula allowance, minus the district's first tier referendum equalization
37.16allowance. For fiscal year 2007 and later, A district's second tier referendum equalization
37.17allowance equals the lesser of the district's referendum allowance under subdivision 1
37.18or26 percent of the formula allowance $760, minus the district's first tier referendum
37.19equalization allowance.
37.20(f)Notwithstanding paragraph (e), the second tier referendum allowance for a
37.21district qualifying for secondary sparsity revenue under section
126C.10, subdivision 7, or
37.22elementary sparsity revenue under section
126C.10, subdivision 8, equals the district's
37.23referendum allowance under subdivision 1 minus the district's first tier referendum
37.24equalization allowance. A district's third tier referendum equalization revenue equals the
37.25district's third tier referendum equalization allowance times the district's adjusted pupil
37.26units for that year.
37.27(g) A district's third tier referendum equalization allowance equals the lesser of
37.28the district's referendum allowance under subdivision 1 or 25 percent of the formula
37.29allowance, minus the sum of the district's first tier referendum equalization allowance and
37.30second tier referendum equalization allowance.
37.31(h) Notwithstanding paragraph (g), the third tier referendum allowance for a district
37.32qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or
37.33elementary sparsity revenue under section 126C.10, subdivision 8, equals the district's
37.34referendum allowance under subdivision 1 minus the sum of the district's first tier
37.35referendum equalization allowance and second tier referendum equalization allowance.
38.1 Subd. 6. Referendum equalization levy. (a) For fiscal year 2003 and later,
38.2a district's referendum equalization levy equals the sum of the first tier referendum
38.3equalization levyand the second tier referendum equalization levy, and the third tier
38.4referendum equalization levy.
38.5(b) A district's first tier referendum equalization levy equals the district's first tier
38.6referendum equalization revenue times the lesser of one or the ratio of the district's
38.7referendum market value per residentmarginal cost pupil unit to $476,000 $880,000.
38.8(c) A district's second tier referendum equalization levy equals the district's second
38.9tier referendum equalization revenue times the lesser of one or the ratio of the district's
38.10referendum market value per residentmarginal cost pupil unit to $270,000 $510,000.
38.11(d) A district's third tier referendum equalization levy equals the district's third
38.12tier referendum equalization revenue times the lesser of one or the ratio of the district's
38.13referendum market value per resident pupil unit to $290,000.
38.14 Subd. 7. Referendum equalization aid. (a) A district's referendum equalization aid
38.15equals the difference between its referendum equalization revenue and levy.
38.16(b) If a district's actual levy for firstor, second, or third tier referendum equalization
38.17revenue is less than its maximum levy limit for that tier, aid shall be proportionately
38.18reduced.
38.19(c) Notwithstanding paragraph (a), the referendum equalization aid for a district,
38.20where the referendum equalization aid under paragraph (a) exceeds 90 percent of the
38.21referendum revenue, must not exceed26 25 percent of the formula allowance times the
38.22district'sresident marginal cost adjusted pupil units. A district's referendum levy is
38.23increased by the amount of any reduction in referendum aid under this paragraph.
38.24 Subd. 7a. Referendum tax base replacement aid. For each school district that
38.25had a referendum allowance for fiscal year 2002 exceeding $415, for each separately
38.26authorized referendum levy, the commissioner of revenue, in consultation with the
38.27commissioner of education, shall certify the amount of the referendum levy in taxes
38.28payable year 2001 attributable to the portion of the referendum allowance exceeding $415
38.29levied against property classified as class 2, noncommercial 4c(1), or 4c(4), under section
38.30273.13
, excluding the portion of the tax paid by the portion of class 2a property consisting
38.31of the house, garage, and surrounding one acre of land. The resulting amount must be
38.32used to reduce the district's referendum levy amount otherwise determined, and must be
38.33paid to the district each year that the referendum authority remains in effect, is renewed,
38.34or new referendum authority is approved. The aid payable under this subdivision must
38.35be subtracted from the district's referendum equalization aid under subdivision 7. The
38.36referendum equalization aid after the subtraction must not be less than zero.
39.1 Subd. 7b. Referendum aid guarantee. (a) Notwithstanding subdivision 7, a
39.2district's referendum equalization aid for fiscal year 2015 must not be less than the sum
39.3of the referendum equalization aid the district would have received for fiscal year 2015
39.4under Minnesota Statutes 2012, section 126C.17, subdivision 7, and the adjustment the
39.5district would have received under Minnesota Statutes 2012, section 127A.47, subdivision
39.67, paragraphs (a), (b), and (c).
39.7(b) Notwithstanding subdivision 7, referendum equalization aid for fiscal year 2016
39.8and later, for a district qualifying for additional aid under paragraph (a) for fiscal year
39.92015, must not be less than the product of (1) the district's referendum equalization aid
39.10for fiscal year 2015, times (2) the lesser of one or the ratio of the district's referendum
39.11revenue for that school year to the district's referendum revenue for fiscal year 2015, times
39.12(3) the lesser of one or the ratio of the district's referendum market value used for fiscal
39.13year 2015 referendum equalization calculations to the district's referendum market value
39.14used for that year's referendum equalization calculations.
39.15 Subd. 8. Unequalized referendum levy. Each year, a district may levy an amount
39.16equal to the difference between its total referendum revenue according to subdivision 4
39.17and its referendum equalization revenue according to subdivision 5.
39.18 Subd. 9. Referendum revenue. (a) The revenue authorized by section126C.10,
39.19subdivision 1 , may be increased in the amount approved by the voters of the district
39.20at a referendum called for the purpose. The referendum may be called by the board.
39.21The referendum must be conducted one or two calendar years before the increased levy
39.22authority, if approved, first becomes payable. Only one election to approve an increase
39.23may be held in a calendar year. Unless the referendum is conducted by mail under
39.24subdivision 11, paragraph (a), the referendum must be held on the first Tuesday after the
39.25first Monday in November. The ballot must state the maximum amount of the increased
39.26revenue perresident marginal cost adjusted pupil unit. The ballot may state a schedule,
39.27determined by the board, of increased revenue perresident marginal cost adjusted pupil
39.28unit that differs from year to year over the number of years for which the increased revenue
39.29is authorized or may state that the amount shall increase annually by the rate of inflation.
39.30For this purpose, the rate of inflation shall be the annual inflationary increase calculated
39.31under subdivision 2, paragraph (b). The ballot may state that existing referendum levy
39.32authority is expiring. In this case, the ballot may also compare the proposed levy authority
39.33to the existing expiring levy authority, and express the proposed increase as the amount, if
39.34any, over the expiring referendum levy authority. The ballot must designate the specific
39.35number of years, not to exceed ten, for which the referendum authorization applies. The
39.36ballot, including a ballot on the question to revoke or reduce the increased revenue amount
40.1under paragraph (c), must abbreviate the term "perresident marginal cost adjusted pupil
40.2unit" as "per pupil." The notice required under section275.60 may be modified to read, in
40.3cases of renewing existing levies at the same amount per pupil as in the previous year:
40.4"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING
40.5TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS
40.6SCHEDULED TO EXPIRE."
40.7 The ballot may contain a textual portion with the information required in this
40.8subdivision and a question stating substantially the following:
40.9 "Shall the increase in the revenue proposed by (petition to) the board of .........,
40.10School District No. .., be approved?"
40.11 If approved, an amount equal to the approved revenue perresident marginal cost
40.12 adjusted pupil unit times theresident marginal cost adjusted pupil units for the school
40.13year beginning in the year after the levy is certified shall be authorized for certification
40.14for the number of years approved, if applicable, or until revoked or reduced by the voters
40.15of the district at a subsequent referendum.
40.16 (b) The board must prepare and deliver by first class mail at least 15 days but no more
40.17than 30 days before the day of the referendum to each taxpayer a notice of the referendum
40.18and the proposed revenue increase. The board need not mail more than one notice to any
40.19taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be
40.20those shown to be owners on the records of the county auditor or, in any county where
40.21tax statements are mailed by the county treasurer, on the records of the county treasurer.
40.22Every property owner whose name does not appear on the records of the county auditor
40.23or the county treasurer is deemed to have waived this mailed notice unless the owner
40.24has requested in writing that the county auditor or county treasurer, as the case may be,
40.25include the name on the records for this purpose. The notice must project the anticipated
40.26amount of tax increase in annual dollars for typical residential homesteads, agricultural
40.27homesteads, apartments, and commercial-industrial property within the school district.
40.28 The notice for a referendum may state that an existing referendum levy is expiring
40.29and project the anticipated amount of increase over the existing referendum levy in
40.30the first year, if any, in annual dollars for typical residential homesteads, agricultural
40.31homesteads, apartments, and commercial-industrial property within the district.
40.32 The notice must include the following statement: "Passage of this referendum will
40.33result in an increase in your property taxes." However, in cases of renewing existing levies,
40.34the notice may include the following statement: "Passage of this referendum extends an
40.35existing operating referendum at the same amount per pupil as in the previous year."
41.1 (c) A referendum on the question of revoking or reducing the increased revenue
41.2amount authorized pursuant to paragraph (a) may be called by the board. A referendum to
41.3revoke or reduce the revenue amount must state the amount per resident marginal cost
41.4pupil unit by which the authority is to be reduced. Revenue authority approved by the
41.5voters of the district pursuant to paragraph (a) must be available to the school district at
41.6least once before it is subject to a referendum on its revocation or reduction for subsequent
41.7years. Only one revocation or reduction referendum may be held to revoke or reduce
41.8referendum revenue for any specific year and for years thereafter.
41.9 (d) The approval of 50 percent plus one of those voting on the question is required to
41.10pass a referendum authorized by this subdivision.
41.11 (e) At least 15 days before the day of the referendum, the district must submit a
41.12copy of the notice required under paragraph (b) to the commissioner and to the county
41.13auditor of each county in which the district is located. Within 15 days after the results
41.14of the referendum have been certified by the board, or in the case of a recount, the
41.15certification of the results of the recount by the canvassing board, the district must notify
41.16the commissioner of the results of the referendum.
41.17 Subd. 9a. Board-approved referendum allowance. Notwithstanding subdivision
41.189, a school district may convert up to $300 per adjusted pupil unit of referendum authority
41.19from voter approved to board approved by a board vote. A district with less than $300
41.20per adjusted pupil unit of referendum authority may authorize new referendum authority
41.21up to the difference between $300 per adjusted pupil unit and the district's referendum
41.22authority. The board may authorize this levy for up to five years and may subsequently
41.23reauthorize that authority in increments of up to five years.
41.24 Subd. 10. School referendum levy; market value. A school referendum levy must
41.25be levied against the referendum market value of all taxable property as defined in section
41.26126C.01, subdivision 3
. Any referendum levy amount subject to the requirements of this
41.27subdivision must be certified separately to the county auditor under section275.07 .
41.28 Subd. 11. Referendum date. (a) Except for a referendum held under paragraph (b),
41.29any referendum under this section held on a day other than the first Tuesday after the first
41.30Monday in November must be conducted by mail in accordance with section204B.46 .
41.31Notwithstanding subdivision 9, paragraph (b), to the contrary, in the case of a referendum
41.32conducted by mail under this paragraph, the notice required by subdivision 9, paragraph (b),
41.33must be prepared and delivered by first-class mail at least 20 days before the referendum.
41.34(b) In addition to the referenda allowed in subdivision 9, clause (a), the commissioner
41.35may grant authority to a district to hold a referendum on a different day if the district is in
42.1statutory operating debt and has an approved plan or has received an extension from the
42.2department to file a plan to eliminate the statutory operating debt.
42.3(c) The commissioner must approve, deny, or modify each district's request for a
42.4referendum levy on a different day within 60 days of receiving the request from a district.
42.5 Subd. 13. Referendum conversion allowance. A school district that received
42.6supplemental or transition revenue in fiscal year 2002 may convert its supplemental
42.7revenue conversion allowance and transition revenue conversion allowance to additional
42.8referendum allowance under subdivision 1 for fiscal year 2003 and thereafter. A majority
42.9of the school board must approve the conversion at a public meeting before November 1,
42.102001. For a district with other referendum authority, the referendum conversion allowance
42.11approved by the board continues until the portion of the district's other referendum
42.12authority with the earliest expiration date after June 30, 2006, expires. For a district
42.13with no other referendum authority, the referendum conversion allowance approved by
42.14the board continues until June 30, 2012.
42.15EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
42.16and later.
42.17 Sec. 6. OPERATING REFERENDUM FREEZE, FISCAL YEAR 2015.
42.18(a) Notwithstanding Minnesota Statutes, section 126C.17, subdivision 9, a school
42.19district may not authorize an increase to its operating referendum in fiscal year 2015. A
42.20school district may reauthorize an operating referendum that is expiring in fiscal year 2015.
42.21(b) Paragraph (a) shall not apply to a district if, prior to June 30, 2013, the board
42.22adopted a resolution to conduct a referendum in 2013.
42.23(c) Paragraph (a) shall not apply to a district if the district did not authorize an
42.24operating referendum in fiscal year 2014.
42.25(d) Paragraph (a) shall not apply to a district if the district is in statutory operating
42.26debt under Minnesota Statutes, section 123B.81, as of June 30, 2013, and has an approved
42.27plan with the Department of Education.
42.30 Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to
42.31read:
42.32 Subd. 3. Evaluation and report. The Board of Water and Soil Resources shall
42.33evaluate performance, financial, and activity information for each local water management
42.34entity. The board shall evaluate the entities' progress in accomplishing their adopted plans
43.1on a regular basis as determined by the board based on budget and operations of the local
43.2water management entity, but not less than once everyfive ten years. The board shall
43.3maintain a summary of local water management entity performance on the board's Web site.
43.4Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis
43.5of local water management entity performance to the chairs of the house of representatives
43.6and senate committees having jurisdiction over environment and natural resources policy.
43.7 Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read:
43.8103B.335 TAX LEVY AUTHORITY.
43.9 Subdivision 1. Local water planning and management. The governing body of
43.10any county, municipality, or township may levy a tax in an amount required to implement
43.11sections103B.301 to
103B.355 or a comprehensive watershed management plan as
43.12defined in section 103B.3363.
43.13 Subd. 2. Priority programs; conservation and watershed districts. A county
43.14may levy amounts necessary to pay the reasonableincreased costs to soil and water
43.15conservation districts and watershed districts of administering and implementing priority
43.16programs identified in an approved and adopted plan or a comprehensive watershed
43.17management plan as defined in section 103B.3363.
43.18 Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read:
43.19 Subd. 5. Financial assistance. A base grant may be awarded to a county that
43.20provides a match utilizing a water implementation tax or other local source. A water
43.21implementation tax that a county intends to use as a match to the base grant must be
43.22levied at a rate sufficient to generate a minimum amount determined by the board.
43.23The board may award performance-based grants to local units of government that are
43.24responsible for implementing elements of applicable portions of watershed management
43.25plans, comprehensive plans, local water management plans, or comprehensive watershed
43.26management plans, developed or amended, adopted and approved, according to chapter
43.27103B, 103C, or 103D. Upon request by a local government unit, the board may also
43.28award performance-based grants to local units of government to carry out TMDL
43.29implementation plans as provided in chapter 114D, if the TMDL implementation plan has
43.30been incorporated into the local water management plan according to the procedures for
43.31approving comprehensive plans, watershed management plans, local water management
43.32plans, or comprehensive watershed management plans under chapter 103B, 103C, or
43.33103D, or if the TMDL implementation plan has undergone a public review process.
43.34Notwithstanding section16A.41 , the board may award performance-based grants on an
44.1advanced basis. The fee authorized in section 40A.152 may be used as a local match
44.2or as a supplement to state funding to accomplish implementation of comprehensive
44.3plans, watershed management plans, local water management plans, or comprehensive
44.4watershed management plans under chapter 103B, 103C, or 103D.
44.5 Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read:
44.6 Subd. 4. Cost-sharing funds. (a) The state board shall allocateat least 70 percent
44.7of cost-sharing funds to areas with high priority erosion, sedimentation, or water quality
44.8problems or water quantity problems due to altered hydrology. The areas must be selected
44.9based onthe statewide priorities established by the state board.
44.10 (b) The allocated funds must be used for conservation practices for high priority
44.11problems identified in the comprehensive and annual work plans of the districts, for
44.12the technical assistance portion of the grant funds to leverage federal or other nonstate
44.13funds, or to address high-priority needs identified in local water management plans or
44.14comprehensive watershed management plans.
44.15(b) The remaining cost-sharing funds may be allocated to districts as follows:
44.16(1) for technical and administrative assistance, not more than 20 percent of the
44.17funds; and
44.18(2) for conservation practices for lower priority erosion, sedimentation, or water
44.19quality problems.
44.20 Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read:
44.21 Subdivision 1. Authority. Each statutory or home rule charter city, town, or
44.22county that has planning and zoning authority under sections366.10 to
366.19 ,
394.21
44.23to394.37 , or
462.351 to
462.365 is encouraged to adopt a soil loss ordinance. The soil
44.24loss ordinance must use the soil loss tolerance for each soil series described in the United
44.25StatesSoil Natural Resources Conservation Service Field Office Technical Guide, or
44.26another method approved by the Board of Water and Soil Resources, to determine the
44.27soil loss limits, but the soil loss limits must be attainable by the best practicable soil
44.28conservation practice. Ordinances adopted by local governmentswithin the metropolitan
44.29area defined in section
473.121local water management plans
44.30adopted under section
103B.235
44.31watershed management plan developed or amended, adopted, and approved according
44.32to chapter 103B, 103C, or 103D.
44.33 Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read:
45.1 Subd. 9. Manufactured homes and park trailers. Manufactured homes and park
45.2trailers shall not be taxed as motor vehicles using the public streets and highways and shall
45.3be exempt from the motor vehicle tax provisions of this chapter. Except as provided in
45.4section273.125 , manufactured homes and park trailers shall be taxed as personal property.
45.5The provisions of Minnesota Statutes 1957, section272.02 or any other act providing for
45.6tax exemption shall be inapplicable to manufactured homes and park trailers, except
45.7such manufactured homes as are held by a licensed dealer or limited dealer, as defined
45.8in section 327B.04, and exempted as inventory under subdivision 9a. Travel trailers not
45.9conspicuously displaying current registration plates on the property tax assessment date
45.10shall be taxed as manufactured homes if occupied as human dwelling places.
45.11EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
45.12thereafter.
45.13 Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision
45.14to read:
45.15 Subd. 9a. Manufactured home as dealer inventory. Manufactured homes as
45.16defined in section 327.31, subdivision 6, shall be considered as dealer inventory, on the
45.17January 2 assessment date, if the home is:
45.18(1) listed as inventory and held by a licensed or limited dealer;
45.19(2) unoccupied and not available for rent;
45.20(3) connected or not connected to utilities when located in a manufactured home
45.21park; and
45.22(4) connected or not connected to utilities when located at a dealer's sales center.
45.23The exemption under this subdivision is allowable for up to five assessment years after
45.24the date a home is initially claimed as dealer inventory.
45.25EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
45.26thereafter.
45.27 Sec. 8. Minnesota Statutes 2012, section 270.41, subdivision 3, is amended to read:
45.28 Subd. 3.Licenses; refusal or revocation Assessor sanctions; refusal to license.
45.29 (a) The board may (i) refuse to grant or renew, or may suspend or revoke, a license
45.30of an applicant or licensee, or (ii) censure, warn, or fine any licensed assessor, or any
45.31other person employed by an assessment jurisdiction or contracting with an assessment
45.32jurisdiction for the purpose of valuing or classifying property for property tax purposes,
45.33 for any of the following causes or acts:
46.1 (1) failure to complete required training;
46.2 (2) inefficiency or neglect of duty;
46.3 (3) failure to comply with the Code of Conduct and Ethics for Licensed Minnesota
46.4Assessors adopted by the board pursuant to Laws 2005, First Special Session chapter 3,
46.5article 1, section 38;
46.6 (4) conviction of a crime involving moral turpitude;or
46.7(5) failure to faithfully and fully perform his or her duties through malfeasance,
46.8misfeasance, or nonfeasance; or
46.9(5) (6) any other cause or act that in the board's opinion warrants a refusal to issue
46.10or suspension or revocation of a license or the imposition of a sanction provided under
46.11this subdivision.
46.12(b) When appropriate for the level of infraction, a written warning must be given
46.13to assessors who have no prior identified infractions. The warning must identify the
46.14infraction and, as appropriate, detail future expectations of performance and behavior.
46.15Fines must not exceed $1,000 for the first occurrence and must not exceed $3,000 for each
46.16occurrence thereafter, and suspensions must not exceed one year for each occurrence,
46.17depending in each case upon the severity of the infraction and the level of negligence or
46.18intent. An action by the board to impose a sanction is subject to review in a contested
46.19case hearing under chapter 14.
46.20EFFECTIVE DATE.This section is effective beginning July 1, 2013.
46.21 Sec. 9. Minnesota Statutes 2012, section 270.41, is amended by adding a subdivision
46.22to read:
46.23 Subd. 3a. Report on disciplinary actions. Each odd-numbered year, the board
46.24must publish a report detailing the number and types of disciplinary actions recommended
46.25by the commissioner of revenue under section 273.0645, subdivision 2, and the disposition
46.26of those recommendations by the board. The report must be presented to the house of
46.27representatives and senate committees with jurisdiction over property taxes by February 1
46.28of each odd-numbered year.
46.29EFFECTIVE DATE.This section is effective beginning July 1, 2013.
46.30 Sec. 10. Minnesota Statutes 2012, section 270.45, is amended to read:
46.31270.45 DISPOSITION OF FEES AND FINES.
47.1 All fees and fines so established and collected shall be paid to the commissioner of
47.2management and budget for deposit in the general fund. The expenses of carrying out the
47.3provisions of sections270.41 to
270.50 shall be paid from appropriations made to the board.
47.4EFFECTIVE DATE.This section is effective beginning July 1, 2013.
47.5 Sec. 11. [270C.9901] ASSESSOR ACCREDITATION.
47.6Every individual who appraises or physically inspects real property for the purpose
47.7of determining its valuation or classification for property tax purposes must obtain
47.8licensure as an accredited Minnesota assessor from the State Board of Assessors by July 1,
47.92019, or within four years of that person having become licensed as a certified Minnesota
47.10assessor, whichever is later.
47.11EFFECTIVE DATE.This section is effective beginning January 1, 2014.
47.12 Sec. 12. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
47.13 Subd. 39. Economic development; public purpose. The holding of property by a
47.14political subdivision of the state for later resale for economic development purposes
47.15shall be considered a public purpose in accordance with subdivision 8 for a period not to
47.16exceed nine years, except that:
47.17(1) for property located in a city of5,000 20,000 population or under that is located
47.18outside of the metropolitan area as defined in section473.121, subdivision 2 , the period
47.19must not exceed 15 years.; and
47.20(2) for any property that was acquired on or after January 1, 2000, and on or before
47.21December 31, 2010, and is located in a city, the period must not exceed 15 years.
47.22The holding of property by a political subdivision of the state for later resale (1)
47.23which is purchased or held for housing purposes, or (2) which meets the conditions
47.24described in section469.174, subdivision 10 , shall be considered a public purpose in
47.25accordance with subdivision 8.
47.26The governing body of the political subdivision which acquires property which is
47.27subject to this subdivision shall after the purchase of the property certify to the city or
47.28county assessor whether the property is held for economic development purposes or
47.29housing purposes, or whether it meets the conditions of section469.174, subdivision 10 .
47.30If the property is acquired for economic development purposes and buildings or other
47.31improvements are constructed after acquisition of the property, and if more than one-half
47.32of the floor space of the buildings or improvements which is available for lease to or use
47.33by a private individual, corporation, or other entity is leased to or otherwise used by
48.1a private individual, corporation, or other entity the provisions of this subdivision shall
48.2not apply to the property. This subdivision shall not create an exemption from section
48.3272.01, subdivision 2
;
272.68 ;
273.19 ; or
469.040, subdivision 3 ; or other provision of
48.4law providing for the taxation of or for payments in lieu of taxes for publicly held property
48.5which is leased, loaned, or otherwise made available and used by a private person.
48.6EFFECTIVE DATE.This section is effective for assessment year 2013 and
48.7thereafter and for taxes payable in 2014 and thereafter.
48.8 Sec. 13. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
48.9to read:
48.10 Subd. 98. Certain property owned by an Indian tribe. (a) Property is exempt that:
48.11(1) was classified as 3a under section 273.13, subdivision 24, for taxes payable
48.12in 2013;
48.13(2) is located in a city of the first class with a population greater than 300,000 as of
48.14the 2010 federal census;
48.15(3) was on January 2, 2012, and is for the current assessment owned by a federally
48.16recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota;
48.17and
48.18(4) is used exclusively for tribal purposes or institutions of purely public charity as
48.19defined in subdivision 7.
48.20(b) For purposes of this subdivision, a "tribal purpose" means a public purpose
48.21as defined in subdivision 8 and includes noncommercial tribal government activities.
48.22Property that qualifies for the exemption under this subdivision is limited to no more than
48.23two contiguous parcels and structures that do not exceed in the aggregate 20,000 square
48.24feet. Property acquired for single-family housing, market-rate apartments, agriculture, or
48.25forestry does not qualify for this exemption. The exemption created by this subdivision
48.26expires with taxes payable in 2024.
48.27EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.
48.28 Sec. 14. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
48.29to read:
48.30 Subd. 99. Electric generation facility; personal property. (a) Notwithstanding
48.31subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and
48.32other personal property which is part of an electric generation facility that exceeds five
49.1megawatts of installed capacity and meets the requirements of this subdivision is exempt.
49.2At the time of construction, the facility must be:
49.3 (1) designed to utilize natural gas as a primary fuel;
49.4 (2) owned and operated by a municipal power agency as defined in section 453.52,
49.5subdivision 8;
49.6 (3) designed to utilize reciprocating engines paired with generators to produce
49.7electrical power;
49.8 (4) located within the service territory of a municipal power agency's electrical
49.9municipal utility that serves load exclusively in a metropolitan county as defined in
49.10section 473.121, subdivision 4; and
49.11(5) designed to connect directly with a municipality's substation.
49.12 (b) Construction of the facility must be commenced after June 1, 2013, and before
49.13June 1, 2017. Property eligible for this exemption does not include electric transmission
49.14lines and interconnections or gas pipelines and interconnections appurtenant to the
49.15property or the facility.
49.16EFFECTIVE DATE.This section is effective for assessment year 2013, taxes
49.17payable in 2014, and thereafter.
49.18 Sec. 15. Minnesota Statutes 2012, section 273.061, subdivision 2, is amended to read:
49.19 Subd. 2. Term; vacancy. (a) The terms of county assessors appointed under this
49.20section shall be four years. A new term shall begin on January 1 of every fourth year
49.21after 1973. When any vacancy in the office occurs, the board of county commissioners,
49.22within 90 days thereafter, shall fill the same by appointment for the remainder of the term,
49.23following the procedure prescribed in subdivision 1. The term of the county assessor
49.24may be terminated by the board of county commissioners at any time, on charges of
49.25malfeasance, misfeasance, or nonfeasance by the commissioner of revenue. If the board
49.26of county commissioners does not intend to reappoint a county assessor who has been
49.27certified by the state Board of Assessors, the board shall present written notice to the
49.28county assessor not later than 90 days prior to the termination of the assessor's term, that it
49.29does not intend to reappoint the assessor. If written notice is not timely made, the county
49.30assessor will automatically be reappointed by the board of county commissioners.
49.31The commissioner of revenue may recommend to the state Board of Assessors the
49.32nonrenewal, suspension, or revocation of an assessor's license as provided in sections
49.33270.41 to
270.50.
49.34(b) In the event of a vacancy in the office of county assessor, through death,
49.35resignation or other reasons, the deputy (or chief deputy, if more than one) shall perform
50.1the functions of the office. If there is no deputy, the county auditor shall designate a person
50.2to perform the duties of the office until an appointment is made as provided in clause (a).
50.3Such person shall perform the duties of the office for a period not exceeding 90 days
50.4during which the county board must appoint a county assessor. Such 90-day period may,
50.5however, be extended by written approval of the commissioner of revenue.
50.6(c) In the case of the first appointment under paragraph (a) of a county assessor who
50.7is accredited but who does not have senior accreditation, an approval of the appointment
50.8by the commissioner shall be provisional, provided that a county assessor appointed to
50.9a provisional term under this paragraph must reapply to the commissioner at the end of
50.10the provisional term. A provisional term may not exceed two years. The commissioner
50.11shall not approve the appointment for the remainder of the four-year term unless the
50.12assessor has obtained senior accreditation.
50.13EFFECTIVE DATE.This section is effective beginning July 1, 2013.
50.14 Sec. 16. Minnesota Statutes 2012, section 273.0645, is amended to read:
50.15273.0645 COMMISSIONER REVIEW OFLOCAL ASSESSMENT
50.16PRACTICES.
50.17 Subdivision 1. Local assessment practices. The commissioner of revenue must
50.18review the assessment practices in a taxing jurisdiction if requested in writing by a
50.19qualifying number of property owners in that taxing jurisdiction. The request must be
50.20signed by the greater of:
50.21 (1) ten percent of the registered voters who voted in the last general election; or
50.22 (2) five property owners.
50.23 The request must identify the city, town, or county and describe why a review is
50.24sought for that taxing jurisdiction. The commissioner must conduct the review in a
50.25reasonable amount of time and report the findings to the county board of the affected
50.26county, to the affected city council or town board, if the review is for a specific city or
50.27town, and to the property owner designated in the request as the person to receive the
50.28report on behalf of all the property owners who signed the request. The commissioner
50.29must also provide the report electronically to all property owners who signed the request
50.30and provided an e-mail address in order to receive the report electronically.
50.31 Subd. 2. Nonfeasance, misfeasance, and malfeasance. County assessors may file a
50.32written complaint with the commissioner of revenue detailing allegations of nonfeasance,
50.33misfeasance, or malfeasance by a local assessor. After receiving a complaint from a county
50.34assessor, the commissioner must complete an investigation and recommend an appropriate
51.1action to the State Board of Assessors. The commissioner is not required to have a written
51.2complaint from a county assessor in order to conduct an investigation and recommend an
51.3action to the board. Active investigative data relating to the investigation of complaints
51.4against an assessor by the commissioner of revenue are subject to section 13.39.
51.5EFFECTIVE DATE.This section is effective July 1, 2013.
51.6 Sec. 17. Minnesota Statutes 2012, section 273.117, is amended to read:
51.7273.117 CONSERVATION PROPERTY TAX VALUATION.
51.8 The value of real property which is subject to a conservation restriction or easement
51.9may be adjusted shall not be reduced by the assessor if:
51.10 (a) the restriction or easement is for a conservation purpose as defined in section
51.1184.64, subdivision 2
, and is recorded on the property; and
51.12 (b) the property is being used in accordance with the terms of the conservation
51.13restriction or easement.
51.14This section does not apply to (1) conservation restrictions or easements covering
51.15riparian buffers along lakes, rivers, and streams that are used for water quantity or quality
51.16control; or (2) to easements in a county that has adopted, by referendum, a program to
51.17protect farmland and natural areas since 1999.
51.18EFFECTIVE DATE.This section is effective for assessment year 2013 and
51.19thereafter, and for taxes payable in 2014 and thereafter.
51.20 Sec. 18. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
51.21 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
51.22units and used or held for use by the owner or by the tenants or lessees of the owner
51.23as a residence for rental periods of 30 days or more, excluding property qualifying for
51.24class 4d. Class 4a also includes hospitals licensed under sections144.50 to
144.56 , other
51.25than hospitals exempt under section272.02 , and contiguous property used for hospital
51.26purposes, without regard to whether the property has been platted or subdivided. The
51.27market value of class 4a property has a class rate of 1.25 percent.
51.28 (b) Class 4b includes:
51.29 (1) residential real estate containing less than four units that does not qualify as class
51.304bb, other than seasonal residential recreational property;
51.31 (2) manufactured homes not classified under any other provision;
51.32 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
51.33farm classified under subdivision 23, paragraph (b) containing two or three units; and
52.1 (4) unimproved property that is classified residential as determined under subdivision
52.233.
52.3 The market value of class 4b property has a class rate of 1.25 percent.
52.4 (c) Class 4bb includes:
52.5(1) nonhomestead residential real estate containing one unit, other than seasonal
52.6residential recreational property; and
52.7(2) a single family dwelling, garage, and surrounding one acre of property on a
52.8nonhomestead farm classified under subdivision 23, paragraph (b).
52.9 Class 4bb property has the same class rates as class 1a property under subdivision 22.
52.10 Property that has been classified as seasonal residential recreational property at
52.11any time during which it has been owned by the current owner or spouse of the current
52.12owner does not qualify for class 4bb.
52.13 (d) Class 4c property includes:
52.14 (1) except as provided in subdivision 22, paragraph (c), real and personal property
52.15devoted to commercial temporary and seasonal residential occupancy for recreation
52.16purposes, for not more than 250 days in the year preceding the year of assessment. For
52.17purposes of this clause, property is devoted to a commercial purpose on a specific day
52.18if any portion of the property is used for residential occupancy, and a fee is charged for
52.19residential occupancy. Class 4c property under this clause must contain three or more
52.20rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
52.21or individual camping site equipped with water and electrical hookups for recreational
52.22vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
52.234c under this clause is also class 4c under this clause regardless of the term of the rental
52.24agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
52.25property to be classified under this clause, either (i) the business located on the property
52.26must provide recreational activities, at least 40 percent of the annual gross lodging receipts
52.27related to the property must be from business conducted during 90 consecutive days,
52.28and either (A) at least 60 percent of all paid bookings by lodging guests during the year
52.29must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
52.30annual gross receipts must be from charges for providing recreational activities, or (ii) the
52.31business must contain 20 or fewer rental units, and must be located in a township or a city
52.32with a population of 2,500 or less located outside the metropolitan area, as defined under
52.33section473.121 , subdivision 2, that contains a portion of a state trail administered by the
52.34Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
52.35more nights shall be counted as two bookings. Class 4c property also includes commercial
52.36use real property used exclusively for recreational purposes in conjunction with other class
53.14c property classified under this clause and devoted to temporary and seasonal residential
53.2occupancy for recreational purposes, up to a total of two acres, provided the property is
53.3not devoted to commercial recreational use for more than 250 days in the year preceding
53.4the year of assessment and is located within two miles of the class 4c property with which
53.5it is used. In order for a property to qualify for classification under this clause, the owner
53.6must submit a declaration to the assessor designating the cabins or units occupied for 250
53.7days or less in the year preceding the year of assessment by January 15 of the assessment
53.8year. Those cabins or units and a proportionate share of the land on which they are located
53.9must be designated class 4c under this clause as otherwise provided. The remainder of the
53.10cabins or units and a proportionate share of the land on which they are located will be
53.11designated as class 3a. The owner of property desiring designation as class 4c property
53.12under this clause must provide guest registers or other records demonstrating that the units
53.13for which class 4c designation is sought were not occupied for more than 250 days in the
53.14year preceding the assessment if so requested. The portion of a property operated as a
53.15(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
53.16nonresidential facility operated on a commercial basis not directly related to temporary and
53.17seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
53.18the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
53.19boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
53.20marina services, launch services, or guide services; or selling bait and fishing tackle;
53.21 (2) qualified property used as a golf course if:
53.22 (i) it is open to the public on a daily fee basis. It may charge membership fees or
53.23dues, but a membership fee may not be required in order to use the property for golfing,
53.24and its green fees for golfing must be comparable to green fees typically charged by
53.25municipal courses; and
53.26 (ii) it meets the requirements of section273.112, subdivision 3 , paragraph (d).
53.27 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
53.28with the golf course is classified as class 3a property;
53.29 (3) real property up to a maximum of three acres of land owned and used by a
53.30nonprofit community service oriented organization and not used for residential purposes
53.31on either a temporary or permanent basis, provided that:
53.32 (i) the property is not used for a revenue-producing activity for more than six days
53.33in the calendar year preceding the year of assessment; or
53.34 (ii) the organization makes annual charitable contributions and donations at least
53.35equal to the property's previous year's property taxes and the property is allowed to be
54.1used for public and community meetings or events for no charge, as appropriate to the
54.2size of the facility.
54.3 For purposes of this clause:
54.4 (A) "charitable contributions and donations" has the same meaning as lawful
54.5gambling purposes under section349.12, subdivision 25 , excluding those purposes
54.6relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
54.7 (B) "property taxes" excludes the state general tax;
54.8 (C) a "nonprofit community service oriented organization" means any corporation,
54.9society, association, foundation, or institution organized and operated exclusively for
54.10charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
54.11federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
54.12Revenue Code; and
54.13 (D) "revenue-producing activities" shall include but not be limited to property or that
54.14portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
54.15liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
54.16alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
54.17insurance business, or office or other space leased or rented to a lessee who conducts a
54.18for-profit enterprise on the premises.
54.19 Any portion of the property not qualifying under either item (i) or (ii) is class 3a.
54.20The use of the property for social events open exclusively to members and their guests
54.21for periods of less than 24 hours, when an admission is not charged nor any revenues are
54.22received by the organization shall not be considered a revenue-producing activity.
54.23 The organization shall maintain records of its charitable contributions and donations
54.24and of public meetings and events held on the property and make them available upon
54.25request any time to the assessor to ensure eligibility. An organization meeting the
54.26requirement under item (ii) must file an application by May 1 with the assessor for
54.27eligibility for the current year's assessment. The commissioner shall prescribe a uniform
54.28application form and instructions;
54.29 (4) postsecondary student housing of not more than one acre of land that is owned by
54.30a nonprofit corporation organized under chapter 317A and is used exclusively by a student
54.31cooperative, sorority, or fraternity for on-campus housing or housing located within two
54.32miles of the border of a college campus;
54.33 (5)(i) manufactured home parks as defined in section327.14, subdivision 3 ,
54.34excluding manufactured home parks described in section273.124, subdivision 3a , and (ii)
54.35manufactured home parks as defined in section327.14, subdivision 3 , that are described in
54.36section273.124, subdivision 3a ;
55.1 (6) real property that is actively and exclusively devoted to indoor fitness, health,
55.2social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
55.3and is located within the metropolitan area as defined in section473.121, subdivision 2 ;
55.4 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
55.5under section272.01, subdivision 2 , and the land on which it is located, provided that:
55.6 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
55.7Airports Commission, or group thereof; and
55.8 (ii) the land lease, or any ordinance or signed agreement restricting the use of the
55.9leased premise, prohibits commercial activity performed at the hangar.
55.10 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
55.11be filed by the new owner with the assessor of the county where the property is located
55.12within 60 days of the sale;
55.13 (8) a privately owned noncommercial aircraft storage hangar not exempt under
55.14section272.01, subdivision 2 , and the land on which it is located, provided that:
55.15 (i) the land abuts a public airport; and
55.16 (ii) the owner of the aircraft storage hangar provides the assessor with a signed
55.17agreement restricting the use of the premises, prohibiting commercial use or activity
55.18performed at the hangar; and
55.19 (9) residential real estate, a portion of which is used by the owner for homestead
55.20purposes, and that is also a place of lodging, if all of the following criteria are met:
55.21 (i) rooms are provided for rent to transient guests that generally stay for periods
55.22of 14 or fewer days;
55.23 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
55.24in the basic room rate;
55.25 (iii) meals are not provided to the general public except for special events on fewer
55.26than seven days in the calendar year preceding the year of the assessment; and
55.27 (iv) the owner is the operator of the property.
55.28 The market value subject to the 4c classification under this clause is limited to
55.29five rental units. Any rental units on the property in excess of five, must be valued and
55.30assessed as class 3a. The portion of the property used for purposes of a homestead by the
55.31owner must be classified as class 1a property under subdivision 22;
55.32 (10) real property up to a maximum of three acres and operated as a restaurant
55.33as defined under section157.15, subdivision 12 , provided it: (A) is located on a lake
55.34as defined under section103G.005, subdivision 15 , paragraph (a), clause (3); and (B)
55.35is either devoted to commercial purposes for not more than 250 consecutive days, or
55.36receives at least 60 percent of its annual gross receipts from business conducted during
56.1four consecutive months. Gross receipts from the sale of alcoholic beverages must be
56.2included in determining the property's qualification under subitem (B). The property's
56.3primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
56.4sales located on the premises must be excluded. Owners of real property desiring 4c
56.5classification under this clause must submit an annual declaration to the assessor by
56.6February 1 of the current assessment year, based on the property's relevant information for
56.7the preceding assessment year;
56.8(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
56.9as a marina, as defined in section86A.20, subdivision 5 , which is made accessible to
56.10the public and devoted to recreational use for marina services. The marina owner must
56.11annually provide evidence to the assessor that it provides services, including lake or river
56.12access to the public by means of an access ramp or other facility that is either located on
56.13the property of the marina or at a publicly owned site that abuts the property of the marina.
56.14No more than 800 feet of lakeshore may be included in this classification. Buildings used
56.15in conjunction with a marina for marina services, including but not limited to buildings
56.16used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
56.17tackle, are classified as class 3a property; and
56.18(12) real and personal property devoted to noncommercial temporary and seasonal
56.19residential occupancy for recreation purposes.
56.20 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
56.21parcel of noncommercial seasonal residential recreational property under clause (12)
56.22has the same class rates as class 4bb property, (ii) manufactured home parks assessed
56.23under clause (5), item (i), have the same class rate as class 4b property, and the market
56.24value of manufactured home parks assessed under clause (5), item (ii), has the same class
56.25rate as class 4d property if more than 50 percent of the lots in the park are occupied by
56.26shareholders in the cooperative corporation or association and a class rate of one percent if
56.2750 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
56.28recreational property and marina recreational land as described in clause (11), has a
56.29class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
56.30remaining market value, (iv) the market value of property described in clause (4) has a
56.31class rate of one percent, (v) the market value of property described in clauses (2), (6), and
56.32(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
56.33in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
56.34 (e) Class 4d property is qualifying low-income rental housing certified to the assessor
56.35by the Housing Finance Agency under section273.128, subdivision 3 . If only a portion
56.36of the units in the building qualify as low-income rental housing units as certified under
57.1section273.128, subdivision 3 , only the proportion of qualifying units to the total number
57.2of units in the building qualify for class 4d. The remaining portion of the building shall be
57.3classified by the assessor based upon its use. Class 4d also includes the same proportion of
57.4land as the qualifying low-income rental housing units are to the total units in the building.
57.5For all properties qualifying as class 4d, the market value determined by the assessor must
57.6be based on the normal approach to value using normal unrestricted rents.
57.7 (f) The first tier of market value of class 4d property has a class rate of 0.75 percent.
57.8 The remaining value of class 4d property has a class rate of 0.25 percent. For the purposes
57.9of this paragraph, the "first tier of market value of class 4d property" means the market
57.10value of each housing unit up to the first tier limit. For the purposes of this paragraph, all
57.11class 4d property value must be assigned to individual housing units. The first tier limit is
57.12$100,000 for assessment year 2014. For subsequent years, the limit is adjusted each year
57.13by the average statewide change in estimated market value of property classified as class 4a
57.14and 4d under this section for the previous assessment year, excluding valuation change due
57.15to new construction, rounded to the nearest $1,000, provided, however, that the limit may
57.16never be less than $100,000. Beginning with assessment year 2015, the commissioner of
57.17revenue must certify the limit for each assessment year by November 1 of the previous year.
57.18EFFECTIVE DATE.This section is effective beginning with assessment year 2014.
57.19 Sec. 19. Minnesota Statutes 2012, section 279.01, subdivision 1, is amended to read:
57.20 Subdivision 1. Due dates; penalties. Except as provided insubdivision subdivisions
57.21 3or 4 to 5, on May 16 or 21 days after the postmark date on the envelope containing the
57.22property tax statement, whichever is later, a penalty accrues and thereafter is charged upon
57.23all unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
57.24penalty is at a rate of two percent on homestead property until May 31 and four percent on
57.25June 1. The penalty on nonhomestead property is at a rate of four percent until May 31 and
57.26eight percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days
57.27after the postmark date on the envelope containing the property tax statements, whichever
57.28is later, on commercial use real property used for seasonal residential recreational purposes
57.29and classified as class 1c or 4c, and on other commercial use real property classified as
57.30class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
57.31class 3a property is earned during the months of May, June, July, and August. In order for
57.32the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
57.33or 21 days after the postmark date on the envelope containing the property tax statement,
57.34whichever is later, without penalty, the owner of the property must attach an affidavit
57.35to the payment attesting to compliance with the income provision of this subdivision.
58.1Thereafter, for both homestead and nonhomestead property, on the first day of each month
58.2beginning July 1, up to and including October 1 following, an additional penalty of one
58.3percent for each month accrues and is charged on all such unpaid taxes provided that if the
58.4due date was extended beyond May 15 as the result of any delay in mailing property tax
58.5statements no additional penalty shall accrue if the tax is paid by the extended due date. If
58.6the tax is not paid by the extended due date, then all penalties that would have accrued if
58.7the due date had been May 15 shall be charged. When the taxes against any tract or lot
58.8exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
58.9date on the envelope containing the property tax statement, whichever is later; and, if so
58.10paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
58.1116 following, without penalty; but, if not so paid, then a penalty of two percent accrues
58.12thereon for homestead property and a penalty of four percent on nonhomestead property.
58.13Thereafter, for homestead property, on the first day of November an additional penalty of
58.14four percent accrues and on the first day of December following, an additional penalty of
58.15two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
58.16property, on the first day of November and December following, an additional penalty of
58.17four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
58.18such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
58.19containing the property tax statement, whichever is later, the same may be paid at any time
58.20prior to October 16, with accrued penalties to the date of payment added, and thereupon
58.21no penalty attaches to the remaining one-half until October 16 following.
58.22 This section applies to payment of personal property taxes assessed against
58.23improvements to leased property, except as provided by section277.01, subdivision 3 .
58.24 A county may provide by resolution that in the case of a property owner that has
58.25multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
58.26installments as provided in this subdivision.
58.27 The county treasurer may accept payments of more or less than the exact amount of
58.28a tax installment due. Payments must be applied first to the oldest installment that is due
58.29but which has not been fully paid. If the accepted payment is less than the amount due,
58.30payments must be applied first to the penalty accrued for the year or the installment being
58.31paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
58.32payment required as a condition for filing an appeal under section278.03 or any other law,
58.33nor does it affect the order of payment of delinquent taxes under section280.39 .
58.34 Sec. 20. Minnesota Statutes 2012, section 279.01, is amended by adding a subdivision
58.35to read:
59.1 Subd. 5. Federal active service exception. In the case of a homestead property
59.2owned by an individual who is on federal active service, as defined in section 190.05,
59.3subdivision 5c, as a member of the National Guard or a reserve component, a four-month
59.4grace period is granted for complying with the due dates imposed by subdivision 1. During
59.5this period, no late fees or penalties shall accrue against the property. The due date for
59.6property taxes owed under this chapter for an individual covered by this subdivision shall
59.7be September 15 for taxes due on May 15, and February 15 of the following year for taxes
59.8due on October 15. A taxpayer making a payment under this subdivision must accompany
59.9the payment with a signed copy of the taxpayer's orders or form DD214 showing the
59.10dates of active service which clearly indicate that the taxpayer was in active service as a
59.11member of the National Guard or a reserve component on the date the payment was due.
59.12This grace period applies to all homestead property owned by individuals on federal active
59.13service, as herein defined, for all of that property's due dates which fall on a day that is
59.14included in the taxpayer's federal active service.
59.15 Sec. 21. Minnesota Statutes 2012, section 279.02, is amended to read:
59.16279.02 DUTIES OF COUNTY AUDITOR AND TREASURER.
59.17 Subdivision 1. Delinquent property; rates. On the first business day in January, of
59.18each year, the county treasurer shall return the tax lists on hand to the county auditor, who
59.19shall compare the same with the statements receipted for by the treasurer on file in the
59.20auditor's office and each tract or lot of real property against which the taxes, or any part
59.21thereof, remain unpaid, shall be deemed delinquent, and thereupon an additional penalty
59.22of two percent on the amount of the original tax remaining unpaid shall immediately
59.23accrue and thereafter be charged upon all such delinquent taxes; and any auditor who
59.24shall make out and deliver any statement of delinquent taxes without including therein
59.25the penalties imposed by law, and any treasurer who shall receive payment of such taxes
59.26without including in such payment all items as shown on the auditor's statement, shall be
59.27liable to the county for the amounts of any items omitted.
59.28 Subd. 2. Federal active service exception. Notwithstanding subdivision 1, a
59.29homestead property owned by an individual who is on federal active service, as defined
59.30in section 190.05, subdivision 5c, as a member of the National Guard or a reserve
59.31component, shall not be deemed delinquent under this section if the due dates imposed
59.32under section 279.01 fall on a day in which the individual was on federal active service.
59.33 Sec. 22. Minnesota Statutes 2012, section 279.37, subdivision 1a, is amended to read:
60.1 Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property
60.2which was classified class 3a, for the previous year's assessmentand had a total market
60.3value of $500,000 or less for that same assessment shall be eligible to be composed into a
60.4confession of judgment with the approval of the county auditor. Property qualifying under
60.5this subdivision shall be subject to the same provisions as provided in this section except
60.6as provided in paragraphs (b) to(d) (f).
60.7 (b) Current year taxes and penalty due at the time the confession of judgment
60.8is entered must be paid.
60.9 (c) The down payment must include all special assessments due in the current tax
60.10year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties,
60.11and interest accrued against the parcel. The balance remaining is payable in four equal
60.12annual installments. A municipality as defined in section 429.011, cities of the first class,
60.13and other special assessment authorities, that have certified special assessments against
60.14any parcel of property, may, through resolution, waive the requirement of payment of all
60.15current and delinquent special assessments at the time the confession is entered. If the
60.16municipality, city, or authority grants the waiver, 100 percent of all current year taxes,
60.17special assessments, and penalties due at the time, along with 20 percent of all delinquent
60.18taxes, special assessments, penalties, interest, and fees must be paid. The balance
60.19remaining shall be subject to and included in the installment plan.
60.20(d) When there are current and delinquent special assessments certified and billed
60.21against a parcel, the assessment authority or municipality as defined in section 429.011
60.22may abate under section 375.192, subdivision 2, all special assessments and the penalty
60.23and interest affiliated with the special assessments, and reassess the special assessments,
60.24penalties, and interest accrued thereon, under section 429.071, subdivision 2. The
60.25municipality shall notify the county auditor of its intent to reassess as a precondition
60.26to the entry of the confession of judgment. Upon the notice to abate and reassess, the
60.27municipality shall, through resolution, notify the county auditor to remove all current
60.28and delinquent special assessments and the accrued penalty and interest on the special
60.29assessments, and the payment of all or a portion of the current and delinquent assessments
60.30shall not be required as part of the down payment due at the time the confession of
60.31judgment is entered in accordance with paragraph (c).
60.32(d) (e) The amounts entered in judgment bear interest at the rate provided in section
60.33279.03, subdivision 1a
, commencing with the date the judgment is entered. The interest
60.34rate is subject to change each year on the unpaid balance in the manner provided in section
60.35279.03, subdivision 1a
.
61.1(f) The county auditor may require conditions on properties including, but not
61.2limited to, environmental remediation action plan requirements, restrictions, or covenants,
61.3when considering a request for approval of eligibility for composition into a confession of
61.4judgment for delinquent taxes upon a parcel of property which was classified class 3a for
61.5the previous year's assessment.
61.6 Sec. 23. Minnesota Statutes 2012, section 279.37, subdivision 2, is amended to read:
61.7 Subd. 2. Installment payments. The owner of any such parcel, or any person to
61.8whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
61.9make and file with the county auditor of the county in which the parcel is located a written
61.10offer to pay the current taxes each year before they become delinquent, or to contest the
61.11taxes under Minnesota Statutes 1941, sections278.01 to
278.13 , and agree to confess
61.12judgment for the amount provided, as determined by the county auditor. By filing the
61.13offer, the owner waives all irregularities in connection with the tax proceedings affecting
61.14the parcel and any defense or objection which the owner may have to the proceedings, and
61.15also waives the requirements of any notice of default in the payment of any installment or
61.16interest to become due pursuant to the composite judgment to be so entered. Unless the
61.17property is subject to subdivision 1a, with the offer, the owner shall (i) tender one-tenth of
61.18the amount of the delinquent taxes, costs, penalty, and interest, andshall (ii) tender all
61.19current year taxes and penalty due at the time the confession of judgment is entered. In the
61.20offer, the owner shall agree to pay the balance in nine equal installments, with interest as
61.21provided in section279.03 , payable annually on installments remaining unpaid from time
61.22to time, on or before December 31 of each year following the year in which judgment
61.23was confessed. The offer must be substantially as follows:
61.24"To the court administrator of the district court of ........... county, I, .....................,
61.25am the owner of the following described parcel of real estate located in ....................
61.26county, Minnesota:
61.27.............................. Upon that real estate there are delinquent taxes for the year ........., and
61.28prior years, as follows: (here insert year of delinquency and the total amount of delinquent
61.29taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
61.30the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
61.31any defense or objection which I may have to them, and direct judgment to be entered for
61.32the amount stated above, minus the sum of $............, to be paid with this document, which
61.33is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
61.34I agree to pay the balance of the judgment in nine or four equal, annual installments, with
61.35interest as provided in section279.03 , payable annually, on the installments remaining
62.1unpaid. I agree to pay the installments and interest on or before December 31 of each year
62.2following the year in which this judgment is confessed and current taxes each year before
62.3they become delinquent, or within 30 days after the entry of final judgment in proceedings
62.4to contest the taxes under Minnesota Statutes, sections278.01 to
278.13 .
62.5Dated .............., ......."
62.6 Sec. 24. Minnesota Statutes 2012, section 281.14, is amended to read:
62.7281.14 EXPIRATION OF TIME FOR REDEMPTION.
62.8The time for redemption from any tax sale, whether made to the state or to a private
62.9person, shall not expire until notice of expiration of redemption, as provided in section
62.10281.13
62.11 Sec. 25. Minnesota Statutes 2012, section 281.17, is amended to read:
62.12281.17 PERIOD FOR REDEMPTION.
62.13Except for properties for which the period of redemption has been limited under
62.14sections281.173 and
281.174 , the following periods for redemption apply.
62.15The period of redemption for all lands sold to the state at a tax judgment sale shall
62.16be three years from the date of sale to the state of Minnesotaif the land is within an
62.17incorporated area unless it is: (a) nonagricultural homesteaded land as defined in section
62.18273.13, subdivision 22; (b) homesteaded agricultural land as defined in section
273.13,
62.19subdivision 23
, paragraph (a); or (c) seasonal residential recreational land as defined in
62.20section
273.13, subdivision 22, paragraph (c), or 25, paragraph (d), clause (1), for which
62.21the period of redemption is five years from the date of sale to the state of Minnesota.
62.22The period of redemption for homesteaded lands as defined in section273.13,
62.23subdivision 22 , located in a targeted neighborhood as defined in Laws 1987, chapter 386,
62.24article 6, section 4, and sold to the state at a tax judgment sale is three years from the date
62.25of sale. The period of redemption for all lands located in a targeted neighborhood as
62.26defined in Laws 1987, chapter 386, article 6, section 4, except (1) homesteaded lands as
62.27defined in section273.13, subdivision 22 , and (2) for periods of redemption beginning
62.28after June 30, 1991, but before July 1, 1996, lands located in the Loring Park targeted
62.29neighborhood on which a notice of lis pendens has been served, and sold to the state at a
62.30tax judgment sale is one year from the date of sale.
62.31The period of redemption for all real property constituting a mixed municipal solid
62.32waste disposal facility that is a qualified facility under section115B.39, subdivision 1 , is
62.33one year from the date of the sale to the state of Minnesota.
63.1The period of redemption for all other lands sold to the state at a tax judgment
63.2sale shall be five years from the date of sale, except that the period of redemption for
63.3nonhomesteaded agricultural land as defined in section
273.13, subdivision 23, paragraph
63.4(b), shall be two years from the date of sale if at that time that property is owned by a
63.5person who owns one or more parcels of property on which taxes are delinquent, and the
63.6delinquent taxes are more than 25 percent of the prior year's school district levy.
63.7 Sec. 26. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision
63.8to read:
63.9 Subd. 10. Hennepin and Ramsey Counties. For properties located in Hennepin
63.10and Ramsey Counties, the county may impose an additional mortgage registry tax as
63.11defined in sections 383A.80 and 383B.80.
63.12EFFECTIVE DATE.This section is effective for deeds and mortgages
63.13acknowledged on or after July 1, 2013.
63.14 Sec. 27. [287.40] HENNEPIN AND RAMSEY COUNTIES.
63.15 For properties located in Hennepin and Ramsey Counties, the county may impose an
63.16additional deed tax as defined in sections 383A.80 and 383B.80.
63.17EFFECTIVE DATE.This section is effective for deeds and mortgages
63.18acknowledged on or after July 1, 2013.
63.19 Sec. 28. Minnesota Statutes 2012, section 383A.80, subdivision 4, is amended to read:
63.20 Subd. 4. Expiration. The authority to impose the tax under this section expires
63.21January 1,2013 2028.
63.22EFFECTIVE DATE.This section is effective for all deeds and mortgages
63.23acknowledged on or after July 1, 2013.
63.24 Sec. 29. Minnesota Statutes 2012, section 383B.80, subdivision 4, is amended to read:
63.25 Subd. 4. Expiration. The authority to impose the tax under this section expires
63.26January 1,2013 2028.
63.27EFFECTIVE DATE.This section is effective for all deeds and mortgages
63.28acknowledged on or after July 1, 2013.
63.29 Sec. 30. Minnesota Statutes 2012, section 428A.101, is amended to read:
64.1428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
64.2GENERAL LAW.
64.3The establishment of a new special service district after June 30,2013 2028, requires
64.4enactment of a special law authorizing the establishment.
64.5EFFECTIVE DATE.This section is effective the day following final enactment.
64.6 Sec. 31. Minnesota Statutes 2012, section 428A.21, is amended to read:
64.7428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
64.8GENERAL LAW.
64.9The establishment of a new housing improvement area after June 30,2013 2028,
64.10requires enactment of a special law authorizing the establishment of the area.
64.11EFFECTIVE DATE.This section is effective the day following final enactment.
64.12 Sec. 32. Minnesota Statutes 2012, section 473F.08, subdivision 3a, is amended to read:
64.13 Subd. 3a. Bloomington computation. (a) Beginning in 1987 and each subsequent
64.14year through 1998, the city of Bloomington shall determine the interest payments for that
64.15year for the bonds which have been sold for the highway improvements pursuant to Laws
64.161986, chapter 391, section 2, paragraph (g). Effective for property taxes payable in 1988
64.17through property taxes payable in 1999, after the Hennepin County auditor has computed
64.18the areawide portion of the levy for the city of Bloomington pursuant to subdivision 3,
64.19clause (a), the auditor shall annually add a dollar amount to the city of Bloomington's
64.20areawide portion of the levy equal to the amount which has been certified to the auditor
64.21by the city of Bloomington for the interest payments for that year for the bonds which
64.22were sold for highway improvements. The total areawide portion of the levy for the city
64.23of Bloomington including the additional amount for interest repayment certified pursuant
64.24to this subdivision shall be certified by the Hennepin County auditor to the administrative
64.25auditor pursuant to subdivision 5. The Hennepin County auditor shall distribute to the
64.26city of Bloomington the additional areawide portion of the levy computed pursuant to this
64.27subdivision at the same time that payments are made to the other counties pursuant to
64.28subdivision 7a. For property taxes payable from the year 2009 through2018 2014, the
64.29Hennepin County auditor shall adjust Bloomington's contribution to the areawide gross tax
64.30capacity upward each year by a value equal to ten percent of the total additional areawide
64.31levy distributed to Bloomington under this subdivision from 1988 to 1999, divided by the
64.32areawide tax rate for taxes payable in the previous year.
65.1(b) For property taxes payable from 2015 through 2018, the administrative auditor
65.2shall increase the areawide net tax capacity each year by an amount equal to ten percent of
65.3the total additional areawide levy distributed to Bloomington under this subdivision from
65.41988 to 1999, divided by the areawide tax rate for taxes payable in the previous year. The
65.5administrative auditor must notify the commissioner of revenue of the amount determined
65.6by multiplying the increase in the areawide net tax capacity by the areawide tax rate
65.7determined under subdivision 5. The commissioner of revenue must pay the amount
65.8determined each payable year to the administrative auditor in two installments on July 10
65.9and November 10, for distribution and settlement as provided in subdivision 7a.
65.10(c) A sum sufficient to meet the obligations under this subdivision is annually
65.11appropriated from the general fund to the commissioner of revenue.
65.12EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.
65.13 Sec. 33. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
65.14article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter
65.15154, article 2, section 30, is amended to read:
65.16 Sec. 3. TAX; PAYMENT OF EXPENSES.
65.17 (a) The tax levied by the hospital district under Minnesota Statutes, section447.34 ,
65.18must not be levied at a rate that exceeds the amount authorized to be levied under that
65.19section. The proceeds of the tax may be used for all purposes of the hospital district,
65.20except as provided in paragraph (b).
65.21 (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
65.22solely by the Cook ambulance service and the Orr ambulance service for the purpose of
65.23capital expenditures as it relates to:
65.24 (1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
65.25serviceand not;
65.26 (2) attached and portable equipment for use in and for the ambulances; and
65.27 (3) parts and replacement parts for maintenance and repair of the ambulances.
65.28The money may not be used for administrative, operation, or salary expenses.
65.29 (c) The part of the levy referred to in paragraph (b) must be administered by the
65.30Cook Hospital and passed on in equal amounts directly to the Cook area ambulance
65.31service board and the city of Orr to beheld in trust until funding for a new ambulance is
65.32needed by either the Cook ambulance service or the Orr ambulance service used for the
65.33purposes in paragraph (b).
65.34 Sec. 34. Laws 1999, chapter 243, article 6, section 11, is amended to read:
66.1 Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.
66.2Subdivision 1. Levy authorized. Notwithstanding other law to the contrary, the
66.3Carlton county board of commissioners may annually levy in and for the unorganized
66.4township territory of Sawyer an amount up to $1,000 annually for cemetery purposes,
66.5beginning with taxes payable in 2000 and ending with taxes payable in 2009.
66.6Subd. 2. Effective date. This section is effective June 1, 1999, without local
66.7approval.
66.8EFFECTIVE DATE; LOCAL APPROVAL.This section applies to taxes
66.9payable in 2014 and thereafter, and is effective the day after the Carlton County Board
66.10of Commissioners and its chief clerical officer timely complete their compliance with
66.11Minnesota Statutes, section 645.021, subdivisions 2 and 3.
66.12 Sec. 35. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to
66.13read:
66.14EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
66.152009, and is repealed effective for taxes levied in2013 2018, payable in 2014 2019,
66.16and thereafter.
66.17EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.
66.18 Sec. 36. Laws 2009, chapter 88, article 2, section 46, subdivision 1, is amended to read:
66.19 Subdivision 1. Agreement. The city of Cloquet and Perch Lake Township, by
66.20resolution of each of their governing bodies, may establish the Cloquet Area Fire and
66.21Ambulance Taxing District for the purpose of providing fireand or ambulance services,
66.22or both, throughout the district. In this section, "municipality" means home rule charter
66.23and statutory cities, towns, and Indian tribes. The district may exercise all the powers
66.24relating to fire and ambulance services of the municipalities that receive fireand or
66.25 ambulance services, or both, from the district. Upon application, any other municipality
66.26that is contiguous to a municipality that is a member of the district may join the district
66.27with the agreement of the municipalities that comprise the district at the time of its
66.28application to join.
66.29 Sec. 37. Laws 2009, chapter 88, article 2, section 46, subdivision 3, is amended to read:
66.30 Subd. 3. Tax. The district board may impose a property tax on taxable propertyin
66.31the district as provided in this subdivision. This The board shall annually determine the
66.32total amount of the levy that is attributable to the cost of providing fire services and the cost
67.1of providing ambulance services within the primary service area. For those municipalities
67.2that only receive ambulance services, the costs for the provision of ambulance services
67.3shall be levied against taxable property within those municipalities at a rate necessary not
67.4to exceed 0.019 percent of the estimated market value. For those municipalities that
67.5receive both fire and ambulance services, the tax shall be imposed at a rate that does not
67.6exceed 0.2835 percent oftaxable estimated market value for taxes payable in 2010. The
67.7board shall annually determine the separate amounts of the levy that are attributable to the
67.8cost of providing fire services and the cost of providing ambulance services. Costs for the
67.9provision of ambulance services shall be levied against taxable property within the area of
67.10the district that receive the services. Costs for the provision of fire services shall be levied
67.11against taxable property within the area of the district that receive the services.
67.12When a member municipality opts to receive fire service from the district or an
67.13additional municipality becomes a member of the district, theadditional cost of providing
67.14ambulance and fire services to that municipality will community shall be determined by
67.15the board and added to the maximum levy amount.
67.16Each county auditor of a county that contains a municipality subject to the tax under
67.17this section must collect the tax and pay it to the Fire and Ambulance Special Taxing
67.18District. The district may also impose other fees or charges as allowed by law for the
67.19provision of fire and ambulance services.
67.20 Sec. 38. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to
67.21read:
67.22EFFECTIVE DATE.This section is effective for assessmentyears year 2010 and
67.232011, for taxes payable in 2011 and 2012 thereafter.
67.24EFFECTIVE DATE.This section is effective for assessment year 2012 and
67.25thereafter.
67.26 Sec. 39. MINNEAPOLIS AND ST. PAUL ENTERTAINMENT FACILITIES
67.27COORDINATION STUDY; APPROPRIATION.
67.28 Subdivision 1. Statement of purpose. The legislature finds that the national
67.29economic structure of professional sports financing, as directly or indirectly sanctioned by
67.30federal law, compels state and local governments in smaller metropolitan areas, such as
67.31Minneapolis and St. Paul, to help finance the construction and operation of venues for
67.32professional sports franchises as a condition of hosting these franchises. The burden and
67.33risk associated with providing this assistance justifies authorizing and directing the cities
68.1and any associated private entities to enter into arrangements that attempt to maximize
68.2the combined revenues of these facilities from direct users, including those unrelated to
68.3professional sports, such as, but not limited to, joint booking of concerts and other events,
68.4to minimize the cost and risk to general taxpayers. Any efforts to put in place such joint
68.5marketing, promotion, and scheduling arrangements by the cities or associated private
68.6entities, in the view of the legislature, is a petition for enactment of this or subsequent
68.7enabling legislation under the Noerr-Pennington doctrine or state action under the Parker
68.8antitrust doctrine. This legislation and any resulting arrangements are intended to minimize
68.9the potential burden on general taxpayers of financing and operation of the arenas.
68.10 Subd. 2. Study and report. On or before February 1, 2014, the cities of
68.11Minneapolis and St. Paul, in consultation with representatives of the primary professional
68.12sports team tenant of each arena, shall study and report to the legislature on establishing
68.13a joint governing structure to be responsible for the joint administration, financing, and
68.14operations of the facilities and the possible effects of joint governance on the finances of
68.15each arena and each city. The commissioner of administration, in consultation with the
68.16two cities, shall contract with an independent consultant to conduct all or a portion of the
68.17study. The cities of Minneapolis and St. Paul together shall pay one-half of the cost of the
68.18consultant contract. The commissioner may accept funding from other public entities and
68.19private organizations to pay for the contract. The study must:
68.20 (1) examine the current finances of each arena including past and projected costs and
68.21revenues, projected capital improvements, and the current and projected impact of each
68.22arena on each city's general fund;
68.23 (2) determine the impact of joint governance on the future finances of each city;
68.24 (3) examine joint scheduling, marketing, and promotion of events at the arenas,
68.25either within a joint governance structure or as separate entities; and
68.26 (4) estimate the amount of funding, if any, that would be required to operate and
68.27maintain the arenas under a joint governing structure.
68.28 Subd. 3. Appropriation. Up to $50,000 is appropriated to the commissioner of
68.29administration from the general fund for fiscal year 2014 to pay up to one-half of the costs
68.30of the consultant contract under subdivision 2.
68.31EFFECTIVE DATE.This section is effective the day following final enactment.
68.32 Sec. 40. REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS;
68.33APPROPRIATION.
69.1 Subdivision 1. Reimbursement. The commissioner of revenue shall reimburse
69.2taxing jurisdictions for property tax abatements granted in Hennepin County under Laws
69.32011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits
69.4contained in that section. The reimbursements must be made to each taxing jurisdiction
69.5pursuant to the certification of the Hennepin County auditor.
69.6 Subd. 2. Appropriation. In fiscal year 2014 only, $336,000 is appropriated to the
69.7commissioner of revenue from the general fund to make the payments required in this
69.8section.
69.9EFFECTIVE DATE.This section is effective the day following final enactment.
69.10 Sec. 41. ST. PAUL BALLPARK PROPERTY TAX EXEMPTION; SPECIAL
69.11ASSESSMENT.
69.12Any real or personal property acquired, owned, leased, controlled, used, or occupied
69.13by the city of St. Paul for the primary purpose of providing a ballpark for a minor league
69.14baseball team is declared to be acquired, owned, leased, controlled, used, and occupied for
69.15public, governmental, and municipal purposes, and is exempt from ad valorem taxation
69.16by the state or any political subdivision of the state, provided that the properties are
69.17subject to special assessments levied by a political subdivision for a local improvement in
69.18amounts proportionate to and not exceeding the special benefit received by the properties
69.19from the improvement. In determining the special benefit received by the properties, no
69.20possible use of any of the properties in any manner different from their intended use
69.21for providing a minor league ballpark at the time may be considered. Notwithstanding
69.22Minnesota Statutes, section272.01 , subdivision 2, or
273.19 , real or personal property
69.23subject to a lease or use agreement between the city and another person for uses related to
69.24the purposes of the operation of the ballpark and related parking facilities is exempt from
69.25taxation regardless of the length of the lease or use agreement. This section, insofar as it
69.26provides an exemption or special treatment, does not apply to any real property that is
69.27leased for residential, business, or commercial development or other purposes different
69.28from those necessary to the provision and operation of the ballpark.
69.29EFFECTIVE DATE.This section is effective the day after compliance by the
69.30governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
69.31subdivisions 2 and 3.
69.32 Sec. 42. PUBLIC ENTERTAINMENT FACILITY; PROPERTY TAX
69.33EXEMPTION; SPECIAL ASSESSMENT.
70.1Any real or personal property acquired, owned, leased, controlled, used, or occupied
70.2by the city of Minneapolis for the primary purpose of providing an arena for a professional
70.3basketball team is declared to be acquired, owned, leased, controlled, used, and occupied
70.4for public, governmental, and municipal purposes, and is exempt from ad valorem taxation
70.5by the state or any political subdivision of the state, provided that the properties are
70.6subject to special assessments levied by a political subdivision for a local improvement in
70.7amounts proportionate to and not exceeding the special benefit received by the properties
70.8from the improvement. In determining the special benefit received by the properties, no
70.9possible use of any of the properties in any manner different from their intended use for
70.10providing a professional basketball arena at the time may be considered. Notwithstanding
70.11Minnesota Statutes, section272.01 , subdivision 2, or
273.19 , real or personal property
70.12subject to a lease or use agreement between the city and another person for uses related to
70.13the purposes of the operation of the arena and related parking facilities is exempt from
70.14taxation regardless of the length of the lease or use agreement. This section, insofar as
70.15it provides an exemption or special treatment, does not apply to any real property that
70.16is leased for residential, business, or commercial development, or for other purposes
70.17different from those necessary to the provision and operation of the arena.
70.18EFFECTIVE DATE.This section is effective the day after compliance by the
70.19governing body of the city of Minneapolis with Minnesota Statutes, section 645.021,
70.20subdivisions 2 and 3.
70.21 Sec. 43. PUBLIC ENTERTAINMENT FACILITY; CONSTRUCTION
70.22MANAGER AT RISK.
70.23(a) For any real or personal property acquired, owned, leased, controlled, used, or
70.24occupied by the city of Minneapolis for the primary purpose of providing an arena for
70.25a professional basketball team, the city of Minneapolis may contract for construction,
70.26materials, supplies, and equipment in accordance with Minnesota Statutes, section
70.27471.345, except that the city may employ or contract with persons, firms, or corporations
70.28to perform one or more or all of the functions of an engineer, architect, construction
70.29manager, or program manager with respect to all or any part of a project to renovate,
70.30refurbish, and remodel the arena under either the traditional design-bid-build plan or
70.31construction manager at risk plan, or a combination thereof.
70.32(b) The city may prepare a request for proposals for one or more of the functions
70.33described in paragraph (a). The request must be published in a newspaper of general
70.34circulation. The city may prequalify offerors by issuing a request for qualifications, in
71.1advance of the request for proposals, and select a short list of responsible offerors to
71.2submit proposals.
71.3(c) As provided in the request for proposals, the city may conduct discussions and
71.4negotiations with responsible offerors in order to determine which proposal is most
71.5advantageous to the city and to negotiate the terms of an agreement. In conducting
71.6discussions, there shall be no disclosure of any information derived from proposals
71.7submitted by competing offerors and the content of all proposals is nonpublic data under
71.8Minnesota Statutes, chapter 13, until such time as a notice to award a contract is given
71.9by the city.
71.10(d) Upon agreement on the guaranteed maximum price, the construction manager
71.11or program manager may enter into contracts with subcontractors for labor, materials,
71.12supplies, and equipment for the renovation project through the process of public bidding,
71.13except that the construction manager or program manager may, with the consent of the city:
71.14(1) narrow the listing of eligible bidders to those that the construction manager
71.15or program manager determines to possess sufficient expertise to perform the intended
71.16functions;
71.17(2) award contracts to the subcontractors that the construction manager or program
71.18manager determines provide the best value under a request for proposals, as described in
71.19Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2), that are not
71.20required to be the lowest responsible bidder; and
71.21(3) for work the construction manager or program manager determines to be
71.22critical to the completion schedule, perform work with its own forces without soliciting
71.23competitive bids or proposals, if the construction manager or program manager provides
71.24evidence of competitive pricing.
71.25EFFECTIVE DATE.This section is effective the day after compliance by the
71.26governing body of the city of Minneapolis with Minnesota Statutes, section 645.021,
71.27subdivisions 2 and 3.
71.28 Sec. 44. EXTENSION OF PROPERTY TAX DUE DATE; COMMERCIAL
71.29SEASONAL RECREATIONAL PROPERTIES.
71.30Notwithstanding the provisions of Minnesota Statutes, section 279.01, subdivision
71.311, for taxes payable in 2013 only, the penalty on first-half property taxes does not accrue
71.32until June 15 on commercial use real property used for seasonal residential recreational
71.33purposes and classified as class 1c or 4c, and on other commercial use real property
71.34classified as class 3a, provided that over 60 percent of the gross income earned by the
71.35enterprise on the class 3a property is earned during the months of May, June, July, and
72.1August. In order for the first half of the tax due on class 3a property to be paid after May
72.215 and before June 15 without penalty, the owner of the property must attach an affidavit
72.3to the payment attesting to compliance with the income provision of this subdivision.
72.4EFFECTIVE DATE.This section is effective the day following final enactment.
72.5 Sec. 45. REPORT ON CLASS 4D TIER STRUCTURE.
72.6The commissioners of revenue and housing finance shall report to the legislature
72.7by January 31, 2015, on the implementation of a second tier of market value for class 4d
72.8property under Minnesota Statutes, section 273.13, subdivision 25, paragraph (f). The
72.9report shall include the number of class 4d properties subject to the second tier of market
72.10value for taxes payable in 2015 and the tax impact of the application of the second tier
72.11of market value. The report shall also include an analysis of the characteristics of the
72.12properties to which the second tier of market value applies, such as location, building
72.13type, and number of units.
72.14EFFECTIVE DATE.This section is effective July 1, 2013.
72.15 Sec. 46. REPORT AND STUDY ON CERTAIN PROPERTY USED IN
72.16BUSINESS AND PRODUCTION; ASSESSMENT MORATORIUM.
72.17 Subdivision 1. Study and report. (a) In order to facilitate a legislative review of
72.18property tax assessment procedures for facilities used in the production of biofuels, wine,
72.19beer, distilled beverages, and dairy products, and the development of standards and criteria
72.20for determining the taxable status of these facilities, the commissioner of revenue must
72.21conduct a study and report the findings of the study. The study must:
72.22(1) include a detailed survey of counties identifying the components and tax status
72.23of biofuel facilities;
72.24(2) identify the function of components in facilities of the affected industries;
72.25(3) consider the taxability for certain components related to size, function, and use;
72.26(4) develop recommendations for assessment guidelines and policies for facilities of
72.27the affected industries; and
72.28(5) identify possible impacts to state and local taxes resulting from study
72.29recommendations.
72.30(b) The commissioner shall request the involvement and participation of
72.31stakeholders, including the affected industries, the assessment community, and others
72.32identified by the commissioner.
73.1(c) The commissioner shall report the findings to the chairs of the house of
73.2representatives and senate committees with jurisdiction over taxes, agriculture, and
73.3economic development as well as the commissioners of agriculture and employment and
73.4economic development by February 1, 2014.
73.5 Subd. 2. Moratorium on changes in assessment practices. (a) For the 2013 and
73.62014 assessments, assessors must continue to use assessment practices or policies in effect
73.7in that county on January 2, 2012, for determining the taxable status of property used in
73.8the production of biofuels, wine, beer, distilled beverages, or dairy products.
73.9(b) An assessor must not change the taxable status of any existing property described
73.10in paragraph (a) from its status on January 2, 2012, unless the change is due to a change in
73.11the use of property, or to correct an error. For taxable properties, the assessor may change
73.12the estimated market value of the property and add value for any new construction that
73.13would have been taxable under practices and policies in place on January 2, 2012.
73.14(c) This subdivision expires on December 31, 2014. Any changes to the taxable
73.15status of the properties in paragraph (a) resulting from the study will not be effective
73.16until the 2015 assessment.
73.17 Sec. 47. PROPERTY TAX SAVINGS REPORT.
73.18(a) In addition to the certification of its proposed property tax levy under Minnesota
73.19Statutes, section 275.065, each city that has a population over 500 and each county shall
73.20also include the amount of sales and use tax paid, or was estimated to be paid, in 2012.
73.21(b) At the time the notice of the proposed property taxes is mailed as required under
73.22Minnesota Statutes, section 275.065, subdivision 3, the county treasurer shall also include
73.23a separate statement providing a list of sales and use tax certified by the county and cities
73.24within their jurisdiction.
73.25(c) At the public hearing required under Minnesota Statutes, section 275.065,
73.26subdivision 3, the county and city must discuss the estimated savings realized to their
73.27budgets that resulted from the sales tax exemption authorized under Minnesota Statutes,
73.28section 297A.70, subdivision 2, and how those savings will be used for property tax levy
73.29reductions, fee reductions, and other purposes as deemed appropriate.
73.30Reasonable costs of preparing the notice required in this section must be apportioned
73.31between taxing jurisdictions as follows:
73.32(1) one-half is allocated to the county; and
73.33(2) one-half is allocated among the cities.
74.1The amount allocated in clause (2) must be further apportioned among all the cities
74.2in the proportion that the number of parcels in the city bears to the number of parcels in all
74.3the cities that have populations over 500.
74.4EFFECTIVE DATE.This section is effective the day following final enactment,
74.5for taxes levied in 2013 and payable in 2014.
74.6 Sec. 48. LEVY LIMITS FOR TAXES LEVIED IN 2013.
74.7 Subdivision 1. Population. "Population" means the population for the local
74.8governmental unit as established by the last federal census, by a census taken under
74.9section Minnesota Statutes, section 275.14, or by an estimate made by the metropolitan
74.10council or by the state demographer under Minnesota Statutes, section 4A.02, whichever
74.11is most recent as to the stated date of the count or estimate up to and including June 1
74.12of the current levy year.
74.13 Subd. 2. Local government unit. "Local governmental unit" means a county with a
74.14population greater than 5,000, or a statutory or home rule charter city with a population
74.15greater than 2,500.
74.16 Subd. 3. Levy limit base. "Levy limit base" for a local governmental unit for levy
74.17year 2013 means the sum of its certified net tax capacity levy plus the total of aids and
74.18reimbursements that the local governmental unit is certified to receive under Minnesota
74.19Statutes, sections 477A.011 to 477A.014, minus any amounts that would qualify as a
74.20special levy under Minnesota Statutes, section 275.70, subdivision 5, clauses (1) to (4) and
74.21(7), for taxes levied in 2011 or 2012, whichever is greater. The levy limit base must be
74.22increased by three percent.
74.23 Subd. 4. Property tax levy limit. For taxes levied in 2013, the net tax capacity
74.24levy limit for a local governmental unit is equal to its levy limit base determined under
74.25subdivision 3 plus any additional levy authorized under Minnesota Statutes, section
74.26275.73, which is levied against net tax capacity, reduced by the total amount of aids and
74.27reimbursements that the local governmental unit is certified to receive under Minnesota
74.28Statutes, sections 477A.011 to 477A.014. The property tax levy limit for any local
74.29government cannot be less than the greater of its certified net tax capacity levies for taxes
74.30levied in 2011 or 2012.
74.31 Subd. 5. Limit on levies. Notwithstanding any other provision of law or municipal
74.32charter to the contrary which authorize ad valorem taxes in excess of the limits established
75.1by this section, the provisions of this section apply to local governmental units for all
75.2purposes other than those for which special levies under Minnesota Statutes, section
75.3275.70, subdivision 5, clauses (1) to (5) and (7), and special assessments are made.
75.4 Subd. 6. Levies in excess of levy limits. If the levy made by a city or county
75.5exceeds the levy limit provided in this section, except when the excess levy is due to the
75.6rounding of the rate in accordance with Minnesota Statutes, section 275.28, the county
75.7auditor shall only extend the amount of taxes permitted under this section as provided
75.8for in Minnesota Statutes, section 275.16.
75.9 Subd. 7. Calculation and notification. The commissioner of revenue shall make
75.10all necessary calculations for determining levy limits for local governmental units and
75.11notify the affected governmental units of their levy limits directly by September 1, 2013.
75.12The local governmental units shall, upon request, provide the commissioner with any
75.13information needed to make the calculations. The local governmental unit shall report
75.14by September 30, in a manner prescribed by the commissioner, the maximum amount of
75.15taxes it plans to levy for each of the purposes listed under special levies and any additional
75.16levy authorized under Minnesota Statutes, section 275.73, along with any necessary
75.17documentation. The commissioner shall review the proposed special levies and make any
75.18adjustments needed. The commissioner's decision is final. The final allowed special levy
75.19amounts and any levy limit adjustments must be certified back to the local governments by
75.20December 10. In addition, the commissioner of revenue shall notify all county auditors on
75.21or before five working days after December 20 of the sum of the levy limit plus the total of
75.22allowed special levies for each local governmental unit located within their boundaries so
75.23that they may fix the levies as required in Minnesota Statutes, section 275.16. The local
75.24governmental units shall provide the commissioner of revenue with all information that
75.25the commissioner deems necessary to make the calculations provided for in this section.
75.26 Subd. 8. Information necessary to calculate levy limit base. A local governmental
75.27unit must provide the commissioner with the information required to calculate the
75.28amount under subdivision 3, by July 20, 2013. If the information is not received by the
75.29commissioner by that date, or is not deemed sufficient to make the calculation under that
75.30clause, the commissioner has the discretion to set the local governmental unit's levy limit
75.31for all purposes including those purposes for which special levies may be made, equal to
75.32the amount of the local governmental unit's certified levy for the prior year.
75.33EFFECTIVE DATE.This section is effective for taxes levied in 2013, payable
75.34in 2014, only.
76.1 Sec. 49. APPROPRIATION.
76.2$2,000,000 in fiscal year 2014 only is appropriated from the general fund to the
76.3commissioner of revenue for a grant to the city of Moose Lake to reimburse for costs
76.4related to connection of state facilities to the sewer line.
76.5EFFECTIVE DATE.This section is effective July 1, 2013.
76.8 Section 1. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read:
76.9 Subdivision 1. Liability imposed. A person who, either singly or jointly with
76.10others, has the control of, supervision of, or responsibility for filing returns or reports,
76.11paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
76.12person who is liable under any other law, is liable for the payment of taxes arising under
76.13chapters 295, 296A, 297A, 297F, and 297G, or sections256.9658, 290.92,297E.02 ,
76.14and the applicable penalties and interest on those taxes.
76.15EFFECTIVE DATE.This section is effective July 1, 2013.
76.16 Sec. 2. Minnesota Statutes 2012, section 296A.09, subdivision 2, is amended to read:
76.17 Subd. 2. Jet fuel and special fuel tax imposed. There is imposed an excise tax
76.18ofthe same rate 15 cents per gallon as the aviation gasoline on all jet fuel or special
76.19fuel received, sold, stored, or withdrawn from storage in this state, for use as substitutes
76.20for aviation gasoline and not otherwise taxed as gasoline. Jet fuel is defined in section
76.21296A.01, subdivision 8
.
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. 3. Minnesota Statutes 2012, section 296A.17, subdivision 3, is amended to read:
76.25 Subd. 3. Refund on graduated basis. Any person who has directly or indirectly
76.26paid the excise tax on aviation gasoline or special fuel for aircraft use provided for by this
76.27chapter and the airflight property tax under section 270.72, shall, as to all such aviation
76.28gasoline and special fuel received, stored, or withdrawn from storage by the person in
76.29this state in any calendar year and not sold or otherwise disposed of to others, or intended
76.30for sale or other disposition to others, on which such tax has been so paid, be entitled to
76.31the following graduated reductions in such tax for that calendar year, to be obtained by
76.32means of the following refunds:
77.1(1) on each gallon of such aviation gasoline or special fuel up to 50,000 gallons, all
77.2but five cents per gallon;
77.3(2) on each gallon of such aviation gasoline or special fuel above 50,000 gallons and
77.4not more than 150,000 gallons, all but two cents per gallon;
77.5(3) on each gallon of such aviation gasoline or special fuel above 150,000 gallons
77.6and not more than 200,000 gallons, all but one cent per gallon;
77.7(4) on each gallon of such aviation gasoline or special fuel above 200,000, all but
77.8one-half cent per gallon.
77.9EFFECTIVE DATE.This section is effective July 1, 2014, and applied to sales
77.10and purchases made on or after that date.
77.11 Sec. 4. Minnesota Statutes 2012, section 297A.82, subdivision 4, is amended to read:
77.12 Subd. 4. Exemptions. (a) The following transactions are exempt from the tax
77.13imposed in this chapter to the extent provided.
77.14(b) The purchase or use of aircraft previously registered in Minnesota by a
77.15corporation or partnership is exempt if the transfer constitutes a transfer within the
77.16meaning of section 351 or 721 of the Internal Revenue Code.
77.17(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer
77.18of an aircraft for which a commercial use permit has been issued pursuant to section
77.19360.654
is exempt, if the aircraft is resold while the permit is in effect.
77.20(d) Air flight equipment when sold to, or purchased, stored, used, or consumed by
77.21airline companies, as defined in section270.071, subdivision 4 , is exempt. For purposes
77.22of this subdivision, "air flight equipment" includes airplanes and parts necessary for the
77.23repair and maintenance of such air flight equipment, and flight simulators, but does
77.24not include airplanes with a gross weight of less than 30,000 pounds that are used on
77.25intermittent or irregularly timed flights.
77.26(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined
77.27in section360.511 and approved by the Federal Aviation Administration, and which the
77.28seller delivers to a purchaser outside Minnesota or which, without intermediate use, is
77.29shipped or transported outside Minnesota by the purchaser are exempt, but only if the
77.30purchaser is not a resident of Minnesota and provided that the aircraft is not thereafter
77.31returned to a point within Minnesota, except in the course of interstate commerce or
77.32isolated and occasional use, and will be registered in another state or country upon its
77.33removal from Minnesota. This exemption applies even if the purchaser takes possession of
77.34the aircraft in Minnesota and uses the aircraft in the state exclusively for training purposes
77.35for a period not to exceed ten days prior to removing the aircraft from this state.
78.1(f) The sale or purchase of the following items that relate to aircraft operated under
78.2Federal Aviation Regulations, Parts 91 and 135, and associated installation charges:
78.3equipment and parts necessary for repair and maintenance of aircraft; and equipment
78.4and parts to upgrade and improve aircraft.
78.5EFFECTIVE DATE.This section is effective for sales and purchases made after
78.6June 30, 2013.
78.7 Sec. 5. Minnesota Statutes 2012, section 297A.82, is amended by adding a subdivision
78.8to read:
78.9 Subd. 4a. Deposit in state airports fund. Tax revenue collected from the sale or
78.10purchase of an aircraft taxable under this chapter must be deposited in the state airports
78.11fund, established in section 360.017.
78.12EFFECTIVE DATE.This section is effective July 1, 2013, and applied to sales
78.13and purchases made on or after that date.
78.14 Sec. 6. Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:
78.15 Subd. 3. Cigarette. "Cigarette" means any roll for smoking made wholly or in part
78.16of tobacco, that weighs 4.5 pounds or less per thousand:
78.17(1) the wrapper or cover of which is made of paper or another substance or material
78.18except tobacco; or
78.19(2) wrapped in any substance containing tobacco, however labeled or named, which,
78.20because of its appearance, size, the type of tobacco used in the filler, or its packaging,
78.21pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as
78.22a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does
78.23not have a cellulose acetate or other cigarette-like filter.
78.24EFFECTIVE DATE.This section is effective July 1, 2013.
78.25 Sec. 7. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
78.26to read:
78.27 Subd. 10b. Moist snuff. "Moist snuff" means any finely cut, ground, or powdered
78.28smokeless tobacco that is intended to be placed or dipped in the mouth.
78.29EFFECTIVE DATE.This section is effective January 1, 2014.
79.1 Sec. 8. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
79.2to read:
79.3 Subd. 13a. Premium cigar. "Premium cigar" means any cigar that is
79.4hand-constructed and hand-rolled, has a wrapper that is made entirely from whole tobacco
79.5leaf, has a filler and binder that is made entirely of tobacco, except for adhesives or other
79.6materials used to maintain size, texture, or flavor, and has a wholesale price of no less
79.7than $2.
79.8EFFECTIVE DATE.This section is effective July 1, 2013.
79.9 Sec. 9. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read:
79.10 Subd. 19. Tobacco products. (a) "Tobacco products" means any product
79.11containing, made, or derived from tobacco that is intended for human consumption,
79.12whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by
79.13any other means, or any component, part, or accessory of a tobacco product, including,
79.14but not limited to, cigars; little cigars; cheroots; stogies; periques; granulated, plug cut,
79.15crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug
79.16and twist tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings,
79.17cuttings and sweepings of tobacco, and other kinds and forms of tobacco; but does not
79.18include cigarettes as defined in this section. Tobacco products excludes any tobacco
79.19product that has been approved by the United States Food and Drug Administration for
79.20sale as a tobacco cessation product, as a tobacco dependence product, or for other medical
79.21purposes, and is being marketed and sold solely for such an approved purpose.
79.22(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4,
79.23tobacco products includes a premium cigar, as defined in subdivision 13a.
79.24EFFECTIVE DATE.This section is effective July 1, 2013.
79.25 Sec. 10. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
79.26 Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
79.27this state, upon having cigarettes in possession in this state with intent to sell, upon any
79.28person engaged in business as a distributor, and upon the use or storage by consumers, at
79.29the following rates:
79.30(1) on cigarettes weighing not more than three pounds per thousand,24 141.5 mills
79.31on each such cigarette; and
79.32(2) on cigarettes weighing more than three pounds per thousand,48 283 mills on
79.33each such cigarette.
80.1EFFECTIVE DATE.This section is effective July 1, 2013.
80.2 Sec. 11. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
80.3to read:
80.4 Subd. 1a. Annual indexing. (a) Each year the commissioner shall adjust the
80.5tax rates under subdivision 1, including any adjustment made in prior years under this
80.6subdivision, by multiplying the mill rates for the current calendar year by an adjustment
80.7factor and rounding the result to the nearest mill. The adjustment factor equals the in-lieu
80.8sales tax rate that applies to the following calendar year divided by the in-lieu sales tax
80.9rate for the current calendar year. For purposes of this subdivision, "in-lieu sales tax rate"
80.10means the tax rate established under section 297F.25, subdivision 1. For purposes of the
80.11calculations under this subdivision to be made in any year in which an increase in the
80.12federal or state excise tax on cigarettes is implemented, the commissioner shall exclude
80.13from the calculated average price for the current year an amount equal to any increase in
80.14the state or federal excise tax rate.
80.15 (b) The commissioner shall publish the resulting rate by November 1 and the rate
80.16applies to sales made on or after January 1 of the following year.
80.17(c) The determination of the commissioner under this subdivision is not a rule and is
80.18not subject to the Administrative Procedure Act in chapter 14.
80.19EFFECTIVE DATE.This section is effective July 1, 2014.
80.20 Sec. 12. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
80.21 Subd. 3. Rates; tobacco products. (a) Except as provided in subdivision 3a, a tax is
80.22imposed upon all tobacco products in this state and upon any person engaged in business
80.23as a distributor, at the rate of35 95 percent of the wholesale sales price of the tobacco
80.24products. The tax is imposed at the time the distributor:
80.25(1) brings, or causes to be brought, into this state from outside the state tobacco
80.26products for sale;
80.27(2) makes, manufactures, or fabricates tobacco products in this state for sale in
80.28this state; or
80.29(3) ships or transports tobacco products to retailers in this state, to be sold by those
80.30retailers.
80.31(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
80.32pack of 20 cigarettes weighing not more than three pounds per thousand, as established
80.33under subdivision 1, is imposed on each container of moist snuff.
81.1For purposes of this subdivision, a "container" means the smallest consumer-size can,
81.2package, or other container that is marketed or packaged by the manufacturer, distributor,
81.3or retailer for separate sale to a retail purchaser. When more than one container is
81.4packaged together, each container is subject to tax.
81.5EFFECTIVE DATE.This section is effective July 1, 2013, except the minimum
81.6tax under paragraph (b) is effective January 1, 2014.
81.7 Sec. 13. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
81.8to read:
81.9 Subd. 3a. Rates; tobacco. (a) A tax is imposed upon all premium cigars in this state
81.10and upon any person engaged in business as a tobacco product distributor, at the lesser of:
81.11(1) the rate of 95 percent of the wholesale sales price of the premium cigars; or
81.12(2) $3.50 per premium cigar.
81.13(b) The tax imposed under paragraph (a) is imposed at the time the tobacco products
81.14distributor:
81.15(1) brings, or causes to be brought, into this state from outside the state premium
81.16cigars for sale;
81.17(2) makes, manufactures, or fabricates premium cigars in this state for sale in this
81.18state; or
81.19(3) ships or transports premium cigars to retailers in this state, to be sold by those
81.20retailers.
81.21EFFECTIVE DATE.This section is effective July 1, 2013.
81.22 Sec. 14. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
81.23 Subd. 4. Use tax; tobacco products. Except as provided in subdivision 4a, a tax is
81.24imposed upon the use or storage by consumers of tobacco products in this state, and upon
81.25such consumers, at the rate of35 95 percent of the cost to the consumer of the tobacco
81.26products or the minimum tax under subdivision 3, paragraph (b), whichever is greater.
81.27EFFECTIVE DATE.This section is effective July 1, 2013.
81.28 Sec. 15. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
81.29to read:
81.30 Subd. 4a. Use tax; premium cigars. A tax is imposed upon the use or storage by
81.31consumers of all premium cigars in this state, and upon such consumers, at the lesser of:
81.32(1) the rate of 95 percent of the cost to the consumer of the premium cigars; or
82.1(2) $3.50 per premium cigar.
82.2EFFECTIVE DATE.This section is effective July 1, 2013.
82.3 Sec. 16. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read:
82.4 Subdivision 1. Fee imposed. (a) A fee is imposed upon the sale of nonsettlement
82.5cigarettes in this state, upon having nonsettlement cigarettes in possession in this state
82.6with intent to sell, upon any person engaged in business as a distributor, and upon the use
82.7or storage by consumers of nonsettlement cigarettes. The fee equals a rate of1.75 2.5
82.8cents per cigarette.
82.9(b) The purpose of this fee is to:
82.10(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that
82.11are comparable to costs attributable to the use of the cigarettes;
82.12(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's
82.13policy of discouraging underage smoking by offering nonsettlement cigarettes at prices
82.14substantially below the cigarettes of other manufacturers; and
82.15(3) fund such other purposes as the legislature determines appropriate.
82.16EFFECTIVE DATE.This section is effective July 1, 2013.
82.17 Sec. 17. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read:
82.18 Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of
82.19cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
82.20state. The tax is equal to6.5 percent of the combined tax rate under section 297A.62,
82.21multiplied by the weighted average retail price and must be expressed in cents per pack
82.22rounded to the nearest one-tenth of a cent. The weighted average retail price must be
82.23determined annually, with new rates published by November 1, and effective for sales
82.24on or after January 1 of the following year. The weighted average retail price must be
82.25established by surveying cigarette retailers statewide in a manner and time determined by
82.26the commissioner. The commissioner shall make an inflation adjustment in accordance
82.27with the Consumer Price Index for all urban consumers inflation indicator as published in
82.28the most recent state budget forecast. The commissioner shall use the inflation factor for
82.29the calendar year in which the new tax rate takes effect. If the survey indicates that the
82.30average retail price of cigarettes has not increased relative to the average retail price in
82.31the previous year's survey, then the commissioner shall not make an inflation adjustment.
82.32The determination of the commissioner pursuant to this subdivision is not a "rule" and is
83.1not subject to the Administrative Procedure Act contained in chapter 14. For packs of
83.2cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally.
83.3(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
83.4tax calculation of the weighted average retail price for the sales of cigarettes from August
83.51, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average
83.6retail price per pack of 20 cigarettes from the most recent survey by the percentage change
83.7in a weighted average of the presumed legal prices for cigarettes during the year after
83.8completion of that survey, as reported and published by the Department of Commerce
83.9under section325D.371 ; (2) subtracting the sales tax included in the retail price; and (3)
83.10adjusting for expected inflation. The rate must be published by May 1 and is effective for
83.11sales after July 31. If the weighted average of the presumed legal prices indicates that the
83.12average retail price of cigarettes has not increased relative to the average retail price in the
83.13most recent survey, then no inflation adjustment must be made. For packs of cigarettes
83.14with other than 20 cigarettes, the tax must be adjusted proportionally.
83.15EFFECTIVE DATE.This section is effective July 1, 2013.
83.16 Sec. 18. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
83.17 Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
83.18is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
83.19beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
83.20take the credit on the 18th day of each month, but the total credit allowed may not exceed
83.21in any fiscal year the lesser of:
83.22 (1) the liability for tax; or
83.23 (2) $115,000.
83.24 For purposes of this subdivision, a "qualified brewer" means a brewer, whether or
83.25not located in this state, manufacturing less than100,000 250,000 barrels of fermented
83.26malt beverages in the calendar year immediately preceding the calendar year for which
83.27the credit under this subdivision is claimed. In determining the number of barrels, all
83.28brands or labels of a brewer must be combined. All facilities for the manufacture of
83.29fermented malt beverages owned or controlled by the same person, corporation, or other
83.30entity must be treated as a single brewer.
83.31EFFECTIVE DATE.This section is effective for determinations based on calendar
83.32year 2012 production and thereafter.
83.33 Sec. 19. Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:
84.1 Subd. 2. Cigarettes. "Cigarettes" means and includes any roll for smoking, made
84.2wholly or in part of tobacco, irrespective of size and shape and whether or not such
84.3tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover
84.4of which is made of paper or any other substance or material except whole tobacco leaf,
84.5and includes any cigarette as defined in section 297F.01, subdivision 3.
84.6EFFECTIVE DATE.This section is effective July 1, 2013.
84.7 Sec. 20. Minnesota Statutes 2012, section 325F.781, subdivision 1, is amended to read:
84.8 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
84.9have the meanings given, unless the language or context clearly provides otherwise.
84.10(b) "Consumer" means an individual who purchases, receives, or possesses tobacco
84.11products for personal consumption and not for resale.
84.12(c) "Delivery sale" means:
84.13(1) a sale of tobacco products to a consumer in this state when:
84.14(i) the purchaser submits the order for the sale by means of a telephonic or other
84.15method of voice transmission, the mail or any other delivery service, or the Internet or
84.16other online service; or
84.17(ii) the tobacco products are delivered by use of the mail or other delivery service; or
84.18(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i),
84.19regardless of whether the seller is located inside or outside of the state.
84.20A sale of tobacco products to an individual in this state must be treated as a sale to a
84.21consumer, unless the individual is licensed as a distributor or retailer of tobacco products.
84.22(d) "Delivery service" means a person, including the United States Postal Service,
84.23that is engaged in the commercial delivery of letters, packages, or other containers.
84.24(e) "Distributor" means a person, whether located inside or outside of this state,
84.25other than a retailer, who sells or distributes tobacco products in the state. Distributor does
84.26not include a tobacco products manufacturer, export warehouse proprietor, or importer
84.27with a valid permit under United States Code, title 26, section 5712 (1997), if the person
84.28sells or distributes tobacco products in this state only to distributors who hold valid and
84.29current licenses under the laws of a state, or to an export warehouse proprietor or another
84.30manufacturer. Distributor does not include a common or contract carrier that is transporting
84.31tobacco products under a proper bill of lading or freight bill that states the quantity, source,
84.32and destination of tobacco products, or a person who ships tobacco products through this
84.33state by common or contract carrier under a bill of lading or freight bill.
84.34(f) "Retailer" means a person, whether located inside or outside this state, who sells
84.35or distributes tobacco products to a consumer in this state.
85.1(g) "Tobacco products" means:
85.2(1) cigarettes, as defined in section297F.01, subdivision 3 ; and
85.3(2) smokeless tobacco as defined in section325F.76 .; and
85.4(3) premium cigars as defined in section 297F.01, subdivision 13a.
85.5EFFECTIVE DATE.This section is effective July 1, 2013.
85.6 Sec. 21. Minnesota Statutes 2012, section 349.166, subdivision 1, is amended to read:
85.7 Subdivision 1. Exclusions. (a) Bingo, with the exception of linked bingo games, may
85.8be conducted without a license and without complying with sections349.168 , subdivisions
85.91 and 2;349.17 , subdivisions 4 and 5;
349.18, subdivision 1 ; and
349.19 , if it is conducted:
85.10(1) by an organization in connection with a county fair, the state fair, or a civic
85.11celebration and is not conducted for more than 12 consecutive days and is limited to no more
85.12than four separate applications for activities applied for and approved in a calendar year; or
85.13(2) by an organization that conducts bingo on four or fewer days in a calendar year.
85.14An organization that holds a license to conduct lawful gambling under this chapter
85.15may not conduct bingo under this subdivision.
85.16(b) Bingo may be conducted within a nursing home or a senior citizen housing
85.17project or by a senior citizen organization if the prizes for a single bingo game do not
85.18exceed $10, total prizes awarded at a single bingo occasion do not exceed $200, no more
85.19than two bingo occasions are held by the organization or at the facility each week, only
85.20members of the organization or residents of the nursing home or housing project are
85.21allowed to play in a bingo game, no compensation is paid for any persons who conduct the
85.22bingo, and a manager is appointed to supervise the bingo. Bingo conducted under this
85.23paragraph is exempt from sections349.11 to
349.23 , and the board may not require an
85.24organization that conducts bingo under this paragraph, or the manager who supervises the
85.25bingo, to register or file a report with the board. The gross receipts from bingo conducted
85.26under the limitations of this subdivision are exempt from taxation under chapter 297A.
85.27(c) Raffles may be conducted by an organization without registering with the board
85.28if the value of all raffle prizes awarded by the organization in a calendar year does not
85.29exceed $1,500 or, if the organization is a 501(c)(3) organization, if the value of all raffle
85.30prizes awarded by the organization at one event in a calendar year does not exceed $5,000.
85.31(d) Except as provided in paragraph (b), the organization must maintain all required
85.32records of excluded gambling activity for 3-1/2 years.
85.33EFFECTIVE DATE.This section is effective July 1, 2013.
86.1 Sec. 22. Minnesota Statutes 2012, section 360.531, is amended to read:
86.2360.531 TAXATION.
86.3 Subdivision 1. In lieu tax. All aircraft using the air space overlying the state of
86.4Minnesota or the airports thereof, except as set forth in section360.55 , shall be taxed in
86.5lieu of all other taxes thereon, on the basis and at the rate for the period January 1, 1966, to
86.6June 30, 1967, and for each fiscal year as follows.
86.7 Subd. 2. Rate. The tax shall beat the rate of one percent of value; provided that
86.8the minimum tax on an aircraft subject to the provisions of sections
360.511 to
360.67
shall not be less than 25 percent of the tax on said aircraft computed on its base price or
86.10$50 whichever is the higher. as follows:
86.28 Subd. 3. First year of life. "First year of life" means the year the aircraft was
86.29manufactured.
86.30 Subd. 4. Base price for taxation. For the purpose of fixing a base price for taxation
86.31from which depreciation in value at a fixed percent per annum can be counted, such , the
86.32base price is defined as follows:
86.33(a) The base price for taxation of an aircraft shall be the manufacturer's list price.
86.34(b) The commissioner shall have authority to fix the base value for taxation purposes
86.35of any aircraft of which no such similar or corresponding model has been manufactured,
86.36and of any rebuilt or foreign aircraft, any aircraft on which a record of the list price is not
86.37available, or any military aircraft converted for civilian use, using as a basis forsuch
87.1valuation the list price of aircraft with comparable performance characteristics, and taking
87.2into consideration the age and condition of the aircraft.
87.3 Subd. 5. Similarity of corresponding model. Models shall be deemed similar if
87.4substantially alike and of the same make. Models shall be deemed to be corresponding
87.5models for the purpose of taxation under sections360.54 to
360.67 if of the same make
87.6and having approximately the same weight and type of frame and the same style and
87.7size of motor.
87.8Subd. 6. Depreciation. After the first year of aircraft life the base value for taxation
87.9purposes shall be reduced as follows: ten percent the second year, and 15 percent the third
87.10and each succeeding year thereafter, but in no event shall such tax be reduced below
87.11the minimum.
87.12 Subd. 7. Prorating tax. When an aircraft first becomes subject to taxation during the
87.13period for which the tax is to be paid, the tax on it shall be for the remainder of that period,
87.14prorated on a monthly basis of 1/12 of the annual tax for each calendar month counting the
87.15month during which it becomes subject to the tax as the first month of such period.
87.16 Subd. 8. Tax, fiscal year. Every aircraft subject to the provisions of sections
87.17360.511
to
360.67 which has at any time since April 19, 1945, used the air space overlying
87.18the state of Minnesota or the airports thereof shall be taxed for the period from January 1,
87.191966, through June 30, 1967, and for each fiscal year thereafter in which it is so used. Any
87.20aircraft which does not use the air space overlying the state of Minnesota or the airports
87.21thereof at any time during the period of January 1, 1966, to and including June 30, 1967,
87.22or at any time during any fiscal year thereafter shall not be subject to the tax provided by
87.23sections360.511 to
360.67 for such period. Rebuilt aircraft shall be subject to the tax
87.24provided by sections360.511 to
360.67 for that portion of the aforesaid periods remaining
87.25after the aircraft has been rebuilt, prorated on a monthly basis.
87.26 Subd. 9. Assessed as personal property in certain cases. Aircraft subject to
87.27taxation under the provisions of sections360.54 to
360.67 shall not be assessed as personal
87.28property and shall be subject to no tax except as provided for by these sections. Aircraft
87.29not subject to taxation as provided in these sections, but subject to taxation as personal
87.30property within the state of Minnesota shall be assessed and valued at 33-1/3 percent of
87.31the market value thereof and taxed at the rate and in the manner provided by law for the
87.32taxation of ordinary personal property. If the person against whom any tax has been levied
87.33on the ad valorem basis because of any aircraft shall, during the calendar year for which
87.34such ad valorem tax is levied, be also taxed under provisions of these sections, then and in
87.35that event, upon proper showing, the commissioner of revenue shall grant to the person
87.36against whom said ad valorem tax was levied, such reduction or abatement of net tax
88.1capacity or taxes as was occasioned by the so-called ad valorem tax imposed. If the ad
88.2valorem tax upon any aircraft has been assessed against a dealer in new and used aircraft,
88.3and the tax imposed by these sections for the required period is thereafter paid by the
88.4owner, then and in that event, upon proper showing, the commissioner of revenue, upon
88.5the application of said dealer, shall grant to such dealer against whom said ad valorem tax
88.6was levied such reduction or abatement of net tax capacity or taxes as was occasioned
88.7by the so-called ad valorem tax imposed.
88.8EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.9tax due on or after that date.
88.10 Sec. 23. Minnesota Statutes 2012, section 360.66, is amended to read:
88.11360.66 STATE AIRPORTS FUND.
88.12 Subdivision 1. Tax credited to fund. The proceeds of the tax imposed on aircraft
88.13under sections360.54360.67 and all fees and penalties provided for therein
88.14shall be collected by the commissioner and paid into the state treasury and credited to the
88.15state airports fund created by other statutes of this state.
88.16 Subd. 2. Reimbursement for expenses. There shall be transferred by the
88.17commissioner of management and budget each year from the state airports fund to the
88.18general fund in the state treasury the amount expended from the latter fund for expenses of
88.19administering the provisions of sections360.54360.67 .
88.20EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.21tax due on or after that date.
88.22 Sec. 24. REPORT.
88.23On or before June 30, 2016, and every four years thereafter, the commissioner of
88.24transportation, in consultation with the commissioner of revenue, shall prepare and submit
88.25to the chairs and ranking minority members of the senate and house of representatives
88.26committees with jurisdiction over transportation policy and budget, a report that identifies
88.27the amount and sources of annual revenues attributable to each type of aviation tax, along
88.28with annual expenditures from the state airports fund, and any other transfers out of the
88.29fund, during the previous four years. The report must include draft legislation for any
88.30recommended statutory changes to ensure the future adequacy of the state airports fund.
88.31EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.32tax due on or after that date.
89.1 Sec. 25. FLOOR STOCKS TAX.
89.2 Subdivision 1. Cigarettes. (a) A floor stocks tax is imposed on every person
89.3engaged in the business in this state as a distributor, retailer, subjobber, vendor,
89.4manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and
89.5unaffixed stamps in the person's possession or under the person's control at 12:01 a.m.
89.6on July 1, 2013. The tax is imposed at the rate of 80 mills on each cigarette plus the
89.7additional cigarette sales tax determined by an adjustment to the weighted average retail
89.8price which reflects the price including the increased tax.
89.9(b) Each distributor, on or before July 11, 2013, shall file a return with the
89.10commissioner of revenue, in the form the commissioner prescribes, showing the stamped
89.11cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount
89.12of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor,
89.13manufacturer, or manufacturer's representative, on or before July 11, 2013, shall file
89.14a return with the commissioner, in the form the commissioner prescribes, showing the
89.15cigarettes on hand at 12:01 a.m. on July 1, 2013, and the amount of tax due on the
89.16cigarettes. The tax imposed by this section is due and payable on or before September 4,
89.172013, and after that date bears interest at the rate of one percent per month.
89.18 Subd. 2. Audit and enforcement. The tax imposed by this section is subject to
89.19the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and
89.20collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner
89.21of revenue may require a distributor to receive and maintain copies of floor stocks fee
89.22returns filed by all persons requesting a credit for returned cigarettes.
89.23 Subd. 3. Deposit of proceeds. (a) The commissioner of revenue shall deposit
89.24$26,500,000 of the revenues from the tax under this section in the state treasury and credit
89.25them to the general reserve account established under Minnesota Statutes 297E.021,
89.26subdivision 4.
89.27(b) The commissioner of revenue shall deposit any revenue remaining after the
89.28transfer under paragraph (a) to the general fund.
89.29EFFECTIVE DATE.This section is effective July 1, 2013.
89.30 Sec. 26. INTERIM SALES TAX RATE.
89.31Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the
89.32commissioner shall adjust the weighted average retail price in section 297F.25, subdivision
89.331, on July 1, 2013, to reflect the price changes under this act. This weighted average
90.1shall be used to compute cigarette sales tax under Minnesota Statutes, section 297F.25,
90.2subdivision 1, until December 31, 2013, when the commissioner shall resume annual
90.3adjustments to the weighted average sales price. The commissioner's determination of
90.4the adjustment that takes effect on January 1, 2014, must be limited to the change in the
90.5weighted average retail price that occurs during calendar year 2013 but after July 15, 2013.
90.6EFFECTIVE DATE.This section is effective July 1, 2013.
90.7 Sec. 27. TOBACCO TAX COLLECTION REPORT.
90.8 Subdivision 1. Report to legislature. (a) The commissioner of revenue shall report
90.9to the 2014 legislature on the tobacco tax collection system, including recommendations
90.10to improve compliance under the excise tax for both cigarettes and other tobacco products.
90.11The purpose of the report is to provide information and guidance to the legislature on
90.12improvements to the tobacco tax collection system to:
90.13(1) provide a unified system of collecting both the cigarette and other tobacco
90.14taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of
90.15tax collection;
90.16(2) discourage tax evasion; and
90.17(3) help to prevent illegal sale of tobacco products, which may make these products
90.18more accessible to youth.
90.19(b) In the report, the commissioner shall:
90.20(1) provide a detailed review of the present excise tax collection and compliance
90.21system as it applies to both cigarettes and other tobacco products. This must include
90.22an assessment of the levels of compliance for each category of products and the effect
90.23of the stamping requirement on compliance for each category of products and the effect
90.24of the stamping requirement on compliance rates for cigarettes relative to other tobacco
90.25products. It also must identify any weaknesses in the system;
90.26(2) survey the methods of collection and enforcement used by other states or nations,
90.27including identifying and discussing emerging best practices that ensure tracking of both
90.28cigarettes and other tobacco products and result in the highest rates of tax collection and
90.29compliance. These best practices must consider high-technology alternatives, such as use
90.30of bar codes, radio-frequency identification tags, or similar mechanisms for tracking
90.31compliance;
90.32(3) evaluate the adequacy and effectiveness of the existing penalties and other
90.33sanctions for noncompliance;
91.1(4) evaluate the adequacy of the resources allocated by the state to enforce the
91.2tobacco tax and prevention laws; and
91.3(5) make recommendations on implementation of a comprehensive tobacco tax
91.4collection system for Minnesota that can be implemented by January 1, 2014, including:
91.5(i) recommendations on the specific steps needed to institute and implement the new
91.6system, including estimates of the state's costs of doing so and any additional personnel
91.7requirements;
91.8(ii) recommendations on methods to recover the cost of implementing the system
91.9from the industry;
91.10(iii) evaluation of the extent to which the proposed system is sufficiently flexible
91.11and adaptable to adjust to modifications in the construction, packaging, formatting, and
91.12marketing of tobacco products by the industry; and
91.13(iv) recommendations to modify existing penalties or to impose new penalties or
91.14other sanctions to ensure compliance with the system.
91.15 Subd. 2. Due date. The report required by subdivision 1 is due February 15, 2014.
91.16 Subd. 3. Procedure. The report required under this section must be made in the
91.17manner provided under Minnesota Statutes, section 3.195. In addition, copies must be
91.18provided to the chairs and ranking minority members of the legislative committees and
91.19divisions with jurisdiction over taxation.
91.20 Subd. 4. Appropriation. (a) $100,000 is appropriated from the general fund to the
91.21commissioner of revenue for fiscal year 2014 for the cost of preparing the report under
91.22subdivision 1.
91.23(b) The appropriation under this subdivision is a onetime appropriation and is not
91.24included in the base budget.
91.25EFFECTIVE DATE.This section is effective the day following final enactment.
91.26 Sec. 28. REPEALER.
91.27Minnesota Statutes 2012, sections 16A.725; and 256.9658, are repealed.
91.28EFFECTIVE DATE.This section is effective July 1, 2013.
91.31 Section 1. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to
91.32read:
92.1 Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
92.2have the meanings given.
92.3(b) "Qualified small business" means a business that has been certified by the
92.4commissioner under subdivision 2.
92.5(c) "Qualified investor" means an investor who has been certified by the
92.6commissioner under subdivision 3.
92.7(d) "Qualified fund" means a pooled angel investment network fund that has been
92.8certified by the commissioner under subdivision 4.
92.9(e) "Qualified investment" means a cash investment in a qualified small business
92.10of a minimum of:
92.11(1) $10,000 in a calendar year by a qualified investor; or
92.12(2) $30,000 in a calendar year by a qualified fund.
92.13A qualified investment must be made in exchange for common stock, a partnership
92.14or membership interest, preferred stock, debt with mandatory conversion to equity, or an
92.15equivalent ownership interest as determined by the commissioner.
92.16(f) "Family" means a family member within the meaning of the Internal Revenue
92.17Code, section 267(c)(4).
92.18(g) "Pass-through entity" means a corporation that for the applicable taxable year is
92.19treated as an S corporation or a general partnership, limited partnership, limited liability
92.20partnership, trust, or limited liability company and which for the applicable taxable year is
92.21not taxed as a corporation under chapter 290.
92.22(h) "Intern" means a student of an accredited institution of higher education, or a
92.23former student who has graduated in the past six months from an accredited institution
92.24of higher education, who is employed by a qualified small business in a nonpermanent
92.25position for a duration of nine months or less that provides training and experience in the
92.26primary business activity of the business.
92.27(i) "Liquidation event" means a conversion of qualified investment for cash, cash
92.28and other consideration, or any other form of equity or debt interest.
92.29EFFECTIVE DATE.This section is effective for qualified small businesses
92.30certified after June 30, 2013.
92.31 Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read:
92.32 Subd. 2. Certification of qualified small businesses. (a) Businesses may apply
92.33to the commissioner for certification as a qualified small business for a calendar year.
92.34The application must be in the form and be made under the procedures specified by the
92.35commissioner, accompanied by an application fee of $150. Application fees are deposited
93.1in the small business investment tax credit administration account in the special revenue
93.2fund. The application for certification for 2010 must be made available on the department's
93.3Web site by August 1, 2010. Applications for subsequent years' certification must be made
93.4available on the department's Web site by November 1 of the preceding year.
93.5(b) Within 30 days of receiving an application for certification under this subdivision,
93.6the commissioner must either certify the business as satisfying the conditions required of a
93.7qualified small business, request additional information from the business, or reject the
93.8application for certification. If the commissioner requests additional information from the
93.9business, the commissioner must either certify the business or reject the application within
93.1030 days of receiving the additional information. If the commissioner neither certifies the
93.11business nor rejects the application within 30 days of receiving the original application or
93.12within 30 days of receiving the additional information requested, whichever is later, then
93.13the application is deemed rejected, and the commissioner must refund the $150 application
93.14fee. A business that applies for certification and is rejected may reapply.
93.15(c) To receive certification, a business must satisfy all of the following conditions:
93.16(1) the business has its headquarters in Minnesota;
93.17(2) at least 51 percent of the business's employees are employed in Minnesota, and
93.1851 percent of the business's total payroll is paid or incurred in the state;
93.19(3) the business is engaged in, or is committed to engage in, innovation in Minnesota
93.20in one of the following as its primary business activity:
93.21(i) using proprietary technology to add value to a product, process, or service in a
93.22qualified high-technology field;
93.23(ii) researching or developing a proprietary product, process, or service in a qualified
93.24high-technology field; or
93.25(iii) researching, developing, or producing a new proprietary technology for use in
93.26the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
93.27(4) other than the activities specifically listed in clause (3), the business is not
93.28engaged in real estate development, insurance, banking, lending, lobbying, political
93.29consulting, information technology consulting, wholesale or retail trade, leisure,
93.30hospitality, transportation, construction, ethanol production from corn, or professional
93.31services provided by attorneys, accountants, business consultants, physicians, or health
93.32care consultants;
93.33(5) the business has fewer than 25 employees;
93.34(6) the business must pay its employees annual wages of at least 175 percent of the
93.35federal poverty guideline for the year for a family of four and must pay its interns annual
93.36wages of at least 175 percent of the federal minimum wage used for federally covered
94.1employers, except that this requirement must be reduced proportionately for employees
94.2and interns who work less than full-time, and does not apply to an executive, officer, or
94.3member of the board of the business, or to any employee who owns, controls, or holds
94.4power to vote more than 20 percent of the outstanding securities of the business;
94.5(7) the business has (i) not been in operation for more than ten years, or (ii) the
94.6business has not been in operation for more than 20 years if the business is engaged
94.7in the research, development, or production of medical devices or pharmaceuticals for
94.8which United States Food and Drug Administration approval is required for use in the
94.9treatment or diagnosis of a disease or condition;
94.10(8) the business has not previously received private equity investments of more
94.11than $4,000,000;and
94.12 (9) the business is not an entity disqualified under section80A.50 , paragraph (b),
94.13clause (3).; and
94.14(10) the business has not issued securities that are traded on a public exchange.
94.15(d) In applying the limit under paragraph (c), clause (5), the employees in all members
94.16of the unitary business, as defined in section290.17, subdivision 4 , must be included.
94.17(e) In order for a qualified investment in a business to be eligible for tax credits,:
94.18(1) the business must have applied for and received certification for the calendar
94.19year in which the investment was made prior to the date on which the qualified investment
94.20was made.;
94.21(2) the business must not have issued securities that are traded on a public exchange;
94.22(3) the business must not issue securities that are traded on a public exchange within
94.23180 days after the date on which the qualified investment was made; and
94.24(4) the business must not have a liquidation event within 180 days after the date on
94.25which the qualified investment was made.
94.26(f) The commissioner must maintain a list of businesses certified under this
94.27subdivision for the calendar year and make the list accessible to the public on the
94.28department's Web site.
94.29(g) For purposes of this subdivision, the following terms have the meanings given:
94.30(1) "qualified high-technology field" includes aerospace, agricultural processing,
94.31renewable energy, energy efficiency and conservation, environmental engineering, food
94.32technology, cellulosic ethanol, information technology, materials science technology,
94.33nanotechnology, telecommunications, biotechnology, medical device products,
94.34pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar
94.35fields; and
95.1(2) "proprietary technology" means the technical innovations that are unique and
95.2legally owned or licensed by a business and includes, without limitation, those innovations
95.3that are patented, patent pending, a subject of trade secrets, or copyrighted.
95.4EFFECTIVE DATE.This section is effective for qualified small businesses
95.5certified after June 30, 2013, except the amendments to paragraph (c), clause (7), are
95.6effective the day following final enactment.
95.7 Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 8, is amended to read:
95.8 Subd. 8. Data privacy. (a) Data contained in an application submitted to the
95.9commissioner under subdivision 2, 3, or 4 are nonpublic data, or private data on
95.10individuals, as defined in section13.02, subdivision 9 or 12, except that the following
95.11data items are public:
95.12(1) the name, mailing address, telephone number, e-mail address, contact person's
95.13name, and industry type of a qualified small business upon approval of the application
95.14and certification by the commissioner under subdivision 2;
95.15(2) the name of a qualified investor upon approval of the application and certification
95.16by the commissioner under subdivision 3;
95.17(3) the name of a qualified fund upon approval of the application and certification
95.18by the commissioner under subdivision 4;
95.19(4) for credit certificates issued under subdivision 5, the amount of the credit
95.20certificate issued, amount of the qualifying investment, the name of the qualifying investor
95.21or qualifying fund that received the certificate, and the name of the qualifying small
95.22business in which the qualifying investment was made;
95.23(5) for credits revoked under subdivision 7, paragraph (a), the amount revoked and
95.24the name of the qualified investor or qualified fund; and
95.25(6) for credits revoked under subdivision 7, paragraphs (b) and (c), the amount
95.26revoked and the name of the qualified small business.
95.27(b) The following data, including data classified as nonpublic or private, must be
95.28provided to the consultant for use in conducting the program evaluation under subdivision
95.2910:
95.30(1) the commissioner of employment and economic development shall provide data
95.31contained in an application for certification received from a qualified small business,
95.32qualified investor, or qualified fund, and any annual reporting information received on a
95.33qualified small business, qualified investor, or qualified fund; and
95.34(2) the commissioner of revenue shall provide data contained in any applicable tax
95.35returns of a qualified small business, qualified investor, or qualified fund.
96.1EFFECTIVE DATE.This section is effective the day following final enactment.
96.2 Sec. 4. [136A.129] GREATER MINNESOTA INTERNSHIP PROGRAM.
96.3 Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
96.4this subdivision have the meanings given to them.
96.5(b) "Eligible employer" means a taxpayer under section 290.01 with employees
96.6located in greater Minnesota.
96.7(c) "Eligible institution" means a Minnesota public postsecondary institution or a
96.8Minnesota private, nonprofit, baccalaureate degree-granting college or university.
96.9(d) "Eligible student" means a student enrolled in an eligible institution who has
96.10completed one-half of the credits necessary for the respective degree or certification.
96.11(e) "Greater Minnesota" means the area of the state outside of the counties of Anoka,
96.12Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and
96.13Wright.
96.14 Subd. 2. Program established. The Office of Higher Education shall administer
96.15a greater Minnesota internship program through eligible institutions to provide credit at
96.16the eligible institution for internships and tax credits for eligible employers who hire
96.17interns for employment in greater Minnesota.
96.18 Subd. 3. Program components. (a) An intern must be an eligible student who has
96.19been admitted to a major program that is related to the intern experience as determined
96.20by the eligible institution.
96.21(b) To participate in the program, an eligible institution must:
96.22(1) enter into written agreements with eligible employers to provide internships that
96.23are at least 12 weeks long and located in greater Minnesota;
96.24(2) determine that the work experience of the internship is related to the eligible
96.25student's course of study; and
96.26(3) provide academic credit for the successful completion of the internship or ensure
96.27that it fulfills requirements necessary to complete a vocational technical education program.
96.28(c) To participate in the program, an eligible employer must enter into a written
96.29agreement with an eligible institution specifying that the intern:
96.30(1) would not have been hired without the tax credit described in subdivision 4;
96.31(2) did not work for the employer in the same or a similar job prior to entering
96.32the agreement;
96.33(3) does not replace an existing employee;
96.34(4) has not previously participated in the program;
96.35(5) will be employed at a location in greater Minnesota;
97.1(6) will be paid at least minimum wage for a minimum of 16 hours per week for a
97.2period of at least 12 weeks; and
97.3(7) will be supervised and evaluated by the employer.
97.4(d) The written agreement between the eligible institution and the eligible employer
97.5must certify a credit amount to the employer, not to exceed $2,000 per intern. The total
97.6dollar amount of credits that an eligible institution certifies to eligible employers in a
97.7calendar year may not exceed the amount of its allocation under subdivision 4.
97.8(e) Participating eligible institutions and eligible employers must report annually to
97.9the office. The report must include at least the following:
97.10(1) the number of interns hired;
97.11(2) the number of hours and weeks worked by interns; and
97.12(3) the compensation paid to interns.
97.13(f) An internship required to complete an academic program does not qualify for the
97.14greater Minnesota internship program under this section.
97.15 Subd. 4. Tax credit allowed. An employer is entitled to a tax credit as provided in
97.16section 290.06, subdivision 36. The total amount of credits allocated in a calendar year
97.17must not exceed $2,000,000. The office shall determine relevant criteria to allocate the
97.18tax credits including the geographic distribution of credits to work locations outside the
97.19metropolitan area, and shall allocate credits to eligible institutions that meet the criteria on
97.20a first come, first served basis. Any credits allocated to an institution but not used may be
97.21reallocated to eligible institutions. The office shall allocate a portion of the administrative
97.22fee under section 290.06, subdivision 36, to participating eligible institutions for their
97.23administrative costs.
97.24 Subd. 5. Reports to the legislature. (a) By February 1, 2015, the office and the
97.25Department of Revenue shall report to the legislature on the greater Minnesota internship
97.26program. The report must include at least the following:
97.27(1) the number and dollar amount of credits allowed;
97.28(2) the number of interns employed under the program; and
97.29(3) the cost of administering the program.
97.30(b) By February 1, 2016, the office and the Department of Revenue shall report to the
97.31legislature with an analysis of the effectiveness of the program in stimulating businesses
97.32to hire interns and in assisting participating interns in finding permanent career positions.
97.33This report must include the number of students who participated in the program who
97.34were subsequently employed full-time by the employer.
97.35EFFECTIVE DATE.This section is effective for taxable years beginning after
97.36December 31, 2013.
98.1 Sec. 5. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read:
98.2 Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
98.3tax under section290.014, subdivision 5 , must file a return, except that a foreign operating
98.4corporation as defined in section
290.01, subdivision 6b, is not required to file a return.
98.5(b) Members of a unitary business that are required to file a combined report on one
98.6return must designate a member of the unitary business to be responsible for tax matters,
98.7including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
98.8or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
98.9taxes lawfully due. The designated member must be a member of the unitary business that
98.10is filing the single combined report and either:
98.11(1) a corporation that is subject to the taxes imposed by chapter 290; or
98.12(2) a corporation that is not subject to the taxes imposed by chapter 290:
98.13(i) Such corporation consents by filing the return as a designated member under this
98.14clause to remit taxes, penalties, interest, or additions to tax due from the members of the
98.15unitary business subject to tax, and receive refunds or other payments on behalf of other
98.16members of the unitary business. The member designated under this clause is a "taxpayer"
98.17for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
98.18on the unitary business under this chapter and chapter 290.
98.19(ii) If the state does not otherwise have the jurisdiction to tax the member designated
98.20under this clause, consenting to be the designated member does not create the jurisdiction
98.21to impose tax on the designated member, other than as described in item (i).
98.22(iii) The member designated under this clause must apply for a business tax account
98.23identification number.
98.24(c) The commissioner shall adopt rules for the filing of one return on behalf of the
98.25members of an affiliated group of corporations that are required to file a combined report.
98.26All members of an affiliated group that are required to file a combined report must file one
98.27return on behalf of the members of the group under rules adopted by the commissioner.
98.28(d) If a corporation claims on a return that it has paid tax in excess of the amount of
98.29taxes lawfully due, that corporation must include on that return information necessary for
98.30payment of the tax in excess of the amount lawfully due by electronic means.
98.31EFFECTIVE DATE.This section is effective for taxable years beginning after
98.32December 31, 2012.
98.33 Sec. 6. Minnesota Statutes 2012, section 290.01, subdivision 19, as amended by Laws
98.342013, chapter 3, section 3, is amended to read:
99.1 Subd. 19. Net income. The term "net income" means the federal taxable income,
99.2as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
99.3date named in this subdivision, incorporating the federal effective dates of changes to the
99.4Internal Revenue Code and any elections made by the taxpayer in accordance with the
99.5Internal Revenue Code in determining federal taxable income for federal income tax
99.6purposes, and with the modifications provided in subdivisions 19a to 19f.
99.7 In the case of a regulated investment company or a fund thereof, as defined in section
99.8851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
99.9company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
99.10except that:
99.11 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
99.12Revenue Code does not apply;
99.13 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
99.14Revenue Code must be applied by allowing a deduction for capital gain dividends and
99.15exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
99.16Revenue Code; and
99.17 (3) the deduction for dividends paid must also be applied in the amount of any
99.18undistributed capital gains which the regulated investment company elects to have treated
99.19as provided in section 852(b)(3)(D) of the Internal Revenue Code.
99.20 The net income of a real estate investment trust as defined and limited by section
99.21856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
99.22taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
99.23 The net income of a designated settlement fund as defined in section 468B(d) of
99.24the Internal Revenue Code means the gross income as defined in section 468B(b) of the
99.25Internal Revenue Code.
99.26 The Internal Revenue Code of 1986, as amended through April 14, 2011, shall be in
99.27effect for taxable years beginning after December 31, 1996, and before January 1, 2012,
99.28and for taxable years beginning after December 31, 2012. The Internal Revenue Code of
99.291986, as amended through January 3, 2013, is in effect for taxable years beginning after
99.30December 31, 2011, and before January 1, 2013.
99.31The provisions of sections 315 and 331 of the American Taxpayer Relief Act of
99.322012, Public Law 112-240, extension of increased expensing limitations and treatment
99.33of certain real property as section 179 property and extension and modification of bonus
99.34depreciation, are effective at the same time they become effective for federal purposes.
100.1 Except as otherwise provided, references to the Internal Revenue Code in
100.2subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
100.3the applicable year.
100.4EFFECTIVE DATE.This section is effective for taxable years beginning after
100.5December 31, 2012.
100.6 Sec. 7. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
100.7 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
100.8and trusts, there shall be subtracted from federal taxable income:
100.9 (1) net interest income on obligations of any authority, commission, or
100.10instrumentality of the United States to the extent includable in taxable income for federal
100.11income tax purposes but exempt from state income tax under the laws of the United States;
100.12 (2) if included in federal taxable income, the amount of any overpayment of income
100.13tax to Minnesota or to any other state, for any previous taxable year, whether the amount
100.14is received as a refund or as a credit to another taxable year's income tax liability;
100.15 (3) the amount paid to others, less the amount used to claim the credit allowed under
100.16section290.0674 , not to exceed $1,625 for each qualifying child in grades kindergarten
100.17to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
100.18transportation of each qualifying child in attending an elementary or secondary school
100.19situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
100.20resident of this state may legally fulfill the state's compulsory attendance laws, which
100.21is not operated for profit, and which adheres to the provisions of the Civil Rights Act
100.22of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
100.23tuition as defined in section290.0674, subdivision 1 , clause (1). As used in this clause,
100.24"textbooks" includes books and other instructional materials and equipment purchased
100.25or leased for use in elementary and secondary schools in teaching only those subjects
100.26legally and commonly taught in public elementary and secondary schools in this state.
100.27Equipment expenses qualifying for deduction includes expenses as defined and limited in
100.28section290.0674, subdivision 1 , clause (3). "Textbooks" does not include instructional
100.29books and materials used in the teaching of religious tenets, doctrines, or worship, the
100.30purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
100.31or materials for, or transportation to, extracurricular activities including sporting events,
100.32musical or dramatic events, speech activities, driver's education, or similar programs. No
100.33deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
100.34the qualifying child's vehicle to provide such transportation for a qualifying child. For
101.1purposes of the subtraction provided by this clause, "qualifying child" has the meaning
101.2given in section 32(c)(3) of the Internal Revenue Code;
101.3 (4) income as provided under section290.0802 ;
101.4 (5) to the extent included in federal adjusted gross income, income realized on
101.5disposition of property exempt from tax under section290.491 ;
101.6 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
101.7of the Internal Revenue Code in determining federal taxable income by an individual
101.8who does not itemize deductions for federal income tax purposes for the taxable year, an
101.9amount equal to 50 percent of the excess of charitable contributions over $500 allowable
101.10as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
101.11under the provisions of Public Law 109-1 and Public Law 111-126;
101.12 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
101.13qualify for a credit under section290.06, subdivision 22 , an amount equal to the carryover
101.14of subnational foreign taxes for the taxable year, but not to exceed the total subnational
101.15foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
101.16"federal foreign tax credit" means the credit allowed under section 27 of the Internal
101.17Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
101.18under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
101.19the extent they exceed the federal foreign tax credit;
101.20 (8) in each of the five tax years immediately following the tax year in which an
101.21addition is required under subdivision 19a, clause (7), or 19c, clause(15) (12), in the case
101.22of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
101.23delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
101.24of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
101.25clause(15) (12), in the case of a shareholder of an S corporation, minus the positive value
101.26of any net operating loss under section 172 of the Internal Revenue Code generated for the
101.27tax year of the addition. The resulting delayed depreciation cannot be less than zero;
101.28 (9) job opportunity building zone income as provided under section469.316 ;
101.29 (10) to the extent included in federal taxable income, the amount of compensation
101.30paid to members of the Minnesota National Guard or other reserve components of the
101.31United States military for active service, excluding compensation for services performed
101.32under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
101.33service" means (i) state active service as defined in section190.05, subdivision 5a , clause
101.34(1); or (ii) federally funded state active service as defined in section190.05, subdivision
101.355b , but "active service" excludes service performed in accordance with section
190.08,
101.36subdivision 3 ;
102.1 (11) to the extent included in federal taxable income, the amount of compensation
102.2paid to Minnesota residents who are members of the armed forces of the United States
102.3or United Nations for active duty performed under United States Code, title 10; or the
102.4authority of the United Nations;
102.5 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
102.6qualified donor's donation, while living, of one or more of the qualified donor's organs
102.7to another person for human organ transplantation. For purposes of this clause, "organ"
102.8means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
102.9"human organ transplantation" means the medical procedure by which transfer of a human
102.10organ is made from the body of one person to the body of another person; "qualified
102.11expenses" means unreimbursed expenses for both the individual and the qualified donor
102.12for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
102.13may be subtracted under this clause only once; and "qualified donor" means the individual
102.14or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
102.15individual may claim the subtraction in this clause for each instance of organ donation for
102.16transplantation during the taxable year in which the qualified expenses occur;
102.17 (13) in each of the five tax years immediately following the tax year in which an
102.18addition is required under subdivision 19a, clause (8), or 19c, clause(16) (13), in the case
102.19of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of
102.20the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause(16)
102.21 (13), in the case of a shareholder of a corporation that is an S corporation, minus the
102.22positive value of any net operating loss under section 172 of the Internal Revenue Code
102.23generated for the tax year of the addition. If the net operating loss exceeds the addition for
102.24the tax year, a subtraction is not allowed under this clause;
102.25 (14) to the extent included in the federal taxable income of a nonresident of
102.26Minnesota, compensation paid to a service member as defined in United States Code, title
102.2710, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
102.28Act, Public Law 108-189, section 101(2);
102.29 (15) to the extent included in federal taxable income, the amount of national service
102.30educational awards received from the National Service Trust under United States Code,
102.31title 42, sections 12601 to 12604, for service in an approved Americorps National Service
102.32program;
102.33(16) to the extent included in federal taxable income, discharge of indebtedness
102.34income resulting from reacquisition of business indebtedness included in federal taxable
102.35income under section 108(i) of the Internal Revenue Code. This subtraction applies only
103.1to the extent that the income was included in net income in a prior year as a result of the
103.2addition under section290.01, subdivision 19a , clause (16); and
103.3(17) the amount of the net operating loss allowed under section290.095, subdivision
103.411 , paragraph (c); and
103.5(18) the amount of expenses not allowed for federal income tax purposes due
103.6to claiming the railroad track maintenance credit under section 45G(a) of the Internal
103.7Revenue Code.
103.8EFFECTIVE DATE.This section is effective for taxable years beginning after
103.9December 31, 2012.
103.10 Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
103.11 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
103.12there shall be added to federal taxable income:
103.13 (1) the amount of any deduction taken for federal income tax purposes for income,
103.14excise, or franchise taxes based on net income or related minimum taxes, including but not
103.15limited to the tax imposed under section290.0922 , paid by the corporation to Minnesota,
103.16another state, a political subdivision of another state, the District of Columbia, or any
103.17foreign country or possession of the United States;
103.18 (2) interest not subject to federal tax upon obligations of: the United States, its
103.19possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
103.20state, any of its political or governmental subdivisions, any of its municipalities, or any
103.21of its governmental agencies or instrumentalities; the District of Columbia; or Indian
103.22tribal governments;
103.23 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
103.24Revenue Code;
103.25 (4) the amount of any net operating loss deduction taken for federal income tax
103.26purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
103.27deduction under section 810 of the Internal Revenue Code;
103.28 (5) the amount of any special deductions taken for federal income tax purposes
103.29under sections 241 to 247 and 965 of the Internal Revenue Code;
103.30 (6) losses from the business of mining, as defined in section290.05, subdivision 1 ,
103.31clause (a), that are not subject to Minnesota income tax;
103.32 (7) the amount of any capital losses deducted for federal income tax purposes under
103.33sections 1211 and 1212 of the Internal Revenue Code;
103.34(8) the exempt foreign trade income of a foreign sales corporation under sections
103.35921(a) and 291 of the Internal Revenue Code;
104.1(9) (8) the amount of percentage depletion deducted under sections 611 through
104.2614 and 291 of the Internal Revenue Code;
104.3(10) (9) for certified pollution control facilities placed in service in a taxable year
104.4beginning before December 31, 1986, and for which amortization deductions were elected
104.5under section 169 of the Internal Revenue Code of 1954, as amended through December
104.631, 1985, the amount of the amortization deduction allowed in computing federal taxable
104.7income for those facilities;
104.8(11) the amount of any deemed dividend from a foreign operating corporation
104.9determined pursuant to section
290.17, subdivision 4, paragraph (g). The deemed dividend
104.10shall be reduced by the amount of the addition to income required by clauses (20), (21),
104.11(22), and (23);
104.12(12) (10) the amount of a partner's pro rata share of net income which does not flow
104.13through to the partner because the partnership elected to pay the tax on the income under
104.14section 6242(a)(2) of the Internal Revenue Code;
104.15(13) the amount of net income excluded under section 114 of the Internal Revenue
104.16Code;
104.17(14) (11) any increase in subpart F income, as defined in section 952(a) of the
104.18Internal Revenue Code, for the taxable year when subpart F income is calculated without
104.19regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
104.20(15) (12) 80 percent of the depreciation deduction allowed under section
104.21168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
104.22the taxpayer has an activity that in the taxable year generates a deduction for depreciation
104.23under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
104.24year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
104.25allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
104.26of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
104.27over the amount of the loss from the activity that is not allowed in the taxable year. In
104.28succeeding taxable years when the losses not allowed in the taxable year are allowed, the
104.29depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
104.30(16) (13) 80 percent of the amount by which the deduction allowed by section 179 of
104.31the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
104.32Revenue Code of 1986, as amended through December 31, 2003;
104.33(17) (14) to the extent deducted in computing federal taxable income, the amount of
104.34the deduction allowable under section 199 of the Internal Revenue Code;
104.35(18) for taxable years beginning before January 1, 2013, the exclusion allowed under
104.36section 139A of the Internal Revenue Code for federal subsidies for prescription drug plans;
105.1(19) (15) the amount of expenses disallowed under section
290.10, subdivision 2 ; and
105.2(20) an amount equal to the interest and intangible expenses, losses, and costs paid,
105.3accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
105.4of a corporation that is a member of the taxpayer's unitary business group that qualifies
105.5as a foreign operating corporation. For purposes of this clause, intangible expenses and
105.6costs include:
105.7(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
105.8use, maintenance or management, ownership, sale, exchange, or any other disposition of
105.9intangible property;
105.10(ii) losses incurred, directly or indirectly, from factoring transactions or discounting
105.11transactions;
105.12(iii) royalty, patent, technical, and copyright fees;
105.13(iv) licensing fees; and
105.14(v) other similar expenses and costs.
105.15For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
105.16applications, trade names, trademarks, service marks, copyrights, mask works, trade
105.17secrets, and similar types of intangible assets.
105.18This clause does not apply to any item of interest or intangible expenses or costs paid,
105.19accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
105.20to such item of income to the extent that the income to the foreign operating corporation
105.21is income from sources without the United States as defined in subtitle A, chapter 1,
105.22subchapter N, part 1, of the Internal Revenue Code;
105.23(21) except as already included in the taxpayer's taxable income pursuant to clause
105.24(20), any interest income and income generated from intangible property received or
105.25accrued by a foreign operating corporation that is a member of the taxpayer's unitary
105.26group. For purposes of this clause, income generated from intangible property includes:
105.27(i) income related to the direct or indirect acquisition, use, maintenance or
105.28management, ownership, sale, exchange, or any other disposition of intangible property;
105.29(ii) income from factoring transactions or discounting transactions;
105.30(iii) royalty, patent, technical, and copyright fees;
105.31(iv) licensing fees; and
105.32(v) other similar income.
105.33For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
105.34applications, trade names, trademarks, service marks, copyrights, mask works, trade
105.35secrets, and similar types of intangible assets.
106.1This clause does not apply to any item of interest or intangible income received or accrued
106.2by a foreign operating corporation with respect to such item of income to the extent that
106.3the income is income from sources without the United States as defined in subtitle A,
106.4chapter 1, subchapter N, part 1, of the Internal Revenue Code;
106.5(22) the dividends attributable to the income of a foreign operating corporation that
106.6is a member of the taxpayer's unitary group in an amount that is equal to the dividends
106.7paid deduction of a real estate investment trust under section 561(a) of the Internal
106.8Revenue Code for amounts paid or accrued by the real estate investment trust to the
106.9foreign operating corporation;
106.10(23) the income of a foreign operating corporation that is a member of the taxpayer's
106.11unitary group in an amount that is equal to gains derived from the sale of real or personal
106.12property located in the United States;
106.13(24) for taxable years beginning before January 1, 2010, the additional amount
106.14allowed as a deduction for donation of computer technology and equipment under section
106.15170(e)(6) of the Internal Revenue Code, to the extent deducted from taxable income; and
106.16(25) (16) discharge of indebtedness income resulting from reacquisition of business
106.17indebtedness and deferred under section 108(i) of the Internal Revenue Code.
106.18EFFECTIVE DATE.This section is effective for taxable years beginning after
106.19December 31, 2012.
106.20 Sec. 9. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
106.21 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
106.22corporations, there shall be subtracted from federal taxable income after the increases
106.23provided in subdivision 19c:
106.24 (1) the amount of foreign dividend gross-up added to gross income for federal
106.25income tax purposes under section 78 of the Internal Revenue Code;
106.26 (2) the amount of salary expense not allowed for federal income tax purposes due to
106.27claiming the work opportunity credit under section 51 of the Internal Revenue Code;
106.28 (3) any dividend (not including any distribution in liquidation) paid within the
106.29taxable year by a national or state bank to the United States, or to any instrumentality of
106.30the United States exempt from federal income taxes, on the preferred stock of the bank
106.31owned by the United States or the instrumentality;
106.32 (4) amounts disallowed for intangible drilling costs due to differences between
106.33this chapter and the Internal Revenue Code in taxable years beginning before January
106.341, 1987, as follows:
107.1 (i) to the extent the disallowed costs are represented by physical property, an amount
107.2equal to the allowance for depreciation under Minnesota Statutes 1986, section290.09,
107.3subdivision 7 , subject to the modifications contained in subdivision 19e; and
107.4 (ii) to the extent the disallowed costs are not represented by physical property, an
107.5amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
107.6290.09, subdivision 8
;
107.7 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
107.8Internal Revenue Code, except that:
107.9 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
107.10capital loss carrybacks shall not be allowed;
107.11 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
107.12a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
107.13allowed;
107.14 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
107.15capital loss carryback to each of the three taxable years preceding the loss year, subject to
107.16the provisions of Minnesota Statutes 1986, section290.16 , shall be allowed; and
107.17 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
107.18a capital loss carryover to each of the five taxable years succeeding the loss year to the
107.19extent such loss was not used in a prior taxable year and subject to the provisions of
107.20Minnesota Statutes 1986, section290.16 , shall be allowed;
107.21 (6) an amount for interest and expenses relating to income not taxable for federal
107.22income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
107.23expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
107.24291 of the Internal Revenue Code in computing federal taxable income;
107.25 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
107.26which percentage depletion was disallowed pursuant to subdivision 19c, clause(9) (8), a
107.27reasonable allowance for depletion based on actual cost. In the case of leases the deduction
107.28must be apportioned between the lessor and lessee in accordance with rules prescribed
107.29by the commissioner. In the case of property held in trust, the allowable deduction must
107.30be apportioned between the income beneficiaries and the trustee in accordance with the
107.31pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
107.32of the trust's income allocable to each;
107.33 (8) for certified pollution control facilities placed in service in a taxable year
107.34beginning before December 31, 1986, and for which amortization deductions were elected
107.35under section 169 of the Internal Revenue Code of 1954, as amended through December
108.131, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
108.21986, section290.09, subdivision 7 ;
108.3 (9) amounts included in federal taxable income that are due to refunds of income,
108.4excise, or franchise taxes based on net income or related minimum taxes paid by the
108.5corporation to Minnesota, another state, a political subdivision of another state, the
108.6District of Columbia, or a foreign country or possession of the United States to the extent
108.7that the taxes were added to federal taxable income undersection
290.01, subdivision 19c
108.8clause (1), in a prior taxable year;
108.9(10) 80 percent of royalties, fees, or other like income accrued or received from a
108.10foreign operating corporation or a foreign corporation which is part of the same unitary
108.11business as the receiving corporation, unless the income resulting from such payments or
108.12accruals is income from sources within the United States as defined in subtitle A, chapter
108.131, subchapter N, part 1, of the Internal Revenue Code;
108.14(11) (10) income or gains from the business of mining as defined in section
290.05,
108.15subdivision 1 , clause (a), that are not subject to Minnesota franchise tax;
108.16(12) (11) the amount of disability access expenditures in the taxable year which are not
108.17allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
108.18(13) (12) the amount of qualified research expenses not allowed for federal income
108.19tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
108.20that the amount exceeds the amount of the credit allowed under section290.068 ;
108.21(14) (13) the amount of salary expenses not allowed for federal income tax purposes
108.22due to claiming the Indian employment credit under section 45A(a) of the Internal
108.23Revenue Code;
108.24(15) for a corporation whose foreign sales corporation, as defined in section 922
108.25of the Internal Revenue Code, constituted a foreign operating corporation during any
108.26taxable year ending before January 1, 1995, and a return was filed by August 15, 1996,
108.27claiming the deduction under section
290.21, subdivision 4, for income received from
108.28the foreign operating corporation, an amount equal to
1.23 multiplied by the amount of
108.29income excluded under section 114 of the Internal Revenue Code, provided the income is
108.30not income of a foreign operating company;
108.31(16) (14) any decrease in subpart F income, as defined in section 952(a) of the
108.32Internal Revenue Code, for the taxable year when subpart F income is calculated without
108.33regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
108.34(17) (15) in each of the five tax years immediately following the tax year in which an
108.35addition is required under subdivision 19c, clause(15) (12), an amount equal to one-fifth
108.36of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
109.1amount of the addition made by the taxpayer under subdivision 19c, clause(15) (12). The
109.2resulting delayed depreciation cannot be less than zero;
109.3(18) (16) in each of the five tax years immediately following the tax year in which an
109.4addition is required under subdivision 19c, clause(16) (13), an amount equal to one-fifth
109.5of the amount of the addition;and
109.6(19) (17) to the extent included in federal taxable income, discharge of indebtedness
109.7income resulting from reacquisition of business indebtedness included in federal taxable
109.8income under section 108(i) of the Internal Revenue Code. This subtraction applies only
109.9to the extent that the income was included in net income in a prior year as a result of the
109.10addition undersection
290.01, subdivision 19c(25). (16); and
109.11(18) the amount of expenses not allowed for federal income tax purposes due
109.12to claiming the railroad track maintenance credit under section 45G(a) of the Internal
109.13Revenue Code.
109.14EFFECTIVE DATE.This section is effective for taxable years beginning after
109.15December 31, 2012.
109.16 Sec. 10. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read:
109.17 Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
109.18taxes imposed by this chapter upon married individuals filing joint returns and surviving
109.19spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
109.20applying to their taxable net income the following schedule of rates:
109.21 (1) On the first$25,680 $35,480, 5.35 percent;
109.22 (2) On all over$25,680 $35,480, but not over $102,030 $140,960, 7.05 percent;
109.23 (3) On all over$102,030 $140,960, but not over $250,000, 7.85 percent.;
109.24(4) On all over $250,000, 9.85 percent.
109.25 Married individuals filing separate returns, estates, and trusts must compute their
109.26income tax by applying the above rates to their taxable income, except that the income
109.27brackets will be one-half of the above amounts.
109.28 (b) The income taxes imposed by this chapter upon unmarried individuals must be
109.29computed by applying to taxable net income the following schedule of rates:
109.30 (1) On the first$17,570 $24,270, 5.35 percent;
109.31 (2) On all over$17,570 $24,270, but not over $57,710 $79,730, 7.05 percent;
109.32 (3) On all over$57,710 $79,730, but not over $150,000, 7.85 percent.;
109.33(4) On all over $150,000, 9.85 percent.
110.1 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
110.2as a head of household as defined in section 2(b) of the Internal Revenue Code must be
110.3computed by applying to taxable net income the following schedule of rates:
110.4 (1) On the first$21,630 $29,880, 5.35 percent;
110.5 (2) On all over$21,630 $29,880, but not over $86,910 $120,070, 7.05 percent;
110.6 (3) On all over$86,910 $120,070, but not over $200,000, 7.85 percent.;
110.7(4) On all over $200,000, 9.85 percent.
110.8 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
110.9tax of any individual taxpayer whose taxable net income for the taxable year is less than
110.10an amount determined by the commissioner must be computed in accordance with tables
110.11prepared and issued by the commissioner of revenue based on income brackets of not
110.12more than $100. The amount of tax for each bracket shall be computed at the rates set
110.13forth in this subdivision, provided that the commissioner may disregard a fractional part of
110.14a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
110.15 (e) An individual who is not a Minnesota resident for the entire year must compute
110.16the individual's Minnesota income tax as provided in this subdivision. After the
110.17application of the nonrefundable credits provided in this chapter, the tax liability must
110.18then be multiplied by a fraction in which:
110.19 (1) the numerator is the individual's Minnesota source federal adjusted gross income
110.20as defined in section 62 of the Internal Revenue Code and increased by the additions
110.21required under section290.01, subdivision 19a , clauses (1), (5), (6), (7), (8), (9), (12),
110.22(13), and (16) to (18), and reduced by the Minnesota assignable portion of the subtraction
110.23for United States government interest under section290.01, subdivision 19b , clause
110.24(1), and the subtractions under section290.01, subdivision 19b , clauses (8), (9), (13),
110.25(14), (16), and (17), after applying the allocation and assignability provisions of section
110.26290.081
, clause (a), or
290.17 ; and
110.27 (2) the denominator is the individual's federal adjusted gross income as defined in
110.28section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
110.29section290.01, subdivision 19a , clauses (1), (5), (6), (7), (8), (9), (12), (13), and (16) to
110.30(18), and reduced by the amounts specified in section290.01, subdivision 19b , clauses (1),
110.31(8), (9), (13), (14), (16), and (17).
110.32EFFECTIVE DATE.This section is effective for taxable years beginning after
110.33December 31, 2012.
110.34 Sec. 11. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read:
111.1 Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after
111.2December 31,2000 2013, the minimum and maximum dollar amounts for each rate
111.3bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
111.4percentage determined under paragraph (b). For the purpose of making the adjustment as
111.5provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
111.6rate brackets as they existed for taxable years beginning after December 31,1999 2012,
111.7and before January 1,2001 2014. The rate applicable to any rate bracket must not be
111.8changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
111.9in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
111.10amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
111.11(b) The commissioner shall adjust the rate brackets and by the percentage determined
111.12pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
111.13section 1(f)(3)(B) the word"1999" "2012" shall be substituted for the word "1992." For
111.142001 2014, the commissioner shall then determine the percent change from the 12 months
111.15ending on August 31,1999 2012, to the 12 months ending on August 31, 2000 2013, and
111.16in each subsequent year, from the 12 months ending on August 31,1999 2012, to the 12
111.17months ending on August 31 of the year preceding the taxable year. The determination of
111.18the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
111.19not be subject to the Administrative Procedure Act contained in chapter 14.
111.20No later than December 15 of each year, the commissioner shall announce the
111.21specific percentage that will be used to adjust the tax rate brackets.
111.22EFFECTIVE DATE.This section is effective for taxable years beginning after
111.23December 31, 2012.
111.24 Sec. 12. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
111.25to read:
111.26 Subd. 36. Greater Minnesota internship credit. (a) A taxpayer who is an eligible
111.27employer may take a credit against the tax due under this chapter equal to the lesser of:
111.28(1) 40 percent of the compensation paid to an intern qualifying under the program
111.29established under section 136A.129, but not to exceed $2,000 per intern; or
111.30(2) the amount certified to the taxpayer by an eligible institution out of the
111.31institution's allocation of credits for the calendar year, as provided in section 136A.129.
111.32(b) Credits allowed to a partnership, a limited liability company taxed as a
111.33partnership, an S corporation, or multiple owners of property are passed through to the
111.34partners, members, shareholders, or owners, respectively, pro rata to each partner, member,
111.35shareholder, or owner based on their share of the entity's income for the taxable year.
112.1(c) If the amount of credit which the taxpayer is eligible to receive under this
112.2subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
112.3revenue shall refund the excess to the taxpayer.
112.4(d) An amount necessary to pay claims for refund provided in this subdivision is
112.5appropriated from the general fund to the commissioner of revenue.
112.6(e) An amount equal to one percent of the total amount of the credits authorized
112.7under section 136A.129, subdivision 4, for an administrative fee for the Office of Higher
112.8Education and participating eligible institutions is appropriated from the general fund to
112.9the commissioner of revenue, for a transfer to the Office of Higher Education.
112.10(f) For purposes of this subdivision, the terms "eligible employer" and "eligible
112.11institution" have the meanings given in section 136A.129.
112.12EFFECTIVE DATE.This section is effective for taxable years beginning after
112.13December 31, 2013.
112.14 Sec. 13. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read:
112.15 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
112.16the meanings given.
112.17 (b) "Designated area" means a:
112.18 (1) combat zone designated by Executive Order from the President of the United
112.19States;
112.20 (2) qualified hazardous duty area, designated in Public Law; or
112.21 (3) location certified by the U. S. Department of Defense as eligible for combat zone
112.22tax benefits due to the location's direct support of military operations.
112.23 (c) "Active military service" means active duty service in any of the United States
112.24armed forces, the National Guard, or reserves.
112.25 (d) "Qualified individual" means an individual who has:
112.26 (1)either (i) met one of the following criteria:
112.27 (i) has served at least 20 years in the militaryor;
112.28 (ii) has a service-connected disability rating of 100 percent for a total and permanent
112.29disability; or
112.30 (iii) has been determined by the military to be eligible for compensation from a
112.31pension or other retirement pay from the federal government for service in the military,
112.32as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455,
112.33or 12733; and
112.34 (2) separated from military service before the end of the taxable year.
113.1 (e) "Adjusted gross income" has the meaning given in section 61 of the Internal
113.2Revenue Code.
113.3EFFECTIVE DATE.This section is effective for taxable years beginning after
113.4December 31, 2012.
113.5 Sec. 14. Minnesota Statutes 2012, section 290.068, subdivision 3, is amended to read:
113.6 Subd. 3. Limitation; carryover. (a)(1) The credit for a taxable year beginning
113.7before January 1, 2010, and after December 31, 2012, shall not exceed the liability for tax.
113.8"Liability for tax" for purposes of this section means the sum of the tax imposed under
113.9section290.06, subdivision subdivisions 1 and 2c , for the taxable year reduced by the sum
113.10of the nonrefundable credits allowed under this chapter, on all of the entities required to
113.11be included on the combined report of the unitary business. If the amount of the credit
113.12allowed exceeds the liability for tax of the taxpayer, but is allowed as a result of the
113.13liability for tax of other members of the unitary group for the taxable year, the taxpayer
113.14must allocate the excess as a research credit to another member of the unitary group.
113.15 (2) In the case of a corporation which is a partner in a partnership, the credit allowed
113.16for the taxable year shall not exceed the lesser of the amount determined under clause (1)
113.17for the taxable year or an amount (separately computed with respect to the corporation's
113.18interest in the trade or business or entity) equal to the amount of tax attributable to that
113.19portion of taxable income which is allocable or apportionable to the corporation's interest
113.20in the trade or business or entity.
113.21 (b) If the amount of the credit determined under this section for any taxable year
113.22exceeds the limitation under clause (a) including amounts allocated to other members
113.23of the unitary group, the excess shall be a research credit carryover to each of the 15
113.24succeeding taxable years. The entire amount of the excess unused credit for the taxable
113.25year shall be carried first to the earliest of the taxable years to which the credit may be
113.26carried and then to each successive year to which the credit may be carried. The amount
113.27of the unused credit which may be added under this clause shall not exceed the taxpayer's
113.28liability for tax less the research credit for the taxable year.
113.29EFFECTIVE DATE.This section is effective for taxable years beginning after
113.30December 31, 2012.
113.31 Sec. 15. Minnesota Statutes 2012, section 290.068, subdivision 6a, is amended to read:
113.32 Subd. 6a. Credit to be refundable. If the amount of credit allowed in this section
113.33for qualified research expenses incurred in taxable years beginning after December 31,
114.12009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter,
114.2the commissioner shall refund the excess amount. The credit allowed for qualified research
114.3expenses incurred in taxable years beginning after December 31, 2009, and before January
114.41, 2013, must be used before any research credit earned under subdivision 3.
114.5EFFECTIVE DATE.This section is effective for taxable years beginning after
114.6December 31, 2012.
114.7 Sec. 16. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read:
114.8 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
114.9have the meanings given.
114.10(b) "Account" means the historic credit administration account in the special
114.11revenue fund.
114.12(c) "Office" means the State Historic Preservation Office of the Minnesota Historical
114.13Society.
114.14(d) "Project" means rehabilitation of a certified historic structure, as defined in
114.15section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is
114.16allowed a federal creditunder section 47(a)(2) of the Internal Revenue Code.
114.17(e) "Society" means the Minnesota Historical Society.
114.18(f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal
114.19Revenue Code.
114.20(g) "Placed in service" has the meaning used in section 47 of the Internal Revenue
114.21Code.
114.22(h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of
114.23the Internal Revenue Code.
114.24EFFECTIVE DATE.This section is effective the day following final enactment.
114.25 Sec. 17. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read:
114.26 Subd. 3. Applications; allocations. (a) To qualify for a credit or grant under this
114.27section, the developer of a project must apply to the office before the rehabilitation begins.
114.28The application must contain the information and be in the form prescribed by the office.
114.29The office may collect a fee for application of up to$5,000 0.5 percent of qualified
114.30rehabilitation expenditures, up to $40,000, based on estimated qualified rehabilitation
114.31expenses expenditures, to offset costs associated with personnel and administrative
114.32expenses related to administering the credit and preparing the economic impact report
114.33in subdivision 9. Application fees are deposited in the account. The application must
115.1indicate if the application is for a credit or a grant in lieu of the credit or a combination of
115.2the two and designate the taxpayer qualifying for the credit or the recipient of the grant.
115.3 (b) Upon approving an application for credit, the office shall issue allocation
115.4certificates that:
115.5 (1) verify eligibility for the credit or grant;
115.6 (2) state the amount of credit or grant anticipated with the project, with the credit
115.7amount equal to 100 percent and the grant amount equal to 90 percent of the federal
115.8credit anticipated in the application;
115.9 (3) state that the credit or grant allowed may increase or decrease if the federal
115.10credit the project receives at the time it is placed in service is different than the amount
115.11anticipated at the time the allocation certificate is issued; and
115.12 (4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer
115.13or grant recipient is entitled to receive the credit or grant at the time the project is placed
115.14in service, provided that date is within three calendar years following the issuance of
115.15the allocation certificate.
115.16 (c) The office, in consultation with the commissionerof revenue, shall determine
115.17if the project is eligible for a credit or a grant under this section and must notify the
115.18developer in writing of its determination. Eligibility for the credit is subject to review
115.19and audit by the commissionerof revenue.
115.20 (d) The federal credit recapture and repayment requirements under section 50 of the
115.21Internal Revenue Code do not apply to the credit allowed under this section.
115.22(e) Any decision of the office under paragraph (c) may be challenged as a contested
115.23case under chapter 14. The contested case proceeding must be initiated within 45 days of
115.24the date of written notification by the office.
115.25EFFECTIVE DATE.This section is effective the day following final enactment
115.26and the change in paragraph (a) applies to applications first received on or after the day
115.27following final enactment.
115.28 Sec. 18. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read:
115.29 Subd. 4. Credit certificates; grants. (a)(1) The developer of a project for which the
115.30office has issued an allocation certificate must notify the office when the project is placed
115.31in service. Upon verifying that the project has been placed in service, and was allowed a
115.32federal credit, the office must issue a credit certificate to the taxpayer designated in the
115.33application or must issue a grant to the recipient designated in the application. The credit
115.34certificate must state the amount of the credit.
115.35 (2) The credit amount equals the federal credit allowed for the project.
116.1 (3) The grant amount equals 90 percent of the federal credit allowed for the project.
116.2 (b) The recipient of a credit certificate may assign the certificate to another taxpayer,
116.3which is then allowed the credit under this section or section297I.20, subdivision 3 . An
116.4assignment is not valid unless the assignee notifies the commissioner within 30 days of the
116.5date that the assignment is made. The commissioner shall prescribe the forms necessary
116.6for notifying the commissioner of the assignment of a credit certificate and for claiming
116.7a credit by assignment.
116.8 (c) Credits passed through to partners, members, shareholders, or owners pursuant to
116.9subdivision 5 are not an assignment of a credit certificate under this subdivision.
116.10 (d) A grant agreement between the office and the recipient of a grant may allow the
116.11grant to be issued to another individual or entity.
116.12EFFECTIVE DATE.This section is effective the day following final enactment.
116.13 Sec. 19. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read:
116.14 Subd. 5. Partnerships; multiple owners. Credits granted to a partnership, a limited
116.15liability company taxed as a partnership, S corporation, or multiple owners of property
116.16are passed through to the partners, members, shareholders, or owners, respectively, pro
116.17rata to each partner, member, shareholder, or owner based on their share of the entity's
116.18assets or as specially allocated in their organizational documents or any other executed
116.19agreement, as of the last day of the taxable year.
116.20EFFECTIVE DATE.This section is effective the day following final enactment.
116.21 Sec. 20. Minnesota Statutes 2012, section 290.0681, subdivision 10, is amended to read:
116.22 Subd. 10. Sunset. This section expires after fiscal year2015 2021, except that
116.23the office's authority to issue credit certificates under subdivision 4 based on allocation
116.24certificates that were issued before fiscal year2016 2022 remains in effect through 2018
116.25 2024, and the reporting requirements in subdivision 9 remain in effect through the year
116.26following the year in which all allocation certificates have either been canceled or resulted
116.27in issuance of credit certificates, or2019 2025, whichever is earlier.
116.28EFFECTIVE DATE.This section is effective the day following final enactment.
116.29 Sec. 21. Minnesota Statutes 2012, section 290.091, subdivision 1, is amended to read:
116.30 Subdivision 1. Imposition of tax. In addition to all other taxes imposed by this
116.31chapter a tax is imposed on individuals, estates, and trusts equal to the excess (if any) of
117.1(a) an amount equal to6.4 6.75 percent of alternative minimum taxable income after
117.2subtracting the exemption amount, over
117.3(b) the regular tax for the taxable year.
117.4EFFECTIVE DATE.This section is effective for taxable years beginning after
117.5December 31, 2012.
117.6 Sec. 22. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read:
117.7 Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
117.8terms have the meanings given:
117.9 (a) "Alternative minimum taxable income" means the sum of the following for
117.10the taxable year:
117.11 (1) the taxpayer's federal alternative minimum taxable income as defined in section
117.1255(b)(2) of the Internal Revenue Code;
117.13 (2) the taxpayer's itemized deductions allowed in computing federal alternative
117.14minimum taxable income, but excluding:
117.15 (i) the charitable contribution deduction under section 170 of the Internal Revenue
117.16Code;
117.17 (ii) the medical expense deduction;
117.18 (iii) the casualty, theft, and disaster loss deduction; and
117.19 (iv) the impairment-related work expenses of a disabled person;
117.20 (3) for depletion allowances computed under section 613A(c) of the Internal
117.21Revenue Code, with respect to each property (as defined in section 614 of the Internal
117.22Revenue Code), to the extent not included in federal alternative minimum taxable income,
117.23the excess of the deduction for depletion allowable under section 611 of the Internal
117.24Revenue Code for the taxable year over the adjusted basis of the property at the end of the
117.25taxable year (determined without regard to the depletion deduction for the taxable year);
117.26 (4) to the extent not included in federal alternative minimum taxable income, the
117.27amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
117.28Internal Revenue Code determined without regard to subparagraph (E);
117.29 (5) to the extent not included in federal alternative minimum taxable income, the
117.30amount of interest income as provided by section290.01, subdivision 19a , clause (1); and
117.31 (6) the amount of addition required by section290.01, subdivision 19a , clauses (7)
117.32to (9), (12), (13), and (16) to (18);
117.33 less the sum of the amounts determined under the following:
117.34 (1) interest income as defined in section290.01, subdivision 19b , clause (1);
118.1 (2) an overpayment of state income tax as provided by section290.01, subdivision
118.219b , clause (2), to the extent included in federal alternative minimum taxable income;
118.3 (3) the amount of investment interest paid or accrued within the taxable year on
118.4indebtedness to the extent that the amount does not exceed net investment income, as
118.5defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
118.6amounts deducted in computing federal adjusted gross income;
118.7 (4) amounts subtracted from federal taxable income as provided by section290.01,
118.8subdivision 19b , clauses (6), (8) to (14), and (16); and
118.9(5) the amount of the net operating loss allowed under section290.095, subdivision
118.1011 , paragraph (c).
118.11 In the case of an estate or trust, alternative minimum taxable income must be
118.12computed as provided in section 59(c) of the Internal Revenue Code.
118.13 (b) "Investment interest" means investment interest as defined in section 163(d)(3)
118.14of the Internal Revenue Code.
118.15 (c) "Net minimum tax" means the minimum tax imposed by this section.
118.16 (d) "Regular tax" means the tax that would be imposed under this chapter (without
118.17regard to this section and section 290.032), reduced by the sum of the nonrefundable
118.18credits allowed under this chapter.
118.19 (e) "Tentative minimum tax" equals6.4 6.75 percent of alternative minimum taxable
118.20income after subtracting the exemption amount determined under subdivision 3.
118.21EFFECTIVE DATE.This section is effective for taxable years beginning after
118.22December 31, 2012.
118.23 Sec. 23. Minnesota Statutes 2012, section 290.091, subdivision 6, is amended to read:
118.24 Subd. 6. Credit for prior years' liability. (a) A credit is allowed against the tax
118.25imposed by this chapter on individuals, trusts, and estates equal to the minimum tax
118.26credit for the taxable year. The minimum tax credit equals the adjusted net minimum
118.27tax for taxable years beginning after December 31, 1988, reduced by the minimum tax
118.28credits allowed in a prior taxable year. The credit may not exceed the excess (if any) for
118.29the taxable year of
118.30(1) the regular tax, over
118.31(2) the greater of (i) the tentative alternative minimum tax, or (ii) zero.
118.32(b) The adjusted net minimum tax for a taxable year equals the lesser of the net
118.33minimum tax or the excess (if any) of
118.34(1) the tentative minimum tax, over
118.35(2)6.4 6.75 percent of the sum of
119.1(i) adjusted gross income as defined in section 62 of the Internal Revenue Code,
119.2(ii) interest income as defined in section290.01, subdivision 19a , clause (1),
119.3(iii) interest on specified private activity bonds, as defined in section 57(a)(5) of the
119.4Internal Revenue Code, to the extent not included under clause (ii),
119.5(iv) depletion as defined in section 57(a)(1), determined without regard to the last
119.6sentence of paragraph (1), of the Internal Revenue Code, less
119.7(v) the deductions allowed in computing alternative minimum taxable income
119.8provided in subdivision 2, paragraph (a), clause (2) of the first series of clauses and clauses
119.9(1), (2), and (3) of the second series of clauses, and
119.10(vi) the exemption amount determined under subdivision 3.
119.11In the case of an individual who is not a Minnesota resident for the entire year,
119.12adjusted net minimum tax must be multiplied by the fraction defined in section290.06,
119.13subdivision 2c , paragraph (e). In the case of a trust or estate, adjusted net minimum tax
119.14must be multiplied by the fraction defined under subdivision 4, paragraph (b).
119.15EFFECTIVE DATE.This section is effective for taxable years beginning after
119.16December 31, 2012.
119.17 Sec. 24. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
119.18 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
119.19income" is Minnesota net income as defined in section290.01, subdivision 19 , and
119.20includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
119.21(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
119.22Minnesota tax return, the minimum tax must be computed on a separate company basis.
119.23If a corporation is part of a tax group filing a unitary return, the minimum tax must be
119.24computed on a unitary basis. The following adjustments must be made.
119.25(1) For purposes of the depreciation adjustments under section 56(a)(1) and
119.2656(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
119.27service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
119.28income tax purposes, including any modification made in a taxable year under section
119.29290.01, subdivision 19e
, or Minnesota Statutes 1986, section
290.09, subdivision 7 ,
119.30paragraph (c).
119.31For taxable years beginning after December 31, 2000, the amount of any remaining
119.32modification made under section290.01, subdivision 19e , or Minnesota Statutes 1986,
119.33section290.09, subdivision 7 , paragraph (c), not previously deducted is a depreciation
119.34allowance in the first taxable year after December 31, 2000.
120.1(2) The portion of the depreciation deduction allowed for federal income tax
120.2purposes under section 168(k) of the Internal Revenue Code that is required as an addition
120.3under section290.01, subdivision 19c , clause (15) (12), is disallowed in determining
120.4alternative minimum taxable income.
120.5(3) The subtraction for depreciation allowed under section290.01, subdivision
120.619d , clause (17) (15), is allowed as a depreciation deduction in determining alternative
120.7minimum taxable income.
120.8(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
120.9of the Internal Revenue Code does not apply.
120.10(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
120.11Revenue Code does not apply.
120.12(6) The special rule for dividends from section 936 companies under section
120.1356(g)(4)(C)(iii) does not apply.
120.14(7) (6) The tax preference for depletion under section 57(a)(1) of the Internal
120.15Revenue Code does not apply.
120.16(8) (7) The tax preference for intangible drilling costs under section 57(a)(2) of the
120.17Internal Revenue Code must be calculated without regard to subparagraph (E) and the
120.18subtraction under section290.01, subdivision 19d , clause (4).
120.19(9) (8) The tax preference for tax exempt interest under section 57(a)(5) of the
120.20Internal Revenue Code does not apply.
120.21(10) (9) The tax preference for charitable contributions of appreciated property
120.22under section 57(a)(6) of the Internal Revenue Code does not apply.
120.23(11) (10) For purposes of calculating the tax preference for accelerated depreciation
120.24or amortization on certain property placed in service before January 1, 1987, under section
120.2557(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
120.26deduction allowed under section290.01, subdivision 19e .
120.27For taxable years beginning after December 31, 2000, the amount of any remaining
120.28modification made under section290.01, subdivision 19e , not previously deducted is a
120.29depreciation or amortization allowance in the first taxable year after December 31, 2004.
120.30(12) (11) For purposes of calculating the adjustment for adjusted current earnings
120.31in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
120.32income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
120.33minimum taxable income as defined in this subdivision, determined without regard to the
120.34adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
120.35(13) (12) For purposes of determining the amount of adjusted current earnings under
120.36section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
121.156(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
121.2gross-up subtracted as provided in section290.01, subdivision 19d , clause (1), or (ii) the
121.3amount of refunds of income, excise, or franchise taxes subtracted as provided in section
121.4290.01, subdivision 19d
, clause (9), or (iii) the amount of royalties, fees or other like
121.5income subtracted as provided in section
290.01, subdivision 19d, clause (10).
121.6(14) (13) Alternative minimum taxable income excludes the income from operating
121.7in a job opportunity building zone as provided under section469.317 .
121.8(15) (14) Alternative minimum taxable income excludes the income from operating
121.9in a biotechnology and health sciences industry zone as provided under section469.337 .
121.10Items of tax preference must not be reduced below zero as a result of the
121.11modifications in this subdivision.
121.12EFFECTIVE DATE.This section is effective for taxable years beginning after
121.13December 31, 2012.
121.14 Sec. 25. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read:
121.15 Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without
121.16regard to this section, the franchise tax imposed on a corporation required to file under
121.17section289A.08, subdivision 3 , other than a corporation treated as an "S" corporation
121.18under section290.9725 for the taxable year includes a tax equal to the following amounts:
121.33 (b) A tax is imposed for each taxable year on a corporation required to file a return
121.34under section289A.12, subdivision 3 , that is treated as an "S" corporation under section
121.35290.9725
and on a partnership required to file a return under section
289A.12, subdivision
121.363 , other than a partnership that derives over 80 percent of its income from farming. The
121.37tax imposed under this paragraph is due on or before the due date of the return for the
122.1taxpayer due under section289A.18, subdivision 1 . The commissioner shall prescribe
122.2the return to be used for payment of this tax. The tax under this paragraph is equal to
122.3the following amounts:
122.20 (c) The commissioner shall adjust the dollar amounts of both the tax and the property,
122.21payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage
122.22determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
122.23that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For
122.242014, the commissioner shall determine the percentage change from the 12 months ending
122.25on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent
122.26year, from the 12 months ending on August 31, 2012, to the 12 months ending on August
122.2731 of the year preceding the taxable year. The determination of the commissioner pursuant
122.28to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in
122.29chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and
122.30the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts
122.31that end in $5, the amount is rounded up to the nearest $10 amount and for the threshold
122.32amounts that end in $5,000, the amount is rounded up to the nearest $10,000.
122.33EFFECTIVE DATE.This section is effective for taxable years beginning after
122.34December 31, 2012.
122.35 Sec. 26. Minnesota Statutes 2012, section 290.095, subdivision 2, is amended to read:
122.36 Subd. 2. Defined and limited. (a) The term "net operating loss" as used in this
122.37section shall mean a net operating loss as defined in section 172(c) of the Internal Revenue
122.38Code, with the modifications specified in subdivision 4. The deductions provided in
123.1section290.21 and the modification provided in section
290.01, subdivision 19d, clause
123.2(10), cannot be used in the determination of a net operating loss.
123.3(b) The term "net operating loss deduction" as used in this section means the
123.4aggregate of the net operating loss carryovers to the taxable year, computed in accordance
123.5with subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating
123.6to the carryback of net operating losses, do not apply.
123.7EFFECTIVE DATE.This section is effective for taxable years beginning after
123.8December 31, 2012.
123.9 Sec. 27. Minnesota Statutes 2012, section 290.10, subdivision 1, is amended to read:
123.10 Subdivision 1. Expenses, interest, and taxes.Except as provided in section
290.17,
123.11subdivision 4
, paragraph (i), In computing the net income of a taxpayer no deduction shall
123.12in any case be allowed for expenses, interest and taxes connected with or allocable against
123.13the production or receipt of all income not included in the measure of the tax imposed by
123.14this chapter, except that for corporations engaged in the business of mining or producing
123.15iron ore, the mining of which is subject to the occupation tax imposed by section298.01,
123.16subdivision 4 , this shall not prevent the deduction of expenses and other items to the extent
123.17that the expenses and other items are allowable under this chapter and are not deductible,
123.18capitalizable, retainable in basis, or taken into account by allowance or otherwise in
123.19computing the occupation tax and do not exceed the amounts taken for federal income tax
123.20purposes for that year. Occupation taxes imposed under chapter 298, royalty taxes imposed
123.21under chapter 299, or depletion expenses may not be deducted under this subdivision.
123.22 Sec. 28. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
123.23 Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
123.24within this state or partly within and partly without this state is part of a unitary business,
123.25the entire income of the unitary business is subject to apportionment pursuant to section
123.26290.191
. Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
123.27business is considered to be derived from any particular source and none may be allocated
123.28to a particular place except as provided by the applicable apportionment formula. The
123.29provisions of this subdivision do not apply to business income subject to subdivision 5,
123.30income of an insurance company, or income of an investment company determined under
123.31section290.36 .
123.32(b) The term "unitary business" means business activities or operations which
123.33result in a flow of value between them. The term may be applied within a single legal
124.1entity or between multiple entities and without regard to whether each entity is a sole
124.2proprietorship, a corporation, a partnership or a trust.
124.3(c) Unity is presumed whenever there is unity of ownership, operation, and use,
124.4evidenced by centralized management or executive force, centralized purchasing,
124.5advertising, accounting, or other controlled interaction, but the absence of these
124.6centralized activities will not necessarily evidence a nonunitary business. Unity is also
124.7presumed when business activities or operations are of mutual benefit, dependent upon or
124.8contributory to one another, either individually or as a group.
124.9(d) Where a business operation conducted in Minnesota is owned by a business
124.10entity that carries on business activity outside the state different in kind from that
124.11conducted within this state, and the other business is conducted entirely outside the state, it
124.12is presumed that the two business operations are unitary in nature, interrelated, connected,
124.13and interdependent unless it can be shown to the contrary.
124.14(e) Unity of ownershipis not deemed to does not exist when a corporation is two or
124.15more corporations are involved unlessthat corporation is a member of a group of two or
124.16more business entities and more than 50 percent of the voting stock of each member of
124.17the group corporation is directly or indirectly owned by a common owner or by common
124.18owners, either corporate or noncorporate, or by one or more of the member corporations
124.19of the group. For this purpose, the term "voting stock" shall include membership interests
124.20of mutual insurance holding companies formed under section66A.40 .
124.21(f) The net income and apportionment factors under section290.191 or
290.20 of
124.22foreign corporations and other foreign entities which are part of a unitary business shall
124.23not be included in the net income or the apportionment factors of the unitary business;
124.24except that the income and apportionment factors of a foreign entity, other than an entity
124.25treated as a C corporation for federal income tax purposes, that are included in the federal
124.26taxable income, as defined in section 63 of the Internal Revenue Code as amended through
124.27the date named in section 290.01, subdivision 19, of a domestic corporation, domestic
124.28entity, or individual must be included in determining net income and the factors to be used
124.29in the apportionment of net income pursuant to section 290.191 or 290.20. A foreign
124.30corporation or other foreign entity which is not included on a combined report and which
124.31is required to file a return under this chapter shall file on a separate return basis.The net
124.32income and apportionment factors under section
290.191 or
290.20 of foreign operating
124.33corporations shall not be included in the net income or the apportionment factors of the
124.34unitary business except as provided in paragraph (g).
124.35(g) The adjusted net income of a foreign operating corporation shall be deemed to
124.36be paid as a dividend on the last day of its taxable year to each shareholder thereof, in
125.1proportion to each shareholder's ownership, with which such corporation is engaged in
125.2a unitary business. Such deemed dividend shall be treated as a dividend under section
125.3290.21, subdivision 4.
125.4Dividends actually paid by a foreign operating corporation to a corporate shareholder
125.5which is a member of the same unitary business as the foreign operating corporation shall
125.6be eliminated from the net income of the unitary business in preparing a combined report
125.7for the unitary business. The adjusted net income of a foreign operating corporation
125.8shall be its net income adjusted as follows:
125.9(1) any taxes paid or accrued to a foreign country, the commonwealth of Puerto
125.10Rico, or a United States possession or political subdivision of any of the foregoing shall
125.11be a deduction; and
125.12(2) the subtraction from federal taxable income for payments received from foreign
125.13corporations or foreign operating corporations under section
290.01, subdivision 19d,
125.14clause (10), shall not be allowed.
125.15If a foreign operating corporation incurs a net loss, neither income nor deduction from
125.16that corporation shall be included in determining the net income of the unitary business.
125.17(h) (g) For purposes of determining the net income of a unitary business and the
125.18factors to be used in the apportionment of net income pursuant to section290.191 or
125.19290.20
, there must be included only the income and apportionment factors of domestic
125.20corporations or other domestic entitiesother than foreign operating corporations that are
125.21determined to be part of the unitary business pursuant to this subdivision, notwithstanding
125.22that foreign corporations or other foreign entities might be included in the unitary
125.23business; except that the income and apportionment factors of a foreign entity, other than
125.24an entity treated as a C corporation for federal income tax purposes, that is included in the
125.25federal taxable income, as defined in section 63 of the Internal Revenue Code as amended
125.26through the date named in section 290.01, subdivision 19, of a domestic corporation,
125.27domestic entity, or individual must be included in determining net income and the factors
125.28to be used in the apportionment of net income pursuant to section 290.191 or 290.20.
125.29(i) Deductions for expenses, interest, or taxes otherwise allowable under this chapter
125.30that are connected with or allocable against dividends, deemed dividends described
125.31in paragraph (g), or royalties, fees, or other like income described in section
290.01,
125.32subdivision 19d
, clause (10), shall not be disallowed.
125.33(j) (h) Each corporation or other entity, except a sole proprietorship, that is part of
125.34a unitary business must file combined reports as the commissioner determines. On the
125.35reports, all intercompany transactions between entities included pursuant to paragraph(h)
125.36 (g) must be eliminated and the entire net income of the unitary business determined in
126.1accordance with this subdivision is apportioned among the entities by using each entity's
126.2Minnesota factors for apportionment purposes in the numerators of the apportionment
126.3formula and the total factors for apportionment purposes of all entities included pursuant
126.4to paragraph(h) (g) in the denominators of the apportionment formula. Except as
126.5otherwise provided by paragraph (f), all sales of the unitary business made within this
126.6state pursuant to section 290.191 or 290.20 must be included on the combined report of a
126.7corporation or other entity that is a member of the unitary business and is subject to the
126.8jurisdiction of this state to impose tax under this chapter.
126.9(k) (i) If a corporation has been divested from a unitary business and is included in a
126.10combined report for a fractional part of the common accounting period of the combined
126.11report:
126.12(1) its income includable in the combined report is its income incurred for that part
126.13of the year determined by proration or separate accounting; and
126.14(2) its sales, property, and payroll included in the apportionment formula must
126.15be prorated or accounted for separately.
126.16EFFECTIVE DATE.This section is effective for taxable years beginning after
126.17December 31, 2012.
126.18 Sec. 29. Minnesota Statutes 2012, section 290.191, subdivision 5, is amended to read:
126.19 Subd. 5. Determination of sales factor. For purposes of this section, the following
126.20rules apply in determining the sales factor.
126.21 (a) The sales factor includes all sales, gross earnings, or receipts received in the
126.22ordinary course of the business, except that the following types of income are not included
126.23in the sales factor:
126.24 (1) interest;
126.25 (2) dividends;
126.26 (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
126.27 (4) sales of property used in the trade or business, except sales of leased property of
126.28a type which is regularly sold as well as leased; and
126.29 (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
126.30Code or sales of stock; and.
126.31(6) royalties, fees, or other like income of a type which qualify for a subtraction from
126.32federal taxable income under section
290.01, subdivision 19d, clause (10).
126.33 (b) Sales of tangible personal property are made within this state if the property is
126.34received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
127.1regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
127.2of the property.
127.3 (c) Tangible personal property delivered to a common or contract carrier or foreign
127.4vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
127.5regardless of f.o.b. point or other conditions of the sale.
127.6 (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
127.7fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
127.8licensed by a state or political subdivision to resell this property only within the state of
127.9ultimate destination, the sale is made in that state.
127.10 (e) Sales made by or through a corporation that is qualified as a domestic
127.11international sales corporation under section 992 of the Internal Revenue Code are not
127.12considered to have been made within this state.
127.13 (f) Sales, rents, royalties, and other income in connection with real property is
127.14attributed to the state in which the property is located.
127.15 (g) Receipts from the lease or rental of tangible personal property, including finance
127.16leases and true leases, must be attributed to this state if the property is located in this
127.17state and to other states if the property is not located in this state. Receipts from the
127.18lease or rental of moving property including, but not limited to, motor vehicles, rolling
127.19stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
127.20factor to the extent that the property is used in this state. The extent of the use of moving
127.21property is determined as follows:
127.22 (1) A motor vehicle is used wholly in the state in which it is registered.
127.23 (2) The extent that rolling stock is used in this state is determined by multiplying
127.24the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
127.25which is the miles traveled within this state by the leased or rented rolling stock and the
127.26denominator of which is the total miles traveled by the leased or rented rolling stock.
127.27 (3) The extent that an aircraft is used in this state is determined by multiplying the
127.28receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
127.29the number of landings of the aircraft in this state and the denominator of which is the
127.30total number of landings of the aircraft.
127.31 (4) The extent that a vessel, mobile equipment, or other mobile property is used in
127.32the state is determined by multiplying the receipts from the lease or rental of the property
127.33by a fraction, the numerator of which is the number of days during the taxable year the
127.34property was in this state and the denominator of which is the total days in the taxable year.
127.35 (h) Royalties and other incomenot described in paragraph (a), clause (6), received
127.36for the use of or for the privilege of using intangible property, including patents,
128.1know-how, formulas, designs, processes, patterns, copyrights, trade names, service names,
128.2franchises, licenses, contracts, customer lists, or similar items, must be attributed to the
128.3state in which the property is used by the purchaser. If the property is used in more
128.4than one state, the royalties or other income must be apportioned to this state pro rata
128.5according to the portion of use in this state. If the portion of use in this state cannot be
128.6determined, the royalties or other income must be excluded from both the numerator
128.7and the denominator. Intangible property is used in this state if the purchaser uses the
128.8intangible property or the rights therein in the regular course of its business operations in
128.9this state, regardless of the location of the purchaser's customers.
128.10 (i) Sales of intangible property are made within the state in which the property is
128.11used by the purchaser. If the property is used in more than one state, the sales must be
128.12apportioned to this state pro rata according to the portion of use in this state. If the
128.13portion of use in this state cannot be determined, the sale must be excluded from both the
128.14numerator and the denominator of the sales factor. Intangible property is used in this
128.15state if the purchaser used the intangible property in the regular course of its business
128.16operations in this state.
128.17 (j) Receipts from the performance of services must be attributed to the state where
128.18the services are received. For the purposes of this section, receipts from the performance
128.19of services provided to a corporation, partnership, or trust may only be attributed to a state
128.20where it has a fixed place of doing business. If the state where the services are received is
128.21not readily determinable or is a state where the corporation, partnership, or trust receiving
128.22the service does not have a fixed place of doing business, the services shall be deemed
128.23to be received at the location of the office of the customer from which the services were
128.24ordered in the regular course of the customer's trade or business. If the ordering office
128.25cannot be determined, the services shall be deemed to be received at the office of the
128.26customer to which the services are billed.
128.27 (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
128.28from management, distribution, or administrative services performed by a corporation
128.29or trust for a fund of a corporation or trust regulated under United States Code, title 15,
128.30sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
128.31the fund resides. Under this paragraph, receipts for services attributed to shareholders are
128.32determined on the basis of the ratio of: (1) the average of the outstanding shares in the
128.33fund owned by shareholders residing within Minnesota at the beginning and end of each
128.34year; and (2) the average of the total number of outstanding shares in the fund at the
128.35beginning and end of each year. Residence of the shareholder, in the case of an individual,
128.36is determined by the mailing address furnished by the shareholder to the fund. Residence
129.1of the shareholder, when the shares are held by an insurance company as a depositor for
129.2the insurance company policyholders, is the mailing address of the policyholders. In
129.3the case of an insurance company holding the shares as a depositor for the insurance
129.4company policyholders, if the mailing address of the policyholders cannot be determined
129.5by the taxpayer, the receipts must be excluded from both the numerator and denominator.
129.6Residence of other shareholders is the mailing address of the shareholder.
129.7EFFECTIVE DATE.This section is effective for taxable years beginning after
129.8December 31, 2012.
129.9 Sec. 30. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
129.10 Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
129.11of dividends received by a corporation during the taxable year from another corporation,
129.12in which the recipient owns 20 percent or more of the stock, by vote and value, not
129.13including stock described in section 1504(a)(4) of the Internal Revenue Code when the
129.14corporate stock with respect to which dividends are paid does not constitute the stock in
129.15trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
129.16constitute property held by the taxpayer primarily for sale to customers in the ordinary
129.17course of the taxpayer's trade or business, or when the trade or business of the taxpayer
129.18does not consist principally of the holding of the stocks and the collection of the income
129.19and gains therefrom; and
129.20 (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
129.21an affiliated company transferred in an overall plan of reorganization and the dividend
129.22is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
129.23amended through December 31, 1989;
129.24 (ii) the remaining 20 percent of dividends if the dividends are received from a
129.25corporation which is subject to tax under section290.36 and which is a member of an
129.26affiliated group of corporations as defined by the Internal Revenue Code and the dividend
129.27is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
129.28amended through December 31, 1989, or is deducted under an election under section
129.29243(b) of the Internal Revenue Code; or
129.30 (iii) the remaining 20 percent of the dividends if the dividends are received from a
129.31property and casualty insurer as defined under section60A.60, subdivision 8 , which is a
129.32member of an affiliated group of corporations as defined by the Internal Revenue Code
129.33and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
129.341.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
129.35under an election under section 243(b) of the Internal Revenue Code.
130.1 (b) Seventy percent of dividends received by a corporation during the taxable year
130.2from another corporation in which the recipient owns less than 20 percent of the stock,
130.3by vote or value, not including stock described in section 1504(a)(4) of the Internal
130.4Revenue Code when the corporate stock with respect to which dividends are paid does not
130.5constitute the stock in trade of the taxpayer, or does not constitute property held by the
130.6taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
130.7business, or when the trade or business of the taxpayer does not consist principally of the
130.8holding of the stocks and the collection of income and gain therefrom.
130.9 (c) The dividend deduction provided in this subdivision shall be allowed only with
130.10respect to dividends that are included in a corporation's Minnesota taxable net income
130.11for the taxable year.
130.12 The dividend deduction provided in this subdivision does not apply to a dividend
130.13from a corporation which, for the taxable year of the corporation in which the distribution
130.14is made or for the next preceding taxable year of the corporation, is a corporation exempt
130.15from tax under section 501 of the Internal Revenue Code.
130.16The dividend deduction provided in this subdivision does not apply to a dividend
130.17received from a real estate investment trust as defined in section 856 of the Internal
130.18Revenue Code.
130.19 The dividend deduction provided in this subdivision applies to the amount of
130.20regulated investment company dividends only to the extent determined under section
130.21854(b) of the Internal Revenue Code.
130.22 The dividend deduction provided in this subdivision shall not be allowed with
130.23respect to any dividend for which a deduction is not allowed under the provisions of
130.24section 246(c) of the Internal Revenue Code.
130.25 (d) If dividends received by a corporation that does not have nexus with Minnesota
130.26under the provisions of Public Law 86-272 are included as income on the return of
130.27an affiliated corporation permitted or required to file a combined report under section
130.28290.17, subdivision 4
, or
290.34, subdivision 2 , then for purposes of this subdivision the
130.29determination as to whether the trade or business of the corporation consists principally
130.30of the holding of stocks and the collection of income and gains therefrom shall be made
130.31with reference to the trade or business of the affiliated corporation having a nexus with
130.32Minnesota.
130.33 (e) The deduction provided by this subdivision does not apply if the dividends are
130.34paid by a FSC as defined in section 922 of the Internal Revenue Code.
130.35 (f) If one or more of the members of the unitary group whose income is included on
130.36the combined report received a dividend, the deduction under this subdivision for each
131.1member of the unitary business required to file a return under this chapter is the product
131.2of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
131.3allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
131.4income apportionable to this state for the taxable year under section290.191 or
290.20 .
131.5EFFECTIVE DATE.This section is effective for taxable years beginning after
131.6December 31, 2012.
131.7 Sec. 31. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read:
131.8 Subd. 3b. Deductions. (a) For purposes of determining taxable income under
131.9subdivision 3, the deductions from gross income include only those expenses necessary
131.10to convert raw ores to marketable quality. Such expenses include costs associated with
131.11refinement but do not include expenses such as transportation, stockpiling, marketing, or
131.12marine insurance that are incurred after marketable ores are produced, unless the expenses
131.13are included in gross income. The allowable deductions from a mine or plant that mines
131.14and produces more than one mineral, metal, or energy resource must be determined
131.15separately for the purposes of computing the deduction in section290.01 , subdivision 19c,
131.16clause(9) (8). These deductions may be combined on one occupation tax return to arrive
131.17at the deduction from gross income for all production.
131.18(b) The provisions of section290.01, subdivisions 19c, clauses (6) and (9), and 19d,
131.19clauses (7) and(11) (10), are not used to determine taxable income.
131.20 Sec. 32. Laws 2010, chapter 216, section 11, the effective date, is amended to read:
131.21EFFECTIVE DATE.This section is effective for taxable years beginning
131.22after December 31, 2009, for certified historic structures for which qualifiedcosts of
131.23rehabilitation are first paid under construction contracts entered into after May 1, 2010
131.24 rehabilitation expenditures are first paid by the developer or taxpayer after May 1, 2010,
131.25for rehabilitation that occurs after May 1, 2010, provided that the application under
131.26subdivision 3 is submitted before the project is placed in service.
131.27EFFECTIVE DATE.This section is effective the day following final enactment
131.28and applies retroactively for taxable years beginning after December 31, 2009, and for
131.29certified historic structures placed in service after May 1, 2010, but the office may not
131.30issue certificates allowed under the change to this section until July 1, 2013.
131.31 Sec. 33. ESTIMATED TAXES; EXCEPTIONS.
132.1No addition to tax, penalties, or interest may be made under Minnesota Statutes,
132.2section 289A.25, for any period before September 15, 2013, with respect to an
132.3underpayment of estimated tax, to the extent that the underpayment was created or
132.4increased by the increase in income tax rates under this article.
132.5EFFECTIVE DATE.This section is effective for taxable years beginning after
132.6December 31, 2012.
132.7 Sec. 34. REPEALER.
132.8Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a;
132.9and 290.0921, subdivision 7, are repealed.
132.10EFFECTIVE DATE.This section is effective for taxable years beginning after
132.11December 31, 2012.
132.14 Section 1. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
132.15 Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
132.16stated otherwise, "Minnesota tax laws" means:
132.17 (1) the taxes, refunds, and fees administered by or paid to the commissioner under
132.18chapters 115B, 289A (except taxes imposed under sections298.01 ,
298.015 , and
298.24 ),
132.19290, 290A, 291, 292, 295, 297A, 297B, and 297H, or any similar Indian tribal tax
132.20administered by the commissioner pursuant to any tax agreement between the state and
132.21the Indian tribal government, and includes any laws for the assessment, collection, and
132.22enforcement of those taxes, refunds, and fees; and
132.23 (2) section273.1315 .
132.24EFFECTIVE DATE.This section is effective for gifts made after December 31,
132.252012.
132.26 Sec. 2. Minnesota Statutes 2012, section 270B.03, subdivision 1, is amended to read:
132.27 Subdivision 1. Who may inspect. Returns and return information must, on request,
132.28be made open to inspection by or disclosure to the data subject. The request must be made
132.29in writing or in accordance with written procedures of the chief disclosure officer of the
132.30department that have been approved by the commissioner to establish the identification
132.31of the person making the request as the data subject. For purposes of this chapter, the
132.32following are the data subject:
133.1(1) in the case of an individual return, that individual;
133.2(2) in the case of an income tax return filed jointly, either of the individuals with
133.3respect to whom the return is filed;
133.4(3) in the case of a return filed by a business entity, an officer of a corporation,
133.5a shareholder owning more than one percent of the stock, or any shareholder of an S
133.6corporation; a general partner in a partnership; the owner of a sole proprietorship; a
133.7member or manager of a limited liability company; a participant in a joint venture; the
133.8individual who signed the return on behalf of the business entity; or an employee who is
133.9responsible for handling the tax matters of the business entity, such as the tax manager,
133.10bookkeeper, or managing agent;
133.11(4) in the case of an estate return:
133.12(i) the personal representative or trustee of the estate; and
133.13(ii) any beneficiary of the estate as shown on the federal estate tax return;
133.14(5) in the case of a trust return:
133.15(i) the trustee or trustees, jointly or separately; and
133.16(ii) any beneficiary of the trust as shown in the trust instrument;
133.17(6) if liability has been assessed to a transferee under section270C.58, subdivision
133.181 , the transferee is the data subject with regard to the returns and return information
133.19relating to the assessed liability;
133.20(7) in the case of an Indian tribal government or an Indian tribal government-owned
133.21entity,
133.22(i) the chair of the tribal government, or
133.23(ii) any person authorized by the tribal government;and
133.24(8) in the case of a successor as defined in section270C.57, subdivision 1 , paragraph
133.25(b), the successor is the data subject and information may be disclosed as provided by
133.26section270C.57, subdivision 4 .; and
133.27(9) in the case of a gift return, the donor.
133.28EFFECTIVE DATE.This section is effective the day following final enactment.
133.29 Sec. 3. Minnesota Statutes 2012, section 289A.10, subdivision 1, is amended to read:
133.30 Subdivision 1. Return required. In the case of a decedent who has an interest in
133.31property with a situs in Minnesota, the personal representative must submit a Minnesota
133.32estate tax return to the commissioner, on a form prescribed by the commissioner, if:
133.33(1) a federal estate tax return is required to be filed; or
133.34(2) the sum of the federal gross estate and federal adjusted taxable gifts made within
133.35three years of the date of the decedent's death exceeds $1,000,000.
134.1The return must contain a computation of the Minnesota estate tax due. The return
134.2must be signed by the personal representative.
134.3EFFECTIVE DATE.This section is effective for estates of decedents dying after
134.4December 31, 2012.
134.5 Sec. 4. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
134.6 Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
134.7terms used in this chapter shall have the following meanings:
134.8 (1) "Commissioner" means the commissioner of revenue or any person to whom the
134.9commissioner has delegated functions under this chapter.
134.10 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
134.11and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
134.12 (3) "Internal Revenue Code" means the United States Internal Revenue Code of
134.131986, as amended throughApril 14, 2011 January 3, 2013, but without regard to the
134.14provisions ofsections 501 and 901 of Public Law 107-16, as amended by Public Law
134.15111-312, and section 301(c) of Public Law 111-312 section 2011, paragraph (f), of the
134.16Internal Revenue Code.
134.17 (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
134.18defined by section 2011(b)(3) of the Internal Revenue Code, plus
134.19(i) the amount of deduction for state death taxes allowed under section 2058 of the
134.20Internal Revenue Code;
134.21(ii) the amount of taxable gifts, as defined in section 292.16, and made by the
134.22decedent within three years of the decedent's date of death; less
134.23(ii) (iii)(A) the value of qualified small business property under section
291.03,
134.24subdivision 9 , and the value of qualified farm property under section
291.03, subdivision
134.2510 , or (B) $4,000,000, whichever is less.
134.26 (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
134.27excluding therefrom any property included therein which has its situs outside Minnesota,
134.28and (b) including therein any property omitted from the federal gross estate which is
134.29includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
134.30authorities.
134.31 (6) "Nonresident decedent" means an individual whose domicile at the time of
134.32death was not in Minnesota.
134.33 (7) "Personal representative" means the executor, administrator or other person
134.34appointed by the court to administer and dispose of the property of the decedent. If there
134.35is no executor, administrator or other person appointed, qualified, and acting within this
135.1state, then any person in actual or constructive possession of any property having a situs in
135.2this state which is included in the federal gross estate of the decedent shall be deemed
135.3to be a personal representative to the extent of the property and the Minnesota estate tax
135.4due with respect to the property.
135.5 (8) "Resident decedent" means an individual whose domicile at the time of death
135.6was in Minnesota.
135.7 (9) "Situs of property" means, with respect to:
135.8 (i) real property, the state or country in which it is located;with respect to
135.9 (ii) tangible personal property, the state or country in which it was normally kept or
135.10located at the time of the decedent's death or for a gift of tangible personal property within
135.11three years of death, the state or country in which it was normally kept or located when
135.12the gift was executed; andwith respect to
135.13 (iii) intangible personal property, the state or country in which the decedent was
135.14domiciled at death or for a gift of intangible personal property within three years of death,
135.15the state or country in which the decedent was domiciled when the gift was executed.
135.16 For a nonresident decedent with an ownership interest in a pass-through entity
135.17with assets that include real or tangible personal property, situs of the real or tangible
135.18personal property is determined as if the pass-through entity does not exist and the real
135.19or tangible personal property is personally owned by the decedent. If the pass-through
135.20entity is owned by a person or persons in addition to the decedent, ownership of the
135.21property is attributed to the decedent in proportion to the decedent's capital ownership
135.22share of the pass-through entity.
135.23(10) "Pass-through entity" includes the following:
135.24(i) an entity electing S corporation status under section 1362 of the Internal Revenue
135.25Code;
135.26(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
135.27(iii) a single-member limited liability company or similar entity, regardless of
135.28whether it is taxed as an association or is disregarded for federal income tax purposes
135.29under Code of Federal Regulations, title 26, section 301.7701-3; or
135.30(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
135.31EFFECTIVE DATE.This section is effective for decedents dying after December
135.3231, 2012.
135.33 Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
135.34 Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
135.35proportion of the maximum credit for state death taxes computed under section 2011 of
136.1the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
136.2adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
136.3gross estate. The tax is reduced by:
136.4 (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
136.5Minnesota adjusted taxable estate and not subtracted as qualified farm or small business
136.6property; and
136.7 (2) any credit allowed under subdivision 1c.
136.8 (b) The tax determined under this subdivision must not be greater than the sum of
136.9the following amounts multiplied by a fraction, the numerator of which is the Minnesota
136.10gross estate and the denominator of which is the federal gross estate:
136.11 (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
136.12multiplied by the sum of:
136.13 (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
136.14 (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
136.15Code; less
136.16(iii) the lesser of (A) the sum of the value of qualified small business property
136.17under subdivision 9, and the value of qualified farm property under subdivision 10, or
136.18(B) $4,000,000; less
136.19 (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
136.20Code; and less
136.21 (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
136.22 (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
136.23Revenue Code of 1986, as amended through December 31, 2000.
136.24EFFECTIVE DATE.This section is effective for decedents dying after December
136.2531, 2012.
136.26 Sec. 6. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision
136.27to read:
136.28 Subd. 1c. Nonresident decedent tax credit. (a) The estate of a nonresident
136.29decedent that is subject to tax under this chapter on the value of Minnesota situs property
136.30held in a pass-through entity is allowed a credit against the tax due under this section
136.31equal to the lesser of:
136.32(1) the amount of estate or inheritance tax paid to another state that is attributable to
136.33the Minnesota situs property held in the pass-through entity; or
136.34(2) the amount of tax paid under this section attributable to the Minnesota situs
136.35property held in the pass-through entity.
137.1(b) The amount of tax attributable to the Minnesota situs property held in the
137.2pass-through entity must be determined by the increase in the estate or inheritance tax that
137.3results from including the market value of the property in the estate or treating the value
137.4as a taxable inheritance to the recipient of the property.
137.5EFFECTIVE DATE.This section is effective for decedents dying after December
137.631, 2012.
137.7 Sec. 7. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
137.8 Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
137.9meanings given in this subdivision.
137.10(b) "Family member" means a family member as defined in section 2032A(e)(2) of
137.11the Internal Revenue Code, or a trust whose present beneficiaries are all family members
137.12as defined in section 2032A(e)(2) of the Internal Revenue Code.
137.13(c) "Qualified heir" means a family member who acquired qualified propertyfrom
137.14 upon the death of the decedent and satisfies the requirement under subdivision 9, clause
137.15(6) (7), or subdivision 10, clause (4) (5), for the property.
137.16(d) "Qualified property" means qualified small business property under subdivision
137.179 and qualified farm property under subdivision 10.
137.18EFFECTIVE DATE.This section is effective retroactively for estates of decedents
137.19dying after June 30, 2011.
137.20 Sec. 8. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read:
137.21 Subd. 9. Qualified small business property. Property satisfying all of the following
137.22requirements is qualified small business property:
137.23(1) The value of the property was included in the federal adjusted taxable estate.
137.24(2) The property consists of the assets of a trade or business or shares of stock or
137.25other ownership interests in a corporation or other entity engaged in a trade or business.
137.26The decedent or the decedent's spouse must have materially participated in the trade or
137.27business within the meaning of section 469 of the Internal Revenue Code during the
137.28taxable year that ended before the date of the decedent's death. Shares of stock in a
137.29corporation or an ownership interest in another type of entity do not qualify under this
137.30subdivision if the shares or ownership interests are traded on a public stock exchange at
137.31any time during the three-year period ending on the decedent's date of death. For purposes
137.32of this subdivision, an ownership interest includes the interest the decedent is deemed to
137.33own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
138.1(3) During the taxable year that ended before the decedent's death, the trade or
138.2business must not have been a passive activity within the meaning of section 469(c) of the
138.3Internal Revenue Code, and the decedent or the decedent's spouse must have materially
138.4participated in the trade or business within the meaning of section 469(h) of the Internal
138.5Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other
138.6provision provided by United States Treasury Department regulation that substitutes
138.7material participation in prior taxable years for material participation in the taxable year
138.8that ended before the decedent's death.
138.9(4) The gross annual sales of the trade or business were $10,000,000 or less for the
138.10last taxable year that ended before the date of the death of the decedent.
138.11(4) (5) The property does not consist of cash or, cash equivalents, publicly traded
138.12securities, or assets not used in the operation of the trade or business. For property
138.13consisting of shares of stock or other ownership interests in an entity, theamount value of
138.14cashor, cash equivalents, publicly traded securities, or assets not used in the operation of
138.15the trade or business held by the corporation or other entity must be deducted from the
138.16value of the property qualifying under this subdivision in proportion to the decedent's
138.17share of ownership of the entity on the date of death.
138.18(5) (6) The decedent continuously owned the property, including property the
138.19decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue
138.20Code, for the three-year period ending on the date of death of the decedent. In the case of
138.21a sole proprietor, if the property replaced similar property within the three-year period,
138.22the replacement property will be treated as having been owned for the three-year period
138.23ending on the date of death of the decedent.
138.24(6) A family member continuously uses the property in the operation of the trade or
138.25business for three years following the date of death of the decedent.
138.26(7) For three years following the date of death of the decedent, the trade or business
138.27is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code,
138.28and a family member materially participates in the operation of the trade or business within
138.29the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3)
138.30of the Internal Revenue Code and any other provision provided by United States Treasury
138.31Department regulation that substitutes material participation in prior taxable years for
138.32material participation in the three years following the date of death of the decedent.
138.33(8) The estate and the qualified heir elect to treat the property as qualified small
138.34business property and agree, in the form prescribed by the commissioner, to pay the
138.35recapture tax under subdivision 11, if applicable.
139.1EFFECTIVE DATE.This section is effective retroactively for estates of decedents
139.2dying after June 30, 2011.
139.3 Sec. 9. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read:
139.4 Subd. 10. Qualified farm property. Property satisfying all of the following
139.5requirements is qualified farm property:
139.6(1) The value of the property was included in the federal adjusted taxable estate.
139.7(2) The property consists ofa farm meeting the requirements of agricultural land and
139.8is owned by a person or entity that is either not subject to or is in compliance with section
139.9500.24
, and was classified for property tax purposes as the homestead of the decedent
139.10or the decedent's spouse or both under section
273.124, and as class 2a property under
139.11section
273.13, subdivision 23
139.12(3) For property taxes payable in the taxable year of the decedent's death, the
139.13property is classified as class 2a property under section 273.13, subdivision 23, and is
139.14classified as agricultural homestead, agricultural relative homestead, or special agricultural
139.15homestead under section 273.124.
139.16(4) The decedent continuously owned the property, including property the decedent
139.17is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for
139.18the three-year period ending on the date of death of the decedent either by ownership of
139.19the agricultural land or pursuant to holding an interest in an entity that is not subject to
139.20or is in compliance with section 500.24.
139.21(4) A family member continuously uses the property in the operation of the trade or
139.22business (5) The property is classified for property tax purposes as class 2a property under
139.23section 273.13, subdivision 23, for three years following the date of death of the decedent.
139.24(5) (6) The estate and the qualified heir elect to treat the property as qualified farm
139.25property and agree, in a form prescribed by the commissioner, to pay the recapture tax
139.26under subdivision 11, if applicable.
139.27EFFECTIVE DATE.This section is effective retroactively for estates of decedents
139.28dying after June 30, 2011.
139.29 Sec. 10. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read:
139.30 Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
139.31before the death of the qualified heir, the qualified heir disposes of any interest in the
139.32qualified property, other than by a disposition to a family member, or a family member
139.33ceases touse the qualified property which was acquired or passed from the decedent
139.34 satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional
140.1estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
140.2replaces qualified small business property excluded under subdivision 9 with similar
140.3property, then the qualified heir will not be treated as having disposed of an interest in the
140.4qualified property.
140.5(b) The amount of the additional tax equals the amount of the exclusion claimed by
140.6the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
140.7(c) The additional tax under this subdivision is due on the day which is six months
140.8after the date of the disposition or cessation in paragraph (a).
140.9EFFECTIVE DATE.This section is effective retroactively for estates of decedents
140.10dying after June 30, 2011.
140.11 Sec. 11. [292.16] DEFINITIONS.
140.12(a) For purposes of this chapter, the following definitions apply.
140.13(b) The definitions of terms defined in section 291.005 apply.
140.14(c) "Resident" has the meaning given in section 290.01, subdivision 7, paragraph (a).
140.15(d) "Taxable gifts" means:
140.16(1) the transfers by gift which are included in taxable gifts for federal gift tax
140.17purposes under the following sections of the Internal Revenue Code:
140.18(i) section 2503;
140.19(ii) sections 2511 to 2514; and
140.20(iii) sections 2516 to 2519; less
140.21(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
140.22EFFECTIVE DATE.This section is effective for taxable gifts made after June
140.2330, 2013.
140.24 Sec. 12. [292.17] GIFT TAX.
140.25 Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
140.26by any individual resident or nonresident in an amount equal to ten percent of the amount
140.27of the taxable gift.
140.28(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
140.29the donee of any gift is personally liable for the tax to the extent of the value of the gift.
140.30 Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
140.31section equal to $100,000. This credit applies to the cumulative amount of taxable gifts
140.32made by the donor during the donor's lifetime.
140.33 Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of:
141.1(1) real property located outside of this state;
141.2(2) tangible personal property that was normally kept at a location outside of the
141.3state on the date the gift was executed; and
141.4(3) intangible personal property made by an individual who is not a resident at
141.5the time the gift was executed.
141.6EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.730, 2013.
141.8 Sec. 13. [292.18] RETURNS.
141.9(a) Any individual who makes a taxable gift during the taxable year shall file a gift
141.10tax return in the form and manner prescribed by the commissioner.
141.11(b) If the donor dies before filing the return, the executor of the donor's will or
141.12the administrator of the donor's estate shall file the return. If the donor becomes legally
141.13incompetent before filing the return, the guardian or conservator shall file the return.
141.14(c) The return must include:
141.15(1) each gift made during the calendar year which is to be included in computing the
141.16taxable gifts;
141.17(2) the deductions claimed and allowable under section 292.16, paragraph (d),
141.18clause (2);
141.19(3) a description of the gift, and the donee's name, address, and Social Security
141.20number;
141.21(4) the fair market value of gifts not made in money; and
141.22(5) any other information the commissioner requires to administer the gift tax.
141.23EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.2430, 2013.
141.25 Sec. 14. [292.19] FILING REQUIREMENTS.
141.26Gift tax returns must be filed by the April 15 following the close of the calendar
141.27year, except if a gift is made during the calendar year in which the donor dies, the return
141.28for the donor must be filed by the last date, including extensions, for filing the gift tax
141.29return for federal gift tax purposes for the donor.
141.30EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.3130, 2013.
141.32 Sec. 15. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
142.1The commissioner may require the donor or the donee to show the property subject to
142.2the tax under section 292.17 to the commissioner upon demand and may employ a suitable
142.3person to appraise the property. The donor shall submit a declaration, in a form prescribed
142.4by the commissioner and including any certification required by the commissioner, that the
142.5property shown by the donor on the gift tax return includes all of the property transferred by
142.6gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).
142.7EFFECTIVE DATE.This section is effective for taxable gifts made after June
142.830, 2013.
142.9 Sec. 16. [292.21] ADMINISTRATIVE PROVISIONS.
142.10 Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
142.11section 292.17 is due and payable to the commissioner by the April 15 following the close
142.12of the calendar year during which the gift was made. The return required under section
142.13292.19 must be included with the payment. If a taxable gift is made during the calendar
142.14year in which the donor dies, the due date is the last date, including extensions, for filing
142.15the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
142.16tax due within the time specified under this section, a penalty applies equal to ten percent
142.17of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
142.18bear interest at the rate under section 270C.40 from the due date of the return.
142.19 Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
142.20filing a gift tax return, if a written request is filed with a tentative return accompanied by a
142.21payment of the tax, which is estimated in the tentative return, on or before the last day for
142.22filing the return. Any person to whom an extension is granted must pay, in addition to the
142.23tax, interest at the rate under section 270C.40 from the date on which the tax would have
142.24been due without the extension.
142.25 Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
142.26for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
142.27calendar year, is changed or corrected by the Internal Revenue Service or other officer
142.28of the United States or other competent authority, the taxpayer shall report the change or
142.29correction in federal taxable gifts within 180 days after the final determination of the change
142.30or correction, and concede the accuracy of the determination or provide a letter detailing
142.31how the federal determination is incorrect or does not change the Minnesota gift tax. Any
142.32taxpayer filing an amended federal gift tax return shall also file within 180 days an amended
142.33return under this chapter and shall include any information the commissioner requires. The
142.34time for filing the report or amended return may be extended by the commissioner upon due
142.35cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination,
143.1the commissioner finds that the taxpayer is liable for the payment of an additional tax, the
143.2commissioner shall, within a reasonable time from the receipt of the report or amended
143.3return, notify the taxpayer of the amount of additional tax, together with interest computed
143.4at the rate under section 270C.40 from the date when the original tax was due and payable.
143.5Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the
143.6amount of the additional tax and interest. If, upon examination of the report or amended
143.7return and related information, the commissioner finds that the taxpayer has overpaid the
143.8tax due the state, the commissioner shall refund the overpayment to the taxpayer.
143.9 Subd. 4. Application of federal rules. In administering the tax under this chapter,
143.10the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
143.11Revenue Code. The words "secretary or his delegate," as used in those sections of the
143.12Internal Revenue Code, mean the commissioner.
143.13EFFECTIVE DATE.This section is effective for taxable gifts made after June
143.1430, 2013.
143.17 Section 1. [116J.3738] QUALIFIED EXPANSIONS OF GREATER MINNESOTA
143.18BUSINESSES.
143.19 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
143.20have the meanings given unless the context clearly indicates otherwise.
143.21(b) "Agricultural processing facility" means one or more facilities or operations
143.22that transform, package, sort, or grade livestock or livestock products, agricultural
143.23commodities, or plants or plant products into goods that are used for intermediate or final
143.24consumption including goods for nonfood use, and surrounding property.
143.25(c) "Business" means an individual, corporation, partnership, limited liability
143.26company, association, or any other entity engaged in operating a trade or business located
143.27in greater Minnesota.
143.28(d) "City" means a statutory or home rule charter city.
143.29(e) "Greater Minnesota" means the area of the state that excludes the metropolitan
143.30area, as defined in section 473.121, subdivision 2.
143.31(f) "Qualified business" means a business that satisfies the requirements of subdivision
143.322, has been certified under subdivision 3, and has not been terminated under subdivision 5.
143.33 Subd. 2. Qualified business. (a) A business is a qualified business if it satisfies the
143.34requirement of this paragraph and is not disqualified under the provisions of paragraph
143.35(b). To qualify, the business must:
144.1(1) have operated its trade or business in a city or cities in greater Minnesota for at
144.2least one year before applying under subdivision 3;
144.3(2) pay or agree to pay in the future each employee compensation, including benefits
144.4not mandated by law, that on an annualized basis equal at least 120 percent of the federal
144.5poverty level for a family of four;
144.6(3) plan and agree to expand its employment in one or more cities in greater Minnesota
144.7by the minimum number of employees required under subdivision 3, paragraph (c); and
144.8(4) received certification from the commissioner under subdivision 3 that it is a
144.9qualified business.
144.10(b) A business is not a qualified business if it is either:
144.11(1) primarily engaged in making retail sales to purchasers who are physically present
144.12at the business's location or locations in greater Minnesota; or
144.13(2) a public utility, as defined in section 336B.01.
144.14(c) The requirements in paragraph (a) that the business' operations and expansion be
144.15located in a city do not apply to an agricultural processing facility.
144.16 Subd. 3. Certification of qualified business. (a) A business may apply to the
144.17commissioner for certification as a qualified business under this section. The commissioner
144.18shall specify the form of the application, the manner and times for applying, and the
144.19information required to be included in the application. The commissioner may impose an
144.20application fee in an amount sufficient to defray the commissioner's cost of processing
144.21certifications. A business must file a copy of its application with the chief clerical officer
144.22of the city at the same time it applies to the commissioner. For an agricultural processing
144.23facility located outside the boundaries of a city, the business must file a copy of the
144.24application with the county auditor.
144.25(b) The commissioner shall certify each business as a qualified business that:
144.26(1) satisfies the requirements of subdivision 2;
144.27(2) the commissioner determines would not expand its operations in greater
144.28Minnesota without the tax incentives available under subdivision 4; and
144.29(3) enters a business subsidy agreement with the commissioner that pledges to
144.30satisfy the minimum expansion requirements of paragraph (c) within three years or less
144.31following execution of the agreement.
144.32The commissioner must act on an application within 60 days after its filing. Failure
144.33by the commissioner to take action within the 60-day period is deemed approval of the
144.34application.
144.35(c) The following minimum expansion requirements apply, based on the number of
144.36employees of the business at locations in greater Minnesota:
145.1(1) a business that employees 50 or fewer full-time equivalent employees in greater
145.2Minnesota when the agreement is executed must increase its employment by five or more
145.3full-time equivalent employees;
145.4(2) a business that employees more than 50 but fewer than 200 full-time equivalent
145.5employees in greater Minnesota when the agreement is executed must increase the number
145.6of its full-time equivalent employees in greater Minnesota by at least ten percent; or
145.7(3) a business that employees 200 or more full-time equivalent employees in greater
145.8Minnesota when the agreement is executed must increase its employment by at least 21
145.9full-time equivalent employees.
145.10(d) The city, or a county for an agricultural processing facility located outside the
145.11boundaries of a city, in which the business proposes to expand its operations may file
145.12comments supporting or opposing the application with the commissioner. The comments
145.13must be filed within 30 days after receipt by the city of the application and may include a
145.14notice of any contribution the city or county intends to make to encourage or support the
145.15business expansion, such as the use of tax increment financing, property tax abatement,
145.16additional city or county services, or other financial assistance.
145.17(e) Certification of a qualified business is effective for the 12-year period beginning
145.18on the first day of the calendar month immediately following execution of the business
145.19subsidy agreement.
145.20 Subd. 4. Available tax incentives. A qualified business is entitled to a sales tax
145.21exemption, as provided in section 297A.68, subdivision 49, for purchases made during the
145.22period the business was certified as a qualified business under this section.
145.23 Subd. 5. Termination of status as a qualified business. (a) The commissioner shall
145.24put in place a system for monitoring and ensuring that each certified business meets within
145.25three years or less the minimum expansion requirement in its business subsidy agreement
145.26and continues to satisfy those requirements for the rest of the duration of the certification
145.27under subdivision 3. This system must include regular reporting by the business to the
145.28commissioner of its baseline and current employment levels and any other information
145.29the commissioner determines may be useful to ensure compliance and for legislative
145.30evaluation of the effectiveness of the tax incentives.
145.31(b) A business ceases to be a qualified business and to qualify for the sales tax
145.32exemption under section 297A.68, subdivision 49, under this subdivision upon the earlier
145.33of the following dates:
145.34(1) the end of the duration of its designation under subdivision 3, paragraph (e),
145.35effective as provided under this subdivision or other provision of law for the tax incentive;
145.36or
146.1(2) the date the commissioner finds that the business has breached its business
146.2subsidy agreement and failed to satisfy the minimum expansion required by subdivision 3
146.3and its agreement.
146.4(c) A business may contest the commissioner's finding that it breached its business
146.5subsidy agreement under paragraph (b), clause (2), under the contested case procedures in
146.6the Administrative Procedure Act, chapter 14.
146.7(d) The commissioner, after consulting with the commissioner of revenue, may
146.8waive a breach of the business subsidy agreement and permit continued receipt of tax
146.9incentives, if the commissioner determines that termination of the tax incentives is not in
146.10the best interest of the state or the local government units and the business' breach of the
146.11agreement is a result of circumstances beyond its control including, but not limited to:
146.12(1) a natural disaster;
146.13(2) unforeseen industry trends;
146.14(3) a decline in economic activity in the overall or greater Minnesota economy; or
146.15(4) loss of a major supplier or customer of the business.
146.16EFFECTIVE DATE.This section is effective the day following final enactment.
146.17 Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
146.18 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
146.19to, each of the transactions listed in this subdivision. In applying the provisions of this
146.20chapter, the terms "tangible personal property" and "retail sale" include the taxable
146.21services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision
146.22of these taxable services, unless specifically provided otherwise. Services performed by
146.23an employee for an employer are not taxable. Services performed by a partnership or
146.24association for another partnership or association are not taxable if one of the entities owns
146.25or controls more than 80 percent of the voting power of the equity interest in the other
146.26entity. Services performed between members of an affiliated group of corporations are not
146.27taxable. For purposes of the preceding sentence, "affiliated group of corporations" means
146.28those entities that would be classified as members of an affiliated group as defined under
146.29United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).
146.30 (b) Sale and purchase include:
146.31 (1) any transfer of title or possession, or both, of tangible personal property, whether
146.32absolutely or conditionally, for a consideration in money or by exchange or barter; and
146.33 (2) the leasing of or the granting of a license to use or consume, for a consideration
146.34in money or by exchange or barter, tangible personal property, other than a manufactured
146.35home used for residential purposes for a continuous period of 30 days or more.
147.1 (c) Sale and purchase include the production, fabrication, printing, or processing of
147.2tangible personal property for a consideration for consumers who furnish either directly or
147.3indirectly the materials used in the production, fabrication, printing, or processing.
147.4 (d) Sale and purchase include the preparing for a consideration of food.
147.5Notwithstanding section297A.67, subdivision 2 , taxable food includes, but is not limited
147.6to, the following:
147.7 (1) prepared food sold by the retailer;
147.8 (2) soft drinks;
147.9 (3) candy;
147.10 (4) dietary supplements; and
147.11 (5) all food sold through vending machines.
147.12 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
147.13gas, water, or steam for use or consumption within this state.
147.14 (f) A sale and a purchase includes
147.15 the transfer for a consideration of prewritten computer software whether delivered
147.16electronically, by load and leave, or otherwise.
147.17 (g) A sale and a purchase includes the furnishing for a consideration of the following
147.18services:
147.19 (1) the privilege of admission to places of amusement, recreational areas, or athletic
147.20events, and the making available of amusement devices, tanning facilities, reducing
147.21salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
147.22 (2) lodging and related services by a hotel, rooming house, resort, campground,
147.23motel, or trailer camp, including furnishing the guest of the facility with access to
147.24telecommunication services, and the granting of any similar license to use real property in
147.25a specific facility, other than the renting or leasing of it for a continuous period of 30 days
147.26or more under an enforceable written agreement that may not be terminated without prior
147.27notice and including accommodations intermediary services provided in connection with
147.28other services provided under this clause;
147.29 (3) nonresidential parking services, whether on a contractual, hourly, or other
147.30periodic basis, except for parking at a meter;
147.31 (4) the granting of membership in a club, association, or other organization if:
147.32 (i) the club, association, or other organization makes available for the use of its
147.33members sports and athletic facilities, without regard to whether a separate charge is
147.34assessed for use of the facilities; and
147.35 (ii) use of the sports and athletic facility is not made available to the general public
147.36on the same basis as it is made available to members.
148.1Granting of membership means both onetime initiation fees and periodic membership
148.2dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
148.3squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
148.4swimming pools; and other similar athletic or sports facilities;
148.5 (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
148.6material used in road construction; and delivery of concrete block by a third party if the
148.7delivery would be subject to the sales tax if provided by the seller of the concrete block.
148.8For purposes of this clause, "road construction" means construction of:
148.9 (i) public roads;
148.10 (ii) cartways; and
148.11 (iii) private roads in townships located outside of the seven-county metropolitan area
148.12up to the point of the emergency response location sign; and
148.13 (6) services as provided in this clause:
148.14 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
148.15and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
148.16drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
148.17include services provided by coin operated facilities operated by the customer;
148.18 (ii) motor vehicle washing, waxing, and cleaning services, including services
148.19provided by coin operated facilities operated by the customer, and rustproofing,
148.20undercoating, and towing of motor vehicles;
148.21 (iii) building and residential cleaning, maintenance, and disinfecting services and
148.22pest control and exterminating services;
148.23 (iv) detective, security, burglar, fire alarm, and armored car services; but not
148.24including services performed within the jurisdiction they serve by off-duty licensed peace
148.25officers as defined in section626.84, subdivision 1 , or services provided by a nonprofit
148.26organization or any organization at the direction of a county for monitoring and electronic
148.27surveillance of persons placed on in-home detention pursuant to court order or under the
148.28direction of the Minnesota Department of Corrections;
148.29 (v) pet grooming services;
148.30 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
148.31and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
148.32plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
148.33clearing contract as defined in section297A.68, subdivision 40 ; and tree trimming for
148.34public utility lines. Services performed under a construction contract for the installation of
148.35shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
149.1 (vii) massages, except when provided by a licensed health care facility or
149.2professional or upon written referral from a licensed health care facility or professional for
149.3treatment of illness, injury, or disease; and
149.4 (viii) the furnishing of lodging, board, and care services for animals in kennels and
149.5other similar arrangements, but excluding veterinary and horse boarding services.
149.6In applying the provisions of this chapter, the terms "tangible personal property"
149.7and "retail sale" include taxable services listed in clause (6), items (i) to (vi) and (viii),
149.8and the provision of these taxable services, unless specifically provided otherwise.
149.9Services performed by an employee for an employer are not taxable. Services performed
149.10by a partnership or association for another partnership or association are not taxable if
149.11one of the entities owns or controls more than 80 percent of the voting power of the
149.12equity interest in the other entity. Services performed between members of an affiliated
149.13group of corporations are not taxable. For purposes of the preceding sentence, "affiliated
149.14group of corporations" means those entities that would be classified as members of an
149.15affiliated group as defined under United States Code, title 26, section 1504, disregarding
149.16the exclusions in section 1504(b).
149.17For purposes of clause (5), "road construction" means construction of (1) public
149.18roads, (2) cartways, and (3) private roads in townships located outside of the seven-county
149.19metropolitan area up to the point of the emergency response location sign.
149.20 (h) A sale and a purchase includes the furnishing for a consideration of tangible
149.21personal property or taxable services by the United States or any of its agencies or
149.22instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
149.23subdivisions.
149.24 (i) A sale and a purchase includes the furnishing for a consideration of
149.25telecommunications services, ancillary services associated with telecommunication
149.26services,cable and pay television services, and direct satellite services. Telecommunication
149.27services include, but are not limited to, the following services, as defined in section
149.28297A.669
: air-to-ground radiotelephone service, mobile telecommunication service,
149.29postpaid calling service, prepaid calling service, prepaid wireless calling service, and
149.30private communication services. The services in this paragraph are taxed to the extent
149.31allowed under federal law.
149.32 (j) A sale and a purchase includes the furnishing for a consideration of installation if
149.33the installation charges would be subject to the sales tax if the installation were provided
149.34by the seller of the item being installed.
149.35 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
149.36to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
150.1the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
150.259B.02, subdivision
11.
150.3 (l) A sale and a purchase includes furnishing for a consideration of specified digital
150.4products or other digital products or granting the right for a consideration to use specified
150.5digital products or other digital products on a temporary or permanent basis and regardless
150.6of whether the purchaser is required to make continued payments for such right. Wherever
150.7the term "tangible personal property" is used in this chapter, other than in subdivisions 10
150.8and 38, the provisions also apply to specified digital products, or other digital products,
150.9unless specifically provided otherwise or the context indicates otherwise.
150.10(m) A sale and purchase includes the furnishing for consideration of the following
150.11services:
150.12(1) repairing and maintaining electronic and precision equipment, which service can
150.13be deducted as a business expense under the Internal Revenue Code. This includes, but
150.14is not limited to, repair or maintenance of electronic devices, computers and computer
150.15peripherals, monitors, computer terminals, storage devices, and CD-ROM drives; other
150.16office equipment such as photocopying machines, printers, and facsimile machines;
150.17televisions, stereos, sound systems, video or digital recorders and players; two-way radios
150.18and other communications equipment; radar and sonar equipment, scientific instruments,
150.19microscopes, and medical equipment;
150.20(2) repairing and maintaining commercial and industrial machinery and equipment.
150.21For purposes of this subdivision, the following items are not commercial or industrial
150.22machinery and equipment: (i) motor vehicles; (ii) furniture and fixtures; (iii) ships; (iv)
150.23railroad stock; and (v) aircraft; and
150.24(3) warehousing or storage services for tangible personal property, excluding:
150.25(i) agricultural products;
150.26(ii) refrigerated storage;
150.27(iii) electronic data; and
150.28(iv) self-storage services and storage of motor vehicles, recreational vehicles, and
150.29boats, not eligible to be deducted as a business expense under the Internal Revenue Code.
150.30EFFECTIVE DATE.This section is effective for sales and purchases made after
150.31June 30, 2013, except that paragraph (m), clause (3), is effective for sales and purchases
150.32made after March 31, 2014.
150.33 Sec. 3. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
150.34 Subd. 4. Retail sale. (a) A "retail sale" means:
151.1 (1) any sale, lease, or rental of tangible personal propertyfor any purpose, other than
151.2resale, sublease, or subrent of items by the purchaser in the normal course of business
151.3as defined in subdivision 21; and
151.4 (2) any sale of a service enumerated in subdivision 3, for any purpose other than
151.5resale by the purchaser in the normal course of business as defined in subdivision 21.
151.6 (b) A sale of property used by the owner only by leasing it to others or by holding it
151.7in an effort to lease it, and put to no use by the owner other than resale after the lease or
151.8effort to lease, is a sale of property for resale.
151.9 (c) A sale of master computer software that is purchased and used to make copies for
151.10sale or lease is a sale of property for resale.
151.11 (d) A sale of building materials, supplies, and equipment to owners, contractors,
151.12subcontractors, or builders for the erection of buildings or the alteration, repair, or
151.13improvement of real property is a retail sale in whatever quantity sold, whether the sale is
151.14for purposes of resale in the form of real property or otherwise.
151.15 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
151.16for installation of the floor covering is a retail sale and not a sale for resale since a sale of
151.17floor covering which includes installation is a contract for the improvement of real property.
151.18 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
151.19for installation of the items is a retail sale and not a sale for resale since a sale of
151.20shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
151.21the improvement of real property.
151.22 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
151.23is not considered a sale of property for resale.
151.24 (h) A sale of tangible personal property utilized or employed in the furnishing or
151.25providing of services under subdivision 3, paragraph (g), clause (1), including, but not
151.26limited to, property given as promotional items, is a retail sale and is not considered a
151.27sale of property for resale.
151.28 (i) A sale of tangible personal property used in conducting lawful gambling under
151.29chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
151.30given as promotional items, is a retail sale and is not considered a sale of property for resale.
151.31 (j) a sale of machines, equipment, or devices that are used to furnish, provide, or
151.32dispense goods or services, including, but not limited to, coin-operated devices, is a retail
151.33sale and is not considered a sale of property for resale.
151.34 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
151.35payment becomes due under the terms of the agreement or the trade practices of the
151.36lessor or (2) in the case of a lease of a motor vehicle, as defined in section297B.01,
152.1subdivision 11 , but excluding vehicles with a manufacturer's gross vehicle weight rating
152.2greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
152.3the lease is executed.
152.4 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
152.5title or possession of the tangible personal property.
152.6 (m) A sale of a bundled transaction in which one or more of the products included
152.7in the bundle is a taxable product is a retail sale, except that if one of the products
152.8is a telecommunication service, ancillary service, Internet access, or audio or video
152.9programming service, and the seller has maintained books and records identifying through
152.10reasonable and verifiable standards the portions of the price that are attributable to the
152.11distinct and separately identifiable products, then the products are not considered part of a
152.12bundled transaction. For purposes of this paragraph:
152.13 (1) the books and records maintained by the seller must be maintained in the regular
152.14course of business, and do not include books and records created and maintained by the
152.15seller primarily for tax purposes;
152.16 (2) books and records maintained in the regular course of business include, but are
152.17not limited to, financial statements, general ledgers, invoicing and billing systems and
152.18reports, and reports for regulatory tariffs and other regulatory matters; and
152.19 (3) books and records are maintained primarily for tax purposes when the books
152.20and records identify taxable and nontaxable portions of the price, but the seller maintains
152.21other books and records that identify different prices attributable to the distinct products
152.22included in the same bundled transaction.
152.23 (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
152.24body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
152.25retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
152.26motor vehicle repair paint and motor vehicle repair materials for resale must either:
152.27 (1) separately state each item of paint and each item of materials, and the sales price
152.28of each, on the invoice to the purchaser; or
152.29 (2) in order to calculate the sales price of the paint and materials, use a method
152.30which estimates the amount and monetary value of the paint and materials used in
152.31the repair of the motor vehicle by multiplying the number of labor hours by a rate of
152.32consideration for the paint and materials used in the repair of the motor vehicle following
152.33industry standard practices that fairly calculate the gross receipts from the retail sale of
152.34the motor vehicle repair paint and motor vehicle repair materials. An industry standard
152.35practice fairly calculates the gross receipts if the sales price of the paint and materials used
152.36or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
153.1by the motor vehicle repair or body shop business. Under this clause, the invoice must
153.2either separately state the "paint and materials" as a single taxable item, or separately state
153.3"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
153.4wholesale transactions at an auto auction facility.
153.5 (o) A sale of specified digital products or other digital products to an end user with
153.6or without rights of permanent use and regardless of whether rights of use are conditioned
153.7upon payment by the purchaser is a retail sale. When a digital code has been purchased that
153.8relates to specified digital products or other digital products, the subsequent receipt of or
153.9access to the related specified digital products or other digital products is not a retail sale.
153.10 (p) A payment made to a cooperative electric association or public utility as a
153.11contribution in aid of construction is a contract for improvement to real property and
153.12is not a retail sale.
153.13EFFECTIVE DATE.This section is effective for sales and purchases made after
153.14June 30, 2013.
153.15 Sec. 4. Minnesota Statutes 2012, section 297A.61, subdivision 10, is amended to read:
153.16 Subd. 10. Tangible personal property. (a) "Tangible personal property" means
153.17personal property that can be seen, weighed, measured, felt, or touched, or that is in any
153.18other manner perceptible to the senses. "Tangible personal property" includes, but is not
153.19limited to, electricity, water, gas, steam, and prewritten computer software.
153.20 (b) Tangible personal property does not include:
153.21 (1) large ponderous machinery and equipment used in a business or production
153.22activity which at common law would be considered to be real property;
153.23 (2) property which is subject to an ad valorem property tax;
153.24 (3) property described in section272.02, subdivision 9 , clauses (a) to (d); and
153.25 (4) property described in section272.03, subdivision 2 , clauses (3) and (5).; and
153.26(5) specified digital products, or other digital products, transferred electronically.
153.27EFFECTIVE DATE.This section is effective for sales and purchases made after
153.28June 30, 2013.
153.29 Sec. 5. Minnesota Statutes 2012, section 297A.61, subdivision 25, is amended to read:
153.30 Subd. 25.Cable Pay television service. "Cable Pay television service" means
153.31the transmission of video, audio, or other programming service to purchasers, and the
153.32subscriber interaction, if any, required for the selection or use of the programming service,
153.33regardless of whether the programming is transmitted over facilities owned or operated
154.1by the cable service provider or over facilities owned or operated by one or more dealers
154.2of communications services. The term includes point-to-multipoint distribution direct to
154.3home satellite services by which programming is transmitted or broadcast by microwave
154.4or other equipment directly to the subscriber's premises, or any similar or comparable
154.5method of service. The term includesbasic, extended, premium, all programming services,
154.6including subscriptions, digital video recorders, pay-per-view,digital, and music services.
154.7EFFECTIVE DATE.This section is effective for sales and purchases made after
154.8June 30, 2013.
154.9 Sec. 6. Minnesota Statutes 2012, section 297A.61, subdivision 38, is amended to read:
154.10 Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale
154.11of two or more products when the products are otherwise distinct and identifiable, and
154.12the products are sold for one nonitemized price. As used in this subdivision, "product"
154.13includes tangible personal property, services, intangibles, and digital goods, including
154.14specified digital products or other digital products, but does not include real property or
154.15services to real property. A bundled transaction does not include the sale of any products
154.16in which the sales price varies, or is negotiable, based on the selection by the purchaser of
154.17the products included in the transaction.
154.18 (b) For purposes of this subdivision, "distinct and identifiable" products does not
154.19include:
154.20 (1) packaging and other materials, such as containers, boxes, sacks, bags, and
154.21bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
154.22products and are incidental or immaterial to the retail sale. Examples of packaging that are
154.23incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
154.24and express delivery envelopes and boxes;
154.25 (2) a promotional product provided free of charge with the required purchase of
154.26another product. A promotional product is provided free of charge if the sales price of
154.27another product, which is required to be purchased in order to receive the promotional
154.28product, does not vary depending on the inclusion of the promotional product; and
154.29 (3) items included in the definition of sales price.
154.30 (c) For purposes of this subdivision, the term "one nonitemized price" does not
154.31include a price that is separately identified by product on binding sales or other supporting
154.32sales-related documentation made available to the customer in paper or electronic form
154.33including but not limited to an invoice, bill of sale, receipt, contract, service agreement,
154.34lease agreement, periodic notice of rates and services, rate card, or price list.
155.1 (d) A transaction that otherwise meets the definition of a bundled transaction is
155.2not a bundled transaction if it is:
155.3 (1) the retail sale of tangible personal property and a service and the tangible
155.4personal property is essential to the use of the service, and is provided exclusively in
155.5connection with the service, and the true object of the transaction is the service;
155.6 (2) the retail sale of services if one service is provided that is essential to the use or
155.7receipt of a second service and the first service is provided exclusively in connection with
155.8the second service and the true object of the transaction is the second service;
155.9 (3) a transaction that includes taxable products and nontaxable products and the
155.10purchase price or sales price of the taxable products is de minimis; or
155.11 (4) the retail sale of exempt tangible personal property and taxable tangible personal
155.12property if:
155.13 (i) the transaction includes food and food ingredients, drugs, durable medical
155.14equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
155.15or medical supplies; and
155.16 (ii) the seller's purchase price or sales price of the taxable tangible personal property is
155.1750 percent or less of the total purchase price or sales price of the bundled tangible personal
155.18property. Sellers must not use a combination of the purchase price and sales price of the
155.19tangible personal property when making the 50 percent determination for a transaction.
155.20 (e) For purposes of this subdivision, "purchase price" means the measure subject to
155.21use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
155.22price or sales price of the taxable products is ten percent or less of the total purchase
155.23price or sales price of the bundled products. Sellers shall use either the purchase price
155.24or the sales price of the products to determine if the taxable products are de minimis.
155.25Sellers must not use a combination of the purchase price and sales price of the products
155.26to determine if the taxable products are de minimis. Sellers shall use the full term of a
155.27service contract to determine if the taxable products are de minimis.
155.28EFFECTIVE DATE.This section is effective for sales and purchases made after
155.29June 30, 2013.
155.30 Sec. 7. Minnesota Statutes 2012, section 297A.61, subdivision 45, is amended to read:
155.31 Subd. 45. Ring tone. "Ring tone" means a digitized sound file that is downloaded
155.32onto a device and that may be used to alert the customerof a telecommunication service
155.33 with respect to a communication. A ring tone does not include ring back tones or other
155.34digital audio files that are not stored on the purchaser's communication device.
156.1EFFECTIVE DATE.This section is effective for sales and purchases made after
156.2June 30, 2013.
156.3 Sec. 8. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
156.4to read:
156.5 Subd. 49. Motor vehicle repair paint and motor vehicle repair materials. "Motor
156.6vehicle repair paint" means a substance composed of solid matter suspended in a liquid
156.7medium and applied as a protective or decorative coating to the surface of a motor vehicle in
156.8order to restore the motor vehicle to its original condition, and includes primer, body paint,
156.9clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01.
156.10"Motor vehicle repair materials" means items, other than motor vehicle repair paint
156.11or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in
156.12repairing the motor vehicle at retail, and include abrasives, battery water, body filler or
156.13putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing
156.14compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape,
156.15oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads,
156.16sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor
156.17vehicle repair materials do not include items that are not used directly on the motor vehicle,
156.18such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
156.19used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.
156.20EFFECTIVE DATE.This section is effective for sales and purchases made after
156.21June 30, 2013.
156.22 Sec. 9. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
156.23to read:
156.24 Subd. 50. Digital audio works. "Digital audio works" means works that result from
156.25a fixation of a series of musical, spoken, or other sounds, that are transferred electronically.
156.26Digital audio works includes such items as the following which may either be prerecorded
156.27or live: songs, music, readings of books or other written materials, speeches, ring tones, or
156.28other sound recordings. Digital audio works does not include audio greeting cards sent by
156.29electronic mail. Unless the context provides otherwise, in this chapter digital audio works
156.30includes the digital code, or a subscription to or access to a digital code, for receiving,
156.31accessing, or otherwise obtaining digital audio works.
156.32EFFECTIVE DATE.This section is effective for sales and purchases made after
156.33June 30, 2013.
157.1 Sec. 10. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.2subdivision to read:
157.3 Subd. 51. Digital audiovisual works. "Digital audiovisual works" means a series
157.4of related images which, when shown in succession, impart an impression of motion,
157.5together with accompanying sounds, if any, that are transferred electronically. Digital
157.6audiovisual works includes such items as motion pictures, movies, musical videos, news
157.7and entertainment, and live events. Digital audiovisual works does not include video
157.8greeting cards sent by electronic mail. Unless the context provides otherwise, in this
157.9chapter digital audiovisual works includes the digital code, or a subscription to or access to
157.10a digital code, for receiving, accessing, or otherwise obtaining digital audiovisual works.
157.11EFFECTIVE DATE.This section is effective for sales and purchases made after
157.12June 30, 2013.
157.13 Sec. 11. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.14subdivision to read:
157.15 Subd. 52. Digital books. "Digital books" means any literary works, other than
157.16digital audiovisual works or digital audio works, expressed in words, numbers, or other
157.17verbal or numerical symbols or indicia so long as the product is generally recognized in
157.18the ordinary and usual sense as a "book." It includes works of fiction and nonfiction and
157.19short stories. It does not include periodicals, magazines, newspapers, or other news or
157.20information products, chat rooms, or weblogs. Unless the context provides otherwise, in
157.21this chapter digital books includes the digital code, or a subscription to or access to a
157.22digital code, for receiving, accessing, or otherwise obtaining digital books.
157.23EFFECTIVE DATE.This section is effective for sales and purchases made after
157.24June 30, 2013.
157.25 Sec. 12. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.26subdivision to read:
157.27 Subd. 53. Digital code. "Digital code" means a code which provides a purchaser
157.28with a right to obtain one or more specified digital products or other digital products.
157.29A digital code may be transferred electronically, such as through electronic mail, or it
157.30may be transferred on a tangible medium, such as on a plastic card, a piece of paper or
157.31invoice, or imprinted on another product. A digital code is not a code that represents a
157.32stored monetary value that is deducted from a total as it is used by the purchaser, and it
157.33is not a code that represents a redeemable card, gift card, or gift certificate that entitles
158.1the holder to select a digital product of an indicated cash value. The end user of a digital
158.2code is any purchaser except one who receives the contractual right to redistribute a digital
158.3product which is the subject of the transaction.
158.4EFFECTIVE DATE.This section is effective for sales and purchases made after
158.5June 30, 2013.
158.6 Sec. 13. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.7subdivision to read:
158.8 Subd. 54. Other digital products. "Other digital products" means the following
158.9items when transferred electronically:
158.10(1) greeting cards; and
158.11(2) online video or electronic games.
158.12EFFECTIVE DATE.This section is effective for sales and purchases made after
158.13June 30, 2013.
158.14 Sec. 14. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.15subdivision to read:
158.16 Subd. 55. Specified digital products. "Specified digital products" means digital
158.17audio works, digital audiovisual works, and digital books that are transferred electronically
158.18to a customer.
158.19EFFECTIVE DATE.This section is effective for sales and purchases made after
158.20June 30, 2013.
158.21 Sec. 15. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.22subdivision to read:
158.23 Subd. 56. Transferred electronically. "Transferred electronically" means obtained
158.24by the purchaser by means other than tangible storage media. For purposes of this
158.25subdivision, it is not necessary that a copy of the product be physically transferred to
158.26the purchaser. A product will be considered to have been transferred electronically to a
158.27purchaser if the purchaser has access to the product.
158.28EFFECTIVE DATE.This section is effective for sales and purchases made after
158.29June 30, 2013.
159.1 Sec. 16. Minnesota Statutes 2012, section 297A.61, is amended by adding a
159.2subdivision to read:
159.3 Subd. 58. Self-storage service. "Self-storage service" means a storage service that
159.4provides secure areas, such as rooms, units, compartments or containers, whether accessible
159.5from outside or from within a building, that are designated for the use of a purchaser,
159.6where the purchaser retains the care custody and control of their property, including
159.7self-storage units, mini-storage units, and areas by any other name to which the purchaser
159.8retains either unlimited free access or free access within reasonable business hours or upon
159.9reasonable notice to the service provider to add or remove property, but does not mean the
159.10rental of an entire building, such as a warehouse. Self-storage service does not include
159.11general warehousing and storage services where the warehouse typically handles, stores,
159.12and retrieves a purchaser's property using the warehouse's staff and equipment, and does
159.13not allow the purchaser free access to the storage space and does not include bailments.
159.14EFFECTIVE DATE.This section is effective July 1, 2013.
159.15 Sec. 17. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
159.16 Subdivision 1. Tax imposed. A tax is imposed on the lease or rental in this state
159.17for not more than 28 days of a passenger automobile as defined in section168.002,
159.18subdivision 24 , a van as defined in section
168.002, subdivision 40 , or a pickup truck as
159.19defined in section168.002, subdivision 26 . The rate of tax is 6.2 9.2 percent of the sales
159.20price. The tax applies whether or not the vehicle is licensed in the state.
159.21EFFECTIVE DATE.This section is effective for sales and purchases made after
159.22June 30, 2013.
159.23 Sec. 18. Minnesota Statutes 2012, section 297A.66, subdivision 3, is amended to read:
159.24 Subd. 3. Retailer not maintaining place of business in this state. (a) To the extent
159.25allowed by the United States Constitution andthe laws of the United States in accordance
159.26with the terms and conditions of federal remote seller law, a retailer making retail sales
159.27from outside this state to a destination within this state and not maintaining a place of
159.28business in this state shall collect sales and use taxes and remit them to the commissioner
159.29under section297A.77 ,.
159.30(b) To the extent allowed by the United States Constitution and the laws of the
159.31United States, a retailer making retail sales from outside this state to a destination within
159.32this state and not maintaining a place of business in this state shall collect sales and use
160.1taxes and remit them to the commissioner under section297A.77 , if the retailer engages in
160.2the regular or systematic soliciting of sales from potential customers in this state by:
160.3(1) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers, or
160.4other written solicitations of business to customers in this state;
160.5(2) display of advertisements on billboards or other outdoor advertising in this state;
160.6(3) advertisements in newspapers published in this state;
160.7(4) advertisements in trade journals or other periodicals the circulation of which is
160.8primarily within this state;
160.9(5) advertisements in a Minnesota edition of a national or regional publication or
160.10a limited regional edition in which this state is included as part of a broader regional or
160.11national publication which are not placed in other geographically defined editions of the
160.12same issue of the same publication;
160.13(6) advertisements in regional or national publications in an edition which is not
160.14by its contents geographically targeted to Minnesota but which is sold over the counter
160.15in Minnesota or by subscription to Minnesota residents;
160.16(7) advertisements broadcast on a radio or television station located in Minnesota; or
160.17(8) any other solicitation by telegraphy, telephone, computer database, cable, optic,
160.18microwave, or other communication system.
160.19This paragraph (a) must be construed without regard to the state from which
160.20distribution of the materials originated or in which they were prepared.
160.21(b) The location within or without this state of independent vendors that provide
160.22products or services to the retailer in connection with its solicitation of customers within this
160.23state, including such products and services as creation of copy, printing, distribution, and
160.24recording, is not considered in determining whether the retailer is required to collect tax.
160.25(c) A retailer not maintaining a place of business in this state is presumed, subject to
160.26rebuttal, to be engaged in regular solicitation within this state if it engages in any of the
160.27activities in paragraph (a) and:
160.28(1) makes 100 or more retail sales from outside this state to destinations in this state
160.29during a period of 12 consecutive months; or
160.30(2) makes ten or more retail sales totaling more than $100,000 from outside this state
160.31to destinations in this state during a period of 12 consecutive months.
160.32EFFECTIVE DATE.This section is effective the day after final enactment.
160.33 Sec. 19. Minnesota Statutes 2012, section 297A.66, is amended by adding a
160.34subdivision to read:
161.1 Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
161.2means a person, whether an independent contractor or other representative, who directly
161.3or indirectly solicits business for the retailer.
161.4(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
161.5with a resident under which the resident, for a commission or other substantially similar
161.6consideration, directly or indirectly refers potential customers, whether by a link on an
161.7Internet Web site, or otherwise, to the seller. This paragraph only applies if the total gross
161.8receipts are at least $10,000 in the 12-month period ending on the last day of the most recent
161.9calendar quarter before the calendar quarter in which the sale is made. For purposes of this
161.10paragraph, gross receipts means receipts from sales to customers located in the state who
161.11were referred to the retailer by all residents with this type of agreement with the retailer.
161.12(c) The presumption under paragraph (b) may be rebutted by proof that the resident
161.13with whom the seller has an agreement did not engage in any solicitation in the state
161.14on behalf of the retailer that would satisfy the nexus requirement of the United States
161.15Constitution during the 12-month period in question. Nothing in this section shall be
161.16construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
161.17representative for purposes of subdivision 1, paragraph (a).
161.18(d) For purposes of this paragraph, "resident" includes an individual who is a
161.19resident of this state, as defined in section 290.01, or a business that owns tangible
161.20personal property located in this state or has one or more employees providing services for
161.21the business in this state.
161.22(e) This subdivision does not apply to chapter 290 and does not expand or contract
161.23the jurisdiction to tax a trade or business under chapter 290.
161.24EFFECTIVE DATE.This section is effective for sales and purchases made after
161.25June 30, 2013.
161.26 Sec. 20. Minnesota Statutes 2012, section 297A.665, is amended to read:
161.27297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
161.28 (a) For the purpose of the proper administration of this chapter and to prevent
161.29evasion of the tax, until the contrary is established, it is presumed that:
161.30 (1) all gross receipts are subject to the tax; and
161.31 (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
161.32in Minnesota.
161.33 (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
161.34However, a seller is relieved of liability if:
162.1 (1) the seller obtains a fully completed exemption certificate or all the relevant
162.2information required by section297A.72, subdivision 2 , at the time of the sale or within
162.390 days after the date of the sale;or
162.4 (2) if the seller has not obtained a fully completed exemption certificate or all the
162.5relevant information required by section297A.72, subdivision 2 , within the time provided
162.6in clause (1), within 120 days after a request for substantiation by the commissioner,
162.7the seller either:
162.8 (i) obtains in good faith a fully completed exemption certificate or all the relevant
162.9information required by section297A.72, subdivision 2 , from the purchaser; or
162.10 (ii) proves by other means that the transaction was not subject to tax;
162.11 (3) in the case of drop shipment sales, a seller engaged in drop shipping may claim a
162.12resale exemption based on an exemption certificate provided by its customer or reseller,
162.13or any other acceptable information available to the seller engaged in drop shipping
162.14evidencing qualification for a resale exemption, regardless of whether the customer or
162.15reseller is registered to collect and remit sales and use tax in the state.
162.16 (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
162.17 (1) fraudulently fails to collect the tax; or
162.18 (2) solicits purchasers to participate in the unlawful claim of an exemption.
162.19 (d) A certified service provider, as defined in section297A.995, subdivision 2 , is
162.20relieved of liability under this section to the extent a seller who is its client is relieved of
162.21liability.
162.22 (e) A purchaser of tangible personal property or any items listed in section297A.63
162.23that are shipped or brought to Minnesota by the purchaser has the burden of proving that the
162.24property was not purchased from a retailer for storage, use, or consumption in Minnesota.
162.25 (f) If a seller claims that certain sales are exempt and does not provide the certificate,
162.26information, or proof required by paragraph (b), clause (2), within 120 days after the date
162.27of the commissioner's request for substantiation, then the exemptions claimed by the seller
162.28that required substantiation are disallowed.
162.29EFFECTIVE DATE.This section is effective for sales and purchases made after
162.30June 30, 2013.
162.31 Sec. 21. Minnesota Statutes 2012, section 297A.668, is amended by adding a
162.32subdivision to read:
162.33 Subd. 6a. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
162.342 and 3, a business purchaser that has not received authorization to pay the tax directly to
162.35the commissioner may use an exemption certificate indicating multiple points of use if:
163.1(1) the purchaser knows at the time of its purchase of a digital good, computer
163.2software delivered electronically, or a service that the good or service will be concurrently
163.3available for use in more than one taxing jurisdiction; and
163.4(2) the purchaser delivers to the seller the exemption certificate indicating multiple
163.5points of use at the time of purchase.
163.6(b) Upon receipt of the fully completed exemption certificate indicating multiple
163.7points of use, the seller is relieved of the obligation to collect, pay, or remit the applicable
163.8tax and the purchaser is obligated to collect, pay, or remit the applicable tax on a direct
163.9pay basis. The provisions of section 297A.665 apply to this paragraph.
163.10(c) The purchaser delivering the exemption certificate indicating multiple points
163.11of use may use any reasonable but consistent and uniform method of apportionment
163.12that is supported by the purchaser's business records as they exist at the time of the
163.13consummation of the sale.
163.14(d) The purchaser shall provide the exemption certificate indicating multiple points
163.15of use to the seller at the time of purchase.
163.16(e) A purchaser that has received authorization to pay the tax directly to the
163.17commissioner is not required to deliver to the seller an exemption certificate indicating
163.18multiple points of use. A purchaser that has received authorization to pay the tax directly
163.19to the commissioner shall follow the provisions of paragraph (c) in apportioning the tax
163.20due on a digital good, computer software delivered electronically, or a service that will be
163.21concurrently available for use in more than one taxing jurisdiction.
163.22EFFECTIVE DATE.This section is effective for sales and purchases made after
163.23June 30, 2013.
163.24 Sec. 22. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
163.25 Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
163.26devices for human use are exempt:
163.27 (1) drugs, including over-the-counter drugs;
163.28 (2) single-use finger-pricking devices for the extraction of blood and other single-use
163.29devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
163.30diabetes;
163.31 (3) insulin and medical oxygen for human use, regardless of whether prescribed
163.32or sold over the counter;
163.33 (4) prosthetic devices;
163.34 (5) durable medical equipment for home use only;
163.35 (6) mobility enhancing equipment;
164.1 (7) prescription corrective eyeglasses; and
164.2 (8) kidney dialysis equipment, including repair and replacement parts.
164.3(b) Items purchased in transactions covered by:
164.4(1) Medicare as defined under title XVIII of the Social Security Act, United States
164.5Code, title 42, section 1395, et seq.; or
164.6(2) Medicaid as defined under title XIX of the Social Security Act, United States
164.7Code, title 42, section 1396, et seq.
164.8(b) (c) For purposes of this subdivision:
164.9 (1) "Drug" means a compound, substance, or preparation, and any component of
164.10a compound, substance, or preparation, other than food and food ingredients, dietary
164.11supplements, or alcoholic beverages that is:
164.12 (i) recognized in the official United States Pharmacopoeia, official Homeopathic
164.13Pharmacopoeia of the United States, or official National Formulary, and supplement
164.14to any of them;
164.15 (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
164.16of disease; or
164.17 (iii) intended to affect the structure or any function of the body.
164.18 (2) "Durable medical equipment" means equipment, including repair and
164.19replacement parts, including single-patient use items, but not including mobility enhancing
164.20equipment, that:
164.21 (i) can withstand repeated use;
164.22 (ii) is primarily and customarily used to serve a medical purpose;
164.23 (iii) generally is not useful to a person in the absence of illness or injury; and
164.24 (iv) is not worn in or on the body.
164.25 For purposes of this clause, "repair and replacement parts" includes all components
164.26or attachments used in conjunction with the durable medical equipment,but does not
164.27include including repair and replacement parts which are for single patient use only.
164.28 (3) "Mobility enhancing equipment" means equipment, including repair and
164.29replacement parts, but not including durable medical equipment, that:
164.30 (i) is primarily and customarily used to provide or increase the ability to move from
164.31one place to another and that is appropriate for use either in a home or a motor vehicle;
164.32 (ii) is not generally used by persons with normal mobility; and
164.33 (iii) does not include any motor vehicle or equipment on a motor vehicle normally
164.34provided by a motor vehicle manufacturer.
164.35 (4) "Over-the-counter drug" means a drug that contains a label that identifies the
164.36product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
165.1label must include a "drug facts" panel or a statement of the active ingredients with a list of
165.2those ingredients contained in the compound, substance, or preparation. Over-the-counter
165.3drugs do not include grooming and hygiene products, regardless of whether they otherwise
165.4meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
165.5shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
165.6 (5) "Prescribed" and "prescription" means a direction in the form of an order,
165.7formula, or recipe issued in any form of oral, written, electronic, or other means of
165.8transmission by a duly licensed health care professional.
165.9 (6) "Prosthetic device" means a replacement, corrective, or supportive device,
165.10including repair and replacement parts, worn on or in the body to:
165.11 (i) artificially replace a missing portion of the body;
165.12 (ii) prevent or correct physical deformity or malfunction; or
165.13 (iii) support a weak or deformed portion of the body.
165.14Prosthetic device does not include corrective eyeglasses.
165.15 (7) "Kidney dialysis equipment" means equipment that:
165.16 (i) is used to remove waste products that build up in the blood when the kidneys are
165.17not able to do so on their own; and
165.18 (ii) can withstand repeated use, including multiple use by a single patient,
165.19notwithstanding the provisions of clause (2).
165.20(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of
165.21the item purchased in the transaction is paid for or reimbursed by the federal government
165.22or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private
165.23insurance company administering the Medicare or Medicaid program on behalf of the
165.24federal government or the state of Minnesota, or by a managed care organization for the
165.25benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu
165.26of conventional Medicare or Medicaid coverage pursuant to agreement with the federal
165.27government or the state of Minnesota.
165.28EFFECTIVE DATE.This section is effective for sales and purchases made after
165.29June 30, 2013.
165.30 Sec. 23. Minnesota Statutes 2012, section 297A.67, is amended by adding a
165.31subdivision to read:
165.32 Subd. 7a. Accessories and supplies. Accessories and supplies required for the
165.33effective use of durable medical equipment for home use only or purchased in a transaction
165.34covered by medicare or Medicaid, that are not already exempt under section 297A.67,
165.35subdivision 7, are exempt. Accessories and supplies for the effective use of a prosthetic
166.1device that are not already exempt under section 297A.67, subdivision 7, are exempt.
166.2For purposes of this subdivision "durable medical equipment," "prosthetic device,"
166.3"Medicare," and "Medicaid" have the definitions given in section 297A.67, subdivision 7.
166.4EFFECTIVE DATE.This section is effective for sales and purchases made after
166.5June 30, 2013.
166.6 Sec. 24. Minnesota Statutes 2012, section 297A.67, subdivision 13, is amended to read:
166.7 Subd. 13. Textbooks. Textbooks, including digital books, that are prescribed for use
166.8in conjunction with a course of study in a school, college, university, and private career
166.9school to students who are regularly enrolled at such institutions are exempt. For purposes
166.10of this subdivision (1) a "school" is as defined in section120A.22, subdivision 4 ; and (2)
166.11"private career school" means a school licensed under section141.25 .
166.12EFFECTIVE DATE.This section is effective for sales and purchases made after
166.13June 30, 2013.
166.14 Sec. 25. Minnesota Statutes 2012, section 297A.68, subdivision 2, is amended to read:
166.15 Subd. 2. Materials consumed in industrial production. (a) Materials stored, used,
166.16or consumed in industrial production of tangible personal property intended to be sold
166.17ultimately at retail, are exempt, whether or not the item so used becomes an ingredient
166.18or constituent part of the property produced. Materials that qualify for this exemption
166.19include, but are not limited to, the following:
166.20(1) chemicals, including chemicals used for cleaning food processing machinery
166.21and equipment;
166.22(2) materials, including chemicals, fuels, and electricity purchased by persons
166.23engaged in industrial production to treat waste generated as a result of the production
166.24process;
166.25(3) fuels, electricity, gas, and steam used or consumed in the production process,
166.26except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt
166.27if (i) it is in excess of the average climate control or lighting for the production area, and
166.28(ii) it is necessary to produce that particular product;
166.29(4) petroleum products and lubricants;
166.30(5) packaging materials, including returnable containers used in packaging food
166.31and beverage products;
167.1(6) accessory tools, equipment, and other items that are separate detachable units
167.2with an ordinary useful life of less than 12 months used in producing a direct effect upon
167.3the product; and
167.4(7) the following materials, tools, and equipment used in metal-casting: crucibles,
167.5thermocouple protection sheaths and tubes, stalk tubes, refractory materials, molten metal
167.6filters and filter boxes, degassing lances, and base blocks.
167.7(b) This exemption does not include:
167.8(1) machinery, equipment, implements, tools, accessories, appliances, contrivances
167.9and furniture and fixtures, except those listed in paragraph (a), clause (6); and
167.10(2) petroleum and special fuels used in producing or generating power for propelling
167.11ready-mixed concrete trucks on the public highways of this state.
167.12(c) Industrial production includes, but is not limited to, research, development,
167.13design or production of any tangible personal property, manufacturing, processing (other
167.14than by restaurants and consumers) of agricultural products (whether vegetable or animal),
167.15commercial fishing, refining, smelting, reducing, brewing, distilling, printing, mining,
167.16quarrying, lumbering, generating electricity, the production of road building materials,
167.17and the research, development, design, or production of computer software. Industrial
167.18production does not include painting, cleaning, repairing or similar processing of property
167.19except as part of the original manufacturing process.
167.20(d) Industrial production does not include:
167.21(1) the furnishing of services listed in section297A.61, subdivision 3 , paragraph (g),
167.22clause (6), items (i) to (vi) and (viii), or paragraph (m); or
167.23(2) the transportation, transmission, or distribution of petroleum, liquefied gas,
167.24natural gas, water, or steam, in, by, or through pipes, lines, tanks, mains, or other means of
167.25transporting those products. For purposes of this paragraph, "transportation, transmission,
167.26or distribution" does not include blending of petroleum or biodiesel fuel as defined
167.27in section239.77 .
167.28EFFECTIVE DATE.This section is effective for sales and purchases made after
167.29June 30, 2013.
167.30 Sec. 26. Minnesota Statutes 2012, section 297A.68, subdivision 5, is amended to read:
167.31 Subd. 5. Capital equipment. (a) Capital equipment is exempt.The tax must be
167.32imposed and collected as if the rate under section
297A.62, subdivision 1, applied, and
167.33then refunded in the manner provided in section
297A.75.
167.34"Capital equipment" means machinery and equipment purchased or leased, and used
167.35in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining,
168.1or refining tangible personal property to be sold ultimately at retail if the machinery and
168.2equipment are essential to the integrated production process of manufacturing, fabricating,
168.3mining, or refining. Capital equipment also includes machinery and equipment
168.4used primarily to electronically transmit results retrieved by a customer of an online
168.5computerized data retrieval system.
168.6(b) Capital equipment includes, but is not limited to:
168.7(1) machinery and equipment used to operate, control, or regulate the production
168.8equipment;
168.9(2) machinery and equipment used for research and development, design, quality
168.10control, and testing activities;
168.11(3) environmental control devices that are used to maintain conditions such as
168.12temperature, humidity, light, or air pressure when those conditions are essential to and are
168.13part of the production process;
168.14(4) materials and supplies used to construct and install machinery or equipment;
168.15(5) repair and replacement parts, including accessories, whether purchased as spare
168.16parts, repair parts, or as upgrades or modifications to machinery or equipment;
168.17(6) materials used for foundations that support machinery or equipment;
168.18(7) materials used to construct and install special purpose buildings used in the
168.19production process;
168.20(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed
168.21as part of the delivery process regardless if mounted on a chassis, repair parts for
168.22ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
168.23(9) machinery or equipment used for research, development, design, or production
168.24of computer software.
168.25(c) Capital equipment does not include the following:
168.26(1) motor vehicles taxed under chapter 297B;
168.27(2) machinery or equipment used to receive or store raw materials;
168.28(3) building materials, except for materials included in paragraph (b), clauses (6)
168.29and (7);
168.30(4) machinery or equipment used for nonproduction purposes, including, but not
168.31limited to, the following: plant security, fire prevention, first aid, and hospital stations;
168.32support operations or administration; pollution control; and plant cleaning, disposal of
168.33scrap and waste, plant communications, space heating, cooling, lighting, or safety;
168.34(5) farm machinery and aquaculture production equipment as defined by section
168.35297A.61
, subdivisions 12 and 13;
169.1(6) machinery or equipment purchased and installed by a contractor as part of an
169.2improvement to real property;
169.3(7) machinery and equipment used by restaurants in the furnishing, preparing, or
169.4serving of prepared foods as defined in section297A.61, subdivision 31 ;
169.5(8) machinery and equipment used to furnish the services listed in section297A.61,
169.6subdivision 3 , paragraph (g), clause (6), items (i) to (vi) and (viii);
169.7(9) machinery or equipment used in the transportation, transmission, or distribution
169.8of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines,
169.9tanks, mains, or other means of transporting those products. This clause does not apply to
169.10machinery or equipment used to blend petroleum or biodiesel fuel as defined in section
169.11239.77
; or
169.12(10) any other item that is not essential to the integrated process of manufacturing,
169.13fabricating, mining, or refining.
169.14(d) For purposes of this subdivision:
169.15(1) "Equipment" means independent devices or tools separate from machinery but
169.16essential to an integrated production process, including computers and computer software,
169.17used in operating, controlling, or regulating machinery and equipment; and any subunit or
169.18assembly comprising a component of any machinery or accessory or attachment parts of
169.19machinery, such as tools, dies, jigs, patterns, and molds.
169.20(2) "Fabricating" means to make, build, create, produce, or assemble components or
169.21property to work in a new or different manner.
169.22(3) "Integrated production process" means a process or series of operations through
169.23which tangible personal property is manufactured, fabricated, mined, or refined. For
169.24purposes of this clause, (i) manufacturing begins with the removal of raw materials
169.25from inventory and ends when the last process prior to loading for shipment has been
169.26completed; (ii) fabricating begins with the removal from storage or inventory of the
169.27property to be assembled, processed, altered, or modified and ends with the creation
169.28or production of the new or changed product; (iii) mining begins with the removal of
169.29overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and
169.30ends when the last process before stockpiling is completed; and (iv) refining begins with
169.31the removal from inventory or storage of a natural resource and ends with the conversion
169.32of the item to its completed form.
169.33(4) "Machinery" means mechanical, electronic, or electrical devices, including
169.34computers and computer software, that are purchased or constructed to be used for the
169.35activities set forth in paragraph (a), beginning with the removal of raw materials from
169.36inventory through completion of the product, including packaging of the product.
170.1(5) "Machinery and equipment used for pollution control" means machinery and
170.2equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
170.3described in paragraph (a).
170.4(6) "Manufacturing" means an operation or series of operations where raw materials
170.5are changed in form, composition, or condition by machinery and equipment and which
170.6results in the production of a new article of tangible personal property. For purposes of
170.7this subdivision, "manufacturing" includes the generation of electricity or steam to be
170.8sold at retail.
170.9(7) "Mining" means the extraction of minerals, ores, stone, or peat.
170.10(8) "Online data retrieval system" means a system whose cumulation of information
170.11is equally available and accessible to all its customers.
170.12(9) "Primarily" means machinery and equipment used 50 percent or more of the time
170.13in an activity described in paragraph (a).
170.14(10) "Refining" means the process of converting a natural resource to an intermediate
170.15or finished product, including the treatment of water to be sold at retail.
170.16(11) This subdivision does not apply to telecommunications equipment as
170.17provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit
170.18for telecommunications services.
170.19EFFECTIVE DATE.This section is effective for sales and purchases made after
170.20August 31, 2014.
170.21 Sec. 27. Minnesota Statutes 2012, section 297A.68, subdivision 42, is amended to read:
170.22 Subd. 42. Qualified data centers. (a) Purchases of enterprise information
170.23technology equipment and computer software for use in a qualified data center, or a
170.24qualified refurbished data center, are exempt. The tax on purchases exempt under this
170.25paragraph must be imposed and collected as if the rate under section297A.62, subdivision
170.261 , applied, and then refunded after June 30, 2013, in the manner provided in section
170.27297A.75
. This exemption includes enterprise information technology equipment and
170.28computer software purchased to replace or upgrade enterprise information technology
170.29equipment and computer software in a qualified data center, or a qualified refurbished
170.30data center.
170.31(b) Electricity used or consumed in the operation of a qualified data center is exempt.
170.32(c) For purposes of this subdivision, "qualified data center, or a qualified refurbished
170.33data center," means a facility in Minnesota:
170.34(1) that is comprised of one or more buildings that consist in the aggregate of at least
170.3530,000 25,000 square feet, and that are located on a single parcel or on contiguous parcels,
171.1where the total cost of construction or refurbishment, investment in enterprise information
171.2technology equipment, and computer software is at least$50,000,000 $30,000,000 within
171.3a24 48-month period;
171.4(2) that is constructed or substantially refurbished after June 30, 2012, where
171.5"substantially refurbished" means that at least30,000 25,000 square feet have been rebuilt
171.6or modified; and, including:
171.7(i) installation of enterprise information technology equipment, environmental
171.8control, computer software, and energy efficiency improvements; and
171.9(ii) building improvements; and
171.10(3) that is used to house enterprise information technology equipment, where the
171.11facility has the following characteristics:
171.12(i) uninterruptible power supplies, generator backup power, or both;
171.13(ii) sophisticated fire suppression and prevention systems; and
171.14(iii) enhanced security. A facility will be considered to have enhanced security if it
171.15has restricted access to the facility to selected personnel; permanent security guards; video
171.16camera surveillance; an electronic system requiring pass codes, keycards, or biometric
171.17scans, such as hand scans and retinal or fingerprint recognition; or similar security features.
171.18In determining whether the facility has the required square footage, the square
171.19footage of the following spaces shall be included if the spaces support the operation
171.20of enterprise information technology equipment: office space, meeting space, and
171.21mechanical and other support facilities. For purposes of this subdivision, "computer
171.22software" includes, but is not limited to, software utilized or loaded at the qualified data
171.23center, including maintenance, licensing, and software customization.
171.24(d) For purposes of this subdivision, a "qualified refurbished data center" means an
171.25existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but
171.26that is comprised of one or more buildings that consist in the aggregate of at least 25,000
171.27square feet, and that are located on a single parcel or contiguous parcels, where the total
171.28cost of construction or refurbishment, investment in enterprise information technology
171.29equipment, and computer software is at least $50,000,000 within a 24-month period.
171.30(d) (e) For purposes of this subdivision, "enterprise information technology
171.31equipment" means computers and equipment supporting computing, networking, or data
171.32storage, including servers and routers. It includes, but is not limited to: cooling systems,
171.33cooling towers, and other temperature control infrastructure; power infrastructure for
171.34transformation, distribution, or management of electricity used for the maintenance
171.35and operation of a qualified data center, including but not limited to exterior dedicated
171.36business-owned substations, backup power generation systems, battery systems, and
172.1related infrastructure; and racking systems, cabling, and trays, which are necessary for
172.2the maintenance and operation of the qualified data center.
172.3(e) (f) A qualified data center may claim the exemptions in this subdivision for
172.4purchases made either within 20 years of the date of its first purchase qualifying for the
172.5exemption under paragraph (a), or by June 30, 2042, whichever is earlier.
172.6(f) (g) The purpose of this exemption is to create jobs in the construction and data
172.7center industries.
172.8(g) (h) This subdivision is effective for sales and purchases made after June 30,
172.92012, and before July 1, 2042.
172.10EFFECTIVE DATE.This section is effective for sales and purchases made after
172.11June 30, 2013.
172.12 Sec. 28. Minnesota Statutes 2012, section 297A.68, is amended by adding a
172.13subdivision to read:
172.14 Subd. 49. Greater Minnesota business expansions. (a) Purchases and use of
172.15tangible personal property or taxable services by a qualified business, as defined in section
172.16116J.3738, are exempt if:
172.17(1) the business subsidy agreement provides that the exemption under this
172.18subdivision applies;
172.19(2) the property or services are primarily used or consumed in greater Minnesota; and
172.20(3) the purchase was made and delivery received during the duration of the
172.21certification of the business as a qualified business under section 116J.3738.
172.22(b) Purchase and use of construction materials and supplies used or consumed in,
172.23and equipment incorporated into, the construction of improvements to real property in
172.24greater Minnesota are exempt if the improvements after completion of construction are
172.25to be used in the conduct of the trade or business of the qualified business, as defined in
172.26section 116J.3738. This exemption applies regardless of whether the purchases are made
172.27by the business or a contractor.
172.28(c) The exemptions under this subdivision apply to a local sales and use tax.
172.29(d) The tax on purchases imposed under this subdivision must be imposed and
172.30collected as if the rate under section 297A.62 applied, and then refunded in the manner
172.31provided in section 297A.75. No more than $7,000,000 may be refunded in a fiscal year
172.32for all purchases under this subdivision. Refunds must be allocated on a first come, first
172.33served basis. If more than $7,000,000 of eligible claims are made in a fiscal year, claims
172.34by qualified businesses carryover to the next fiscal year, and the commissioner must first
172.35allocate refunds to qualified businesses eligible for a refund in the preceding fiscal year.
173.1Any portion of the balance of funds allocated for refunds under this paragraph does not
173.2cancel and shall be carried forward to and available for refunds in subsequent fiscal years.
173.3EFFECTIVE DATE.This section is effective for sales and purchases made after
173.4June 30, 2014.
173.5 Sec. 29. Minnesota Statutes 2012, section 297A.70, subdivision 2, is amended to read:
173.6 Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
173.7to the following governments and political subdivisions, or to the listed agencies or
173.8instrumentalities of governments and political subdivisions, are exempt:
173.9(1) the United States and its agencies and instrumentalities;
173.10(2) school districts, local governments, the University of Minnesota, state universities,
173.11community colleges, technical colleges, state academies, the Perpich Minnesota Center for
173.12Arts Education, and an instrumentality of a political subdivision that is accredited as an
173.13optional/special function school by the North Central Association of Colleges and Schools;
173.14(3) hospitals and nursing homes owned and operated by political subdivisions of
173.15the state of tangible personal property and taxable services used at or by hospitals and
173.16nursing homes;
173.17(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
173.18operations provided for in section473.4051 ;
173.19(5) other states or political subdivisions of other states, if the sale would be exempt
173.20from taxation if it occurred in that state; and
173.21(6) public libraries, public library systems, multicounty, multitype library systems as
173.22defined in section134.001 , county law libraries under chapter 134A, state agency libraries,
173.23the state library under section480.09 , and the Legislative Reference Library; and.
173.24(7) towns.
173.25(b) This exemption does not apply to the sales of the following products and services:
173.26(1) building, construction, or reconstruction materials purchased by a contractor
173.27or a subcontractor as a part of a lump-sum contract or similar type of contract with a
173.28guaranteed maximum price covering both labor and materials for use in the construction,
173.29alteration, or repair of a building or facility;
173.30(2) construction materials purchased by tax exempt entities or their contractors to
173.31be used in constructing buildings or facilities which will not be used principally by the
173.32tax exempt entities;
173.33(3) the leasing of a motor vehicle as defined in section297B.01, subdivision 11 ,
173.34except for leases entered into by the United States or its agencies or instrumentalities;
174.1(4) lodging as defined under section297A.61, subdivision 3 , paragraph (g), clause
174.2(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
174.3297A.67, subdivision 2
, except for lodging, prepared food, candy, soft drinks, and alcoholic
174.4beverages purchased directly by the United States or its agencies or instrumentalities; or
174.5(5) goods or services purchased by atown local government as inputs to goods and
174.6services that are generally provided by a private business and the purchases would be
174.7taxable if made by a private business engaged in the same activity.
174.8(c) As used in this subdivision, "school districts" means public school entities and
174.9districts of every kind and nature organized under the laws of the state of Minnesota, and
174.10any instrumentality of a school district, as defined in section471.59 .
174.11(d) As used in this subdivision, "local governments" means cities, counties, and
174.12townships.
174.13(d) (e) As used in this subdivision, "goods or services generally provided by a private
174.14business" include, but are not limited to, goods or services provided by liquor stores, gas
174.15and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
174.16and laundromats. "Goods or services generally provided by a private business" do not
174.17include housing services, sewer and water services, wastewater treatment, ambulance and
174.18other public safety services, correctional services, chore or homemaking services provided
174.19to elderly or disabled individuals, or road and street maintenance or lighting.
174.20EFFECTIVE DATE.This section is effective for sales and purchases made after
174.21December 31, 2013.
174.22 Sec. 30. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
174.23 Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
174.24(b), to the following "nonprofit organizations" are exempt:
174.25(1) a corporation, society, association, foundation, or institution organized and
174.26operated exclusively for charitable, religious, or educational purposes if the item
174.27purchased is used in the performance of charitable, religious, or educational functions; and
174.28(2) any senior citizen group or association of groups that:
174.29(i) in general limits membership to persons who are either age 55 or older, or
174.30physically disabled;
174.31(ii) is organized and operated exclusively for pleasure, recreation, and other
174.32nonprofit purposes, not including housing, no part of the net earnings of which inures to
174.33the benefit of any private shareholders; and
174.34(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
175.1For purposes of this subdivision, charitable purpose includes the maintenance of a
175.2cemetery owned by a religious organization.
175.3(b) This exemption does not apply to the following sales:
175.4(1) building, construction, or reconstruction materials purchased by a contractor
175.5or a subcontractor as a part of a lump-sum contract or similar type of contract with a
175.6guaranteed maximum price covering both labor and materials for use in the construction,
175.7alteration, or repair of a building or facility;
175.8(2) construction materials purchased by tax-exempt entities or their contractors to
175.9be used in constructing buildings or facilities that will not be used principally by the
175.10tax-exempt entities; and
175.11(3) lodging as defined under section297A.61, subdivision 3 , paragraph (g), clause
175.12(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
175.13297A.67, subdivision 2
, except wine purchased by an established religious organization
175.14for sacramental purposes or as allowed under subdivision 9a; and
175.15(4) leasing of a motor vehicle as defined in section297B.01, subdivision 11 , except
175.16as provided in paragraph (c).
175.17(c) This exemption applies to the leasing of a motor vehicle as defined in section
175.18297B.01, subdivision 11
, only if the vehicle is:
175.19(1) a truck, as defined in section168.002 , a bus, as defined in section
168.002 , or a
175.20passenger automobile, as defined in section168.002 , if the automobile is designed and
175.21used for carrying more than nine persons including the driver; and
175.22(2) intended to be used primarily to transport tangible personal property or
175.23individuals, other than employees, to whom the organization provides service in
175.24performing its charitable, religious, or educational purpose.
175.25(d) A limited liability company also qualifies for exemption under this subdivision if
175.26(1) it consists of a sole member that would qualify for the exemption, and (2) the items
175.27purchased qualify for the exemption.
175.28EFFECTIVE DATE.This section is effective retroactively for sales and purchases
175.29made after June 30, 2012.
175.30 Sec. 31. Minnesota Statutes 2012, section 297A.70, subdivision 5, is amended to read:
175.31 Subd. 5. Veterans groups. Sales to an organization of military service veterans or
175.32an auxiliary unit of an organization of military service veterans are exempt if:
175.33(1) the organization or auxiliary unit is organized within the state of Minnesota
175.34and is exempt from federal taxation under section 501(c), clause (19), of the Internal
175.35Revenue Code; and
176.1(2) the tangible personal propertyis or services are for charitable, civic, educational,
176.2or nonprofit uses and not for social, recreational, pleasure, or profit uses.
176.3EFFECTIVE DATE.This section is effective for sales and purchases made after
176.4June 30, 2013.
176.5 Sec. 32. Minnesota Statutes 2012, section 297A.70, subdivision 7, is amended to read:
176.6 Subd. 7. Hospitalsand, outpatient surgical centers, and critical access dental
176.7providers. (a) Sales, except for those listed in paragraph(c) (d), to a hospital are exempt,
176.8if the items purchased are used in providing hospital services. For purposes of this
176.9subdivision, "hospital" means a hospital organized and operated for charitable purposes
176.10within the meaning of section 501(c)(3) of the Internal Revenue Code, and licensed under
176.11chapter 144 or by any other jurisdiction, and "hospital services" are services authorized or
176.12required to be performed by a "hospital" under chapter 144.
176.13 (b) Sales, except for those listed in paragraph(c) (d), to an outpatient surgical center
176.14are exempt, if the items purchased are used in providing outpatient surgical services. For
176.15purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
176.16center organized and operated for charitable purposes within the meaning of section
176.17501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
176.18jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
176.19(1) services authorized or required to be performed by an outpatient surgical center under
176.20chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
176.21health services furnished to a person whose medical condition is sufficiently acute to
176.22require treatment unavailable through, or inappropriate to be provided by, a clinic or
176.23physician's office, but not so acute as to require treatment in a hospital emergency room.
176.24 (c) Sales, except for those listed in paragraph (d), to a critical access dental provider
176.25are exempt, if the items purchased are used in providing critical access dental care
176.26services. For the purposes of this subdivision, "critical access dental provider" means a
176.27dentist or dental clinic that qualifies under section 256B.76, subdivision 4, paragraph (b)
176.28and, in the previous calendar year, had no more than 15 percent of its patients covered by
176.29private dental insurance.
176.30 (d) This exemption does not apply to the following products and services:
176.31 (1) purchases made by a clinic, physician's office, or any other medical facility not
176.32operating as a hospitalor, outpatient surgical center, or critical access dental provider,
176.33even though the clinic, office, or facility may be owned and operated by a hospitalor,
176.34 outpatient surgical center, or critical access dental provider;
177.1 (2) sales under section297A.61, subdivision 3 , paragraph (g), clause (2), and
177.2prepared food, candy, and soft drinks;
177.3 (3) building and construction materials used in constructing buildings or facilities
177.4that will not be used principally by the hospitalor, outpatient surgical center, or critical
177.5access dental provider;
177.6 (4) building, construction, or reconstruction materials purchased by a contractor or a
177.7subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
177.8maximum price covering both labor and materials for use in the construction, alteration, or
177.9repair of a hospitalor, outpatient surgical center, or critical access dental provider; or
177.10 (5) the leasing of a motor vehicle as defined in section297B.01, subdivision 11 .
177.11(d) (e) A limited liability company also qualifies for exemption under this
177.12subdivision if (1) it consists of a sole member that would qualify for the exemption, and
177.13(2) the items purchased qualify for the exemption.
177.14(e) (f) An entity that contains both a hospital and a nonprofit unit may claim this
177.15exemption on purchases made for both the hospital and nonprofit unit provided that:
177.16 (1) the nonprofit unit would have qualified for exemption under subdivision 4; and
177.17 (2) the items purchased would have qualified for the exemption.
177.18EFFECTIVE DATE.This section is effective retroactively for sales and purchases
177.19made after June 30, 2007. Purchasers may apply for a refund of tax paid for qualifying
177.20purchases under this subdivision made after June 30, 2007, and before July 1, 2013, in the
177.21manner provided in Minnesota Statutes, section 297A.75. Notwithstanding limitations
177.22on claims for refunds under Minnesota Statutes, section 297A.40, claims may be filed
177.23with the commissioner until June 30, 2014.
177.24 Sec. 33. Minnesota Statutes 2012, section 297A.70, is amended by adding a
177.25subdivision to read:
177.26 Subd. 9a. Established religious orders. (a) Sales of lodging, prepared food, candy,
177.27soft drinks, and alcoholic beverages at noncatered events between an established religious
177.28order and an affiliated institution of higher education are exempt.
177.29(b) For purposes of this subdivision, "established religious order" means an
177.30organization directly or indirectly under the control or supervision of a church or
177.31convention or association of churches, where members of the organization:
177.32(1) normally live together as part of a community;
177.33(2) make long-term commitments to live under a strict set of moral and spiritual
177.34rules; and
178.1(3) work or engage full time in a combination of prayer, religious study, church
178.2reform or renewal, or other religious, educational, or charitable goals of the organization.
178.3(c) For purposes of this subdivision, an institution of higher education is "affiliated"
178.4with an established religious order if members of the religious order are represented
178.5on the governing board of the institution of higher education and the two organization
178.6share campus space and common facilities.
178.7EFFECTIVE DATE.This section is effective retroactively for sales and purchases
178.8made after June 30, 2012.
178.9 Sec. 34. Minnesota Statutes 2012, section 297A.70, subdivision 13, is amended to read:
178.10 Subd. 13. Fund-raising sales by or for nonprofit groups. (a) The following
178.11sales by the specified organizations for fund-raising purposes are exempt, subject to the
178.12limitations listed in paragraph (b):
178.13(1) all sales made by a nonprofit organization that exists solely for the purpose of
178.14providing educational or social activities for young people primarily age 18 and under;
178.15(2) all sales made by an organization that is a senior citizen group or association of
178.16groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
178.17and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii)
178.18no part of its net earnings inures to the benefit of any private shareholders;
178.19(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if
178.20the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization
178.21under section 501(c)(3) of the Internal Revenue Code; and
178.22(4) sales of candy sold for fund-raising purposes by a nonprofit organization that
178.23provides educational and social activities primarily for young people age 18 and under.
178.24(b) The exemptions listed in paragraph (a) are limited in the following manner:
178.25(1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross
178.26annual receipts of the organization from fund-raising do not exceed $10,000; and
178.27(2) the exemption under paragraph (a), clause (1), does not apply if the sales are
178.28derived from admission charges or from activities for which the money must be deposited
178.29with the school district treasurer under section123B.49, subdivision 2 , or be recorded in
178.30the same manner as other revenues or expenditures of the school district under section
178.31123B.49, subdivision 4
.
178.32(c) Sales of tangible personal property and services are exempt if the entire proceeds,
178.33less the necessary expenses for obtaining the property or services, will be contributed to
178.34a registered combined charitable organization described in section43A.50 , to be used
178.35exclusively for charitable, religious, or educational purposes, and the registered combined
179.1charitable organization has given its written permission for the sale. Sales that occur over
179.2a period of more than 24 days per year are not exempt under this paragraph.
179.3(d) For purposes of this subdivision, a club, association, or other organization of
179.4elementary or secondary school students organized for the purpose of carrying on sports,
179.5educational, or other extracurricular activities is a separate organization from the school
179.6district or school for purposes of applying the $10,000 limit.
179.7EFFECTIVE DATE.This section is effective for sales and purchases made after
179.8June 30, 2013.
179.9 Sec. 35. Minnesota Statutes 2012, section 297A.70, subdivision 14, is amended to read:
179.10 Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of
179.11tangible personal property or services at, and admission charges for fund-raising events
179.12sponsored by, a nonprofit organization are exempt if:
179.13(1) all gross receipts are recorded as such, in accordance with generally accepted
179.14accounting practices, on the books of the nonprofit organization; and
179.15(2) the entire proceeds, less the necessary expenses for the event, will be used solely
179.16and exclusively for charitable, religious, or educational purposes. Exempt sales include
179.17the sale of prepared food, candy, and soft drinks at the fund-raising event.
179.18(b) This exemption is limited in the following manner:
179.19(1) it does not apply to admission charges for events involving bingo or other
179.20gambling activities or to charges for use of amusement devices involving bingo or other
179.21gambling activities;
179.22(2) all gross receipts are taxable if the profits are not used solely and exclusively for
179.23charitable, religious, or educational purposes;
179.24(3) it does not apply unless the organization keeps a separate accounting record,
179.25including receipts and disbursements from each fund-raising event that documents all
179.26deductions from gross receipts with receipts and other records;
179.27(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
179.28the active or passive agent of a person that is not a nonprofit corporation;
179.29(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;
179.30(6) it does not apply to fund-raising events conducted on premises leased for more
179.31than five days but less than 30 days; and
179.32(7) it does not apply if the risk of the event is not borne by the nonprofit organization
179.33and the benefit to the nonprofit organization is less than the total amount of the state and
179.34local tax revenues forgone by this exemption.
180.1(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
180.2government, corporation, society, association, foundation, or institution organized and
180.3operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
180.4veterans' purposes, no part of the net earnings of which inures to the benefit of a private
180.5individual.
180.6EFFECTIVE DATE.This section is effective for sales and purchases made after
180.7June 30, 2013.
180.8 Sec. 36. Minnesota Statutes 2012, section 297A.70, is amended by adding a
180.9subdivision to read:
180.10 Subd. 18. Nursing homes and boarding care homes. (a) All sales, except those
180.11listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding
180.12care home certified as a nursing facility under title 19 of the Social Security Act are
180.13exempt if the facility:
180.14(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the
180.15Internal Revenue Code; and
180.16(2) is certified to participate in the medical assistance program under title 19 of the
180.17Social Security Act, or certifies to the commissioner that it does not discharge residents
180.18due to the inability to pay.
180.19(b) This exemption does not apply to the following sales:
180.20(1) building, construction, or reconstruction materials purchased by a contractor
180.21or a subcontractor as a part of a lump-sum contract or similar type of contract with a
180.22guaranteed maximum price covering both labor and materials for use in the construction,
180.23alteration, or repair of a building or facility;
180.24(2) construction materials purchased by tax-exempt entities or their contractors to
180.25be used in constructing buildings or facilities that will not be used principally by the
180.26tax-exempt entities;
180.27(3) lodging as defined under section297A.61, subdivision 3 , paragraph (g), clause
180.28(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
180.29297A.67, subdivision 2 ; and
180.30(4) leasing of a motor vehicle as defined in section297B.01, subdivision 11 , except
180.31as provided in paragraph (c).
180.32(c) This exemption applies to the leasing of a motor vehicle as defined in section
180.33297B.01, subdivision 11 , only if the vehicle is:
181.1(1) a truck, as defined in section168.002 ; a bus, as defined in section
168.002 ; or a
181.2passenger automobile, as defined in section168.002 , if the automobile is designed and
181.3used for carrying more than nine persons including the driver; and
181.4(2) intended to be used primarily to transport tangible personal property or residents
181.5of the nursing home or boarding care home.
181.6EFFECTIVE DATE.This section is effective for sales and purchases made after
181.7June 30, 2013.
181.8 Sec. 37. Minnesota Statutes 2012, section 297A.71, is amended by adding a
181.9subdivision to read:
181.10 Subd. 45. Biopharmaceutical manufacturing facility. (a) Materials and
181.11supplies used or consumed in, capital equipment incorporated into, and privately
181.12owned infrastructure in support of the construction, improvement, or expansion of a
181.13biopharmaceutical manufacturing facility in the state are exempt if the following criteria
181.14are met:
181.15(1) the facility is used for the manufacturing of biologics;
181.16(2) the total capital investment made at the facility exceeds $50,000,000; and
181.17(3) the facility creates and maintains at least 190 full-time equivalent positions at the
181.18facility. These positions must be new jobs in Minnesota and not the result of relocating
181.19jobs that currently exist in Minnesota.
181.20(b) The tax must be imposed and collected as if the rate under section 297A.62
181.21applied, and refunded in the manner provided in section 297A.75.
181.22(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
181.23facility must:
181.24(1) initially apply to the Department of Employment and Economic Development
181.25for certification no later than one year from the final completion date of construction,
181.26improvement, or expansion of the facility; and
181.27(2) for each year that the owner of the biopharmaceutical manufacturing facility
181.28applies for a refund, the owner must have received written certification from the
181.29Department of Employment and Economic Development that the facility has met the
181.30criteria of paragraph (a).
181.31(d) The refund is to be paid annually at a rate of 25 percent of the total allowable
181.32refund payable to date, with the commissioner making annual payments of the remaining
181.33refund until all of the refund has been paid.
181.34(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
181.35interchangeable and mean medical drugs or medicinal preparations produced using
182.1technology that uses biological systems, living organisms or derivatives of living
182.2organisms, to make or modify products or processes for specific use. The medical drugs or
182.3medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
182.4and vaccines.
182.5EFFECTIVE DATE.This section is effective retroactively to capital investments
182.6made and jobs created after December 31, 2012, and effective retroactively for sales and
182.7purchases made after December 31, 2012, and before July 1, 2019.
182.8 Sec. 38. Minnesota Statutes 2012, section 297A.71, is amended by adding a
182.9subdivision to read:
182.10 Subd. 46. Research and development facility. Materials and supplies used or
182.11consumed in, and equipment incorporated into, the construction or improvement of a
182.12research and development facility that has laboratory space of at least 400,000 square feet
182.13and utilizes both high-intensity and low-intensity laboratories, provided that the project
182.14has a total construction cost of at least $140,000,000 within a 24-month period. The tax on
182.15purchases imposed under this subdivision must be imposed and collected as if the rate under
182.16section 297A.62 applied and then refunded in the manner provided in section 297A.75.
182.17EFFECTIVE DATE.This section is effective for sales and purchases made after
182.18June 30, 2013, and before September 1, 2015.
182.19 Sec. 39. Minnesota Statutes 2012, section 297A.71, is amended by adding a
182.20subdivision to read:
182.21 Subd. 47. Industrial measurement manufacturing and controls facility. (a)
182.22Materials and supplies used or consumed in, capital equipment incorporated into,
182.23fixtures installed in, and privately owned infrastructure in support of the construction,
182.24improvement, or expansion of an industrial measurement manufacturing and controls
182.25facility are exempt if:
182.26(1) the total capital investment made at the facility is at least $60,000,000;
182.27(2) the facility employs at least 250 full-time equivalent employees that are not
182.28employees currently employed by the company in the state; and
182.29(3) the Department of Employment and Economic Development determines that
182.30the expansion, remodeling, or improvement of the facility has a significant impact on
182.31the state economy.
183.1(b) The tax must be imposed and collected as if the rate under section 297A.62
183.2applied and refunded in the manner provided in section 297A.75, only after the following
183.3criteria are met:
183.4(1) a refund may not be issued until the owner of the facility has received
183.5certification from the Department of Employment and Economic Development that the
183.6company meets the requirements in paragraph (a); and
183.7(2) to receive the refund, the owner of the industrial measurement manufacturing
183.8and controls facility must initially apply to the Department of Employment and Economic
183.9Development for certification no later than one year from the final completion date of
183.10construction, improvement, or expansion of the industrial measurement manufacturing
183.11and controls facility.
183.12EFFECTIVE DATE.This section is effective for sales and purchases made after
183.13June 30, 2013, and before December 31, 2015.
183.14 Sec. 40. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
183.15 Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
183.16following exempt items must be imposed and collected as if the sale were taxable and the
183.17rate under section297A.62, subdivision 1 , applied. The exempt items include:
183.18(1) capital equipment exempt under section
297A.68, subdivision 5;
183.19(2) (1) building materials for an agricultural processing facility exempt under section
183.20297A.71, subdivision 13
;
183.21(3) (2) building materials for mineral production facilities exempt under section
183.22297A.71, subdivision 14
;
183.23(4) (3) building materials for correctional facilities under section
297A.71,
183.24subdivision 3 ;
183.25(5) (4) building materials used in a residence for disabled veterans exempt under
183.26section297A.71, subdivision 11 ;
183.27(6) (5) elevators and building materials exempt under section
297A.71, subdivision
183.2812 ;
183.29(7) (6) building materials for the Long Lake Conservation Center exempt under
183.30section297A.71, subdivision 17 ;
183.31(8) (7) materials and supplies for qualified low-income housing under section
183.32297A.71, subdivision 23
;
183.33(9) (8) materials, supplies, and equipment for municipal electric utility facilities
183.34under section297A.71, subdivision 35 ;
184.1(10) (9) equipment and materials used for the generation, transmission, and
184.2distribution of electrical energy and an aerial camera package exempt under section
184.3297A.68
, subdivision 37;
184.4(11) (10) commuter rail vehicle and repair parts under section
297A.70 , subdivision
184.53, paragraph (a), clause (10);
184.6(12) (11) materials, supplies, and equipment for construction or improvement of
184.7projects and facilities under section297A.71, subdivision 40 ;
184.8(13) (12) materials, supplies, and equipment for construction or improvement of a
184.9meat processing facility exempt under section297A.71, subdivision 41 ;
184.10(14) (13) materials, supplies, and equipment for construction, improvement, or
184.11expansion of:
184.12(i) an aerospace defense manufacturing facility exempt under section297A.71 ,
184.13subdivision 42;
184.14(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71,
184.15subdivision 45;
184.16(iii) a research and development facility exempt under section 297A.71, subdivision
184.174b; and
184.18(iv) an industrial measurement manufacturing and controls facility exempt under
184.19section 297A.71, subdivision 47;
184.20(15) (14) enterprise information technology equipment and computer software for
184.21use in a qualified data center exempt under section297A.68, subdivision 42 ; and
184.22(16) (15) materials, supplies, and equipment for qualifying capital projects under
184.23section297A.71, subdivision 44 ;
184.24(16) items purchased for use in providing critical access dental services exempt
184.25under section 297A.70, subdivision 7, paragraph (c); and
184.26(17) items and services purchased under a business subsidy agreement for use or
184.27consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 49.
184.28EFFECTIVE DATE.The change to clause (1) is effective for sales and purchases
184.29made after August 31, 2014. The changes in clauses (13), (16), and (17), are effective the
184.30day following final enactment.
184.31 Sec. 41. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
184.32 Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
184.33commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
184.34must be paid to the applicant. Only the following persons may apply for the refund:
185.1 (1) for subdivision 1, clauses (1) to (3), (2), and (16), the applicant must be the
185.2purchaser;
185.3 (2) for subdivision 1, clauses(4) (3) and (7) (6), the applicant must be the
185.4governmental subdivision;
185.5 (3) for subdivision 1, clause(5) (4), the applicant must be the recipient of the
185.6benefits provided in United States Code, title 38, chapter 21;
185.7 (4) for subdivision 1, clause(6) (5), the applicant must be the owner of the
185.8homestead property;
185.9 (5) for subdivision 1, clause(8) (7), the owner of the qualified low-income housing
185.10project;
185.11 (6) for subdivision 1, clause(9) (8), the applicant must be a municipal electric utility
185.12or a joint venture of municipal electric utilities;
185.13 (7) for subdivision 1, clauses(10), (9), (12), (13), (14), and (15) and (17), the owner
185.14of the qualifying business; and
185.15 (8) for subdivision 1, clauses (10), (11),(12), and (16) (15), the applicant must be
185.16the governmental entity that owns or contracts for the project or facility.
185.17EFFECTIVE DATE.This section is effective the day following final enactment.
185.18 Sec. 42. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
185.19 Subd. 3. Application. (a) The application must include sufficient information
185.20to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
185.21subcontractor, or builder, under subdivision 1,clause (4), (5), (6), (7), (8), (9), (10), (11),
185.22(12), (13), (14), clauses (3) to (15), or (16) (17), the contractor, subcontractor, or builder
185.23must furnish to the refund applicant a statement including the cost of the exempt items and
185.24the taxes paid on the items unless otherwise specifically provided by this subdivision. The
185.25provisions of sections289A.40 and
289A.50 apply to refunds under this section.
185.26 (b) An applicant may not file more than two applications per calendar year for
185.27refunds for taxes paid on capital equipment exempt under section297A.68, subdivision 5 .
185.28 (c) Total refunds for purchases of items in section297A.71, subdivision 40 , must not
185.29exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
185.30of items in sections297A.70, subdivision 3 , paragraph (a), clause (11), and
297A.71 ,
185.31subdivision 40, must not be filed until after June 30, 2009.
185.32EFFECTIVE DATE.This section is effective the day following final enactment.
185.33 Sec. 43. Minnesota Statutes 2012, section 297A.99, subdivision 1, is amended to read:
186.1 Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
186.2impose a general sales tax (1) under section297A.992 , (2) under section
297A.993 , (3) if
186.3permitted by special law, or (4) if the political subdivision enacted and imposed the tax
186.4before January 1, 1982, and its predecessor provision.
186.5 (b) This section governs the imposition of a general sales tax by the political
186.6subdivision. The provisions of this section preempt the provisions of any special law:
186.7 (1) enacted before June 2, 1997, or
186.8 (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
186.9provision from this section's rules by reference.
186.10 (c) This section does not apply to or preempt a sales tax on motor vehicles or a
186.11special excise tax on motor vehicles.
186.12(d) A political subdivision may not advertise or expend funds for the promotion of a
186.13referendum to support imposing a local option sales tax.
186.14(e) Notwithstanding paragraph (d), a political subdivision mayonly expend funds to:
186.15(1) conduct the referendum.;
186.16(2) disseminate information included in the resolution adopted under subdivision 2;
186.17(3) provide notice of, and conduct public forums at which proponents and opponents
186.18on the merits of the referendum are given equal time to express their opinions on the
186.19merits of the referendum;
186.20(4) provide facts and data on the impact of the proposed sales tax on consumer
186.21purchases; and
186.22(5) provide facts and data related to the programs and projects to be funded with
186.23the sales tax.
186.24EFFECTIVE DATE.This section is effective the day following final enactment.
186.25 Sec. 44. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
186.26Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section
186.2730, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First
186.28Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4,
186.29section 15, is amended to read:
186.30 Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision
186.311 may only be used by the city to pay the cost of collecting the tax, and, except as provided in
186.32paragraph (e), to pay for the following projects or to secure or pay any principal, premium,
186.33or interest on bonds issued in accordance with subdivision 3 for the following projects.
186.34 (a) To pay all or a portion of the capital expenses of construction, equipment and
186.35acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
187.1including the demolition of the existing arena and the construction and equipping of a
187.2new arena.
187.3 (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
187.4spent for:
187.5
1.3 relating to financing of state and local government; making changes to individual
1.4income, corporate franchise, property, sales and use, estate, mineral, liquor,
1.5tobacco, aggregate materials, local, and other taxes and tax-related provisions;
1.6restoring the school district current year aid payment shift percentage to 90;
1.7conforming to federal section 179 expensing allowances; imposing an income
1.8surcharge; allowing an up-front exemption for capital equipment; modifying
1.9the definition of income for the property tax refund; decreasing the threshold
1.10percentage for the homestead credit refund for homeowners and the property
1.11tax refund for renters; increasing the maximum refunds for renters; changing
1.12property tax aids and credits; imposing an insurance surcharge; modifying
1.13pension aids; providing pension funding; changing provisions of the Sustainable
1.14Forest Incentive Act; modifying definitions for property taxes; providing
1.15exemptions; creating joint entertainment facilities coordination; imposing a
1.16sports memorabilia gross receipts tax; changing tax rates on tobacco and liquor;
1.17providing reimbursement for certain property tax abatement; modifying the small
1.18business investment tax credit; expanding the definition of domestic corporation
1.19to include foreign corporations incorporated in or doing business in tax havens;
1.20making changes to additions and subtractions from federal taxable income;
1.21changing rates for individuals, estates, and trusts; providing for charitable
1.22contributions and veterans jobs tax credits; modifying estate tax exclusions for
1.23qualifying small business and farm property; imposing a gift tax; expanding
1.24the sales tax to include suite and box seat rentals; modifying the definition
1.25of sales and purchase; changing the tax rate and modifying provisions for the
1.26rental motor vehicle tax; modifying nexus provisions; providing for multiple
1.27points of use certificates; modifying exemptions; authorizing local sales taxes;
1.28authorizing economic development powers; providing authority, organization,
1.29powers, and duties for development of a Destination Medical Center; authorizing
1.30state infrastructure aid; imposing a tax on extraction and processing of fracturing
1.31sand; providing a taconite production tax grant for water supply improvements;
1.32authorizing taconite production tax bonds for grants to school districts; modifying
1.33and providing provisions for public finance; modifying the definition of market
1.34value for tax, debt, and other purposes; requiring labor peace agreements on
1.35certain qualifying projects; making conforming, policy, and technical changes to
1.36tax provisions; requiring studies and reports; appropriating money;amending
1.37Minnesota Statutes 2012, sections 16A.152, subdivision 2; 16A.46; 38.18;
1.3840A.15, subdivision 2; 69.011, subdivision 1; 69.021, subdivisions 7, 8, by
1.39adding a subdivision; 88.51, subdivision 3; 103B.102, subdivision 3; 103B.245,
1.40subdivision 3; 103B.251, subdivision 8; 103B.335; 103B.3369, subdivision 5;
1.41103B.635, subdivision 2; 103B.691, subdivision 2; 103C.501, subdivision 4;
1.42103D.905, subdivisions 2, 3, 8; 103F.405, subdivision 1; 116J.8737, subdivisions
1.431, 2, 8; 117.025, subdivision 7; 118A.04, subdivision 3; 118A.05, subdivision
2.15; 123A.455, subdivision 1; 123B.75, subdivision 5; 126C.48, subdivision 8;
2.2127A.45, subdivision 2; 127A.48, subdivision 1; 138.053; 144F.01, subdivision
2.34; 162.07, subdivisions 3, 4; 163.04, subdivision 3; 163.051; 163.06, subdivision
2.46; 165.10, subdivision 1; 168.012, subdivision 9, by adding a subdivision;
2.5216C.436, subdivision 7; 237.52, subdivision 3, by adding a subdivision;
2.6270.077; 270.41, subdivision 5; 270B.01, subdivision 8; 270B.12, subdivision
2.74; 270C.34, subdivision 1; 270C.38, subdivision 1; 270C.42, subdivision 2;
2.8270C.56, subdivision 1; 271.06, by adding a subdivision; 272.01, subdivision 2;
2.9272.02, subdivisions 39, 97, by adding subdivisions; 272.03, subdivision 9, by
2.10adding subdivisions; 273.032; 273.11, subdivision 1, by adding a subdivision;
2.11273.114, subdivision 6; 273.124, subdivisions 3a, 13; 273.13, subdivisions
2.1221b, 23, 25; 273.1398, subdivisions 3, 4; 273.19, subdivision 1; 273.372,
2.13subdivision 4; 273.39; 275.011, subdivision 1; 275.077, subdivision 2; 275.71,
2.14subdivision 4; 276.04, subdivision 2; 276A.01, subdivisions 10, 12, 13, 15;
2.15276A.06, subdivision 10; 279.01, subdivision 1, by adding a subdivision; 279.02;
2.16279.06, subdivision 1; 287.05, by adding a subdivision; 287.08; 287.20, by
2.17adding a subdivision; 287.23, subdivision 1; 287.385, subdivision 7; 289A.02,
2.18subdivision 7; 289A.08, subdivisions 1, 3, 7; 289A.10, subdivision 1, by adding
2.19a subdivision; 289A.12, subdivision 14, by adding a subdivision; 289A.18, by
2.20adding a subdivision; 289A.20, subdivisions 3, 4, by adding a subdivision;
2.21289A.26, subdivisions 3, 4, 7, 9; 289A.55, subdivision 9; 289A.60, subdivision
2.224; 290.01, subdivisions 5, 19, as amended, 19a, 19b, 19c, 19d, 31, as amended,
2.23by adding subdivisions; 290.06, subdivisions 2c, 2d, by adding subdivisions;
2.24290.067, subdivisions 1, 2a; 290.0671, subdivision 1; 290.0675, subdivision 1;
2.25290.0677, subdivision 2; 290.068, subdivisions 3, 6a; 290.0681, subdivisions 1,
2.263, 4, 5; 290.091, subdivision 2; 290.0921, subdivision 3; 290.0922, subdivision 1;
2.27290.17, subdivision 4; 290.21, subdivision 4; 290.9705, subdivision 1; 290A.03,
2.28subdivisions 3, 15, as amended; 290A.04, subdivisions 2, 2a, 4; 290B.04,
2.29subdivision 2; 290C.02, subdivision 6; 290C.05; 290C.07; 291.005, subdivision
2.301; 291.03, subdivisions 1, 8, 9, 10, 11, by adding a subdivision; 296A.01,
2.31subdivision 19, by adding a subdivision; 296A.22, subdivisions 1, 3; 297A.61,
2.32subdivisions 3, 4, by adding a subdivision; 297A.64, subdivisions 1, 2; 297A.66,
2.33by adding a subdivision; 297A.665; 297A.668, by adding a subdivision;
2.34297A.67, subdivision 7; 297A.68, subdivision 5; 297A.70, subdivisions 4, 8, by
2.35adding subdivisions; 297A.71, by adding subdivisions; 297A.75, subdivisions 1,
2.362, 3; 297A.815, subdivision 3; 297A.993, subdivisions 1, 2; 297B.11; 297E.021,
2.37subdivision 2; 297E.14, subdivision 7; 297F.01, subdivisions 3, 19, 23, by
2.38adding a subdivision; 297F.05, subdivisions 1, 3, 4, by adding a subdivision;
2.39297F.09, subdivision 9; 297F.18, subdivision 7; 297F.24, subdivision 1; 297F.25,
2.40subdivision 1; 297G.03, subdivision 1, by adding a subdivision; 297G.04;
2.41297G.09, subdivision 8; 297G.17, subdivision 7; 297I.05, subdivisions 7, 11, 12;
2.42297I.30, subdivisions 1, 2; 297I.80, subdivision 1; 298.01, subdivisions 3, 3b,
2.434; 298.018; 298.227, as amended; 298.24, subdivision 1; 298.28, subdivisions
2.444, 6, 10; 298.75, subdivision 2; 325D.32, subdivision 2; 353G.08, subdivision
2.452; 365.025, subdivision 4; 366.095, subdivision 1; 366.27; 368.01, subdivision
2.4623; 368.47; 370.01; 373.01, subdivisions 1, 3; 373.40, subdivisions 1, 2, 4;
2.47375.167, subdivision 1; 375.18, subdivision 3; 375.555; 383B.152; 383B.245;
2.48383B.73, subdivision 1; 383D.41, by adding a subdivision; 383E.20; 383E.23;
2.49385.31; 394.36, subdivision 1; 398A.04, subdivision 8; 401.05, subdivision 3;
2.50403.02, subdivision 21, by adding subdivisions; 403.06, subdivision 1a; 403.11,
2.51subdivision 1, by adding a subdivision; 410.32; 412.221, subdivision 2; 412.301;
2.52428A.02, subdivision 1; 430.102, subdivision 2; 447.10; 450.19; 450.25;
2.53458A.10; 458A.31, subdivision 1; 465.04; 469.033, subdivision 6; 469.034,
2.54subdivision 2; 469.053, subdivisions 4, 4a, 6; 469.071, subdivision 5; 469.107,
2.55subdivision 1; 469.169, by adding a subdivision; 469.176, subdivisions 4c, 4g,
2.566; 469.177, by adding a subdivision; 469.180, subdivision 2; 469.187; 469.190,
2.57subdivision 7, by adding a subdivision; 469.206; 469.319, subdivision 4; 469.340,
2.58subdivision 4; 471.24; 471.571, subdivisions 1, 2; 471.73; 473.325, subdivision
3.12; 473.39, by adding a subdivision; 473.629; 473.661, subdivision 3; 473.667,
3.2subdivision 9; 473.671; 473.711, subdivision 2a; 473F.02, subdivisions 12, 14,
3.315, 23; 473F.08, subdivision 10, by adding a subdivision; 474A.04, subdivision
3.41a; 474A.062; 474A.091, subdivision 3a; 475.521, subdivisions 1, 2, 4; 475.53,
3.5subdivisions 1, 3, 4; 475.58, subdivisions 2, 3b; 475.73, subdivision 1; 477A.011,
3.6subdivisions 20, 30, 32, 34, 42, by adding subdivisions; 477A.0124, subdivision
3.72; 477A.013, subdivisions 8, 9, by adding a subdivision; 477A.015; 477A.03,
3.8subdivisions 2a, 2b, by adding a subdivision; 641.23; 641.24; 645.44, by adding
3.9a subdivision; Laws 1971, chapter 773, section 1, subdivision 2, as amended;
3.10Laws 1988, chapter 645, section 3, as amended; Laws 1993, chapter 375, article
3.119, section 46, subdivisions 2, as amended, 5, as amended; Laws 1998, chapter
3.12389, article 8, section 43, subdivisions 1, 3, as amended, 5, as amended; Laws
3.131999, chapter 243, article 6, section 11; Laws 2002, chapter 377, article 3, section
3.1425, as amended; Laws 2005, First Special Session chapter 3, article 5, section
3.1537, subdivisions 2, 4; Laws 2008, chapter 366, article 5, sections 26; 33; 34, as
3.16amended; article 7, section 19, subdivision 3, as amended; Laws 2010, chapter
3.17216, section 55; Laws 2010, chapter 389, article 1, section 12; article 5, section 6,
3.18subdivisions 4, 6; Laws 2010, First Special Session chapter 1, article 13, section 4,
3.19subdivision 1, as amended; proposing coding for new law in Minnesota Statutes,
3.20chapters 116C; 287; 290; 290A; 292; 295; 297I; 403; 435; 469; proposing coding
3.21for new law as Minnesota Statutes, chapter 297J; repealing Minnesota Statutes
3.222012, sections 16A.725; 256.9658; 272.69; 273.11, subdivisions 1a, 22; 276A.01,
3.23subdivision 11; 289A.60, subdivision 31; 290.01, subdivision 6b; 290.06,
3.24subdivision 22a; 290.0672; 290.0921, subdivision 7; 383A.80, subdivision 4;
3.25383B.80, subdivision 4; 428A.101; 428A.21; 473F.02, subdivision 13; 477A.011,
3.26subdivisions 2a, 19, 21, 29, 31, 32, 33, 36, 39, 40, 41, 42; 477A.013, subdivisions
3.2711, 12; 477A.0133; 477A.0134; Laws 2006, chapter 259, article 11, section 3, as
3.28amended; Laws 2009, chapter 88, article 4, section 23, as amended.
3.29May 19, 2013
3.30The Honorable Paul Thissen
3.31Speaker of the House of Representatives
3.32The Honorable Sandra L. Pappas
3.33President of the Senate
3.34We, the undersigned conferees for H. F. No. 677 report that we have agreed upon the
3.35items in dispute and recommend as follows:
3.36That the Senate recede from its amendments and that H. F. No. 677 be further
3.37amended as follows:
3.38Delete everything after the enacting clause and insert:
3.41 Section 1. Minnesota Statutes 2012, section 290A.03, subdivision 3, is amended to read:
3.42 Subd. 3. Income. (1) "Income" means the sum of the following:
3.43 (a) federal adjusted gross income as defined in the Internal Revenue Code; and
3.44 (b) the sum of the following amounts to the extent not included in clause (a):
3.45 (i) all nontaxable income;
4.1 (ii) the amount of a passive activity loss that is not disallowed as a result of section
4.2469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
4.3loss carryover allowed under section 469(b) of the Internal Revenue Code;
4.4 (iii) an amount equal to the total of any discharge of qualified farm indebtedness
4.5of a solvent individual excluded from gross income under section 108(g) of the Internal
4.6Revenue Code;
4.7 (iv) cash public assistance and relief;
4.8 (v) any pension or annuity (including railroad retirement benefits, all payments
4.9received under the federal Social Security Act, Supplemental Security Income, and
4.10veterans benefits), which was not exclusively funded by the claimant or spouse, or which
4.11was funded exclusively by the claimant or spouse and which funding payments were
4.12excluded from federal adjusted gross income in the years when the payments were made;
4.13 (vi) interest received from the federal or a state government or any instrumentality
4.14or political subdivision thereof;
4.15 (vii) workers' compensation;
4.16 (viii) nontaxable strike benefits;
4.17 (ix) the gross amounts of payments received in the nature of disability income or
4.18sick pay as a result of accident, sickness, or other disability, whether funded through
4.19insurance or otherwise;
4.20 (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
4.211986, as amended through December 31, 1995;
4.22 (xi) contributions made by the claimant to an individual retirement account,
4.23including a qualified voluntary employee contribution; simplified employee pension plan;
4.24self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
4.25of the Internal Revenue Code; or deferred compensation plan under section 457 of the
4.26Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base
4.27amount for the claimant and spouse;
4.28 (xii) to the extent not included in federal adjusted gross income, distributions received
4.29by the claimant or spouse from a traditional or Roth style retirement account or plan;
4.30 (xiii) nontaxable scholarship or fellowship grants;
4.31
4.32Revenue Code;
4.33
4.34Revenue Code;
5.1
5.2
5.3Internal Revenue Code; and
5.4
5.5school teachers under section 62(a)(2)(D) of the Internal Revenue Code
5.6
5.7 In the case of an individual who files an income tax return on a fiscal year basis, the
5.8term "federal adjusted gross income" shall mean federal adjusted gross income reflected
5.9in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
5.10reduced by the amount of a net operating loss carryback or carryforward or a capital loss
5.11carryback or carryforward allowed for the year.
5.12 (2) "Income" does not include:
5.13 (a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
5.14 (b) amounts of any pension or annuity which was exclusively funded by the claimant
5.15or spouse and which funding payments were not excluded from federal adjusted gross
5.16income in the years when the payments were made;
5.17 (c) to the extent included in federal adjusted gross income, amounts contributed by
5.18the claimant or spouse to a traditional or Roth style retirement account or plan, but not
5.19to exceed the retirement base amount reduced by the amount of contributions excluded
5.20from federal adjusted gross income, but not less than zero;
5.21 (d) surplus food or other relief in kind supplied by a governmental agency;
5.22
5.23
5.24dissolution or legal separation; or
5.25
5.26as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
5.272001, Public Law 107-16.
5.28 (3) The sum of the following amounts may be subtracted from income:
5.29 (a) for the claimant's first dependent, the exemption amount multiplied by 1.4;
5.30 (b) for the claimant's second dependent, the exemption amount multiplied by 1.3;
5.31 (c) for the claimant's third dependent, the exemption amount multiplied by 1.2;
5.32 (d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
5.33 (e) for the claimant's fifth dependent, the exemption amount; and
5.34 (f) if the claimant or claimant's spouse was disabled or attained the age of 65
5.35on or before December 31 of the year for which the taxes were levied or rent paid, the
5.36exemption amount.
6.1 For purposes of this subdivision, the "exemption amount" means the exemption
6.2amount under section 151(d) of the Internal Revenue Code for the taxable year for which
6.3the income is reported; "retirement base amount" means the deductible amount for the
6.4taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal
6.5Revenue Code, adjusted for inflation as provided in section 219(b)(5)(D) of the Internal
6.6Revenue Code, without regard to whether the claimant or spouse claimed a deduction;
6.7and "traditional or Roth style retirement account or plan" means retirement plans under
6.8sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.
6.9EFFECTIVE DATE.This section is effective beginning with refunds based on
6.10property taxes payable in 2014 and rent paid in 2013.
6.11 Sec. 2. Minnesota Statutes 2012, section 290A.04, subdivision 2, is amended to read:
6.12 Subd. 2. Homeowners; homestead credit refund. A claimant whose property
6.13taxes payable are in excess of the percentage of the household income stated below shall
6.14pay an amount equal to the percent of income shown for the appropriate household
6.15income level along with the percent to be paid by the claimant of the remaining amount
6.16of property taxes payable. The state refund equals the amount of property taxes payable
6.17that remain, up to the state refund amount shown below.
7.35 The payment made to a claimant shall be the amount of the state refund calculated
7.36under this subdivision. No payment is allowed if the claimant's household income is
7.37
7.38EFFECTIVE DATE.This section is effective for refund claims based on taxes
7.39payable in 2014 and thereafter.
7.40 Sec. 3. Minnesota Statutes 2012, section 290A.04, subdivision 2a, is amended to read:
8.1 Subd. 2a. Renters. A claimant whose rent constituting property taxes exceeds the
8.2percentage of the household income stated below must pay an amount equal to the percent
8.3of income shown for the appropriate household income level along with the percent to
8.4be paid by the claimant of the remaining amount of rent constituting property taxes. The
8.5state refund equals the amount of rent constituting property taxes that remain, up to the
8.6maximum state refund amount shown below.
9.19 The payment made to a claimant is the amount of the state refund calculated under
9.20this subdivision. No payment is allowed if the claimant's household income is
9.21 $57,170 or more.
9.22EFFECTIVE DATE.This section is effective for claims based on rent paid in
9.232013 and following years.
9.24 Sec. 4. Minnesota Statutes 2012, section 290A.04, subdivision 4, is amended to read:
9.25 Subd. 4. Inflation adjustment. (a) Beginning for property tax refunds payable in
9.26calendar year 2002, the commissioner shall annually adjust the dollar amounts of the
9.27income thresholds and the maximum refunds under subdivisions 2 and 2a for inflation.
9.28The commissioner shall make the inflation adjustments in accordance with section 1(f) of
9.29the Internal Revenue Code, except that for purposes of this subdivision the percentage
9.30increase shall be determined as provided in this subdivision.
9.31 (b) In adjusting the dollar amounts of the income thresholds and the maximum
9.32refunds under subdivision 2 for inflation, the percentage increase shall be determined
9.33from the year ending on June 30,
9.34preceding that in which the refund is payable.
9.35 (c) In adjusting the dollar amounts of the income thresholds and the maximum
9.36refunds under subdivision 2a for inflation, the percentage increase shall be determined
10.1from the year ending on June 30,
10.2preceding that in which the refund is payable.
10.3 (d) The commissioner shall use the appropriate percentage increase to annually
10.4adjust the income thresholds and maximum refunds under subdivisions 2 and 2a for
10.5inflation without regard to whether or not the income tax brackets are adjusted for inflation
10.6in that year. The commissioner shall round the thresholds and the maximum amounts,
10.7as adjusted to the nearest $10 amount. If the amount ends in $5, the commissioner shall
10.8round it up to the next $10 amount.
10.9 (e) The commissioner shall annually announce the adjusted refund schedule at the
10.10same time provided under section
10.11this subdivision is not a rule under the Administrative Procedure Act.
10.12EFFECTIVE DATE.This section is effective for refund claims based on taxes
10.13payable in 2014 and rent paid in 2013 and following years.
10.14 Sec. 5. [290A.28] NOTIFICATION OF POTENTIAL ELIGIBILITY.
10.15 Subdivision 1. Notification of eligibility. (a) By September 1, 2014, the
10.16commissioner shall notify, in writing or electronically, individual homeowners whom the
10.17commissioner determines may be eligible for a homestead credit refund under this chapter
10.18for that property taxes payable year as provided in this section. In determining whether
10.19to notify a homeowner, the commissioner shall consider the property tax information
10.20available to the commissioner under paragraph (b) for the homeowner and must estimate
10.21the homeowner's household income using the most recent income information available to
10.22the commissioner from filing under this chapter for the prior year, under chapter 290 for
10.23the current or prior year, and any other income information available to the commissioner.
10.24For each homeowner, the commissioner must estimate the homestead credit refund
10.25amount under the schedule in section 290A.04, subdivision 2, using the homeowner's
10.26property tax amount and estimated household income. If the estimated homestead credit
10.27refund is at least $1,000, the commissioner must notify the homeowner of potential
10.28eligibility for the homestead credit refund. The notification must include information
10.29on how to file for the homestead credit refund. The notification requirement under this
10.30section does not apply to a homeowner who has already filed for the homestead credit
10.31refund for the current or prior year.
10.32 (b) By May 15, 2014, each county auditor shall transmit to the commissioner
10.33of revenue the following information for each property classified as a residential or
10.34agricultural homestead under section 273.13, subdivision 22 or 23:
10.35 (1) the property taxes payable;
11.1 (2) the name and address of the owner;
11.2 (3) the Social Security number or numbers of the owners; and
11.3 (4) any other information the commissioner deems necessary or useful to carry
11.4out the provisions of this section.
11.5The information must be provided in the form and manner prescribed by the commissioner.
11.6 Subd. 2. Reports. (a) By March 15, 2015, the commissioner must provide a written
11.7report to the chairs and ranking minority members of the legislative committees with
11.8jurisdiction over taxes, in compliance with sections 3.195 and 3.197. The report must
11.9provide information on the number and dollar amount of homeowner property tax refund
11.10claims based on taxes payable in 2014, including:
11.11 (1) the number and dollar amount of claims projected for homestead credit refunds
11.12based on taxes payable in 2014 prior to enactment of the notification requirement in
11.13this section;
11.14 (2) the number of notifications issued as provided in this section, including the
11.15number issued by county;
11.16 (3) preliminary information on the number and dollar amount of claims for
11.17homestead credit refunds based on taxes payable in 2014; and
11.18 (4) a description of any outreach efforts undertaken by the commissioner for
11.19homestead credit refunds based on taxes payable in 2014, in addition to the notification
11.20required in this section.
11.21 (b) By February 1, 2016, the commissioner must provide a written report to the chairs
11.22and ranking minority members of the legislative committees with jurisdiction over taxes,
11.23in compliance with sections 3.195 and 3.197. The report must include the information
11.24required in paragraph (a) and must also include final information on the number and dollar
11.25amount of claims for homestead credit refunds based on taxes payable in 2014.
11.26EFFECTIVE DATE.This section is effective for refund claims based on property
11.27taxes payable in 2014.
11.30 Section 1. Minnesota Statutes 2012, section 273.1398, subdivision 4, is amended to read:
11.31 Subd. 4. Disparity reduction credit. (a) Beginning with taxes payable in 1989,
11.32class 4a and class 3a property qualifies for a disparity reduction credit if: (1) the property
11.33is located in a border city that has an enterprise zone, as defined in section
11.34the property is located in a city with a population greater than 2,500 and less than 35,000
11.35according to the 1980 decennial census; (3) the city is adjacent to a city in another state or
12.1immediately adjacent to a city adjacent to a city in another state; and (4) the adjacent city
12.2in the other state has a population of greater than 5,000 and less than 75,000 according to
12.3the 1980 decennial census.
12.4 (b) The credit is an amount sufficient to reduce (i) the taxes levied on class 4a
12.5property to
12.6property to
12.7 (c) The county auditor shall annually certify the costs of the credits to the
12.8Department of Revenue. The department shall reimburse local governments for the
12.9property taxes forgone as the result of the credits in proportion to their total levies.
12.10EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.
12.11 Sec. 2. Minnesota Statutes 2012, section 290C.02, subdivision 6, is amended to read:
12.12 Subd. 6. Forest land. "Forest land" means land containing a minimum of 20
12.13contiguous acres for which the owner has implemented a forest management plan that was
12.14prepared or updated within the past ten years by an approved plan writer. For purposes of
12.15this subdivision, acres are considered to be contiguous even if they are separated by a road,
12.16waterway, railroad track, or other similar intervening property. At least 50 percent of the
12.17contiguous acreage must meet the definition of forest land in section
12.187
12.19land used for residential or agricultural purposes, (ii) land enrolled in the reinvest in
12.20Minnesota program, a state or federal conservation reserve or easement reserve program
12.21under sections
12.22section
12.23as defined in section
12.24chapter 473H,
12.25easement funded under section 97A.056 or a comparable permanent easement conveyed
12.26to a governmental or nonprofit entity; (iv) any land that becomes subject to a conservation
12.27easement funded under section 97A.056 or a comparable permanent easement conveyed
12.28to a governmental or nonprofit entity after May 30, 2013; or (v) land improved with a
12.29structure, pavement, sewer, campsite, or any road, other than a township road, used for
12.30purposes not prescribed in the forest management plan.
12.31EFFECTIVE DATE.This section is effective for certifications and applications
12.32due in 2013 and thereafter.
12.33 Sec. 3. Minnesota Statutes 2012, section 290C.03, is amended to read:
13.1290C.03 ELIGIBILITY REQUIREMENTS.
13.2(a) Land may be enrolled in the sustainable forest incentive program under this
13.3chapter if all of the following conditions are met:
13.4(1) the land consists of at least 20 contiguous acres and at least 50 percent of the
13.5land must meet the definition of forest land in section
13.6enrollment;
13.7(2) a forest management plan for the land must be prepared by an approved plan
13.8writer and implemented during the period in which the land is enrolled;
13.9(3) timber harvesting and forest management guidelines must be used in conjunction
13.10with any timber harvesting or forest management activities conducted on the land during
13.11the period in which the land is enrolled;
13.12(4) the land must be enrolled for a minimum of eight years;
13.13(5) there are no delinquent property taxes on the land; and
13.14(6) claimants enrolling more than 1,920 acres in the sustainable forest incentive
13.15program must allow year-round, nonmotorized access to fish and wildlife resources and
13.16motorized access on established and maintained roads and trails, unless the road or trail is
13.17temporarily closed for safety, natural resource, or road damage reasons on enrolled land
13.18except within one-fourth mile of a permanent dwelling or during periods of high fire
13.19hazard as determined by the commissioner of natural resources.
13.20(b) Claimants required to allow access under paragraph (a), clause (6), do not by
13.21that action:
13.22(1) extend any assurance that the land is safe for any purpose;
13.23(2) confer upon the person the legal status of an invitee or licensee to whom a duty
13.24of care is owed; or
13.25(3) assume responsibility for or incur liability for any injury to the person or property
13.26caused by an act or omission of the person.
13.27EFFECTIVE DATE.This section is effective for calculations made in 2013 and
13.28thereafter.
13.29 Sec. 4. Minnesota Statutes 2012, section 290C.055, is amended to read:
13.30290C.055 LENGTH OF COVENANT.
13.31(a) The covenant remains in effect for a minimum of eight years. If land is removed
13.32from the program before it has been enrolled for four years, the covenant remains in
13.33effect for eight years from the date recorded.
14.1(b) If land that has been enrolled for four years or more is removed from the program
14.2for any reason, there is a waiting period before the covenant terminates. The covenant
14.3terminates on January 1 of the fifth calendar year that begins after the date that:
14.4(1) the commissioner receives notification from the claimant that the claimant wishes
14.5to remove the land from the program under section
14.6(2) the date that the land is removed from the program under section
14.7(c) Notwithstanding the other provisions of this section, the covenant is terminated:
14.8(1) at the same time that the land is removed from the program due to acquisition of
14.9title or possession for a public purpose under section
14.10(2) at the request of the claimant after a reduction in payments due to changes in the
14.11payment formula under section 290C.07.
14.12EFFECTIVE DATE.This section is effective for calculations made in 2013 and
14.13thereafter.
14.14 Sec. 5. Minnesota Statutes 2012, section 290C.07, is amended to read:
14.15290C.07 CALCULATION OF INCENTIVE PAYMENT.
14.16
14.17to receive an annual payment. The payment shall equal $7 per acre for each acre enrolled
14.18in the sustainable forest incentive program.
14.19
14.20
14.21EFFECTIVE DATE.This section is effective for calculations made in 2013 and
14.22thereafter.
14.23 Sec. 6. [423A.022] POLICE AND FIREFIGHTER RETIREMENT
14.24SUPPLEMENTAL STATE AID.
14.25 Subdivision 1. Supplemental state aid. Annually, the commissioner of revenue
14.26shall allocate police and firefighter retirement supplemental state aid appropriated under
14.27subdivision 6 as provided in subdivision 2 and paid as provided in subdivision 4.
14.28 Subd. 2. Allocation. Of the total amount appropriated as supplemental state aid:
14.29 (1) 58.065 percent must be paid to the executive director of the Public Employees
14.30Retirement Association for deposit in the public employees police and fire retirement fund
14.31established by section 353.65, subdivision 1;
14.32 (2) 35.484 percent must be paid to municipalities other than municipalities solely
14.33employing firefighters with retirement coverage provided by the public employees police
15.1and fire retirement plan which qualified to receive fire state aid in that calendar year,
15.2allocated in proportion to the most recent amount of fire state aid paid under section
15.369.021, subdivision 7, for the municipality bears to the most recent total fire state aid
15.4for all municipalities other than the municipalities solely employing firefighters with
15.5retirement coverage provided by the public employees police and fire retirement plan
15.6paid under section 69.021, subdivision 7, with the allocated amount for fire departments
15.7participating in the voluntary statewide lump-sum volunteer firefighter retirement plan
15.8paid to the executive director of the Public Employees Retirement Association for deposit
15.9in the fund established by section 353G.02, subdivision 3, and credited to the respective
15.10account and with the balance paid to the treasurer of each municipality for transmittal
15.11within 30 days of receipt to the treasurer of the applicable volunteer firefighter relief
15.12association for deposit in its special fund; and
15.13 (3) 6.452 percent must be paid to the executive director of the Minnesota State
15.14Retirement System for deposit in the state patrol retirement fund.
15.15 Subd. 3. Reporting; definitions. (a) On or before September 1, annually, the
15.16executive director of the Public Employees Retirement Association shall report to the
15.17commissioner of revenue the following:
15.18 (1) the municipalities which employ firefighters with retirement coverage by the
15.19public employees police and fire retirement plan;
15.20 (2) the number of firefighters with public employees police and fire retirement plan
15.21coverage employed by each municipality;
15.22 (3) the fire departments covered by the voluntary statewide lump-sum volunteer
15.23firefighter retirement plan; and
15.24 (4) any other information requested by the commissioner to administer the police
15.25and firefighter retirement supplemental state aid program.
15.26 (b) For this subdivision, (i) the number of firefighters employed by a municipality
15.27who have public employees police and fire retirement plan coverage means the number
15.28of firefighters with public employees police and fire retirement plan coverage that were
15.29employed by the municipality for not less than 30 hours per week for a minimum of six
15.30months prior to December 31 preceding the date of the payment under this section and, if
15.31the person was employed for less than the full year, prorated to the number of full months
15.32employed; and (ii) the number of active police officers certified for police state aid receipt
15.33under section 69.011, subdivisions 2 and 2b, means, for each municipality, the number of
15.34police officers meeting the definition of peace officer in section 69.011, subdivision 1,
15.35counted as provided and limited by section 69.011, subdivisions 2 and 2b.
16.1 Subd. 4. Payments; conditions prerequisite. (a) The payments under this section
16.2must be made on October 1 each year, with interest at one percent for each month, or
16.3portion of a month, that the amount remains unpaid after October 1. Any necessary
16.4adjustments must be made to subsequent payments.
16.5 (b) The provisions of sections 69.011 to 69.051 that prevent municipalities and relief
16.6associations from being eligible for, or receiving fire state aid under sections 69.011 to
16.769.051 until the applicable financial reporting requirements have been complied with,
16.8apply to the amounts payable to municipalities and relief associations under this section.
16.9 Subd. 5. Aid termination. The aid program under this section ends on the
16.10December 1 next following the actuarial valuation date on which the assets of the
16.11retirement plan on a market value basis equals or exceeds 90 percent of the total
16.12actuarial accrued liabilities of the retirement plan as disclosed in an actuarial valuation
16.13prepared under section 356.215 and the Standards for Actuarial Work promulgated by the
16.14Legislative Commission on Pensions and Retirement, for the State Patrol retirement plan
16.15or the public employees police and fire retirement plan, whichever occurs last.
16.16 Subd. 6. Appropriation. $15,500,000 is appropriated annually to the commissioner
16.17of revenue for this aid program.
16.18EFFECTIVE DATE.This section is effective beginning in the fiscal year beginning
16.19July 1, 2013.
16.20 Sec. 7. Minnesota Statutes 2012, section 477A.011, subdivision 30, is amended to read:
16.21 Subd. 30. Pre-1940 housing percentage. (a) Except as provided in paragraph (b),
16.22"pre-1940 housing percentage" for a city is 100 times the most recent
16.23by the United States Bureau of the Census of all housing units in the city built before
16.241940, divided by the total number of all housing units in the city. Housing units includes
16.25both occupied and vacant housing units as defined by the federal census. For aids payable
16.26in 2014, "pre-1940 housing percentage" shall be based on 2010 housing data.
16.27 (b) For the city of East Grand Forks only, "pre-1940 housing percentage" is equal
16.28to 100 times the 1990 federal census count of all housing units in the city built before
16.291940, divided by the most recent count by the United States Bureau of the Census of all
16.30housing units in the city. Housing units includes both occupied and vacant housing units
16.31as defined by the federal census.
16.32EFFECTIVE DATE.This section is effective for aids payable in calendar year
16.332014 and thereafter.
17.1 Sec. 8. Minnesota Statutes 2012, section 477A.011, is amended by adding a
17.2subdivision to read:
17.3 Subd. 30a. Percent of housing built between 1940 and 1970. "Percent of housing
17.4built between 1940 and 1970" is equal to 100 times the most recent count by the United
17.5States Bureau of the Census of all housing units in the city built after 1939 but before
17.61970, divided by the total number of all housing units in the city. Housing units includes
17.7both occupied and vacant housing units as defined by the federal census. For aids payable
17.8in 2014, "percent of housing built between 1940 and 1970" shall be based on 2010
17.9housing data.
17.10EFFECTIVE DATE.This section is effective for aids payable in calendar year
17.112014 and thereafter.
17.12 Sec. 9. Minnesota Statutes 2012, section 477A.011, subdivision 34, is amended to read:
17.13 Subd. 34. City revenue need. (a) For a city with a population equal to or greater
17.14than
17.15
17.16
17.171970; plus (3)
17.18capita; plus (4)
17.19
17.20 (b) For a city with a population equal to or greater than 2,500 and less than 10,000,
17.21"city revenue need" is 1.15 times the sum of (1) 572.62; plus (2) 5.026 times the pre-1940
17.22housing percentage; minus (3) 53.768 times household size; plus (4) 14.022 times peak
17.23population decline.
17.24
17.25
17.26
17.27
17.28population over 100. The city revenue need under this paragraph shall not exceed 630.
17.29
17.30
17.31
17.32
17.33
17.34
17.35
18.1
18.2
18.3revenue need" equals (1) the transition factor times the city's revenue need calculated in
18.4paragraph (b) plus (2) 630 times the difference between one and the transition factor. For
18.5a city with a population of at least 10,000 but less than 10,500, the "city revenue need"
18.6equals (1) the transition factor times the city's revenue need calculated in paragraph (a)
18.7plus (2) the city's revenue need calculated under the formula in paragraph (b) times the
18.8difference between one and the transition factor. For purposes of this paragraph "transition
18.9factor" is 0.2 percent times the amount that the city's population exceeds the minimum
18.10threshold in either of the first two sentences.
18.11
18.12
18.13a city, as determined in paragraphs (a) to
18.14implicit price deflator for government consumption expenditures and gross investment for
18.15state and local governments as prepared by the United States Department of Commerce,
18.16for the most recently available year to the
18.17and local government purchases.
18.18EFFECTIVE DATE.This section is effective for aids payable in calendar year
18.192014 and thereafter.
18.20 Sec. 10. Minnesota Statutes 2012, section 477A.011, subdivision 42, is amended to read:
18.21 Subd. 42.
18.22
18.23
18.24
18.25
18.26
18.27
18.28
18.29
18.30
18.31
18.32
18.33average annual number of employees in the city based on the data from the Quarterly
18.34Census of Employment and Wages, as reported by the Department of Employment and
18.35Economic Development, for the most recent calendar year available
19.1 November 1 of every odd-numbered year, divided by (2) the city's population for the
19.2same calendar year as the employment data. The commissioner of the Department of
19.3Employment and Economic Development shall certify to the city the average annual
19.4number of employees for each city by
19.5year beginning with January 1, 2014. A city may challenge an estimate under this
19.6paragraph by filing its specific objection, including the names of employers that it feels
19.7may have misreported data, in writing with the commissioner by
19.81 of every odd-numbered year. The commissioner shall make every reasonable effort
19.9to address the specific objection and adjust the data as necessary. The commissioner
19.10shall certify the estimates of the annual employment to the commissioner of revenue by
19.11
19.12objection. For aids payable in 2014, "jobs per capita" shall be based on the annual number
19.13of employees and population for calendar year 2010 without additional review.
19.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.152014 and thereafter.
19.16 Sec. 11. Minnesota Statutes 2012, section 477A.011, is amended by adding a
19.17subdivision to read:
19.18 Subd. 44. Peak population decline. "Peak population decline" is equal to 100
19.19times the difference between one and the ratio of the city's current population, to the
19.20highest city population reported in a federal census from the 1970 census or later. "Peak
19.21population decline" shall not be less than zero.
19.22EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.232014 and thereafter.
19.24 Sec. 12. Minnesota Statutes 2012, section 477A.011, is amended by adding a
19.25subdivision to read:
19.26 Subd. 45. Sparsity adjustment. For a city with a population of 10,000 or more, the
19.27sparsity adjustment is 100 for any city with an average population density less than 150
19.28per square mile, according to the most recent federal census, and the sparsity adjustment is
19.29zero for all other cities.
19.30EFFECTIVE DATE.This section is effective for aids payable in calendar year
19.312014 and thereafter.
19.32 Sec. 13. Minnesota Statutes 2012, section 477A.013, subdivision 1, is amended to read:
20.1 Subdivision 1. Towns.
20.2
20.3subdivision equal to the product of (i) its agricultural property factor, (ii) its town area
20.4factor, (iii) its population factor, and (iv) 0.0045. As used in this subdivision, the following
20.5terms have the meanings given them:
20.6(1) "agricultural property factor" means the ratio of the adjusted net tax capacity of
20.7agricultural property located in a town, divided by the adjusted net tax capacity of all other
20.8property located in the town. The agricultural property factor cannot exceed eight;
20.9(2) "agricultural property" means property classified under section 273.13, as
20.10homestead and nonhomestead agricultural property, rural vacant land, and noncommercial
20.11seasonal recreational property;
20.12(3) "town area factor" means the most recent estimate of total acreage, not to exceed
20.1350,000 acres, located in the township available as of July 1 in the aid calculation year,
20.14estimated or established by:
20.15(i) the United States Bureau of the Census;
20.16(ii) the State Land Management Information Center; or
20.17(iii) the secretary of state; and
20.18(4) "population factor" means the square root of the towns' population.
20.19If the sum of the aids payable to all towns under this subdivision exceeds the limit
20.20under section 477A.03, subdivision 2c, the distribution to each town must be reduced
20.21proportionately so that the total amount of aids distributed under this section does not
20.22exceed the limit in section 477A.03, subdivision 2c.
20.23EFFECTIVE DATE.This section is effective for aids payable in calendar year
20.242014 and thereafter.
20.25 Sec. 14. Minnesota Statutes 2012, section 477A.013, subdivision 8, is amended to read:
20.26 Subd. 8. City formula aid. (a) For aids payable in 2014 only, the formula aid for a
20.27city is equal to the sum of (1) its 2013 certified aid and (2) the product of (i) the difference
20.28between its unmet need and its 2013 certified aid and (ii) the aid gap percentage.
20.29 (b) For aids payable in 2015 and thereafter, the formula aid for a city is equal to
20.30the sum of (1) its
20.31
20.32
20.33its unmet need and its certified aid in the previous year under subdivision 9, and (ii)
20.34the aid gap percentage.
21.1No city may have a formula aid amount less than zero. The
21.2 percentage must be the same for all cities.
21.3 The applicable
21.4Department of Revenue so that the total of the aid under subdivision 9 equals the total
21.5amount available for aid under section
21.6under sections
21.7January 1 in the year in which the aid is calculated
21.8
21.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
21.102014 and thereafter.
21.11 Sec. 15. Minnesota Statutes 2012, section 477A.013, subdivision 9, is amended to read:
21.12 Subd. 9. City aid distribution. (a) In calendar year
21.13city shall receive an aid distribution equal to the sum of (1) the city formula aid under
21.14subdivision 8, and (2) its
21.15
21.16
21.17
21.18
21.19
21.20
21.21
21.22
21.23
21.24
21.25
21.26
21.27amount it was certified to receive in 2013. For aids payable in
21.28the total aid for a city
21.29it was certified to receive in the previous year minus the lesser of $10 multiplied by its
21.30population, or five percent of
21.31
21.32
21.33
21.34
22.1
22.2
22.3
22.4
22.5
22.6
22.7
22.8
22.9
22.10
22.11
22.12EFFECTIVE DATE.This section is effective for aids payable in calendar year
22.132014 and thereafter.
22.14 Sec. 16. Minnesota Statutes 2012, section 477A.013, is amended by adding a
22.15subdivision to read:
22.16 Subd. 13. Certified aid adjustments. (a) A city that received an aid base increase
22.17under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall
22.18have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids
22.19payable in 2014 through 2018.
22.20(b) A city that received an aid base increase under section 477A.011, subdivision 36,
22.21paragraph (r), shall have its total aid under subdivision 9 increased by an amount equal to
22.22$160,000 for aids payable in 2014 and thereafter.
22.23(c) A city that received a temporary aid increase under Minnesota Statutes 2012,
22.24section 477A.011, subdivision 36, paragraph (o), shall have its total aid under subdivision
22.259 increased by an amount equal to $1,000,000 for aids payable in 2014 only.
22.26 Sec. 17. Minnesota Statutes 2012, section 477A.015, is amended to read:
22.27477A.015 PAYMENT DATES.
22.28The commissioner of revenue shall make the payments of local government aid to
22.29affected taxing authorities in two installments on July 20 and December 26 annually.
22.30When the commissioner of public safety determines that a local government has
22.31suffered financial hardship due to a natural disaster, the commissioner of public safety
22.32shall notify the commissioner of revenue, who shall make payments of aids under sections
23.2after the determination is made but not before July 20.
23.3The commissioner may pay all or part of the payments of aids under sections
23.5local government requests such payment as being necessary for meeting its cash flow
23.6needs. For aids payable in 2013 only, a city that is located in an area deemed a disaster
23.7area during the month of April 2013, as defined in section 12A.02, subdivision 5, shall
23.8receive its December 26, 2013 payment with its July 20, 2013 payment.
23.9EFFECTIVE DATE.This section is effective for aids payable in calendar year
23.102013 and thereafter.
23.11 Sec. 18. Minnesota Statutes 2012, section 477A.03, subdivision 2a, is amended to read:
23.12 Subd. 2a. Cities. For aids payable in
23.13under section
23.14under section 477A.013, subdivision 9, is $509,098,012 for aids payable in 2015. For aids
23.15payable in 2016 and thereafter, the total aid paid under section 477A.013, subdivision
23.169, is $511,598,012.
23.17EFFECTIVE DATE.This section is effective for aids payable in calendar year
23.182014 and thereafter.
23.19 Sec. 19. Minnesota Statutes 2012, section 477A.03, subdivision 2b, is amended to read:
23.20 Subd. 2b. Counties. (a) For aids payable in
23.21payable under section
23.22calendar year, $500,000 of this appropriation shall be retained by the commissioner
23.23of revenue to make reimbursements to the commissioner of management and budget
23.24for payments made under section
23.25
23.26
23.27
23.28costs associated with court-ordered counsel under section
23.29not used for reimbursement in a year shall be included in the next distribution of county
23.30need aid that is certified to the county auditors for the purpose of property tax reduction
23.31for the next taxes payable year.
23.32 (b) For aids payable in
24.1
24.2commissioner of management and budget $207,000 annually for the cost of preparation
24.3of local impact notes as required by section
24.4
24.5
24.6
24.7
24.8preparation of local impact notes for school districts as required by section 3.987. The
24.9commissioner of revenue shall deduct the amounts
24.10from the appropriation under this paragraph. The amounts
24.11appropriated to the commissioner of management and budget and the commissioner of
24.12education
24.13EFFECTIVE DATE.This section is effective for aid payable in 2014 and thereafter.
24.14 Sec. 20. Minnesota Statutes 2012, section 477A.03, is amended by adding a
24.15subdivision to read:
24.16 Subd. 2c. Towns. For aids payable in 2014, the total aids paid under section
24.17477A.013, subdivision 1, is limited to $10,000,000. For aids payable in 2015 and
24.18thereafter, the total aids paid under section 477A.013, subdivision 1, is limited to the
24.19amount certified to be paid in the previous year.
24.20EFFECTIVE DATE.This section is effective for aids payable in calendar year
24.212014 and thereafter.
24.22 Sec. 21. [477A.085] DEBT SERVICE AID; CITY OF MINNEAPOLIS.
24.23On or before November 1, 2016, and the first day of each November thereafter, the
24.24commissioner shall pay to the city of Minneapolis an amount equal to 40 percent of the
24.25city's otherwise required levy to pay its general obligation library referendum bonds for
24.26the following calendar year. The levy excludes any amount to pay bonds, other than
24.27refunding bonds, issued after May 1, 2013. An amount sufficient to pay the aid under this
24.28section is appropriated from the general fund to the commissioner of revenue.
24.29 Sec. 22. [477A.10] NATURAL RESOURCES LAND PAYMENTS IN LIEU;
24.30PURPOSE.
24.31The purposes of sections 477A.11 to 477A.14 are:
25.1(1) to compensate local units of government for the loss of tax base from state
25.2ownership of land and the need to provide services for state land;
25.3(2) to address the disproportionate impact of state land ownership on local units of
25.4government with a large proportion of state land; and
25.5(3) to address the need to manage state lands held in trust for the local taxing districts.
25.6 Sec. 23. Minnesota Statutes 2012, section 477A.11, subdivision 3, is amended to read:
25.7 Subd. 3. Acquired natural resources land. "Acquired natural resources land"
25.8means:
25.9(1)
25.10commissioner in which the state acquired by purchase, condemnation, or gift, a fee title
25.11interest in lands which were previously privately owned; and
25.12(2) lands acquired by the state under chapter 84A that are designated as state parks,
25.13state recreation areas, scientific and natural areas, or wildlife management areas.
25.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.152013 and thereafter.
25.16 Sec. 24. Minnesota Statutes 2012, section 477A.11, subdivision 4, is amended to read:
25.17 Subd. 4. Other natural resources land. "Other natural resources land" means
25.18any
25.19 presently owned in fee title by the state and administered by the commissioner, or
25.20any tax-forfeited land, other than platted lots within a city or those lands described
25.21under subdivision 3, clause (2), which is owned by the state and administered by the
25.22commissioner or by the county in which it is located.
25.23EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.242013 and thereafter.
25.25 Sec. 25. Minnesota Statutes 2012, section 477A.11, is amended by adding a
25.26subdivision to read:
25.27 Subd. 6. Military game refuge. "Military game refuge" means land owned in
25.28fee by another state agency for military purposes and designated as a state game refuge
25.29under section 97A.085.
25.30EFFECTIVE DATE.This section is effective for aids payable in calendar year
25.312013 and thereafter.
26.1 Sec. 26. Minnesota Statutes 2012, section 477A.11, is amended by adding a
26.2subdivision to read:
26.3 Subd. 7. Transportation wetland. "Transportation wetland" means land
26.4administered by the Department of Transportation in which the state acquired, by purchase
26.5from a private owner, a fee title interest in over 500 acres of land within a county to
26.6replace wetland losses from transportation projects.
26.7EFFECTIVE DATE.This section is effective for aids payable in calendar year
26.82013 and thereafter.
26.9 Sec. 27. Minnesota Statutes 2012, section 477A.11, is amended by adding a
26.10subdivision to read:
26.11 Subd. 8. Wildlife management land. "Wildlife management land" means land
26.12administered by the commissioner in which the state acquired, from a private owner by
26.13purchase, condemnation, or gift, a fee interest under the authority granted in chapter 94 or
26.1497A for wildlife management purposes and actually used as a wildlife management area.
26.15EFFECTIVE DATE.This section is effective for aids payable in calendar year
26.162013 and thereafter.
26.17 Sec. 28. Minnesota Statutes 2012, section 477A.12, subdivision 1, is amended to read:
26.18 Subdivision 1. Types of land; payments.
26.19
26.20annually appropriated to the commissioner of natural resources from the general fund for
26.21transfer to the commissioner of revenue. The commissioner of revenue shall pay the
26.22transferred funds to counties as required by sections
26.23based on the acreage as of July 1 of each year prior to the payment year, are:
26.24(1)
26.25of acquired natural resources land or, at the county's option three-fourths of one percent of
26.26the appraised value of all acquired natural resources land in the county, whichever is greater;
26.27(2) $5.133, multiplied by the total number of acres of transportation wetland or, at
26.28the county's option, three-fourths of one percent of the appraised value of all acquired
26.29natural resources land in the county, whichever is greater;
26.30(3) three-fourths of one percent of the appraised value of all wildlife management
26.31land in the county;
26.32(4) 50 percent of the dollar amount as determined under clause (1), multiplied by
26.33the number of acres of military refuge land in the county;
27.1
27.2natural resources land in the county;
27.3
27.4project land in the county;
27.5
27.6commissioner-administered other natural resources land
27.7
27.8 (8) without regard to acreage, $300,000 for local assessments under section 84A.55,
27.9subdivision 9.
27.10
27.11
27.12
27.13
27.14
27.15EFFECTIVE DATE.This section is effective for aids payable in calendar year
27.162013 and thereafter.
27.17 Sec. 29. Minnesota Statutes 2012, section 477A.12, subdivision 2, is amended to read:
27.18 Subd. 2. Procedure.
27.19
27.20
27.21Natural Resources during July of each year prior to the payment year the number of acres
27.22of county-administered other natural resources land within the county. The Department of
27.23Natural resources may, in addition to the certification of acreage, require descriptive lists
27.24of land so certified. The commissioner of natural resources shall determine and certify to
27.25the commissioner of revenue by March 1 of the payment year:
27.26(1) the number of acres and most recent appraised value of acquired natural
27.27resources land, wildlife management land, and military refuge land within each county;
27.28(2) the number of acres of commissioner-administered natural resources land within
27.29each county;
27.30(3) the number of acres of county-administered other natural resources land within
27.31each county, based on the reports filed by each county auditor with the commissioner
27.32of natural resources; and
27.33(4) the number of acres of land utilization project land within each county.
27.34The commissioner of transportation shall determine and certify to the commissioner
27.35of revenue by March 1 of the payment year the number of acres of
28.1wetland and the appraised value of the land
28.2only if it exceeds 500 acres in a county.
28.3The commissioner of revenue shall determine the distributions provided for in this
28.4section using the number of acres and appraised values certified by the commissioner of
28.5natural resources and the commissioner of transportation by March 1 of the payment year.
28.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
28.72013 and thereafter.
28.8 Sec. 30. Minnesota Statutes 2012, section 477A.12, subdivision 3, is amended to read:
28.9 Subd. 3. Determination of appraised value. For the purposes of this section, the
28.10appraised value of acquired natural resources land is the purchase price
28.11
28.12The appraised value of acquired natural resources land received as a donation is the value
28.13determined for the commissioner of natural resources by a licensed appraiser, or the
28.14county assessor's estimated market value if no appraisal is done. The appraised value must
28.15be determined by the county assessor every
28.16reappraisals shall be done in the same year as county assessors are required to assess
28.17exempt land under section 273.18.
28.18EFFECTIVE DATE.This section is effective for aids payable in calendar year
28.192013 and thereafter.
28.20 Sec. 31. Minnesota Statutes 2012, section 477A.14, subdivision 1, is amended to read:
28.21 Subdivision 1. General distribution. Except as provided in
28.22
28.23the county shall be deposited in the county general revenue fund to be used to provide
28.24property tax levy reduction. The remainder shall be distributed by the county in the
28.25following priority:
28.26(a) 64.2 cents, for each acre of county-administered other natural resources land shall
28.27be deposited in a resource development fund to be created within the county treasury for
28.28use in resource development, forest management, game and fish habitat improvement, and
28.29recreational development and maintenance of county-administered other natural resources
28.30land. Any county receiving less than $5,000 annually for the resource development fund
28.31may elect to deposit that amount in the county general revenue fund;
28.32(b) from the funds remaining, within 30 days of receipt of the payment to the county,
28.33the county treasurer shall pay each organized township
29.1
29.2
29.3
29.4under section 477A.12, subdivision 1, clauses (1), (2), and (5) to (7). Payments for natural
29.5resources lands not located in an organized township shall be deposited in the county
29.6general revenue fund. Payments to counties and townships pursuant to this paragraph shall
29.7be used to provide property tax levy reduction, except that of the payments for natural
29.8resources lands not located in an organized township, the county may allocate the amount
29.9determined to be necessary for maintenance of roads in unorganized townships. Provided
29.10that, if the total payment to the county pursuant to section
29.11fund the distribution provided for in this clause, the amount available shall be distributed
29.12to each township and the county general revenue fund on a pro rata basis; and
29.13(c) any remaining funds shall be deposited in the county general revenue fund.
29.14Provided that, if the distribution to the county general revenue fund exceeds $35,000, the
29.15excess shall be used to provide property tax levy reduction.
29.16EFFECTIVE DATE.This section is effective for aids payable in calendar year
29.172013 and thereafter.
29.18 Sec. 32. Minnesota Statutes 2012, section 477A.14, is amended by adding a
29.19subdivision to read:
29.20 Subd. 3. Distribution for wildlife management lands and military refuge lands.
29.21(a) The county treasurer shall allocate the payment for wildlife management land and
29.22military game refuge land among the county, towns, and school districts on the same basis
29.23as if the payments were taxes on the land received in the year. Payment of a town's or a
29.24school district's allocation must be made by the county treasurer to the town or school
29.25district within 30 days of receipt of the payment to the county. The county's share of the
29.26payment shall be deposited in the county general revenue fund.
29.27(b) The county treasurer of a county with a population over 39,000, but less than
29.2842,000, in the 1950 federal census shall allocate the payment only among the towns and
29.29school districts on the same basis as if the payments were taxes on the lands received
29.30in the current year.
29.31(c) If a town received a payment in calendar year 2006 or thereafter under this
29.32subdivision, and subsequently incorporated as a city, the city shall continue to receive any
29.33future year's allocations of wildlife land payments that would have been made to the town
29.34had it not incorporated, provided that the payments shall terminate if the governing body
29.35of the city passes an ordinance that prohibits hunting within the boundaries of the city.
30.1EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.22013 and thereafter.
30.3 Sec. 33. Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008,
30.4chapter 154, article 1, section 4, is amended to read:
30.5 Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
30.6PROPERTY TAX REIMBURSEMENT.
30.7 Subdivision 1. Aid appropriation.
30.8from the general fund to the commissioner of revenue to be used to make payments to
30.9compensate for the loss of property tax revenue related to the trust conversion application
30.10of the Shooting Star Casino. The commissioner shall pay the county of Mahnomen,
30.11
30.12District No. 432, Mahnomen,
30.13of
30.14EFFECTIVE DATE.This section is effective for aids payable in calendar year
30.152013 and thereafter.
30.16 Sec. 34. INELIGIBILITY; SUSTAINABLE FOREST INCENTIVE PROGRAM.
30.17Lands that no longer qualify as forest land under Minnesota Statutes, section
30.18290C.02, subdivision 6, item (iii), are released from the covenant required under
30.19Minnesota Statutes, section 290C.04.
30.20EFFECTIVE DATE.This section is effective the day following final enactment.
30.21 Sec. 35. REENROLLMENT; SUSTAINABLE FOREST INCENTIVE
30.22PROGRAM.
30.23A person who elected to terminate participation in the sustainable forest incentive
30.24program, as provided in Laws 2011, First Special Session chapter 7, article 6, section 12,
30.25may reenroll lands for which the claimant terminated participation and be eligible for a
30.26payment in October 2013. A person must apply for reenrollment under this section within
30.2760 days after the effective date of this section.
30.28EFFECTIVE DATE.This section is effective the day following final enactment.
30.29 Sec. 36. REPEALER.
31.1(a) Minnesota Statutes 2012, sections 477A.011, subdivisions 2a, 19, 29, 31, 32, 33,
31.236, 39, 40, and 41; 477A.013, subdivisions 11 and 12; 477A.0133; and 477A.0134, are
31.3repealed.
31.4(b) Minnesota Statutes 2012, section 97A.061, and Laws 1973, chapter 567, section
31.57, as amended by Laws 1977, chapter 403, section 12, are repealed on July 1, 2013.
31.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
31.72014 and thereafter.
31.10 Section 1. [124D.862] ACHIEVEMENT AND INTEGRATION REVENUE.
31.11 Subdivision 1. Initial achievement and integration revenue. (a) An eligible
31.12district's initial achievement and integration revenue equals the sum of (1) $350 times
31.13the district's adjusted pupil units for that year times the ratio of the district's enrollment
31.14of protected students for the previous school year to total enrollment for the previous
31.15school year and (2) the greater of zero or 66 percent of the difference between the district's
31.16integration revenue for fiscal year 2013 and the district's integration revenue for fiscal
31.17year 2014 under clause (1).
31.18(b) In each year, 0.3 percent of each district's initial achievement and integration
31.19revenue is transferred to the department for the oversight and accountability activities
31.20required under this section and section 124D.861.
31.21 Subd. 2. Incentive revenue. An eligible school district's maximum incentive
31.22revenue equals $10 per adjusted pupil unit. In order to receive this revenue, a district must
31.23be implementing a voluntary plan to reduce racial and economic enrollment disparities
31.24through intradistrict and interdistrict activities that have been approved as a part of the
31.25district's achievement and integration plan.
31.26 Subd. 3. Achievement and integration revenue. Achievement and integration
31.27revenue equals the sum of initial achievement and integration revenue and incentive
31.28revenue.
31.29 Subd. 4. Achievement and integration aid. For fiscal year 2015 and later,
31.30a district's achievement and integration aid equals 70 percent of its achievement and
31.31integration revenue.
31.32 Subd. 5. Achievement and integration levy. A district's achievement and
31.33integration levy equals its achievement and integration revenue times 30 percent. For
31.34Special School District No. 1, Minneapolis; Independent School District No. 625, St.
31.35Paul; and Independent School District No. 709, Duluth, 100 percent of the levy certified
32.1under this subdivision is shifted into the prior calendar year for purposes of sections
32.2123B.75, subdivision 5, and 127A.441.
32.3 Subd. 6. Revenue uses. (a) At least 80 percent of a district's achievement and
32.4integration revenue received under this section must be used for innovative and integrated
32.5learning environments, school enrollment choices, family engagement activities, and other
32.6approved programs providing direct services to students.
32.7(b) Up to 20 percent of the revenue may be used for professional development and
32.8staff development activities and placement services.
32.9(c) No more than ten percent of the total amount of revenue may be spent on
32.10administrative services.
32.11 Subd. 7. Revenue reserved. Integration revenue received under this section must
32.12be reserved and used only for the programs authorized in subdivision 2.
32.13 Subd. 8. Commissioner authority to withhold revenue. (a) The commissioner
32.14must review the results of each district's integration and achievement plan by August 1 at
32.15the end of the third year of implementing the plan and determine if the district met its goals.
32.16(b) If a district met its goals, it may submit a new three-year plan to the commissioner
32.17for review.
32.18(c) If a district has not met its goals, the commissioner must:
32.19(1) develop a district improvement plan and timeline, in consultation with the
32.20affected district, that identifies strategies and practices designed to meet the district's goals
32.21under this section and section 120B.11; and
32.22(2) use up to 20 percent of the district's integration revenue, until the district's goals
32.23are reached, to implement the improvement plan.
32.24EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 and
32.25later. Subdivision 5 is effective for taxes payable in 2014 only.
32.26 Sec. 2. Minnesota Statutes 2012, section 126C.10, subdivision 1, is amended to read:
32.27 Subdivision 1. General education revenue. (a) For fiscal years 2013 and 2014, the
32.28general education revenue for each district equals the sum of the district's basic revenue,
32.29extended time revenue, gifted and talented revenue, small schools revenue, basic skills
32.30revenue,
32.31revenue, transportation sparsity revenue, total operating capital revenue, equity revenue,
32.32alternative teacher compensation revenue, and transition revenue.
32.33(b) For fiscal year 2015 and later, the general education revenue for each district
32.34equals the sum of the district's basic revenue, extended time revenue, gifted and
32.35talented revenue, declining enrollment revenue, location equity revenue, small schools
33.1revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity revenue,
33.2transportation sparsity revenue, total operating capital revenue, equity revenue, pension
33.3adjustment revenue, and transition revenue.
33.4 Sec. 3. Minnesota Statutes 2012, section 126C.10, is amended by adding a subdivision
33.5to read:
33.6 Subd. 2d. Location equity revenue. (a) For a school district with any of its area
33.7located within the seven-county metropolitan area, location equity revenue equals $424
33.8times the adjusted pupil units of the district for that school year.
33.9(b) For all other school districts with more than 2,000 pupils in adjusted average
33.10daily membership for the fiscal year ending in the year before the levy is certified, location
33.11equity revenue equals $212 times the adjusted pupil units of the district for that year.
33.12(c) A district's location equity levy equals its location equity revenue times the lesser
33.13of one or the ratio of its referendum market value per resident pupil unit to $510,000. The
33.14location equity revenue levy must be spread on referendum market value.
33.15(d) A district's location equity aid equals its location equity revenue less its location
33.16equity levy, times the ratio of the actual amount levied to the permitted levy.
33.17(e) A school district may elect not to participate in the location equity revenue
33.18program by a board vote taken prior to September 1 of the fiscal year before the fiscal year
33.19for which the decision not to participate becomes effective. The board resolution must
33.20state which fiscal years the district will not participate. A copy of the board resolution
33.21to not participate must be submitted to the commissioner.
33.22EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
33.23and later.
33.24 Sec. 4. Minnesota Statutes 2012, section 126C.13, subdivision 4, is amended to read:
33.25 Subd. 4. General education aid. (a) For fiscal years
33.26a district's general education aid is the sum of the following amounts:
33.27 (1) general education revenue, excluding equity revenue, total operating capital
33.28revenue, alternative teacher compensation revenue, and transition revenue;
33.29 (2) operating capital aid under section
33.30 (3) equity aid under section
33.31 (4) alternative teacher compensation aid under section
33.32 (5) transition aid under section
33.33 (6) shared time aid under section
33.34 (7) referendum aid under section
34.1 (8) online learning aid according to section
34.2(b) For fiscal year 2015 and later, a district's general education aid equals:
34.3(1) general education revenue, excluding operating capital revenue, equity revenue,
34.4location equity revenue, and transition revenue, minus the student achievement levy,
34.5multiplied times the ratio of the actual amount of student achievement levy levied to the
34.6permitted student achievement levy; plus
34.7(2) equity aid under section 126C.10, subdivision 30; plus
34.8(3) transition aid under section 126C.10, subdivision 33; plus
34.9(4) shared time aid under section 126C.10, subdivision 7; plus
34.10(5) referendum aid under section 126C.17, subdivisions 7 and 7a;
34.11(6) online learning aid under section 124D.096; plus
34.12(7) location equity aid according to section 126C.10, subdivision 2d, paragraph (d).
34.13 Sec. 5. Minnesota Statutes 2012, section 126C.17, is amended to read:
34.14126C.17 REFERENDUM REVENUE.
34.15 Subdivision 1. Referendum allowance.
34.16
34.17
34.18
34.19
34.20
34.21
34.22
34.23
34.24
34.25
34.26
34.27
34.28
34.29
34.30
34.31
34.32
34.33
34.34
34.35
35.1
35.2
35.3(a) A district's initial referendum allowance for fiscal year 2015 equals the result of
35.4the following calculations:
35.5(1) multiply the referendum allowance the district would have received for fiscal
35.6year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 1, based on
35.7elections held before July 1, 2013, by the resident marginal cost pupil units the district
35.8would have counted for fiscal year 2015 under Minnesota Statutes 2012, section 126C.05;
35.9(2) add to the result of clause (1) the adjustment the district would have received
35.10under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and
35.11(c), based on elections held before July 1, 2013;
35.12(3) divide the result of clause (2) by the district's adjusted pupil units for fiscal
35.13year 2015; and
35.14(4) if the result of clause (3) is less than zero, set the allowance to zero.
35.15(b) A district's referendum allowance equals the sum of the district's initial
35.16referendum allowance for fiscal year 2015, plus any additional referendum allowance per
35.17adjusted pupil unit authorized after June 30, 2013, minus (i) the location equity revenue
35.18subtraction, and (ii) any allowances expiring in fiscal year 2016 or later, provided that
35.19the allowance may not be less than zero. For a district with more than one referendum
35.20allowance for fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, the
35.21allowance calculated under paragraph (a) must be divided into components such that the
35.22same percentage of the district's allowance expires at the same time as the old allowances
35.23would have expired under Minnesota Statutes 2012, section 126C.17.
35.24(c) For purposes of this subdivision, a district's location equity revenue subtraction
35.25equals $424 for a district receiving location equity revenue under section 126C.10,
35.26subdivision 2d, paragraph (a), $212 for a district receiving location equity revenue under
35.27section 126C.10, subdivision 2d, paragraph (b), and zero for all other school districts.
35.28 Subd. 2. Referendum allowance limit. (a) Notwithstanding subdivision 1, for fiscal
35.29year
35.30
35.31
35.32
35.33
35.34annual inflationary increase as calculated under paragraph (b)
35.35(1) $1,845;
36.1(2) the sum of the referendum revenue the district would have received for fiscal
36.2year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 4, based on
36.3elections held before July 1, 2013, and the adjustment the district would have received
36.4under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and
36.5(c), based on elections held before July 1, 2013, divided by the district's adjusted pupil
36.6units for fiscal year 2015; or
36.7(3) the product of the referendum allowance limit the district would have received
36.8for fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 2, and
36.9the resident marginal cost pupil units the district would have received for fiscal year 2015
36.10under Minnesota Statutes 2012, section 126C.05, subdivision 6, plus the adjustment the
36.11district would have received under Minnesota Statutes 2012, section 127A.47, subdivision
36.127, paragraphs (a), (b), and (c), based on elections held before July 1, 2013, divided by
36.13the district's adjusted pupil units for fiscal year 2015; minus $424 for a district receiving
36.14location equity revenue under section 126C.10, subdivision 2d, paragraph (a), minus
36.15$212 for a district receiving location equity revenue under section 126C.10, subdivision
36.162d, paragraph (b), or
36.17
36.18revenue authority for each reorganizing district in the year preceding reorganization divided
36.19by its
36.20(b) For purposes of this subdivision, for fiscal year
36.21increase" means one plus the percentage change in the Consumer Price Index for urban
36.22consumers, as prepared by the United States Bureau of Labor Standards, for the current
36.23fiscal year to fiscal year
36.24of paragraph (a), clause
36.25
36.26for that year compared with the formula allowance for fiscal year
36.27 Subd. 3. Sparsity exception. A district that qualifies for sparsity revenue under
36.28section
36.29 Subd. 4. Total referendum revenue. The total referendum revenue for each district
36.30equals the district's referendum allowance times the
36.31units for the school year.
36.32 Subd. 5. Referendum equalization revenue. (a)
36.33 A district's referendum equalization revenue equals the sum of the first tier referendum
36.34equalization revenue and the second tier referendum equalization revenue, and the third
36.35tier referendum equalization revenue.
37.1(b) A district's first tier referendum equalization revenue equals the district's first
37.2tier referendum equalization allowance times the district's
37.3 pupil units for that year.
37.4(c)
37.5
37.6
37.7
37.8
37.9equals the lesser of the district's referendum allowance under subdivision 1 or
37.10(d) A district's second tier referendum equalization revenue equals the district's
37.11second tier referendum equalization allowance times the district's
37.12 adjusted pupil units for that year.
37.13(e)
37.14
37.15
37.16
37.17allowance equals the lesser of the district's referendum allowance under subdivision 1
37.18or
37.19equalization allowance.
37.20(f)
37.21
37.22
37.23
37.24
37.25district's third tier referendum equalization allowance times the district's adjusted pupil
37.26units for that year.
37.27(g) A district's third tier referendum equalization allowance equals the lesser of
37.28the district's referendum allowance under subdivision 1 or 25 percent of the formula
37.29allowance, minus the sum of the district's first tier referendum equalization allowance and
37.30second tier referendum equalization allowance.
37.31(h) Notwithstanding paragraph (g), the third tier referendum allowance for a district
37.32qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or
37.33elementary sparsity revenue under section 126C.10, subdivision 8, equals the district's
37.34referendum allowance under subdivision 1 minus the sum of the district's first tier
37.35referendum equalization allowance and second tier referendum equalization allowance.
38.1 Subd. 6. Referendum equalization levy. (a) For fiscal year 2003 and later,
38.2a district's referendum equalization levy equals the sum of the first tier referendum
38.3equalization levy
38.4referendum equalization levy.
38.5(b) A district's first tier referendum equalization levy equals the district's first tier
38.6referendum equalization revenue times the lesser of one or the ratio of the district's
38.7referendum market value per resident
38.8(c) A district's second tier referendum equalization levy equals the district's second
38.9tier referendum equalization revenue times the lesser of one or the ratio of the district's
38.10referendum market value per resident
38.11(d) A district's third tier referendum equalization levy equals the district's third
38.12tier referendum equalization revenue times the lesser of one or the ratio of the district's
38.13referendum market value per resident pupil unit to $290,000.
38.14 Subd. 7. Referendum equalization aid. (a) A district's referendum equalization aid
38.15equals the difference between its referendum equalization revenue and levy.
38.16(b) If a district's actual levy for first
38.17revenue is less than its maximum levy limit for that tier, aid shall be proportionately
38.18reduced.
38.19(c) Notwithstanding paragraph (a), the referendum equalization aid for a district,
38.20where the referendum equalization aid under paragraph (a) exceeds 90 percent of the
38.21referendum revenue, must not exceed
38.22district's
38.23increased by the amount of any reduction in referendum aid under this paragraph.
38.24 Subd. 7a. Referendum tax base replacement aid. For each school district that
38.25had a referendum allowance for fiscal year 2002 exceeding $415, for each separately
38.26authorized referendum levy, the commissioner of revenue, in consultation with the
38.27commissioner of education, shall certify the amount of the referendum levy in taxes
38.28payable year 2001 attributable to the portion of the referendum allowance exceeding $415
38.29levied against property classified as class 2, noncommercial 4c(1), or 4c(4), under section
38.31of the house, garage, and surrounding one acre of land. The resulting amount must be
38.32used to reduce the district's referendum levy amount otherwise determined, and must be
38.33paid to the district each year that the referendum authority remains in effect, is renewed,
38.34or new referendum authority is approved. The aid payable under this subdivision must
38.35be subtracted from the district's referendum equalization aid under subdivision 7. The
38.36referendum equalization aid after the subtraction must not be less than zero.
39.1 Subd. 7b. Referendum aid guarantee. (a) Notwithstanding subdivision 7, a
39.2district's referendum equalization aid for fiscal year 2015 must not be less than the sum
39.3of the referendum equalization aid the district would have received for fiscal year 2015
39.4under Minnesota Statutes 2012, section 126C.17, subdivision 7, and the adjustment the
39.5district would have received under Minnesota Statutes 2012, section 127A.47, subdivision
39.67, paragraphs (a), (b), and (c).
39.7(b) Notwithstanding subdivision 7, referendum equalization aid for fiscal year 2016
39.8and later, for a district qualifying for additional aid under paragraph (a) for fiscal year
39.92015, must not be less than the product of (1) the district's referendum equalization aid
39.10for fiscal year 2015, times (2) the lesser of one or the ratio of the district's referendum
39.11revenue for that school year to the district's referendum revenue for fiscal year 2015, times
39.12(3) the lesser of one or the ratio of the district's referendum market value used for fiscal
39.13year 2015 referendum equalization calculations to the district's referendum market value
39.14used for that year's referendum equalization calculations.
39.15 Subd. 8. Unequalized referendum levy. Each year, a district may levy an amount
39.16equal to the difference between its total referendum revenue according to subdivision 4
39.17and its referendum equalization revenue according to subdivision 5.
39.18 Subd. 9. Referendum revenue. (a) The revenue authorized by section
39.19subdivision 1
39.20at a referendum called for the purpose. The referendum may be called by the board.
39.21The referendum must be conducted one or two calendar years before the increased levy
39.22authority, if approved, first becomes payable. Only one election to approve an increase
39.23may be held in a calendar year. Unless the referendum is conducted by mail under
39.24subdivision 11, paragraph (a), the referendum must be held on the first Tuesday after the
39.25first Monday in November. The ballot must state the maximum amount of the increased
39.26revenue per
39.27determined by the board, of increased revenue per
39.28unit that differs from year to year over the number of years for which the increased revenue
39.29is authorized or may state that the amount shall increase annually by the rate of inflation.
39.30For this purpose, the rate of inflation shall be the annual inflationary increase calculated
39.31under subdivision 2, paragraph (b). The ballot may state that existing referendum levy
39.32authority is expiring. In this case, the ballot may also compare the proposed levy authority
39.33to the existing expiring levy authority, and express the proposed increase as the amount, if
39.34any, over the expiring referendum levy authority. The ballot must designate the specific
39.35number of years, not to exceed ten, for which the referendum authorization applies. The
39.36ballot, including a ballot on the question to revoke or reduce the increased revenue amount
40.1under paragraph (c), must abbreviate the term "per
40.2unit" as "per pupil." The notice required under section
40.3cases of renewing existing levies at the same amount per pupil as in the previous year:
40.4"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING
40.5TO EXTEND AN EXISTING PROPERTY TAX REFERENDUM THAT IS
40.6SCHEDULED TO EXPIRE."
40.7 The ballot may contain a textual portion with the information required in this
40.8subdivision and a question stating substantially the following:
40.9 "Shall the increase in the revenue proposed by (petition to) the board of .........,
40.10School District No. .., be approved?"
40.11 If approved, an amount equal to the approved revenue per
40.12 adjusted pupil unit times the
40.13year beginning in the year after the levy is certified shall be authorized for certification
40.14for the number of years approved, if applicable, or until revoked or reduced by the voters
40.15of the district at a subsequent referendum.
40.16 (b) The board must prepare and deliver by first class mail at least 15 days but no more
40.17than 30 days before the day of the referendum to each taxpayer a notice of the referendum
40.18and the proposed revenue increase. The board need not mail more than one notice to any
40.19taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be
40.20those shown to be owners on the records of the county auditor or, in any county where
40.21tax statements are mailed by the county treasurer, on the records of the county treasurer.
40.22Every property owner whose name does not appear on the records of the county auditor
40.23or the county treasurer is deemed to have waived this mailed notice unless the owner
40.24has requested in writing that the county auditor or county treasurer, as the case may be,
40.25include the name on the records for this purpose. The notice must project the anticipated
40.26amount of tax increase in annual dollars for typical residential homesteads, agricultural
40.27homesteads, apartments, and commercial-industrial property within the school district.
40.28 The notice for a referendum may state that an existing referendum levy is expiring
40.29and project the anticipated amount of increase over the existing referendum levy in
40.30the first year, if any, in annual dollars for typical residential homesteads, agricultural
40.31homesteads, apartments, and commercial-industrial property within the district.
40.32 The notice must include the following statement: "Passage of this referendum will
40.33result in an increase in your property taxes." However, in cases of renewing existing levies,
40.34the notice may include the following statement: "Passage of this referendum extends an
40.35existing operating referendum at the same amount per pupil as in the previous year."
41.1 (c) A referendum on the question of revoking or reducing the increased revenue
41.2amount authorized pursuant to paragraph (a) may be called by the board. A referendum to
41.3revoke or reduce the revenue amount must state the amount per resident marginal cost
41.4pupil unit by which the authority is to be reduced. Revenue authority approved by the
41.5voters of the district pursuant to paragraph (a) must be available to the school district at
41.6least once before it is subject to a referendum on its revocation or reduction for subsequent
41.7years. Only one revocation or reduction referendum may be held to revoke or reduce
41.8referendum revenue for any specific year and for years thereafter.
41.9 (d) The approval of 50 percent plus one of those voting on the question is required to
41.10pass a referendum authorized by this subdivision.
41.11 (e) At least 15 days before the day of the referendum, the district must submit a
41.12copy of the notice required under paragraph (b) to the commissioner and to the county
41.13auditor of each county in which the district is located. Within 15 days after the results
41.14of the referendum have been certified by the board, or in the case of a recount, the
41.15certification of the results of the recount by the canvassing board, the district must notify
41.16the commissioner of the results of the referendum.
41.17 Subd. 9a. Board-approved referendum allowance. Notwithstanding subdivision
41.189, a school district may convert up to $300 per adjusted pupil unit of referendum authority
41.19from voter approved to board approved by a board vote. A district with less than $300
41.20per adjusted pupil unit of referendum authority may authorize new referendum authority
41.21up to the difference between $300 per adjusted pupil unit and the district's referendum
41.22authority. The board may authorize this levy for up to five years and may subsequently
41.23reauthorize that authority in increments of up to five years.
41.24 Subd. 10. School referendum levy; market value. A school referendum levy must
41.25be levied against the referendum market value of all taxable property as defined in section
41.27subdivision must be certified separately to the county auditor under section
41.28 Subd. 11. Referendum date. (a) Except for a referendum held under paragraph (b),
41.29any referendum under this section held on a day other than the first Tuesday after the first
41.30Monday in November must be conducted by mail in accordance with section
41.31Notwithstanding subdivision 9, paragraph (b), to the contrary, in the case of a referendum
41.32conducted by mail under this paragraph, the notice required by subdivision 9, paragraph (b),
41.33must be prepared and delivered by first-class mail at least 20 days before the referendum.
41.34(b) In addition to the referenda allowed in subdivision 9, clause (a), the commissioner
41.35may grant authority to a district to hold a referendum on a different day if the district is in
42.1statutory operating debt and has an approved plan or has received an extension from the
42.2department to file a plan to eliminate the statutory operating debt.
42.3(c) The commissioner must approve, deny, or modify each district's request for a
42.4referendum levy on a different day within 60 days of receiving the request from a district.
42.5 Subd. 13. Referendum conversion allowance. A school district that received
42.6supplemental or transition revenue in fiscal year 2002 may convert its supplemental
42.7revenue conversion allowance and transition revenue conversion allowance to additional
42.8referendum allowance under subdivision 1 for fiscal year 2003 and thereafter. A majority
42.9of the school board must approve the conversion at a public meeting before November 1,
42.102001. For a district with other referendum authority, the referendum conversion allowance
42.11approved by the board continues until the portion of the district's other referendum
42.12authority with the earliest expiration date after June 30, 2006, expires. For a district
42.13with no other referendum authority, the referendum conversion allowance approved by
42.14the board continues until June 30, 2012.
42.15EFFECTIVE DATE.This section is effective for revenue for fiscal year 2015
42.16and later.
42.17 Sec. 6. OPERATING REFERENDUM FREEZE, FISCAL YEAR 2015.
42.18(a) Notwithstanding Minnesota Statutes, section 126C.17, subdivision 9, a school
42.19district may not authorize an increase to its operating referendum in fiscal year 2015. A
42.20school district may reauthorize an operating referendum that is expiring in fiscal year 2015.
42.21(b) Paragraph (a) shall not apply to a district if, prior to June 30, 2013, the board
42.22adopted a resolution to conduct a referendum in 2013.
42.23(c) Paragraph (a) shall not apply to a district if the district did not authorize an
42.24operating referendum in fiscal year 2014.
42.25(d) Paragraph (a) shall not apply to a district if the district is in statutory operating
42.26debt under Minnesota Statutes, section 123B.81, as of June 30, 2013, and has an approved
42.27plan with the Department of Education.
42.30 Section 1. Minnesota Statutes 2012, section 103B.102, subdivision 3, is amended to
42.31read:
42.32 Subd. 3. Evaluation and report. The Board of Water and Soil Resources shall
42.33evaluate performance, financial, and activity information for each local water management
42.34entity. The board shall evaluate the entities' progress in accomplishing their adopted plans
43.1on a regular basis as determined by the board based on budget and operations of the local
43.2water management entity, but not less than once every
43.3maintain a summary of local water management entity performance on the board's Web site.
43.4Beginning February 1, 2008, and annually thereafter, the board shall provide an analysis
43.5of local water management entity performance to the chairs of the house of representatives
43.6and senate committees having jurisdiction over environment and natural resources policy.
43.7 Sec. 2. Minnesota Statutes 2012, section 103B.335, is amended to read:
43.8103B.335 TAX LEVY AUTHORITY.
43.9 Subdivision 1. Local water planning and management. The governing body of
43.10any county, municipality, or township may levy a tax in an amount required to implement
43.11sections
43.12defined in section 103B.3363.
43.13 Subd. 2. Priority programs; conservation and watershed districts. A county
43.14may levy amounts necessary to pay the reasonable
43.15conservation districts and watershed districts of administering and implementing priority
43.16programs identified in an approved and adopted plan or a comprehensive watershed
43.17management plan as defined in section 103B.3363.
43.18 Sec. 3. Minnesota Statutes 2012, section 103B.3369, subdivision 5, is amended to read:
43.19 Subd. 5. Financial assistance. A base grant may be awarded to a county that
43.20provides a match utilizing a water implementation tax or other local source. A water
43.21implementation tax that a county intends to use as a match to the base grant must be
43.22levied at a rate sufficient to generate a minimum amount determined by the board.
43.23The board may award performance-based grants to local units of government that are
43.24responsible for implementing elements of applicable portions of watershed management
43.25plans, comprehensive plans, local water management plans, or comprehensive watershed
43.26management plans, developed or amended, adopted and approved, according to chapter
43.27103B, 103C, or 103D. Upon request by a local government unit, the board may also
43.28award performance-based grants to local units of government to carry out TMDL
43.29implementation plans as provided in chapter 114D, if the TMDL implementation plan has
43.30been incorporated into the local water management plan according to the procedures for
43.31approving comprehensive plans, watershed management plans, local water management
43.32plans, or comprehensive watershed management plans under chapter 103B, 103C, or
43.33103D, or if the TMDL implementation plan has undergone a public review process.
43.34Notwithstanding section
44.1advanced basis. The fee authorized in section 40A.152 may be used as a local match
44.2or as a supplement to state funding to accomplish implementation of comprehensive
44.3plans, watershed management plans, local water management plans, or comprehensive
44.4watershed management plans under chapter 103B, 103C, or 103D.
44.5 Sec. 4. Minnesota Statutes 2012, section 103C.501, subdivision 4, is amended to read:
44.6 Subd. 4. Cost-sharing funds. (a) The state board shall allocate
44.7
44.8problems or water quantity problems due to altered hydrology. The areas must be selected
44.9based on
44.10 (b) The allocated funds must be used for conservation practices for high priority
44.11problems identified in the comprehensive and annual work plans of the districts, for
44.12the technical assistance portion of the grant funds to leverage federal or other nonstate
44.13funds, or to address high-priority needs identified in local water management plans or
44.14comprehensive watershed management plans.
44.15
44.16
44.17
44.18
44.19
44.20 Sec. 5. Minnesota Statutes 2012, section 103F.405, subdivision 1, is amended to read:
44.21 Subdivision 1. Authority. Each statutory or home rule charter city, town, or
44.22county that has planning and zoning authority under sections
44.23to
44.24loss ordinance must use the soil loss tolerance for each soil series described in the United
44.25States
44.26another method approved by the Board of Water and Soil Resources, to determine the
44.27soil loss limits, but the soil loss limits must be attainable by the best practicable soil
44.28conservation practice. Ordinances adopted by local governments
44.29
44.30
44.31watershed management plan developed or amended, adopted, and approved according
44.32to chapter 103B, 103C, or 103D.
44.33 Sec. 6. Minnesota Statutes 2012, section 168.012, subdivision 9, is amended to read:
45.1 Subd. 9. Manufactured homes and park trailers. Manufactured homes and park
45.2trailers shall not be taxed as motor vehicles using the public streets and highways and shall
45.3be exempt from the motor vehicle tax provisions of this chapter. Except as provided in
45.4section
45.5The provisions of Minnesota Statutes 1957, section
45.6tax exemption shall be inapplicable to manufactured homes and park trailers, except
45.7such manufactured homes as are held by a licensed dealer or limited dealer, as defined
45.8in section 327B.04, and exempted as inventory under subdivision 9a. Travel trailers not
45.9conspicuously displaying current registration plates on the property tax assessment date
45.10shall be taxed as manufactured homes if occupied as human dwelling places.
45.11EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
45.12thereafter.
45.13 Sec. 7. Minnesota Statutes 2012, section 168.012, is amended by adding a subdivision
45.14to read:
45.15 Subd. 9a. Manufactured home as dealer inventory. Manufactured homes as
45.16defined in section 327.31, subdivision 6, shall be considered as dealer inventory, on the
45.17January 2 assessment date, if the home is:
45.18(1) listed as inventory and held by a licensed or limited dealer;
45.19(2) unoccupied and not available for rent;
45.20(3) connected or not connected to utilities when located in a manufactured home
45.21park; and
45.22(4) connected or not connected to utilities when located at a dealer's sales center.
45.23The exemption under this subdivision is allowable for up to five assessment years after
45.24the date a home is initially claimed as dealer inventory.
45.25EFFECTIVE DATE.This section is effective for taxes payable in 2014 and
45.26thereafter.
45.27 Sec. 8. Minnesota Statutes 2012, section 270.41, subdivision 3, is amended to read:
45.28 Subd. 3.
45.29 (a) The board may (i) refuse to grant or renew, or may suspend or revoke, a license
45.30of an applicant or licensee, or (ii) censure, warn, or fine any licensed assessor, or any
45.31other person employed by an assessment jurisdiction or contracting with an assessment
45.32jurisdiction for the purpose of valuing or classifying property for property tax purposes,
45.33 for any of the following causes or acts:
46.1 (1) failure to complete required training;
46.2 (2) inefficiency or neglect of duty;
46.3 (3) failure to comply with the Code of Conduct and Ethics for Licensed Minnesota
46.4Assessors adopted by the board pursuant to Laws 2005, First Special Session chapter 3,
46.5article 1, section 38;
46.6 (4) conviction of a crime involving moral turpitude;
46.7(5) failure to faithfully and fully perform his or her duties through malfeasance,
46.8misfeasance, or nonfeasance; or
46.9
46.10
46.11this subdivision.
46.12(b) When appropriate for the level of infraction, a written warning must be given
46.13to assessors who have no prior identified infractions. The warning must identify the
46.14infraction and, as appropriate, detail future expectations of performance and behavior.
46.15Fines must not exceed $1,000 for the first occurrence and must not exceed $3,000 for each
46.16occurrence thereafter, and suspensions must not exceed one year for each occurrence,
46.17depending in each case upon the severity of the infraction and the level of negligence or
46.18intent. An action by the board to impose a sanction is subject to review in a contested
46.19case hearing under chapter 14.
46.20EFFECTIVE DATE.This section is effective beginning July 1, 2013.
46.21 Sec. 9. Minnesota Statutes 2012, section 270.41, is amended by adding a subdivision
46.22to read:
46.23 Subd. 3a. Report on disciplinary actions. Each odd-numbered year, the board
46.24must publish a report detailing the number and types of disciplinary actions recommended
46.25by the commissioner of revenue under section 273.0645, subdivision 2, and the disposition
46.26of those recommendations by the board. The report must be presented to the house of
46.27representatives and senate committees with jurisdiction over property taxes by February 1
46.28of each odd-numbered year.
46.29EFFECTIVE DATE.This section is effective beginning July 1, 2013.
46.30 Sec. 10. Minnesota Statutes 2012, section 270.45, is amended to read:
46.31270.45 DISPOSITION OF FEES AND FINES.
47.1 All fees and fines so established and collected shall be paid to the commissioner of
47.2management and budget for deposit in the general fund. The expenses of carrying out the
47.3provisions of sections
47.4EFFECTIVE DATE.This section is effective beginning July 1, 2013.
47.5 Sec. 11. [270C.9901] ASSESSOR ACCREDITATION.
47.6Every individual who appraises or physically inspects real property for the purpose
47.7of determining its valuation or classification for property tax purposes must obtain
47.8licensure as an accredited Minnesota assessor from the State Board of Assessors by July 1,
47.92019, or within four years of that person having become licensed as a certified Minnesota
47.10assessor, whichever is later.
47.11EFFECTIVE DATE.This section is effective beginning January 1, 2014.
47.12 Sec. 12. Minnesota Statutes 2012, section 272.02, subdivision 39, is amended to read:
47.13 Subd. 39. Economic development; public purpose. The holding of property by a
47.14political subdivision of the state for later resale for economic development purposes
47.15shall be considered a public purpose in accordance with subdivision 8 for a period not to
47.16exceed nine years, except that:
47.17(1) for property located in a city of
47.18outside of the metropolitan area as defined in section
47.19must not exceed 15 years
47.20(2) for any property that was acquired on or after January 1, 2000, and on or before
47.21December 31, 2010, and is located in a city, the period must not exceed 15 years.
47.22The holding of property by a political subdivision of the state for later resale (1)
47.23which is purchased or held for housing purposes, or (2) which meets the conditions
47.24described in section
47.25accordance with subdivision 8.
47.26The governing body of the political subdivision which acquires property which is
47.27subject to this subdivision shall after the purchase of the property certify to the city or
47.28county assessor whether the property is held for economic development purposes or
47.29housing purposes, or whether it meets the conditions of section
47.30If the property is acquired for economic development purposes and buildings or other
47.31improvements are constructed after acquisition of the property, and if more than one-half
47.32of the floor space of the buildings or improvements which is available for lease to or use
47.33by a private individual, corporation, or other entity is leased to or otherwise used by
48.1a private individual, corporation, or other entity the provisions of this subdivision shall
48.2not apply to the property. This subdivision shall not create an exemption from section
48.4law providing for the taxation of or for payments in lieu of taxes for publicly held property
48.5which is leased, loaned, or otherwise made available and used by a private person.
48.6EFFECTIVE DATE.This section is effective for assessment year 2013 and
48.7thereafter and for taxes payable in 2014 and thereafter.
48.8 Sec. 13. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
48.9to read:
48.10 Subd. 98. Certain property owned by an Indian tribe. (a) Property is exempt that:
48.11(1) was classified as 3a under section 273.13, subdivision 24, for taxes payable
48.12in 2013;
48.13(2) is located in a city of the first class with a population greater than 300,000 as of
48.14the 2010 federal census;
48.15(3) was on January 2, 2012, and is for the current assessment owned by a federally
48.16recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota;
48.17and
48.18(4) is used exclusively for tribal purposes or institutions of purely public charity as
48.19defined in subdivision 7.
48.20(b) For purposes of this subdivision, a "tribal purpose" means a public purpose
48.21as defined in subdivision 8 and includes noncommercial tribal government activities.
48.22Property that qualifies for the exemption under this subdivision is limited to no more than
48.23two contiguous parcels and structures that do not exceed in the aggregate 20,000 square
48.24feet. Property acquired for single-family housing, market-rate apartments, agriculture, or
48.25forestry does not qualify for this exemption. The exemption created by this subdivision
48.26expires with taxes payable in 2024.
48.27EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.
48.28 Sec. 14. Minnesota Statutes 2012, section 272.02, is amended by adding a subdivision
48.29to read:
48.30 Subd. 99. Electric generation facility; personal property. (a) Notwithstanding
48.31subdivision 9, clause (a), and section 453.54, subdivision 20, attached machinery and
48.32other personal property which is part of an electric generation facility that exceeds five
49.1megawatts of installed capacity and meets the requirements of this subdivision is exempt.
49.2At the time of construction, the facility must be:
49.3 (1) designed to utilize natural gas as a primary fuel;
49.4 (2) owned and operated by a municipal power agency as defined in section 453.52,
49.5subdivision 8;
49.6 (3) designed to utilize reciprocating engines paired with generators to produce
49.7electrical power;
49.8 (4) located within the service territory of a municipal power agency's electrical
49.9municipal utility that serves load exclusively in a metropolitan county as defined in
49.10section 473.121, subdivision 4; and
49.11(5) designed to connect directly with a municipality's substation.
49.12 (b) Construction of the facility must be commenced after June 1, 2013, and before
49.13June 1, 2017. Property eligible for this exemption does not include electric transmission
49.14lines and interconnections or gas pipelines and interconnections appurtenant to the
49.15property or the facility.
49.16EFFECTIVE DATE.This section is effective for assessment year 2013, taxes
49.17payable in 2014, and thereafter.
49.18 Sec. 15. Minnesota Statutes 2012, section 273.061, subdivision 2, is amended to read:
49.19 Subd. 2. Term; vacancy. (a) The terms of county assessors appointed under this
49.20section shall be four years. A new term shall begin on January 1 of every fourth year
49.21after 1973. When any vacancy in the office occurs, the board of county commissioners,
49.22within 90 days thereafter, shall fill the same by appointment for the remainder of the term,
49.23following the procedure prescribed in subdivision 1. The term of the county assessor
49.24may be terminated by the board of county commissioners at any time, on charges of
49.25malfeasance, misfeasance, or nonfeasance by the commissioner of revenue. If the board
49.26of county commissioners does not intend to reappoint a county assessor who has been
49.27certified by the state Board of Assessors, the board shall present written notice to the
49.28county assessor not later than 90 days prior to the termination of the assessor's term, that it
49.29does not intend to reappoint the assessor. If written notice is not timely made, the county
49.30assessor will automatically be reappointed by the board of county commissioners.
49.31
49.32
49.33
49.34(b) In the event of a vacancy in the office of county assessor, through death,
49.35resignation or other reasons, the deputy (or chief deputy, if more than one) shall perform
50.1the functions of the office. If there is no deputy, the county auditor shall designate a person
50.2to perform the duties of the office until an appointment is made as provided in clause (a).
50.3Such person shall perform the duties of the office for a period not exceeding 90 days
50.4during which the county board must appoint a county assessor. Such 90-day period may,
50.5however, be extended by written approval of the commissioner of revenue.
50.6(c) In the case of the first appointment under paragraph (a) of a county assessor who
50.7is accredited but who does not have senior accreditation, an approval of the appointment
50.8by the commissioner shall be provisional, provided that a county assessor appointed to
50.9a provisional term under this paragraph must reapply to the commissioner at the end of
50.10the provisional term. A provisional term may not exceed two years. The commissioner
50.11shall not approve the appointment for the remainder of the four-year term unless the
50.12assessor has obtained senior accreditation.
50.13EFFECTIVE DATE.This section is effective beginning July 1, 2013.
50.14 Sec. 16. Minnesota Statutes 2012, section 273.0645, is amended to read:
50.15273.0645 COMMISSIONER REVIEW OF
50.16PRACTICES.
50.17 Subdivision 1. Local assessment practices. The commissioner of revenue must
50.18review the assessment practices in a taxing jurisdiction if requested in writing by a
50.19qualifying number of property owners in that taxing jurisdiction. The request must be
50.20signed by the greater of:
50.21 (1) ten percent of the registered voters who voted in the last general election; or
50.22 (2) five property owners.
50.23 The request must identify the city, town, or county and describe why a review is
50.24sought for that taxing jurisdiction. The commissioner must conduct the review in a
50.25reasonable amount of time and report the findings to the county board of the affected
50.26county, to the affected city council or town board, if the review is for a specific city or
50.27town, and to the property owner designated in the request as the person to receive the
50.28report on behalf of all the property owners who signed the request. The commissioner
50.29must also provide the report electronically to all property owners who signed the request
50.30and provided an e-mail address in order to receive the report electronically.
50.31 Subd. 2. Nonfeasance, misfeasance, and malfeasance. County assessors may file a
50.32written complaint with the commissioner of revenue detailing allegations of nonfeasance,
50.33misfeasance, or malfeasance by a local assessor. After receiving a complaint from a county
50.34assessor, the commissioner must complete an investigation and recommend an appropriate
51.1action to the State Board of Assessors. The commissioner is not required to have a written
51.2complaint from a county assessor in order to conduct an investigation and recommend an
51.3action to the board. Active investigative data relating to the investigation of complaints
51.4against an assessor by the commissioner of revenue are subject to section 13.39.
51.5EFFECTIVE DATE.This section is effective July 1, 2013.
51.6 Sec. 17. Minnesota Statutes 2012, section 273.117, is amended to read:
51.7273.117 CONSERVATION PROPERTY TAX VALUATION.
51.8 The value of real property which is subject to a conservation restriction or easement
51.9
51.10 (a) the restriction or easement is for a conservation purpose as defined in section
51.12 (b) the property is being used in accordance with the terms of the conservation
51.13restriction or easement.
51.14This section does not apply to (1) conservation restrictions or easements covering
51.15riparian buffers along lakes, rivers, and streams that are used for water quantity or quality
51.16control; or (2) to easements in a county that has adopted, by referendum, a program to
51.17protect farmland and natural areas since 1999.
51.18EFFECTIVE DATE.This section is effective for assessment year 2013 and
51.19thereafter, and for taxes payable in 2014 and thereafter.
51.20 Sec. 18. Minnesota Statutes 2012, section 273.13, subdivision 25, is amended to read:
51.21 Subd. 25. Class 4. (a) Class 4a is residential real estate containing four or more
51.22units and used or held for use by the owner or by the tenants or lessees of the owner
51.23as a residence for rental periods of 30 days or more, excluding property qualifying for
51.24class 4d. Class 4a also includes hospitals licensed under sections
51.25than hospitals exempt under section
51.26purposes, without regard to whether the property has been platted or subdivided. The
51.27market value of class 4a property has a class rate of 1.25 percent.
51.28 (b) Class 4b includes:
51.29 (1) residential real estate containing less than four units that does not qualify as class
51.304bb, other than seasonal residential recreational property;
51.31 (2) manufactured homes not classified under any other provision;
51.32 (3) a dwelling, garage, and surrounding one acre of property on a nonhomestead
51.33farm classified under subdivision 23, paragraph (b) containing two or three units; and
52.1 (4) unimproved property that is classified residential as determined under subdivision
52.233.
52.3 The market value of class 4b property has a class rate of 1.25 percent.
52.4 (c) Class 4bb includes
52.5
52.6residential recreational property; and
52.7
52.8nonhomestead farm classified under subdivision 23, paragraph (b).
52.9 Class 4bb property has the same class rates as class 1a property under subdivision 22.
52.10 Property that has been classified as seasonal residential recreational property at
52.11any time during which it has been owned by the current owner or spouse of the current
52.12owner does not qualify for class 4bb.
52.13 (d) Class 4c property includes:
52.14 (1) except as provided in subdivision 22, paragraph (c), real and personal property
52.15devoted to commercial temporary and seasonal residential occupancy for recreation
52.16purposes, for not more than 250 days in the year preceding the year of assessment. For
52.17purposes of this clause, property is devoted to a commercial purpose on a specific day
52.18if any portion of the property is used for residential occupancy, and a fee is charged for
52.19residential occupancy. Class 4c property under this clause must contain three or more
52.20rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room,
52.21or individual camping site equipped with water and electrical hookups for recreational
52.22vehicles. A camping pad offered for rent by a property that otherwise qualifies for class
52.234c under this clause is also class 4c under this clause regardless of the term of the rental
52.24agreement, as long as the use of the camping pad does not exceed 250 days. In order for a
52.25property to be classified under this clause, either (i) the business located on the property
52.26must provide recreational activities, at least 40 percent of the annual gross lodging receipts
52.27related to the property must be from business conducted during 90 consecutive days,
52.28and either (A) at least 60 percent of all paid bookings by lodging guests during the year
52.29must be for periods of at least two consecutive nights; or (B) at least 20 percent of the
52.30annual gross receipts must be from charges for providing recreational activities, or (ii) the
52.31business must contain 20 or fewer rental units, and must be located in a township or a city
52.32with a population of 2,500 or less located outside the metropolitan area, as defined under
52.33section
52.34Department of Natural Resources. For purposes of item (i)(A), a paid booking of five or
52.35more nights shall be counted as two bookings. Class 4c property also includes commercial
52.36use real property used exclusively for recreational purposes in conjunction with other class
53.14c property classified under this clause and devoted to temporary and seasonal residential
53.2occupancy for recreational purposes, up to a total of two acres, provided the property is
53.3not devoted to commercial recreational use for more than 250 days in the year preceding
53.4the year of assessment and is located within two miles of the class 4c property with which
53.5it is used. In order for a property to qualify for classification under this clause, the owner
53.6must submit a declaration to the assessor designating the cabins or units occupied for 250
53.7days or less in the year preceding the year of assessment by January 15 of the assessment
53.8year. Those cabins or units and a proportionate share of the land on which they are located
53.9must be designated class 4c under this clause as otherwise provided. The remainder of the
53.10cabins or units and a proportionate share of the land on which they are located will be
53.11designated as class 3a. The owner of property desiring designation as class 4c property
53.12under this clause must provide guest registers or other records demonstrating that the units
53.13for which class 4c designation is sought were not occupied for more than 250 days in the
53.14year preceding the assessment if so requested. The portion of a property operated as a
53.15(1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other
53.16nonresidential facility operated on a commercial basis not directly related to temporary and
53.17seasonal residential occupancy for recreation purposes does not qualify for class 4c. For
53.18the purposes of this paragraph, "recreational activities" means renting ice fishing houses,
53.19boats and motors, snowmobiles, downhill or cross-country ski equipment; providing
53.20marina services, launch services, or guide services; or selling bait and fishing tackle;
53.21 (2) qualified property used as a golf course if:
53.22 (i) it is open to the public on a daily fee basis. It may charge membership fees or
53.23dues, but a membership fee may not be required in order to use the property for golfing,
53.24and its green fees for golfing must be comparable to green fees typically charged by
53.25municipal courses; and
53.26 (ii) it meets the requirements of section
53.27 A structure used as a clubhouse, restaurant, or place of refreshment in conjunction
53.28with the golf course is classified as class 3a property;
53.29 (3) real property up to a maximum of three acres of land owned and used by a
53.30nonprofit community service oriented organization and not used for residential purposes
53.31on either a temporary or permanent basis, provided that:
53.32 (i) the property is not used for a revenue-producing activity for more than six days
53.33in the calendar year preceding the year of assessment; or
53.34 (ii) the organization makes annual charitable contributions and donations at least
53.35equal to the property's previous year's property taxes and the property is allowed to be
54.1used for public and community meetings or events for no charge, as appropriate to the
54.2size of the facility.
54.3 For purposes of this clause:
54.4 (A) "charitable contributions and donations" has the same meaning as lawful
54.5gambling purposes under section
54.6relating to the payment of taxes, assessments, fees, auditing costs, and utility payments;
54.7 (B) "property taxes" excludes the state general tax;
54.8 (C) a "nonprofit community service oriented organization" means any corporation,
54.9society, association, foundation, or institution organized and operated exclusively for
54.10charitable, religious, fraternal, civic, or educational purposes, and which is exempt from
54.11federal income taxation pursuant to section 501(c)(3), (8), (10), or (19) of the Internal
54.12Revenue Code; and
54.13 (D) "revenue-producing activities" shall include but not be limited to property or that
54.14portion of the property that is used as an on-sale intoxicating liquor or 3.2 percent malt
54.15liquor establishment licensed under chapter 340A, a restaurant open to the public, bowling
54.16alley, a retail store, gambling conducted by organizations licensed under chapter 349, an
54.17insurance business, or office or other space leased or rented to a lessee who conducts a
54.18for-profit enterprise on the premises.
54.19 Any portion of the property not qualifying under either item (i) or (ii) is class 3a.
54.20The use of the property for social events open exclusively to members and their guests
54.21for periods of less than 24 hours, when an admission is not charged nor any revenues are
54.22received by the organization shall not be considered a revenue-producing activity.
54.23 The organization shall maintain records of its charitable contributions and donations
54.24and of public meetings and events held on the property and make them available upon
54.25request any time to the assessor to ensure eligibility. An organization meeting the
54.26requirement under item (ii) must file an application by May 1 with the assessor for
54.27eligibility for the current year's assessment. The commissioner shall prescribe a uniform
54.28application form and instructions;
54.29 (4) postsecondary student housing of not more than one acre of land that is owned by
54.30a nonprofit corporation organized under chapter 317A and is used exclusively by a student
54.31cooperative, sorority, or fraternity for on-campus housing or housing located within two
54.32miles of the border of a college campus;
54.33 (5)(i) manufactured home parks as defined in section
54.34excluding manufactured home parks described in section
54.35manufactured home parks as defined in section
54.36section
55.1 (6) real property that is actively and exclusively devoted to indoor fitness, health,
55.2social, recreational, and related uses, is owned and operated by a not-for-profit corporation,
55.3and is located within the metropolitan area as defined in section
55.4 (7) a leased or privately owned noncommercial aircraft storage hangar not exempt
55.5under section
55.6 (i) the land is on an airport owned or operated by a city, town, county, Metropolitan
55.7Airports Commission, or group thereof; and
55.8 (ii) the land lease, or any ordinance or signed agreement restricting the use of the
55.9leased premise, prohibits commercial activity performed at the hangar.
55.10 If a hangar classified under this clause is sold after June 30, 2000, a bill of sale must
55.11be filed by the new owner with the assessor of the county where the property is located
55.12within 60 days of the sale;
55.13 (8) a privately owned noncommercial aircraft storage hangar not exempt under
55.14section
55.15 (i) the land abuts a public airport; and
55.16 (ii) the owner of the aircraft storage hangar provides the assessor with a signed
55.17agreement restricting the use of the premises, prohibiting commercial use or activity
55.18performed at the hangar; and
55.19 (9) residential real estate, a portion of which is used by the owner for homestead
55.20purposes, and that is also a place of lodging, if all of the following criteria are met:
55.21 (i) rooms are provided for rent to transient guests that generally stay for periods
55.22of 14 or fewer days;
55.23 (ii) meals are provided to persons who rent rooms, the cost of which is incorporated
55.24in the basic room rate;
55.25 (iii) meals are not provided to the general public except for special events on fewer
55.26than seven days in the calendar year preceding the year of the assessment; and
55.27 (iv) the owner is the operator of the property.
55.28 The market value subject to the 4c classification under this clause is limited to
55.29five rental units. Any rental units on the property in excess of five, must be valued and
55.30assessed as class 3a. The portion of the property used for purposes of a homestead by the
55.31owner must be classified as class 1a property under subdivision 22;
55.32 (10) real property up to a maximum of three acres and operated as a restaurant
55.33as defined under section
55.34as defined under section
55.35is either devoted to commercial purposes for not more than 250 consecutive days, or
55.36receives at least 60 percent of its annual gross receipts from business conducted during
56.1four consecutive months. Gross receipts from the sale of alcoholic beverages must be
56.2included in determining the property's qualification under subitem (B). The property's
56.3primary business must be as a restaurant and not as a bar. Gross receipts from gift shop
56.4sales located on the premises must be excluded. Owners of real property desiring 4c
56.5classification under this clause must submit an annual declaration to the assessor by
56.6February 1 of the current assessment year, based on the property's relevant information for
56.7the preceding assessment year;
56.8(11) lakeshore and riparian property and adjacent land, not to exceed six acres, used
56.9as a marina, as defined in section
56.10the public and devoted to recreational use for marina services. The marina owner must
56.11annually provide evidence to the assessor that it provides services, including lake or river
56.12access to the public by means of an access ramp or other facility that is either located on
56.13the property of the marina or at a publicly owned site that abuts the property of the marina.
56.14No more than 800 feet of lakeshore may be included in this classification. Buildings used
56.15in conjunction with a marina for marina services, including but not limited to buildings
56.16used to provide food and beverage services, fuel, boat repairs, or the sale of bait or fishing
56.17tackle, are classified as class 3a property; and
56.18(12) real and personal property devoted to noncommercial temporary and seasonal
56.19residential occupancy for recreation purposes.
56.20 Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
56.21parcel of noncommercial seasonal residential recreational property under clause (12)
56.22has the same class rates as class 4bb property, (ii) manufactured home parks assessed
56.23under clause (5), item (i), have the same class rate as class 4b property, and the market
56.24value of manufactured home parks assessed under clause (5), item (ii), has the same class
56.25rate as class 4d property if more than 50 percent of the lots in the park are occupied by
56.26shareholders in the cooperative corporation or association and a class rate of one percent if
56.2750 percent or less of the lots are so occupied, (iii) commercial-use seasonal residential
56.28recreational property and marina recreational land as described in clause (11), has a
56.29class rate of one percent for the first $500,000 of market value, and 1.25 percent for the
56.30remaining market value, (iv) the market value of property described in clause (4) has a
56.31class rate of one percent, (v) the market value of property described in clauses (2), (6), and
56.32(10) has a class rate of 1.25 percent, and (vi) that portion of the market value of property
56.33in clause (9) qualifying for class 4c property has a class rate of 1.25 percent.
56.34 (e) Class 4d property is qualifying low-income rental housing certified to the assessor
56.35by the Housing Finance Agency under section
56.36of the units in the building qualify as low-income rental housing units as certified under
57.1section
57.2of units in the building qualify for class 4d. The remaining portion of the building shall be
57.3classified by the assessor based upon its use. Class 4d also includes the same proportion of
57.4land as the qualifying low-income rental housing units are to the total units in the building.
57.5For all properties qualifying as class 4d, the market value determined by the assessor must
57.6be based on the normal approach to value using normal unrestricted rents.
57.7 (f) The first tier of market value of class 4d property has a class rate of 0.75 percent.
57.8 The remaining value of class 4d property has a class rate of 0.25 percent. For the purposes
57.9of this paragraph, the "first tier of market value of class 4d property" means the market
57.10value of each housing unit up to the first tier limit. For the purposes of this paragraph, all
57.11class 4d property value must be assigned to individual housing units. The first tier limit is
57.12$100,000 for assessment year 2014. For subsequent years, the limit is adjusted each year
57.13by the average statewide change in estimated market value of property classified as class 4a
57.14and 4d under this section for the previous assessment year, excluding valuation change due
57.15to new construction, rounded to the nearest $1,000, provided, however, that the limit may
57.16never be less than $100,000. Beginning with assessment year 2015, the commissioner of
57.17revenue must certify the limit for each assessment year by November 1 of the previous year.
57.18EFFECTIVE DATE.This section is effective beginning with assessment year 2014.
57.19 Sec. 19. Minnesota Statutes 2012, section 279.01, subdivision 1, is amended to read:
57.20 Subdivision 1. Due dates; penalties. Except as provided in
57.21 3
57.22property tax statement, whichever is later, a penalty accrues and thereafter is charged upon
57.23all unpaid taxes on real estate on the current lists in the hands of the county treasurer. The
57.24penalty is at a rate of two percent on homestead property until May 31 and four percent on
57.25June 1. The penalty on nonhomestead property is at a rate of four percent until May 31 and
57.26eight percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days
57.27after the postmark date on the envelope containing the property tax statements, whichever
57.28is later, on commercial use real property used for seasonal residential recreational purposes
57.29and classified as class 1c or 4c, and on other commercial use real property classified as
57.30class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
57.31class 3a property is earned during the months of May, June, July, and August. In order for
57.32the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
57.33or 21 days after the postmark date on the envelope containing the property tax statement,
57.34whichever is later, without penalty, the owner of the property must attach an affidavit
57.35to the payment attesting to compliance with the income provision of this subdivision.
58.1Thereafter, for both homestead and nonhomestead property, on the first day of each month
58.2beginning July 1, up to and including October 1 following, an additional penalty of one
58.3percent for each month accrues and is charged on all such unpaid taxes provided that if the
58.4due date was extended beyond May 15 as the result of any delay in mailing property tax
58.5statements no additional penalty shall accrue if the tax is paid by the extended due date. If
58.6the tax is not paid by the extended due date, then all penalties that would have accrued if
58.7the due date had been May 15 shall be charged. When the taxes against any tract or lot
58.8exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
58.9date on the envelope containing the property tax statement, whichever is later; and, if so
58.10paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
58.1116 following, without penalty; but, if not so paid, then a penalty of two percent accrues
58.12thereon for homestead property and a penalty of four percent on nonhomestead property.
58.13Thereafter, for homestead property, on the first day of November an additional penalty of
58.14four percent accrues and on the first day of December following, an additional penalty of
58.15two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
58.16property, on the first day of November and December following, an additional penalty of
58.17four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
58.18such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
58.19containing the property tax statement, whichever is later, the same may be paid at any time
58.20prior to October 16, with accrued penalties to the date of payment added, and thereupon
58.21no penalty attaches to the remaining one-half until October 16 following.
58.22 This section applies to payment of personal property taxes assessed against
58.23improvements to leased property, except as provided by section
58.24 A county may provide by resolution that in the case of a property owner that has
58.25multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
58.26installments as provided in this subdivision.
58.27 The county treasurer may accept payments of more or less than the exact amount of
58.28a tax installment due. Payments must be applied first to the oldest installment that is due
58.29but which has not been fully paid. If the accepted payment is less than the amount due,
58.30payments must be applied first to the penalty accrued for the year or the installment being
58.31paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
58.32payment required as a condition for filing an appeal under section
58.33nor does it affect the order of payment of delinquent taxes under section
58.34 Sec. 20. Minnesota Statutes 2012, section 279.01, is amended by adding a subdivision
58.35to read:
59.1 Subd. 5. Federal active service exception. In the case of a homestead property
59.2owned by an individual who is on federal active service, as defined in section 190.05,
59.3subdivision 5c, as a member of the National Guard or a reserve component, a four-month
59.4grace period is granted for complying with the due dates imposed by subdivision 1. During
59.5this period, no late fees or penalties shall accrue against the property. The due date for
59.6property taxes owed under this chapter for an individual covered by this subdivision shall
59.7be September 15 for taxes due on May 15, and February 15 of the following year for taxes
59.8due on October 15. A taxpayer making a payment under this subdivision must accompany
59.9the payment with a signed copy of the taxpayer's orders or form DD214 showing the
59.10dates of active service which clearly indicate that the taxpayer was in active service as a
59.11member of the National Guard or a reserve component on the date the payment was due.
59.12This grace period applies to all homestead property owned by individuals on federal active
59.13service, as herein defined, for all of that property's due dates which fall on a day that is
59.14included in the taxpayer's federal active service.
59.15 Sec. 21. Minnesota Statutes 2012, section 279.02, is amended to read:
59.16279.02 DUTIES OF COUNTY AUDITOR AND TREASURER.
59.17 Subdivision 1. Delinquent property; rates. On the first business day in January, of
59.18each year, the county treasurer shall return the tax lists on hand to the county auditor, who
59.19shall compare the same with the statements receipted for by the treasurer on file in the
59.20auditor's office and each tract or lot of real property against which the taxes, or any part
59.21thereof, remain unpaid, shall be deemed delinquent, and thereupon an additional penalty
59.22of two percent on the amount of the original tax remaining unpaid shall immediately
59.23accrue and thereafter be charged upon all such delinquent taxes; and any auditor who
59.24shall make out and deliver any statement of delinquent taxes without including therein
59.25the penalties imposed by law, and any treasurer who shall receive payment of such taxes
59.26without including in such payment all items as shown on the auditor's statement, shall be
59.27liable to the county for the amounts of any items omitted.
59.28 Subd. 2. Federal active service exception. Notwithstanding subdivision 1, a
59.29homestead property owned by an individual who is on federal active service, as defined
59.30in section 190.05, subdivision 5c, as a member of the National Guard or a reserve
59.31component, shall not be deemed delinquent under this section if the due dates imposed
59.32under section 279.01 fall on a day in which the individual was on federal active service.
59.33 Sec. 22. Minnesota Statutes 2012, section 279.37, subdivision 1a, is amended to read:
60.1 Subd. 1a. Class 3a property. (a) The delinquent taxes upon a parcel of property
60.2which was classified class 3a, for the previous year's assessment
60.3
60.4confession of judgment with the approval of the county auditor. Property qualifying under
60.5this subdivision shall be subject to the same provisions as provided in this section except
60.6as provided in paragraphs (b) to
60.7 (b) Current year taxes and penalty due at the time the confession of judgment
60.8is entered must be paid.
60.9 (c) The down payment must include all special assessments due in the current tax
60.10year, all delinquent special assessments, and 20 percent of the ad valorem tax, penalties,
60.11and interest accrued against the parcel. The balance remaining is payable in four equal
60.12annual installments. A municipality as defined in section 429.011, cities of the first class,
60.13and other special assessment authorities, that have certified special assessments against
60.14any parcel of property, may, through resolution, waive the requirement of payment of all
60.15current and delinquent special assessments at the time the confession is entered. If the
60.16municipality, city, or authority grants the waiver, 100 percent of all current year taxes,
60.17special assessments, and penalties due at the time, along with 20 percent of all delinquent
60.18taxes, special assessments, penalties, interest, and fees must be paid. The balance
60.19remaining shall be subject to and included in the installment plan.
60.20(d) When there are current and delinquent special assessments certified and billed
60.21against a parcel, the assessment authority or municipality as defined in section 429.011
60.22may abate under section 375.192, subdivision 2, all special assessments and the penalty
60.23and interest affiliated with the special assessments, and reassess the special assessments,
60.24penalties, and interest accrued thereon, under section 429.071, subdivision 2. The
60.25municipality shall notify the county auditor of its intent to reassess as a precondition
60.26to the entry of the confession of judgment. Upon the notice to abate and reassess, the
60.27municipality shall, through resolution, notify the county auditor to remove all current
60.28and delinquent special assessments and the accrued penalty and interest on the special
60.29assessments, and the payment of all or a portion of the current and delinquent assessments
60.30shall not be required as part of the down payment due at the time the confession of
60.31judgment is entered in accordance with paragraph (c).
60.32
60.34rate is subject to change each year on the unpaid balance in the manner provided in section
61.1(f) The county auditor may require conditions on properties including, but not
61.2limited to, environmental remediation action plan requirements, restrictions, or covenants,
61.3when considering a request for approval of eligibility for composition into a confession of
61.4judgment for delinquent taxes upon a parcel of property which was classified class 3a for
61.5the previous year's assessment.
61.6 Sec. 23. Minnesota Statutes 2012, section 279.37, subdivision 2, is amended to read:
61.7 Subd. 2. Installment payments. The owner of any such parcel, or any person to
61.8whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
61.9make and file with the county auditor of the county in which the parcel is located a written
61.10offer to pay the current taxes each year before they become delinquent, or to contest the
61.11taxes under Minnesota Statutes 1941, sections
61.12judgment for the amount provided, as determined by the county auditor. By filing the
61.13offer, the owner waives all irregularities in connection with the tax proceedings affecting
61.14the parcel and any defense or objection which the owner may have to the proceedings, and
61.15also waives the requirements of any notice of default in the payment of any installment or
61.16interest to become due pursuant to the composite judgment to be so entered. Unless the
61.17property is subject to subdivision 1a, with the offer, the owner shall (i) tender one-tenth of
61.18the amount of the delinquent taxes, costs, penalty, and interest, and
61.19current year taxes and penalty due at the time the confession of judgment is entered. In the
61.20offer, the owner shall agree to pay the balance in nine equal installments, with interest as
61.21provided in section
61.22to time, on or before December 31 of each year following the year in which judgment
61.23was confessed. The offer must be substantially as follows:
61.24"To the court administrator of the district court of ........... county, I, .....................,
61.25am the owner of the following described parcel of real estate located in ....................
61.26county, Minnesota:
61.27.............................. Upon that real estate there are delinquent taxes for the year ........., and
61.28prior years, as follows: (here insert year of delinquency and the total amount of delinquent
61.29taxes, costs, interest, and penalty). By signing this document I offer to confess judgment in
61.30the sum of $...... and waive all irregularities in the tax proceedings affecting these taxes and
61.31any defense or objection which I may have to them, and direct judgment to be entered for
61.32the amount stated above, minus the sum of $............, to be paid with this document, which
61.33is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and interest stated above.
61.34I agree to pay the balance of the judgment in nine or four equal, annual installments, with
61.35interest as provided in section
62.1unpaid. I agree to pay the installments and interest on or before December 31 of each year
62.2following the year in which this judgment is confessed and current taxes each year before
62.3they become delinquent, or within 30 days after the entry of final judgment in proceedings
62.4to contest the taxes under Minnesota Statutes, sections
62.5Dated .............., ......."
62.6 Sec. 24. Minnesota Statutes 2012, section 281.14, is amended to read:
62.7281.14 EXPIRATION OF TIME FOR REDEMPTION.
62.8The time for redemption from any tax sale, whether made to the state or to a private
62.9person, shall not expire until notice of expiration of redemption, as provided in section
62.10
62.11 Sec. 25. Minnesota Statutes 2012, section 281.17, is amended to read:
62.12281.17 PERIOD FOR REDEMPTION.
62.13Except for properties for which the period of redemption has been limited under
62.14sections
62.15The period of redemption for all lands sold to the state at a tax judgment sale shall
62.16be three years from the date of sale to the state of Minnesota
62.17
62.18
62.19
62.20
62.21
62.22The period of redemption for homesteaded lands as defined in section
62.23subdivision 22
62.24article 6, section 4, and sold to the state at a tax judgment sale is three years from the date
62.25of sale. The period of redemption for all lands located in a targeted neighborhood as
62.26defined in Laws 1987, chapter 386, article 6, section 4, except (1) homesteaded lands as
62.27defined in section
62.28after June 30, 1991, but before July 1, 1996, lands located in the Loring Park targeted
62.29neighborhood on which a notice of lis pendens has been served, and sold to the state at a
62.30tax judgment sale is one year from the date of sale.
62.31The period of redemption for all real property constituting a mixed municipal solid
62.32waste disposal facility that is a qualified facility under section
62.33one year from the date of the sale to the state of Minnesota.
63.1
63.2
63.3
63.4
63.5
63.6
63.7 Sec. 26. Minnesota Statutes 2012, section 287.05, is amended by adding a subdivision
63.8to read:
63.9 Subd. 10. Hennepin and Ramsey Counties. For properties located in Hennepin
63.10and Ramsey Counties, the county may impose an additional mortgage registry tax as
63.11defined in sections 383A.80 and 383B.80.
63.12EFFECTIVE DATE.This section is effective for deeds and mortgages
63.13acknowledged on or after July 1, 2013.
63.14 Sec. 27. [287.40] HENNEPIN AND RAMSEY COUNTIES.
63.15 For properties located in Hennepin and Ramsey Counties, the county may impose an
63.16additional deed tax as defined in sections 383A.80 and 383B.80.
63.17EFFECTIVE DATE.This section is effective for deeds and mortgages
63.18acknowledged on or after July 1, 2013.
63.19 Sec. 28. Minnesota Statutes 2012, section 383A.80, subdivision 4, is amended to read:
63.20 Subd. 4. Expiration. The authority to impose the tax under this section expires
63.21January 1,
63.22EFFECTIVE DATE.This section is effective for all deeds and mortgages
63.23acknowledged on or after July 1, 2013.
63.24 Sec. 29. Minnesota Statutes 2012, section 383B.80, subdivision 4, is amended to read:
63.25 Subd. 4. Expiration. The authority to impose the tax under this section expires
63.26January 1,
63.27EFFECTIVE DATE.This section is effective for all deeds and mortgages
63.28acknowledged on or after July 1, 2013.
63.29 Sec. 30. Minnesota Statutes 2012, section 428A.101, is amended to read:
64.1428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
64.2GENERAL LAW.
64.3The establishment of a new special service district after June 30,
64.4enactment of a special law authorizing the establishment.
64.5EFFECTIVE DATE.This section is effective the day following final enactment.
64.6 Sec. 31. Minnesota Statutes 2012, section 428A.21, is amended to read:
64.7428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
64.8GENERAL LAW.
64.9The establishment of a new housing improvement area after June 30,
64.10requires enactment of a special law authorizing the establishment of the area.
64.11EFFECTIVE DATE.This section is effective the day following final enactment.
64.12 Sec. 32. Minnesota Statutes 2012, section 473F.08, subdivision 3a, is amended to read:
64.13 Subd. 3a. Bloomington computation. (a) Beginning in 1987 and each subsequent
64.14year through 1998, the city of Bloomington shall determine the interest payments for that
64.15year for the bonds which have been sold for the highway improvements pursuant to Laws
64.161986, chapter 391, section 2, paragraph (g). Effective for property taxes payable in 1988
64.17through property taxes payable in 1999, after the Hennepin County auditor has computed
64.18the areawide portion of the levy for the city of Bloomington pursuant to subdivision 3,
64.19clause (a), the auditor shall annually add a dollar amount to the city of Bloomington's
64.20areawide portion of the levy equal to the amount which has been certified to the auditor
64.21by the city of Bloomington for the interest payments for that year for the bonds which
64.22were sold for highway improvements. The total areawide portion of the levy for the city
64.23of Bloomington including the additional amount for interest repayment certified pursuant
64.24to this subdivision shall be certified by the Hennepin County auditor to the administrative
64.25auditor pursuant to subdivision 5. The Hennepin County auditor shall distribute to the
64.26city of Bloomington the additional areawide portion of the levy computed pursuant to this
64.27subdivision at the same time that payments are made to the other counties pursuant to
64.28subdivision 7a. For property taxes payable from the year 2009 through
64.29Hennepin County auditor shall adjust Bloomington's contribution to the areawide gross tax
64.30capacity upward each year by a value equal to ten percent of the total additional areawide
64.31levy distributed to Bloomington under this subdivision from 1988 to 1999, divided by the
64.32areawide tax rate for taxes payable in the previous year.
65.1(b) For property taxes payable from 2015 through 2018, the administrative auditor
65.2shall increase the areawide net tax capacity each year by an amount equal to ten percent of
65.3the total additional areawide levy distributed to Bloomington under this subdivision from
65.41988 to 1999, divided by the areawide tax rate for taxes payable in the previous year. The
65.5administrative auditor must notify the commissioner of revenue of the amount determined
65.6by multiplying the increase in the areawide net tax capacity by the areawide tax rate
65.7determined under subdivision 5. The commissioner of revenue must pay the amount
65.8determined each payable year to the administrative auditor in two installments on July 10
65.9and November 10, for distribution and settlement as provided in subdivision 7a.
65.10(c) A sum sufficient to meet the obligations under this subdivision is annually
65.11appropriated from the general fund to the commissioner of revenue.
65.12EFFECTIVE DATE.This section is effective beginning with taxes payable in 2015.
65.13 Sec. 33. Laws 1988, chapter 645, section 3, as amended by Laws 1999, chapter 243,
65.14article 6, section 9, Laws 2000, chapter 490, article 6, section 15, and Laws 2008, chapter
65.15154, article 2, section 30, is amended to read:
65.16 Sec. 3. TAX; PAYMENT OF EXPENSES.
65.17 (a) The tax levied by the hospital district under Minnesota Statutes, section
65.18must not be levied at a rate that exceeds the amount authorized to be levied under that
65.19section. The proceeds of the tax may be used for all purposes of the hospital district,
65.20except as provided in paragraph (b).
65.21 (b) 0.015 percent of taxable market value of the tax in paragraph (a) may be used
65.22
65.23
65.24 (1) ambulance acquisitions for the Cook ambulance service and the Orr ambulance
65.25service
65.26 (2) attached and portable equipment for use in and for the ambulances; and
65.27 (3) parts and replacement parts for maintenance and repair of the ambulances.
65.28The money may not be used for administrative, operation, or salary expenses.
65.29 (c) The part of the levy referred to in paragraph (b) must be administered by the
65.30Cook Hospital and passed on in equal amounts directly to the Cook area ambulance
65.31service board and the city of Orr to be
65.32
65.33purposes in paragraph (b).
65.34 Sec. 34. Laws 1999, chapter 243, article 6, section 11, is amended to read:
66.1 Sec. 11. CEMETERY LEVY FOR SAWYER BY CARLTON COUNTY.
66.2
66.3Carlton county board of commissioners may annually levy in and for the unorganized
66.4
66.5
66.6
66.7
66.8EFFECTIVE DATE; LOCAL APPROVAL.This section applies to taxes
66.9payable in 2014 and thereafter, and is effective the day after the Carlton County Board
66.10of Commissioners and its chief clerical officer timely complete their compliance with
66.11Minnesota Statutes, section 645.021, subdivisions 2 and 3.
66.12 Sec. 35. Laws 2008, chapter 366, article 5, section 33, the effective date, is amended to
66.13read:
66.14EFFECTIVE DATE.This section is effective for taxes levied in 2008, payable in
66.152009, and is repealed effective for taxes levied in
66.16and thereafter.
66.17EFFECTIVE DATE.This section is effective beginning with taxes payable in 2014.
66.18 Sec. 36. Laws 2009, chapter 88, article 2, section 46, subdivision 1, is amended to read:
66.19 Subdivision 1. Agreement. The city of Cloquet and Perch Lake Township, by
66.20resolution of each of their governing bodies, may establish the Cloquet Area Fire and
66.21Ambulance Taxing District for the purpose of providing fire
66.22or both, throughout the district. In this section, "municipality" means home rule charter
66.23and statutory cities, towns, and Indian tribes. The district may exercise all the powers
66.24relating to fire and ambulance services of the municipalities that receive fire
66.25 ambulance services, or both, from the district. Upon application, any other municipality
66.26
66.27with the agreement of the municipalities that comprise the district at the time of its
66.28application to join.
66.29 Sec. 37. Laws 2009, chapter 88, article 2, section 46, subdivision 3, is amended to read:
66.30 Subd. 3. Tax. The district board may impose a property tax on taxable property
66.31
66.32total amount of the levy that is attributable to the cost of providing fire services and the cost
67.1of providing ambulance services within the primary service area. For those municipalities
67.2that only receive ambulance services, the costs for the provision of ambulance services
67.3shall be levied against taxable property within those municipalities at a rate necessary not
67.4to exceed 0.019 percent of the estimated market value. For those municipalities that
67.5receive both fire and ambulance services, the tax shall be imposed at a rate that does not
67.6exceed 0.2835 percent of
67.7
67.8
67.9
67.10
67.11
67.12When a member municipality opts to receive fire service from the district or an
67.13additional municipality becomes a member of the district, the
67.14
67.15the board and added to the maximum levy amount.
67.16Each county auditor of a county that contains a municipality subject to the tax under
67.17this section must collect the tax and pay it to the Fire and Ambulance Special Taxing
67.18District. The district may also impose other fees or charges as allowed by law for the
67.19provision of fire and ambulance services.
67.20 Sec. 38. Laws 2010, chapter 389, article 1, section 12, the effective date, is amended to
67.21read:
67.22EFFECTIVE DATE.This section is effective for assessment
67.23
67.24EFFECTIVE DATE.This section is effective for assessment year 2012 and
67.25thereafter.
67.26 Sec. 39. MINNEAPOLIS AND ST. PAUL ENTERTAINMENT FACILITIES
67.27COORDINATION STUDY; APPROPRIATION.
67.28 Subdivision 1. Statement of purpose. The legislature finds that the national
67.29economic structure of professional sports financing, as directly or indirectly sanctioned by
67.30federal law, compels state and local governments in smaller metropolitan areas, such as
67.31Minneapolis and St. Paul, to help finance the construction and operation of venues for
67.32professional sports franchises as a condition of hosting these franchises. The burden and
67.33risk associated with providing this assistance justifies authorizing and directing the cities
68.1and any associated private entities to enter into arrangements that attempt to maximize
68.2the combined revenues of these facilities from direct users, including those unrelated to
68.3professional sports, such as, but not limited to, joint booking of concerts and other events,
68.4to minimize the cost and risk to general taxpayers. Any efforts to put in place such joint
68.5marketing, promotion, and scheduling arrangements by the cities or associated private
68.6entities, in the view of the legislature, is a petition for enactment of this or subsequent
68.7enabling legislation under the Noerr-Pennington doctrine or state action under the Parker
68.8antitrust doctrine. This legislation and any resulting arrangements are intended to minimize
68.9the potential burden on general taxpayers of financing and operation of the arenas.
68.10 Subd. 2. Study and report. On or before February 1, 2014, the cities of
68.11Minneapolis and St. Paul, in consultation with representatives of the primary professional
68.12sports team tenant of each arena, shall study and report to the legislature on establishing
68.13a joint governing structure to be responsible for the joint administration, financing, and
68.14operations of the facilities and the possible effects of joint governance on the finances of
68.15each arena and each city. The commissioner of administration, in consultation with the
68.16two cities, shall contract with an independent consultant to conduct all or a portion of the
68.17study. The cities of Minneapolis and St. Paul together shall pay one-half of the cost of the
68.18consultant contract. The commissioner may accept funding from other public entities and
68.19private organizations to pay for the contract. The study must:
68.20 (1) examine the current finances of each arena including past and projected costs and
68.21revenues, projected capital improvements, and the current and projected impact of each
68.22arena on each city's general fund;
68.23 (2) determine the impact of joint governance on the future finances of each city;
68.24 (3) examine joint scheduling, marketing, and promotion of events at the arenas,
68.25either within a joint governance structure or as separate entities; and
68.26 (4) estimate the amount of funding, if any, that would be required to operate and
68.27maintain the arenas under a joint governing structure.
68.28 Subd. 3. Appropriation. Up to $50,000 is appropriated to the commissioner of
68.29administration from the general fund for fiscal year 2014 to pay up to one-half of the costs
68.30of the consultant contract under subdivision 2.
68.31EFFECTIVE DATE.This section is effective the day following final enactment.
68.32 Sec. 40. REIMBURSEMENT FOR PROPERTY TAX ABATEMENTS;
68.33APPROPRIATION.
69.1 Subdivision 1. Reimbursement. The commissioner of revenue shall reimburse
69.2taxing jurisdictions for property tax abatements granted in Hennepin County under Laws
69.32011, First Special Session chapter 7, article 5, section 13, notwithstanding the time limits
69.4contained in that section. The reimbursements must be made to each taxing jurisdiction
69.5pursuant to the certification of the Hennepin County auditor.
69.6 Subd. 2. Appropriation. In fiscal year 2014 only, $336,000 is appropriated to the
69.7commissioner of revenue from the general fund to make the payments required in this
69.8section.
69.9EFFECTIVE DATE.This section is effective the day following final enactment.
69.10 Sec. 41. ST. PAUL BALLPARK PROPERTY TAX EXEMPTION; SPECIAL
69.11ASSESSMENT.
69.12Any real or personal property acquired, owned, leased, controlled, used, or occupied
69.13by the city of St. Paul for the primary purpose of providing a ballpark for a minor league
69.14baseball team is declared to be acquired, owned, leased, controlled, used, and occupied for
69.15public, governmental, and municipal purposes, and is exempt from ad valorem taxation
69.16by the state or any political subdivision of the state, provided that the properties are
69.17subject to special assessments levied by a political subdivision for a local improvement in
69.18amounts proportionate to and not exceeding the special benefit received by the properties
69.19from the improvement. In determining the special benefit received by the properties, no
69.20possible use of any of the properties in any manner different from their intended use
69.21for providing a minor league ballpark at the time may be considered. Notwithstanding
69.22Minnesota Statutes, section
69.23subject to a lease or use agreement between the city and another person for uses related to
69.24the purposes of the operation of the ballpark and related parking facilities is exempt from
69.25taxation regardless of the length of the lease or use agreement. This section, insofar as it
69.26provides an exemption or special treatment, does not apply to any real property that is
69.27leased for residential, business, or commercial development or other purposes different
69.28from those necessary to the provision and operation of the ballpark.
69.29EFFECTIVE DATE.This section is effective the day after compliance by the
69.30governing body of the city of St. Paul with Minnesota Statutes, section 645.021,
69.31subdivisions 2 and 3.
69.32 Sec. 42. PUBLIC ENTERTAINMENT FACILITY; PROPERTY TAX
69.33EXEMPTION; SPECIAL ASSESSMENT.
70.1Any real or personal property acquired, owned, leased, controlled, used, or occupied
70.2by the city of Minneapolis for the primary purpose of providing an arena for a professional
70.3basketball team is declared to be acquired, owned, leased, controlled, used, and occupied
70.4for public, governmental, and municipal purposes, and is exempt from ad valorem taxation
70.5by the state or any political subdivision of the state, provided that the properties are
70.6subject to special assessments levied by a political subdivision for a local improvement in
70.7amounts proportionate to and not exceeding the special benefit received by the properties
70.8from the improvement. In determining the special benefit received by the properties, no
70.9possible use of any of the properties in any manner different from their intended use for
70.10providing a professional basketball arena at the time may be considered. Notwithstanding
70.11Minnesota Statutes, section
70.12subject to a lease or use agreement between the city and another person for uses related to
70.13the purposes of the operation of the arena and related parking facilities is exempt from
70.14taxation regardless of the length of the lease or use agreement. This section, insofar as
70.15it provides an exemption or special treatment, does not apply to any real property that
70.16is leased for residential, business, or commercial development, or for other purposes
70.17different from those necessary to the provision and operation of the arena.
70.18EFFECTIVE DATE.This section is effective the day after compliance by the
70.19governing body of the city of Minneapolis with Minnesota Statutes, section 645.021,
70.20subdivisions 2 and 3.
70.21 Sec. 43. PUBLIC ENTERTAINMENT FACILITY; CONSTRUCTION
70.22MANAGER AT RISK.
70.23(a) For any real or personal property acquired, owned, leased, controlled, used, or
70.24occupied by the city of Minneapolis for the primary purpose of providing an arena for
70.25a professional basketball team, the city of Minneapolis may contract for construction,
70.26materials, supplies, and equipment in accordance with Minnesota Statutes, section
70.27471.345, except that the city may employ or contract with persons, firms, or corporations
70.28to perform one or more or all of the functions of an engineer, architect, construction
70.29manager, or program manager with respect to all or any part of a project to renovate,
70.30refurbish, and remodel the arena under either the traditional design-bid-build plan or
70.31construction manager at risk plan, or a combination thereof.
70.32(b) The city may prepare a request for proposals for one or more of the functions
70.33described in paragraph (a). The request must be published in a newspaper of general
70.34circulation. The city may prequalify offerors by issuing a request for qualifications, in
71.1advance of the request for proposals, and select a short list of responsible offerors to
71.2submit proposals.
71.3(c) As provided in the request for proposals, the city may conduct discussions and
71.4negotiations with responsible offerors in order to determine which proposal is most
71.5advantageous to the city and to negotiate the terms of an agreement. In conducting
71.6discussions, there shall be no disclosure of any information derived from proposals
71.7submitted by competing offerors and the content of all proposals is nonpublic data under
71.8Minnesota Statutes, chapter 13, until such time as a notice to award a contract is given
71.9by the city.
71.10(d) Upon agreement on the guaranteed maximum price, the construction manager
71.11or program manager may enter into contracts with subcontractors for labor, materials,
71.12supplies, and equipment for the renovation project through the process of public bidding,
71.13except that the construction manager or program manager may, with the consent of the city:
71.14(1) narrow the listing of eligible bidders to those that the construction manager
71.15or program manager determines to possess sufficient expertise to perform the intended
71.16functions;
71.17(2) award contracts to the subcontractors that the construction manager or program
71.18manager determines provide the best value under a request for proposals, as described in
71.19Minnesota Statutes, section 16C.28, subdivision 1, paragraph (a), clause (2), that are not
71.20required to be the lowest responsible bidder; and
71.21(3) for work the construction manager or program manager determines to be
71.22critical to the completion schedule, perform work with its own forces without soliciting
71.23competitive bids or proposals, if the construction manager or program manager provides
71.24evidence of competitive pricing.
71.25EFFECTIVE DATE.This section is effective the day after compliance by the
71.26governing body of the city of Minneapolis with Minnesota Statutes, section 645.021,
71.27subdivisions 2 and 3.
71.28 Sec. 44. EXTENSION OF PROPERTY TAX DUE DATE; COMMERCIAL
71.29SEASONAL RECREATIONAL PROPERTIES.
71.30Notwithstanding the provisions of Minnesota Statutes, section 279.01, subdivision
71.311, for taxes payable in 2013 only, the penalty on first-half property taxes does not accrue
71.32until June 15 on commercial use real property used for seasonal residential recreational
71.33purposes and classified as class 1c or 4c, and on other commercial use real property
71.34classified as class 3a, provided that over 60 percent of the gross income earned by the
71.35enterprise on the class 3a property is earned during the months of May, June, July, and
72.1August. In order for the first half of the tax due on class 3a property to be paid after May
72.215 and before June 15 without penalty, the owner of the property must attach an affidavit
72.3to the payment attesting to compliance with the income provision of this subdivision.
72.4EFFECTIVE DATE.This section is effective the day following final enactment.
72.5 Sec. 45. REPORT ON CLASS 4D TIER STRUCTURE.
72.6The commissioners of revenue and housing finance shall report to the legislature
72.7by January 31, 2015, on the implementation of a second tier of market value for class 4d
72.8property under Minnesota Statutes, section 273.13, subdivision 25, paragraph (f). The
72.9report shall include the number of class 4d properties subject to the second tier of market
72.10value for taxes payable in 2015 and the tax impact of the application of the second tier
72.11of market value. The report shall also include an analysis of the characteristics of the
72.12properties to which the second tier of market value applies, such as location, building
72.13type, and number of units.
72.14EFFECTIVE DATE.This section is effective July 1, 2013.
72.15 Sec. 46. REPORT AND STUDY ON CERTAIN PROPERTY USED IN
72.16BUSINESS AND PRODUCTION; ASSESSMENT MORATORIUM.
72.17 Subdivision 1. Study and report. (a) In order to facilitate a legislative review of
72.18property tax assessment procedures for facilities used in the production of biofuels, wine,
72.19beer, distilled beverages, and dairy products, and the development of standards and criteria
72.20for determining the taxable status of these facilities, the commissioner of revenue must
72.21conduct a study and report the findings of the study. The study must:
72.22(1) include a detailed survey of counties identifying the components and tax status
72.23of biofuel facilities;
72.24(2) identify the function of components in facilities of the affected industries;
72.25(3) consider the taxability for certain components related to size, function, and use;
72.26(4) develop recommendations for assessment guidelines and policies for facilities of
72.27the affected industries; and
72.28(5) identify possible impacts to state and local taxes resulting from study
72.29recommendations.
72.30(b) The commissioner shall request the involvement and participation of
72.31stakeholders, including the affected industries, the assessment community, and others
72.32identified by the commissioner.
73.1(c) The commissioner shall report the findings to the chairs of the house of
73.2representatives and senate committees with jurisdiction over taxes, agriculture, and
73.3economic development as well as the commissioners of agriculture and employment and
73.4economic development by February 1, 2014.
73.5 Subd. 2. Moratorium on changes in assessment practices. (a) For the 2013 and
73.62014 assessments, assessors must continue to use assessment practices or policies in effect
73.7in that county on January 2, 2012, for determining the taxable status of property used in
73.8the production of biofuels, wine, beer, distilled beverages, or dairy products.
73.9(b) An assessor must not change the taxable status of any existing property described
73.10in paragraph (a) from its status on January 2, 2012, unless the change is due to a change in
73.11the use of property, or to correct an error. For taxable properties, the assessor may change
73.12the estimated market value of the property and add value for any new construction that
73.13would have been taxable under practices and policies in place on January 2, 2012.
73.14(c) This subdivision expires on December 31, 2014. Any changes to the taxable
73.15status of the properties in paragraph (a) resulting from the study will not be effective
73.16until the 2015 assessment.
73.17 Sec. 47. PROPERTY TAX SAVINGS REPORT.
73.18(a) In addition to the certification of its proposed property tax levy under Minnesota
73.19Statutes, section 275.065, each city that has a population over 500 and each county shall
73.20also include the amount of sales and use tax paid, or was estimated to be paid, in 2012.
73.21(b) At the time the notice of the proposed property taxes is mailed as required under
73.22Minnesota Statutes, section 275.065, subdivision 3, the county treasurer shall also include
73.23a separate statement providing a list of sales and use tax certified by the county and cities
73.24within their jurisdiction.
73.25(c) At the public hearing required under Minnesota Statutes, section 275.065,
73.26subdivision 3, the county and city must discuss the estimated savings realized to their
73.27budgets that resulted from the sales tax exemption authorized under Minnesota Statutes,
73.28section 297A.70, subdivision 2, and how those savings will be used for property tax levy
73.29reductions, fee reductions, and other purposes as deemed appropriate.
73.30Reasonable costs of preparing the notice required in this section must be apportioned
73.31between taxing jurisdictions as follows:
73.32(1) one-half is allocated to the county; and
73.33(2) one-half is allocated among the cities.
74.1The amount allocated in clause (2) must be further apportioned among all the cities
74.2in the proportion that the number of parcels in the city bears to the number of parcels in all
74.3the cities that have populations over 500.
74.4EFFECTIVE DATE.This section is effective the day following final enactment,
74.5for taxes levied in 2013 and payable in 2014.
74.6 Sec. 48. LEVY LIMITS FOR TAXES LEVIED IN 2013.
74.7 Subdivision 1. Population. "Population" means the population for the local
74.8governmental unit as established by the last federal census, by a census taken under
74.9section Minnesota Statutes, section 275.14, or by an estimate made by the metropolitan
74.10council or by the state demographer under Minnesota Statutes, section 4A.02, whichever
74.11is most recent as to the stated date of the count or estimate up to and including June 1
74.12of the current levy year.
74.13 Subd. 2. Local government unit. "Local governmental unit" means a county with a
74.14population greater than 5,000, or a statutory or home rule charter city with a population
74.15greater than 2,500.
74.16 Subd. 3. Levy limit base. "Levy limit base" for a local governmental unit for levy
74.17year 2013 means the sum of its certified net tax capacity levy plus the total of aids and
74.18reimbursements that the local governmental unit is certified to receive under Minnesota
74.19Statutes, sections 477A.011 to 477A.014, minus any amounts that would qualify as a
74.20special levy under Minnesota Statutes, section 275.70, subdivision 5, clauses (1) to (4) and
74.21(7), for taxes levied in 2011 or 2012, whichever is greater. The levy limit base must be
74.22increased by three percent.
74.23 Subd. 4. Property tax levy limit. For taxes levied in 2013, the net tax capacity
74.24levy limit for a local governmental unit is equal to its levy limit base determined under
74.25subdivision 3 plus any additional levy authorized under Minnesota Statutes, section
74.26275.73, which is levied against net tax capacity, reduced by the total amount of aids and
74.27reimbursements that the local governmental unit is certified to receive under Minnesota
74.28Statutes, sections 477A.011 to 477A.014. The property tax levy limit for any local
74.29government cannot be less than the greater of its certified net tax capacity levies for taxes
74.30levied in 2011 or 2012.
74.31 Subd. 5. Limit on levies. Notwithstanding any other provision of law or municipal
74.32charter to the contrary which authorize ad valorem taxes in excess of the limits established
75.1by this section, the provisions of this section apply to local governmental units for all
75.2purposes other than those for which special levies under Minnesota Statutes, section
75.3275.70, subdivision 5, clauses (1) to (5) and (7), and special assessments are made.
75.4 Subd. 6. Levies in excess of levy limits. If the levy made by a city or county
75.5exceeds the levy limit provided in this section, except when the excess levy is due to the
75.6rounding of the rate in accordance with Minnesota Statutes, section 275.28, the county
75.7auditor shall only extend the amount of taxes permitted under this section as provided
75.8for in Minnesota Statutes, section 275.16.
75.9 Subd. 7. Calculation and notification. The commissioner of revenue shall make
75.10all necessary calculations for determining levy limits for local governmental units and
75.11notify the affected governmental units of their levy limits directly by September 1, 2013.
75.12The local governmental units shall, upon request, provide the commissioner with any
75.13information needed to make the calculations. The local governmental unit shall report
75.14by September 30, in a manner prescribed by the commissioner, the maximum amount of
75.15taxes it plans to levy for each of the purposes listed under special levies and any additional
75.16levy authorized under Minnesota Statutes, section 275.73, along with any necessary
75.17documentation. The commissioner shall review the proposed special levies and make any
75.18adjustments needed. The commissioner's decision is final. The final allowed special levy
75.19amounts and any levy limit adjustments must be certified back to the local governments by
75.20December 10. In addition, the commissioner of revenue shall notify all county auditors on
75.21or before five working days after December 20 of the sum of the levy limit plus the total of
75.22allowed special levies for each local governmental unit located within their boundaries so
75.23that they may fix the levies as required in Minnesota Statutes, section 275.16. The local
75.24governmental units shall provide the commissioner of revenue with all information that
75.25the commissioner deems necessary to make the calculations provided for in this section.
75.26 Subd. 8. Information necessary to calculate levy limit base. A local governmental
75.27unit must provide the commissioner with the information required to calculate the
75.28amount under subdivision 3, by July 20, 2013. If the information is not received by the
75.29commissioner by that date, or is not deemed sufficient to make the calculation under that
75.30clause, the commissioner has the discretion to set the local governmental unit's levy limit
75.31for all purposes including those purposes for which special levies may be made, equal to
75.32the amount of the local governmental unit's certified levy for the prior year.
75.33EFFECTIVE DATE.This section is effective for taxes levied in 2013, payable
75.34in 2014, only.
76.1 Sec. 49. APPROPRIATION.
76.2$2,000,000 in fiscal year 2014 only is appropriated from the general fund to the
76.3commissioner of revenue for a grant to the city of Moose Lake to reimburse for costs
76.4related to connection of state facilities to the sewer line.
76.5EFFECTIVE DATE.This section is effective July 1, 2013.
76.8 Section 1. Minnesota Statutes 2012, section 270C.56, subdivision 1, is amended to read:
76.9 Subdivision 1. Liability imposed. A person who, either singly or jointly with
76.10others, has the control of, supervision of, or responsibility for filing returns or reports,
76.11paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
76.12person who is liable under any other law, is liable for the payment of taxes arising under
76.13chapters 295, 296A, 297A, 297F, and 297G, or sections
76.14and the applicable penalties and interest on those taxes.
76.15EFFECTIVE DATE.This section is effective July 1, 2013.
76.16 Sec. 2. Minnesota Statutes 2012, section 296A.09, subdivision 2, is amended to read:
76.17 Subd. 2. Jet fuel and special fuel tax imposed. There is imposed an excise tax
76.18of
76.19fuel received, sold, stored, or withdrawn from storage in this state, for use as substitutes
76.20for aviation gasoline and not otherwise taxed as gasoline. Jet fuel is defined in section
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. 3. Minnesota Statutes 2012, section 296A.17, subdivision 3, is amended to read:
76.25 Subd. 3. Refund on graduated basis. Any person who has directly or indirectly
76.26paid the excise tax on aviation gasoline or special fuel for aircraft use provided for by this
76.27chapter and the airflight property tax under section 270.72, shall, as to all such aviation
76.28gasoline and special fuel received, stored, or withdrawn from storage by the person in
76.29this state in any calendar year and not sold or otherwise disposed of to others, or intended
76.30for sale or other disposition to others, on which such tax has been so paid, be entitled to
76.31the following graduated reductions in such tax for that calendar year, to be obtained by
76.32means of the following refunds:
77.1(1) on each gallon of such aviation gasoline or special fuel up to 50,000 gallons, all
77.2but five cents per gallon;
77.3(2) on each gallon of such aviation gasoline or special fuel above 50,000 gallons and
77.4not more than 150,000 gallons, all but two cents per gallon;
77.5(3) on each gallon of such aviation gasoline or special fuel above 150,000 gallons
77.6and not more than 200,000 gallons, all but one cent per gallon;
77.7(4) on each gallon of such aviation gasoline or special fuel above 200,000, all but
77.8one-half cent per gallon.
77.9EFFECTIVE DATE.This section is effective July 1, 2014, and applied to sales
77.10and purchases made on or after that date.
77.11 Sec. 4. Minnesota Statutes 2012, section 297A.82, subdivision 4, is amended to read:
77.12 Subd. 4. Exemptions. (a) The following transactions are exempt from the tax
77.13imposed in this chapter to the extent provided.
77.14(b) The purchase or use of aircraft previously registered in Minnesota by a
77.15corporation or partnership is exempt if the transfer constitutes a transfer within the
77.16meaning of section 351 or 721 of the Internal Revenue Code.
77.17(c) The sale to or purchase, storage, use, or consumption by a licensed aircraft dealer
77.18of an aircraft for which a commercial use permit has been issued pursuant to section
77.20(d) Air flight equipment when sold to, or purchased, stored, used, or consumed by
77.21airline companies, as defined in section
77.22of this subdivision, "air flight equipment" includes airplanes and parts necessary for the
77.23repair and maintenance of such air flight equipment, and flight simulators, but does
77.24not include airplanes with a gross weight of less than 30,000 pounds that are used on
77.25intermittent or irregularly timed flights.
77.26(e) Sales of, and the storage, distribution, use, or consumption of aircraft, as defined
77.27in section
77.28seller delivers to a purchaser outside Minnesota or which, without intermediate use, is
77.29shipped or transported outside Minnesota by the purchaser are exempt, but only if the
77.30purchaser is not a resident of Minnesota and provided that the aircraft is not thereafter
77.31returned to a point within Minnesota, except in the course of interstate commerce or
77.32isolated and occasional use, and will be registered in another state or country upon its
77.33removal from Minnesota. This exemption applies even if the purchaser takes possession of
77.34the aircraft in Minnesota and uses the aircraft in the state exclusively for training purposes
77.35for a period not to exceed ten days prior to removing the aircraft from this state.
78.1(f) The sale or purchase of the following items that relate to aircraft operated under
78.2Federal Aviation Regulations, Parts 91 and 135, and associated installation charges:
78.3equipment and parts necessary for repair and maintenance of aircraft; and equipment
78.4and parts to upgrade and improve aircraft.
78.5EFFECTIVE DATE.This section is effective for sales and purchases made after
78.6June 30, 2013.
78.7 Sec. 5. Minnesota Statutes 2012, section 297A.82, is amended by adding a subdivision
78.8to read:
78.9 Subd. 4a. Deposit in state airports fund. Tax revenue collected from the sale or
78.10purchase of an aircraft taxable under this chapter must be deposited in the state airports
78.11fund, established in section 360.017.
78.12EFFECTIVE DATE.This section is effective July 1, 2013, and applied to sales
78.13and purchases made on or after that date.
78.14 Sec. 6. Minnesota Statutes 2012, section 297F.01, subdivision 3, is amended to read:
78.15 Subd. 3. Cigarette. "Cigarette" means any roll for smoking made wholly or in part
78.16of tobacco
78.17(1) the wrapper or cover of which is made of paper or another substance or material
78.18except tobacco; or
78.19(2) wrapped in any substance containing tobacco, however labeled or named, which,
78.20because of its appearance, size, the type of tobacco used in the filler, or its packaging,
78.21pricing, marketing, or labeling, is likely to be offered to or purchased by consumers as
78.22a cigarette, as defined in clause (1), unless it is wrapped in whole tobacco leaf and does
78.23not have a cellulose acetate or other cigarette-like filter.
78.24EFFECTIVE DATE.This section is effective July 1, 2013.
78.25 Sec. 7. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
78.26to read:
78.27 Subd. 10b. Moist snuff. "Moist snuff" means any finely cut, ground, or powdered
78.28smokeless tobacco that is intended to be placed or dipped in the mouth.
78.29EFFECTIVE DATE.This section is effective January 1, 2014.
79.1 Sec. 8. Minnesota Statutes 2012, section 297F.01, is amended by adding a subdivision
79.2to read:
79.3 Subd. 13a. Premium cigar. "Premium cigar" means any cigar that is
79.4hand-constructed and hand-rolled, has a wrapper that is made entirely from whole tobacco
79.5leaf, has a filler and binder that is made entirely of tobacco, except for adhesives or other
79.6materials used to maintain size, texture, or flavor, and has a wholesale price of no less
79.7than $2.
79.8EFFECTIVE DATE.This section is effective July 1, 2013.
79.9 Sec. 9. Minnesota Statutes 2012, section 297F.01, subdivision 19, is amended to read:
79.10 Subd. 19. Tobacco products. (a) "Tobacco products" means any product
79.11containing, made, or derived from tobacco that is intended for human consumption,
79.12whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by
79.13any other means, or any component, part, or accessory of a tobacco product, including,
79.14but not limited to, cigars;
79.15crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug
79.16and twist tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings,
79.17cuttings and sweepings of tobacco, and other kinds and forms of tobacco; but does not
79.18include cigarettes as defined in this section. Tobacco products excludes any tobacco
79.19product that has been approved by the United States Food and Drug Administration for
79.20sale as a tobacco cessation product, as a tobacco dependence product, or for other medical
79.21purposes, and is being marketed and sold solely for such an approved purpose.
79.22(b) Except for the imposition of tax under section 297F.05, subdivisions 3 and 4,
79.23tobacco products includes a premium cigar, as defined in subdivision 13a.
79.24EFFECTIVE DATE.This section is effective July 1, 2013.
79.25 Sec. 10. Minnesota Statutes 2012, section 297F.05, subdivision 1, is amended to read:
79.26 Subdivision 1. Rates; cigarettes. A tax is imposed upon the sale of cigarettes in
79.27this state, upon having cigarettes in possession in this state with intent to sell, upon any
79.28person engaged in business as a distributor, and upon the use or storage by consumers, at
79.29the following rates:
79.30(1) on cigarettes weighing not more than three pounds per thousand,
79.31on each such cigarette; and
79.32(2) on cigarettes weighing more than three pounds per thousand,
79.33each such cigarette.
80.1EFFECTIVE DATE.This section is effective July 1, 2013.
80.2 Sec. 11. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
80.3to read:
80.4 Subd. 1a. Annual indexing. (a) Each year the commissioner shall adjust the
80.5tax rates under subdivision 1, including any adjustment made in prior years under this
80.6subdivision, by multiplying the mill rates for the current calendar year by an adjustment
80.7factor and rounding the result to the nearest mill. The adjustment factor equals the in-lieu
80.8sales tax rate that applies to the following calendar year divided by the in-lieu sales tax
80.9rate for the current calendar year. For purposes of this subdivision, "in-lieu sales tax rate"
80.10means the tax rate established under section 297F.25, subdivision 1. For purposes of the
80.11calculations under this subdivision to be made in any year in which an increase in the
80.12federal or state excise tax on cigarettes is implemented, the commissioner shall exclude
80.13from the calculated average price for the current year an amount equal to any increase in
80.14the state or federal excise tax rate.
80.15 (b) The commissioner shall publish the resulting rate by November 1 and the rate
80.16applies to sales made on or after January 1 of the following year.
80.17(c) The determination of the commissioner under this subdivision is not a rule and is
80.18not subject to the Administrative Procedure Act in chapter 14.
80.19EFFECTIVE DATE.This section is effective July 1, 2014.
80.20 Sec. 12. Minnesota Statutes 2012, section 297F.05, subdivision 3, is amended to read:
80.21 Subd. 3. Rates; tobacco products. (a) Except as provided in subdivision 3a, a tax is
80.22imposed upon all tobacco products in this state and upon any person engaged in business
80.23as a distributor, at the rate of
80.24products. The tax is imposed at the time the distributor:
80.25(1) brings, or causes to be brought, into this state from outside the state tobacco
80.26products for sale;
80.27(2) makes, manufactures, or fabricates tobacco products in this state for sale in
80.28this state; or
80.29(3) ships or transports tobacco products to retailers in this state, to be sold by those
80.30retailers.
80.31(b) Notwithstanding paragraph (a), a minimum tax equal to the rate imposed on a
80.32pack of 20 cigarettes weighing not more than three pounds per thousand, as established
80.33under subdivision 1, is imposed on each container of moist snuff.
81.1For purposes of this subdivision, a "container" means the smallest consumer-size can,
81.2package, or other container that is marketed or packaged by the manufacturer, distributor,
81.3or retailer for separate sale to a retail purchaser. When more than one container is
81.4packaged together, each container is subject to tax.
81.5EFFECTIVE DATE.This section is effective July 1, 2013, except the minimum
81.6tax under paragraph (b) is effective January 1, 2014.
81.7 Sec. 13. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
81.8to read:
81.9 Subd. 3a. Rates; tobacco. (a) A tax is imposed upon all premium cigars in this state
81.10and upon any person engaged in business as a tobacco product distributor, at the lesser of:
81.11(1) the rate of 95 percent of the wholesale sales price of the premium cigars; or
81.12(2) $3.50 per premium cigar.
81.13(b) The tax imposed under paragraph (a) is imposed at the time the tobacco products
81.14distributor:
81.15(1) brings, or causes to be brought, into this state from outside the state premium
81.16cigars for sale;
81.17(2) makes, manufactures, or fabricates premium cigars in this state for sale in this
81.18state; or
81.19(3) ships or transports premium cigars to retailers in this state, to be sold by those
81.20retailers.
81.21EFFECTIVE DATE.This section is effective July 1, 2013.
81.22 Sec. 14. Minnesota Statutes 2012, section 297F.05, subdivision 4, is amended to read:
81.23 Subd. 4. Use tax; tobacco products. Except as provided in subdivision 4a, a tax is
81.24imposed upon the use or storage by consumers of tobacco products in this state, and upon
81.25such consumers, at the rate of
81.26products or the minimum tax under subdivision 3, paragraph (b), whichever is greater.
81.27EFFECTIVE DATE.This section is effective July 1, 2013.
81.28 Sec. 15. Minnesota Statutes 2012, section 297F.05, is amended by adding a subdivision
81.29to read:
81.30 Subd. 4a. Use tax; premium cigars. A tax is imposed upon the use or storage by
81.31consumers of all premium cigars in this state, and upon such consumers, at the lesser of:
81.32(1) the rate of 95 percent of the cost to the consumer of the premium cigars; or
82.1(2) $3.50 per premium cigar.
82.2EFFECTIVE DATE.This section is effective July 1, 2013.
82.3 Sec. 16. Minnesota Statutes 2012, section 297F.24, subdivision 1, is amended to read:
82.4 Subdivision 1. Fee imposed. (a) A fee is imposed upon the sale of nonsettlement
82.5cigarettes in this state, upon having nonsettlement cigarettes in possession in this state
82.6with intent to sell, upon any person engaged in business as a distributor, and upon the use
82.7or storage by consumers of nonsettlement cigarettes. The fee equals a rate of
82.8cents per cigarette.
82.9(b) The purpose of this fee is to:
82.10(1) ensure that manufacturers of nonsettlement cigarettes pay fees to the state that
82.11are comparable to costs attributable to the use of the cigarettes;
82.12(2) prevent manufacturers of nonsettlement cigarettes from undermining the state's
82.13policy of discouraging underage smoking by offering nonsettlement cigarettes at prices
82.14substantially below the cigarettes of other manufacturers; and
82.15(3) fund such other purposes as the legislature determines appropriate.
82.16EFFECTIVE DATE.This section is effective July 1, 2013.
82.17 Sec. 17. Minnesota Statutes 2012, section 297F.25, subdivision 1, is amended to read:
82.18 Subdivision 1. Imposition. (a) A tax is imposed on distributors on the sale of
82.19cigarettes by a cigarette distributor to a retailer or cigarette subjobber for resale in this
82.20state. The tax is equal to
82.21multiplied by the weighted average retail price and must be expressed in cents per pack
82.22rounded to the nearest one-tenth of a cent. The weighted average retail price must be
82.23determined annually, with new rates published by November 1, and effective for sales
82.24on or after January 1 of the following year. The weighted average retail price must be
82.25established by surveying cigarette retailers statewide in a manner and time determined by
82.26the commissioner. The commissioner shall make an inflation adjustment in accordance
82.27with the Consumer Price Index for all urban consumers inflation indicator as published in
82.28the most recent state budget forecast. The commissioner shall use the inflation factor for
82.29the calendar year in which the new tax rate takes effect. If the survey indicates that the
82.30average retail price of cigarettes has not increased relative to the average retail price in
82.31the previous year's survey, then the commissioner shall not make an inflation adjustment.
82.32The determination of the commissioner pursuant to this subdivision is not a "rule" and is
83.1not subject to the Administrative Procedure Act contained in chapter 14. For packs of
83.2cigarettes with other than 20 cigarettes, the tax must be adjusted proportionally.
83.3(b) Notwithstanding paragraph (a), and in lieu of a survey of cigarette retailers, the
83.4tax calculation of the weighted average retail price for the sales of cigarettes from August
83.51, 2011, through December 31, 2011, shall be calculated by: (1) increasing the average
83.6retail price per pack of 20 cigarettes from the most recent survey by the percentage change
83.7in a weighted average of the presumed legal prices for cigarettes during the year after
83.8completion of that survey, as reported and published by the Department of Commerce
83.9under section
83.10adjusting for expected inflation. The rate must be published by May 1 and is effective for
83.11sales after July 31. If the weighted average of the presumed legal prices indicates that the
83.12average retail price of cigarettes has not increased relative to the average retail price in the
83.13most recent survey, then no inflation adjustment must be made. For packs of cigarettes
83.14with other than 20 cigarettes, the tax must be adjusted proportionally.
83.15EFFECTIVE DATE.This section is effective July 1, 2013.
83.16 Sec. 18. Minnesota Statutes 2012, section 297G.04, subdivision 2, is amended to read:
83.17 Subd. 2. Tax credit. A qualified brewer producing fermented malt beverages
83.18is entitled to a tax credit of $4.60 per barrel on 25,000 barrels sold in any fiscal year
83.19beginning July 1, regardless of the alcohol content of the product. Qualified brewers may
83.20take the credit on the 18th day of each month, but the total credit allowed may not exceed
83.21in any fiscal year the lesser of:
83.22 (1) the liability for tax; or
83.23 (2) $115,000.
83.24 For purposes of this subdivision, a "qualified brewer" means a brewer, whether or
83.25not located in this state, manufacturing less than
83.26malt beverages in the calendar year immediately preceding the calendar year for which
83.27the credit under this subdivision is claimed. In determining the number of barrels, all
83.28brands or labels of a brewer must be combined. All facilities for the manufacture of
83.29fermented malt beverages owned or controlled by the same person, corporation, or other
83.30entity must be treated as a single brewer.
83.31EFFECTIVE DATE.This section is effective for determinations based on calendar
83.32year 2012 production and thereafter.
83.33 Sec. 19. Minnesota Statutes 2012, section 325D.32, subdivision 2, is amended to read:
84.1 Subd. 2. Cigarettes. "Cigarettes" means and includes any roll for smoking, made
84.2wholly or in part of tobacco, irrespective of size and shape and whether or not such
84.3tobacco is flavored, adulterated or mixed with any other ingredient, the wrapper or cover
84.4of which is made of paper or any other substance or material except whole tobacco leaf,
84.5and includes any cigarette as defined in section 297F.01, subdivision 3.
84.6EFFECTIVE DATE.This section is effective July 1, 2013.
84.7 Sec. 20. Minnesota Statutes 2012, section 325F.781, subdivision 1, is amended to read:
84.8 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
84.9have the meanings given, unless the language or context clearly provides otherwise.
84.10(b) "Consumer" means an individual who purchases, receives, or possesses tobacco
84.11products for personal consumption and not for resale.
84.12(c) "Delivery sale" means:
84.13(1) a sale of tobacco products to a consumer in this state when:
84.14(i) the purchaser submits the order for the sale by means of a telephonic or other
84.15method of voice transmission, the mail or any other delivery service, or the Internet or
84.16other online service; or
84.17(ii) the tobacco products are delivered by use of the mail or other delivery service; or
84.18(2) a sale of tobacco products that satisfies the criteria in clause (1), item (i),
84.19regardless of whether the seller is located inside or outside of the state.
84.20A sale of tobacco products to an individual in this state must be treated as a sale to a
84.21consumer, unless the individual is licensed as a distributor or retailer of tobacco products.
84.22(d) "Delivery service" means a person, including the United States Postal Service,
84.23that is engaged in the commercial delivery of letters, packages, or other containers.
84.24(e) "Distributor" means a person, whether located inside or outside of this state,
84.25other than a retailer, who sells or distributes tobacco products in the state. Distributor does
84.26not include a tobacco products manufacturer, export warehouse proprietor, or importer
84.27with a valid permit under United States Code, title 26, section 5712 (1997), if the person
84.28sells or distributes tobacco products in this state only to distributors who hold valid and
84.29current licenses under the laws of a state, or to an export warehouse proprietor or another
84.30manufacturer. Distributor does not include a common or contract carrier that is transporting
84.31tobacco products under a proper bill of lading or freight bill that states the quantity, source,
84.32and destination of tobacco products, or a person who ships tobacco products through this
84.33state by common or contract carrier under a bill of lading or freight bill.
84.34(f) "Retailer" means a person, whether located inside or outside this state, who sells
84.35or distributes tobacco products to a consumer in this state.
85.1(g) "Tobacco products" means:
85.2(1) cigarettes, as defined in section
85.3(2) smokeless tobacco as defined in section
85.4(3) premium cigars as defined in section 297F.01, subdivision 13a.
85.5EFFECTIVE DATE.This section is effective July 1, 2013.
85.6 Sec. 21. Minnesota Statutes 2012, section 349.166, subdivision 1, is amended to read:
85.7 Subdivision 1. Exclusions. (a) Bingo, with the exception of linked bingo games, may
85.8be conducted without a license and without complying with sections
85.91 and 2;
85.10(1) by an organization in connection with a county fair, the state fair, or a civic
85.11celebration and is not conducted for more than 12 consecutive days and is limited to no more
85.12than four separate applications for activities applied for and approved in a calendar year; or
85.13(2) by an organization that conducts bingo on four or fewer days in a calendar year.
85.14An organization that holds a license to conduct lawful gambling under this chapter
85.15may not conduct bingo under this subdivision.
85.16(b) Bingo may be conducted within a nursing home or a senior citizen housing
85.17project or by a senior citizen organization if the prizes for a single bingo game do not
85.18exceed $10, total prizes awarded at a single bingo occasion do not exceed $200, no more
85.19than two bingo occasions are held by the organization or at the facility each week, only
85.20members of the organization or residents of the nursing home or housing project are
85.21allowed to play in a bingo game, no compensation is paid for any persons who conduct the
85.22bingo, and a manager is appointed to supervise the bingo. Bingo conducted under this
85.23paragraph is exempt from sections
85.24organization that conducts bingo under this paragraph, or the manager who supervises the
85.25bingo, to register or file a report with the board. The gross receipts from bingo conducted
85.26under the limitations of this subdivision are exempt from taxation under chapter 297A.
85.27(c) Raffles may be conducted by an organization without registering with the board
85.28if the value of all raffle prizes awarded by the organization in a calendar year does not
85.29exceed $1,500 or, if the organization is a 501(c)(3) organization, if the value of all raffle
85.30prizes awarded by the organization at one event in a calendar year does not exceed $5,000.
85.31(d) Except as provided in paragraph (b), the organization must maintain all required
85.32records of excluded gambling activity for 3-1/2 years.
85.33EFFECTIVE DATE.This section is effective July 1, 2013.
86.1 Sec. 22. Minnesota Statutes 2012, section 360.531, is amended to read:
86.2360.531 TAXATION.
86.3 Subdivision 1. In lieu tax. All aircraft using the air space overlying the state of
86.4Minnesota or the airports thereof, except as set forth in section
86.5lieu of all other taxes thereon, on the basis and at the rate for the period January 1, 1966, to
86.6June 30, 1967, and for each fiscal year as follows.
86.7 Subd. 2. Rate. The tax shall be
86.8
86.10
86.28 Subd. 3. First year of life. "First year of life" means the year the aircraft was
86.29manufactured.
86.30 Subd. 4. Base price for taxation. For the purpose of fixing a base price for taxation
86.31
86.32base price is defined as follows:
86.33(a) The base price for taxation of an aircraft shall be the manufacturer's list price.
86.34(b) The commissioner shall have authority to fix the base value for taxation purposes
86.35of any aircraft of which no such similar or corresponding model has been manufactured,
86.36and of any rebuilt or foreign aircraft, any aircraft on which a record of the list price is not
86.37available, or any military aircraft converted for civilian use, using as a basis for
87.1valuation the list price of aircraft with comparable performance characteristics, and taking
87.2into consideration the age and condition of the aircraft.
87.3 Subd. 5. Similarity of corresponding model. Models shall be deemed similar if
87.4substantially alike and of the same make. Models shall be deemed to be corresponding
87.5models for the purpose of taxation under sections
87.6and having approximately the same weight and type of frame and the same style and
87.7size of motor.
87.8
87.9
87.10
87.11
87.12 Subd. 7. Prorating tax. When an aircraft first becomes subject to taxation during the
87.13period for which the tax is to be paid, the tax on it shall be for the remainder of that period,
87.14prorated on a monthly basis of 1/12 of the annual tax for each calendar month counting the
87.15month during which it becomes subject to the tax as the first month of such period.
87.16 Subd. 8. Tax, fiscal year. Every aircraft subject to the provisions of sections
87.18the state of Minnesota or the airports thereof shall be taxed for the period from January 1,
87.191966, through June 30, 1967, and for each fiscal year thereafter in which it is so used. Any
87.20aircraft which does not use the air space overlying the state of Minnesota or the airports
87.21thereof at any time during the period of January 1, 1966, to and including June 30, 1967,
87.22or at any time during any fiscal year thereafter shall not be subject to the tax provided by
87.23sections
87.24provided by sections
87.25after the aircraft has been rebuilt, prorated on a monthly basis.
87.26 Subd. 9. Assessed as personal property in certain cases. Aircraft subject to
87.27taxation under the provisions of sections
87.28property and shall be subject to no tax except as provided for by these sections. Aircraft
87.29not subject to taxation as provided in these sections, but subject to taxation as personal
87.30property within the state of Minnesota shall be assessed and valued at 33-1/3 percent of
87.31the market value thereof and taxed at the rate and in the manner provided by law for the
87.32taxation of ordinary personal property. If the person against whom any tax has been levied
87.33on the ad valorem basis because of any aircraft shall, during the calendar year for which
87.34such ad valorem tax is levied, be also taxed under provisions of these sections, then and in
87.35that event, upon proper showing, the commissioner of revenue shall grant to the person
87.36against whom said ad valorem tax was levied, such reduction or abatement of net tax
88.1capacity or taxes as was occasioned by the so-called ad valorem tax imposed. If the ad
88.2valorem tax upon any aircraft has been assessed against a dealer in new and used aircraft,
88.3and the tax imposed by these sections for the required period is thereafter paid by the
88.4owner, then and in that event, upon proper showing, the commissioner of revenue, upon
88.5the application of said dealer, shall grant to such dealer against whom said ad valorem tax
88.6was levied such reduction or abatement of net tax capacity or taxes as was occasioned
88.7by the so-called ad valorem tax imposed.
88.8EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.9tax due on or after that date.
88.10 Sec. 23. Minnesota Statutes 2012, section 360.66, is amended to read:
88.11360.66 STATE AIRPORTS FUND.
88.12 Subdivision 1. Tax credited to fund. The proceeds of the tax imposed on aircraft
88.13under sections
88.14shall be collected by the commissioner and paid into the state treasury and credited to the
88.15state airports fund created by other statutes of this state.
88.16 Subd. 2. Reimbursement for expenses. There shall be transferred by the
88.17commissioner of management and budget each year from the state airports fund to the
88.18general fund in the state treasury the amount expended from the latter fund for expenses of
88.19administering the provisions of sections
88.20EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.21tax due on or after that date.
88.22 Sec. 24. REPORT.
88.23On or before June 30, 2016, and every four years thereafter, the commissioner of
88.24transportation, in consultation with the commissioner of revenue, shall prepare and submit
88.25to the chairs and ranking minority members of the senate and house of representatives
88.26committees with jurisdiction over transportation policy and budget, a report that identifies
88.27the amount and sources of annual revenues attributable to each type of aviation tax, along
88.28with annual expenditures from the state airports fund, and any other transfers out of the
88.29fund, during the previous four years. The report must include draft legislation for any
88.30recommended statutory changes to ensure the future adequacy of the state airports fund.
88.31EFFECTIVE DATE.This section is effective July 1, 2014, and applies to aircraft
88.32tax due on or after that date.
89.1 Sec. 25. FLOOR STOCKS TAX.
89.2 Subdivision 1. Cigarettes. (a) A floor stocks tax is imposed on every person
89.3engaged in the business in this state as a distributor, retailer, subjobber, vendor,
89.4manufacturer, or manufacturer's representative of cigarettes, on the stamped cigarettes and
89.5unaffixed stamps in the person's possession or under the person's control at 12:01 a.m.
89.6on July 1, 2013. The tax is imposed at the rate of 80 mills on each cigarette plus the
89.7additional cigarette sales tax determined by an adjustment to the weighted average retail
89.8price which reflects the price including the increased tax.
89.9(b) Each distributor, on or before July 11, 2013, shall file a return with the
89.10commissioner of revenue, in the form the commissioner prescribes, showing the stamped
89.11cigarettes and unaffixed stamps on hand at 12:01 a.m. on July 1, 2013, and the amount
89.12of tax due on the cigarettes and unaffixed stamps. Each retailer, subjobber, vendor,
89.13manufacturer, or manufacturer's representative, on or before July 11, 2013, shall file
89.14a return with the commissioner, in the form the commissioner prescribes, showing the
89.15cigarettes on hand at 12:01 a.m. on July 1, 2013, and the amount of tax due on the
89.16cigarettes. The tax imposed by this section is due and payable on or before September 4,
89.172013, and after that date bears interest at the rate of one percent per month.
89.18 Subd. 2. Audit and enforcement. The tax imposed by this section is subject to
89.19the audit, assessment, interest, appeal, refund, penalty, enforcement, administrative, and
89.20collection provisions of Minnesota Statutes, chapters 270C and 297F. The commissioner
89.21of revenue may require a distributor to receive and maintain copies of floor stocks fee
89.22returns filed by all persons requesting a credit for returned cigarettes.
89.23 Subd. 3. Deposit of proceeds. (a) The commissioner of revenue shall deposit
89.24$26,500,000 of the revenues from the tax under this section in the state treasury and credit
89.25them to the general reserve account established under Minnesota Statutes 297E.021,
89.26subdivision 4.
89.27(b) The commissioner of revenue shall deposit any revenue remaining after the
89.28transfer under paragraph (a) to the general fund.
89.29EFFECTIVE DATE.This section is effective July 1, 2013.
89.30 Sec. 26. INTERIM SALES TAX RATE.
89.31Notwithstanding the provisions of Minnesota Statutes, section 297F.25, the
89.32commissioner shall adjust the weighted average retail price in section 297F.25, subdivision
89.331, on July 1, 2013, to reflect the price changes under this act. This weighted average
90.1shall be used to compute cigarette sales tax under Minnesota Statutes, section 297F.25,
90.2subdivision 1, until December 31, 2013, when the commissioner shall resume annual
90.3adjustments to the weighted average sales price. The commissioner's determination of
90.4the adjustment that takes effect on January 1, 2014, must be limited to the change in the
90.5weighted average retail price that occurs during calendar year 2013 but after July 15, 2013.
90.6EFFECTIVE DATE.This section is effective July 1, 2013.
90.7 Sec. 27. TOBACCO TAX COLLECTION REPORT.
90.8 Subdivision 1. Report to legislature. (a) The commissioner of revenue shall report
90.9to the 2014 legislature on the tobacco tax collection system, including recommendations
90.10to improve compliance under the excise tax for both cigarettes and other tobacco products.
90.11The purpose of the report is to provide information and guidance to the legislature on
90.12improvements to the tobacco tax collection system to:
90.13(1) provide a unified system of collecting both the cigarette and other tobacco
90.14taxes, regardless of category, size, or shape, that ensures the highest reasonable rates of
90.15tax collection;
90.16(2) discourage tax evasion; and
90.17(3) help to prevent illegal sale of tobacco products, which may make these products
90.18more accessible to youth.
90.19(b) In the report, the commissioner shall:
90.20(1) provide a detailed review of the present excise tax collection and compliance
90.21system as it applies to both cigarettes and other tobacco products. This must include
90.22an assessment of the levels of compliance for each category of products and the effect
90.23of the stamping requirement on compliance for each category of products and the effect
90.24of the stamping requirement on compliance rates for cigarettes relative to other tobacco
90.25products. It also must identify any weaknesses in the system;
90.26(2) survey the methods of collection and enforcement used by other states or nations,
90.27including identifying and discussing emerging best practices that ensure tracking of both
90.28cigarettes and other tobacco products and result in the highest rates of tax collection and
90.29compliance. These best practices must consider high-technology alternatives, such as use
90.30of bar codes, radio-frequency identification tags, or similar mechanisms for tracking
90.31compliance;
90.32(3) evaluate the adequacy and effectiveness of the existing penalties and other
90.33sanctions for noncompliance;
91.1(4) evaluate the adequacy of the resources allocated by the state to enforce the
91.2tobacco tax and prevention laws; and
91.3(5) make recommendations on implementation of a comprehensive tobacco tax
91.4collection system for Minnesota that can be implemented by January 1, 2014, including:
91.5(i) recommendations on the specific steps needed to institute and implement the new
91.6system, including estimates of the state's costs of doing so and any additional personnel
91.7requirements;
91.8(ii) recommendations on methods to recover the cost of implementing the system
91.9from the industry;
91.10(iii) evaluation of the extent to which the proposed system is sufficiently flexible
91.11and adaptable to adjust to modifications in the construction, packaging, formatting, and
91.12marketing of tobacco products by the industry; and
91.13(iv) recommendations to modify existing penalties or to impose new penalties or
91.14other sanctions to ensure compliance with the system.
91.15 Subd. 2. Due date. The report required by subdivision 1 is due February 15, 2014.
91.16 Subd. 3. Procedure. The report required under this section must be made in the
91.17manner provided under Minnesota Statutes, section 3.195. In addition, copies must be
91.18provided to the chairs and ranking minority members of the legislative committees and
91.19divisions with jurisdiction over taxation.
91.20 Subd. 4. Appropriation. (a) $100,000 is appropriated from the general fund to the
91.21commissioner of revenue for fiscal year 2014 for the cost of preparing the report under
91.22subdivision 1.
91.23(b) The appropriation under this subdivision is a onetime appropriation and is not
91.24included in the base budget.
91.25EFFECTIVE DATE.This section is effective the day following final enactment.
91.26 Sec. 28. REPEALER.
91.27Minnesota Statutes 2012, sections 16A.725; and 256.9658, are repealed.
91.28EFFECTIVE DATE.This section is effective July 1, 2013.
91.31 Section 1. Minnesota Statutes 2012, section 116J.8737, subdivision 1, is amended to
91.32read:
92.1 Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
92.2have the meanings given.
92.3(b) "Qualified small business" means a business that has been certified by the
92.4commissioner under subdivision 2.
92.5(c) "Qualified investor" means an investor who has been certified by the
92.6commissioner under subdivision 3.
92.7(d) "Qualified fund" means a pooled angel investment network fund that has been
92.8certified by the commissioner under subdivision 4.
92.9(e) "Qualified investment" means a cash investment in a qualified small business
92.10of a minimum of:
92.11(1) $10,000 in a calendar year by a qualified investor; or
92.12(2) $30,000 in a calendar year by a qualified fund.
92.13A qualified investment must be made in exchange for common stock, a partnership
92.14or membership interest, preferred stock, debt with mandatory conversion to equity, or an
92.15equivalent ownership interest as determined by the commissioner.
92.16(f) "Family" means a family member within the meaning of the Internal Revenue
92.17Code, section 267(c)(4).
92.18(g) "Pass-through entity" means a corporation that for the applicable taxable year is
92.19treated as an S corporation or a general partnership, limited partnership, limited liability
92.20partnership, trust, or limited liability company and which for the applicable taxable year is
92.21not taxed as a corporation under chapter 290.
92.22(h) "Intern" means a student of an accredited institution of higher education, or a
92.23former student who has graduated in the past six months from an accredited institution
92.24of higher education, who is employed by a qualified small business in a nonpermanent
92.25position for a duration of nine months or less that provides training and experience in the
92.26primary business activity of the business.
92.27(i) "Liquidation event" means a conversion of qualified investment for cash, cash
92.28and other consideration, or any other form of equity or debt interest.
92.29EFFECTIVE DATE.This section is effective for qualified small businesses
92.30certified after June 30, 2013.
92.31 Sec. 2. Minnesota Statutes 2012, section 116J.8737, subdivision 2, is amended to read:
92.32 Subd. 2. Certification of qualified small businesses. (a) Businesses may apply
92.33to the commissioner for certification as a qualified small business for a calendar year.
92.34The application must be in the form and be made under the procedures specified by the
92.35commissioner, accompanied by an application fee of $150. Application fees are deposited
93.1in the small business investment tax credit administration account in the special revenue
93.2fund. The application for certification for 2010 must be made available on the department's
93.3Web site by August 1, 2010. Applications for subsequent years' certification must be made
93.4available on the department's Web site by November 1 of the preceding year.
93.5(b) Within 30 days of receiving an application for certification under this subdivision,
93.6the commissioner must either certify the business as satisfying the conditions required of a
93.7qualified small business, request additional information from the business, or reject the
93.8application for certification. If the commissioner requests additional information from the
93.9business, the commissioner must either certify the business or reject the application within
93.1030 days of receiving the additional information. If the commissioner neither certifies the
93.11business nor rejects the application within 30 days of receiving the original application or
93.12within 30 days of receiving the additional information requested, whichever is later, then
93.13the application is deemed rejected, and the commissioner must refund the $150 application
93.14fee. A business that applies for certification and is rejected may reapply.
93.15(c) To receive certification, a business must satisfy all of the following conditions:
93.16(1) the business has its headquarters in Minnesota;
93.17(2) at least 51 percent of the business's employees are employed in Minnesota, and
93.1851 percent of the business's total payroll is paid or incurred in the state;
93.19(3) the business is engaged in, or is committed to engage in, innovation in Minnesota
93.20in one of the following as its primary business activity:
93.21(i) using proprietary technology to add value to a product, process, or service in a
93.22qualified high-technology field;
93.23(ii) researching or developing a proprietary product, process, or service in a qualified
93.24high-technology field; or
93.25(iii) researching, developing, or producing a new proprietary technology for use in
93.26the fields of agriculture, tourism, forestry, mining, manufacturing, or transportation;
93.27(4) other than the activities specifically listed in clause (3), the business is not
93.28engaged in real estate development, insurance, banking, lending, lobbying, political
93.29consulting, information technology consulting, wholesale or retail trade, leisure,
93.30hospitality, transportation, construction, ethanol production from corn, or professional
93.31services provided by attorneys, accountants, business consultants, physicians, or health
93.32care consultants;
93.33(5) the business has fewer than 25 employees;
93.34(6) the business must pay its employees annual wages of at least 175 percent of the
93.35federal poverty guideline for the year for a family of four and must pay its interns annual
93.36wages of at least 175 percent of the federal minimum wage used for federally covered
94.1employers, except that this requirement must be reduced proportionately for employees
94.2and interns who work less than full-time, and does not apply to an executive, officer, or
94.3member of the board of the business, or to any employee who owns, controls, or holds
94.4power to vote more than 20 percent of the outstanding securities of the business;
94.5(7) the business has (i) not been in operation for more than ten years, or (ii) the
94.6business has not been in operation for more than 20 years if the business is engaged
94.7in the research, development, or production of medical devices or pharmaceuticals for
94.8which United States Food and Drug Administration approval is required for use in the
94.9treatment or diagnosis of a disease or condition;
94.10(8) the business has not previously received private equity investments of more
94.11than $4,000,000;
94.12 (9) the business is not an entity disqualified under section
94.13clause (3)
94.14(10) the business has not issued securities that are traded on a public exchange.
94.15(d) In applying the limit under paragraph (c), clause (5), the employees in all members
94.16of the unitary business, as defined in section
94.17(e) In order for a qualified investment in a business to be eligible for tax credits
94.18(1) the business must have applied for and received certification for the calendar
94.19year in which the investment was made prior to the date on which the qualified investment
94.20was made
94.21(2) the business must not have issued securities that are traded on a public exchange;
94.22(3) the business must not issue securities that are traded on a public exchange within
94.23180 days after the date on which the qualified investment was made; and
94.24(4) the business must not have a liquidation event within 180 days after the date on
94.25which the qualified investment was made.
94.26(f) The commissioner must maintain a list of businesses certified under this
94.27subdivision for the calendar year and make the list accessible to the public on the
94.28department's Web site.
94.29(g) For purposes of this subdivision, the following terms have the meanings given:
94.30(1) "qualified high-technology field" includes aerospace, agricultural processing,
94.31renewable energy, energy efficiency and conservation, environmental engineering, food
94.32technology, cellulosic ethanol, information technology, materials science technology,
94.33nanotechnology, telecommunications, biotechnology, medical device products,
94.34pharmaceuticals, diagnostics, biologicals, chemistry, veterinary science, and similar
94.35fields; and
95.1(2) "proprietary technology" means the technical innovations that are unique and
95.2legally owned or licensed by a business and includes, without limitation, those innovations
95.3that are patented, patent pending, a subject of trade secrets, or copyrighted.
95.4EFFECTIVE DATE.This section is effective for qualified small businesses
95.5certified after June 30, 2013, except the amendments to paragraph (c), clause (7), are
95.6effective the day following final enactment.
95.7 Sec. 3. Minnesota Statutes 2012, section 116J.8737, subdivision 8, is amended to read:
95.8 Subd. 8. Data privacy. (a) Data contained in an application submitted to the
95.9commissioner under subdivision 2, 3, or 4 are nonpublic data, or private data on
95.10individuals, as defined in section
95.11data items are public:
95.12(1) the name, mailing address, telephone number, e-mail address, contact person's
95.13name, and industry type of a qualified small business upon approval of the application
95.14and certification by the commissioner under subdivision 2;
95.15(2) the name of a qualified investor upon approval of the application and certification
95.16by the commissioner under subdivision 3;
95.17(3) the name of a qualified fund upon approval of the application and certification
95.18by the commissioner under subdivision 4;
95.19(4) for credit certificates issued under subdivision 5, the amount of the credit
95.20certificate issued, amount of the qualifying investment, the name of the qualifying investor
95.21or qualifying fund that received the certificate, and the name of the qualifying small
95.22business in which the qualifying investment was made;
95.23(5) for credits revoked under subdivision 7, paragraph (a), the amount revoked and
95.24the name of the qualified investor or qualified fund; and
95.25(6) for credits revoked under subdivision 7, paragraphs (b) and (c), the amount
95.26revoked and the name of the qualified small business.
95.27(b) The following data, including data classified as nonpublic or private, must be
95.28provided to the consultant for use in conducting the program evaluation under subdivision
95.2910:
95.30(1) the commissioner of employment and economic development shall provide data
95.31contained in an application for certification received from a qualified small business,
95.32qualified investor, or qualified fund, and any annual reporting information received on a
95.33qualified small business, qualified investor, or qualified fund; and
95.34(2) the commissioner of revenue shall provide data contained in any applicable tax
95.35returns of a qualified small business, qualified investor, or qualified fund.
96.1EFFECTIVE DATE.This section is effective the day following final enactment.
96.2 Sec. 4. [136A.129] GREATER MINNESOTA INTERNSHIP PROGRAM.
96.3 Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in
96.4this subdivision have the meanings given to them.
96.5(b) "Eligible employer" means a taxpayer under section 290.01 with employees
96.6located in greater Minnesota.
96.7(c) "Eligible institution" means a Minnesota public postsecondary institution or a
96.8Minnesota private, nonprofit, baccalaureate degree-granting college or university.
96.9(d) "Eligible student" means a student enrolled in an eligible institution who has
96.10completed one-half of the credits necessary for the respective degree or certification.
96.11(e) "Greater Minnesota" means the area of the state outside of the counties of Anoka,
96.12Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and
96.13Wright.
96.14 Subd. 2. Program established. The Office of Higher Education shall administer
96.15a greater Minnesota internship program through eligible institutions to provide credit at
96.16the eligible institution for internships and tax credits for eligible employers who hire
96.17interns for employment in greater Minnesota.
96.18 Subd. 3. Program components. (a) An intern must be an eligible student who has
96.19been admitted to a major program that is related to the intern experience as determined
96.20by the eligible institution.
96.21(b) To participate in the program, an eligible institution must:
96.22(1) enter into written agreements with eligible employers to provide internships that
96.23are at least 12 weeks long and located in greater Minnesota;
96.24(2) determine that the work experience of the internship is related to the eligible
96.25student's course of study; and
96.26(3) provide academic credit for the successful completion of the internship or ensure
96.27that it fulfills requirements necessary to complete a vocational technical education program.
96.28(c) To participate in the program, an eligible employer must enter into a written
96.29agreement with an eligible institution specifying that the intern:
96.30(1) would not have been hired without the tax credit described in subdivision 4;
96.31(2) did not work for the employer in the same or a similar job prior to entering
96.32the agreement;
96.33(3) does not replace an existing employee;
96.34(4) has not previously participated in the program;
96.35(5) will be employed at a location in greater Minnesota;
97.1(6) will be paid at least minimum wage for a minimum of 16 hours per week for a
97.2period of at least 12 weeks; and
97.3(7) will be supervised and evaluated by the employer.
97.4(d) The written agreement between the eligible institution and the eligible employer
97.5must certify a credit amount to the employer, not to exceed $2,000 per intern. The total
97.6dollar amount of credits that an eligible institution certifies to eligible employers in a
97.7calendar year may not exceed the amount of its allocation under subdivision 4.
97.8(e) Participating eligible institutions and eligible employers must report annually to
97.9the office. The report must include at least the following:
97.10(1) the number of interns hired;
97.11(2) the number of hours and weeks worked by interns; and
97.12(3) the compensation paid to interns.
97.13(f) An internship required to complete an academic program does not qualify for the
97.14greater Minnesota internship program under this section.
97.15 Subd. 4. Tax credit allowed. An employer is entitled to a tax credit as provided in
97.16section 290.06, subdivision 36. The total amount of credits allocated in a calendar year
97.17must not exceed $2,000,000. The office shall determine relevant criteria to allocate the
97.18tax credits including the geographic distribution of credits to work locations outside the
97.19metropolitan area, and shall allocate credits to eligible institutions that meet the criteria on
97.20a first come, first served basis. Any credits allocated to an institution but not used may be
97.21reallocated to eligible institutions. The office shall allocate a portion of the administrative
97.22fee under section 290.06, subdivision 36, to participating eligible institutions for their
97.23administrative costs.
97.24 Subd. 5. Reports to the legislature. (a) By February 1, 2015, the office and the
97.25Department of Revenue shall report to the legislature on the greater Minnesota internship
97.26program. The report must include at least the following:
97.27(1) the number and dollar amount of credits allowed;
97.28(2) the number of interns employed under the program; and
97.29(3) the cost of administering the program.
97.30(b) By February 1, 2016, the office and the Department of Revenue shall report to the
97.31legislature with an analysis of the effectiveness of the program in stimulating businesses
97.32to hire interns and in assisting participating interns in finding permanent career positions.
97.33This report must include the number of students who participated in the program who
97.34were subsequently employed full-time by the employer.
97.35EFFECTIVE DATE.This section is effective for taxable years beginning after
97.36December 31, 2013.
98.1 Sec. 5. Minnesota Statutes 2012, section 289A.08, subdivision 3, is amended to read:
98.2 Subd. 3. Corporations. (a) A corporation that is subject to the state's jurisdiction to
98.3tax under section
98.4
98.5(b) Members of a unitary business that are required to file a combined report on one
98.6return must designate a member of the unitary business to be responsible for tax matters,
98.7including the filing of returns, the payment of taxes, additions to tax, penalties, interest,
98.8or any other payment, and for the receipt of refunds of taxes or interest paid in excess of
98.9taxes lawfully due. The designated member must be a member of the unitary business that
98.10is filing the single combined report and either:
98.11(1) a corporation that is subject to the taxes imposed by chapter 290; or
98.12(2) a corporation that is not subject to the taxes imposed by chapter 290:
98.13(i) Such corporation consents by filing the return as a designated member under this
98.14clause to remit taxes, penalties, interest, or additions to tax due from the members of the
98.15unitary business subject to tax, and receive refunds or other payments on behalf of other
98.16members of the unitary business. The member designated under this clause is a "taxpayer"
98.17for the purposes of this chapter and chapter 270C, and is liable for any liability imposed
98.18on the unitary business under this chapter and chapter 290.
98.19(ii) If the state does not otherwise have the jurisdiction to tax the member designated
98.20under this clause, consenting to be the designated member does not create the jurisdiction
98.21to impose tax on the designated member, other than as described in item (i).
98.22(iii) The member designated under this clause must apply for a business tax account
98.23identification number.
98.24(c) The commissioner shall adopt rules for the filing of one return on behalf of the
98.25members of an affiliated group of corporations that are required to file a combined report.
98.26All members of an affiliated group that are required to file a combined report must file one
98.27return on behalf of the members of the group under rules adopted by the commissioner.
98.28(d) If a corporation claims on a return that it has paid tax in excess of the amount of
98.29taxes lawfully due, that corporation must include on that return information necessary for
98.30payment of the tax in excess of the amount lawfully due by electronic means.
98.31EFFECTIVE DATE.This section is effective for taxable years beginning after
98.32December 31, 2012.
98.33 Sec. 6. Minnesota Statutes 2012, section 290.01, subdivision 19, as amended by Laws
98.342013, chapter 3, section 3, is amended to read:
99.1 Subd. 19. Net income. The term "net income" means the federal taxable income,
99.2as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
99.3date named in this subdivision, incorporating the federal effective dates of changes to the
99.4Internal Revenue Code and any elections made by the taxpayer in accordance with the
99.5Internal Revenue Code in determining federal taxable income for federal income tax
99.6purposes, and with the modifications provided in subdivisions 19a to 19f.
99.7 In the case of a regulated investment company or a fund thereof, as defined in section
99.8851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
99.9company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
99.10except that:
99.11 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
99.12Revenue Code does not apply;
99.13 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
99.14Revenue Code must be applied by allowing a deduction for capital gain dividends and
99.15exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
99.16Revenue Code; and
99.17 (3) the deduction for dividends paid must also be applied in the amount of any
99.18undistributed capital gains which the regulated investment company elects to have treated
99.19as provided in section 852(b)(3)(D) of the Internal Revenue Code.
99.20 The net income of a real estate investment trust as defined and limited by section
99.21856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
99.22taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
99.23 The net income of a designated settlement fund as defined in section 468B(d) of
99.24the Internal Revenue Code means the gross income as defined in section 468B(b) of the
99.25Internal Revenue Code.
99.26 The Internal Revenue Code of 1986, as amended through April 14, 2011, shall be in
99.27effect for taxable years beginning after December 31, 1996, and before January 1, 2012,
99.28and for taxable years beginning after December 31, 2012. The Internal Revenue Code of
99.291986, as amended through January 3, 2013, is in effect for taxable years beginning after
99.30December 31, 2011, and before January 1, 2013.
99.31The provisions of sections 315 and 331 of the American Taxpayer Relief Act of
99.322012, Public Law 112-240, extension of increased expensing limitations and treatment
99.33of certain real property as section 179 property and extension and modification of bonus
99.34depreciation, are effective at the same time they become effective for federal purposes.
100.1 Except as otherwise provided, references to the Internal Revenue Code in
100.2subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
100.3the applicable year.
100.4EFFECTIVE DATE.This section is effective for taxable years beginning after
100.5December 31, 2012.
100.6 Sec. 7. Minnesota Statutes 2012, section 290.01, subdivision 19b, is amended to read:
100.7 Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
100.8and trusts, there shall be subtracted from federal taxable income:
100.9 (1) net interest income on obligations of any authority, commission, or
100.10instrumentality of the United States to the extent includable in taxable income for federal
100.11income tax purposes but exempt from state income tax under the laws of the United States;
100.12 (2) if included in federal taxable income, the amount of any overpayment of income
100.13tax to Minnesota or to any other state, for any previous taxable year, whether the amount
100.14is received as a refund or as a credit to another taxable year's income tax liability;
100.15 (3) the amount paid to others, less the amount used to claim the credit allowed under
100.16section
100.17to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
100.18transportation of each qualifying child in attending an elementary or secondary school
100.19situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
100.20resident of this state may legally fulfill the state's compulsory attendance laws, which
100.21is not operated for profit, and which adheres to the provisions of the Civil Rights Act
100.22of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
100.23tuition as defined in section
100.24"textbooks" includes books and other instructional materials and equipment purchased
100.25or leased for use in elementary and secondary schools in teaching only those subjects
100.26legally and commonly taught in public elementary and secondary schools in this state.
100.27Equipment expenses qualifying for deduction includes expenses as defined and limited in
100.28section
100.29books and materials used in the teaching of religious tenets, doctrines, or worship, the
100.30purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
100.31or materials for, or transportation to, extracurricular activities including sporting events,
100.32musical or dramatic events, speech activities, driver's education, or similar programs. No
100.33deduction is permitted for any expense the taxpayer incurred in using the taxpayer's or
100.34the qualifying child's vehicle to provide such transportation for a qualifying child. For
101.1purposes of the subtraction provided by this clause, "qualifying child" has the meaning
101.2given in section 32(c)(3) of the Internal Revenue Code;
101.3 (4) income as provided under section
101.4 (5) to the extent included in federal adjusted gross income, income realized on
101.5disposition of property exempt from tax under section
101.6 (6) to the extent not deducted or not deductible pursuant to section 408(d)(8)(E)
101.7of the Internal Revenue Code in determining federal taxable income by an individual
101.8who does not itemize deductions for federal income tax purposes for the taxable year, an
101.9amount equal to 50 percent of the excess of charitable contributions over $500 allowable
101.10as a deduction for the taxable year under section 170(a) of the Internal Revenue Code,
101.11under the provisions of Public Law 109-1 and Public Law 111-126;
101.12 (7) for individuals who are allowed a federal foreign tax credit for taxes that do not
101.13qualify for a credit under section
101.14of subnational foreign taxes for the taxable year, but not to exceed the total subnational
101.15foreign taxes reported in claiming the foreign tax credit. For purposes of this clause,
101.16"federal foreign tax credit" means the credit allowed under section 27 of the Internal
101.17Revenue Code, and "carryover of subnational foreign taxes" equals the carryover allowed
101.18under section 904(c) of the Internal Revenue Code minus national level foreign taxes to
101.19the extent they exceed the federal foreign tax credit;
101.20 (8) in each of the five tax years immediately following the tax year in which an
101.21addition is required under subdivision 19a, clause (7), or 19c, clause
101.22of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of the
101.23delayed depreciation. For purposes of this clause, "delayed depreciation" means the amount
101.24of the addition made by the taxpayer under subdivision 19a, clause (7), or subdivision 19c,
101.25clause
101.26of any net operating loss under section 172 of the Internal Revenue Code generated for the
101.27tax year of the addition. The resulting delayed depreciation cannot be less than zero;
101.28 (9) job opportunity building zone income as provided under section
101.29 (10) to the extent included in federal taxable income, the amount of compensation
101.30paid to members of the Minnesota National Guard or other reserve components of the
101.31United States military for active service, excluding compensation for services performed
101.32under the Active Guard Reserve (AGR) program. For purposes of this clause, "active
101.33service" means (i) state active service as defined in section
101.34(1); or (ii) federally funded state active service as defined in section
101.355b
101.36subdivision 3
102.1 (11) to the extent included in federal taxable income, the amount of compensation
102.2paid to Minnesota residents who are members of the armed forces of the United States
102.3or United Nations for active duty performed under United States Code, title 10; or the
102.4authority of the United Nations;
102.5 (12) an amount, not to exceed $10,000, equal to qualified expenses related to a
102.6qualified donor's donation, while living, of one or more of the qualified donor's organs
102.7to another person for human organ transplantation. For purposes of this clause, "organ"
102.8means all or part of an individual's liver, pancreas, kidney, intestine, lung, or bone marrow;
102.9"human organ transplantation" means the medical procedure by which transfer of a human
102.10organ is made from the body of one person to the body of another person; "qualified
102.11expenses" means unreimbursed expenses for both the individual and the qualified donor
102.12for (i) travel, (ii) lodging, and (iii) lost wages net of sick pay, except that such expenses
102.13may be subtracted under this clause only once; and "qualified donor" means the individual
102.14or the individual's dependent, as defined in section 152 of the Internal Revenue Code. An
102.15individual may claim the subtraction in this clause for each instance of organ donation for
102.16transplantation during the taxable year in which the qualified expenses occur;
102.17 (13) in each of the five tax years immediately following the tax year in which an
102.18addition is required under subdivision 19a, clause (8), or 19c, clause
102.19of a shareholder of a corporation that is an S corporation, an amount equal to one-fifth of
102.20the addition made by the taxpayer under subdivision 19a, clause (8), or 19c, clause
102.21 (13), in the case of a shareholder of a corporation that is an S corporation, minus the
102.22positive value of any net operating loss under section 172 of the Internal Revenue Code
102.23generated for the tax year of the addition. If the net operating loss exceeds the addition for
102.24the tax year, a subtraction is not allowed under this clause;
102.25 (14) to the extent included in the federal taxable income of a nonresident of
102.26Minnesota, compensation paid to a service member as defined in United States Code, title
102.2710, section 101(a)(5), for military service as defined in the Servicemembers Civil Relief
102.28Act, Public Law 108-189, section 101(2);
102.29 (15) to the extent included in federal taxable income, the amount of national service
102.30educational awards received from the National Service Trust under United States Code,
102.31title 42, sections 12601 to 12604, for service in an approved Americorps National Service
102.32program;
102.33(16) to the extent included in federal taxable income, discharge of indebtedness
102.34income resulting from reacquisition of business indebtedness included in federal taxable
102.35income under section 108(i) of the Internal Revenue Code. This subtraction applies only
103.1to the extent that the income was included in net income in a prior year as a result of the
103.2addition under section
103.3(17) the amount of the net operating loss allowed under section
103.411
103.5(18) the amount of expenses not allowed for federal income tax purposes due
103.6to claiming the railroad track maintenance credit under section 45G(a) of the Internal
103.7Revenue Code.
103.8EFFECTIVE DATE.This section is effective for taxable years beginning after
103.9December 31, 2012.
103.10 Sec. 8. Minnesota Statutes 2012, section 290.01, subdivision 19c, is amended to read:
103.11 Subd. 19c. Corporations; additions to federal taxable income. For corporations,
103.12there shall be added to federal taxable income:
103.13 (1) the amount of any deduction taken for federal income tax purposes for income,
103.14excise, or franchise taxes based on net income or related minimum taxes, including but not
103.15limited to the tax imposed under section
103.16another state, a political subdivision of another state, the District of Columbia, or any
103.17foreign country or possession of the United States;
103.18 (2) interest not subject to federal tax upon obligations of: the United States, its
103.19possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
103.20state, any of its political or governmental subdivisions, any of its municipalities, or any
103.21of its governmental agencies or instrumentalities; the District of Columbia; or Indian
103.22tribal governments;
103.23 (3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
103.24Revenue Code;
103.25 (4) the amount of any net operating loss deduction taken for federal income tax
103.26purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
103.27deduction under section 810 of the Internal Revenue Code;
103.28 (5) the amount of any special deductions taken for federal income tax purposes
103.29under sections 241 to 247 and 965 of the Internal Revenue Code;
103.30 (6) losses from the business of mining, as defined in section
103.31clause (a), that are not subject to Minnesota income tax;
103.32 (7) the amount of any capital losses deducted for federal income tax purposes under
103.33sections 1211 and 1212 of the Internal Revenue Code;
103.34
103.35
104.1
104.2614 and 291 of the Internal Revenue Code;
104.3
104.4beginning before December 31, 1986, and for which amortization deductions were elected
104.5under section 169 of the Internal Revenue Code of 1954, as amended through December
104.631, 1985, the amount of the amortization deduction allowed in computing federal taxable
104.7income for those facilities;
104.8
104.9
104.10
104.11
104.12
104.13through to the partner because the partnership elected to pay the tax on the income under
104.14section 6242(a)(2) of the Internal Revenue Code;
104.15
104.16
104.17
104.18Internal Revenue Code, for the taxable year when subpart F income is calculated without
104.19regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
104.20
104.21168(k)(1)(A) and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if
104.22the taxpayer has an activity that in the taxable year generates a deduction for depreciation
104.23under section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable
104.24year that the taxpayer is not allowed to claim for the taxable year, "the depreciation
104.25allowed under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess
104.26of the depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A)
104.27over the amount of the loss from the activity that is not allowed in the taxable year. In
104.28succeeding taxable years when the losses not allowed in the taxable year are allowed, the
104.29depreciation under section 168(k)(1)(A) and (k)(4)(A) is allowed;
104.30
104.31the Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
104.32Revenue Code of 1986, as amended through December 31, 2003;
104.33
104.34the deduction allowable under section 199 of the Internal Revenue Code;
104.35
104.36
105.1
105.2
105.3
105.4
105.5
105.6
105.7
105.8
105.9
105.10
105.11
105.12
105.13
105.14
105.15
105.16
105.17
105.18
105.19
105.20
105.21
105.22
105.23
105.24
105.25
105.26
105.27
105.28
105.29
105.30
105.31
105.32
105.33
105.34
105.35
106.1
106.2
106.3
106.4
106.5
106.6
106.7
106.8
106.9
106.10
106.11
106.12
106.13
106.14
106.15
106.16
106.17indebtedness and deferred under section 108(i) of the Internal Revenue Code.
106.18EFFECTIVE DATE.This section is effective for taxable years beginning after
106.19December 31, 2012.
106.20 Sec. 9. Minnesota Statutes 2012, section 290.01, subdivision 19d, is amended to read:
106.21 Subd. 19d. Corporations; modifications decreasing federal taxable income. For
106.22corporations, there shall be subtracted from federal taxable income after the increases
106.23provided in subdivision 19c:
106.24 (1) the amount of foreign dividend gross-up added to gross income for federal
106.25income tax purposes under section 78 of the Internal Revenue Code;
106.26 (2) the amount of salary expense not allowed for federal income tax purposes due to
106.27claiming the work opportunity credit under section 51 of the Internal Revenue Code;
106.28 (3) any dividend (not including any distribution in liquidation) paid within the
106.29taxable year by a national or state bank to the United States, or to any instrumentality of
106.30the United States exempt from federal income taxes, on the preferred stock of the bank
106.31owned by the United States or the instrumentality;
106.32 (4) amounts disallowed for intangible drilling costs due to differences between
106.33this chapter and the Internal Revenue Code in taxable years beginning before January
106.341, 1987, as follows:
107.1 (i) to the extent the disallowed costs are represented by physical property, an amount
107.2equal to the allowance for depreciation under Minnesota Statutes 1986, section
107.3subdivision 7
107.4 (ii) to the extent the disallowed costs are not represented by physical property, an
107.5amount equal to the allowance for cost depletion under Minnesota Statutes 1986, section
107.7 (5) the deduction for capital losses pursuant to sections 1211 and 1212 of the
107.8Internal Revenue Code, except that:
107.9 (i) for capital losses incurred in taxable years beginning after December 31, 1986,
107.10capital loss carrybacks shall not be allowed;
107.11 (ii) for capital losses incurred in taxable years beginning after December 31, 1986,
107.12a capital loss carryover to each of the 15 taxable years succeeding the loss year shall be
107.13allowed;
107.14 (iii) for capital losses incurred in taxable years beginning before January 1, 1987, a
107.15capital loss carryback to each of the three taxable years preceding the loss year, subject to
107.16the provisions of Minnesota Statutes 1986, section
107.17 (iv) for capital losses incurred in taxable years beginning before January 1, 1987,
107.18a capital loss carryover to each of the five taxable years succeeding the loss year to the
107.19extent such loss was not used in a prior taxable year and subject to the provisions of
107.20Minnesota Statutes 1986, section
107.21 (6) an amount for interest and expenses relating to income not taxable for federal
107.22income tax purposes, if (i) the income is taxable under this chapter and (ii) the interest and
107.23expenses were disallowed as deductions under the provisions of section 171(a)(2), 265 or
107.24291 of the Internal Revenue Code in computing federal taxable income;
107.25 (7) in the case of mines, oil and gas wells, other natural deposits, and timber for
107.26which percentage depletion was disallowed pursuant to subdivision 19c, clause
107.27reasonable allowance for depletion based on actual cost. In the case of leases the deduction
107.28must be apportioned between the lessor and lessee in accordance with rules prescribed
107.29by the commissioner. In the case of property held in trust, the allowable deduction must
107.30be apportioned between the income beneficiaries and the trustee in accordance with the
107.31pertinent provisions of the trust, or if there is no provision in the instrument, on the basis
107.32of the trust's income allocable to each;
107.33 (8) for certified pollution control facilities placed in service in a taxable year
107.34beginning before December 31, 1986, and for which amortization deductions were elected
107.35under section 169 of the Internal Revenue Code of 1954, as amended through December
108.131, 1985, an amount equal to the allowance for depreciation under Minnesota Statutes
108.21986, section
108.3 (9) amounts included in federal taxable income that are due to refunds of income,
108.4excise, or franchise taxes based on net income or related minimum taxes paid by the
108.5corporation to Minnesota, another state, a political subdivision of another state, the
108.6District of Columbia, or a foreign country or possession of the United States to the extent
108.7that the taxes were added to federal taxable income under
108.8clause (1), in a prior taxable year;
108.9
108.10
108.11
108.12
108.13
108.14
108.15subdivision 1
108.16
108.17allowed to be deducted or capitalized under section 44(d)(7) of the Internal Revenue Code;
108.18
108.19tax purposes under section 280C(c) of the Internal Revenue Code, but only to the extent
108.20that the amount exceeds the amount of the credit allowed under section
108.21
108.22due to claiming the Indian employment credit under section 45A(a) of the Internal
108.23Revenue Code;
108.24
108.25
108.26
108.27
108.28
108.29
108.30
108.31
108.32Internal Revenue Code, for the taxable year when subpart F income is calculated without
108.33regard to the provisions of Division C, title III, section 303(b) of Public Law 110-343;
108.34
108.35addition is required under subdivision 19c, clause
108.36of the delayed depreciation. For purposes of this clause, "delayed depreciation" means the
109.1amount of the addition made by the taxpayer under subdivision 19c, clause
109.2resulting delayed depreciation cannot be less than zero;
109.3
109.4addition is required under subdivision 19c, clause
109.5of the amount of the addition;
109.6
109.7income resulting from reacquisition of business indebtedness included in federal taxable
109.8income under section 108(i) of the Internal Revenue Code. This subtraction applies only
109.9to the extent that the income was included in net income in a prior year as a result of the
109.10addition under
109.11(18) the amount of expenses not allowed for federal income tax purposes due
109.12to claiming the railroad track maintenance credit under section 45G(a) of the Internal
109.13Revenue Code.
109.14EFFECTIVE DATE.This section is effective for taxable years beginning after
109.15December 31, 2012.
109.16 Sec. 10. Minnesota Statutes 2012, section 290.06, subdivision 2c, is amended to read:
109.17 Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income
109.18taxes imposed by this chapter upon married individuals filing joint returns and surviving
109.19spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
109.20applying to their taxable net income the following schedule of rates:
109.21 (1) On the first
109.22 (2) On all over
109.23 (3) On all over
109.24(4) On all over $250,000, 9.85 percent.
109.25 Married individuals filing separate returns, estates, and trusts must compute their
109.26income tax by applying the above rates to their taxable income, except that the income
109.27brackets will be one-half of the above amounts.
109.28 (b) The income taxes imposed by this chapter upon unmarried individuals must be
109.29computed by applying to taxable net income the following schedule of rates:
109.30 (1) On the first
109.31 (2) On all over
109.32 (3) On all over
109.33(4) On all over $150,000, 9.85 percent.
110.1 (c) The income taxes imposed by this chapter upon unmarried individuals qualifying
110.2as a head of household as defined in section 2(b) of the Internal Revenue Code must be
110.3computed by applying to taxable net income the following schedule of rates:
110.4 (1) On the first
110.5 (2) On all over
110.6 (3) On all over
110.7(4) On all over $200,000, 9.85 percent.
110.8 (d) In lieu of a tax computed according to the rates set forth in this subdivision, the
110.9tax of any individual taxpayer whose taxable net income for the taxable year is less than
110.10an amount determined by the commissioner must be computed in accordance with tables
110.11prepared and issued by the commissioner of revenue based on income brackets of not
110.12more than $100. The amount of tax for each bracket shall be computed at the rates set
110.13forth in this subdivision, provided that the commissioner may disregard a fractional part of
110.14a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.
110.15 (e) An individual who is not a Minnesota resident for the entire year must compute
110.16the individual's Minnesota income tax as provided in this subdivision. After the
110.17application of the nonrefundable credits provided in this chapter, the tax liability must
110.18then be multiplied by a fraction in which:
110.19 (1) the numerator is the individual's Minnesota source federal adjusted gross income
110.20as defined in section 62 of the Internal Revenue Code and increased by the additions
110.21required under section
110.22(13), and (16) to (18), and reduced by the Minnesota assignable portion of the subtraction
110.23for United States government interest under section
110.24(1), and the subtractions under section
110.25(14), (16), and (17), after applying the allocation and assignability provisions of section
110.27 (2) the denominator is the individual's federal adjusted gross income as defined in
110.28section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
110.29section
110.30(18), and reduced by the amounts specified in section
110.31(8), (9), (13), (14), (16), and (17).
110.32EFFECTIVE DATE.This section is effective for taxable years beginning after
110.33December 31, 2012.
110.34 Sec. 11. Minnesota Statutes 2012, section 290.06, subdivision 2d, is amended to read:
111.1 Subd. 2d. Inflation adjustment of brackets. (a) For taxable years beginning after
111.2December 31,
111.3bracket for which a tax is imposed in subdivision 2c shall be adjusted for inflation by the
111.4percentage determined under paragraph (b). For the purpose of making the adjustment as
111.5provided in this subdivision all of the rate brackets provided in subdivision 2c shall be the
111.6rate brackets as they existed for taxable years beginning after December 31,
111.7and before January 1,
111.8changed. The dollar amounts setting forth the tax shall be adjusted to reflect the changes
111.9in the rate brackets. The rate brackets as adjusted must be rounded to the nearest $10
111.10amount. If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.
111.11(b) The commissioner shall adjust the rate brackets and by the percentage determined
111.12pursuant to the provisions of section 1(f) of the Internal Revenue Code, except that in
111.13section 1(f)(3)(B) the word
111.14
111.15ending on August 31,
111.16in each subsequent year, from the 12 months ending on August 31,
111.17months ending on August 31 of the year preceding the taxable year. The determination of
111.18the commissioner pursuant to this subdivision shall not be considered a "rule" and shall
111.19not be subject to the Administrative Procedure Act contained in chapter 14.
111.20No later than December 15 of each year, the commissioner shall announce the
111.21specific percentage that will be used to adjust the tax rate brackets.
111.22EFFECTIVE DATE.This section is effective for taxable years beginning after
111.23December 31, 2012.
111.24 Sec. 12. Minnesota Statutes 2012, section 290.06, is amended by adding a subdivision
111.25to read:
111.26 Subd. 36. Greater Minnesota internship credit. (a) A taxpayer who is an eligible
111.27employer may take a credit against the tax due under this chapter equal to the lesser of:
111.28(1) 40 percent of the compensation paid to an intern qualifying under the program
111.29established under section 136A.129, but not to exceed $2,000 per intern; or
111.30(2) the amount certified to the taxpayer by an eligible institution out of the
111.31institution's allocation of credits for the calendar year, as provided in section 136A.129.
111.32(b) Credits allowed to a partnership, a limited liability company taxed as a
111.33partnership, an S corporation, or multiple owners of property are passed through to the
111.34partners, members, shareholders, or owners, respectively, pro rata to each partner, member,
111.35shareholder, or owner based on their share of the entity's income for the taxable year.
112.1(c) If the amount of credit which the taxpayer is eligible to receive under this
112.2subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
112.3revenue shall refund the excess to the taxpayer.
112.4(d) An amount necessary to pay claims for refund provided in this subdivision is
112.5appropriated from the general fund to the commissioner of revenue.
112.6(e) An amount equal to one percent of the total amount of the credits authorized
112.7under section 136A.129, subdivision 4, for an administrative fee for the Office of Higher
112.8Education and participating eligible institutions is appropriated from the general fund to
112.9the commissioner of revenue, for a transfer to the Office of Higher Education.
112.10(f) For purposes of this subdivision, the terms "eligible employer" and "eligible
112.11institution" have the meanings given in section 136A.129.
112.12EFFECTIVE DATE.This section is effective for taxable years beginning after
112.13December 31, 2013.
112.14 Sec. 13. Minnesota Statutes 2012, section 290.0677, subdivision 2, is amended to read:
112.15 Subd. 2. Definitions. (a) For purposes of this section, the following terms have
112.16the meanings given.
112.17 (b) "Designated area" means a:
112.18 (1) combat zone designated by Executive Order from the President of the United
112.19States;
112.20 (2) qualified hazardous duty area, designated in Public Law; or
112.21 (3) location certified by the U. S. Department of Defense as eligible for combat zone
112.22tax benefits due to the location's direct support of military operations.
112.23 (c) "Active military service" means active duty service in any of the United States
112.24armed forces, the National Guard, or reserves.
112.25 (d) "Qualified individual" means an individual who has:
112.26 (1)
112.27 (i) has served at least 20 years in the military
112.28 (ii) has a service-connected disability rating of 100 percent for a total and permanent
112.29disability; or
112.30 (iii) has been determined by the military to be eligible for compensation from a
112.31pension or other retirement pay from the federal government for service in the military,
112.32as computed under United States Code, title 10, sections 1401 to 1414, 1447 to 1455,
112.33or 12733; and
112.34 (2) separated from military service before the end of the taxable year.
113.1 (e) "Adjusted gross income" has the meaning given in section 61 of the Internal
113.2Revenue Code.
113.3EFFECTIVE DATE.This section is effective for taxable years beginning after
113.4December 31, 2012.
113.5 Sec. 14. Minnesota Statutes 2012, section 290.068, subdivision 3, is amended to read:
113.6 Subd. 3. Limitation; carryover. (a)(1) The credit for a taxable year beginning
113.7before January 1, 2010, and after December 31, 2012, shall not exceed the liability for tax.
113.8"Liability for tax" for purposes of this section means the sum of the tax imposed under
113.9section
113.10of the nonrefundable credits allowed under this chapter, on all of the entities required to
113.11be included on the combined report of the unitary business. If the amount of the credit
113.12allowed exceeds the liability for tax of the taxpayer, but is allowed as a result of the
113.13liability for tax of other members of the unitary group for the taxable year, the taxpayer
113.14must allocate the excess as a research credit to another member of the unitary group.
113.15 (2) In the case of a corporation which is a partner in a partnership, the credit allowed
113.16for the taxable year shall not exceed the lesser of the amount determined under clause (1)
113.17for the taxable year or an amount (separately computed with respect to the corporation's
113.18interest in the trade or business or entity) equal to the amount of tax attributable to that
113.19portion of taxable income which is allocable or apportionable to the corporation's interest
113.20in the trade or business or entity.
113.21 (b) If the amount of the credit determined under this section for any taxable year
113.22exceeds the limitation under clause (a) including amounts allocated to other members
113.23of the unitary group, the excess shall be a research credit carryover to each of the 15
113.24succeeding taxable years. The entire amount of the excess unused credit for the taxable
113.25year shall be carried first to the earliest of the taxable years to which the credit may be
113.26carried and then to each successive year to which the credit may be carried. The amount
113.27of the unused credit which may be added under this clause shall not exceed the taxpayer's
113.28liability for tax less the research credit for the taxable year.
113.29EFFECTIVE DATE.This section is effective for taxable years beginning after
113.30December 31, 2012.
113.31 Sec. 15. Minnesota Statutes 2012, section 290.068, subdivision 6a, is amended to read:
113.32 Subd. 6a. Credit to be refundable. If the amount of credit allowed in this section
113.33for qualified research expenses incurred in taxable years beginning after December 31,
114.12009, and before January 1, 2013, exceeds the taxpayer's tax liability under this chapter,
114.2the commissioner shall refund the excess amount. The credit allowed for qualified research
114.3expenses incurred in taxable years beginning after December 31, 2009, and before January
114.41, 2013, must be used before any research credit earned under subdivision 3.
114.5EFFECTIVE DATE.This section is effective for taxable years beginning after
114.6December 31, 2012.
114.7 Sec. 16. Minnesota Statutes 2012, section 290.0681, subdivision 1, is amended to read:
114.8 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
114.9have the meanings given.
114.10(b) "Account" means the historic credit administration account in the special
114.11revenue fund.
114.12(c) "Office" means the State Historic Preservation Office of the Minnesota Historical
114.13Society.
114.14(d) "Project" means rehabilitation of a certified historic structure, as defined in
114.15section 47(c)(3)(A) of the Internal Revenue Code, that is located in Minnesota and is
114.16allowed a federal credit
114.17(e) "Society" means the Minnesota Historical Society.
114.18(f) "Federal credit" means the credit allowed under section 47(a)(2) of the Internal
114.19Revenue Code.
114.20(g) "Placed in service" has the meaning used in section 47 of the Internal Revenue
114.21Code.
114.22(h) "Qualified rehabilitation expenditures" has the meaning given in section 47 of
114.23the Internal Revenue Code.
114.24EFFECTIVE DATE.This section is effective the day following final enactment.
114.25 Sec. 17. Minnesota Statutes 2012, section 290.0681, subdivision 3, is amended to read:
114.26 Subd. 3. Applications; allocations. (a) To qualify for a credit or grant under this
114.27section, the developer of a project must apply to the office before the rehabilitation begins.
114.28The application must contain the information and be in the form prescribed by the office.
114.29The office may collect a fee for application of up to
114.30rehabilitation expenditures, up to $40,000, based on estimated qualified rehabilitation
114.31
114.32expenses related to administering the credit and preparing the economic impact report
114.33in subdivision 9. Application fees are deposited in the account. The application must
115.1indicate if the application is for a credit or a grant in lieu of the credit or a combination of
115.2the two and designate the taxpayer qualifying for the credit or the recipient of the grant.
115.3 (b) Upon approving an application for credit, the office shall issue allocation
115.4certificates that:
115.5 (1) verify eligibility for the credit or grant;
115.6 (2) state the amount of credit or grant anticipated with the project, with the credit
115.7amount equal to 100 percent and the grant amount equal to 90 percent of the federal
115.8credit anticipated in the application;
115.9 (3) state that the credit or grant allowed may increase or decrease if the federal
115.10credit the project receives at the time it is placed in service is different than the amount
115.11anticipated at the time the allocation certificate is issued; and
115.12 (4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer
115.13or grant recipient is entitled to receive the credit or grant at the time the project is placed
115.14in service, provided that date is within three calendar years following the issuance of
115.15the allocation certificate.
115.16 (c) The office, in consultation with the commissioner
115.17if the project is eligible for a credit or a grant under this section and must notify the
115.18developer in writing of its determination. Eligibility for the credit is subject to review
115.19and audit by the commissioner
115.20 (d) The federal credit recapture and repayment requirements under section 50 of the
115.21Internal Revenue Code do not apply to the credit allowed under this section.
115.22(e) Any decision of the office under paragraph (c) may be challenged as a contested
115.23case under chapter 14. The contested case proceeding must be initiated within 45 days of
115.24the date of written notification by the office.
115.25EFFECTIVE DATE.This section is effective the day following final enactment
115.26and the change in paragraph (a) applies to applications first received on or after the day
115.27following final enactment.
115.28 Sec. 18. Minnesota Statutes 2012, section 290.0681, subdivision 4, is amended to read:
115.29 Subd. 4. Credit certificates; grants. (a)(1) The developer of a project for which the
115.30office has issued an allocation certificate must notify the office when the project is placed
115.31in service. Upon verifying that the project has been placed in service, and was allowed a
115.32federal credit, the office must issue a credit certificate to the taxpayer designated in the
115.33application or must issue a grant to the recipient designated in the application. The credit
115.34certificate must state the amount of the credit.
115.35 (2) The credit amount equals the federal credit allowed for the project.
116.1 (3) The grant amount equals 90 percent of the federal credit allowed for the project.
116.2 (b) The recipient of a credit certificate may assign the certificate to another taxpayer,
116.3which is then allowed the credit under this section or section
116.4assignment is not valid unless the assignee notifies the commissioner within 30 days of the
116.5date that the assignment is made. The commissioner shall prescribe the forms necessary
116.6for notifying the commissioner of the assignment of a credit certificate and for claiming
116.7a credit by assignment.
116.8 (c) Credits passed through to partners, members, shareholders, or owners pursuant to
116.9subdivision 5 are not an assignment of a credit certificate under this subdivision.
116.10 (d) A grant agreement between the office and the recipient of a grant may allow the
116.11grant to be issued to another individual or entity.
116.12EFFECTIVE DATE.This section is effective the day following final enactment.
116.13 Sec. 19. Minnesota Statutes 2012, section 290.0681, subdivision 5, is amended to read:
116.14 Subd. 5. Partnerships; multiple owners. Credits granted to a partnership, a limited
116.15liability company taxed as a partnership, S corporation, or multiple owners of property
116.16are passed through to the partners, members, shareholders, or owners, respectively, pro
116.17rata to each partner, member, shareholder, or owner based on their share of the entity's
116.18assets or as specially allocated in their organizational documents or any other executed
116.19agreement, as of the last day of the taxable year.
116.20EFFECTIVE DATE.This section is effective the day following final enactment.
116.21 Sec. 20. Minnesota Statutes 2012, section 290.0681, subdivision 10, is amended to read:
116.22 Subd. 10. Sunset. This section expires after fiscal year
116.23the office's authority to issue credit certificates under subdivision 4 based on allocation
116.24certificates that were issued before fiscal year
116.25 2024, and the reporting requirements in subdivision 9 remain in effect through the year
116.26following the year in which all allocation certificates have either been canceled or resulted
116.27in issuance of credit certificates, or
116.28EFFECTIVE DATE.This section is effective the day following final enactment.
116.29 Sec. 21. Minnesota Statutes 2012, section 290.091, subdivision 1, is amended to read:
116.30 Subdivision 1. Imposition of tax. In addition to all other taxes imposed by this
116.31chapter a tax is imposed on individuals, estates, and trusts equal to the excess (if any) of
117.1(a) an amount equal to
117.2subtracting the exemption amount, over
117.3(b) the regular tax for the taxable year.
117.4EFFECTIVE DATE.This section is effective for taxable years beginning after
117.5December 31, 2012.
117.6 Sec. 22. Minnesota Statutes 2012, section 290.091, subdivision 2, is amended to read:
117.7 Subd. 2. Definitions. For purposes of the tax imposed by this section, the following
117.8terms have the meanings given:
117.9 (a) "Alternative minimum taxable income" means the sum of the following for
117.10the taxable year:
117.11 (1) the taxpayer's federal alternative minimum taxable income as defined in section
117.1255(b)(2) of the Internal Revenue Code;
117.13 (2) the taxpayer's itemized deductions allowed in computing federal alternative
117.14minimum taxable income, but excluding:
117.15 (i) the charitable contribution deduction under section 170 of the Internal Revenue
117.16Code;
117.17 (ii) the medical expense deduction;
117.18 (iii) the casualty, theft, and disaster loss deduction; and
117.19 (iv) the impairment-related work expenses of a disabled person;
117.20 (3) for depletion allowances computed under section 613A(c) of the Internal
117.21Revenue Code, with respect to each property (as defined in section 614 of the Internal
117.22Revenue Code), to the extent not included in federal alternative minimum taxable income,
117.23the excess of the deduction for depletion allowable under section 611 of the Internal
117.24Revenue Code for the taxable year over the adjusted basis of the property at the end of the
117.25taxable year (determined without regard to the depletion deduction for the taxable year);
117.26 (4) to the extent not included in federal alternative minimum taxable income, the
117.27amount of the tax preference for intangible drilling cost under section 57(a)(2) of the
117.28Internal Revenue Code determined without regard to subparagraph (E);
117.29 (5) to the extent not included in federal alternative minimum taxable income, the
117.30amount of interest income as provided by section
117.31 (6) the amount of addition required by section
117.32to (9), (12), (13), and (16) to (18);
117.33 less the sum of the amounts determined under the following:
117.34 (1) interest income as defined in section
118.1 (2) an overpayment of state income tax as provided by section
118.219b
118.3 (3) the amount of investment interest paid or accrued within the taxable year on
118.4indebtedness to the extent that the amount does not exceed net investment income, as
118.5defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include
118.6amounts deducted in computing federal adjusted gross income;
118.7 (4) amounts subtracted from federal taxable income as provided by section
118.8subdivision 19b
118.9(5) the amount of the net operating loss allowed under section
118.1011
118.11 In the case of an estate or trust, alternative minimum taxable income must be
118.12computed as provided in section 59(c) of the Internal Revenue Code.
118.13 (b) "Investment interest" means investment interest as defined in section 163(d)(3)
118.14of the Internal Revenue Code.
118.15 (c) "Net minimum tax" means the minimum tax imposed by this section.
118.16 (d) "Regular tax" means the tax that would be imposed under this chapter (without
118.17regard to this section and section 290.032), reduced by the sum of the nonrefundable
118.18credits allowed under this chapter.
118.19 (e) "Tentative minimum tax" equals
118.20income after subtracting the exemption amount determined under subdivision 3.
118.21EFFECTIVE DATE.This section is effective for taxable years beginning after
118.22December 31, 2012.
118.23 Sec. 23. Minnesota Statutes 2012, section 290.091, subdivision 6, is amended to read:
118.24 Subd. 6. Credit for prior years' liability. (a) A credit is allowed against the tax
118.25imposed by this chapter on individuals, trusts, and estates equal to the minimum tax
118.26credit for the taxable year. The minimum tax credit equals the adjusted net minimum
118.27tax for taxable years beginning after December 31, 1988, reduced by the minimum tax
118.28credits allowed in a prior taxable year. The credit may not exceed the excess (if any) for
118.29the taxable year of
118.30(1) the regular tax, over
118.31(2) the greater of (i) the tentative alternative minimum tax, or (ii) zero.
118.32(b) The adjusted net minimum tax for a taxable year equals the lesser of the net
118.33minimum tax or the excess (if any) of
118.34(1) the tentative minimum tax, over
118.35(2)
119.1(i) adjusted gross income as defined in section 62 of the Internal Revenue Code,
119.2(ii) interest income as defined in section
119.3(iii) interest on specified private activity bonds, as defined in section 57(a)(5) of the
119.4Internal Revenue Code, to the extent not included under clause (ii),
119.5(iv) depletion as defined in section 57(a)(1), determined without regard to the last
119.6sentence of paragraph (1), of the Internal Revenue Code, less
119.7(v) the deductions allowed in computing alternative minimum taxable income
119.8provided in subdivision 2, paragraph (a), clause (2) of the first series of clauses and clauses
119.9(1), (2), and (3) of the second series of clauses, and
119.10(vi) the exemption amount determined under subdivision 3.
119.11In the case of an individual who is not a Minnesota resident for the entire year,
119.12adjusted net minimum tax must be multiplied by the fraction defined in section
119.13subdivision 2c
119.14must be multiplied by the fraction defined under subdivision 4, paragraph (b).
119.15EFFECTIVE DATE.This section is effective for taxable years beginning after
119.16December 31, 2012.
119.17 Sec. 24. Minnesota Statutes 2012, section 290.0921, subdivision 3, is amended to read:
119.18 Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable
119.19income" is Minnesota net income as defined in section
119.20includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e),
119.21(f), and (h) of the Internal Revenue Code. If a corporation files a separate company
119.22Minnesota tax return, the minimum tax must be computed on a separate company basis.
119.23If a corporation is part of a tax group filing a unitary return, the minimum tax must be
119.24computed on a unitary basis. The following adjustments must be made.
119.25(1) For purposes of the depreciation adjustments under section 56(a)(1) and
119.2656(g)(4)(A) of the Internal Revenue Code, the basis for depreciable property placed in
119.27service in a taxable year beginning before January 1, 1990, is the adjusted basis for federal
119.28income tax purposes, including any modification made in a taxable year under section
119.30paragraph (c).
119.31For taxable years beginning after December 31, 2000, the amount of any remaining
119.32modification made under section
119.33section
119.34allowance in the first taxable year after December 31, 2000.
120.1(2) The portion of the depreciation deduction allowed for federal income tax
120.2purposes under section 168(k) of the Internal Revenue Code that is required as an addition
120.3under section
120.4alternative minimum taxable income.
120.5(3) The subtraction for depreciation allowed under section
120.619d
120.7minimum taxable income.
120.8(4) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d)
120.9of the Internal Revenue Code does not apply.
120.10(5) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal
120.11Revenue Code does not apply.
120.12
120.13
120.14
120.15Revenue Code does not apply.
120.16
120.17Internal Revenue Code must be calculated without regard to subparagraph (E) and the
120.18subtraction under section
120.19
120.20Internal Revenue Code does not apply.
120.21
120.22under section 57(a)(6) of the Internal Revenue Code does not apply.
120.23
120.24or amortization on certain property placed in service before January 1, 1987, under section
120.2557(a)(7) of the Internal Revenue Code, the deduction allowable for the taxable year is the
120.26deduction allowed under section
120.27For taxable years beginning after December 31, 2000, the amount of any remaining
120.28modification made under section
120.29depreciation or amortization allowance in the first taxable year after December 31, 2004.
120.30
120.31in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable
120.32income" as it is used in section 56(g) of the Internal Revenue Code, means alternative
120.33minimum taxable income as defined in this subdivision, determined without regard to the
120.34adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.
120.35
120.36section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section
121.156(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend
121.2gross-up subtracted as provided in section
121.3amount of refunds of income, excise, or franchise taxes subtracted as provided in section
121.5
121.6
121.7in a job opportunity building zone as provided under section
121.8
121.9in a biotechnology and health sciences industry zone as provided under section
121.10Items of tax preference must not be reduced below zero as a result of the
121.11modifications in this subdivision.
121.12EFFECTIVE DATE.This section is effective for taxable years beginning after
121.13December 31, 2012.
121.14 Sec. 25. Minnesota Statutes 2012, section 290.0922, subdivision 1, is amended to read:
121.15 Subdivision 1. Imposition. (a) In addition to the tax imposed by this chapter without
121.16regard to this section, the franchise tax imposed on a corporation required to file under
121.17section
121.18under section
121.33 (b) A tax is imposed for each taxable year on a corporation required to file a return
121.34under section
121.363
121.37tax imposed under this paragraph is due on or before the due date of the return for the
122.1taxpayer due under section
122.2the return to be used for payment of this tax. The tax under this paragraph is equal to
122.3the following amounts:
122.20 (c) The commissioner shall adjust the dollar amounts of both the tax and the property,
122.21payrolls, and sales or receipts thresholds in paragraphs (a) and (b) by the percentage
122.22determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
122.23that in section 1(f)(3)(B) the word "2012" must be substituted for the word "1992." For
122.242014, the commissioner shall determine the percentage change from the 12 months ending
122.25on August 31, 2012, to the 12 months ending on August 31, 2013, and in each subsequent
122.26year, from the 12 months ending on August 31, 2012, to the 12 months ending on August
122.2731 of the year preceding the taxable year. The determination of the commissioner pursuant
122.28to this subdivision is not a "rule" subject to the Administrative Procedure Act contained in
122.29chapter 14. The tax amounts as adjusted must be rounded to the nearest $10 amount and
122.30the threshold amounts must be adjusted to the nearest $10,000 amount. For tax amounts
122.31that end in $5, the amount is rounded up to the nearest $10 amount and for the threshold
122.32amounts that end in $5,000, the amount is rounded up to the nearest $10,000.
122.33EFFECTIVE DATE.This section is effective for taxable years beginning after
122.34December 31, 2012.
122.35 Sec. 26. Minnesota Statutes 2012, section 290.095, subdivision 2, is amended to read:
122.36 Subd. 2. Defined and limited. (a) The term "net operating loss" as used in this
122.37section shall mean a net operating loss as defined in section 172(c) of the Internal Revenue
122.38Code, with the modifications specified in subdivision 4. The deductions provided in
123.1section
123.2
123.3(b) The term "net operating loss deduction" as used in this section means the
123.4aggregate of the net operating loss carryovers to the taxable year, computed in accordance
123.5with subdivision 3. The provisions of section 172(b) of the Internal Revenue Code relating
123.6to the carryback of net operating losses, do not apply.
123.7EFFECTIVE DATE.This section is effective for taxable years beginning after
123.8December 31, 2012.
123.9 Sec. 27. Minnesota Statutes 2012, section 290.10, subdivision 1, is amended to read:
123.10 Subdivision 1. Expenses, interest, and taxes.
123.11
123.12in any case be allowed for expenses, interest and taxes connected with or allocable against
123.13the production or receipt of all income not included in the measure of the tax imposed by
123.14this chapter, except that for corporations engaged in the business of mining or producing
123.15iron ore, the mining of which is subject to the occupation tax imposed by section
123.16subdivision 4
123.17that the expenses and other items are allowable under this chapter and are not deductible,
123.18capitalizable, retainable in basis, or taken into account by allowance or otherwise in
123.19computing the occupation tax and do not exceed the amounts taken for federal income tax
123.20purposes for that year. Occupation taxes imposed under chapter 298, royalty taxes imposed
123.21under chapter 299, or depletion expenses may not be deducted under this subdivision.
123.22 Sec. 28. Minnesota Statutes 2012, section 290.17, subdivision 4, is amended to read:
123.23 Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
123.24within this state or partly within and partly without this state is part of a unitary business,
123.25the entire income of the unitary business is subject to apportionment pursuant to section
123.27business is considered to be derived from any particular source and none may be allocated
123.28to a particular place except as provided by the applicable apportionment formula. The
123.29provisions of this subdivision do not apply to business income subject to subdivision 5,
123.30income of an insurance company, or income of an investment company determined under
123.31section
123.32(b) The term "unitary business" means business activities or operations which
123.33result in a flow of value between them. The term may be applied within a single legal
124.1entity or between multiple entities and without regard to whether each entity is a sole
124.2proprietorship, a corporation, a partnership or a trust.
124.3(c) Unity is presumed whenever there is unity of ownership, operation, and use,
124.4evidenced by centralized management or executive force, centralized purchasing,
124.5advertising, accounting, or other controlled interaction, but the absence of these
124.6centralized activities will not necessarily evidence a nonunitary business. Unity is also
124.7presumed when business activities or operations are of mutual benefit, dependent upon or
124.8contributory to one another, either individually or as a group.
124.9(d) Where a business operation conducted in Minnesota is owned by a business
124.10entity that carries on business activity outside the state different in kind from that
124.11conducted within this state, and the other business is conducted entirely outside the state, it
124.12is presumed that the two business operations are unitary in nature, interrelated, connected,
124.13and interdependent unless it can be shown to the contrary.
124.14(e) Unity of ownership
124.15more corporations are involved unless
124.16
124.17
124.18owners, either corporate or noncorporate, or by one or more of the member corporations
124.19of the group. For this purpose, the term "voting stock" shall include membership interests
124.20of mutual insurance holding companies formed under section
124.21(f) The net income and apportionment factors under section
124.22foreign corporations and other foreign entities which are part of a unitary business shall
124.23not be included in the net income or the apportionment factors of the unitary business;
124.24except that the income and apportionment factors of a foreign entity, other than an entity
124.25treated as a C corporation for federal income tax purposes, that are included in the federal
124.26taxable income, as defined in section 63 of the Internal Revenue Code as amended through
124.27the date named in section 290.01, subdivision 19, of a domestic corporation, domestic
124.28entity, or individual must be included in determining net income and the factors to be used
124.29in the apportionment of net income pursuant to section 290.191 or 290.20. A foreign
124.30corporation or other foreign entity which is not included on a combined report and which
124.31is required to file a return under this chapter shall file on a separate return basis.
124.32
124.33
124.34
124.35
124.36
125.1
125.2
125.3
125.4
125.5
125.6
125.7
125.8
125.9
125.10
125.11
125.12
125.13
125.14
125.15
125.16
125.17
125.18factors to be used in the apportionment of net income pursuant to section
125.20corporations or other domestic entities
125.21determined to be part of the unitary business pursuant to this subdivision, notwithstanding
125.22that foreign corporations or other foreign entities might be included in the unitary
125.23business; except that the income and apportionment factors of a foreign entity, other than
125.24an entity treated as a C corporation for federal income tax purposes, that is included in the
125.25federal taxable income, as defined in section 63 of the Internal Revenue Code as amended
125.26through the date named in section 290.01, subdivision 19, of a domestic corporation,
125.27domestic entity, or individual must be included in determining net income and the factors
125.28to be used in the apportionment of net income pursuant to section 290.191 or 290.20.
125.29
125.30
125.31
125.32
125.33
125.34a unitary business must file combined reports as the commissioner determines. On the
125.35reports, all intercompany transactions between entities included pursuant to paragraph
125.36 (g) must be eliminated and the entire net income of the unitary business determined in
126.1accordance with this subdivision is apportioned among the entities by using each entity's
126.2Minnesota factors for apportionment purposes in the numerators of the apportionment
126.3formula and the total factors for apportionment purposes of all entities included pursuant
126.4to paragraph
126.5otherwise provided by paragraph (f), all sales of the unitary business made within this
126.6state pursuant to section 290.191 or 290.20 must be included on the combined report of a
126.7corporation or other entity that is a member of the unitary business and is subject to the
126.8jurisdiction of this state to impose tax under this chapter.
126.9
126.10combined report for a fractional part of the common accounting period of the combined
126.11report:
126.12(1) its income includable in the combined report is its income incurred for that part
126.13of the year determined by proration or separate accounting; and
126.14(2) its sales, property, and payroll included in the apportionment formula must
126.15be prorated or accounted for separately.
126.16EFFECTIVE DATE.This section is effective for taxable years beginning after
126.17December 31, 2012.
126.18 Sec. 29. Minnesota Statutes 2012, section 290.191, subdivision 5, is amended to read:
126.19 Subd. 5. Determination of sales factor. For purposes of this section, the following
126.20rules apply in determining the sales factor.
126.21 (a) The sales factor includes all sales, gross earnings, or receipts received in the
126.22ordinary course of the business, except that the following types of income are not included
126.23in the sales factor:
126.24 (1) interest;
126.25 (2) dividends;
126.26 (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
126.27 (4) sales of property used in the trade or business, except sales of leased property of
126.28a type which is regularly sold as well as leased; and
126.29 (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
126.30Code or sales of stock
126.31
126.32
126.33 (b) Sales of tangible personal property are made within this state if the property is
126.34received by a purchaser at a point within this state, and the taxpayer is taxable in this state,
127.1regardless of the f.o.b. point, other conditions of the sale, or the ultimate destination
127.2of the property.
127.3 (c) Tangible personal property delivered to a common or contract carrier or foreign
127.4vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
127.5regardless of f.o.b. point or other conditions of the sale.
127.6 (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
127.7fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
127.8licensed by a state or political subdivision to resell this property only within the state of
127.9ultimate destination, the sale is made in that state.
127.10 (e) Sales made by or through a corporation that is qualified as a domestic
127.11international sales corporation under section 992 of the Internal Revenue Code are not
127.12considered to have been made within this state.
127.13 (f) Sales, rents, royalties, and other income in connection with real property is
127.14attributed to the state in which the property is located.
127.15 (g) Receipts from the lease or rental of tangible personal property, including finance
127.16leases and true leases, must be attributed to this state if the property is located in this
127.17state and to other states if the property is not located in this state. Receipts from the
127.18lease or rental of moving property including, but not limited to, motor vehicles, rolling
127.19stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
127.20factor to the extent that the property is used in this state. The extent of the use of moving
127.21property is determined as follows:
127.22 (1) A motor vehicle is used wholly in the state in which it is registered.
127.23 (2) The extent that rolling stock is used in this state is determined by multiplying
127.24the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
127.25which is the miles traveled within this state by the leased or rented rolling stock and the
127.26denominator of which is the total miles traveled by the leased or rented rolling stock.
127.27 (3) The extent that an aircraft is used in this state is determined by multiplying the
127.28receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
127.29the number of landings of the aircraft in this state and the denominator of which is the
127.30total number of landings of the aircraft.
127.31 (4) The extent that a vessel, mobile equipment, or other mobile property is used in
127.32the state is determined by multiplying the receipts from the lease or rental of the property
127.33by a fraction, the numerator of which is the number of days during the taxable year the
127.34property was in this state and the denominator of which is the total days in the taxable year.
127.35 (h) Royalties and other income
127.36for the use of or for the privilege of using intangible property, including patents,
128.1know-how, formulas, designs, processes, patterns, copyrights, trade names, service names,
128.2franchises, licenses, contracts, customer lists, or similar items, must be attributed to the
128.3state in which the property is used by the purchaser. If the property is used in more
128.4than one state, the royalties or other income must be apportioned to this state pro rata
128.5according to the portion of use in this state. If the portion of use in this state cannot be
128.6determined, the royalties or other income must be excluded from both the numerator
128.7and the denominator. Intangible property is used in this state if the purchaser uses the
128.8intangible property or the rights therein in the regular course of its business operations in
128.9this state, regardless of the location of the purchaser's customers.
128.10 (i) Sales of intangible property are made within the state in which the property is
128.11used by the purchaser. If the property is used in more than one state, the sales must be
128.12apportioned to this state pro rata according to the portion of use in this state. If the
128.13portion of use in this state cannot be determined, the sale must be excluded from both the
128.14numerator and the denominator of the sales factor. Intangible property is used in this
128.15state if the purchaser used the intangible property in the regular course of its business
128.16operations in this state.
128.17 (j) Receipts from the performance of services must be attributed to the state where
128.18the services are received. For the purposes of this section, receipts from the performance
128.19of services provided to a corporation, partnership, or trust may only be attributed to a state
128.20where it has a fixed place of doing business. If the state where the services are received is
128.21not readily determinable or is a state where the corporation, partnership, or trust receiving
128.22the service does not have a fixed place of doing business, the services shall be deemed
128.23to be received at the location of the office of the customer from which the services were
128.24ordered in the regular course of the customer's trade or business. If the ordering office
128.25cannot be determined, the services shall be deemed to be received at the office of the
128.26customer to which the services are billed.
128.27 (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
128.28from management, distribution, or administrative services performed by a corporation
128.29or trust for a fund of a corporation or trust regulated under United States Code, title 15,
128.30sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
128.31the fund resides. Under this paragraph, receipts for services attributed to shareholders are
128.32determined on the basis of the ratio of: (1) the average of the outstanding shares in the
128.33fund owned by shareholders residing within Minnesota at the beginning and end of each
128.34year; and (2) the average of the total number of outstanding shares in the fund at the
128.35beginning and end of each year. Residence of the shareholder, in the case of an individual,
128.36is determined by the mailing address furnished by the shareholder to the fund. Residence
129.1of the shareholder, when the shares are held by an insurance company as a depositor for
129.2the insurance company policyholders, is the mailing address of the policyholders. In
129.3the case of an insurance company holding the shares as a depositor for the insurance
129.4company policyholders, if the mailing address of the policyholders cannot be determined
129.5by the taxpayer, the receipts must be excluded from both the numerator and denominator.
129.6Residence of other shareholders is the mailing address of the shareholder.
129.7EFFECTIVE DATE.This section is effective for taxable years beginning after
129.8December 31, 2012.
129.9 Sec. 30. Minnesota Statutes 2012, section 290.21, subdivision 4, is amended to read:
129.10 Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
129.11of dividends received by a corporation during the taxable year from another corporation,
129.12in which the recipient owns 20 percent or more of the stock, by vote and value, not
129.13including stock described in section 1504(a)(4) of the Internal Revenue Code when the
129.14corporate stock with respect to which dividends are paid does not constitute the stock in
129.15trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
129.16constitute property held by the taxpayer primarily for sale to customers in the ordinary
129.17course of the taxpayer's trade or business, or when the trade or business of the taxpayer
129.18does not consist principally of the holding of the stocks and the collection of the income
129.19and gains therefrom; and
129.20 (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
129.21an affiliated company transferred in an overall plan of reorganization and the dividend
129.22is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
129.23amended through December 31, 1989;
129.24 (ii) the remaining 20 percent of dividends if the dividends are received from a
129.25corporation which is subject to tax under section
129.26affiliated group of corporations as defined by the Internal Revenue Code and the dividend
129.27is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
129.28amended through December 31, 1989, or is deducted under an election under section
129.29243(b) of the Internal Revenue Code; or
129.30 (iii) the remaining 20 percent of the dividends if the dividends are received from a
129.31property and casualty insurer as defined under section
129.32member of an affiliated group of corporations as defined by the Internal Revenue Code
129.33and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
129.341.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
129.35under an election under section 243(b) of the Internal Revenue Code.
130.1 (b) Seventy percent of dividends received by a corporation during the taxable year
130.2from another corporation in which the recipient owns less than 20 percent of the stock,
130.3by vote or value, not including stock described in section 1504(a)(4) of the Internal
130.4Revenue Code when the corporate stock with respect to which dividends are paid does not
130.5constitute the stock in trade of the taxpayer, or does not constitute property held by the
130.6taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
130.7business, or when the trade or business of the taxpayer does not consist principally of the
130.8holding of the stocks and the collection of income and gain therefrom.
130.9 (c) The dividend deduction provided in this subdivision shall be allowed only with
130.10respect to dividends that are included in a corporation's Minnesota taxable net income
130.11for the taxable year.
130.12 The dividend deduction provided in this subdivision does not apply to a dividend
130.13from a corporation which, for the taxable year of the corporation in which the distribution
130.14is made or for the next preceding taxable year of the corporation, is a corporation exempt
130.15from tax under section 501 of the Internal Revenue Code.
130.16The dividend deduction provided in this subdivision does not apply to a dividend
130.17received from a real estate investment trust as defined in section 856 of the Internal
130.18Revenue Code.
130.19 The dividend deduction provided in this subdivision applies to the amount of
130.20regulated investment company dividends only to the extent determined under section
130.21854(b) of the Internal Revenue Code.
130.22 The dividend deduction provided in this subdivision shall not be allowed with
130.23respect to any dividend for which a deduction is not allowed under the provisions of
130.24section 246(c) of the Internal Revenue Code.
130.25 (d) If dividends received by a corporation that does not have nexus with Minnesota
130.26under the provisions of Public Law 86-272 are included as income on the return of
130.27an affiliated corporation permitted or required to file a combined report under section
130.29determination as to whether the trade or business of the corporation consists principally
130.30of the holding of stocks and the collection of income and gains therefrom shall be made
130.31with reference to the trade or business of the affiliated corporation having a nexus with
130.32Minnesota.
130.33 (e) The deduction provided by this subdivision does not apply if the dividends are
130.34paid by a FSC as defined in section 922 of the Internal Revenue Code.
130.35 (f) If one or more of the members of the unitary group whose income is included on
130.36the combined report received a dividend, the deduction under this subdivision for each
131.1member of the unitary business required to file a return under this chapter is the product
131.2of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
131.3allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
131.4income apportionable to this state for the taxable year under section
131.5EFFECTIVE DATE.This section is effective for taxable years beginning after
131.6December 31, 2012.
131.7 Sec. 31. Minnesota Statutes 2012, section 298.01, subdivision 3b, is amended to read:
131.8 Subd. 3b. Deductions. (a) For purposes of determining taxable income under
131.9subdivision 3, the deductions from gross income include only those expenses necessary
131.10to convert raw ores to marketable quality. Such expenses include costs associated with
131.11refinement but do not include expenses such as transportation, stockpiling, marketing, or
131.12marine insurance that are incurred after marketable ores are produced, unless the expenses
131.13are included in gross income. The allowable deductions from a mine or plant that mines
131.14and produces more than one mineral, metal, or energy resource must be determined
131.15separately for the purposes of computing the deduction in section
131.16clause
131.17at the deduction from gross income for all production.
131.18(b) The provisions of section
131.19clauses (7) and
131.20 Sec. 32. Laws 2010, chapter 216, section 11, the effective date, is amended to read:
131.21EFFECTIVE DATE.This section is effective for taxable years beginning
131.22after December 31, 2009, for certified historic structures for which qualified
131.23
131.24 rehabilitation expenditures are first paid by the developer or taxpayer after May 1, 2010,
131.25for rehabilitation that occurs after May 1, 2010, provided that the application under
131.26subdivision 3 is submitted before the project is placed in service.
131.27EFFECTIVE DATE.This section is effective the day following final enactment
131.28and applies retroactively for taxable years beginning after December 31, 2009, and for
131.29certified historic structures placed in service after May 1, 2010, but the office may not
131.30issue certificates allowed under the change to this section until July 1, 2013.
131.31 Sec. 33. ESTIMATED TAXES; EXCEPTIONS.
132.1No addition to tax, penalties, or interest may be made under Minnesota Statutes,
132.2section 289A.25, for any period before September 15, 2013, with respect to an
132.3underpayment of estimated tax, to the extent that the underpayment was created or
132.4increased by the increase in income tax rates under this article.
132.5EFFECTIVE DATE.This section is effective for taxable years beginning after
132.6December 31, 2012.
132.7 Sec. 34. REPEALER.
132.8Minnesota Statutes 2012, sections 290.01, subdivision 6b; 290.06, subdivision 22a;
132.9and 290.0921, subdivision 7, are repealed.
132.10EFFECTIVE DATE.This section is effective for taxable years beginning after
132.11December 31, 2012.
132.14 Section 1. Minnesota Statutes 2012, section 270B.01, subdivision 8, is amended to read:
132.15 Subd. 8. Minnesota tax laws. For purposes of this chapter only, unless expressly
132.16stated otherwise, "Minnesota tax laws" means:
132.17 (1) the taxes, refunds, and fees administered by or paid to the commissioner under
132.18chapters 115B, 289A (except taxes imposed under sections
132.19290, 290A, 291, 292, 295, 297A, 297B, and 297H, or any similar Indian tribal tax
132.20administered by the commissioner pursuant to any tax agreement between the state and
132.21the Indian tribal government, and includes any laws for the assessment, collection, and
132.22enforcement of those taxes, refunds, and fees; and
132.23 (2) section
132.24EFFECTIVE DATE.This section is effective for gifts made after December 31,
132.252012.
132.26 Sec. 2. Minnesota Statutes 2012, section 270B.03, subdivision 1, is amended to read:
132.27 Subdivision 1. Who may inspect. Returns and return information must, on request,
132.28be made open to inspection by or disclosure to the data subject. The request must be made
132.29in writing or in accordance with written procedures of the chief disclosure officer of the
132.30department that have been approved by the commissioner to establish the identification
132.31of the person making the request as the data subject. For purposes of this chapter, the
132.32following are the data subject:
133.1(1) in the case of an individual return, that individual;
133.2(2) in the case of an income tax return filed jointly, either of the individuals with
133.3respect to whom the return is filed;
133.4(3) in the case of a return filed by a business entity, an officer of a corporation,
133.5a shareholder owning more than one percent of the stock, or any shareholder of an S
133.6corporation; a general partner in a partnership; the owner of a sole proprietorship; a
133.7member or manager of a limited liability company; a participant in a joint venture; the
133.8individual who signed the return on behalf of the business entity; or an employee who is
133.9responsible for handling the tax matters of the business entity, such as the tax manager,
133.10bookkeeper, or managing agent;
133.11(4) in the case of an estate return:
133.12(i) the personal representative or trustee of the estate; and
133.13(ii) any beneficiary of the estate as shown on the federal estate tax return;
133.14(5) in the case of a trust return:
133.15(i) the trustee or trustees, jointly or separately; and
133.16(ii) any beneficiary of the trust as shown in the trust instrument;
133.17(6) if liability has been assessed to a transferee under section
133.181
133.19relating to the assessed liability;
133.20(7) in the case of an Indian tribal government or an Indian tribal government-owned
133.21entity,
133.22(i) the chair of the tribal government, or
133.23(ii) any person authorized by the tribal government;
133.24(8) in the case of a successor as defined in section
133.25(b), the successor is the data subject and information may be disclosed as provided by
133.26section
133.27(9) in the case of a gift return, the donor.
133.28EFFECTIVE DATE.This section is effective the day following final enactment.
133.29 Sec. 3. Minnesota Statutes 2012, section 289A.10, subdivision 1, is amended to read:
133.30 Subdivision 1. Return required. In the case of a decedent who has an interest in
133.31property with a situs in Minnesota, the personal representative must submit a Minnesota
133.32estate tax return to the commissioner, on a form prescribed by the commissioner, if:
133.33(1) a federal estate tax return is required to be filed; or
133.34(2) the sum of the federal gross estate and federal adjusted taxable gifts made within
133.35three years of the date of the decedent's death exceeds $1,000,000.
134.1The return must contain a computation of the Minnesota estate tax due. The return
134.2must be signed by the personal representative.
134.3EFFECTIVE DATE.This section is effective for estates of decedents dying after
134.4December 31, 2012.
134.5 Sec. 4. Minnesota Statutes 2012, section 291.005, subdivision 1, is amended to read:
134.6 Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
134.7terms used in this chapter shall have the following meanings:
134.8 (1) "Commissioner" means the commissioner of revenue or any person to whom the
134.9commissioner has delegated functions under this chapter.
134.10 (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
134.11and otherwise determined for federal estate tax purposes under the Internal Revenue Code.
134.12 (3) "Internal Revenue Code" means the United States Internal Revenue Code of
134.131986, as amended through
134.14provisions of
134.15
134.16Internal Revenue Code.
134.17 (4) "Minnesota adjusted taxable estate" means federal adjusted taxable estate as
134.18defined by section 2011(b)(3) of the Internal Revenue Code, plus
134.19(i) the amount of deduction for state death taxes allowed under section 2058 of the
134.20Internal Revenue Code;
134.21(ii) the amount of taxable gifts, as defined in section 292.16, and made by the
134.22decedent within three years of the decedent's date of death; less
134.23
134.24subdivision 9
134.2510
134.26 (5) "Minnesota gross estate" means the federal gross estate of a decedent after (a)
134.27excluding therefrom any property included therein which has its situs outside Minnesota,
134.28and (b) including therein any property omitted from the federal gross estate which is
134.29includable therein, has its situs in Minnesota, and was not disclosed to federal taxing
134.30authorities.
134.31 (6) "Nonresident decedent" means an individual whose domicile at the time of
134.32death was not in Minnesota.
134.33 (7) "Personal representative" means the executor, administrator or other person
134.34appointed by the court to administer and dispose of the property of the decedent. If there
134.35is no executor, administrator or other person appointed, qualified, and acting within this
135.1state, then any person in actual or constructive possession of any property having a situs in
135.2this state which is included in the federal gross estate of the decedent shall be deemed
135.3to be a personal representative to the extent of the property and the Minnesota estate tax
135.4due with respect to the property.
135.5 (8) "Resident decedent" means an individual whose domicile at the time of death
135.6was in Minnesota.
135.7 (9) "Situs of property" means, with respect to:
135.8 (i) real property, the state or country in which it is located;
135.9 (ii) tangible personal property, the state or country in which it was normally kept or
135.10located at the time of the decedent's death or for a gift of tangible personal property within
135.11three years of death, the state or country in which it was normally kept or located when
135.12the gift was executed; and
135.13 (iii) intangible personal property, the state or country in which the decedent was
135.14domiciled at death or for a gift of intangible personal property within three years of death,
135.15the state or country in which the decedent was domiciled when the gift was executed.
135.16 For a nonresident decedent with an ownership interest in a pass-through entity
135.17with assets that include real or tangible personal property, situs of the real or tangible
135.18personal property is determined as if the pass-through entity does not exist and the real
135.19or tangible personal property is personally owned by the decedent. If the pass-through
135.20entity is owned by a person or persons in addition to the decedent, ownership of the
135.21property is attributed to the decedent in proportion to the decedent's capital ownership
135.22share of the pass-through entity.
135.23(10) "Pass-through entity" includes the following:
135.24(i) an entity electing S corporation status under section 1362 of the Internal Revenue
135.25Code;
135.26(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
135.27(iii) a single-member limited liability company or similar entity, regardless of
135.28whether it is taxed as an association or is disregarded for federal income tax purposes
135.29under Code of Federal Regulations, title 26, section 301.7701-3; or
135.30(iv) a trust to the extent the property is includible in the decedent's federal gross estate.
135.31EFFECTIVE DATE.This section is effective for decedents dying after December
135.3231, 2012.
135.33 Sec. 5. Minnesota Statutes 2012, section 291.03, subdivision 1, is amended to read:
135.34 Subdivision 1. Tax amount. (a) The tax imposed shall be an amount equal to the
135.35proportion of the maximum credit for state death taxes computed under section 2011 of
136.1the Internal Revenue Code, but using Minnesota adjusted taxable estate instead of federal
136.2adjusted taxable estate, as the Minnesota gross estate bears to the value of the federal
136.3gross estate. The tax is reduced by:
136.4 (1) the gift tax paid by the decedent under section 292.17 on gifts included in the
136.5Minnesota adjusted taxable estate and not subtracted as qualified farm or small business
136.6property; and
136.7 (2) any credit allowed under subdivision 1c.
136.8 (b) The tax determined under this subdivision must not be greater than the sum of
136.9the following amounts multiplied by a fraction, the numerator of which is the Minnesota
136.10gross estate and the denominator of which is the federal gross estate:
136.11 (1) the rates and brackets under section 2001(c) of the Internal Revenue Code
136.12multiplied by the sum of:
136.13 (i) the taxable estate, as defined under section 2051 of the Internal Revenue Code; plus
136.14 (ii) adjusted taxable gifts, as defined in section 2001(b) of the Internal Revenue
136.15Code; less
136.16(iii) the lesser of (A) the sum of the value of qualified small business property
136.17under subdivision 9, and the value of qualified farm property under subdivision 10, or
136.18(B) $4,000,000; less
136.19 (2) the amount of tax allowed under section 2001(b)(2) of the Internal Revenue
136.20Code; and less
136.21 (3) the federal credit allowed under section 2010 of the Internal Revenue Code.
136.22 (c) For purposes of this subdivision, "Internal Revenue Code" means the Internal
136.23Revenue Code of 1986, as amended through December 31, 2000.
136.24EFFECTIVE DATE.This section is effective for decedents dying after December
136.2531, 2012.
136.26 Sec. 6. Minnesota Statutes 2012, section 291.03, is amended by adding a subdivision
136.27to read:
136.28 Subd. 1c. Nonresident decedent tax credit. (a) The estate of a nonresident
136.29decedent that is subject to tax under this chapter on the value of Minnesota situs property
136.30held in a pass-through entity is allowed a credit against the tax due under this section
136.31equal to the lesser of:
136.32(1) the amount of estate or inheritance tax paid to another state that is attributable to
136.33the Minnesota situs property held in the pass-through entity; or
136.34(2) the amount of tax paid under this section attributable to the Minnesota situs
136.35property held in the pass-through entity.
137.1(b) The amount of tax attributable to the Minnesota situs property held in the
137.2pass-through entity must be determined by the increase in the estate or inheritance tax that
137.3results from including the market value of the property in the estate or treating the value
137.4as a taxable inheritance to the recipient of the property.
137.5EFFECTIVE DATE.This section is effective for decedents dying after December
137.631, 2012.
137.7 Sec. 7. Minnesota Statutes 2012, section 291.03, subdivision 8, is amended to read:
137.8 Subd. 8. Definitions. (a) For purposes of this section, the following terms have the
137.9meanings given in this subdivision.
137.10(b) "Family member" means a family member as defined in section 2032A(e)(2) of
137.11the Internal Revenue Code, or a trust whose present beneficiaries are all family members
137.12as defined in section 2032A(e)(2) of the Internal Revenue Code.
137.13(c) "Qualified heir" means a family member who acquired qualified property
137.14 upon the death of the decedent and satisfies the requirement under subdivision 9, clause
137.15
137.16(d) "Qualified property" means qualified small business property under subdivision
137.179 and qualified farm property under subdivision 10.
137.18EFFECTIVE DATE.This section is effective retroactively for estates of decedents
137.19dying after June 30, 2011.
137.20 Sec. 8. Minnesota Statutes 2012, section 291.03, subdivision 9, is amended to read:
137.21 Subd. 9. Qualified small business property. Property satisfying all of the following
137.22requirements is qualified small business property:
137.23(1) The value of the property was included in the federal adjusted taxable estate.
137.24(2) The property consists of the assets of a trade or business or shares of stock or
137.25other ownership interests in a corporation or other entity engaged in a trade or business.
137.26
137.27
137.28
137.29corporation or an ownership interest in another type of entity do not qualify under this
137.30subdivision if the shares or ownership interests are traded on a public stock exchange at
137.31any time during the three-year period ending on the decedent's date of death. For purposes
137.32of this subdivision, an ownership interest includes the interest the decedent is deemed to
137.33own under sections 2036, 2037, and 2038 of the Internal Revenue Code.
138.1(3) During the taxable year that ended before the decedent's death, the trade or
138.2business must not have been a passive activity within the meaning of section 469(c) of the
138.3Internal Revenue Code, and the decedent or the decedent's spouse must have materially
138.4participated in the trade or business within the meaning of section 469(h) of the Internal
138.5Revenue Code, excluding section 469(h)(3) of the Internal Revenue Code and any other
138.6provision provided by United States Treasury Department regulation that substitutes
138.7material participation in prior taxable years for material participation in the taxable year
138.8that ended before the decedent's death.
138.9(4) The gross annual sales of the trade or business were $10,000,000 or less for the
138.10last taxable year that ended before the date of the death of the decedent.
138.11
138.12securities, or assets not used in the operation of the trade or business. For property
138.13consisting of shares of stock or other ownership interests in an entity, the
138.14cash
138.15the trade or business held by the corporation or other entity must be deducted from the
138.16value of the property qualifying under this subdivision in proportion to the decedent's
138.17share of ownership of the entity on the date of death.
138.18
138.19decedent is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue
138.20Code, for the three-year period ending on the date of death of the decedent. In the case of
138.21a sole proprietor, if the property replaced similar property within the three-year period,
138.22the replacement property will be treated as having been owned for the three-year period
138.23ending on the date of death of the decedent.
138.24
138.25
138.26(7) For three years following the date of death of the decedent, the trade or business
138.27is not a passive activity within the meaning of section 469(c) of the Internal Revenue Code,
138.28and a family member materially participates in the operation of the trade or business within
138.29the meaning of section 469(h) of the Internal Revenue Code, excluding section 469(h)(3)
138.30of the Internal Revenue Code and any other provision provided by United States Treasury
138.31Department regulation that substitutes material participation in prior taxable years for
138.32material participation in the three years following the date of death of the decedent.
138.33(8) The estate and the qualified heir elect to treat the property as qualified small
138.34business property and agree, in the form prescribed by the commissioner, to pay the
138.35recapture tax under subdivision 11, if applicable.
139.1EFFECTIVE DATE.This section is effective retroactively for estates of decedents
139.2dying after June 30, 2011.
139.3 Sec. 9. Minnesota Statutes 2012, section 291.03, subdivision 10, is amended to read:
139.4 Subd. 10. Qualified farm property. Property satisfying all of the following
139.5requirements is qualified farm property:
139.6(1) The value of the property was included in the federal adjusted taxable estate.
139.7(2) The property consists of
139.8is owned by a person or entity that is either not subject to or is in compliance with section
139.10
139.11
139.12(3) For property taxes payable in the taxable year of the decedent's death, the
139.13property is classified as class 2a property under section 273.13, subdivision 23, and is
139.14classified as agricultural homestead, agricultural relative homestead, or special agricultural
139.15homestead under section 273.124.
139.16(4) The decedent continuously owned the property, including property the decedent
139.17is deemed to own under sections 2036, 2037, and 2038 of the Internal Revenue Code, for
139.18the three-year period ending on the date of death of the decedent either by ownership of
139.19the agricultural land or pursuant to holding an interest in an entity that is not subject to
139.20or is in compliance with section 500.24.
139.21
139.22
139.23section 273.13, subdivision 23, for three years following the date of death of the decedent.
139.24
139.25property and agree, in a form prescribed by the commissioner, to pay the recapture tax
139.26under subdivision 11, if applicable.
139.27EFFECTIVE DATE.This section is effective retroactively for estates of decedents
139.28dying after June 30, 2011.
139.29 Sec. 10. Minnesota Statutes 2012, section 291.03, subdivision 11, is amended to read:
139.30 Subd. 11. Recapture tax. (a) If, within three years after the decedent's death and
139.31before the death of the qualified heir, the qualified heir disposes of any interest in the
139.32qualified property, other than by a disposition to a family member, or a family member
139.33ceases to
139.34 satisfy the requirement under subdivision 9, clause (7); or 10, clause (5), an additional
140.1estate tax is imposed on the property. In the case of a sole proprietor, if the qualified heir
140.2replaces qualified small business property excluded under subdivision 9 with similar
140.3property, then the qualified heir will not be treated as having disposed of an interest in the
140.4qualified property.
140.5(b) The amount of the additional tax equals the amount of the exclusion claimed by
140.6the estate under subdivision 8, paragraph (d), multiplied by 16 percent.
140.7(c) The additional tax under this subdivision is due on the day which is six months
140.8after the date of the disposition or cessation in paragraph (a).
140.9EFFECTIVE DATE.This section is effective retroactively for estates of decedents
140.10dying after June 30, 2011.
140.11 Sec. 11. [292.16] DEFINITIONS.
140.12(a) For purposes of this chapter, the following definitions apply.
140.13(b) The definitions of terms defined in section 291.005 apply.
140.14(c) "Resident" has the meaning given in section 290.01, subdivision 7, paragraph (a).
140.15(d) "Taxable gifts" means:
140.16(1) the transfers by gift which are included in taxable gifts for federal gift tax
140.17purposes under the following sections of the Internal Revenue Code:
140.18(i) section 2503;
140.19(ii) sections 2511 to 2514; and
140.20(iii) sections 2516 to 2519; less
140.21(2) the deductions allowed in sections 2522 to 2524 of the Internal Revenue Code.
140.22EFFECTIVE DATE.This section is effective for taxable gifts made after June
140.2330, 2013.
140.24 Sec. 12. [292.17] GIFT TAX.
140.25 Subdivision 1. Imposition. (a) A tax is imposed on the transfer of property by gift
140.26by any individual resident or nonresident in an amount equal to ten percent of the amount
140.27of the taxable gift.
140.28(b) The donor is liable for payment of the tax. If the gift tax is not paid when due,
140.29the donee of any gift is personally liable for the tax to the extent of the value of the gift.
140.30 Subd. 2. Lifetime credit. A credit is allowed against the tax imposed under this
140.31section equal to $100,000. This credit applies to the cumulative amount of taxable gifts
140.32made by the donor during the donor's lifetime.
140.33 Subd. 3. Out-of-state gifts. Taxable gifts exclude the transfer of:
141.1(1) real property located outside of this state;
141.2(2) tangible personal property that was normally kept at a location outside of the
141.3state on the date the gift was executed; and
141.4(3) intangible personal property made by an individual who is not a resident at
141.5the time the gift was executed.
141.6EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.730, 2013.
141.8 Sec. 13. [292.18] RETURNS.
141.9(a) Any individual who makes a taxable gift during the taxable year shall file a gift
141.10tax return in the form and manner prescribed by the commissioner.
141.11(b) If the donor dies before filing the return, the executor of the donor's will or
141.12the administrator of the donor's estate shall file the return. If the donor becomes legally
141.13incompetent before filing the return, the guardian or conservator shall file the return.
141.14(c) The return must include:
141.15(1) each gift made during the calendar year which is to be included in computing the
141.16taxable gifts;
141.17(2) the deductions claimed and allowable under section 292.16, paragraph (d),
141.18clause (2);
141.19(3) a description of the gift, and the donee's name, address, and Social Security
141.20number;
141.21(4) the fair market value of gifts not made in money; and
141.22(5) any other information the commissioner requires to administer the gift tax.
141.23EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.2430, 2013.
141.25 Sec. 14. [292.19] FILING REQUIREMENTS.
141.26Gift tax returns must be filed by the April 15 following the close of the calendar
141.27year, except if a gift is made during the calendar year in which the donor dies, the return
141.28for the donor must be filed by the last date, including extensions, for filing the gift tax
141.29return for federal gift tax purposes for the donor.
141.30EFFECTIVE DATE.This section is effective for taxable gifts made after June
141.3130, 2013.
141.32 Sec. 15. [292.20] APPRAISAL OF PROPERTY; DECLARATION BY DONOR.
142.1The commissioner may require the donor or the donee to show the property subject to
142.2the tax under section 292.17 to the commissioner upon demand and may employ a suitable
142.3person to appraise the property. The donor shall submit a declaration, in a form prescribed
142.4by the commissioner and including any certification required by the commissioner, that the
142.5property shown by the donor on the gift tax return includes all of the property transferred by
142.6gift for the calendar year and not deductible under section 292.16, paragraph (d), clause (2).
142.7EFFECTIVE DATE.This section is effective for taxable gifts made after June
142.830, 2013.
142.9 Sec. 16. [292.21] ADMINISTRATIVE PROVISIONS.
142.10 Subdivision 1. Payment of tax; penalty for late payment. The tax imposed under
142.11section 292.17 is due and payable to the commissioner by the April 15 following the close
142.12of the calendar year during which the gift was made. The return required under section
142.13292.19 must be included with the payment. If a taxable gift is made during the calendar
142.14year in which the donor dies, the due date is the last date, including extensions, for filing
142.15the gift tax return for federal gift tax purposes for the donor. If any person fails to pay the
142.16tax due within the time specified under this section, a penalty applies equal to ten percent
142.17of the amount due and unpaid or $100, whichever is greater. The unpaid tax and penalty
142.18bear interest at the rate under section 270C.40 from the due date of the return.
142.19 Subd. 2. Extensions. The commissioner may, for good cause, extend the time for
142.20filing a gift tax return, if a written request is filed with a tentative return accompanied by a
142.21payment of the tax, which is estimated in the tentative return, on or before the last day for
142.22filing the return. Any person to whom an extension is granted must pay, in addition to the
142.23tax, interest at the rate under section 270C.40 from the date on which the tax would have
142.24been due without the extension.
142.25 Subd. 3. Changes in federal gift tax. If the amount of a taxpayer's taxable gifts
142.26for federal gift tax purposes, as reported on the taxpayer's federal gift tax return for any
142.27calendar year, is changed or corrected by the Internal Revenue Service or other officer
142.28of the United States or other competent authority, the taxpayer shall report the change or
142.29correction in federal taxable gifts within 180 days after the final determination of the change
142.30or correction, and concede the accuracy of the determination or provide a letter detailing
142.31how the federal determination is incorrect or does not change the Minnesota gift tax. Any
142.32taxpayer filing an amended federal gift tax return shall also file within 180 days an amended
142.33return under this chapter and shall include any information the commissioner requires. The
142.34time for filing the report or amended return may be extended by the commissioner upon due
142.35cause shown. Notwithstanding any limitation of time in this chapter, if, upon examination,
143.1the commissioner finds that the taxpayer is liable for the payment of an additional tax, the
143.2commissioner shall, within a reasonable time from the receipt of the report or amended
143.3return, notify the taxpayer of the amount of additional tax, together with interest computed
143.4at the rate under section 270C.40 from the date when the original tax was due and payable.
143.5Within 30 days of the mailing of the notice, the taxpayer shall pay the commissioner the
143.6amount of the additional tax and interest. If, upon examination of the report or amended
143.7return and related information, the commissioner finds that the taxpayer has overpaid the
143.8tax due the state, the commissioner shall refund the overpayment to the taxpayer.
143.9 Subd. 4. Application of federal rules. In administering the tax under this chapter,
143.10the commissioner shall apply the provisions of sections 2701 to 2704 of the Internal
143.11Revenue Code. The words "secretary or his delegate," as used in those sections of the
143.12Internal Revenue Code, mean the commissioner.
143.13EFFECTIVE DATE.This section is effective for taxable gifts made after June
143.1430, 2013.
143.17 Section 1. [116J.3738] QUALIFIED EXPANSIONS OF GREATER MINNESOTA
143.18BUSINESSES.
143.19 Subdivision 1. Definitions. (a) For purposes of this section, the following terms
143.20have the meanings given unless the context clearly indicates otherwise.
143.21(b) "Agricultural processing facility" means one or more facilities or operations
143.22that transform, package, sort, or grade livestock or livestock products, agricultural
143.23commodities, or plants or plant products into goods that are used for intermediate or final
143.24consumption including goods for nonfood use, and surrounding property.
143.25(c) "Business" means an individual, corporation, partnership, limited liability
143.26company, association, or any other entity engaged in operating a trade or business located
143.27in greater Minnesota.
143.28(d) "City" means a statutory or home rule charter city.
143.29(e) "Greater Minnesota" means the area of the state that excludes the metropolitan
143.30area, as defined in section 473.121, subdivision 2.
143.31(f) "Qualified business" means a business that satisfies the requirements of subdivision
143.322, has been certified under subdivision 3, and has not been terminated under subdivision 5.
143.33 Subd. 2. Qualified business. (a) A business is a qualified business if it satisfies the
143.34requirement of this paragraph and is not disqualified under the provisions of paragraph
143.35(b). To qualify, the business must:
144.1(1) have operated its trade or business in a city or cities in greater Minnesota for at
144.2least one year before applying under subdivision 3;
144.3(2) pay or agree to pay in the future each employee compensation, including benefits
144.4not mandated by law, that on an annualized basis equal at least 120 percent of the federal
144.5poverty level for a family of four;
144.6(3) plan and agree to expand its employment in one or more cities in greater Minnesota
144.7by the minimum number of employees required under subdivision 3, paragraph (c); and
144.8(4) received certification from the commissioner under subdivision 3 that it is a
144.9qualified business.
144.10(b) A business is not a qualified business if it is either:
144.11(1) primarily engaged in making retail sales to purchasers who are physically present
144.12at the business's location or locations in greater Minnesota; or
144.13(2) a public utility, as defined in section 336B.01.
144.14(c) The requirements in paragraph (a) that the business' operations and expansion be
144.15located in a city do not apply to an agricultural processing facility.
144.16 Subd. 3. Certification of qualified business. (a) A business may apply to the
144.17commissioner for certification as a qualified business under this section. The commissioner
144.18shall specify the form of the application, the manner and times for applying, and the
144.19information required to be included in the application. The commissioner may impose an
144.20application fee in an amount sufficient to defray the commissioner's cost of processing
144.21certifications. A business must file a copy of its application with the chief clerical officer
144.22of the city at the same time it applies to the commissioner. For an agricultural processing
144.23facility located outside the boundaries of a city, the business must file a copy of the
144.24application with the county auditor.
144.25(b) The commissioner shall certify each business as a qualified business that:
144.26(1) satisfies the requirements of subdivision 2;
144.27(2) the commissioner determines would not expand its operations in greater
144.28Minnesota without the tax incentives available under subdivision 4; and
144.29(3) enters a business subsidy agreement with the commissioner that pledges to
144.30satisfy the minimum expansion requirements of paragraph (c) within three years or less
144.31following execution of the agreement.
144.32The commissioner must act on an application within 60 days after its filing. Failure
144.33by the commissioner to take action within the 60-day period is deemed approval of the
144.34application.
144.35(c) The following minimum expansion requirements apply, based on the number of
144.36employees of the business at locations in greater Minnesota:
145.1(1) a business that employees 50 or fewer full-time equivalent employees in greater
145.2Minnesota when the agreement is executed must increase its employment by five or more
145.3full-time equivalent employees;
145.4(2) a business that employees more than 50 but fewer than 200 full-time equivalent
145.5employees in greater Minnesota when the agreement is executed must increase the number
145.6of its full-time equivalent employees in greater Minnesota by at least ten percent; or
145.7(3) a business that employees 200 or more full-time equivalent employees in greater
145.8Minnesota when the agreement is executed must increase its employment by at least 21
145.9full-time equivalent employees.
145.10(d) The city, or a county for an agricultural processing facility located outside the
145.11boundaries of a city, in which the business proposes to expand its operations may file
145.12comments supporting or opposing the application with the commissioner. The comments
145.13must be filed within 30 days after receipt by the city of the application and may include a
145.14notice of any contribution the city or county intends to make to encourage or support the
145.15business expansion, such as the use of tax increment financing, property tax abatement,
145.16additional city or county services, or other financial assistance.
145.17(e) Certification of a qualified business is effective for the 12-year period beginning
145.18on the first day of the calendar month immediately following execution of the business
145.19subsidy agreement.
145.20 Subd. 4. Available tax incentives. A qualified business is entitled to a sales tax
145.21exemption, as provided in section 297A.68, subdivision 49, for purchases made during the
145.22period the business was certified as a qualified business under this section.
145.23 Subd. 5. Termination of status as a qualified business. (a) The commissioner shall
145.24put in place a system for monitoring and ensuring that each certified business meets within
145.25three years or less the minimum expansion requirement in its business subsidy agreement
145.26and continues to satisfy those requirements for the rest of the duration of the certification
145.27under subdivision 3. This system must include regular reporting by the business to the
145.28commissioner of its baseline and current employment levels and any other information
145.29the commissioner determines may be useful to ensure compliance and for legislative
145.30evaluation of the effectiveness of the tax incentives.
145.31(b) A business ceases to be a qualified business and to qualify for the sales tax
145.32exemption under section 297A.68, subdivision 49, under this subdivision upon the earlier
145.33of the following dates:
145.34(1) the end of the duration of its designation under subdivision 3, paragraph (e),
145.35effective as provided under this subdivision or other provision of law for the tax incentive;
145.36or
146.1(2) the date the commissioner finds that the business has breached its business
146.2subsidy agreement and failed to satisfy the minimum expansion required by subdivision 3
146.3and its agreement.
146.4(c) A business may contest the commissioner's finding that it breached its business
146.5subsidy agreement under paragraph (b), clause (2), under the contested case procedures in
146.6the Administrative Procedure Act, chapter 14.
146.7(d) The commissioner, after consulting with the commissioner of revenue, may
146.8waive a breach of the business subsidy agreement and permit continued receipt of tax
146.9incentives, if the commissioner determines that termination of the tax incentives is not in
146.10the best interest of the state or the local government units and the business' breach of the
146.11agreement is a result of circumstances beyond its control including, but not limited to:
146.12(1) a natural disaster;
146.13(2) unforeseen industry trends;
146.14(3) a decline in economic activity in the overall or greater Minnesota economy; or
146.15(4) loss of a major supplier or customer of the business.
146.16EFFECTIVE DATE.This section is effective the day following final enactment.
146.17 Sec. 2. Minnesota Statutes 2012, section 297A.61, subdivision 3, is amended to read:
146.18 Subd. 3. Sale and purchase. (a) "Sale" and "purchase" include, but are not limited
146.19to, each of the transactions listed in this subdivision. In applying the provisions of this
146.20chapter, the terms "tangible personal property" and "retail sale" include the taxable
146.21services listed in paragraph (g), clause (6), items (i) to (vi) and (viii), and the provision
146.22of these taxable services, unless specifically provided otherwise. Services performed by
146.23an employee for an employer are not taxable. Services performed by a partnership or
146.24association for another partnership or association are not taxable if one of the entities owns
146.25or controls more than 80 percent of the voting power of the equity interest in the other
146.26entity. Services performed between members of an affiliated group of corporations are not
146.27taxable. For purposes of the preceding sentence, "affiliated group of corporations" means
146.28those entities that would be classified as members of an affiliated group as defined under
146.29United States Code, title 26, section 1504, disregarding the exclusions in section 1504(b).
146.30 (b) Sale and purchase include:
146.31 (1) any transfer of title or possession, or both, of tangible personal property, whether
146.32absolutely or conditionally, for a consideration in money or by exchange or barter; and
146.33 (2) the leasing of or the granting of a license to use or consume, for a consideration
146.34in money or by exchange or barter, tangible personal property, other than a manufactured
146.35home used for residential purposes for a continuous period of 30 days or more.
147.1 (c) Sale and purchase include the production, fabrication, printing, or processing of
147.2tangible personal property for a consideration for consumers who furnish either directly or
147.3indirectly the materials used in the production, fabrication, printing, or processing.
147.4 (d) Sale and purchase include the preparing for a consideration of food.
147.5Notwithstanding section
147.6to, the following:
147.7 (1) prepared food sold by the retailer;
147.8 (2) soft drinks;
147.9 (3) candy;
147.10 (4) dietary supplements; and
147.11 (5) all food sold through vending machines.
147.12 (e) A sale and a purchase includes the furnishing for a consideration of electricity,
147.13gas, water, or steam for use or consumption within this state.
147.14 (f) A sale and a purchase includes
147.15 the transfer for a consideration of prewritten computer software whether delivered
147.16electronically, by load and leave, or otherwise.
147.17 (g) A sale and a purchase includes the furnishing for a consideration of the following
147.18services:
147.19 (1) the privilege of admission to places of amusement, recreational areas, or athletic
147.20events, and the making available of amusement devices, tanning facilities, reducing
147.21salons, steam baths, Turkish baths, health clubs, and spas or athletic facilities;
147.22 (2) lodging and related services by a hotel, rooming house, resort, campground,
147.23motel, or trailer camp, including furnishing the guest of the facility with access to
147.24telecommunication services, and the granting of any similar license to use real property in
147.25a specific facility, other than the renting or leasing of it for a continuous period of 30 days
147.26or more under an enforceable written agreement that may not be terminated without prior
147.27notice and including accommodations intermediary services provided in connection with
147.28other services provided under this clause;
147.29 (3) nonresidential parking services, whether on a contractual, hourly, or other
147.30periodic basis, except for parking at a meter;
147.31 (4) the granting of membership in a club, association, or other organization if:
147.32 (i) the club, association, or other organization makes available for the use of its
147.33members sports and athletic facilities, without regard to whether a separate charge is
147.34assessed for use of the facilities; and
147.35 (ii) use of the sports and athletic facility is not made available to the general public
147.36on the same basis as it is made available to members.
148.1Granting of membership means both onetime initiation fees and periodic membership
148.2dues. Sports and athletic facilities include golf courses; tennis, racquetball, handball, and
148.3squash courts; basketball and volleyball facilities; running tracks; exercise equipment;
148.4swimming pools; and other similar athletic or sports facilities;
148.5 (5) delivery of aggregate materials by a third party, excluding delivery of aggregate
148.6material used in road construction; and delivery of concrete block by a third party if the
148.7delivery would be subject to the sales tax if provided by the seller of the concrete block.
148.8For purposes of this clause, "road construction" means construction of:
148.9 (i) public roads;
148.10 (ii) cartways; and
148.11 (iii) private roads in townships located outside of the seven-county metropolitan area
148.12up to the point of the emergency response location sign; and
148.13 (6) services as provided in this clause:
148.14 (i) laundry and dry cleaning services including cleaning, pressing, repairing, altering,
148.15and storing clothes, linen services and supply, cleaning and blocking hats, and carpet,
148.16drapery, upholstery, and industrial cleaning. Laundry and dry cleaning services do not
148.17include services provided by coin operated facilities operated by the customer;
148.18 (ii) motor vehicle washing, waxing, and cleaning services, including services
148.19provided by coin operated facilities operated by the customer, and rustproofing,
148.20undercoating, and towing of motor vehicles;
148.21 (iii) building and residential cleaning, maintenance, and disinfecting services and
148.22pest control and exterminating services;
148.23 (iv) detective, security, burglar, fire alarm, and armored car services; but not
148.24including services performed within the jurisdiction they serve by off-duty licensed peace
148.25officers as defined in section
148.26organization or any organization at the direction of a county for monitoring and electronic
148.27surveillance of persons placed on in-home detention pursuant to court order or under the
148.28direction of the Minnesota Department of Corrections;
148.29 (v) pet grooming services;
148.30 (vi) lawn care, fertilizing, mowing, spraying and sprigging services; garden planting
148.31and maintenance; tree, bush, and shrub pruning, bracing, spraying, and surgery; indoor
148.32plant care; tree, bush, shrub, and stump removal, except when performed as part of a land
148.33clearing contract as defined in section
148.34public utility lines. Services performed under a construction contract for the installation of
148.35shrubbery, plants, sod, trees, bushes, and similar items are not taxable;
149.1 (vii) massages, except when provided by a licensed health care facility or
149.2professional or upon written referral from a licensed health care facility or professional for
149.3treatment of illness, injury, or disease; and
149.4 (viii) the furnishing of lodging, board, and care services for animals in kennels and
149.5other similar arrangements, but excluding veterinary and horse boarding services.
149.6
149.7
149.8
149.9
149.10
149.11
149.12
149.13
149.14
149.15
149.16
149.17
149.18
149.19
149.20 (h) A sale and a purchase includes the furnishing for a consideration of tangible
149.21personal property or taxable services by the United States or any of its agencies or
149.22instrumentalities, or the state of Minnesota, its agencies, instrumentalities, or political
149.23subdivisions.
149.24 (i) A sale and a purchase includes the furnishing for a consideration of
149.25telecommunications services, ancillary services associated with telecommunication
149.26services,
149.27services include, but are not limited to, the following services, as defined in section
149.29postpaid calling service, prepaid calling service, prepaid wireless calling service, and
149.30private communication services. The services in this paragraph are taxed to the extent
149.31allowed under federal law.
149.32 (j) A sale and a purchase includes the furnishing for a consideration of installation if
149.33the installation charges would be subject to the sales tax if the installation were provided
149.34by the seller of the item being installed.
149.35 (k) A sale and a purchase includes the rental of a vehicle by a motor vehicle dealer
149.36to a customer when (1) the vehicle is rented by the customer for a consideration, or (2)
150.1the motor vehicle dealer is reimbursed pursuant to a service contract as defined in section
150.3 (l) A sale and a purchase includes furnishing for a consideration of specified digital
150.4products or other digital products or granting the right for a consideration to use specified
150.5digital products or other digital products on a temporary or permanent basis and regardless
150.6of whether the purchaser is required to make continued payments for such right. Wherever
150.7the term "tangible personal property" is used in this chapter, other than in subdivisions 10
150.8and 38, the provisions also apply to specified digital products, or other digital products,
150.9unless specifically provided otherwise or the context indicates otherwise.
150.10(m) A sale and purchase includes the furnishing for consideration of the following
150.11services:
150.12(1) repairing and maintaining electronic and precision equipment, which service can
150.13be deducted as a business expense under the Internal Revenue Code. This includes, but
150.14is not limited to, repair or maintenance of electronic devices, computers and computer
150.15peripherals, monitors, computer terminals, storage devices, and CD-ROM drives; other
150.16office equipment such as photocopying machines, printers, and facsimile machines;
150.17televisions, stereos, sound systems, video or digital recorders and players; two-way radios
150.18and other communications equipment; radar and sonar equipment, scientific instruments,
150.19microscopes, and medical equipment;
150.20(2) repairing and maintaining commercial and industrial machinery and equipment.
150.21For purposes of this subdivision, the following items are not commercial or industrial
150.22machinery and equipment: (i) motor vehicles; (ii) furniture and fixtures; (iii) ships; (iv)
150.23railroad stock; and (v) aircraft; and
150.24(3) warehousing or storage services for tangible personal property, excluding:
150.25(i) agricultural products;
150.26(ii) refrigerated storage;
150.27(iii) electronic data; and
150.28(iv) self-storage services and storage of motor vehicles, recreational vehicles, and
150.29boats, not eligible to be deducted as a business expense under the Internal Revenue Code.
150.30EFFECTIVE DATE.This section is effective for sales and purchases made after
150.31June 30, 2013, except that paragraph (m), clause (3), is effective for sales and purchases
150.32made after March 31, 2014.
150.33 Sec. 3. Minnesota Statutes 2012, section 297A.61, subdivision 4, is amended to read:
150.34 Subd. 4. Retail sale. (a) A "retail sale" means:
151.1 (1) any sale, lease, or rental of tangible personal propertyfor any purpose, other than
151.2resale, sublease, or subrent of items by the purchaser in the normal course of business
151.3as defined in subdivision 21; and
151.4 (2) any sale of a service enumerated in subdivision 3, for any purpose other than
151.5resale by the purchaser in the normal course of business as defined in subdivision 21.
151.6 (b) A sale of property used by the owner only by leasing it to others or by holding it
151.7in an effort to lease it, and put to no use by the owner other than resale after the lease or
151.8effort to lease, is a sale of property for resale.
151.9 (c) A sale of master computer software that is purchased and used to make copies for
151.10sale or lease is a sale of property for resale.
151.11 (d) A sale of building materials, supplies, and equipment to owners, contractors,
151.12subcontractors, or builders for the erection of buildings or the alteration, repair, or
151.13improvement of real property is a retail sale in whatever quantity sold, whether the sale is
151.14for purposes of resale in the form of real property or otherwise.
151.15 (e) A sale of carpeting, linoleum, or similar floor covering to a person who provides
151.16for installation of the floor covering is a retail sale and not a sale for resale since a sale of
151.17floor covering which includes installation is a contract for the improvement of real property.
151.18 (f) A sale of shrubbery, plants, sod, trees, and similar items to a person who provides
151.19for installation of the items is a retail sale and not a sale for resale since a sale of
151.20shrubbery, plants, sod, trees, and similar items that includes installation is a contract for
151.21the improvement of real property.
151.22 (g) A sale of tangible personal property that is awarded as prizes is a retail sale and
151.23is not considered a sale of property for resale.
151.24 (h) A sale of tangible personal property utilized or employed in the furnishing or
151.25providing of services under subdivision 3, paragraph (g), clause (1), including, but not
151.26limited to, property given as promotional items, is a retail sale and is not considered a
151.27sale of property for resale.
151.28 (i) A sale of tangible personal property used in conducting lawful gambling under
151.29chapter 349 or the State Lottery under chapter 349A, including, but not limited to, property
151.30given as promotional items, is a retail sale and is not considered a sale of property for resale.
151.31 (j) a sale of machines, equipment, or devices that are used to furnish, provide, or
151.32dispense goods or services, including, but not limited to, coin-operated devices, is a retail
151.33sale and is not considered a sale of property for resale.
151.34 (k) In the case of a lease, a retail sale occurs (1) when an obligation to make a lease
151.35payment becomes due under the terms of the agreement or the trade practices of the
151.36lessor or (2) in the case of a lease of a motor vehicle, as defined in section
152.1subdivision 11
152.2greater than 10,000 pounds and rentals of vehicles for not more than 28 days, at the time
152.3the lease is executed.
152.4 (l) In the case of a conditional sales contract, a retail sale occurs upon the transfer of
152.5title or possession of the tangible personal property.
152.6 (m) A sale of a bundled transaction in which one or more of the products included
152.7in the bundle is a taxable product is a retail sale, except that if one of the products
152.8is a telecommunication service, ancillary service, Internet access, or audio or video
152.9programming service, and the seller has maintained books and records identifying through
152.10reasonable and verifiable standards the portions of the price that are attributable to the
152.11distinct and separately identifiable products, then the products are not considered part of a
152.12bundled transaction. For purposes of this paragraph:
152.13 (1) the books and records maintained by the seller must be maintained in the regular
152.14course of business, and do not include books and records created and maintained by the
152.15seller primarily for tax purposes;
152.16 (2) books and records maintained in the regular course of business include, but are
152.17not limited to, financial statements, general ledgers, invoicing and billing systems and
152.18reports, and reports for regulatory tariffs and other regulatory matters; and
152.19 (3) books and records are maintained primarily for tax purposes when the books
152.20and records identify taxable and nontaxable portions of the price, but the seller maintains
152.21other books and records that identify different prices attributable to the distinct products
152.22included in the same bundled transaction.
152.23 (n) A sale of motor vehicle repair paint and materials by a motor vehicle repair or
152.24body shop business is a retail sale and the sales tax is imposed on the gross receipts from the
152.25retail sale of the paint and materials. The motor vehicle repair or body shop that purchases
152.26motor vehicle repair paint and motor vehicle repair materials for resale must either:
152.27 (1) separately state each item of paint and each item of materials, and the sales price
152.28of each, on the invoice to the purchaser; or
152.29 (2) in order to calculate the sales price of the paint and materials, use a method
152.30which estimates the amount and monetary value of the paint and materials used in
152.31the repair of the motor vehicle by multiplying the number of labor hours by a rate of
152.32consideration for the paint and materials used in the repair of the motor vehicle following
152.33industry standard practices that fairly calculate the gross receipts from the retail sale of
152.34the motor vehicle repair paint and motor vehicle repair materials. An industry standard
152.35practice fairly calculates the gross receipts if the sales price of the paint and materials used
152.36or consumed in the repair of a motor vehicle equals or exceeds the purchase price paid
153.1by the motor vehicle repair or body shop business. Under this clause, the invoice must
153.2either separately state the "paint and materials" as a single taxable item, or separately state
153.3"paint" as a taxable item and "materials" as a taxable item. This clause does not apply to
153.4wholesale transactions at an auto auction facility.
153.5 (o) A sale of specified digital products or other digital products to an end user with
153.6or without rights of permanent use and regardless of whether rights of use are conditioned
153.7upon payment by the purchaser is a retail sale. When a digital code has been purchased that
153.8relates to specified digital products or other digital products, the subsequent receipt of or
153.9access to the related specified digital products or other digital products is not a retail sale.
153.10 (p) A payment made to a cooperative electric association or public utility as a
153.11contribution in aid of construction is a contract for improvement to real property and
153.12is not a retail sale.
153.13EFFECTIVE DATE.This section is effective for sales and purchases made after
153.14June 30, 2013.
153.15 Sec. 4. Minnesota Statutes 2012, section 297A.61, subdivision 10, is amended to read:
153.16 Subd. 10. Tangible personal property. (a) "Tangible personal property" means
153.17personal property that can be seen, weighed, measured, felt, or touched, or that is in any
153.18other manner perceptible to the senses. "Tangible personal property" includes, but is not
153.19limited to, electricity, water, gas, steam, and prewritten computer software.
153.20 (b) Tangible personal property does not include:
153.21 (1) large ponderous machinery and equipment used in a business or production
153.22activity which at common law would be considered to be real property;
153.23 (2) property which is subject to an ad valorem property tax;
153.24 (3) property described in section
153.25 (4) property described in section
153.26(5) specified digital products, or other digital products, transferred electronically.
153.27EFFECTIVE DATE.This section is effective for sales and purchases made after
153.28June 30, 2013.
153.29 Sec. 5. Minnesota Statutes 2012, section 297A.61, subdivision 25, is amended to read:
153.30 Subd. 25.
153.31the transmission of video, audio, or other programming service to purchasers, and the
153.32subscriber interaction, if any, required for the selection or use of the programming service,
153.33regardless of whether the programming is transmitted over facilities owned or operated
154.1by the cable service provider or over facilities owned or operated by one or more dealers
154.2of communications services. The term includes point-to-multipoint distribution direct to
154.3home satellite services by which programming is transmitted or broadcast by microwave
154.4or other equipment directly to the subscriber's premises, or any similar or comparable
154.5method of service. The term includes
154.6including subscriptions, digital video recorders, pay-per-view,
154.7EFFECTIVE DATE.This section is effective for sales and purchases made after
154.8June 30, 2013.
154.9 Sec. 6. Minnesota Statutes 2012, section 297A.61, subdivision 38, is amended to read:
154.10 Subd. 38. Bundled transaction. (a) "Bundled transaction" means the retail sale
154.11of two or more products when the products are otherwise distinct and identifiable, and
154.12the products are sold for one nonitemized price. As used in this subdivision, "product"
154.13includes tangible personal property, services, intangibles, and digital goods, including
154.14specified digital products or other digital products, but does not include real property or
154.15services to real property. A bundled transaction does not include the sale of any products
154.16in which the sales price varies, or is negotiable, based on the selection by the purchaser of
154.17the products included in the transaction.
154.18 (b) For purposes of this subdivision, "distinct and identifiable" products does not
154.19include:
154.20 (1) packaging and other materials, such as containers, boxes, sacks, bags, and
154.21bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the
154.22products and are incidental or immaterial to the retail sale. Examples of packaging that are
154.23incidental or immaterial include grocery sacks, shoe boxes, dry cleaning garment bags,
154.24and express delivery envelopes and boxes;
154.25 (2) a promotional product provided free of charge with the required purchase of
154.26another product. A promotional product is provided free of charge if the sales price of
154.27another product, which is required to be purchased in order to receive the promotional
154.28product, does not vary depending on the inclusion of the promotional product; and
154.29 (3) items included in the definition of sales price.
154.30 (c) For purposes of this subdivision, the term "one nonitemized price" does not
154.31include a price that is separately identified by product on binding sales or other supporting
154.32sales-related documentation made available to the customer in paper or electronic form
154.33including but not limited to an invoice, bill of sale, receipt, contract, service agreement,
154.34lease agreement, periodic notice of rates and services, rate card, or price list.
155.1 (d) A transaction that otherwise meets the definition of a bundled transaction is
155.2not a bundled transaction if it is:
155.3 (1) the retail sale of tangible personal property and a service and the tangible
155.4personal property is essential to the use of the service, and is provided exclusively in
155.5connection with the service, and the true object of the transaction is the service;
155.6 (2) the retail sale of services if one service is provided that is essential to the use or
155.7receipt of a second service and the first service is provided exclusively in connection with
155.8the second service and the true object of the transaction is the second service;
155.9 (3) a transaction that includes taxable products and nontaxable products and the
155.10purchase price or sales price of the taxable products is de minimis; or
155.11 (4) the retail sale of exempt tangible personal property and taxable tangible personal
155.12property if:
155.13 (i) the transaction includes food and food ingredients, drugs, durable medical
155.14equipment, mobility enhancing equipment, over-the-counter drugs, prosthetic devices,
155.15or medical supplies; and
155.16 (ii) the seller's purchase price or sales price of the taxable tangible personal property is
155.1750 percent or less of the total purchase price or sales price of the bundled tangible personal
155.18property. Sellers must not use a combination of the purchase price and sales price of the
155.19tangible personal property when making the 50 percent determination for a transaction.
155.20 (e) For purposes of this subdivision, "purchase price" means the measure subject to
155.21use tax on purchases made by the seller, and "de minimis" means that the seller's purchase
155.22price or sales price of the taxable products is ten percent or less of the total purchase
155.23price or sales price of the bundled products. Sellers shall use either the purchase price
155.24or the sales price of the products to determine if the taxable products are de minimis.
155.25Sellers must not use a combination of the purchase price and sales price of the products
155.26to determine if the taxable products are de minimis. Sellers shall use the full term of a
155.27service contract to determine if the taxable products are de minimis.
155.28EFFECTIVE DATE.This section is effective for sales and purchases made after
155.29June 30, 2013.
155.30 Sec. 7. Minnesota Statutes 2012, section 297A.61, subdivision 45, is amended to read:
155.31 Subd. 45. Ring tone. "Ring tone" means a digitized sound file that is downloaded
155.32onto a device and that may be used to alert the customer
155.33 with respect to a communication. A ring tone does not include ring back tones or other
155.34digital audio files that are not stored on the purchaser's communication device.
156.1EFFECTIVE DATE.This section is effective for sales and purchases made after
156.2June 30, 2013.
156.3 Sec. 8. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
156.4to read:
156.5 Subd. 49. Motor vehicle repair paint and motor vehicle repair materials. "Motor
156.6vehicle repair paint" means a substance composed of solid matter suspended in a liquid
156.7medium and applied as a protective or decorative coating to the surface of a motor vehicle in
156.8order to restore the motor vehicle to its original condition, and includes primer, body paint,
156.9clear coat, and paint thinner used to paint motor vehicles, as defined in section 297B.01.
156.10"Motor vehicle repair materials" means items, other than motor vehicle repair paint
156.11or motor vehicle parts, that become a part of a repaired motor vehicle or are consumed in
156.12repairing the motor vehicle at retail, and include abrasives, battery water, body filler or
156.13putty, bolts and nuts, brake fluid, buffing pads, chamois, cleaning compounds, degreasing
156.14compounds, glaze, grease, grinding discs, hydraulic jack oil, lubricants, masking tape,
156.15oxygen and acetylene, polishes, rags, razor blades, sandpaper, sanding discs, scuff pads,
156.16sealer, solder, solvents, striping tape, tack cloth, thinner, waxes, and welding rods. Motor
156.17vehicle repair materials do not include items that are not used directly on the motor vehicle,
156.18such as floor dry that is used to clean the shop, or cleaning compounds and rags that are
156.19used to clean tools, equipment, or the shop and are not used to clean the motor vehicle.
156.20EFFECTIVE DATE.This section is effective for sales and purchases made after
156.21June 30, 2013.
156.22 Sec. 9. Minnesota Statutes 2012, section 297A.61, is amended by adding a subdivision
156.23to read:
156.24 Subd. 50. Digital audio works. "Digital audio works" means works that result from
156.25a fixation of a series of musical, spoken, or other sounds, that are transferred electronically.
156.26Digital audio works includes such items as the following which may either be prerecorded
156.27or live: songs, music, readings of books or other written materials, speeches, ring tones, or
156.28other sound recordings. Digital audio works does not include audio greeting cards sent by
156.29electronic mail. Unless the context provides otherwise, in this chapter digital audio works
156.30includes the digital code, or a subscription to or access to a digital code, for receiving,
156.31accessing, or otherwise obtaining digital audio works.
156.32EFFECTIVE DATE.This section is effective for sales and purchases made after
156.33June 30, 2013.
157.1 Sec. 10. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.2subdivision to read:
157.3 Subd. 51. Digital audiovisual works. "Digital audiovisual works" means a series
157.4of related images which, when shown in succession, impart an impression of motion,
157.5together with accompanying sounds, if any, that are transferred electronically. Digital
157.6audiovisual works includes such items as motion pictures, movies, musical videos, news
157.7and entertainment, and live events. Digital audiovisual works does not include video
157.8greeting cards sent by electronic mail. Unless the context provides otherwise, in this
157.9chapter digital audiovisual works includes the digital code, or a subscription to or access to
157.10a digital code, for receiving, accessing, or otherwise obtaining digital audiovisual works.
157.11EFFECTIVE DATE.This section is effective for sales and purchases made after
157.12June 30, 2013.
157.13 Sec. 11. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.14subdivision to read:
157.15 Subd. 52. Digital books. "Digital books" means any literary works, other than
157.16digital audiovisual works or digital audio works, expressed in words, numbers, or other
157.17verbal or numerical symbols or indicia so long as the product is generally recognized in
157.18the ordinary and usual sense as a "book." It includes works of fiction and nonfiction and
157.19short stories. It does not include periodicals, magazines, newspapers, or other news or
157.20information products, chat rooms, or weblogs. Unless the context provides otherwise, in
157.21this chapter digital books includes the digital code, or a subscription to or access to a
157.22digital code, for receiving, accessing, or otherwise obtaining digital books.
157.23EFFECTIVE DATE.This section is effective for sales and purchases made after
157.24June 30, 2013.
157.25 Sec. 12. Minnesota Statutes 2012, section 297A.61, is amended by adding a
157.26subdivision to read:
157.27 Subd. 53. Digital code. "Digital code" means a code which provides a purchaser
157.28with a right to obtain one or more specified digital products or other digital products.
157.29A digital code may be transferred electronically, such as through electronic mail, or it
157.30may be transferred on a tangible medium, such as on a plastic card, a piece of paper or
157.31invoice, or imprinted on another product. A digital code is not a code that represents a
157.32stored monetary value that is deducted from a total as it is used by the purchaser, and it
157.33is not a code that represents a redeemable card, gift card, or gift certificate that entitles
158.1the holder to select a digital product of an indicated cash value. The end user of a digital
158.2code is any purchaser except one who receives the contractual right to redistribute a digital
158.3product which is the subject of the transaction.
158.4EFFECTIVE DATE.This section is effective for sales and purchases made after
158.5June 30, 2013.
158.6 Sec. 13. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.7subdivision to read:
158.8 Subd. 54. Other digital products. "Other digital products" means the following
158.9items when transferred electronically:
158.10(1) greeting cards; and
158.11(2) online video or electronic games.
158.12EFFECTIVE DATE.This section is effective for sales and purchases made after
158.13June 30, 2013.
158.14 Sec. 14. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.15subdivision to read:
158.16 Subd. 55. Specified digital products. "Specified digital products" means digital
158.17audio works, digital audiovisual works, and digital books that are transferred electronically
158.18to a customer.
158.19EFFECTIVE DATE.This section is effective for sales and purchases made after
158.20June 30, 2013.
158.21 Sec. 15. Minnesota Statutes 2012, section 297A.61, is amended by adding a
158.22subdivision to read:
158.23 Subd. 56. Transferred electronically. "Transferred electronically" means obtained
158.24by the purchaser by means other than tangible storage media. For purposes of this
158.25subdivision, it is not necessary that a copy of the product be physically transferred to
158.26the purchaser. A product will be considered to have been transferred electronically to a
158.27purchaser if the purchaser has access to the product.
158.28EFFECTIVE DATE.This section is effective for sales and purchases made after
158.29June 30, 2013.
159.1 Sec. 16. Minnesota Statutes 2012, section 297A.61, is amended by adding a
159.2subdivision to read:
159.3 Subd. 58. Self-storage service. "Self-storage service" means a storage service that
159.4provides secure areas, such as rooms, units, compartments or containers, whether accessible
159.5from outside or from within a building, that are designated for the use of a purchaser,
159.6where the purchaser retains the care custody and control of their property, including
159.7self-storage units, mini-storage units, and areas by any other name to which the purchaser
159.8retains either unlimited free access or free access within reasonable business hours or upon
159.9reasonable notice to the service provider to add or remove property, but does not mean the
159.10rental of an entire building, such as a warehouse. Self-storage service does not include
159.11general warehousing and storage services where the warehouse typically handles, stores,
159.12and retrieves a purchaser's property using the warehouse's staff and equipment, and does
159.13not allow the purchaser free access to the storage space and does not include bailments.
159.14EFFECTIVE DATE.This section is effective July 1, 2013.
159.15 Sec. 17. Minnesota Statutes 2012, section 297A.64, subdivision 1, is amended to read:
159.16 Subdivision 1. Tax imposed. A tax is imposed on the lease or rental in this state
159.17for not more than 28 days of a passenger automobile as defined in section
159.18subdivision 24
159.19defined in section
159.20price. The tax applies whether or not the vehicle is licensed in the state.
159.21EFFECTIVE DATE.This section is effective for sales and purchases made after
159.22June 30, 2013.
159.23 Sec. 18. Minnesota Statutes 2012, section 297A.66, subdivision 3, is amended to read:
159.24 Subd. 3. Retailer not maintaining place of business in this state. (a) To the extent
159.25allowed by the United States Constitution and
159.26with the terms and conditions of federal remote seller law, a retailer making retail sales
159.27from outside this state to a destination within this state and not maintaining a place of
159.28business in this state shall collect sales and use taxes and remit them to the commissioner
159.29under section
159.30(b) To the extent allowed by the United States Constitution and the laws of the
159.31United States, a retailer making retail sales from outside this state to a destination within
159.32this state and not maintaining a place of business in this state shall collect sales and use
160.1taxes and remit them to the commissioner under section
160.2the regular or systematic soliciting of sales from potential customers in this state by:
160.3(1) distribution, by mail or otherwise, of catalogs, periodicals, advertising flyers, or
160.4other written solicitations of business to customers in this state;
160.5(2) display of advertisements on billboards or other outdoor advertising in this state;
160.6(3) advertisements in newspapers published in this state;
160.7(4) advertisements in trade journals or other periodicals the circulation of which is
160.8primarily within this state;
160.9(5) advertisements in a Minnesota edition of a national or regional publication or
160.10a limited regional edition in which this state is included as part of a broader regional or
160.11national publication which are not placed in other geographically defined editions of the
160.12same issue of the same publication;
160.13(6) advertisements in regional or national publications in an edition which is not
160.14by its contents geographically targeted to Minnesota but which is sold over the counter
160.15in Minnesota or by subscription to Minnesota residents;
160.16(7) advertisements broadcast on a radio or television station located in Minnesota; or
160.17(8) any other solicitation by telegraphy, telephone, computer database, cable, optic,
160.18microwave, or other communication system.
160.19This paragraph (a) must be construed without regard to the state from which
160.20distribution of the materials originated or in which they were prepared.
160.21(b) The location within or without this state of independent vendors that provide
160.22products or services to the retailer in connection with its solicitation of customers within this
160.23state, including such products and services as creation of copy, printing, distribution, and
160.24recording, is not considered in determining whether the retailer is required to collect tax.
160.25(c) A retailer not maintaining a place of business in this state is presumed, subject to
160.26rebuttal, to be engaged in regular solicitation within this state if it engages in any of the
160.27activities in paragraph (a) and:
160.28(1) makes 100 or more retail sales from outside this state to destinations in this state
160.29during a period of 12 consecutive months; or
160.30(2) makes ten or more retail sales totaling more than $100,000 from outside this state
160.31to destinations in this state during a period of 12 consecutive months.
160.32EFFECTIVE DATE.This section is effective the day after final enactment.
160.33 Sec. 19. Minnesota Statutes 2012, section 297A.66, is amended by adding a
160.34subdivision to read:
161.1 Subd. 4a. Solicitor. (a) "Solicitor," for purposes of subdivision 1, paragraph (a),
161.2means a person, whether an independent contractor or other representative, who directly
161.3or indirectly solicits business for the retailer.
161.4(b) A retailer is presumed to have a solicitor in this state if it enters into an agreement
161.5with a resident under which the resident, for a commission or other substantially similar
161.6consideration, directly or indirectly refers potential customers, whether by a link on an
161.7Internet Web site, or otherwise, to the seller. This paragraph only applies if the total gross
161.8receipts are at least $10,000 in the 12-month period ending on the last day of the most recent
161.9calendar quarter before the calendar quarter in which the sale is made. For purposes of this
161.10paragraph, gross receipts means receipts from sales to customers located in the state who
161.11were referred to the retailer by all residents with this type of agreement with the retailer.
161.12(c) The presumption under paragraph (b) may be rebutted by proof that the resident
161.13with whom the seller has an agreement did not engage in any solicitation in the state
161.14on behalf of the retailer that would satisfy the nexus requirement of the United States
161.15Constitution during the 12-month period in question. Nothing in this section shall be
161.16construed to narrow the scope of the terms affiliate, agent, salesperson, canvasser, or other
161.17representative for purposes of subdivision 1, paragraph (a).
161.18(d) For purposes of this paragraph, "resident" includes an individual who is a
161.19resident of this state, as defined in section 290.01, or a business that owns tangible
161.20personal property located in this state or has one or more employees providing services for
161.21the business in this state.
161.22(e) This subdivision does not apply to chapter 290 and does not expand or contract
161.23the jurisdiction to tax a trade or business under chapter 290.
161.24EFFECTIVE DATE.This section is effective for sales and purchases made after
161.25June 30, 2013.
161.26 Sec. 20. Minnesota Statutes 2012, section 297A.665, is amended to read:
161.27297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.
161.28 (a) For the purpose of the proper administration of this chapter and to prevent
161.29evasion of the tax, until the contrary is established, it is presumed that:
161.30 (1) all gross receipts are subject to the tax; and
161.31 (2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
161.32in Minnesota.
161.33 (b) The burden of proving that a sale is not a taxable retail sale is on the seller.
161.34However, a seller is relieved of liability if:
162.1 (1) the seller obtains a fully completed exemption certificate or all the relevant
162.2information required by section
162.390 days after the date of the sale;
162.4 (2) if the seller has not obtained a fully completed exemption certificate or all the
162.5relevant information required by section
162.6in clause (1), within 120 days after a request for substantiation by the commissioner,
162.7the seller either:
162.8 (i) obtains in good faith a fully completed exemption certificate or all the relevant
162.9information required by section
162.10 (ii) proves by other means that the transaction was not subject to tax;
162.11 (3) in the case of drop shipment sales, a seller engaged in drop shipping may claim a
162.12resale exemption based on an exemption certificate provided by its customer or reseller,
162.13or any other acceptable information available to the seller engaged in drop shipping
162.14evidencing qualification for a resale exemption, regardless of whether the customer or
162.15reseller is registered to collect and remit sales and use tax in the state.
162.16 (c) Notwithstanding paragraph (b), relief from liability does not apply to a seller who:
162.17 (1) fraudulently fails to collect the tax; or
162.18 (2) solicits purchasers to participate in the unlawful claim of an exemption.
162.19 (d) A certified service provider, as defined in section
162.20relieved of liability under this section to the extent a seller who is its client is relieved of
162.21liability.
162.22 (e) A purchaser of tangible personal property or any items listed in section
162.24property was not purchased from a retailer for storage, use, or consumption in Minnesota.
162.25 (f) If a seller claims that certain sales are exempt and does not provide the certificate,
162.26information, or proof required by paragraph (b), clause (2), within 120 days after the date
162.27of the commissioner's request for substantiation, then the exemptions claimed by the seller
162.28that required substantiation are disallowed.
162.29EFFECTIVE DATE.This section is effective for sales and purchases made after
162.30June 30, 2013.
162.31 Sec. 21. Minnesota Statutes 2012, section 297A.668, is amended by adding a
162.32subdivision to read:
162.33 Subd. 6a. Multiple points of use. (a) Notwithstanding the provisions of subdivisions
162.342 and 3, a business purchaser that has not received authorization to pay the tax directly to
162.35the commissioner may use an exemption certificate indicating multiple points of use if:
163.1(1) the purchaser knows at the time of its purchase of a digital good, computer
163.2software delivered electronically, or a service that the good or service will be concurrently
163.3available for use in more than one taxing jurisdiction; and
163.4(2) the purchaser delivers to the seller the exemption certificate indicating multiple
163.5points of use at the time of purchase.
163.6(b) Upon receipt of the fully completed exemption certificate indicating multiple
163.7points of use, the seller is relieved of the obligation to collect, pay, or remit the applicable
163.8tax and the purchaser is obligated to collect, pay, or remit the applicable tax on a direct
163.9pay basis. The provisions of section 297A.665 apply to this paragraph.
163.10(c) The purchaser delivering the exemption certificate indicating multiple points
163.11of use may use any reasonable but consistent and uniform method of apportionment
163.12that is supported by the purchaser's business records as they exist at the time of the
163.13consummation of the sale.
163.14(d) The purchaser shall provide the exemption certificate indicating multiple points
163.15of use to the seller at the time of purchase.
163.16(e) A purchaser that has received authorization to pay the tax directly to the
163.17commissioner is not required to deliver to the seller an exemption certificate indicating
163.18multiple points of use. A purchaser that has received authorization to pay the tax directly
163.19to the commissioner shall follow the provisions of paragraph (c) in apportioning the tax
163.20due on a digital good, computer software delivered electronically, or a service that will be
163.21concurrently available for use in more than one taxing jurisdiction.
163.22EFFECTIVE DATE.This section is effective for sales and purchases made after
163.23June 30, 2013.
163.24 Sec. 22. Minnesota Statutes 2012, section 297A.67, subdivision 7, is amended to read:
163.25 Subd. 7. Drugs; medical devices. (a) Sales of the following drugs and medical
163.26devices for human use are exempt:
163.27 (1) drugs, including over-the-counter drugs;
163.28 (2) single-use finger-pricking devices for the extraction of blood and other single-use
163.29devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
163.30diabetes;
163.31 (3) insulin and medical oxygen for human use, regardless of whether prescribed
163.32or sold over the counter;
163.33 (4) prosthetic devices;
163.34 (5) durable medical equipment for home use only;
163.35 (6) mobility enhancing equipment;
164.1 (7) prescription corrective eyeglasses; and
164.2 (8) kidney dialysis equipment, including repair and replacement parts.
164.3(b) Items purchased in transactions covered by:
164.4(1) Medicare as defined under title XVIII of the Social Security Act, United States
164.5Code, title 42, section 1395, et seq.; or
164.6(2) Medicaid as defined under title XIX of the Social Security Act, United States
164.7Code, title 42, section 1396, et seq.
164.8
164.9 (1) "Drug" means a compound, substance, or preparation, and any component of
164.10a compound, substance, or preparation, other than food and food ingredients, dietary
164.11supplements, or alcoholic beverages that is:
164.12 (i) recognized in the official United States Pharmacopoeia, official Homeopathic
164.13Pharmacopoeia of the United States, or official National Formulary, and supplement
164.14to any of them;
164.15 (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
164.16of disease; or
164.17 (iii) intended to affect the structure or any function of the body.
164.18 (2) "Durable medical equipment" means equipment, including repair and
164.19replacement parts, including single-patient use items, but not including mobility enhancing
164.20equipment, that:
164.21 (i) can withstand repeated use;
164.22 (ii) is primarily and customarily used to serve a medical purpose;
164.23 (iii) generally is not useful to a person in the absence of illness or injury; and
164.24 (iv) is not worn in or on the body.
164.25 For purposes of this clause, "repair and replacement parts" includes all components
164.26or attachments used in conjunction with the durable medical equipment,
164.27
164.28 (3) "Mobility enhancing equipment" means equipment, including repair and
164.29replacement parts, but not including durable medical equipment, that:
164.30 (i) is primarily and customarily used to provide or increase the ability to move from
164.31one place to another and that is appropriate for use either in a home or a motor vehicle;
164.32 (ii) is not generally used by persons with normal mobility; and
164.33 (iii) does not include any motor vehicle or equipment on a motor vehicle normally
164.34provided by a motor vehicle manufacturer.
164.35 (4) "Over-the-counter drug" means a drug that contains a label that identifies the
164.36product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
165.1label must include a "drug facts" panel or a statement of the active ingredients with a list of
165.2those ingredients contained in the compound, substance, or preparation. Over-the-counter
165.3drugs do not include grooming and hygiene products, regardless of whether they otherwise
165.4meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
165.5shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
165.6 (5) "Prescribed" and "prescription" means a direction in the form of an order,
165.7formula, or recipe issued in any form of oral, written, electronic, or other means of
165.8transmission by a duly licensed health care professional.
165.9 (6) "Prosthetic device" means a replacement, corrective, or supportive device,
165.10including repair and replacement parts, worn on or in the body to:
165.11 (i) artificially replace a missing portion of the body;
165.12 (ii) prevent or correct physical deformity or malfunction; or
165.13 (iii) support a weak or deformed portion of the body.
165.14Prosthetic device does not include corrective eyeglasses.
165.15 (7) "Kidney dialysis equipment" means equipment that:
165.16 (i) is used to remove waste products that build up in the blood when the kidneys are
165.17not able to do so on their own; and
165.18 (ii) can withstand repeated use, including multiple use by a single patient,
165.19notwithstanding the provisions of clause (2).
165.20(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of
165.21the item purchased in the transaction is paid for or reimbursed by the federal government
165.22or the state of Minnesota pursuant to the Medicare or Medicaid program, by a private
165.23insurance company administering the Medicare or Medicaid program on behalf of the
165.24federal government or the state of Minnesota, or by a managed care organization for the
165.25benefit of a patient enrolled in a prepaid program that furnishes medical services in lieu
165.26of conventional Medicare or Medicaid coverage pursuant to agreement with the federal
165.27government or the state of Minnesota.
165.28EFFECTIVE DATE.This section is effective for sales and purchases made after
165.29June 30, 2013.
165.30 Sec. 23. Minnesota Statutes 2012, section 297A.67, is amended by adding a
165.31subdivision to read:
165.32 Subd. 7a. Accessories and supplies. Accessories and supplies required for the
165.33effective use of durable medical equipment for home use only or purchased in a transaction
165.34covered by medicare or Medicaid, that are not already exempt under section 297A.67,
165.35subdivision 7, are exempt. Accessories and supplies for the effective use of a prosthetic
166.1device that are not already exempt under section 297A.67, subdivision 7, are exempt.
166.2For purposes of this subdivision "durable medical equipment," "prosthetic device,"
166.3"Medicare," and "Medicaid" have the definitions given in section 297A.67, subdivision 7.
166.4EFFECTIVE DATE.This section is effective for sales and purchases made after
166.5June 30, 2013.
166.6 Sec. 24. Minnesota Statutes 2012, section 297A.67, subdivision 13, is amended to read:
166.7 Subd. 13. Textbooks. Textbooks, including digital books, that are prescribed for use
166.8in conjunction with a course of study in a school, college, university, and private career
166.9school to students who are regularly enrolled at such institutions are exempt. For purposes
166.10of this subdivision (1) a "school" is as defined in section
166.11"private career school" means a school licensed under section
166.12EFFECTIVE DATE.This section is effective for sales and purchases made after
166.13June 30, 2013.
166.14 Sec. 25. Minnesota Statutes 2012, section 297A.68, subdivision 2, is amended to read:
166.15 Subd. 2. Materials consumed in industrial production. (a) Materials stored, used,
166.16or consumed in industrial production of tangible personal property intended to be sold
166.17ultimately at retail, are exempt, whether or not the item so used becomes an ingredient
166.18or constituent part of the property produced. Materials that qualify for this exemption
166.19include, but are not limited to, the following:
166.20(1) chemicals, including chemicals used for cleaning food processing machinery
166.21and equipment;
166.22(2) materials, including chemicals, fuels, and electricity purchased by persons
166.23engaged in industrial production to treat waste generated as a result of the production
166.24process;
166.25(3) fuels, electricity, gas, and steam used or consumed in the production process,
166.26except that electricity, gas, or steam used for space heating, cooling, or lighting is exempt
166.27if (i) it is in excess of the average climate control or lighting for the production area, and
166.28(ii) it is necessary to produce that particular product;
166.29(4) petroleum products and lubricants;
166.30(5) packaging materials, including returnable containers used in packaging food
166.31and beverage products;
167.1(6) accessory tools, equipment, and other items that are separate detachable units
167.2with an ordinary useful life of less than 12 months used in producing a direct effect upon
167.3the product; and
167.4(7) the following materials, tools, and equipment used in metal-casting: crucibles,
167.5thermocouple protection sheaths and tubes, stalk tubes, refractory materials, molten metal
167.6filters and filter boxes, degassing lances, and base blocks.
167.7(b) This exemption does not include:
167.8(1) machinery, equipment, implements, tools, accessories, appliances, contrivances
167.9and furniture and fixtures, except those listed in paragraph (a), clause (6); and
167.10(2) petroleum and special fuels used in producing or generating power for propelling
167.11ready-mixed concrete trucks on the public highways of this state.
167.12(c) Industrial production includes, but is not limited to, research, development,
167.13design or production of any tangible personal property, manufacturing, processing (other
167.14than by restaurants and consumers) of agricultural products (whether vegetable or animal),
167.15commercial fishing, refining, smelting, reducing, brewing, distilling, printing, mining,
167.16quarrying, lumbering, generating electricity, the production of road building materials,
167.17and the research, development, design, or production of computer software. Industrial
167.18production does not include painting, cleaning, repairing or similar processing of property
167.19except as part of the original manufacturing process.
167.20(d) Industrial production does not include:
167.21(1) the furnishing of services listed in section
167.22clause (6), items (i) to (vi) and (viii), or paragraph (m); or
167.23(2) the transportation, transmission, or distribution of petroleum, liquefied gas,
167.24natural gas, water, or steam, in, by, or through pipes, lines, tanks, mains, or other means of
167.25transporting those products. For purposes of this paragraph, "transportation, transmission,
167.26or distribution" does not include blending of petroleum or biodiesel fuel as defined
167.27in section
167.28EFFECTIVE DATE.This section is effective for sales and purchases made after
167.29June 30, 2013.
167.30 Sec. 26. Minnesota Statutes 2012, section 297A.68, subdivision 5, is amended to read:
167.31 Subd. 5. Capital equipment. (a) Capital equipment is exempt.
167.32
167.33
167.34"Capital equipment" means machinery and equipment purchased or leased, and used
167.35in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining,
168.1or refining tangible personal property to be sold ultimately at retail if the machinery and
168.2equipment are essential to the integrated production process of manufacturing, fabricating,
168.3mining, or refining. Capital equipment also includes machinery and equipment
168.4used primarily to electronically transmit results retrieved by a customer of an online
168.5computerized data retrieval system.
168.6(b) Capital equipment includes, but is not limited to:
168.7(1) machinery and equipment used to operate, control, or regulate the production
168.8equipment;
168.9(2) machinery and equipment used for research and development, design, quality
168.10control, and testing activities;
168.11(3) environmental control devices that are used to maintain conditions such as
168.12temperature, humidity, light, or air pressure when those conditions are essential to and are
168.13part of the production process;
168.14(4) materials and supplies used to construct and install machinery or equipment;
168.15(5) repair and replacement parts, including accessories, whether purchased as spare
168.16parts, repair parts, or as upgrades or modifications to machinery or equipment;
168.17(6) materials used for foundations that support machinery or equipment;
168.18(7) materials used to construct and install special purpose buildings used in the
168.19production process;
168.20(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed
168.21as part of the delivery process regardless if mounted on a chassis, repair parts for
168.22ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
168.23(9) machinery or equipment used for research, development, design, or production
168.24of computer software.
168.25(c) Capital equipment does not include the following:
168.26(1) motor vehicles taxed under chapter 297B;
168.27(2) machinery or equipment used to receive or store raw materials;
168.28(3) building materials, except for materials included in paragraph (b), clauses (6)
168.29and (7);
168.30(4) machinery or equipment used for nonproduction purposes, including, but not
168.31limited to, the following: plant security, fire prevention, first aid, and hospital stations;
168.32support operations or administration; pollution control; and plant cleaning, disposal of
168.33scrap and waste, plant communications, space heating, cooling, lighting, or safety;
168.34(5) farm machinery and aquaculture production equipment as defined by section
169.1(6) machinery or equipment purchased and installed by a contractor as part of an
169.2improvement to real property;
169.3(7) machinery and equipment used by restaurants in the furnishing, preparing, or
169.4serving of prepared foods as defined in section
169.5(8) machinery and equipment used to furnish the services listed in section
169.6subdivision 3
169.7(9) machinery or equipment used in the transportation, transmission, or distribution
169.8of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines,
169.9tanks, mains, or other means of transporting those products. This clause does not apply to
169.10machinery or equipment used to blend petroleum or biodiesel fuel as defined in section
169.12(10) any other item that is not essential to the integrated process of manufacturing,
169.13fabricating, mining, or refining.
169.14(d) For purposes of this subdivision:
169.15(1) "Equipment" means independent devices or tools separate from machinery but
169.16essential to an integrated production process, including computers and computer software,
169.17used in operating, controlling, or regulating machinery and equipment; and any subunit or
169.18assembly comprising a component of any machinery or accessory or attachment parts of
169.19machinery, such as tools, dies, jigs, patterns, and molds.
169.20(2) "Fabricating" means to make, build, create, produce, or assemble components or
169.21property to work in a new or different manner.
169.22(3) "Integrated production process" means a process or series of operations through
169.23which tangible personal property is manufactured, fabricated, mined, or refined. For
169.24purposes of this clause, (i) manufacturing begins with the removal of raw materials
169.25from inventory and ends when the last process prior to loading for shipment has been
169.26completed; (ii) fabricating begins with the removal from storage or inventory of the
169.27property to be assembled, processed, altered, or modified and ends with the creation
169.28or production of the new or changed product; (iii) mining begins with the removal of
169.29overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and
169.30ends when the last process before stockpiling is completed; and (iv) refining begins with
169.31the removal from inventory or storage of a natural resource and ends with the conversion
169.32of the item to its completed form.
169.33(4) "Machinery" means mechanical, electronic, or electrical devices, including
169.34computers and computer software, that are purchased or constructed to be used for the
169.35activities set forth in paragraph (a), beginning with the removal of raw materials from
169.36inventory through completion of the product, including packaging of the product.
170.1(5) "Machinery and equipment used for pollution control" means machinery and
170.2equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
170.3described in paragraph (a).
170.4(6) "Manufacturing" means an operation or series of operations where raw materials
170.5are changed in form, composition, or condition by machinery and equipment and which
170.6results in the production of a new article of tangible personal property. For purposes of
170.7this subdivision, "manufacturing" includes the generation of electricity or steam to be
170.8sold at retail.
170.9(7) "Mining" means the extraction of minerals, ores, stone, or peat.
170.10(8) "Online data retrieval system" means a system whose cumulation of information
170.11is equally available and accessible to all its customers.
170.12(9) "Primarily" means machinery and equipment used 50 percent or more of the time
170.13in an activity described in paragraph (a).
170.14(10) "Refining" means the process of converting a natural resource to an intermediate
170.15or finished product, including the treatment of water to be sold at retail.
170.16(11) This subdivision does not apply to telecommunications equipment as
170.17provided in subdivision 35, and does not apply to wire, cable, fiber, poles, or conduit
170.18for telecommunications services.
170.19EFFECTIVE DATE.This section is effective for sales and purchases made after
170.20August 31, 2014.
170.21 Sec. 27. Minnesota Statutes 2012, section 297A.68, subdivision 42, is amended to read:
170.22 Subd. 42. Qualified data centers. (a) Purchases of enterprise information
170.23technology equipment and computer software for use in a qualified data center, or a
170.24qualified refurbished data center, are exempt. The tax on purchases exempt under this
170.25paragraph must be imposed and collected as if the rate under section
170.261
170.28computer software purchased to replace or upgrade enterprise information technology
170.29equipment and computer software in a qualified data center, or a qualified refurbished
170.30data center.
170.31(b) Electricity used or consumed in the operation of a qualified data center is exempt.
170.32(c) For purposes of this subdivision, "qualified data center, or a qualified refurbished
170.33data center," means a facility in Minnesota:
170.34(1) that is comprised of one or more buildings that consist in the aggregate of at least
170.35
171.1where the total cost of construction or refurbishment, investment in enterprise information
171.2technology equipment, and computer software is at least
171.3a
171.4(2) that is constructed or substantially refurbished after June 30, 2012, where
171.5"substantially refurbished" means that at least
171.6or modified
171.7(i) installation of enterprise information technology equipment, environmental
171.8control, computer software, and energy efficiency improvements; and
171.9(ii) building improvements; and
171.10(3) that is used to house enterprise information technology equipment, where the
171.11facility has the following characteristics:
171.12(i) uninterruptible power supplies, generator backup power, or both;
171.13(ii) sophisticated fire suppression and prevention systems; and
171.14(iii) enhanced security. A facility will be considered to have enhanced security if it
171.15has restricted access to the facility to selected personnel; permanent security guards; video
171.16camera surveillance; an electronic system requiring pass codes, keycards, or biometric
171.17scans, such as hand scans and retinal or fingerprint recognition; or similar security features.
171.18In determining whether the facility has the required square footage, the square
171.19footage of the following spaces shall be included if the spaces support the operation
171.20of enterprise information technology equipment: office space, meeting space, and
171.21mechanical and other support facilities. For purposes of this subdivision, "computer
171.22software" includes, but is not limited to, software utilized or loaded at the qualified data
171.23center, including maintenance, licensing, and software customization.
171.24(d) For purposes of this subdivision, a "qualified refurbished data center" means an
171.25existing facility that qualifies as a data center under paragraph (c), clauses (2) and (3), but
171.26that is comprised of one or more buildings that consist in the aggregate of at least 25,000
171.27square feet, and that are located on a single parcel or contiguous parcels, where the total
171.28cost of construction or refurbishment, investment in enterprise information technology
171.29equipment, and computer software is at least $50,000,000 within a 24-month period.
171.30
171.31equipment" means computers and equipment supporting computing, networking, or data
171.32storage, including servers and routers. It includes, but is not limited to: cooling systems,
171.33cooling towers, and other temperature control infrastructure; power infrastructure for
171.34transformation, distribution, or management of electricity used for the maintenance
171.35and operation of a qualified data center, including but not limited to exterior dedicated
171.36business-owned substations, backup power generation systems, battery systems, and
172.1related infrastructure; and racking systems, cabling, and trays, which are necessary for
172.2the maintenance and operation of the qualified data center.
172.3
172.4purchases made either within 20 years of the date of its first purchase qualifying for the
172.5exemption under paragraph (a), or by June 30, 2042, whichever is earlier.
172.6
172.7center industries.
172.8
172.92012, and before July 1, 2042.
172.10EFFECTIVE DATE.This section is effective for sales and purchases made after
172.11June 30, 2013.
172.12 Sec. 28. Minnesota Statutes 2012, section 297A.68, is amended by adding a
172.13subdivision to read:
172.14 Subd. 49. Greater Minnesota business expansions. (a) Purchases and use of
172.15tangible personal property or taxable services by a qualified business, as defined in section
172.16116J.3738, are exempt if:
172.17(1) the business subsidy agreement provides that the exemption under this
172.18subdivision applies;
172.19(2) the property or services are primarily used or consumed in greater Minnesota; and
172.20(3) the purchase was made and delivery received during the duration of the
172.21certification of the business as a qualified business under section 116J.3738.
172.22(b) Purchase and use of construction materials and supplies used or consumed in,
172.23and equipment incorporated into, the construction of improvements to real property in
172.24greater Minnesota are exempt if the improvements after completion of construction are
172.25to be used in the conduct of the trade or business of the qualified business, as defined in
172.26section 116J.3738. This exemption applies regardless of whether the purchases are made
172.27by the business or a contractor.
172.28(c) The exemptions under this subdivision apply to a local sales and use tax.
172.29(d) The tax on purchases imposed under this subdivision must be imposed and
172.30collected as if the rate under section 297A.62 applied, and then refunded in the manner
172.31provided in section 297A.75. No more than $7,000,000 may be refunded in a fiscal year
172.32for all purchases under this subdivision. Refunds must be allocated on a first come, first
172.33served basis. If more than $7,000,000 of eligible claims are made in a fiscal year, claims
172.34by qualified businesses carryover to the next fiscal year, and the commissioner must first
172.35allocate refunds to qualified businesses eligible for a refund in the preceding fiscal year.
173.1Any portion of the balance of funds allocated for refunds under this paragraph does not
173.2cancel and shall be carried forward to and available for refunds in subsequent fiscal years.
173.3EFFECTIVE DATE.This section is effective for sales and purchases made after
173.4June 30, 2014.
173.5 Sec. 29. Minnesota Statutes 2012, section 297A.70, subdivision 2, is amended to read:
173.6 Subd. 2. Sales to government. (a) All sales, except those listed in paragraph (b),
173.7to the following governments and political subdivisions, or to the listed agencies or
173.8instrumentalities of governments and political subdivisions, are exempt:
173.9(1) the United States and its agencies and instrumentalities;
173.10(2) school districts, local governments, the University of Minnesota, state universities,
173.11community colleges, technical colleges, state academies, the Perpich Minnesota Center for
173.12Arts Education, and an instrumentality of a political subdivision that is accredited as an
173.13optional/special function school by the North Central Association of Colleges and Schools;
173.14(3) hospitals and nursing homes owned and operated by political subdivisions of
173.15the state of tangible personal property and taxable services used at or by hospitals and
173.16nursing homes;
173.17(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
173.18operations provided for in section
173.19(5) other states or political subdivisions of other states, if the sale would be exempt
173.20from taxation if it occurred in that state; and
173.21(6) public libraries, public library systems, multicounty, multitype library systems as
173.22defined in section
173.23the state library under section
173.24
173.25(b) This exemption does not apply to the sales of the following products and services:
173.26(1) building, construction, or reconstruction materials purchased by a contractor
173.27or a subcontractor as a part of a lump-sum contract or similar type of contract with a
173.28guaranteed maximum price covering both labor and materials for use in the construction,
173.29alteration, or repair of a building or facility;
173.30(2) construction materials purchased by tax exempt entities or their contractors to
173.31be used in constructing buildings or facilities which will not be used principally by the
173.32tax exempt entities;
173.33(3) the leasing of a motor vehicle as defined in section
173.34except for leases entered into by the United States or its agencies or instrumentalities;
174.1(4) lodging as defined under section
174.2(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
174.4beverages purchased directly by the United States or its agencies or instrumentalities; or
174.5(5) goods or services purchased by a
174.6services that are generally provided by a private business and the purchases would be
174.7taxable if made by a private business engaged in the same activity.
174.8(c) As used in this subdivision, "school districts" means public school entities and
174.9districts of every kind and nature organized under the laws of the state of Minnesota, and
174.10any instrumentality of a school district, as defined in section
174.11(d) As used in this subdivision, "local governments" means cities, counties, and
174.12townships.
174.13
174.14business" include, but are not limited to, goods or services provided by liquor stores, gas
174.15and electric utilities, golf courses, marinas, health and fitness centers, campgrounds, cafes,
174.16and laundromats. "Goods or services generally provided by a private business" do not
174.17include housing services, sewer and water services, wastewater treatment, ambulance and
174.18other public safety services, correctional services, chore or homemaking services provided
174.19to elderly or disabled individuals, or road and street maintenance or lighting.
174.20EFFECTIVE DATE.This section is effective for sales and purchases made after
174.21December 31, 2013.
174.22 Sec. 30. Minnesota Statutes 2012, section 297A.70, subdivision 4, is amended to read:
174.23 Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
174.24(b), to the following "nonprofit organizations" are exempt:
174.25(1) a corporation, society, association, foundation, or institution organized and
174.26operated exclusively for charitable, religious, or educational purposes if the item
174.27purchased is used in the performance of charitable, religious, or educational functions; and
174.28(2) any senior citizen group or association of groups that:
174.29(i) in general limits membership to persons who are either age 55 or older, or
174.30physically disabled;
174.31(ii) is organized and operated exclusively for pleasure, recreation, and other
174.32nonprofit purposes, not including housing, no part of the net earnings of which inures to
174.33the benefit of any private shareholders; and
174.34(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
175.1For purposes of this subdivision, charitable purpose includes the maintenance of a
175.2cemetery owned by a religious organization.
175.3(b) This exemption does not apply to the following sales:
175.4(1) building, construction, or reconstruction materials purchased by a contractor
175.5or a subcontractor as a part of a lump-sum contract or similar type of contract with a
175.6guaranteed maximum price covering both labor and materials for use in the construction,
175.7alteration, or repair of a building or facility;
175.8(2) construction materials purchased by tax-exempt entities or their contractors to
175.9be used in constructing buildings or facilities that will not be used principally by the
175.10tax-exempt entities; and
175.11(3) lodging as defined under section
175.12(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
175.14for sacramental purposes or as allowed under subdivision 9a; and
175.15(4) leasing of a motor vehicle as defined in section
175.16as provided in paragraph (c).
175.17(c) This exemption applies to the leasing of a motor vehicle as defined in section
175.19(1) a truck, as defined in section
175.20passenger automobile, as defined in section
175.21used for carrying more than nine persons including the driver; and
175.22(2) intended to be used primarily to transport tangible personal property or
175.23individuals, other than employees, to whom the organization provides service in
175.24performing its charitable, religious, or educational purpose.
175.25(d) A limited liability company also qualifies for exemption under this subdivision if
175.26(1) it consists of a sole member that would qualify for the exemption, and (2) the items
175.27purchased qualify for the exemption.
175.28EFFECTIVE DATE.This section is effective retroactively for sales and purchases
175.29made after June 30, 2012.
175.30 Sec. 31. Minnesota Statutes 2012, section 297A.70, subdivision 5, is amended to read:
175.31 Subd. 5. Veterans groups. Sales to an organization of military service veterans or
175.32an auxiliary unit of an organization of military service veterans are exempt if:
175.33(1) the organization or auxiliary unit is organized within the state of Minnesota
175.34and is exempt from federal taxation under section 501(c), clause (19), of the Internal
175.35Revenue Code; and
176.1(2) the tangible personal property
176.2or nonprofit uses and not for social, recreational, pleasure, or profit uses.
176.3EFFECTIVE DATE.This section is effective for sales and purchases made after
176.4June 30, 2013.
176.5 Sec. 32. Minnesota Statutes 2012, section 297A.70, subdivision 7, is amended to read:
176.6 Subd. 7. Hospitals
176.7providers. (a) Sales, except for those listed in paragraph
176.8if the items purchased are used in providing hospital services. For purposes of this
176.9subdivision, "hospital" means a hospital organized and operated for charitable purposes
176.10within the meaning of section 501(c)(3) of the Internal Revenue Code, and licensed under
176.11chapter 144 or by any other jurisdiction, and "hospital services" are services authorized or
176.12required to be performed by a "hospital" under chapter 144.
176.13 (b) Sales, except for those listed in paragraph
176.14are exempt, if the items purchased are used in providing outpatient surgical services. For
176.15purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
176.16center organized and operated for charitable purposes within the meaning of section
176.17501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
176.18jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
176.19(1) services authorized or required to be performed by an outpatient surgical center under
176.20chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
176.21health services furnished to a person whose medical condition is sufficiently acute to
176.22require treatment unavailable through, or inappropriate to be provided by, a clinic or
176.23physician's office, but not so acute as to require treatment in a hospital emergency room.
176.24 (c) Sales, except for those listed in paragraph (d), to a critical access dental provider
176.25are exempt, if the items purchased are used in providing critical access dental care
176.26services. For the purposes of this subdivision, "critical access dental provider" means a
176.27dentist or dental clinic that qualifies under section 256B.76, subdivision 4, paragraph (b)
176.28and, in the previous calendar year, had no more than 15 percent of its patients covered by
176.29private dental insurance.
176.30 (d) This exemption does not apply to the following products and services:
176.31 (1) purchases made by a clinic, physician's office, or any other medical facility not
176.32operating as a hospital
176.33even though the clinic, office, or facility may be owned and operated by a hospital
176.34 outpatient surgical center, or critical access dental provider;
177.1 (2) sales under section
177.2prepared food, candy, and soft drinks;
177.3 (3) building and construction materials used in constructing buildings or facilities
177.4that will not be used principally by the hospital
177.5access dental provider;
177.6 (4) building, construction, or reconstruction materials purchased by a contractor or a
177.7subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed
177.8maximum price covering both labor and materials for use in the construction, alteration, or
177.9repair of a hospital
177.10 (5) the leasing of a motor vehicle as defined in section
177.11
177.12subdivision if (1) it consists of a sole member that would qualify for the exemption, and
177.13(2) the items purchased qualify for the exemption.
177.14
177.15exemption on purchases made for both the hospital and nonprofit unit provided that:
177.16 (1) the nonprofit unit would have qualified for exemption under subdivision 4; and
177.17 (2) the items purchased would have qualified for the exemption.
177.18EFFECTIVE DATE.This section is effective retroactively for sales and purchases
177.19made after June 30, 2007. Purchasers may apply for a refund of tax paid for qualifying
177.20purchases under this subdivision made after June 30, 2007, and before July 1, 2013, in the
177.21manner provided in Minnesota Statutes, section 297A.75. Notwithstanding limitations
177.22on claims for refunds under Minnesota Statutes, section 297A.40, claims may be filed
177.23with the commissioner until June 30, 2014.
177.24 Sec. 33. Minnesota Statutes 2012, section 297A.70, is amended by adding a
177.25subdivision to read:
177.26 Subd. 9a. Established religious orders. (a) Sales of lodging, prepared food, candy,
177.27soft drinks, and alcoholic beverages at noncatered events between an established religious
177.28order and an affiliated institution of higher education are exempt.
177.29(b) For purposes of this subdivision, "established religious order" means an
177.30organization directly or indirectly under the control or supervision of a church or
177.31convention or association of churches, where members of the organization:
177.32(1) normally live together as part of a community;
177.33(2) make long-term commitments to live under a strict set of moral and spiritual
177.34rules; and
178.1(3) work or engage full time in a combination of prayer, religious study, church
178.2reform or renewal, or other religious, educational, or charitable goals of the organization.
178.3(c) For purposes of this subdivision, an institution of higher education is "affiliated"
178.4with an established religious order if members of the religious order are represented
178.5on the governing board of the institution of higher education and the two organization
178.6share campus space and common facilities.
178.7EFFECTIVE DATE.This section is effective retroactively for sales and purchases
178.8made after June 30, 2012.
178.9 Sec. 34. Minnesota Statutes 2012, section 297A.70, subdivision 13, is amended to read:
178.10 Subd. 13. Fund-raising sales by or for nonprofit groups. (a) The following
178.11sales by the specified organizations for fund-raising purposes are exempt, subject to the
178.12limitations listed in paragraph (b):
178.13(1) all sales made by a nonprofit organization that exists solely for the purpose of
178.14providing educational or social activities for young people primarily age 18 and under;
178.15(2) all sales made by an organization that is a senior citizen group or association of
178.16groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized
178.17and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii)
178.18no part of its net earnings inures to the benefit of any private shareholders;
178.19(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if
178.20the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization
178.21under section 501(c)(3) of the Internal Revenue Code; and
178.22(4) sales of candy sold for fund-raising purposes by a nonprofit organization that
178.23provides educational and social activities primarily for young people age 18 and under.
178.24(b) The exemptions listed in paragraph (a) are limited in the following manner:
178.25(1) the exemption under paragraph (a), clauses (1) and (2), applies only if the gross
178.26annual receipts of the organization from fund-raising do not exceed $10,000; and
178.27(2) the exemption under paragraph (a), clause (1), does not apply if the sales are
178.28derived from admission charges or from activities for which the money must be deposited
178.29with the school district treasurer under section
178.30the same manner as other revenues or expenditures of the school district under section
178.32(c) Sales of tangible personal property and services are exempt if the entire proceeds,
178.33less the necessary expenses for obtaining the property or services, will be contributed to
178.34a registered combined charitable organization described in section
178.35exclusively for charitable, religious, or educational purposes, and the registered combined
179.1charitable organization has given its written permission for the sale. Sales that occur over
179.2a period of more than 24 days per year are not exempt under this paragraph.
179.3(d) For purposes of this subdivision, a club, association, or other organization of
179.4elementary or secondary school students organized for the purpose of carrying on sports,
179.5educational, or other extracurricular activities is a separate organization from the school
179.6district or school for purposes of applying the $10,000 limit.
179.7EFFECTIVE DATE.This section is effective for sales and purchases made after
179.8June 30, 2013.
179.9 Sec. 35. Minnesota Statutes 2012, section 297A.70, subdivision 14, is amended to read:
179.10 Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of
179.11tangible personal property or services at, and admission charges for fund-raising events
179.12sponsored by, a nonprofit organization are exempt if:
179.13(1) all gross receipts are recorded as such, in accordance with generally accepted
179.14accounting practices, on the books of the nonprofit organization; and
179.15(2) the entire proceeds, less the necessary expenses for the event, will be used solely
179.16and exclusively for charitable, religious, or educational purposes. Exempt sales include
179.17the sale of prepared food, candy, and soft drinks at the fund-raising event.
179.18(b) This exemption is limited in the following manner:
179.19(1) it does not apply to admission charges for events involving bingo or other
179.20gambling activities or to charges for use of amusement devices involving bingo or other
179.21gambling activities;
179.22(2) all gross receipts are taxable if the profits are not used solely and exclusively for
179.23charitable, religious, or educational purposes;
179.24(3) it does not apply unless the organization keeps a separate accounting record,
179.25including receipts and disbursements from each fund-raising event that documents all
179.26deductions from gross receipts with receipts and other records;
179.27(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
179.28the active or passive agent of a person that is not a nonprofit corporation;
179.29(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;
179.30(6) it does not apply to fund-raising events conducted on premises leased for more
179.31than five days but less than 30 days; and
179.32(7) it does not apply if the risk of the event is not borne by the nonprofit organization
179.33and the benefit to the nonprofit organization is less than the total amount of the state and
179.34local tax revenues forgone by this exemption.
180.1(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
180.2government, corporation, society, association, foundation, or institution organized and
180.3operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
180.4veterans' purposes, no part of the net earnings of which inures to the benefit of a private
180.5individual.
180.6EFFECTIVE DATE.This section is effective for sales and purchases made after
180.7June 30, 2013.
180.8 Sec. 36. Minnesota Statutes 2012, section 297A.70, is amended by adding a
180.9subdivision to read:
180.10 Subd. 18. Nursing homes and boarding care homes. (a) All sales, except those
180.11listed in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding
180.12care home certified as a nursing facility under title 19 of the Social Security Act are
180.13exempt if the facility:
180.14(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the
180.15Internal Revenue Code; and
180.16(2) is certified to participate in the medical assistance program under title 19 of the
180.17Social Security Act, or certifies to the commissioner that it does not discharge residents
180.18due to the inability to pay.
180.19(b) This exemption does not apply to the following sales:
180.20(1) building, construction, or reconstruction materials purchased by a contractor
180.21or a subcontractor as a part of a lump-sum contract or similar type of contract with a
180.22guaranteed maximum price covering both labor and materials for use in the construction,
180.23alteration, or repair of a building or facility;
180.24(2) construction materials purchased by tax-exempt entities or their contractors to
180.25be used in constructing buildings or facilities that will not be used principally by the
180.26tax-exempt entities;
180.27(3) lodging as defined under section
180.28(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
180.29
180.30(4) leasing of a motor vehicle as defined in section
180.31as provided in paragraph (c).
180.32(c) This exemption applies to the leasing of a motor vehicle as defined in section
180.33
181.1(1) a truck, as defined in section
181.2passenger automobile, as defined in section
181.3used for carrying more than nine persons including the driver; and
181.4(2) intended to be used primarily to transport tangible personal property or residents
181.5of the nursing home or boarding care home.
181.6EFFECTIVE DATE.This section is effective for sales and purchases made after
181.7June 30, 2013.
181.8 Sec. 37. Minnesota Statutes 2012, section 297A.71, is amended by adding a
181.9subdivision to read:
181.10 Subd. 45. Biopharmaceutical manufacturing facility. (a) Materials and
181.11supplies used or consumed in, capital equipment incorporated into, and privately
181.12owned infrastructure in support of the construction, improvement, or expansion of a
181.13biopharmaceutical manufacturing facility in the state are exempt if the following criteria
181.14are met:
181.15(1) the facility is used for the manufacturing of biologics;
181.16(2) the total capital investment made at the facility exceeds $50,000,000; and
181.17(3) the facility creates and maintains at least 190 full-time equivalent positions at the
181.18facility. These positions must be new jobs in Minnesota and not the result of relocating
181.19jobs that currently exist in Minnesota.
181.20(b) The tax must be imposed and collected as if the rate under section 297A.62
181.21applied, and refunded in the manner provided in section 297A.75.
181.22(c) To be eligible for a refund, the owner of the biopharmaceutical manufacturing
181.23facility must:
181.24(1) initially apply to the Department of Employment and Economic Development
181.25for certification no later than one year from the final completion date of construction,
181.26improvement, or expansion of the facility; and
181.27(2) for each year that the owner of the biopharmaceutical manufacturing facility
181.28applies for a refund, the owner must have received written certification from the
181.29Department of Employment and Economic Development that the facility has met the
181.30criteria of paragraph (a).
181.31(d) The refund is to be paid annually at a rate of 25 percent of the total allowable
181.32refund payable to date, with the commissioner making annual payments of the remaining
181.33refund until all of the refund has been paid.
181.34(e) For purposes of this subdivision, "biopharmaceutical" and "biologics" are
181.35interchangeable and mean medical drugs or medicinal preparations produced using
182.1technology that uses biological systems, living organisms or derivatives of living
182.2organisms, to make or modify products or processes for specific use. The medical drugs or
182.3medicinal preparations include but are not limited to proteins, antibodies, nucleic acids,
182.4and vaccines.
182.5EFFECTIVE DATE.This section is effective retroactively to capital investments
182.6made and jobs created after December 31, 2012, and effective retroactively for sales and
182.7purchases made after December 31, 2012, and before July 1, 2019.
182.8 Sec. 38. Minnesota Statutes 2012, section 297A.71, is amended by adding a
182.9subdivision to read:
182.10 Subd. 46. Research and development facility. Materials and supplies used or
182.11consumed in, and equipment incorporated into, the construction or improvement of a
182.12research and development facility that has laboratory space of at least 400,000 square feet
182.13and utilizes both high-intensity and low-intensity laboratories, provided that the project
182.14has a total construction cost of at least $140,000,000 within a 24-month period. The tax on
182.15purchases imposed under this subdivision must be imposed and collected as if the rate under
182.16section 297A.62 applied and then refunded in the manner provided in section 297A.75.
182.17EFFECTIVE DATE.This section is effective for sales and purchases made after
182.18June 30, 2013, and before September 1, 2015.
182.19 Sec. 39. Minnesota Statutes 2012, section 297A.71, is amended by adding a
182.20subdivision to read:
182.21 Subd. 47. Industrial measurement manufacturing and controls facility. (a)
182.22Materials and supplies used or consumed in, capital equipment incorporated into,
182.23fixtures installed in, and privately owned infrastructure in support of the construction,
182.24improvement, or expansion of an industrial measurement manufacturing and controls
182.25facility are exempt if:
182.26(1) the total capital investment made at the facility is at least $60,000,000;
182.27(2) the facility employs at least 250 full-time equivalent employees that are not
182.28employees currently employed by the company in the state; and
182.29(3) the Department of Employment and Economic Development determines that
182.30the expansion, remodeling, or improvement of the facility has a significant impact on
182.31the state economy.
183.1(b) The tax must be imposed and collected as if the rate under section 297A.62
183.2applied and refunded in the manner provided in section 297A.75, only after the following
183.3criteria are met:
183.4(1) a refund may not be issued until the owner of the facility has received
183.5certification from the Department of Employment and Economic Development that the
183.6company meets the requirements in paragraph (a); and
183.7(2) to receive the refund, the owner of the industrial measurement manufacturing
183.8and controls facility must initially apply to the Department of Employment and Economic
183.9Development for certification no later than one year from the final completion date of
183.10construction, improvement, or expansion of the industrial measurement manufacturing
183.11and controls facility.
183.12EFFECTIVE DATE.This section is effective for sales and purchases made after
183.13June 30, 2013, and before December 31, 2015.
183.14 Sec. 40. Minnesota Statutes 2012, section 297A.75, subdivision 1, is amended to read:
183.15 Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the
183.16following exempt items must be imposed and collected as if the sale were taxable and the
183.17rate under section
183.18
183.19
183.21
183.23
183.24subdivision 3
183.25
183.26section
183.27
183.2812
183.29
183.30section
183.31
183.33
183.34under section
184.1
184.2distribution of electrical energy and an aerial camera package exempt under section
184.4
184.53, paragraph (a), clause (10);
184.6
184.7projects and facilities under section
184.8
184.9meat processing facility exempt under section
184.10
184.11expansion of:
184.12(i) an aerospace defense manufacturing facility exempt under section
184.13subdivision 42;
184.14(ii) a biopharmaceutical manufacturing facility exempt under section 297A.71,
184.15subdivision 45;
184.16(iii) a research and development facility exempt under section 297A.71, subdivision
184.174b; and
184.18(iv) an industrial measurement manufacturing and controls facility exempt under
184.19section 297A.71, subdivision 47;
184.20
184.21use in a qualified data center exempt under section
184.22
184.23section
184.24(16) items purchased for use in providing critical access dental services exempt
184.25under section 297A.70, subdivision 7, paragraph (c); and
184.26(17) items and services purchased under a business subsidy agreement for use or
184.27consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 49.
184.28EFFECTIVE DATE.The change to clause (1) is effective for sales and purchases
184.29made after August 31, 2014. The changes in clauses (13), (16), and (17), are effective the
184.30day following final enactment.
184.31 Sec. 41. Minnesota Statutes 2012, section 297A.75, subdivision 2, is amended to read:
184.32 Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the
184.33commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
184.34must be paid to the applicant. Only the following persons may apply for the refund:
185.1 (1) for subdivision 1, clauses (1)
185.2purchaser;
185.3 (2) for subdivision 1, clauses
185.4governmental subdivision;
185.5 (3) for subdivision 1, clause
185.6benefits provided in United States Code, title 38, chapter 21;
185.7 (4) for subdivision 1, clause
185.8homestead property;
185.9 (5) for subdivision 1, clause
185.10project;
185.11 (6) for subdivision 1, clause
185.12or a joint venture of municipal electric utilities;
185.13 (7) for subdivision 1, clauses
185.14of the qualifying business; and
185.15 (8) for subdivision 1, clauses (10), (11),
185.16the governmental entity that owns or contracts for the project or facility.
185.17EFFECTIVE DATE.This section is effective the day following final enactment.
185.18 Sec. 42. Minnesota Statutes 2012, section 297A.75, subdivision 3, is amended to read:
185.19 Subd. 3. Application. (a) The application must include sufficient information
185.20to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
185.21subcontractor, or builder, under subdivision 1,
185.22
185.23must furnish to the refund applicant a statement including the cost of the exempt items and
185.24the taxes paid on the items unless otherwise specifically provided by this subdivision. The
185.25provisions of sections
185.26 (b) An applicant may not file more than two applications per calendar year for
185.27refunds for taxes paid on capital equipment exempt under section
185.28 (c) Total refunds for purchases of items in section
185.29exceed $5,000,000 in fiscal years 2010 and 2011. Applications for refunds for purchases
185.30of items in sections
185.31subdivision 40, must not be filed until after June 30, 2009.
185.32EFFECTIVE DATE.This section is effective the day following final enactment.
185.33 Sec. 43. Minnesota Statutes 2012, section 297A.99, subdivision 1, is amended to read:
186.1 Subdivision 1. Authorization; scope. (a) A political subdivision of this state may
186.2impose a general sales tax (1) under section
186.3permitted by special law, or (4) if the political subdivision enacted and imposed the tax
186.4before January 1, 1982, and its predecessor provision.
186.5 (b) This section governs the imposition of a general sales tax by the political
186.6subdivision. The provisions of this section preempt the provisions of any special law:
186.7 (1) enacted before June 2, 1997, or
186.8 (2) enacted on or after June 2, 1997, that does not explicitly exempt the special law
186.9provision from this section's rules by reference.
186.10 (c) This section does not apply to or preempt a sales tax on motor vehicles or a
186.11special excise tax on motor vehicles.
186.12(d) A political subdivision may not advertise or expend funds for the promotion of a
186.13referendum to support imposing a local option sales tax.
186.14(e) Notwithstanding paragraph (d), a political subdivision may
186.15(1) conduct the referendum
186.16(2) disseminate information included in the resolution adopted under subdivision 2;
186.17(3) provide notice of, and conduct public forums at which proponents and opponents
186.18on the merits of the referendum are given equal time to express their opinions on the
186.19merits of the referendum;
186.20(4) provide facts and data on the impact of the proposed sales tax on consumer
186.21purchases; and
186.22(5) provide facts and data related to the programs and projects to be funded with
186.23the sales tax.
186.24EFFECTIVE DATE.This section is effective the day following final enactment.
186.25 Sec. 44. Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
186.26Laws 1997, chapter 231, article 7, section 40, Laws 1998, chapter 389, article 8, section
186.2730, Laws 2003, First Special Session chapter 21, article 8, section 13, Laws 2005, First
186.28Special Session chapter 3, article 5, section 26, and Laws 2009, chapter 88, article 4,
186.29section 15, is amended to read:
186.30 Subd. 2. Use of revenues. Revenues received from the tax authorized by subdivision
186.311 may only be used by the city to pay the cost of collecting the tax, and, except as provided in
186.32paragraph (e), to pay for the following projects or to secure or pay any principal, premium,
186.33or interest on bonds issued in accordance with subdivision 3 for the following projects.
186.34 (a) To pay all or a portion of the capital expenses of construction, equipment and
186.35acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
187.1including the demolition of the existing arena and the construction and equipping of a
187.2new arena.
187.3 (b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
187.4spent for:
187.5