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Capital IconMinnesota Legislature

HF 785

4th Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

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

Current Version - 4th Engrossment

Line numbers 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30 1.31 1.32 1.33 1.34 1.35 1.36 1.37 1.38 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28
2.29 2.30
2.31 2.32 2.33 2.34 2.35 2.36 2.37 2.38 2.39 2.40
2.41 2.42
2.43 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31
3.32 3.33
3.34 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20
4.21 4.22
4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 4.35 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9
5.10
5.11 5.12
5.13 5.14 5.15 5.16 5.17
5.18
5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18
6.19
6.20 6.21 6.22 6.23 6.24 6.25 6.26 6.27 6.28 6.29 6.30 6.31 6.32 6.33 6.34 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 7.10 7.11 7.12 7.13 7.14 7.15 7.16 7.17 7.18 7.19 7.20 7.21 7.22 7.23 7.24 7.25 7.26 7.27 7.28 7.29 7.30 7.31 7.32 7.33 7.34 7.35 7.36 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11 8.12 8.13 8.14
8.15 8.16
8.17 8.18 8.19 8.20 8.21 8.22 8.23 8.24 8.25 8.26 8.27 8.28 8.29 8.30 8.31 8.32 8.33 8.34 8.35 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 9.20 9.21 9.22 9.23 9.24 9.25 9.26 9.27 9.28 9.29 9.30 9.31 9.32 9.33 9.34 9.35 10.1 10.2 10.3 10.4 10.5 10.6 10.7
10.8 10.9 10.10
10.11 10.12 10.13 10.14 10.15
10.16 10.17 10.18
10.19 10.20 10.21 10.22 10.23 10.24 10.25 10.26 10.27 10.28 10.29 10.30 10.31 10.32 10.33 11.1 11.2 11.3 11.4 11.5
11.6 11.7
11.8 11.9 11.10 11.11
11.12 11.13 11.14
11.15 11.16 11.17 11.18 11.19 11.20 11.21 11.22 11.23 11.24 11.25 11.26 11.27 11.28 11.29 11.30 11.31 11.32 11.33 12.1 12.2 12.3 12.4 12.5 12.6 12.7 12.8 12.9 12.10 12.11 12.12 12.13 12.14 12.15 12.16
12.17 12.18
12.19 12.20
12.21 12.22 12.23 12.24 12.25 12.26 12.27 12.28 12.29 12.30 12.31 12.32 12.33 12.34 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 13.11 13.12 13.13
13.14 13.15 13.16 13.17 13.18 13.19 13.20 13.21 13.22 13.23 13.24
13.25 13.26
13.27 13.28 13.29 13.30 13.31 13.32 13.33 13.34 14.1 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9
14.10 14.11 14.12
14.13 14.14 14.15 14.16 14.17 14.18 14.19 14.20 14.21 14.22
14.23 14.24 14.25
14.26 14.27
14.28 14.29
14.30 14.31 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9
15.10 15.11 15.12
15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 15.23 15.24 15.25 15.26
15.27 15.28 15.29
15.30 15.31 15.32 16.1 16.2 16.3 16.4 16.5 16.6 16.7 16.8 16.9
16.10
16.11 16.12 16.13 16.14 16.15 16.16 16.17 16.18 16.19 16.20 16.21 16.22 16.23 16.24 16.25 16.26 16.27 16.28 16.29 16.30 16.31 16.32 16.33 16.34 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8
17.9 17.10 17.11
17.12 17.13 17.14 17.15 17.16 17.17 17.18 17.19 17.20 17.21 17.22 17.23 17.24 17.25 17.26 17.27 17.28 17.29 17.30 17.31 17.32 17.33 17.34 17.35 18.1 18.2 18.3 18.4 18.5 18.6 18.7 18.8 18.9 18.10 18.11
18.12 18.13 18.14
18.15 18.16 18.17 18.18 18.19 18.20 18.21 18.22 18.23 18.24 18.25 18.26 18.27 18.28 18.29 18.30 18.31 18.32 18.33 18.34 19.1 19.2 19.3 19.4 19.5 19.6 19.7 19.8 19.9 19.10 19.11 19.12 19.13 19.14 19.15 19.16
19.17 19.18 19.19
19.20 19.21 19.22 19.23 19.24 19.25 19.26 19.27 19.28 19.29 19.30 19.31 19.32 19.33 19.34 19.35 20.1 20.2 20.3 20.4 20.5 20.6 20.7 20.8 20.9 20.10 20.11 20.12 20.13 20.14 20.15 20.16 20.17 20.18 20.19 20.20 20.21 20.22 20.23 20.24 20.25
20.26 20.27 20.28
20.29 20.30
20.31 20.32 20.33 20.34 21.1 21.2 21.3 21.4 21.5 21.6 21.7 21.8 21.9 21.10 21.11 21.12 21.13 21.14 21.15 21.16 21.17 21.18 21.19 21.20 21.21 21.22 21.23 21.24 21.25 21.26 21.27 21.28 21.29 21.30 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 22.12 22.13
22.14 22.15 22.16 22.17 22.18 22.19 22.20 22.21 22.22 22.23 22.24 22.25 22.26 22.27 22.28 22.29 22.30 22.31 22.32 22.33 22.34 22.35 23.1 23.2 23.3 23.4 23.5 23.6 23.7 23.8 23.9 23.10 23.11 23.12 23.13 23.14 23.15 23.16 23.17 23.18 23.19 23.20 23.21 23.22 23.23 23.24 23.25 23.26 23.27 23.28 23.29 23.30 23.31 23.32 23.33 23.34 23.35 23.36 24.1 24.2 24.3 24.4 24.5 24.6 24.7 24.8 24.9 24.10 24.11 24.12 24.13 24.14 24.15 24.16 24.17 24.18
24.19 24.20
24.21 24.22 24.23 24.24 24.25 24.26 24.27 24.28 24.29 24.30 24.31
24.32 24.33 24.34 25.1 25.2 25.3 25.4 25.5 25.6 25.7 25.8 25.9 25.10 25.11 25.12 25.13 25.14 25.15 25.16 25.17 25.18 25.19 25.20 25.21 25.22 25.23 25.24 25.25 25.26 25.27 25.28 25.29 25.30 25.31 25.32 25.33 25.34 25.35 25.36 26.1 26.2 26.3 26.4 26.5 26.6 26.7 26.8 26.9 26.10 26.11 26.12 26.13 26.14 26.15 26.16 26.17 26.18 26.19
26.20 26.21
26.22 26.23 26.24 26.25 26.26 26.27 26.28 26.29 26.30 26.31 26.32 26.33 26.34 26.35
27.1 27.2
27.3 27.4 27.5 27.6 27.7 27.8 27.9 27.10 27.11 27.12 27.13 27.14 27.15 27.16
27.17 27.18
27.19 27.20 27.21 27.22 27.23 27.24 27.25 27.26 27.27 27.28 27.29 27.30 27.31 27.32 27.33
28.1 28.2
28.3 28.4 28.5 28.6 28.7 28.8 28.9 28.10 28.11 28.12 28.13 28.14 28.15 28.16 28.17 28.18 28.19 28.20 28.21 28.22 28.23 28.24 28.25
28.26
28.27 28.28 28.29 28.30 28.31 28.32 28.33 28.34 29.1 29.2 29.3 29.4 29.5 29.6 29.7
29.8 29.9
29.10 29.11 29.12 29.13 29.14 29.15 29.16 29.17 29.18 29.19 29.20 29.21 29.22 29.23 29.24 29.25 29.26 29.27 29.28 29.29 29.30 29.31 29.32 29.33 29.34 30.1 30.2 30.3 30.4 30.5 30.6
30.7 30.8
30.9 30.10 30.11 30.12 30.13 30.14 30.15 30.16 30.17 30.18 30.19 30.20 30.21 30.22 30.23 30.24 30.25
30.26 30.27
30.28 30.29 30.30 30.31 30.32 30.33 31.1 31.2 31.3 31.4 31.5 31.6 31.7 31.8 31.9 31.10 31.11 31.12 31.13 31.14 31.15
31.16 31.17
31.18 31.19 31.20 31.21 31.22 31.23 31.24 31.25 31.26 31.27 31.28 31.29 31.30 31.31 31.32 31.33 31.34 32.1 32.2 32.3 32.4 32.5 32.6 32.7 32.8 32.9 32.10 32.11 32.12 32.13 32.14 32.15 32.16 32.17 32.18 32.19 32.20 32.21 32.22 32.23 32.24 32.25 32.26 32.27 32.28 32.29 32.30 32.31 32.32 32.33 32.34 32.35 32.36 33.1 33.2 33.3 33.4 33.5 33.6 33.7 33.8 33.9 33.10 33.11 33.12 33.13 33.14 33.15 33.16 33.17 33.18 33.19 33.20 33.21 33.22 33.23 33.24 33.25 33.26 33.27 33.28 33.29 33.30 33.31 33.32 33.33 33.34 34.1 34.2 34.3 34.4 34.5 34.6 34.7 34.8 34.9 34.10 34.11
34.12 34.13
34.14 34.15 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 35.1 35.2 35.3
35.4 35.5 35.6 35.7 35.8 35.9 35.10 35.11 35.12 35.13 35.14 35.15 35.16 35.17 35.18 35.19 35.20 35.21 35.22 35.23 35.24 35.25 35.26 35.27 35.28 35.29
35.30 35.31 35.32 35.33 35.34 36.1 36.2 36.3 36.4 36.5 36.6 36.7 36.8 36.9 36.10 36.11 36.12 36.13 36.14 36.15 36.16 36.17 36.18 36.19 36.20 36.21 36.22 36.23 36.24 36.25 36.26 36.27 36.28 36.29 36.30 36.31 36.32 36.33 36.34 36.35 37.1 37.2 37.3 37.4 37.5 37.6 37.7 37.8 37.9 37.10 37.11 37.12 37.13 37.14 37.15 37.16 37.17 37.18
37.19 37.20 37.21 37.22 37.23 37.24 37.25 37.26
37.27 37.28 37.29 37.30 37.31
37.32 37.33 38.1 38.2 38.3 38.4 38.5
38.6 38.7 38.8 38.9
38.10 38.11 38.12 38.13 38.14 38.15 38.16 38.17 38.18 38.19 38.20
38.21
38.22 38.23 38.24 38.25 38.26 38.27 38.28 38.29 38.30 38.31 38.32 39.1 39.2 39.3 39.4 39.5 39.6 39.7
39.8
39.9 39.10 39.11 39.12 39.13 39.14 39.15 39.16
39.17 39.18 39.19 39.20 39.21 39.22
39.23
39.24 39.25 39.26 39.27 39.28 39.29 39.30 39.31 39.32 40.1 40.2 40.3 40.4 40.5
40.6 40.7
40.8 40.9
40.10 40.11 40.12 40.13 40.14 40.15 40.16 40.17 40.18 40.19 40.20 40.21 40.22 40.23 40.24 40.25 40.26 40.27 40.28 40.29 40.30 40.31 40.32 40.33 40.34 41.1 41.2 41.3 41.4 41.5 41.6 41.7 41.8 41.9 41.10 41.11 41.12 41.13 41.14 41.15 41.16 41.17 41.18 41.19 41.20 41.21 41.22 41.23 41.24 41.25 41.26 41.27 41.28 41.29 41.30 41.31 41.32 41.33 41.34 41.35 41.36 42.1 42.2 42.3 42.4 42.5 42.6 42.7 42.8
42.9 42.10
42.11 42.12 42.13 42.14 42.15 42.16 42.17 42.18 42.19 42.20 42.21 42.22 42.23 42.24 42.25 42.26 42.27 42.28 42.29 42.30 42.31 42.32 42.33 42.34 43.1 43.2 43.3 43.4 43.5 43.6 43.7 43.8 43.9 43.10 43.11 43.12 43.13 43.14 43.15 43.16 43.17 43.18 43.19 43.20 43.21 43.22 43.23 43.24 43.25 43.26 43.27 43.28 43.29 43.30 43.31 43.32 43.33 43.34 43.35 43.36 44.1 44.2 44.3 44.4 44.5 44.6 44.7 44.8 44.9 44.10 44.11 44.12 44.13 44.14 44.15 44.16 44.17 44.18 44.19 44.20 44.21 44.22 44.23 44.24 44.25 44.26 44.27 44.28 44.29 44.30 44.31 44.32 44.33 44.34 44.35 44.36 45.1 45.2 45.3 45.4 45.5 45.6 45.7 45.8 45.9 45.10 45.11 45.12 45.13 45.14 45.15 45.16 45.17 45.18 45.19 45.20 45.21 45.22 45.23 45.24 45.25 45.26 45.27 45.28 45.29 45.30 45.31 45.32 45.33 45.34 45.35 45.36 46.1 46.2 46.3 46.4 46.5 46.6 46.7 46.8 46.9 46.10 46.11 46.12 46.13 46.14 46.15 46.16
46.17 46.18
46.19 46.20 46.21 46.22 46.23 46.24 46.25 46.26 46.27 46.28 46.29 46.30 46.31 46.32 46.33 46.34 46.35 47.1 47.2
47.3 47.4
47.5 47.6 47.7 47.8 47.9 47.10 47.11 47.12 47.13 47.14 47.15 47.16 47.17 47.18 47.19 47.20
47.21 47.22
47.23 47.24 47.25 47.26 47.27 47.28 47.29 47.30 47.31 47.32 47.33 48.1 48.2 48.3 48.4 48.5 48.6 48.7 48.8 48.9 48.10
48.11 48.12
48.13 48.14 48.15 48.16 48.17 48.18 48.19 48.20 48.21 48.22 48.23 48.24 48.25
48.26
48.27 48.28 48.29 48.30 48.31 48.32 48.33 49.1 49.2 49.3 49.4
49.5
49.6 49.7 49.8 49.9 49.10 49.11 49.12 49.13 49.14 49.15 49.16 49.17 49.18 49.19 49.20 49.21 49.22 49.23 49.24 49.25 49.26 49.27 49.28 49.29 49.30 49.31 49.32 49.33 49.34 49.35 50.1 50.2 50.3 50.4 50.5 50.6 50.7 50.8 50.9 50.10 50.11 50.12 50.13
50.14
50.15 50.16
50.17 50.18 50.19 50.20 50.21 50.22 50.23 50.24 50.25 50.26 50.27 50.28 50.29 50.30 50.31 50.32 50.33 50.34 51.1 51.2 51.3 51.4 51.5 51.6 51.7 51.8 51.9 51.10 51.11 51.12 51.13 51.14 51.15 51.16 51.17 51.18 51.19 51.20 51.21 51.22 51.23 51.24 51.25 51.26 51.27 51.28 51.29 51.30 51.31 51.32 51.33 51.34 51.35 52.1 52.2 52.3 52.4 52.5 52.6 52.7 52.8 52.9 52.10 52.11 52.12 52.13 52.14 52.15 52.16 52.17 52.18 52.19 52.20 52.21 52.22 52.23 52.24 52.25 52.26 52.27 52.28 52.29 52.30 52.31 52.32 52.33 52.34 52.35 53.1 53.2 53.3 53.4 53.5 53.6 53.7 53.8 53.9 53.10 53.11 53.12 53.13 53.14 53.15 53.16
53.17
53.18 53.19 53.20 53.21 53.22 53.23 53.24 53.25 53.26 53.27 53.28 53.29 53.30 53.31 53.32 53.33 53.34 53.35 54.1 54.2 54.3 54.4 54.5 54.6
54.7
54.8 54.9 54.10 54.11 54.12
54.13
54.14 54.15 54.16 54.17
54.18
54.19 54.20 54.21 54.22 54.23
54.24
54.25 54.26 54.27 54.28 54.29 54.30 55.1 55.2 55.3 55.4 55.5 55.6 55.7 55.8 55.9 55.10 55.11 55.12 55.13 55.14 55.15 55.16 55.17
55.18
55.19 55.20 55.21 55.22 55.23 55.24 55.25 55.26 55.27 55.28 55.29 55.30 55.31 55.32 55.33 55.34 55.35
56.1
56.2 56.3 56.4 56.5 56.6 56.7 56.8 56.9 56.10 56.11 56.12 56.13 56.14 56.15 56.16 56.17 56.18 56.19 56.20 56.21 56.22 56.23 56.24
56.25
56.26 56.27 56.28 56.29 56.30 56.31 56.32 56.33 57.1 57.2 57.3 57.4 57.5 57.6 57.7 57.8 57.9 57.10 57.11 57.12 57.13 57.14 57.15
57.16
57.17 57.18 57.19 57.20 57.21
57.22
57.23 57.24 57.25 57.26 57.27
57.28
57.29 57.30 57.31 57.32 58.1 58.2 58.3
58.4
58.5 58.6 58.7 58.8 58.9 58.10 58.11 58.12 58.13 58.14 58.15 58.16 58.17 58.18 58.19 58.20
58.21
58.22 58.23 58.24 58.25 58.26 58.27 58.28 58.29 58.30 58.31 58.32 58.33
59.1
59.2 59.3 59.4 59.5 59.6 59.7 59.8
59.9
59.10 59.11 59.12 59.13 59.14 59.15 59.16 59.17 59.18 59.19 59.20 59.21 59.22 59.23 59.24 59.25 59.26 59.27 59.28 59.29 59.30 59.31 59.32 59.33 60.1 60.2 60.3 60.4 60.5 60.6 60.7 60.8 60.9 60.10 60.11 60.12 60.13 60.14 60.15 60.16
60.17 60.18 60.19
60.20 60.21 60.22 60.23 60.24 60.25 60.26 60.27 60.28 60.29 60.30 60.31 60.32 60.33 60.34 61.1 61.2 61.3 61.4 61.5 61.6 61.7 61.8 61.9 61.10 61.11 61.12 61.13 61.14
61.15 61.16
61.17 61.18 61.19 61.20 61.21 61.22 61.23 61.24 61.25 61.26 61.27 61.28 61.29 61.30 61.31 61.32 61.33 61.34 62.1 62.2 62.3 62.4 62.5 62.6 62.7 62.8 62.9 62.10 62.11 62.12 62.13 62.14 62.15 62.16 62.17 62.18 62.19
62.20
62.21 62.22 62.23 62.24 62.25 62.26 62.27 62.28 62.29 62.30 62.31 62.32 62.33 62.34 62.35 63.1 63.2 63.3 63.4 63.5 63.6 63.7 63.8 63.9 63.10 63.11 63.12 63.13 63.14 63.15 63.16 63.17 63.18 63.19 63.20 63.21 63.22 63.23 63.24
63.25 63.26 63.27 63.28
63.29 63.30 63.31 63.32 63.33 63.34 63.35 64.1 64.2 64.3 64.4 64.5 64.6 64.7 64.8 64.9 64.10 64.11 64.12 64.13 64.14 64.15 64.16 64.17 64.18 64.19 64.20 64.21 64.22 64.23 64.24 64.25 64.26 64.27 64.28 64.29 64.30
64.31
64.32 64.33 64.34 65.1 65.2 65.3 65.4 65.5 65.6 65.7 65.8 65.9 65.10 65.11 65.12 65.13 65.14 65.15 65.16 65.17 65.18 65.19 65.20 65.21 65.22 65.23 65.24 65.25 65.26 65.27 65.28 65.29 65.30 65.31 65.32
65.33
65.34 66.1 66.2 66.3 66.4 66.5 66.6 66.7 66.8 66.9 66.10 66.11 66.12 66.13 66.14 66.15 66.16 66.17 66.18 66.19 66.20 66.21 66.22 66.23 66.24 66.25 66.26 66.27 66.28 66.29 66.30 66.31 66.32 66.33
66.34
66.35 67.1 67.2 67.3 67.4 67.5 67.6 67.7 67.8 67.9 67.10 67.11 67.12 67.13 67.14 67.15 67.16 67.17 67.18 67.19 67.20 67.21 67.22 67.23 67.24 67.25 67.26 67.27 67.28 67.29 67.30 67.31
67.32
67.33 67.34 67.35 68.1 68.2 68.3 68.4 68.5 68.6 68.7 68.8
68.9
68.10 68.11 68.12 68.13 68.14 68.15 68.16 68.17 68.18 68.19
68.20
68.21 68.22 68.23 68.24 68.25 68.26 68.27 68.28 68.29 68.30 68.31 68.32 69.1 69.2 69.3 69.4 69.5 69.6 69.7 69.8 69.9 69.10 69.11 69.12 69.13 69.14 69.15 69.16
69.17
69.18 69.19 69.20 69.21 69.22 69.23 69.24 69.25 69.26 69.27 69.28 69.29 69.30 69.31 69.32 69.33 69.34
70.1
70.2 70.3 70.4 70.5 70.6 70.7 70.8 70.9 70.10 70.11 70.12
70.13
70.14 70.15 70.16 70.17 70.18 70.19 70.20 70.21 70.22 70.23 70.24 70.25 70.26 70.27 70.28 70.29 70.30 70.31 70.32 70.33 70.34 71.1 71.2 71.3 71.4 71.5 71.6 71.7 71.8 71.9 71.10
71.11 71.12
71.13 71.14 71.15 71.16 71.17 71.18 71.19 71.20 71.21 71.22
71.23
71.24 71.25 71.26 71.27 71.28 71.29 71.30 71.31
71.32
72.1 72.2 72.3 72.4
72.5
72.6 72.7
72.8 72.9 72.10 72.11 72.12 72.13 72.14 72.15 72.16 72.17 72.18 72.19 72.20 72.21 72.22 72.23 72.24 72.25 72.26 72.27 72.28 72.29 72.30 72.31 72.32 72.33 72.34 73.1 73.2 73.3 73.4 73.5 73.6
73.7 73.8
73.9 73.10 73.11 73.12 73.13 73.14 73.15 73.16
73.17 73.18
73.19 73.20 73.21 73.22 73.23 73.24 73.25 73.26 73.27 73.28 73.29 73.30 73.31 73.32 73.33 74.1 74.2 74.3 74.4 74.5 74.6 74.7 74.8 74.9 74.10 74.11 74.12 74.13 74.14 74.15 74.16 74.17 74.18 74.19 74.20 74.21 74.22
74.23
74.24 74.25 74.26 74.27 74.28 74.29 74.30 74.31 74.32 74.33 74.34 74.35 75.1 75.2 75.3 75.4 75.5
75.6
75.7 75.8 75.9 75.10 75.11 75.12 75.13 75.14 75.15 75.16 75.17 75.18
75.19
75.20 75.21 75.22 75.23 75.24 75.25 75.26 75.27 75.28 75.29 75.30 75.31
75.32
76.1 76.2 76.3 76.4 76.5 76.6 76.7 76.8 76.9 76.10 76.11 76.12 76.13
76.14
76.15 76.16
76.17 76.18 76.19 76.20 76.21 76.22
76.23
76.24 76.25 76.26 76.27 76.28 76.29 76.30 76.31
76.32
77.1 77.2 77.3 77.4 77.5 77.6 77.7 77.8 77.9 77.10 77.11 77.12 77.13 77.14 77.15 77.16 77.17 77.18 77.19 77.20 77.21 77.22 77.23 77.24 77.25
77.26
77.27 77.28 77.29 77.30 77.31 77.32 77.33 77.34 77.35 78.1 78.2 78.3 78.4
78.5
78.6 78.7 78.8 78.9 78.10 78.11 78.12 78.13 78.14 78.15 78.16 78.17
78.18
78.19 78.20 78.21 78.22 78.23 78.24 78.25 78.26
78.27
78.28 78.29 78.30 78.31 79.1 79.2 79.3 79.4 79.5 79.6 79.7 79.8 79.9 79.10 79.11 79.12 79.13 79.14 79.15 79.16 79.17 79.18 79.19 79.20 79.21 79.22 79.23 79.24 79.25 79.26
79.27
79.28 79.29 79.30 79.31 79.32 79.33 79.34 80.1 80.2 80.3 80.4 80.5 80.6 80.7 80.8 80.9 80.10 80.11 80.12 80.13 80.14 80.15 80.16 80.17 80.18
80.19 80.20 80.21
80.22 80.23
80.24 80.25 80.26 80.27 80.28
80.29 80.30 80.31 80.32 80.33 81.1 81.2 81.3 81.4
81.5 81.6 81.7 81.8 81.9 81.10 81.11 81.12 81.13 81.14 81.15 81.16 81.17 81.18 81.19 81.20 81.21 81.22 81.23 81.24 81.25 81.26 81.27 81.28 81.29 81.30 81.31 81.32 81.33
81.34 82.1 82.2 82.3 82.4 82.5 82.6 82.7 82.8 82.9 82.10 82.11 82.12 82.13 82.14 82.15 82.16 82.17 82.18 82.19 82.20 82.21 82.22
82.23 82.24 82.25 82.26 82.27 82.28 82.29 82.30 82.31 82.32 82.33 82.34 83.1 83.2 83.3 83.4 83.5 83.6 83.7 83.8 83.9 83.10 83.11 83.12
83.13 83.14 83.15 83.16 83.17 83.18 83.19 83.20 83.21 83.22 83.23 83.24 83.25 83.26 83.27 83.28
83.29 83.30 83.31 83.32 83.33 83.34 84.1 84.2 84.3 84.4 84.5 84.6 84.7 84.8 84.9 84.10 84.11 84.12 84.13 84.14
84.15 84.16 84.17 84.18 84.19 84.20 84.21
84.22 84.23 84.24 84.25 84.26 84.27 84.28 84.29 84.30 84.31 84.32 84.33 84.34 85.1 85.2 85.3
85.4 85.5 85.6 85.7 85.8 85.9 85.10
85.11 85.12
85.13 85.14 85.15
85.16 85.17 85.18 85.19 85.20 85.21 85.22
85.23 85.24 85.25 85.26 85.27 85.28 85.29 85.30 85.31 86.1 86.2
86.3
86.4 86.5 86.6 86.7 86.8 86.9 86.10 86.11 86.12 86.13 86.14 86.15 86.16
86.17
86.18 86.19 86.20 86.21 86.22 86.23
86.24
86.25 86.26
86.27 86.28 86.29 86.30 86.31 87.1 87.2 87.3 87.4 87.5 87.6 87.7 87.8 87.9 87.10 87.11 87.12 87.13 87.14 87.15 87.16 87.17 87.18 87.19 87.20 87.21 87.22 87.23 87.24 87.25 87.26 87.27 87.28 87.29 87.30 87.31 87.32
87.33 87.34
87.35 88.1 88.2 88.3 88.4 88.5 88.6 88.7 88.8 88.9 88.10 88.11 88.12 88.13 88.14 88.15 88.16 88.17 88.18 88.19 88.20 88.21 88.22 88.23 88.24 88.25 88.26 88.27 88.28 88.29 88.30 88.31 88.32 88.33 88.34 88.35
89.1 89.2 89.3
89.4 89.5 89.6 89.7 89.8 89.9 89.10 89.11 89.12 89.13 89.14 89.15 89.16 89.17 89.18 89.19 89.20 89.21
89.22 89.23
89.24 89.25 89.26 89.27 89.28 89.29 89.30 89.31 89.32 89.33 90.1 90.2 90.3 90.4 90.5 90.6 90.7 90.8
90.9 90.10 90.11
90.12 90.13 90.14 90.15 90.16 90.17 90.18 90.19 90.20 90.21 90.22 90.23 90.24 90.25 90.26 90.27 90.28 90.29 90.30 90.31 90.32 90.33 90.34 90.35 91.1 91.2 91.3 91.4 91.5 91.6 91.7 91.8 91.9 91.10 91.11 91.12 91.13 91.14 91.15 91.16 91.17 91.18 91.19 91.20 91.21 91.22 91.23
91.24 91.25
91.26 91.27 91.28 91.29 91.30 91.31 91.32 91.33 91.34 91.35 92.1 92.2 92.3 92.4 92.5 92.6 92.7 92.8 92.9 92.10 92.11 92.12 92.13 92.14
92.15 92.16 92.17 92.18 92.19 92.20 92.21 92.22 92.23 92.24 92.25 92.26 92.27 92.28 92.29 92.30 92.31 92.32 92.33 92.34 92.35 93.1 93.2 93.3 93.4 93.5 93.6 93.7 93.8
93.9 93.10
93.11 93.12 93.13 93.14 93.15 93.16 93.17 93.18 93.19 93.20 93.21 93.22 93.23 93.24 93.25 93.26 93.27 93.28 93.29 93.30 93.31 93.32 93.33 93.34 93.35 94.1 94.2 94.3 94.4 94.5 94.6 94.7 94.8 94.9 94.10 94.11 94.12 94.13 94.14 94.15 94.16 94.17 94.18 94.19 94.20 94.21 94.22 94.23 94.24 94.25 94.26 94.27 94.28 94.29 94.30 94.31 94.32 94.33 94.34 94.35 94.36 95.1 95.2 95.3 95.4 95.5 95.6 95.7 95.8 95.9 95.10 95.11 95.12 95.13 95.14 95.15 95.16 95.17 95.18 95.19 95.20 95.21 95.22 95.23
95.24 95.25 95.26
95.27 95.28 95.29 95.30 95.31 95.32 95.33 95.34 96.1 96.2 96.3 96.4 96.5 96.6 96.7 96.8 96.9 96.10 96.11 96.12 96.13 96.14 96.15 96.16 96.17 96.18 96.19 96.20 96.21 96.22 96.23 96.24 96.25 96.26 96.27 96.28 96.29 96.30 96.31 96.32 96.33 96.34 96.35 96.36 97.1 97.2 97.3 97.4 97.5 97.6 97.7 97.8 97.9 97.10 97.11 97.12 97.13 97.14 97.15 97.16 97.17 97.18 97.19 97.20
97.21 97.22
97.23 97.24 97.25 97.26 97.27 97.28 97.29 97.30 97.31 97.32 97.33 97.34 97.35 98.1 98.2 98.3 98.4 98.5 98.6 98.7 98.8 98.9 98.10 98.11 98.12 98.13 98.14 98.15 98.16 98.17 98.18 98.19 98.20 98.21 98.22 98.23 98.24 98.25 98.26 98.27 98.28
98.29 98.30
98.31 98.32 98.33 98.34 98.35 99.1 99.2 99.3 99.4 99.5 99.6 99.7 99.8 99.9 99.10 99.11 99.12 99.13 99.14 99.15 99.16 99.17 99.18 99.19 99.20 99.21 99.22 99.23 99.24
99.25
99.26 99.27 99.28 99.29 99.30 99.31 99.32
99.33 99.34
100.1 100.2 100.3 100.4 100.5 100.6 100.7 100.8 100.9 100.10 100.11 100.12 100.13 100.14 100.15 100.16 100.17 100.18 100.19 100.20 100.21 100.22 100.23 100.24 100.25 100.26 100.27
100.28 100.29 100.30 100.31 100.32 100.33 100.34 101.1 101.2 101.3 101.4 101.5 101.6 101.7 101.8 101.9 101.10 101.11 101.12 101.13 101.14 101.15 101.16 101.17 101.18 101.19 101.20 101.21 101.22 101.23 101.24 101.25 101.26 101.27 101.28 101.29 101.30 101.31 101.32 101.33 101.34 101.35
102.1 102.2
102.3 102.4 102.5 102.6 102.7 102.8 102.9 102.10 102.11 102.12
102.13 102.14 102.15 102.16
102.17 102.18 102.19 102.20 102.21 102.22 102.23 102.24 102.25 102.26 102.27 102.28 102.29 102.30 102.31 102.32 102.33 102.34 103.1 103.2 103.3 103.4 103.5 103.6
103.7 103.8 103.9 103.10 103.11
103.12 103.13 103.14 103.15 103.16 103.17
103.18 103.19
103.20 103.21
103.22 103.23 103.24 103.25 103.26 103.27 103.28 103.29 103.30 103.31 103.32 104.1 104.2 104.3 104.4 104.5 104.6 104.7 104.8 104.9 104.10 104.11 104.12 104.13 104.14 104.15 104.16 104.17 104.18 104.19 104.20 104.21 104.22 104.23 104.24 104.25 104.26 104.27 104.28 104.29 104.30 104.31 104.32 104.33 104.34 104.35 104.36 105.1 105.2 105.3 105.4 105.5 105.6 105.7 105.8 105.9 105.10 105.11 105.12 105.13 105.14 105.15 105.16 105.17 105.18 105.19 105.20 105.21 105.22 105.23 105.24 105.25 105.26 105.27 105.28 105.29 105.30 105.31 105.32 105.33 105.34 105.35 105.36 106.1 106.2 106.3 106.4 106.5 106.6 106.7 106.8 106.9 106.10 106.11 106.12 106.13 106.14 106.15 106.16 106.17 106.18 106.19 106.20 106.21 106.22 106.23 106.24 106.25 106.26 106.27 106.28 106.29 106.30 106.31 106.32 106.33 106.34 106.35 106.36 107.1 107.2 107.3 107.4 107.5 107.6 107.7 107.8 107.9 107.10 107.11 107.12 107.13 107.14 107.15 107.16 107.17 107.18 107.19 107.20 107.21 107.22 107.23 107.24 107.25 107.26 107.27 107.28 107.29 107.30 107.31 107.32 107.33 107.34 107.35 107.36 108.1 108.2 108.3 108.4 108.5 108.6 108.7 108.8 108.9 108.10 108.11
108.12
108.13 108.14 108.15 108.16 108.17 108.18 108.19 108.20 108.21 108.22 108.23 108.24 108.25 108.26 108.27 108.28 108.29 108.30 108.31 108.32 108.33 108.34 108.35 109.1 109.2 109.3
109.4
109.5 109.6 109.7 109.8 109.9 109.10 109.11 109.12 109.13 109.14 109.15 109.16 109.17 109.18 109.19 109.20 109.21 109.22
109.23
109.24 109.25
109.26 109.27 109.28 109.29
109.30 109.31
110.1 110.2 110.3 110.4 110.5 110.6 110.7 110.8 110.9 110.10 110.11 110.12 110.13 110.14 110.15 110.16 110.17 110.18 110.19 110.20 110.21 110.22
110.23 110.24
110.25 110.26 110.27 110.28 110.29 110.30 110.31 110.32 110.33 111.1 111.2 111.3
111.4 111.5
111.6 111.7 111.8 111.9 111.10 111.11 111.12 111.13 111.14 111.15 111.16 111.17 111.18
111.19 111.20
111.21 111.22 111.23 111.24 111.25 111.26 111.27 111.28 111.29 111.30 111.31 111.32 111.33 112.1 112.2 112.3 112.4 112.5 112.6 112.7 112.8 112.9
112.10 112.11
112.12 112.13 112.14 112.15 112.16 112.17 112.18 112.19 112.20 112.21 112.22 112.23 112.24 112.25 112.26 112.27 112.28
112.29 112.30
112.31 112.32 112.33 113.1 113.2 113.3 113.4 113.5 113.6 113.7 113.8 113.9
113.10 113.11
113.12 113.13 113.14 113.15 113.16 113.17 113.18 113.19 113.20 113.21 113.22
113.23 113.24
113.25 113.26 113.27 113.28 113.29 113.30 113.31 113.32 113.33 114.1 114.2 114.3 114.4 114.5 114.6 114.7 114.8 114.9 114.10 114.11 114.12 114.13 114.14 114.15 114.16 114.17 114.18 114.19 114.20 114.21 114.22 114.23 114.24 114.25 114.26 114.27 114.28 114.29 114.30
114.31 114.32 114.33 114.34 114.35 115.1 115.2 115.3 115.4 115.5 115.6 115.7 115.8 115.9
115.10 115.11 115.12 115.13 115.14 115.15 115.16 115.17 115.18
115.19 115.20
115.21 115.22 115.23 115.24 115.25 115.26 115.27 115.28 115.29 115.30 115.31 115.32 115.33 115.34 116.1 116.2 116.3 116.4 116.5 116.6 116.7 116.8
116.9 116.10 116.11 116.12 116.13 116.14 116.15 116.16 116.17 116.18 116.19 116.20 116.21 116.22 116.23 116.24 116.25 116.26 116.27 116.28 116.29 116.30 116.31 116.32 116.33 116.34 116.35 117.1 117.2 117.3 117.4 117.5 117.6 117.7 117.8 117.9 117.10 117.11
117.12
117.13 117.14 117.15 117.16 117.17 117.18 117.19 117.20 117.21 117.22 117.23 117.24 117.25 117.26
117.27 117.28 117.29
117.30 117.31 117.32 117.33 118.1 118.2 118.3 118.4 118.5 118.6 118.7 118.8
118.9
118.10 118.11 118.12 118.13
118.14
118.15 118.16 118.17
118.18 118.19
118.20 118.21 118.22 118.23 118.24 118.25 118.26 118.27 118.28 118.29 118.30 118.31 118.32 119.1 119.2 119.3
119.4
119.5 119.6 119.7 119.8 119.9 119.10 119.11 119.12 119.13 119.14 119.15 119.16 119.17 119.18 119.19 119.20 119.21 119.22 119.23 119.24 119.25 119.26 119.27 119.28
119.29 119.30
119.31 119.32 119.33 120.1 120.2 120.3 120.4 120.5 120.6 120.7 120.8 120.9 120.10 120.11 120.12 120.13
120.14 120.15
120.16 120.17 120.18 120.19 120.20 120.21 120.22 120.23 120.24 120.25 120.26 120.27 120.28 120.29 120.30 120.31 120.32 120.33 120.34 121.1 121.2 121.3 121.4
121.5
121.6 121.7 121.8 121.9 121.10 121.11 121.12 121.13 121.14 121.15 121.16 121.17 121.18 121.19 121.20 121.21 121.22 121.23 121.24 121.25 121.26 121.27 121.28 121.29 121.30 121.31 121.32
121.33
122.1 122.2 122.3 122.4 122.5 122.6 122.7 122.8 122.9 122.10 122.11 122.12 122.13 122.14 122.15 122.16 122.17 122.18 122.19 122.20 122.21 122.22 122.23 122.24 122.25 122.26 122.27 122.28 122.29 122.30 122.31
122.32
122.33 122.34 122.35 123.1 123.2 123.3 123.4 123.5 123.6 123.7 123.8 123.9 123.10 123.11 123.12
123.13 123.14
123.15 123.16 123.17 123.18 123.19 123.20 123.21 123.22 123.23 123.24 123.25 123.26 123.27 123.28
123.29 123.30
123.31 123.32 123.33 124.1 124.2 124.3 124.4
124.5
124.6 124.7 124.8 124.9 124.10 124.11 124.12 124.13 124.14 124.15 124.16
124.17
124.18 124.19 124.20 124.21 124.22 124.23 124.24 124.25 124.26 124.27 124.28 124.29 124.30 124.31 124.32 125.1 125.2 125.3 125.4 125.5 125.6 125.7 125.8 125.9 125.10 125.11 125.12 125.13 125.14
125.15
125.16 125.17 125.18 125.19 125.20 125.21 125.22 125.23 125.24 125.25 125.26 125.27 125.28 125.29 125.30 125.31 125.32 125.33
126.1 126.2 126.3 126.4 126.5 126.6 126.7 126.8 126.9 126.10 126.11 126.12 126.13 126.14 126.15 126.16 126.17 126.18 126.19 126.20 126.21 126.22 126.23 126.24 126.25 126.26 126.27 126.28 126.29 126.30 126.31 126.32 126.33 126.34 126.35
127.1
127.2 127.3 127.4 127.5 127.6 127.7 127.8 127.9
127.10
127.11 127.12 127.13 127.14 127.15 127.16 127.17 127.18 127.19 127.20 127.21 127.22 127.23 127.24 127.25 127.26
127.27
127.28 127.29 127.30 127.31 128.1 128.2 128.3 128.4 128.5 128.6 128.7 128.8
128.9 128.10 128.11 128.12 128.13 128.14 128.15 128.16
128.17
128.18 128.19 128.20

A bill for an act
relating to financing and operation of state and local government; making policy,
technical, administrative, enforcement, collection, refund, appeal, abatement,
and other changes to income, franchise, property, sales and use, deed, health
care provider, cigarette and tobacco products, liquor, estate, aggregate removal,
occupation, and production taxes, the property tax refund, and other taxes and
tax-related provisions; providing for administration of certain fees, aids, tax
titles, and tax sales; modifying accelerated sales tax requirements; conforming
provisions to changes in the Internal Revenue Code; providing income tax
credits; modifying and authorizing sales tax exemptions; modifying and
authorizing local government sales taxes; modifying certain levies; changing
ballots for referendum revenue; changing and providing property tax exemptions;
providing for aids and payments to local governments; modifying international
economic development zone authority; authorizing distributions of tax proceeds;
providing terms and conditions related to the issuance of obligations; defining
terms; providing for authorization of interfund loans; modifying the priorities for
allocating bond issuance authority; changing and imposing powers, duties, and
requirements on certain local governments and authorities and state departments
or agencies; providing for issuance of obligations by local governments and
other public authorities, and use of the proceeds of the debt; changing tax
increment financing and abatement provisions, and providing authorities to
certain districts; providing for allocation and transfers of funds; appropriating
money; amending Minnesota Statutes 2004, sections 103E.635, subdivision
7; 116A.20, subdivision 3; 116J.993, subdivision 3; 144F.01, subdivision 4;
162.18, subdivision 1; 162.181, subdivision 1; 216B.2424, subdivision 5;
272.02, subdivisions 45, 54, 55, by adding a subdivision; 272.029, subdivision
2; 273.032; 273.11, by adding a subdivision; 273.124, subdivision 12; 273.13,
subdivision 23; 273.1384, subdivision 2; 273.1398, subdivision 3; 281.23,
subdivision 9; 289A.60, subdivision 15; 290.06, by adding a subdivision;
290.091, subdivision 3; 290.17, subdivision 1; 295.50, subdivision 4; 295.53,
subdivision 3; 297A.61, subdivisions 12, 17, by adding subdivisions; 297A.63;
297A.668, subdivision 6; 297A.669, subdivision 11; 297A.67, subdivisions 4,
5, 14, 27; 297A.70, subdivisions 2, 3, 4, 7, 13, 14, 15; 297A.71, by adding a
subdivision; 297A.99, subdivision 7; 297F.01, by adding a subdivision; 297F.09,
subdivision 10; 297G.01, subdivision 7, by adding a subdivision; 297G.09,
subdivision 9; 298.001, by adding a subdivision; 298.01, subdivisions 3a, 3b, 4a,
4b, by adding a subdivision; 298.227; 298.28, subdivisions 6, 8; 298.2961, by
adding a subdivision; 298.75, by adding a subdivision; 373.45, subdivision 1;
469.035; 469.103, subdivision 2; 469.175, subdivision 4; 469.176, subdivision 1;
469.1763, subdivisions 3, 4; 469.1771, subdivision 2a; 469.1813, subdivisions
1, 6b, 8, 9, by adding a subdivision; 469.312, subdivision 5; 473.39, by adding
a subdivision; 474A.062; 475.58, subdivision 1; 477A.013, subdivision 9;
477A.014, subdivision 1; 645.44, by adding a subdivision; Minnesota Statutes
2005 Supplement, sections 115B.49, subdivision 4; 126C.17, subdivision 9;
270C.01, subdivision 4; 270C.304; 270C.33, subdivision 4; 270C.57, subdivision
3; 270C.67, subdivision 1, by adding a subdivision; 270C.722, subdivision 2;
271.12; 272.02, subdivisions 53, 83; 273.13, subdivisions 22, 25; 273.1384,
subdivision 1; 284.07; 289A.02, subdivision 7; 289A.121, subdivision 5;
289A.20, subdivision 4; 290.01, subdivisions 19, 19a, 19c, 31; 290.0675,
subdivision 1; 290.0922, subdivisions 2, 3; 290A.03, subdivision 15; 291.005,
subdivision 1; 297A.61, subdivision 3; 297A.67, subdivision 6; 297A.68,
subdivisions 37, 38, 41; 297A.72, subdivision 2; 297A.75, subdivisions 1, 2, 3;
297A.815, subdivision 1; 298.01, subdivisions 3, 4; 298.2961, subdivision 4;
469.175, subdivisions 2, 5; 469.1763, subdivisions 2, 6; 469.177, subdivision 1;
469.178, subdivision 7; 469.1813, subdivision 6; 469.322; 469.323, subdivision
2; 469.327; 477A.011, subdivision 36; Laws 1996, chapter 471, article 2,
section 29, subdivisions 1, 4; Laws 2005, chapter 152, article 1, section 39,
subdivision 1; Laws 2001, First Special Session chapter 5, article 3, section 8,
as amended; Laws 2005, First Special Session chapter 3, article 5, sections 3;
14; 38, subdivision 2; 43, subdivision 3; 44, subdivision 1; article 10, section
23; proposing coding for new law in Minnesota Statutes, chapters 287; 290;
469; repealing Minnesota Statutes 2004, sections 297A.68, subdivisions 15, 18;
298.01, subdivisions 3c, 3d, 4d, 4e; Laws 1998, chapter 389, article 11, section
18; Minnesota Rules, parts 8130.0400, subpart 3; 8130.4800, subparts 1, 3, 4, 5,
6, 7, 8; 8130.5100; 8130.5400; 8130.5800, subpart 6.

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

ARTICLE 1

INCOME AND FRANCHISE TAXES

Section 1.

Minnesota Statutes 2004, section 290.06, is amended by adding a
subdivision to read:


new text begin Subd. 36. new text end

new text begin Bovine testing credit. new text end

new text begin (a) An owner of cattle in Minnesota may take a
credit against the tax due under this chapter for an amount equal to one-half the expenses
incurred during the taxable year to conduct tuberculosis testing on those cattle.
new text end

new text begin (b) If the amount of credit which the taxpayer is eligible to receive under this
subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of
revenue shall refund the excess to the taxpayer.
new text end

new text begin (c) The amount necessary to pay claims for the refund provided in this subdivision is
appropriated from the general fund to the commissioner of revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2005.
new text end

Sec. 2.

new text begin [290.0677] MILITARY SERVICE CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual is allowed a credit against the tax
due under this chapter equal to $59 for each month or portion thereof that the individual
was in active military service in a designated area after September 11, 2001, while a
Minnesota domiciliary.
new text end

new text begin (b) For active service performed after September 11, 2001, and before December 31,
2006, the individual may claim the credit in the taxable year beginning after December 31,
2005, and before January 1, 2007.
new text end

new text begin (c) For active service performed after December 31, 2006, the individual may claim
the credit for the taxable year in which the active service was performed.
new text end

new text begin (d) If a Minnesota domiciliary is killed while performing active military service in
a designated area, the individual's surviving spouse or dependent child may take
the credit in the taxable year of the death. If a Minnesota domiciliary was killed while
performing active military service in a designated area between September 11, 2001, and
December 31, 2006, the individual's surviving spouse or dependent child may claim
this credit in the taxable year beginning after December 31, 2005, and before January
1, 2007.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section the following terms have
the meanings given.
new text end

new text begin (b) "Designated area" means a:
new text end

new text begin (1) combat zone designated by Executive Order from the President of the United
States;
new text end

new text begin (2) qualified hazardous duty area, designated in Public Law; or
new text end

new text begin (3) location certified by the U. S. Department of Defense as eligible for combat zone
tax benefits due to the location's direct support of military operations.
new text end

new text begin (c) "Active military service" means active duty service in any of the United States
Armed Forces, the National Guard, or reserves.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable. new text end

new text begin If the amount of credit which the individual is eligible
to receive under this section exceeds the individual's tax liability under this chapter, the
commissioner shall refund the excess to the individual.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the refunds required by this
section is appropriated to the commissioner from the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2005.
new text end

Sec. 3.

Minnesota Statutes 2004, section 290.091, subdivision 3, is amended to read:


Subd. 3.

Exemption amount.

new text begin(a) new text endFor purposes of computing the alternative
minimum tax, the exemption amount isnew text begin:
new text end

new text begin (1) for taxable years beginning before January 1, 2006,new text end the exemption determined
under section 55(d) of the Internal Revenue Code, as amended through December 31,
1992new text begin; and
new text end

new text begin (2) for taxable years beginning after December 31, 2005, $60,000 for married
couples filing joint returns, $30,000 for married individuals filing separate returns, estates,
and trusts, and $45,000 for unmarried individuals.
new text end

new text begin (b) The exemption amount determined under this subdivision is subject to the phase
out under section 55(d)(3) of the Internal Revenue Code
new text end, except that alternative minimum
taxable income as determined under this section must be substituted in the computation
of the phase out deleted text beginunder section 55(d)(3)deleted text end.

new text begin (c) For taxable years beginning after December 31, 2006, the exemption amount
under paragraph (a), clause (2), must be adjusted for inflation. The commissioner shall
make the inflation adjustments in accordance with section 1(f) of the Internal Revenue
Code except that for the purposes of this subdivision the percentage increase must be
determined from the year starting September 1, 2005, and ending August 31, 2006, as the
base year for adjusting for inflation for the tax year beginning after December 31, 2006.
The determination of the commissioner under this subdivision is not a rule under the
Administrative Procedure Act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2005.
new text end

Sec. 4.

Minnesota Statutes 2004, section 290.17, subdivision 1, is amended to read:


Subdivision 1.

Scope of allocation rules.

(a) The income of resident individuals
is not subject to allocation outside this state. The allocation rules apply to nonresident
individuals, estates, trusts, nonresident partners of partnerships, nonresident shareholders
of corporations treated as "S" corporations under section 290.9725, and all corporations
not having such an election in effect. If a partnership or corporation would not otherwise
be subject to the allocation rules, but conducts a trade or business that is part of a
unitary business involving another legal entity that is subject to the allocation rules, the
partnership or corporation is subject to the allocation rules.

(b) Expenses, losses, and other deductions (referred to collectively in this paragraph
as "deductions") must be allocated along with the item or class of gross income to which
they are definitely related for purposes of assignment under this section or apportionment
under section 290.191, 290.20, or 290.36. Deductions deleted text beginnotdeleted text end definitely related to any item
deleted text begin or classdeleted text end of gross income deleted text beginaredeleted text end assigned new text beginunder subdivision 2, paragraph (e), are assigned new text endto
the taxpayer's domicile.

(c) In the case of an individual who is a resident for only part of a taxable year,
the individual's income, gains, losses, and deductions from the distributive share of a
partnership, S corporation, trust, or estate are not subject to allocation outside this state
to the extent of the distributive share multiplied by a ratio, the numerator of which is
the number of days the individual was a resident of this state during the tax year of the
partnership, S corporation, trust, or estate, and the denominator of which is the number of
days in the taxable year of the partnership, S corporation, trust, or estate.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

FEDERAL UPDATE

Section 1.

Minnesota Statutes 2005 Supplement, section 289A.02, subdivision 7,
is amended to read:


Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text beginApril
15, 2005
deleted text endnew text begin May 18, 2006new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19, is
amended to read:


Subd. 19.

Net income.

The term "net income" means the federal taxable income,
as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
date named in this subdivision, incorporating the federal effective dates of changes to the
Internal Revenue Code and any elections made by the taxpayer in accordance with the
Internal Revenue Code in determining federal taxable income for federal income tax
purposes, and with the modifications provided in subdivisions 19a to 19f.

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

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

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

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

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

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

The Internal Revenue Code of 1986, as amended through deleted text beginApril 15, 2005deleted text endnew text begin May 18,
2006
new text end, shall be in effect for taxable years beginning after December 31, 1996.

Except as otherwise provided, references to the Internal Revenue Code in
subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
the applicable year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19a, is
amended to read:


Subd. 19a.

Additions to federal taxable income.

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

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

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

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

(2) the amount of income or sales and use taxes paid or accrued within the taxable
year under this chapter and the amount of taxes based on net income paid or sales and
use taxes paid to any other state or to any province or territory of Canada, to the extent
allowed as a deduction under section 63(d) of the Internal Revenue Code, but the addition
may not be more than the amount by which the itemized deductions as allowed under
section 63(d) of the Internal Revenue Code exceeds the amount of the standard deduction
as defined in section 63(c) of the Internal Revenue Code deleted text beginminus the addition which would
have been required under clause (10) if the taxpayer had claimed the standard deduction
deleted text end.
For the purpose of this paragraph, the disallowance of itemized deductions under section
68 of the Internal Revenue Code of 1986, income or sales and use tax is the last itemized
deduction disallowed;

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

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

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

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

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

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

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

deleted text begin (10) for tax years beginning after December 31, 2004, to the extent deducted in
computing federal taxable income, the amount by which the standard deduction allowed
under section 63(c) of the Internal Revenue Code exceeds the standard deduction
allowable under section 63(c) of the Internal Revenue Code of 1986, as amended through
December 31, 2003; and
deleted text end

deleted text begin (11)deleted text endnew text begin (10)new text end the exclusion allowed under section 139A of the Internal Revenue Code
for federal subsidies for prescription drug plans.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2005.
new text end

Sec. 4.

Minnesota Statutes 2005 Supplement, section 290.01, subdivision 19c, is
amended to read:


Subd. 19c.

Corporations; additions to federal taxable income.

For corporations,
there shall be added to federal taxable income:

(1) the amount of any deduction taken for federal income tax purposes for income,
excise, or franchise taxes based on net income or related minimum taxes, including but not
limited to the tax imposed under section 290.0922, paid by the corporation to Minnesota,
another state, a political subdivision of another state, the District of Columbia, or any
foreign country or possession of the United States;

(2) interest not subject to federal tax upon obligations of: the United States, its
possessions, its agencies, or its instrumentalities; the state of Minnesota or any other
state, any of its political or governmental subdivisions, any of its municipalities, or any
of its governmental agencies or instrumentalities; the District of Columbia; or Indian
tribal governments;

(3) exempt-interest dividends received as defined in section 852(b)(5) of the Internal
Revenue Code;

(4) the amount of any net operating loss deduction taken for federal income tax
purposes under section 172 or 832(c)(10) of the Internal Revenue Code or operations loss
deduction under section 810 of the Internal Revenue Code;

(5) the amount of any special deductions taken for federal income tax purposes
under sections 241 to 247new text begin and 965 new text end of the Internal Revenue Code;

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

(7) the amount of any capital losses deducted for federal income tax purposes under
sections 1211 and 1212 of the Internal Revenue Code;

(8) the exempt foreign trade income of a foreign sales corporation under sections
921(a) and 291 of the Internal Revenue Code;

(9) the amount of percentage depletion deducted under sections 611 through 614 and
291 of the Internal Revenue Code;

(10) for certified pollution control facilities placed in service in a taxable year
beginning before December 31, 1986, and for which amortization deductions were elected
under section 169 of the Internal Revenue Code of 1954, as amended through December
31, 1985, the amount of the amortization deduction allowed in computing federal taxable
income for those facilities;

(11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g);

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

(13) the amount of net income excluded under section 114 of the Internal Revenue
Code;

(14) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of section deleted text begin614 of Public Law 107-147deleted text endnew text begin 103 of Public Law 109-222new text end;

(15) 80 percent of the depreciation deduction allowed under section 168(k)(1)(A)
and (k)(4)(A) of the Internal Revenue Code. For purposes of this clause, if the taxpayer
has an activity that in the taxable year generates a deduction for depreciation under
section 168(k)(1)(A) and (k)(4)(A) and the activity generates a loss for the taxable year
that the taxpayer is not allowed to claim for the taxable year, "the depreciation allowed
under section 168(k)(1)(A) and (k)(4)(A)" for the taxable year is limited to excess of the
depreciation claimed by the activity under section 168(k)(1)(A) and (k)(4)(A) over the
amount of the loss from the activity that is not allowed in the taxable year. In succeeding
taxable years when the losses not allowed in the taxable year are allowed, the depreciation
under section 168(k)(1)(A) and (k)(4)(A) is allowed;

(16) 80 percent of the amount by which the deduction allowed by section 179 of the
Internal Revenue Code exceeds the deduction allowable by section 179 of the Internal
Revenue Code of 1986, as amended through December 31, 2003;

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

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

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to clause (5) is effective at the same time as
the provisions of section 965 of the Internal Revenue Code. Clause (14) of this section is
effective for taxable years beginning after December 31, 2006.
new text end

Sec. 5.

Minnesota Statutes 2005 Supplement, section 290.01, subdivision 31, is
amended to read:


Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text beginApril
15, 2005
deleted text endnew text begin May 18, 2006new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2005 Supplement, section 290.0675, subdivision 1, is
amended to read:


Subdivision 1.

Definitions.

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

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

(1) earned income as defined in section 32(c)(2) of the Internal Revenue Code;

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

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

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

(d) "Earned income of lesser-earning spouse" means the earned income of the
spouse with the lesser amount of earned income as defined in paragraph (b) for the taxable
year minus the sum of (i) the amount for one exemption under section 151(d) of the
Internal Revenue Code and (ii) one-half the amount of the standard deduction under
section 63(c)(2)(A) and (4) of the Internal Revenue Code deleted text beginminus one-half of any addition
required under section 290.01, subdivision 19a, clause (10), and one-half of the addition
which would have been required under section 290.01, subdivision 19a, clause (10), if the
taxpayer had claimed the standard deduction
deleted text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2005.
new text end

Sec. 7.

Minnesota Statutes 2005 Supplement, section 290A.03, subdivision 15, is
amended to read:


Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through deleted text beginApril 15, 2005deleted text endnew text begin May 18, 2006new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on
property taxes payable on or after December 31, 2005, and rent paid on or after December
31, 2004.
new text end

Sec. 8.

Minnesota Statutes 2005 Supplement, section 291.005, subdivision 1, is
amended to read:


Subdivision 1.

Scope.

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

(1) "Federal gross estate" means the gross estate of a decedent as valued and
otherwise determined for federal estate tax purposes by federal taxing authorities pursuant
to the provisions of the Internal Revenue Code.

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

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

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

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

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

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

(8) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through deleted text beginApril 15, 2005deleted text endnew text begin May 18, 2006new text end.

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

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

SALES AND USE TAX

Section 1.

Minnesota Statutes 2005 Supplement, section 270C.722, subdivision 2,
is amended to read:


Subd. 2.

New permits after revocation.

(a) The commissioner shall not issue a
new permit after revocation or reinstate a revoked permit unless the taxpayer applies for a
permit and provides reasonable evidence of intention to comply with the sales and use
tax laws and rules. The commissioner may require the applicant to provide security, in
addition to that authorized by section 297A.92, in an amount reasonably necessary to
ensure compliance with the sales and use tax laws and rules. If the commissioner issues
or reinstates a permit not in conformance with the requirements of this subdivision or
applicable rules, the commissioner may cancel the permit upon notice to the permit holder.
The notice must be served by first class and certified mail at the permit holder's last known
address. The cancellation shall be effective immediately, subject to the right of the permit
holder to show that the permit was issued in conformance with the requirements of this
subdivision and applicable rules. Upon such showing, the permit must be reissued.

(b) If a taxpayer has had a permit or permits revoked three times in a five-year
period, the commissioner deleted text beginshall notdeleted text endnew text begin may refuse tonew text end issue a new permit or reinstate the
revoked permit until 24 months have elapsed after revocation and the taxpayer has
satisfied the conditions for reinstatement of a revoked permit or issuance of a new permit
imposed by this section and rules adopted under this section.

(c) For purposes of this subdivision, "taxpayer" means:

(1) an individual, if a revoked permit was issued to or in the name of an individual,
or a corporation or partnership, if a revoked permit was issued to or in the name of a
corporation or partnership; and

(2) an officer of a corporation, a member of a partnership, or an individual who is
liable for delinquent sales taxes, either for the entity for which the new or reinstated
permit is at issue, or for another entity for which a permit was previously revoked, or
personally as a permit holder.

Sec. 2.

Minnesota Statutes 2004, section 297A.71, is amended by adding a subdivision
to read:


new text begin Subd. 37. new text end

new text begin Hydroelectric generating facility. new text end

new text begin Materials and supplies used or
consumed in the construction of a 10.3 megawatt run-of-the-river hydroelectric generating
facility that meets the requirements of this subdivision are exempt. To qualify for the
exemption under this subdivision, a hydroelectric generating facility must:
new text end

new text begin (1) utilize between 12 and 16 turbine generators at a dam site existing on March
31, 1994;
new text end

new text begin (2) be located on land within 3,000 feet of a 13.8 kilovolt distribution circuit; and
new text end

new text begin (3) be eligible to receive a renewable energy production incentive payment under
section 216C.41.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
April 30, 2006, and on or before December 31, 2009.
new text end

Sec. 3.

Laws 1996, chapter 471, article 2, section 29, subdivision 1, is amended to read:



Subdivision 1. Sales tax authorized. Notwithstanding Minnesota Statutes, section
477A.016, or any other contrary provision of law, ordinance, or city charter, the city of
Hermantown may, by ordinance, impose an additional sales tax of up to one percent
on sales transactions taxable pursuant to Minnesota Statutes, chapter 297A, that occur
within the city. The proceeds of the tax imposed under this section must be used to
meet the costs of:


(1) extending a sewer interceptor line;


(2) construction of a booster pump station, reservoirs, and related improvements
to the water system; and


(3) construction of a new text beginbuilding containing a new text endpolice and fire stationnew text begin and an
administrative services facility
new text end.


new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
upon compliance with Minnesota Statutes, section 645.021, subdivision 3, by the city of
Hermantown.
new text end

Sec. 4.

Laws 1996, chapter 471, article 2, section 29, subdivision 4, is amended to read:



Subd. 4. Termination. The tax authorized under this section terminates deleted text beginat the later
of (1) ten years after the date of initial imposition of the tax, or (2) on the first day of the
second month next succeeding a determination by the city council that sufficient funds
have been received from the tax to finance the improvements described in subdivision 1,
clauses (1) to (3), and to prepay or retire at maturity the principal, interest, and premium
due on any bonds issued for the improvements
deleted text endnew text begin on March 31, 2026new text end. Any funds remaining
after completion of the improvements and retirement or redemption of the bonds may
be placed in the general fund of the city.

new text begin EFFECTIVE DATE.new text end

new text beginThis section is effective the day following final enactment,
upon compliance with Minnesota Statutes, section 645.021, subdivision 3, by the city of
Hermantown.
new text end


Sec. 5.

Laws 2005, First Special Session chapter 3, article 5, section 14, the effective
date, is amended to read:


EFFECTIVE DATE.

This section is effective for sales made after December 31,
2004, and on or before December 31, deleted text begin2007deleted text endnew text begin 2009new text end.

Sec. 6.

Laws 2005, First Special Session chapter 3, article 5, section 38, subdivision 2,
is amended to read:


Subd. 2. Use of revenues. The proceeds of the tax imposed under this section shall
be used to pay for lake improvement projects as detailed in the Shell Rock River watershed
plan new text beginand as directed by the Shell Rock River Watershed Board. Notwithstanding any
provision of statute, other law, or city charter to the contrary, the city shall transfer all
revenues from the tax imposed under subdivision 1, as soon as they are received, to the
Shell Rock River Watershed District. The city is not required to review the intended uses
of the revenues by the watershed district, nor is the watershed district required to submit
to the city proposed budgets, statements, or invoices explaining the intended uses of the
revenues as a prerequisite for the transfer of the revenues
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by the
governing body of the city of Albert Lea with Minnesota Statutes, section 645.021,
subdivision 3.
new text end

Sec. 7.

Laws 2005, First Special Session chapter 3, article 5, section 43, subdivision 3,
is amended to read:



Subd. 3. Use of revenues. Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
contained in the Minnesota Department of Transportation's Winona Intermodal study
dated June 2002 and in the resolution approved by the city council on January 3, 2005,
new text begin and all or a part of the capital costs of flood control projects, up to $1,200,000, approved
by resolution of the city council on February 6, 2006,
new text endincluding securing or paying debt
service on bonds issued under subdivision 4, for the transportation new text beginand flood control
new text end projects and to pay the cost of collecting and administering the tax. Authorized costs
include, but are not limited to, acquiring property and paying construction and engineering
costs related to the projects.


new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Winona and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 8.

Laws 2005, First Special Session chapter 3, article 5, section 44, subdivision 1,
is amended to read:



Subdivision 1. Sales and use tax. Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the
voters pursuant to Minnesota Statutes, section 297A.99, at deleted text beginthe nextdeleted text endnew text begin a new text end general electionnew text begin
held before January 1, 2008
new text end, the city of Worthington may impose by ordinance a sales
and use tax of up to one-half of one percent for the purpose specified in subdivision 3.
Except as otherwise provided in this section, the provisions of Minnesota Statutes, section
297A.99, govern the imposition, administration, collection, and enforcement of the tax
authorized under this subdivision.


new text begin EFFECTIVE DATE. new text end

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

Sec. 9. new text beginCITY OF AUSTIN; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, if approved by the
voters pursuant to Minnesota Statutes, section 297A.99, at the next general election or
special election held for that purpose before January 1, 2007, the city of Austin may
impose by ordinance a sales and use tax of up to one-half of one percent for the purpose
specified in subdivision 2. Except as otherwise provided in this section, the provisions of
Minnesota Statutes, section 297A.99, govern the imposition, administration, collection,
and enforcement of the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from taxes authorized by subdivision
1 must be used by the city of Austin to pay all or part of the capital or administrative costs
of flood mitigation projects in the city of Austin. Authorized expenses include, but are not
limited to, acquiring property and paying construction and engineering expenses related
to the flood mitigation projects.
new text end

new text begin Subd. 3. new text end

new text begin Bonding authority. new text end

new text begin Pursuant to the approval of the city voters to impose
the tax authorized in subdivision 1, the city of Austin may issue, without an additional
election, general obligation bonds of the city in an amount not to exceed $14,000,000 to
finance the costs for the projects specified in subdivision 2. The debt represented by the
bonds must not be included in computing any debt limitations applicable to the city, and
the levy of taxes required by Minnesota Statutes, section 475.61, to pay the principal or
any interest on the bonds must not be subject to any levy limitation.
new text end

new text begin Subd. 4. new text end

new text begin Termination of tax. new text end

new text begin The tax authorized under subdivision 1 terminates at
the earlier of:
new text end

new text begin (1) 20 years after the date of initial imposition of the tax; or
new text end

new text begin (2) when the Austin City Council determines that the amount described in
subdivision 2 has been received from the tax to finance the capital and administrative costs
for the projects specified in subdivision 2, and to repay or retire at maturity, the principal,
interest, and premium due on any bonds issued for the projects under subdivision 3.
new text end

new text begin Any funds remaining after completion of the projects specified in subdivision 2, and
retirement or redemption of the bonds in subdivision 3, may be placed in the general fund
of the city. The tax imposed under subdivision 1 may expire at an earlier time if the
city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Austin and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 10. new text beginCITY OF BAXTER; TAXES AUTHORIZED.
new text end

new text begin new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
the approval of the voters on November 2, 2004, and pursuant to Minnesota Statutes,
section 297A.99, the city of Baxter may impose by ordinance a sales and use tax of
one-half of one percent for the purposes specified in subdivision 3. The provisions of
Minnesota Statutes, section 297A.99, govern the imposition, administration, collection,
and enforcement of the tax authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other contrary provision of law, ordinance, or city charter, the city of
Baxter may impose by ordinance, for the purposes specified in subdivision 3, an excise tax
of up to $20 per motor vehicle, as defined by ordinance, purchased or acquired from any
person engaged within the city of Baxter in the business of selling motor vehicles at retail.
new text end

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
and to finance the acquisition and betterment of water and wastewater facilities to serve the
cities of Brainerd and Baxter, building and equipping a fire substation, as approved by the
voters at the referendum authorizing the tax. Authorized costs include, but are not limited
to, acquiring property and paying construction and engineering costs related to the projects.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The city of Baxter, pursuant to the approval of the voters at the
November 2, 2004, referendum authorizing the imposition of the taxes in this section, may
issue general obligation bonds of the city, in one or more series, in the aggregate principal
amount not to exceed $15,000,000 to finance the projects listed in subdivision 3. The debt
represented by the bonds is not included in computing any debt limitations applicable to
the city, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the
principal of and interest on the bonds is not subject to any levy limitation or included in
computing or applying any levy limitation applicable to the city of Baxter.
new text end

new text begin Subd. 5. new text end

new text begin Termination of taxes. new text end

new text begin The taxes imposed under subdivisions 1 and 2
expire at the earlier of a date 12 years after the imposition of the tax or when the Baxter
City Council first determines that the amount of revenues raised from the taxes to pay for
the projects under subdivision 3 equals or exceeds $15,000,000 plus any interest on bonds
issued for the projects under subdivision 4. Any funds remaining after the expiration of
the taxes and retirement of the bonds shall be placed in a capital project fund of the city of
Baxter. The taxes imposed under subdivisions 1 and 2 may expire at an earlier time if the
city of Baxter so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Baxter and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 11. new text beginCITY OF BRAINERD; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, contingent
on the approval of the voters on the November 7, 2006, referendum, and pursuant to
Minnesota Statutes, section 297A.99, the city of Brainerd may impose by ordinance a sales
and use tax of one-half of one percent for the purposes specified in subdivision 3. The
provisions of Minnesota Statutes, section 297A.99, govern the imposition, administration,
collection, and enforcement of the tax authorized under this section.
new text end

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, the city of Brainerd
may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of up
to $20 per motor vehicle, as defined by ordinance, purchased, or acquired from any person
engaged within the city of Brainerd in the business of selling motor vehicles at retail.
new text end

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay the cost of collecting and administering the tax
and to finance all or part of the costs of constructing upgraded water and wastewater
treatment facilities to serve the cities of Brainerd and Baxter, water infrastructure
improvements, and trail development, contingent on approval by Brainerd voters at the
November 7, 2006, referendum. Authorized costs include, but are not limited to, acquiring
property and paying construction and engineering costs related to the projects.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin The city of Brainerd, contingent on approval of the voters at the
November 7, 2006, referendum authorizing the imposition of taxes in this section, may
issue general obligation bonds of the city, in one or more series, in the aggregate principal
amount not to exceed $22,030,000 to finance the projects listed in subdivision 3. The debt
represented by the bonds is not included in computing any debt limitations applicable to
Brainerd, and the levy of taxes required by Minnesota Statutes, section 475.61, to pay the
principal and interest on the bonds is not subject to any levy limitation or included in
computing any levy limitation applicable to the city of Brainerd.
new text end

new text begin Subd. 5. new text end

new text begin Termination of taxes. new text end

new text begin The taxes imposed under subdivisions 1 and 2
expire at the earlier of a date 12 years after the imposition of the tax or when the city
council first determines that the amount of revenues raised from the taxes to pay for
projects under subdivision 3 equals or exceeds $22,030,000 plus any interest on bonds
issued for the projects under subdivision 4. Any funds remaining after the expiration of
the taxes and retirement of the bonds shall be placed in a capital project fund of the city of
Brainerd. The taxes imposed under subdivision 1 and 2 may expire at an earlier time if the
city of Brainerd so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Brainerd and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3.
new text end

Sec. 12. new text beginCITY OF OWATONNA; TAXES AUTHORIZED.
new text end

new text begin Subdivision 1. new text end

new text begin Sales and use tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes,
section 477A.016, or any other provision of law, ordinance, or city charter, if approved by
the voters at the next general election pursuant to Minnesota Statutes, section 297A.99,
the city of Owatonna may impose by ordinance a sales and use tax of one-half of one
percent for the purposes specified in subdivision 3. The provisions of Minnesota Statutes,
section 297A.99, govern the imposition, administration, collection, and enforcement of
the taxes authorized under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Excise tax authorized. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other provision of law, ordinance, or city charter, the city of Owatonna
may impose by ordinance, for the purposes specified in subdivision 3, an excise tax of
$20 per motor vehicle, as defined by ordinance, purchased or acquired from any person
engaged within the city in the business of selling motor vehicles at retail.
new text end

new text begin Subd. 3. new text end

new text begin Use of revenues. new text end

new text begin Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota
Department of Transportation, Steele County, and the city of Owatonna; regional parks
and trail developments; and the West Hills complex, including the firehall, and library
improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted
by the city on January 17, 2006. The amount paid from these revenues for transportation
projects may not exceed $4,450,000 plus associated bond costs. The amount paid from
these revenues for park and trail projects may not exceed $5,400,000 plus associated bond
costs. The amount paid from these revenues for West Hills complex, fire hall, and library
improvement projects may not exceed $2,823,000 plus associated bond costs.
new text end

new text begin Subd. 4. new text end

new text begin Bonds. new text end

new text begin (a) The city of Owatonna, if approved by voters pursuant to
Minnesota Statutes, section 297A.99, may issue bonds under Minnesota Statutes, chapter
475, to pay capital and administrative expenses for the projects described in subdivision 3,
in an amount that does not exceed $12,700,000. A separate election to approve the bonds
under Minnesota Statutes, section 475.58, is not required.
new text end

new text begin (b) The debt represented by the bonds is not included in computing any debt
limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
475.61, to pay principal and interest on the bonds, is not subject to any levy limitation.
new text end

new text begin Subd. 5. new text end

new text begin Termination of taxes. new text end

new text begin The taxes imposed under subdivisions 1 and 2
expire at the earlier of (1) ten years after the tax is first imposed, or (2) when the city
council determines that the amount of revenues received from the taxes to pay for the
projects under subdivision 3 first equals or exceeds the amount authorized to be spent for
each project plus the additional amount needed to pay the costs related to issuance of the
bonds under subdivision 4, including interest on the bonds. Any funds remaining after
completion of the projects and retirement or redemption of the bonds shall be placed in
a capital project fund of the city. The taxes imposed under sections 1 and 2 may expire
at an earlier time if the city so determines by ordinance.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after compliance by the
governing body of the city of Owatonna with Minnesota Statutes, section 645.021,
subdivision 3.
new text end

ARTICLE 4

PROPERTY TAXES

Section 1.

Minnesota Statutes 2004, section 116J.993, subdivision 3, is amended to
read:


Subd. 3.

Business subsidy.

"Business subsidy" or "subsidy" means a state or local
government agency grant, contribution of personal property, real property, infrastructure,
the principal amount of a loan at rates below those commercially available to the recipient,
any reduction or deferral of any tax or any fee, any guarantee of any payment under any
loan, lease, or other obligation, or any preferential use of government facilities given
to a business.

The following forms of financial assistance are not a business subsidy:

(1) a business subsidy of less than $25,000;

(2) assistance that is generally available to all businesses or to a general class of
similar businesses, such as a line of business, size, location, or similar general criteria;

(3) public improvements to buildings or lands owned by the state or local
government that serve a public purpose and do not principally benefit a single business or
defined group of businesses at the time the improvements are made;

(4) redevelopment property polluted by contaminants as defined in section 116J.552,
subdivision 3
;

(5) assistance provided for the sole purpose of renovating old or decaying building
stock or bringing it up to code and assistance provided for designated historic preservation
districts, provided that the assistance is equal to or less than 50 percent of the total cost;

(6) assistance to provide job readiness and training services if the sole purpose of
the assistance is to provide those services;

(7) assistance for housing;

(8) assistance for pollution control or abatement, including assistance for a tax
increment financing hazardous substance subdistrict as defined under section 469.174,
subdivision 23
;

(9) assistance for energy conservation;

(10) tax reductions resulting from conformity with federal tax law;

(11) workers' compensation and unemployment insurance;

(12) benefits derived from regulation;

(13) indirect benefits derived from assistance to educational institutions;

(14) funds from bonds allocated under chapter 474A, bonds issued to refund
outstanding bonds, and bonds issued for the benefit of an organization described in section
501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999;

(15) assistance for a collaboration between a Minnesota higher education institution
and a business;

(16) assistance for a tax increment financing soils condition district as defined under
section 469.174, subdivision 19;

(17) redevelopment when the recipient's investment in the purchase of the site
and in site preparation is 70 percent or more of the assessor's current year's estimated
market value;

(18) general changes in tax increment financing law and other general tax law
changes of a principally technical nature;

(19) federal assistance until the assistance has been repaid to, and reinvested by, the
state or local government agency;

(20) funds from dock and wharf bonds issued by a seaway port authority;

(21) business loans and loan guarantees of $75,000 or less; deleted text beginand
deleted text end

(22) federal loan funds provided through the United States Department of
Commerce, Economic Development Administrationnew text begin; and
new text end

new text begin (23) property tax abatements granted under section 469.1813 to property that is
subject to valuation under Minnesota Rules, chapter 8100
new text end.

Sec. 2.

Minnesota Statutes 2005 Supplement, section 126C.17, subdivision 9, is
amended to read:


Subd. 9.

Referendum revenue.

(a) The revenue authorized by section 126C.10,
subdivision 1
, may be increased in the amount approved by the voters of the district at a
referendum called for the purpose. The referendum may be called by the board or shall be
called by the board upon written petition of qualified voters of the district. The referendum
must be conducted one or two calendar years before the increased levy authority, if
approved, first becomes payable. Only one election to approve an increase may be held
in a calendar year. Unless the referendum is conducted by mail under paragraph (g), the
referendum must be held on the first Tuesday after the first Monday in November. The
ballot must state the maximum amount of the increased revenue per resident marginal cost
pupil unit. The ballot may state a schedule, determined by the board, of increased revenue
per resident marginal cost pupil unit that differs from year to year over the number of
years for which the increased revenue is authorizednew text begin or may state that the amount shall
increase annually by the rate of inflation. For this purpose, the rate of inflation shall be the
annual inflationary increase calculated under subdivision 2, paragraph (b)
new text end. The ballot may
state that existing referendum levy authority is expiring. In this case, the ballot may also
compare the proposed levy authority to the existing expiring levy authority, and express
the proposed increase as the amount, if any, over the expiring referendum levy authority.
The ballot must designate the specific number of years, not to exceed ten, for which the
referendum authorization applies. The ballot, including a ballot on the question to revoke
or reduce the increased revenue amount under paragraph (c), must abbreviate the term
"per resident marginal cost pupil unit" as "per pupil." The notice required under section
275.60 may be modified to read, in cases of renewing existing levies:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING
FOR A PROPERTY TAX INCREASE."

The ballot may contain a textual portion with the information required in this
subdivision and a question stating substantially the following:

"Shall the increase in the revenue proposed by (petition to) the board of .........,
School District No. .., be approved?"

If approved, an amount equal to the approved revenue per resident marginal cost
pupil unit times the resident marginal cost pupil units for the school year beginning in
the year after the levy is certified shall be authorized for certification for the number of
years approved, if applicable, or until revoked or reduced by the voters of the district at a
subsequent referendum.

(b) The board must prepare and deliver by first class mail at least 15 days but no more
than 30 days before the day of the referendum to each taxpayer a notice of the referendum
and the proposed revenue increase. The board need not mail more than one notice to any
taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be
those shown to be owners on the records of the county auditor or, in any county where
tax statements are mailed by the county treasurer, on the records of the county treasurer.
Every property owner whose name does not appear on the records of the county auditor
or the county treasurer is deemed to have waived this mailed notice unless the owner
has requested in writing that the county auditor or county treasurer, as the case may be,
include the name on the records for this purpose. The notice must project the anticipated
amount of tax increase in annual dollars for typical residential homesteads, agricultural
homesteads, apartments, and commercial-industrial property within the school district.

The notice for a referendum may state that an existing referendum levy is expiring
and project the anticipated amount of increase over the existing referendum levy in
the first year, if any, in annual dollars for typical residential homesteads, agricultural
homesteads, apartments, and commercial-industrial property within the district.

The notice must include the following statement: "Passage of this referendum will
result in an increase in your property taxes." However, in cases of renewing existing
levies, the notice may include the following statement: "Passage of this referendum may
result in an increase in your property taxes."

(c) A referendum on the question of revoking or reducing the increased revenue
amount authorized pursuant to paragraph (a) may be called by the board and shall be called
by the board upon the written petition of qualified voters of the district. A referendum to
revoke or reduce the revenue amount must state the amount per resident marginal cost
pupil unit by which the authority is to be reduced. Revenue authority approved by the
voters of the district pursuant to paragraph (a) must be available to the school district at
least once before it is subject to a referendum on its revocation or reduction for subsequent
years. Only one revocation or reduction referendum may be held to revoke or reduce
referendum revenue for any specific year and for years thereafter.

(d) A petition authorized by paragraph (a) or (c) is effective if signed by a number of
qualified voters in excess of 15 percent of the registered voters of the district on the day
the petition is filed with the board. A referendum invoked by petition must be held on the
date specified in paragraph (a).

(e) The approval of 50 percent plus one of those voting on the question is required to
pass a referendum authorized by this subdivision.

(f) At least 15 days before the day of the referendum, the district must submit a
copy of the notice required under paragraph (b) to the commissioner and to the county
auditor of each county in which the district is located. Within 15 days after the results
of the referendum have been certified by the board, or in the case of a recount, the
certification of the results of the recount by the canvassing board, the district must notify
the commissioner of the results of the referendum.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for referenda conducted on or after
July 1, 2006.
new text end

Sec. 3.

Minnesota Statutes 2004, section 144F.01, subdivision 4, is amended to read:


Subd. 4.

Property tax levy authority.

The district's board may levy a tax on
the taxable real and personal property in the district. The ad valorem tax levy may not
exceed 0.048 percent of the taxable market value of the district or deleted text begin$250,000deleted text endnew text begin $400,000new text end,
whichever is less. The proceeds of the levy must be used as provided in subdivision 5.
The board shall certify the levy at the times as provided under section 275.07. The board
shall provide the county with whatever information is necessary to identify the property
that is located within the district. If the boundaries include a part of a parcel, the entire
parcel shall be included in the district. The county auditors must spread, collect, and
distribute the proceeds of the tax at the same time and in the same manner as provided by
law for all other property taxes.

Sec. 4.

Minnesota Statutes 2004, section 216B.2424, subdivision 5, is amended to read:


Subd. 5.

Mandate.

(a) A public utility, as defined in section 216B.02, subdivision 4,
that operates a nuclear-powered electric generating plant within this state must construct
and operate, purchase, or contract to construct and operate (1) by December 31, 1998,
50 megawatts of electric energy installed capacity generated by farm-grown closed-loop
biomass scheduled to be operational by December 31, 2001; and (2) by December 31,
1998, an additional 75 megawatts of installed capacity so generated scheduled to be
operational by December 31, 2002.

(b) Of the 125 megawatts of biomass electricity installed capacity required under
this subdivision, no more than 55 megawatts of this capacity may be provided by a facility
that uses poultry litter as its primary fuel source and any such facility:

(1) need not use biomass that complies with the definition in subdivision 1;

(2) must enter into a contract with the public utility for such capacity, that has an
average purchase price per megawatt hour over the life of the contract that is equal to or
less than the average purchase price per megawatt hour over the life of the contract in
contracts approved by the Public Utilities Commission before April 1, 2000, to satisfy
the mandate of this section, and file that contract with the Public Utilities Commission
prior to September 1, 2000; and

(3) must schedule such capacity to be operational by December 31, 2002.

(c) Of the total 125 megawatts of biomass electric energy installed capacity required
under this section, no more than 75 megawatts may be provided by a single project.

(d) Of the 75 megawatts of biomass electric energy installed capacity required under
paragraph (a), clause (2), no more than 33 megawatts of this capacity may be provided by
a St. Paul district heating and cooling system cogeneration facility utilizing waste wood
as a primary fuel source. The St. Paul district heating and cooling system cogeneration
facility need not use biomass that complies with the definition in subdivision 1.

(e) The public utility must accept and consider on an equal basis with other biomass
proposals:

(1) a proposal to satisfy the requirements of this section that includes a project that
exceeds the megawatt capacity requirements of either paragraph (a), clause (1) or (2), and
that proposes to sell the excess capacity to the public utility or to other purchasers; and

(2) a proposal for a new facility to satisfy more than ten but not more than 20
megawatts of the electrical generation requirements by a small business-sponsored
independent power producer facility to be located within the northern quarter of the state,
which means the area located north of Constitutional Route No. 8 as described in section
161.114, subdivision 2, and that utilizes biomass residue wood, sawdust, bark, chipped
wood, or brush to generate electricity. A facility described in this clause is not required
to utilize biomass complying with the definition in subdivision 1, but must be under
construction by December 31, 2005.

(f) If a public utility files a contract with the commission for electric energy installed
capacity that uses poultry litter as its primary fuel source, the commission must do a
preliminary review of the contract to determine if it meets the purchase price criteria
provided in paragraph (b), clause (2), of this subdivision. The commission shall perform
its review and advise the parties of its determination within 30 days of filing of such a
contract by a public utility. A public utility may submit by September 1, 2000, a revised
contract to address the commission's preliminary determination.

(g) The commission shall finally approve, modify, or disapprove no later than July
1, 2001, all contracts submitted by a public utility as of September 1, 2000, to meet the
mandate set forth in this subdivision.

(h) If a public utility subject to this section exercises an option to increase the
generating capacity of a project in a contract approved by the commission prior to April
25, 2000, to satisfy the mandate in this subdivision, the public utility must notify the
commission by September 1, 2000, that it has exercised the option and include in the
notice the amount of additional megawatts to be generated under the option exercised.
Any review by the commission of the project after exercise of such an option shall be
based on the same criteria used to review the existing contract.

(i) A facility specified in this subdivision qualifies for exemption from property
taxation under section 272.02, subdivision deleted text begin43deleted text endnew text begin 45new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes levied in 2006,
payable in 2007, and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2004, section 272.02, subdivision 45, is amended to read:


Subd. 45.

Biomass electrical generation facility; personal property.

Notwithstanding subdivision 9, clause (a), attached machinery and other personal property
which is part of an electrical generating facility that meets the requirements of this
subdivision is exempt. At the time of construction, the facility must:

(1) be designed to utilize biomass as established in section 216B.2424 as a primary
fuel source; and

(2) be constructed for the purpose of generating power at the facility that will be sold
pursuant to a contract approved by the Public Utilities Commission in accordance with
the biomass mandate imposed under section 216B.2424.

Construction of the facility must be commenced after January 1, 2000, and before
December 31, deleted text begin2002deleted text endnew text begin 2005new text end. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or facility.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2006, payable
in 2007, and thereafter.
new text end

Sec. 6.

Minnesota Statutes 2005 Supplement, section 272.02, subdivision 53, is
amended to read:


Subd. 53.

Electric generation facility; personal property.

Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property which is part
of a 3.2 megawatt run-of-the-river hydroelectric generation facility and that meets the
requirements of this subdivision is exempt. At the time of construction, the facility must:

(1) utilize two turbine generators at a dam site existing on March 31, 1994;

(2) be located on land within 1,500 feet of a 13.8 kilovolt distribution substation; and

(3) be eligible to receive a renewable energy production incentive payment under
section 216C.41.

Construction of the facility must be commenced deleted text beginafter December 31, 2004, anddeleted text end
before January 1, deleted text begin2007deleted text endnew text begin 2009new text end. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2006, payable
in 2007, and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2004, section 272.02, subdivision 54, is amended to read:


Subd. 54.

Small biomass electric generation facility; personal property.

new text begin(a)
Subject to paragraph (b),
new text end notwithstanding subdivision 9, clause (a), attached machinery
and other personal property which is part of an electrical generating facility that meets the
requirements of this subdivision is exempt. At the time of construction the facility must:

(1) have a generation capacity of less than 25 megawatts;

(2) provide process heating needs in addition to electrical generation; and

(3) utilize agricultural by-products from the malting process and other biomass
fuels as its primary fuel source.

Construction of the facility must be commenced after January 1, 2002, and before
deleted text begin January 1, 2006deleted text endnew text begin January 1, 2008new text end. Property eligible for this exemption does not include
electric transmission lines and interconnections or gas pipelines and interconnections
appurtenant to the property or facility.

new text begin (b) The exemption under this subdivision is contingent on approval by the governing
bodies of the municipality and county in which the electric generation facility is located.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2004, section 272.02, subdivision 55, is amended to read:


Subd. 55.

Electric generation facility; personal property.

Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property which is part of
an electric generating facility that meets the requirements of this subdivision is exempt. At
the time of construction, the facility must deleted text beginbe sited on an energy park thatdeleted text end (i) deleted text beginis located on
an active mining site, or on a former mining or industrial site where mining or industrial
operations have terminated
deleted text endnew text begin be designated as an innovative energy project as defined in
section 216B.1694
new text end, (ii) deleted text beginisdeleted text end new text beginbe new text endwithin a tax relief area as defined in section 273.134, (iii)
deleted text begin has deleted text enddeleted text beginon-site deleted text endnew text beginhave new text endaccess to existing railroad infrastructurenew text begin within less than three milesnew text end, (iv)
deleted text begin has direct rail access to a Great Lakes port, (v) has sufficient private water resources
on
deleted text enddeleted text beginsite, and (vi) isdeleted text end new text beginhave received by resolution approval from the governing body of
the county and township or city in which the proposed facility is to be located for the
exemption of personal property under this subdivision, and (v) be
new text end designed to host at
least 500 megawatts of electrical generation.

Construction of the first deleted text begin250deleted text endnew text begin 500new text end megawatts of the facility must be commenced
after January 1, deleted text begin2002deleted text endnew text begin 2006new text end, and before January 1, deleted text begin2005deleted text endnew text begin 2010new text end. Construction of up to an
additional 750 megawatts of generation must be commenced before January 1, deleted text begin2010deleted text endnew text begin
2015
new text end. Property eligible for this exemption does not include electric transmission lines and
interconnections or gas pipelines and interconnections appurtenant to the property or the
facility. new text beginTo qualify for an exemption under this subdivision, the owner of the electric
generation facility must have an agreement with the host county, township or city, and
school district, for payment in lieu of personal property taxes to the host county, township
or city, and school district.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2004, section 272.02, is amended by adding a subdivision
to read:


new text begin Subd. 84. new text end

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

new text begin Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property which is part
of a 10.3 megawatt run-of-the-river hydroelectric generation facility and that meets the
requirements of this subdivision is exempt. At the time of construction, the facility must:
new text end

new text begin (1) utilize between 12 and 16 turbine generators at a dam site existing on March
31, 1994;
new text end

new text begin (2) be located on land within 3,000 feet of a 13.8 kilovolt distribution substation; and
new text end

new text begin (3) be eligible to receive a renewable energy production incentive payment under
section 216C.41.
new text end

new text begin Construction of the facility must be commenced after April 30, 2006, and
before January 1, 2009. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes levied in 2006,
payable in 2007, and thereafter.
new text end

Sec. 10.

Minnesota Statutes 2004, section 272.029, subdivision 2, is amended to read:


Subd. 2.

Definitions.

(a) For the purposes of this section, the term:

(1) "wind energy conversion system" has the meaning given deleted text beginitdeleted text end in section 216C.06,
subdivision 19new text begin, and also includes a substation that is used and owned by one or more
wind energy conversion facilities
new text end
;

(2) "large scale wind energy conversion system" means a wind energy conversion
system of more than 12 megawatts, as measured by the nameplate capacity of the system
or as combined with other systems as provided in paragraph (b);

(3) "medium scale wind energy conversion system" means a wind energy conversion
system of over two and not more than 12 megawatts, as measured by the nameplate
capacity of the system or as combined with other systems as provided in paragraph (b); and

(4) "small scale wind energy conversion system" means a wind energy conversion
system of two megawatts and under, as measured by the nameplate capacity of the system
or as combined with other systems as provided in paragraph (b).

(b) For systems installed and contracted for after January 1, 2002, the total size of a
wind energy conversion system under this subdivision shall be determined according to
this paragraph. Unless the systems are interconnected with different distribution systems,
the nameplate capacity of one wind energy conversion system shall be combined with the
nameplate capacity of any other wind energy conversion system that is:

(1) located within five miles of the wind energy conversion system;

(2) constructed within the same calendar year as the wind energy conversion system;
and

(3) under common ownership.

In the case of a dispute, the commissioner of commerce shall determine the total size
of the system, and shall draw all reasonable inferences in favor of combining the systems.

(c) In making a determination under paragraph (b), the commissioner of commerce
may determine that two wind energy conversion systems are under common ownership
when the underlying ownership structure contains similar persons or entities, even if the
ownership shares differ between the two systems. Wind energy conversion systems are
not under common ownership solely because the same person or entity provided equity
financing for the systems.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2006, payable
in 2007, and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2004, section 273.11, is amended by adding a subdivision
to read:


new text begin Subd. 23. new text end

new text begin First tier valuation limit; agricultural homestead property. new text end

new text begin (a)
Beginning with assessment year 2006, the commissioner of revenue shall annually certify
the first tier limit for agricultural homestead property as the product of (i) $600,000, and
(ii) the ratio of the statewide average taxable market value of agricultural property per acre
of deeded farm land in the preceding assessment year to the statewide average taxable
market value of agricultural property per acre of deeded farm land for assessment year
2004. The limit shall be rounded to the nearest $10,000.
new text end

new text begin (b) For the purposes of this subdivision, "agricultural property" means all class 2
property under section 273.13, subdivision 23, except for (1) timberland, (2) a landing
area or public access area of a privately owned public use airport, and (3) property
consisting of the house, garage and immediately surrounding one acre of land of an
agricultural homestead.
new text end

new text begin (c) The commissioner shall certify the limit by January 2 of each assessment year,
except that for assessment year 2006 the commissioner shall certify the limit by June
1, 2006.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2006 and
thereafter.
new text end

Sec. 12.

Minnesota Statutes 2004, section 273.124, subdivision 12, is amended to read:


Subd. 12.

Homestead of member of United States armed forces; Peace Corps;
VISTA.

new text begin (a) new text endReal estate actually occupied and used for the purpose of a homestead by
a person, or by a member of that person's immediate family shall be classified as a
homestead even though the person or family is absent if (1) the person or the person's
family is absent solely because the person is on active duty with the armed forces of the
United States, or is serving as a volunteer under the VISTA or Peace Corps program; (2)
the owner intends to return as soon as discharged or relieved from service; and (3) the
owner claims it as a homestead. A person who knowingly makes or submits to an assessor
an affidavit or other statement that is false in any material matter to obtain or aid another
in obtaining a benefit under this subdivision is guilty of a felony.

new text begin (b) In the case of a person who is absent solely because the person is on active duty
with the United States armed forces, homestead classification must be granted as provided
in this paragraph if the requirements of paragraph (a), clauses (1) to (3), are met, even
if the property has not been occupied as a homestead by the person or a member of the
person's family. To qualify for this classification, the person who acquires the property
must notify the assessor of the acquisition and of the person's absence due to military
service. When the person returns from military service and occupies the property as
a homestead, the person shall notify the assessor, who will provide for abatement of
the difference between the nonhomestead and homestead taxes for the current and two
preceding years, not to exceed the time during which the person owned the property.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessments in 2006, taxes
payable in 2007, and thereafter.
new text end

Sec. 13.

Minnesota Statutes 2004, section 273.13, subdivision 23, is amended to read:


Subd. 23.

Class 2.

(a) Class 2a property is agricultural land including any
improvements that is homesteaded. The market value of the house and garage and
immediately surrounding one acre of land has the same class rates as class 1a property
under subdivision 22. The value of the remaining land including improvements up to deleted text beginand
including $600,000 market value
deleted text endnew text begin the first tier valuation limit of agricultural homestead
property
new text end has a net class rate of 0.55 percent of market value. The remaining property
over deleted text begin$600,000 market valuedeleted text endnew text begin the first tier new text end has a class rate of one percent of market value.new text begin
For purposes of this subdivision, the "first tier valuation limit of agricultural homestead
property" and "first tier" means the limit certified under section 273.11, subdivision 23.
new text end

(b) Class 2b property is (1) real estate, rural in character and used exclusively for
growing trees for timber, lumber, and wood and wood products; (2) real estate that
is not improved with a structure and is used exclusively for growing trees for timber,
lumber, and wood and wood products, if the owner has participated or is participating in
a cost-sharing program for afforestation, reforestation, or timber stand improvement on
that particular property, administered or coordinated by the commissioner of natural
resources; (3) real estate that is nonhomestead agricultural land; or (4) a landing area or
public access area of a privately owned public use airport. Class 2b property has a net
class rate of one percent of market value.

(c) Agricultural land as used in this section means contiguous acreage of ten acres or
more, used during the preceding year for agricultural purposes. "Agricultural purposes" as
used in this section means the raising or cultivation of agricultural products. "Agricultural
purposes" also includes enrollment in the Reinvest in Minnesota program under sections
103F.501 to 103F.535 or the federal Conservation Reserve Program as contained in Public
Law 99-198 if the property was classified as agricultural (i) under this subdivision for
the assessment year 2002 or (ii) in the year prior to its enrollment. Contiguous acreage
on the same parcel, or contiguous acreage on an immediately adjacent parcel under the
same ownership, may also qualify as agricultural land, but only if it is pasture, timber,
waste, unusable wild land, or land included in state or federal farm programs. Agricultural
classification for property shall be determined excluding the house, garage, and
immediately surrounding one acre of land, and shall not be based upon the market value of
any residential structures on the parcel or contiguous parcels under the same ownership.

(d) Real estate, excluding the house, garage, and immediately surrounding one acre
of land, of less than ten acres which is exclusively and intensively used for raising or
cultivating agricultural products, shall be considered as agricultural land.

Land shall be classified as agricultural even if all or a portion of the agricultural use
of that property is the leasing to, or use by another person for agricultural purposes.

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

The property classification under this section supersedes, for property tax purposes
only, any locally administered agricultural policies or land use restrictions that define
minimum or maximum farm acreage.

(e) The term "agricultural products" as used in this subdivision includes production
for sale of:

(1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
bees, and apiary products by the owner;

(2) fish bred for sale and consumption if the fish breeding occurs on land zoned
for agricultural use;

(3) the commercial boarding of horses if the boarding is done in conjunction with
raising or cultivating agricultural products as defined in clause (1);

(4) property which is owned and operated by nonprofit organizations used for
equestrian activities, excluding racing;

(5) game birds and waterfowl bred and raised for use on a shooting preserve licensed
under section 97A.115;

(6) insects primarily bred to be used as food for animals;

(7) trees, grown for sale as a crop, and not sold for timber, lumber, wood, or wood
products; and

(8) maple syrup taken from trees grown by a person licensed by the Minnesota
Department of Agriculture under chapter 28A as a food processor.

(f) If a parcel used for agricultural purposes is also used for commercial or industrial
purposes, including but not limited to:

(1) wholesale and retail sales;

(2) processing of raw agricultural products or other goods;

(3) warehousing or storage of processed goods; and

(4) office facilities for the support of the activities enumerated in clauses (1), (2),
and (3),

the assessor shall classify the part of the parcel used for agricultural purposes as class
1b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
use. The grading, sorting, and packaging of raw agricultural products for first sale is
considered an agricultural purpose. A greenhouse or other building where horticultural
or nursery products are grown that is also used for the conduct of retail sales must be
classified as agricultural if it is primarily used for the growing of horticultural or nursery
products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
those products. Use of a greenhouse or building only for the display of already grown
horticultural or nursery products does not qualify as an agricultural purpose.

The assessor shall determine and list separately on the records the market value of
the homestead dwelling and the one acre of land on which that dwelling is located. If any
farm buildings or structures are located on this homesteaded acre of land, their market
value shall not be included in this separate determination.

(g) To qualify for classification under paragraph (b), clause (4), a privately owned
public use airport must be licensed as a public airport under section 360.018. For purposes
of paragraph (b), clause (4), "landing area" means that part of a privately owned public use
airport properly cleared, regularly maintained, and made available to the public for use by
aircraft and includes runways, taxiways, aprons, and sites upon which are situated landing
or navigational aids. A landing area also includes land underlying both the primary surface
and the approach surfaces that comply with all of the following:

(i) the land is properly cleared and regularly maintained for the primary purposes of
the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;

(ii) the land is part of the airport property; and

(iii) the land is not used for commercial or residential purposes.

The land contained in a landing area under paragraph (b), clause (4), must be described
and certified by the commissioner of transportation. The certification is effective until
it is modified, or until the airport or landing area no longer meets the requirements of
paragraph (b), clause (4). For purposes of paragraph (b), clause (4), "public access area"
means property used as an aircraft parking ramp, apron, or storage hangar, or an arrival
and departure building in connection with the airport.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes levied in 2006, payable
in 2007, and thereafter.
new text end

Sec. 14.

Minnesota Statutes 2004, section 469.1813, subdivision 1, is amended to read:


Subdivision 1.

Authority.

The governing body of a political subdivision may grant
deleted text begin andeleted text endnew text begin a current or prospectivenew text end abatementnew text begin, by contract or otherwise,new text end of the taxes imposed by
the political subdivision on a parcel of property, new text beginwhich may include personal property
and machinery,
new text endor defer the payments of the taxes and abate the interest and penalty
that otherwise would apply, if:

deleted text begin (a)deleted text end new text begin(1) new text endit expects the benefits to the political subdivision of the proposed abatement
agreement to at least equal the costs to the political subdivision of the proposed agreement
or intends the abatement to phase in a property tax increase, as provided in clause (b)(7);
and

deleted text begin (b)deleted text end new text begin(2) new text endit finds that doing so is in the public interest because it will:

deleted text begin (1)deleted text end new text begin(i) new text endincrease or preserve tax base;

deleted text begin (2)deleted text end new text begin(ii) new text endprovide employment opportunities in the political subdivision;

deleted text begin (3)deleted text end new text begin(iii) new text endprovide or help acquire or construct public facilities;

deleted text begin (4)deleted text end new text begin(iv) new text endhelp redevelop or renew blighted areas;

deleted text begin (5)deleted text end new text begin(v) new text endhelp provide access to services for residents of the political subdivision;

deleted text begin (6)deleted text end new text begin(vi) new text endfinance or provide public infrastructure; deleted text beginor
deleted text end

deleted text begin (7)deleted text end new text begin(vii) new text endphase in a property tax increase on the parcel resulting from an increase of
50 percent or more in one year on the estimated market value of the parcel, other than
increase attributable to improvement of the parcelnew text begin; or
new text end

new text begin (viii) stabilize the tax base through equalization of property tax revenues for a
specified period of time with respect to a taxpayer whose real and personal property is
subject to valuation under Minnesota Rules, chapter 8100
new text end.

Sec. 15.

Minnesota Statutes 2005 Supplement, section 469.1813, subdivision 6,
is amended to read:


Subd. 6.

Duration limit.

(a) A political subdivision may grant an abatement for a
period no longer than 15 years, except as provided under paragraph (b). new text beginThe abatement
period commences in the first year in which the abatement granted is either paid or
retained in accordance with section 469.1815, subdivision 2.
new text endThe subdivision may specify
in the abatement resolution a shorter duration. If the resolution does not specify a period
of time, the abatement is for eight years. If an abatement has been granted to a parcel of
property and the period of the abatement has expired, the political subdivision that granted
the abatement may not grant another abatement for eight years after the expiration of the
first abatement. This prohibition does not apply to improvements added after and not
subject to the first abatement.new text begin Economic abatement agreements for real and personal
property subject to valuation under Minnesota Rules, chapter 8100, are not subject to this
prohibition and may be granted successively.
new text end

(b) A political subdivision proposing to abate taxes for a parcel may request, in
writing, that the other political subdivisions in which the parcel is located grant an
abatement for the property. If one of the other political subdivisions declines, in writing,
to grant an abatement or if 90 days pass after receipt of the request to grant an abatement
without a written response from one of the political subdivisions, the duration limit
for an abatement for the parcel by the requesting political subdivision and any other
participating political subdivision is increased to 20 years. If the political subdivision
which declined to grant an abatement later grants an abatement for the parcel, the 20-year
duration limit is reduced by one year for each year that the declining political subdivision
grants an abatement for the parcel during the period of the abatement granted by the
requesting political subdivision. The duration limit may not be reduced below the limit
under paragraph (a).

Sec. 16.

Minnesota Statutes 2004, section 469.1813, subdivision 6b, is amended to
read:


Subd. 6b.

Extended duration limit.

(a) Notwithstanding the provisions of
subdivision 6, a political subdivision may grant an abatement for a period of up to 20
years, if the abatement is for a qualified business.

(b) To be a qualified business for purposes of this subdivision, at least 50 percent of
the payroll of the operations of the business that qualify for the abatement must be for
employees engaged in one of the following lines of business or any combination of them:

(1) manufacturing;

(2) agricultural processing;

(3) mining;

(4) research and development;

(5) warehousing; or

(6) qualified high technology.

new text begin Alternatively, a qualified business also includes a taxpayer whose real and personal
property is subject to valuation under Minnesota Rules, chapter 8100.
new text end

(c)(1) "Manufacturing" means the material staging and production of tangible
personal property by procedures commonly regarded as manufacturing, processing,
fabrication, or assembling which changes some existing material into new shapes, new
qualities, or new combinations.

(2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code
of 1986.

(3) "Agricultural processing" means transforming, packaging, sorting, or grading
livestock or livestock products, agricultural commodities, or plants or plant products into
goods that are used for intermediate or final consumption including goods for nonfood use.

(4) "Research and development" means qualified research as defined in section
41(d) of the Internal Revenue Code of 1986.

(5) "Qualified high technology" means one or more of the following activities:

(i) advanced computing, which is any technology used in the design and
development of any of the following:

(A) computer hardware and software;

(B) data communications; and

(C) information technologies;

(ii) advanced materials, which are materials with engineered properties created
through the development of specialized process and synthesis technology;

(iii) biotechnology, which is any technology that uses living organisms, cells,
macromolecules, microorganisms, or substances from living organisms to make or modify
a product, improve plants or animals, or develop microorganisms for useful purposes;

(iv) electronic device technology, which is any technology that involves
microelectronics, semiconductors, electronic equipment, and instrumentation, radio
frequency, microwave, and millimeter electronics, and optical and optic-electrical devices,
or data and digital communications and imaging devices;

(v) engineering or laboratory testing related to the development of a product;

(vi) technology that assists in the assessment or prevention of threats or damage to
human health or the environment, including, but not limited to, environmental cleanup
technology, pollution prevention technology, or development of alternative energy sources;

(vii) medical device technology, which is any technology that involves medical
equipment or products other than a pharmaceutical product that has therapeutic or
diagnostic value and is regulated; or

(viii) advanced vehicles technology which is any technology that involves electric
vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the
construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric
vehicle is a road vehicle that draws propulsion energy only from an on-board source of
electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from
both a consumable fuel and a rechargeable energy storage system.

(d) The authority to grant new abatements under this subdivision expires on July 1,
2004new text begin, except that the authority to grant new abatements for real and personal property
subject to valuation under Minnesota Rules, chapter 8100, does not expire
new text end.

Sec. 17.

Minnesota Statutes 2004, section 469.1813, subdivision 8, is amended to read:


Subd. 8.

Limitation on abatements.

In any year, the total amount of property taxes
abated by a political subdivision under this section may not exceed (1) ten percent of
the current levy, or (2) $200,000, whichever is greater. The limit under this subdivision
does not apply tonew text begin:
new text end

new text begin (1)new text end an uncollected abatement from a prior year that is added to the abatement levynew text begin; or
new text end

new text begin (2) a taxpayer whose real and personal property is subject to valuation under
Minnesota Rules, chapter 8100
new text end.

Sec. 18.

Minnesota Statutes 2004, section 469.1813, subdivision 9, is amended to read:


Subd. 9.

Consent of property owner not required.

A political subdivision may
abate the taxes on a parcel under sections 469.1812 to 469.1815 without obtaining the
consent of the property owner.new text begin This subdivision does not apply to abatements granted to a
taxpayer whose real and personal property is valued under Minnesota Rules, chapter 8100.
new text end

Sec. 19.

Minnesota Statutes 2004, section 469.1813, is amended by adding a
subdivision to read:


new text begin Subd. 10. new text end

new text begin Applicability to utility properties. new text end

new text begin When this statute is applied or
utilized with respect to a taxpayer whose real and personal property is subject to valuation
under Minnesota Rules, chapter 8100, the provisions of this section and sections 469.1814
and 469.1815 shall apply only to property specified or described in the abatement contract
or agreement.
new text end

Sec. 20.

Laws 2001, First Special Session chapter 5, article 3, section 8, the effective
date, as amended by Laws 2005, chapter 151, article 3, section 19, is amended to read:


[EFFECTIVE DATE.] This section is effective for taxes levied in 2002, payable in
2003, through taxes levied in deleted text begin2009deleted text endnew text begin 2011new text end, payable in deleted text begin2010deleted text endnew text begin 2012new text end.

Sec. 21. new text beginPROPERTY TAX REFUND COLLECTION ACTION PROHIBITED;
REFUNDS REQUIRED.
new text end

new text begin Notwithstanding Minnesota Statutes, section 289A.60, subdivision 12, or any other
law to the contrary, the commissioner of revenue shall not disallow any part of a claim
for a property tax refund filed in 2005 or an earlier year to the extent that the claim
was excessive because it did not include in the claimant's income as determined under
Minnesota Statutes, section 290A.03, subdivision 3, the cash value of a tuition discount
provided by a postsecondary education institution. If a claimant was required to repay
any part of a property tax refund based on inclusion of this discount in the claimant's
income on a claim filed in 2005 or an earlier year, the commissioner must refund that
amount to the claimant.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22. new text beginBUFFALO-RED RIVER WATERSHED DISTRICT.
new text end

new text begin (a) Notwithstanding the limitations of Minnesota Statutes, section 103D.905,
subdivision 3, and Laws 1976, chapter 162, as amended, the Buffalo-Red River watershed
district may levy only (1) the annual general levy as provided in Minnesota Statutes,
section 103D.905, subdivision 3, and (2) a tax not to exceed 0.02394 percent of taxable
market value to pay the cost attributable to the basic water management features of
projects initiated by petition of a political subdivision within the watershed district or by
petition of at least 50 resident owners of property within the watershed district. In addition
to any other purposes authorized by law, the levy under this section may be used to
develop and implement total maximum daily loads for water quality. Any project initiated
by petition cannot be for a period exceeding 15 consecutive years.
new text end

new text begin (b) The tax levy under paragraph (a), clause (2), is effective beginning with taxes
levied in 2006, payable in 2007, through taxes levied in 2008, payable in 2009, except that
any project initiated by petition under this section within the two-year time period that
extends beyond taxes payable in 2009, the 0.00798 percent of taxable market value levy
authorization under Minnesota Statutes, section 103D.905, subdivision 3, shall continue to
fund those projects for their duration. The tax levy under paragraph (a), clause (i), has
no expiration date.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 23. new text beginCOOK-ORR HOSPITAL DISTRICT; ADDITION OF TERRITORY.
new text end

new text begin The board of the hospital district created under Laws 1988, chapter 645, may
enter into an agreement with the Tribal Council of the Bois Forte Band of Minnesota
Chippewa that would permit the reservation lands of the Bois Forte Band at Nett Lake
and Lake Vermilion to be included in the territory of the hospital district. The agreement
must establish the terms and conditions under which the territory would be so expanded,
including the amount of or means for determining the amount of the contribution by the
Bois Forte Band to the district.
new text end

Sec. 24. new text beginPROPERTY TAX CERTIFICATION; ROCHESTER SCHOOL
DISTRICT.
new text end

new text begin Notwithstanding Minnesota Statutes, sections 126C.48 and 275.065, with the
agreement of the school district's home county, Independent School District No. 535,
Rochester, on or before October 8, shall certify to the county auditor the district's proposed
property tax levy for taxes payable in the following year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2007 only.
new text end

Sec. 25. new text beginLEASE LEVY; ADMINISTRATIVE SPACE, ROCORI AND
FARIBAULT.
new text end

new text begin Independent School Districts Nos. 656, Faribault, and 750, Rocori, may lease
administrative space under Minnesota Statutes, section 126C.40, subdivision 1, if the
district can demonstrate to the satisfaction of the commissioner of education that the
administrative space is less expensive than instructional space that the district would
otherwise lease. A school district may not levy under this section for more than five years.
The commissioner must deny this levy authority unless the district passes a resolution
stating its intent to lease instructional space under Minnesota Statutes, section 126C.40,
subdivision 1, if the commissioner does not grant authority under this section. The
resolution must also certify that a lease of administrative space under this section is
less expensive than the district's proposed instructional lease. Levy authority under
this section shall not exceed the total levy authority under Minnesota Statutes, section
126C.40, subdivision 1, paragraph (e).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with revenue for taxes
payable in 2007.
new text end

ARTICLE 5

DEPARTMENT OF REVENUE PROPERTY TAXES AND AIDS

Section 1.

Minnesota Statutes 2005 Supplement, section 273.13, subdivision 22,
is amended to read:


Subd. 22.

Class 1.

(a) Except as provided in subdivision 23 and in paragraphs (b)
and (c), real estate which is residential and used for homestead purposes is class 1a. In the
case of a duplex or triplex in which one of the units is used for homestead purposes, the
entire property is deemed to be used for homestead purposes. The market value of class 1a
property must be determined based upon the value of the house, garage, and land.

The first $500,000 of market value of class 1a property has a net class rate of
one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a class rate of 1.25 percent of its market value.

(b) Class 1b property includes homestead real estate or homestead manufactured
homes used for the purposes of a homestead by

(1) any person who is blind as defined in section 256D.35, or the blind person and
the blind person's spouse; or

(2) any person, hereinafter referred to as "veteran," who:

(i) served in the active military or naval service of the United States; and

(ii) is entitled to compensation under the laws and regulations of the United States
for permanent and total service-connected disability due to the loss, or loss of use, by
reason of amputation, ankylosis, progressive muscular dystrophies, or paralysis, of both
lower extremities, such as to preclude motion without the aid of braces, crutches, canes, or
a wheelchair; and

(iii) has acquired a special housing unit with special fixtures or movable facilities
made necessary by the nature of the veteran's disability, or the surviving spouse of the
deceased veteran for as long as the surviving spouse retains the special housing unit
as a homestead; or

(3) any person who is permanently and totally disabled.

Property is classified and assessed under clause (3) only if the government agency or
income-providing source certifies, upon the request of the homestead occupant, that the
homestead occupant satisfies the disability requirements of this paragraph.

Property is classified and assessed pursuant to clause (1) only if the commissioner of
revenue certifies to the assessor that the homestead occupant satisfies the requirements of
this paragraph.

Permanently and totally disabled for the purpose of this subdivision means a
condition which is permanent in nature and totally incapacitates the person from working
at an occupation which brings the person an income. The first $32,000 market value of
class 1b property has a net class rate of .45 percent of its market value. The remaining
market value of class 1b property has a class rate using the rates for class 1a or class 2a
property, whichever is appropriate, of similar market value.

(c) Class 1c property is commercial use real property that abuts a lakeshore line and
is devoted to temporary and seasonal residential occupancy for recreational purposes but
not devoted to commercial purposes for more than 250 days in the year preceding the
year of assessment, and that includes a portion used as a homestead by the owner, which
includes a dwelling occupied as a homestead by a shareholder of a corporation that owns
the resort, a partner in a partnership that owns the resort, or a member of a limited liability
company that owns the resort even if the title to the homestead is held by the corporation,
partnership, or limited liability company. For purposes of this clause, property is devoted
to a commercial purpose on a specific day if any portion of the property, excluding the
portion used exclusively as a homestead, is used for residential occupancy and a fee
is charged for residential occupancy. The portion of the property used as a homestead
deleted text begin by the owner has the same class rates asdeleted text end new text beginis new text endclass 1a property under paragraph (a). The
remainder of the property is classified as follows: the first $500,000 of market value is tier
I, the next $1,700,000 of market value is tier II, and any remaining market value is tier III.
The class rates for class 1c are: tier I, 0.55 percent; tier II, 1.0 percent; and tier III, 1.25
percent. If a class 1c resort property has any market value in tier III, the entire property
must meet the requirements of subdivision 25, paragraph (d), clause (1), to qualify for
class 1c treatment under this paragraph.

(d) Class 1d property includes structures that meet all of the following criteria:

(1) the structure is located on property that is classified as agricultural property under
section 273.13, subdivision 23;

(2) the structure is occupied exclusively by seasonal farm workers during the time
when they work on that farm, and the occupants are not charged rent for the privilege of
occupying the property, provided that use of the structure for storage of farm equipment
and produce does not disqualify the property from classification under this paragraph;

(3) the structure meets all applicable health and safety requirements for the
appropriate season; and

(4) the structure is not salable as residential property because it does not comply
with local ordinances relating to location in relation to streets or roads.

The market value of class 1d property has the same class rates as class 1a property
under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2006 and
thereafter.
new text end

Sec. 2.

Minnesota Statutes 2005 Supplement, section 273.13, subdivision 25, is
amended to read:


Subd. 25.

Class 4.

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

(b) Class 4b includes:

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

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

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

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

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

(c) Class 4bb includes:

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

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

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

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

(d) Class 4c property includes:

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

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

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

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

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

(3) real property up to a maximum of one acre of land owned by a nonprofit
community service oriented organization; provided that the property is not used for a
revenue-producing activity for more than six days in the calendar year preceding the year
of assessment and the property is not used for residential purposes on either a temporary
or permanent basis. For purposes of this clause, a "nonprofit community service oriented
organization" means any corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious, fraternal, civic, or educational
purposes, and which is exempt from federal income taxation pursuant to section 501(c)(3),
(10), or (19) of the Internal Revenue Code of 1986, as amended through December 31,
1990. For purposes of this clause, "revenue-producing activities" shall include but not be
limited to property or that portion of the property that is used as an on-sale intoxicating
liquor or 3.2 percent malt liquor establishment licensed under chapter 340A, a restaurant
open to the public, bowling alley, a retail store, gambling conducted by organizations
licensed under chapter 349, an insurance business, or office or other space leased or
rented to a lessee who conducts a for-profit enterprise on the premises. Any portion of
the property which is used for revenue-producing activities for more than six days in the
calendar year preceding the year of assessment shall be assessed as class 3a. The use of
the property for social events open exclusively to members and their guests for periods of
less than 24 hours, when an admission is not charged nor any revenues are received by the
organization shall not be considered a revenue-producing activity;

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

(5) manufactured home parks as defined in section 327.14, subdivision 3;

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

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

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

Class 4c property has a class rate of 1.5 percent of market value, except that (i) each
parcel of seasonal residential recreational property not used for commercial purposes has
the same class rates as class 4bb property, (ii) manufactured home parks assessed under
clause (5) have the same class rate as class 4b property, (iii) commercial-use seasonal
residential recreational property has a class rate of one percent for the first $500,000
of market value, deleted text beginwhich includes any market value receiving the one percent rate under
subdivision 22,
deleted text end and 1.25 percent for the remaining market value, (iv) the market value
of property described in clause (4) has a class rate of one percent, (v) the market value
of property described in clauses (2) and (6) has a class rate of 1.25 percent, and (vi) that
portion of the market value of property in clause (9) qualifying for class 4c property
has a class rate of 1.25 percent.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2006 and
subsequent years.
new text end

Sec. 3.

Minnesota Statutes 2005 Supplement, section 273.1384, subdivision 1, is
amended to read:


Subdivision 1.

Residential homestead market value credit.

Each county auditor
shall determine a homestead credit for each class 1a, 1b, deleted text begin1c,deleted text end and 2a homestead property
within the county equal to 0.4 percent of the first $76,000 of market value of the property
minus .09 percent of the market value in excess of $76,000. The credit amount may not
be less than zero. In the case of an agricultural or resort homestead, only the market
value of the house, garage, and immediately surrounding one acre of land is eligible
in determining the property's homestead credit. In the case of a property deleted text beginwhichdeleted text endnew text begin thatnew text end is
classified as part homestead and part nonhomestead, (i) the credit shall apply only to
the homestead portion of the property, but (ii) if a portion of a property is classified as
nonhomestead solely because not all the owners occupy the property,new text begin not all the owners
have qualifying relatives occupying the property,
new text end or solely because deleted text beginbothdeleted text endnew text begin not all thenew text end spouses
deleted text begin do notdeleted text endnew text begin of ownersnew text end occupy the property, the credit amount shall be initially computed as
if that nonhomestead portion were also in the homestead class and then prorated to the
owner-occupant's percentage of ownership deleted text beginor prorated to one-half if both spouses do not
occupy the property
deleted text end.new text begin For the purpose of this section, when an owner-occupant's spouse
does not occupy the property, the percentage of ownership for the owner-occupant spouse
is one-half of the couple's ownership percentage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2007 and
thereafter.
new text end

Sec. 4.

Minnesota Statutes 2004, section 273.1384, subdivision 2, is amended to read:


Subd. 2.

Agricultural homestead market value credit.

Property classified
as class 2a agricultural homestead is eligible for an agricultural credit. new text beginThe credit is
computed using the property's agricultural credit market value, defined for this purpose
as the property's class 2a market value excluding the market value of the house, garage,
and immediately surrounding one acre of land.
new text endThe credit is equal to 0.3 percent of the
first $115,000 of the property's new text beginagricultural credit new text endmarket valuedeleted text begin. The credit under this
subdivision is limited to $345 for each homestead. The credit is reduced by
deleted text end new text begin minus new text end.05
percent of the new text beginproperty's agricultural credit new text endmarket value in excess of $115,000, subject to
a maximum reduction of $115.new text begin In the case of property that is classified in part as class 2a
agricultural homestead and in part as class 2b nonhomestead farm land solely because not
all the owners occupy or farm the property, not all the owners have qualifying relatives
occupying or farming the property, or solely because not all the spouses of owners occupy
the property, the credit must be initially computed as if that nonhomestead agricultural
land was also classified as class 2a agricultural homestead and then prorated to the
owner-occupant's percentage of ownership.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2007 and
thereafter.
new text end

Sec. 5.

Minnesota Statutes 2004, section 273.1398, subdivision 3, is amended to read:


Subd. 3.

Disparity reduction aid.

deleted text beginFor taxes payable in 2003 and subsequent years,deleted text end
The amount of disparity aid certified for each taxing district within each unique taxing
jurisdiction for taxes payable in the prior year shall be multiplied by the ratio of (1) the
jurisdiction's tax capacity using the class rates for taxes payable in the year for which aid
is being computed, to (2) its tax capacity using the class rates for taxes payable in the year
prior to that for which aid is being computed, both based upon market values for taxes
payable in the year prior to that for which aid is being computed. deleted text beginFor the purposes of this
aid determination, disparity reduction aid certified for taxes payable in the prior year for
a taxing entity other than a town or school district is deemed to be county government
disparity reduction aid. The amount of disparity aid certified to each taxing jurisdiction
shall be reduced by any reductions required in the current year or permanent reductions
required in previous years under section 477A.0132.
deleted text endnew text begin If the commissioner determines that
insufficient information is available to reasonably and timely calculate the numerator
in this ratio for the first taxes payable year that a class rate change or new class rate is
effective, the commissioner shall omit the effects of that class rate change or new class
rate when calculating this ratio for aid payable in that taxes payable year. For aid payable
in the year following a year for which such omission was made, the commissioner shall
use in the denominator for the class that was changed or created, the tax capacity for taxes
payable two years prior to that in which the aid is payable, based on market values for
taxes payable in the year prior to that for which aid is being computed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2006 and
thereafter.
new text end

Sec. 6.

Minnesota Statutes 2004, section 281.23, subdivision 9, is amended to read:


Subd. 9.

Certificate.

After the time for redemption of any lands shall have expired
after notice given, as provided in subdivisions 2, 3, 5, and 6, the county auditor shall
execute a certificate describing the lands, specifying the tax judgment sale at which the
same were bid in for the state, and stating that the time for redemption thereof has expired
after notice given as provided by law and that absolute title thereto has vested in the
state of Minnesota. Such certificate shall be recorded in the office of the county recorder
deleted text begin and thereafter filed in the office of the county auditordeleted text end, except that in case of registered
land such certificate shall be deleted text beginfileddeleted text end new text beginrecorded new text endin the office of the registrar of titles deleted text beginand a
duplicate filed in the office of the county auditor
deleted text end. Such certificate and the record thereof
shall be prima facie evidence of the facts therein stated, but failure to execute or record or
file such certificate shall not affect the validity of any proceedings hereunder respecting
such lands or the title of the state thereto.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2005 Supplement, section 284.07, is amended to read:


284.07 COUNTY AUDITOR'S CERTIFICATE TO BE PRIMA FACIE
EVIDENCE.

The county auditor's certificate of forfeiture deleted text beginfileddeleted text end new text begin recorded by the county auditor
new text end as provided by section 281.23, subdivision 9, and acts supplemental thereto, or by any
other law hereafter enacted providing for the recording of such a certificate or a certified
copy of such certificate or of the record thereof, shall, for all purposes, be prima facie
evidence that all requirements of the law respecting the taxation and forfeiture of the
lands therein described were complied with, and that at the date of the certificate absolute
title to such lands had vested in the state by reason of forfeiture for delinquent taxes, as
set forth in the certificate.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2004, section 477A.014, subdivision 1, is amended to read:


Subdivision 1.

Calculations and payments.

new text begin(a) new text endThe commissioner of revenue
shall make all necessary calculations and make payments pursuant to sections 477A.013,
477A.0132, and 477A.03 directly to the affected taxing authorities annually. In addition,
the commissioner shall notify the authorities of their aid amounts, as well as the
computational factors used in making the calculations for their authority, and those
statewide total figures that are pertinent, before August 1 of the year preceding the aid
distribution year.

new text begin (b)new text end For the purposes of this subdivision, aid is determined for a city or town based
on its city or town status as of June 30 of the year preceding the aid distribution year. If
the effective date for a municipal incorporation, consolidation, annexation, detachment,
dissolution, or township organization is on or before June 30 of the year preceding
the aid distribution year, such change in boundaries or form of government shall be
recognized for aid determinations for the aid distribution year. If the effective date for a
municipal incorporation, consolidation, annexation, detachment, dissolution, or township
organization is after June 30 of the year preceding the aid distribution year, such change in
boundaries or form of government shall not be recognized for aid determinations until
the following year.

new text begin (c) Changes in boundaries or form of government will only be recognized for the
purposes of this subdivision, to the extent that: (1) changes in market values are included
in market values reported by assessors to the commissioner, and changes in population,
household size, and the road accidents factor are included in their respective certifications
to the commissioner as referenced in section 477A.011, or (2) an annexation information
report as provided in paragraph (d) is received by the commissioner on or before July 15
of the aid calculation year. Revisions to estimates or data for use in recognizing changes
in boundaries or form of government are not effective for purposes of this subdivision
unless received by the commissioner on or before July 15 of the aid calculation year.
Clerical errors in the certification or use of estimates and data established as of July 15 in
the aid calculation year are subject to correction within the time periods allowed under
subdivision 3.
new text end

new text begin (d) In the case of an annexation, an annexation information report may be completed
by the annexing jurisdiction and submitted to the commissioner for purposes of this
subdivision if the net tax capacity of annexed area for the assessment year preceding the
effective date of the annexation exceeds five percent of the city's net tax capacity for the
same year. The form and contents of the annexation information report shall be prescribed
by the commissioner. The commissioner shall change the net tax capacity, the population,
the population decline, the commercial industrial percentage, and the transformed
population for the annexing jurisdiction only if the annexation information report provides
data the commissioner determines to be reliable for all of these factors used to compute city
revenue need for the annexing jurisdiction. The commissioner shall adjust the pre-1940
housing percentage, the road accidents factor, and household size only if the entire area of
an existing city or town is annexed or consolidated and only if reliable data is available for
all of these factors used to compute city revenue need for the annexing jurisdiction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid payable in 2007 and thereafter.
new text end

ARTICLE 6

DEPARTMENT OF REVENUE SALES AND USE TAXES

Section 1.

Minnesota Statutes 2005 Supplement, section 297A.61, subdivision 3,
is amended to read:


Subd. 3.

Sale and purchase.

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

(b) Sale and purchase include:

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

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

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

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

(1) prepared food sold by the retailer;

(2) soft drinks;

(3) candy;

(4) dietary supplements; and

(5) all food sold through vending machines.

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

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

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

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

(2) lodging and related services by a hotel, rooming house, resort, campground,
motel, or trailer camp and the granting of any similar license to use real property in a
specific facility, other than the renting or leasing of it for a continuous period of 30 days
or more under an enforceable written agreement that may not be terminated without
prior notice;

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

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

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

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

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

(5) delivery of aggregate materials and concrete block by a third party if the delivery
would be subject to the sales tax if provided by the seller of the aggregate material or
concrete block; and

(6) services as provided in this clause:

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

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

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

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

(v) pet grooming services;

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

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

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

In applying the provisions of this chapter, the terms "tangible personal property"
and "deleted text beginsales atdeleted text end retailnew text begin salenew text end" include taxable services listed in clause (6), items (i) to (vi) and
(viii), and the provision of these taxable services, unless specifically provided otherwise.
Services performed by an employee for an employer are not taxable. Services performed
by a partnership or association for another partnership or association are not taxable if one
of the entities owns or controls more than 80 percent of the voting power of the equity
interest in the other entity. Services performed between members of an affiliated group of
corporations are not taxable. For purposes of the preceding sentence, "affiliated group
of corporations" deleted text beginincludesdeleted text end new text beginmeans new text endthose entities that would be classified as members of an
affiliated group new text beginas defined new text endunder United States Code, title 26, section 1504, deleted text beginand that are
eligible to file a consolidated tax return for federal income tax purposes
deleted text endnew text begin disregarding
the exclusions in section 1504(b)
new text end.

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

(i) A sale and a purchase includes the furnishing for a consideration of
telecommunications services, including cable television services and direct satellite
services. Telecommunications services are taxed to the extent allowed under federal law.

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2004, section 297A.61, subdivision 12, is amended to read:


Subd. 12.

Farm machinery.

(a) "Farm machinery" means new or used machinery,
equipment, implements, accessories, and contrivances used directly and principally in
agricultural production new text beginof tangible personal property intended to be sold ultimately at
retail
new text endincluding, but not limited to:

(1) machinery for the preparation, seeding, or cultivation of soil for growing
agricultural crops;

(2) barn cleaners, milking systems, grain dryers, feeding systems including
stationary feed bunks, and similar installations, whether or not the equipment is installed
by the seller and becomes part of the real property; and

(3) irrigation equipment sold for exclusively agricultural use, including pumps, pipe
fittings, valves, sprinklers, and other equipment necessary to the operation of an irrigation
system when sold as part of an irrigation system, whether or not the equipment is installed
by the seller and becomes part of the real property.

(b) Farm machinery does not include:

(1) repair or replacement parts;

(2) tools, shop equipment, grain bins, fencing material, communication equipment,
and other farm supplies;

(3) motor vehicles taxed under chapter 297B;

(4) snowmobiles or snow blowers;

(5) lawn mowers except those used in the production of sod for sale, or garden-type
tractors or garden tillers; or

(6) machinery, equipment, implements, accessories, and contrivances used directly in
the production of horses not raised for slaughter, fur-bearing animals, or research animals.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
to read:


new text begin Subd. 16a. new text end

new text begin Computer. new text end

new text begin "Computer" means an electronic device that accepts
information in digital or similar form and manipulates it for a result based on a sequence
of instructions.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
to read:


new text begin Subd. 16b. new text end

new text begin Electronic. new text end

new text begin "Electronic" means relating to technology having electrical,
digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
to read:


new text begin Subd. 16c. new text end

new text begin Computer software. new text end

new text begin "Computer software" means a set of coded
instructions designed to cause a computer or automatic data processing equipment to
perform a task.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2004, section 297A.61, subdivision 17, is amended to read:


Subd. 17.

Prewritten computer software.

"Prewritten computer software" means
computer software, including prewritten upgrades, that is not designed and developed by
the author or other creator to the specifications of a specific purchaser. The combining
of two or more "prewritten computer software" programs or prewritten portions of the
programs does not cause the combination to be other than "prewritten computer software."
"Prewritten computer software" includes software designed and developed by the author
or other creator to the specifications of a specific purchaser when it is sold to a person
other than thenew text begin specific new text end purchaser. If a person modifies or enhances computer software
of which the person is not the author or creator, the person is deemed to be the author
or creator only of such person's modifications or enhancements. "Prewritten computer
software" or a prewritten portion of it that is modified or enhanced to any degree, if the
modification or enhancement is designed and developed to the specifications of a specific
purchaser, remains "prewritten computer software"; provided, however, that if there is a
reasonable, separately stated charge or an invoice or other statement of the price given to
the purchaser for such modification or enhancement, the modification or enhancement
does not constitute "prewritten computer software." deleted text beginFor purposes of this subdivision:
deleted text end

deleted text begin (1) "computer" means an electronic device that accepts information in digital or
similar form and manipulates it for a result based on a sequence of instructions;
deleted text end

deleted text begin (2) "electronic" means relating to technology having electrical, digital, magnetic,
wireless, optical, electromagnetic, or similar capabilities; and
deleted text end

deleted text begin (3) "computer software" means a set of coded instructions designed to cause a
"computer" or automatic data processing equipment to perform a task.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2004, section 297A.61, is amended by adding a subdivision
to read:


new text begin Subd. 37. new text end

new text begin Logging equipment. new text end

new text begin (a) "Logging equipment" means new or used
machinery, equipment, implements, accessories, and contrivances used directly and
principally in the commercial cutting or removal or both of timber or other solid wood
forest products intended to be sold ultimately at retail, including, but not limited to:
new text end

new text begin (1) machinery used for bucking, bunching, debarking, delimbing, felling, forwarding,
loading, piling, skidding, topping, and yarding operations performed on timber; and
new text end

new text begin (2) chain saws.
new text end

new text begin (b) Logging equipment does not include:
new text end

new text begin (1) repair or replacement parts;
new text end

new text begin (2) tools, shop equipment, communication equipment, and other logging supplies;
new text end

new text begin (3) motor vehicles taxed under chapter 297B;
new text end

new text begin (4) snowmobiles, snow blowers, or recreational all-terrain vehicles; or
new text end

new text begin (5) machinery, equipment, implements, accessories, and contrivances used in the
creation of other commercial wood products for sale to others, including, but not limited
to, milling, planing, carving, wood chipping, or paper manufacturing.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2004, section 297A.63, is amended to read:


297A.63 USE TAXES IMPOSED; RATES.

Subdivision 1.

Use of tangible personal property or taxable services.

(a) For the
privilege of using, storing, distributing, or consuming in Minnesota tangible personal
property or taxable services purchased for use, storage, distribution, or consumption in
this state, a use tax is imposed on a person in Minnesota. The tax is imposed on the deleted text beginsalesdeleted text end
new text begin purchase new text endprice of retail sales of the tangible personal property or taxable services at the
rate of tax imposed under section 297A.62.new text begin A person that purchases property from a
Minnesota retailer and returns the tangible personal property to a point within Minnesota,
except in the course of interstate commerce, after it was delivered outside of Minnesota,
is subject to the use tax.
new text end

(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
was paid on the sales price of the tangible personal property or taxable services.

(c) No tax is imposed under paragraph (a) if the purchase meets the requirements for
exemption under section 297A.67, subdivision 21.

Subd. 2.

Use of tangible personal property made from materials.

(a) A use tax
is imposed on a person who manufactures, fabricates, or assembles tangible personal
property from materials, either within or outside this state and who uses, stores, distributes,
or consumes the tangible personal property in Minnesota. The tax is imposed on the deleted text beginsalesdeleted text end
new text begin purchase new text endprice of retail sales of the materials contained in the tangible personal property at
the rate of tax imposed under section 297A.62.

(b) No tax is imposed under paragraph (a) if the tax imposed by section 297A.62
was paid on the sales price of materials contained in the tangible personal property.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2004, section 297A.668, subdivision 6, is amended to read:


Subd. 6.

Multiple points of use.

(a) Notwithstanding the provisions of subdivisions
2 to 5, a business purchaser that is not a holder of a direct pay permit that knows at the
time of its purchase of a digital good, computer software delivered electronically, or a
service that the digital good, computer software delivered electronically, or service will
be concurrently available for use in more than one deleted text begintaxingdeleted text end jurisdiction shall deliver to
the seller in conjunction with its purchase a multiple points of use exemption certificate
disclosing this fact.

(b) Upon receipt of the multiple points of use exemption certificate, the seller is
relieved of the obligation to collect, pay, or remit the applicable tax and the purchaser is
obligated to collect, pay, or remit the applicable tax on a direct pay basis.

(c) A purchaser delivering the multiple points of use exemption certificate may use
any reasonable, but consistent and uniform, method of apportionment that is supported by
the purchaser's business records as they exist at the time of the consummation of the sale.

(d) The multiple points of use exemption certificate remains in effect for all future
sales by the seller to the purchaser until it is revoked in writing, except as to the subsequent
sale's specific apportionment that is governed by the principle of paragraph (c) and the
facts existing at the time of the sale.

(e) A holder of a direct pay permit is not required to deliver a multiple points or use
exemption certificate to the seller. A direct pay permit holder shall follow the provisions
of paragraph (c) in apportioning the tax due on a digital good, computer software delivered
electronically, or a service that will be concurrently available for use in more than one
deleted text begin taxingdeleted text end jurisdiction.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2004, section 297A.669, subdivision 11, is amended to
read:


Subd. 11.

Mobile telecommunications service.

"Mobile telecommunications
service," for purposes of this section, means the same as that term is defined in Section
deleted text begin 124(1)deleted text end new text begin 124(7) new text endof Public Law 106-252 (Mobile Telecommunications Sourcing Act).

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2004, section 297A.67, subdivision 4, is amended to read:


Subd. 4.

Exempt meals at residential facilities.

deleted text beginMeals ordeleted text end new text beginPrepared food, candy,
and soft
new text enddrinks served to patients, inmates, or persons residing at hospitals, sanitariums,
nursing homes, senior citizen homes, and correctional, detention, and detoxification
facilities are exempt.new text begin Food sold through vending machines is not exempt.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2004, section 297A.67, subdivision 5, is amended to read:


Subd. 5.

Exempt meals at schools.

deleted text beginMeals and lunches deleted text endnew text beginPrepared food, candy,
and soft drinks
new text endserved at public and private elementary, middle, or secondary schools as
defined in section 120A.05 are exempt. deleted text beginMeals and lunches deleted text endnew text begin Prepared food, candy, and soft
drinks
new text endserved to students at a college, university, or private career school under a board
contract are exempt. deleted text beginFor purposes of this subdivision, "meals and lunches" does not
include sales from vending machines.
deleted text endnew text begin Food sold through vending machines is not exempt.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2005 Supplement, section 297A.67, subdivision 6, is
amended to read:


Subd. 6.

Other exempt meals.

(a) deleted text beginMeals ordeleted text end new text beginPrepared food, candy, and soft new text enddrinks
purchased for and served exclusively to individuals who are 60 years of age or over and
their spouses or to handicapped persons and their spouses by governmental agencies,
nonprofit organizations, or churches, or pursuant to any program funded in whole or in
part through United States Code, title 42, sections 3001 through 3045, wherever delivered,
prepared, or served, are exempt.new text begin Food sold through vending machines is not exempt.
new text end

(b) deleted text beginMeals or deleted text endnew text beginPrepared food, candy, and soft new text enddrinks purchased for and served
exclusively to children who are less than 14 years of age or disabled children who are less
than 16 years of age and who are attending a child care or early childhood education
program, are exempt if they are:

(1) purchased by a nonprofit child care facility that is exempt under section 297A.70,
subdivision 4
, and that primarily serves families with income of 250 percent or less of
federal poverty guidelines; and

(2) prepared at the site of the child care facility.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2004, section 297A.67, subdivision 14, is amended to read:


Subd. 14.

deleted text beginPersonaldeleted text end Computers prescribed for use by school.

deleted text beginPersonaldeleted text end Computers
and related computer software sold by a school, college, university, or private career
school to students who are enrolled at the institutions are exempt if:

(1) the use of the deleted text beginpersonaldeleted text end computer, or of a substantially similar model of computer,
and the related computer software is prescribed by the institution in conjunction with a
course of study; and

(2) each student of the institution, or of a unit of the institution in which the student
is enrolled, is required by the institution to have such a deleted text beginpersonaldeleted text end computer and related
software as a condition of enrollment.

For the purposes of this subdivision, "school" and "private career school" have the
meanings given in subdivision 13.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2004, section 297A.67, subdivision 27, is amended to read:


Subd. 27.

Sewing materials.

Sewing materials are exempt. For purposes of this
subdivision "sewing materials" mean fabric, thread, zippers, interfacing, buttons, trim,
and other items that are usually directly incorporated into the construction of clothing,new text begin as
defined in subdivision 8,
new text end regardless of whether it is actually used for making clothing.
It does not include batting, foam, or fabric specifically manufactured for arts and craft
projects, or other materials for craft projects.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 37,
is amended to read:


Subd. 37.

Job opportunity building zones.

(a) Purchases of tangible personal
property or taxable services by a qualified business, as defined in section 469.310, are
exempt if the property or services are primarily used or consumed in a job opportunity
building zone designated under section 469.314. For purposes of this subdivision, an aerial
camera package, including any camera, computer, and navigation device contained in the
package, that is used in an aircraft that is operated under a Federal Aviation Administration
Restricted Airworthiness Certificate according to Code of Federal Regulations, title 14,
part 21, section 21.25(b)(3), relating to aerial surveying, and that is based, maintained, and
dispatched from a job opportunity building zone, qualifies as primarily used or consumed
in a job opportunity building zone if the imagery acquired from the aerial camera package
is returned to the job opportunity building zone for processing. The exemption for an
aerial camera package is limited deleted text begintodeleted text end deleted text begin$50,000 in taxes deleted text endnew text begin as provided in this subdivision new text endand
the tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied and then refunded in the manner provided in section 297A.75.new text begin The total amount
of the aerial camera package exemption refunded for all taxpayers for all fiscal years is
limited to $50,000 in taxes.
new text end

(b) Purchase and use of construction materialsdeleted text begin,deleted text end new text beginand new text endsuppliesdeleted text begin, or equipmentdeleted text end used or
consumed innew text begin, and equipment incorporated into, new text end the construction of improvements to
real property in a job opportunity building zone are exempt if the improvements after
completion of construction are to be used in the conduct of a qualified business, as defined
in section 469.310. This exemption applies regardless of whether the purchases are made
by the business or a contractor.

(c) The exemptions under this subdivision apply to a local sales and use tax
regardless of whether the local sales tax is imposed on the sales taxable as defined under
this chapter.

(d) This subdivision applies to sales, if the purchase was made and delivery received
during the duration of the zone.

(e) Notwithstanding the restriction in paragraph (a), which requires items purchased
to be primarily used or consumed in the zone, purchases by a qualified business that is
an electrical cooperative located in Meeker County of equipment and materials used for
the generation, transmission, and distribution of electrical energy are exempt under this
subdivision, except that:

(1) the exemption for materials and equipment used or consumed outside the zone
must not exceed $200,000 in taxesnew text begin for all taxpayers for all fiscal yearsnew text end; and

(2) no sales and use tax exemption is allowed for equipment purchased for resale.

For purposes of this paragraph, the tax must be imposed and collected as if the rate
under section 297A.62, subdivision 1, applied and then refunded in the manner provided
in section 297A.75.

new text begin EFFECTIVE DATE. new text end

new text begin Paragraphs (a) and (e) are effective for sales and purchases
made on or after August 1, 2005. Paragraph (b) is effective for sales and purchases made
on or after January 1, 2004.
new text end

Sec. 17.

Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 38,
is amended to read:


Subd. 38.

Biotechnology and health sciences industry zone.

(a) Purchases of
tangible personal property or taxable services by a qualified business, as defined in section
469.330, are exempt if the property or services are primarily used or consumed in a
biotechnology and health sciences industry zone designated under section 469.334.

(b) Purchase and use of construction materialsdeleted text begin,deleted text end new text beginand new text endsuppliesdeleted text begin, or equipmentdeleted text end used
or consumed innew text begin, and equipment incorporated into, new text end the construction of improvements
to real property in a biotechnology and health sciences industry zone are exempt if the
improvements after completion of construction are to be used in the conduct of a qualified
business, as defined in section 469.330. This exemption applies regardless of whether the
purchases are made by the business or a contractor.

(c) The exemptions under this subdivision apply to a local sales and use tax
regardless of whether the local sales tax is imposed on the sales taxable as defined under
this chapter.

(d)(1) The tax on sales of goods or services exempted under this subdivision are
imposed and collected as if the applicable rate under section 297A.62 applied. Upon
application by the purchaser, on forms prescribed by the commissioner, a refund equal
to the tax paid must be paid to the purchaser. The application must include sufficient
information to permit the commissioner to verify the sales tax paid and the eligibility of
the claimant to receive the credit. No more than two applications for refunds may be filed
under this subdivision in a calendar year. The provisions of section 289A.40 apply to
the refunds payable under this subdivision.

(2) The amount required to make the refunds is annually appropriated to the
commissioner of revenue.

(3) The aggregate amount refunded to a qualified business must not exceed the
amount allocated to the qualified business under section 469.335.

(e) This subdivision applies only to sales made during the duration of the designation
of the zone.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made on
or after January 1, 2004.
new text end

Sec. 18.

Minnesota Statutes 2004, section 297A.70, subdivision 2, is amended to read:


Subd. 2.

Sales to government.

(a) All sales, except those listed in paragraph (b),
to the following governments and political subdivisions, or to the listed agencies or
instrumentalities of governments and political subdivisions, are exempt:

(1) the United States and its agencies and instrumentalities;

(2) school districts, the University of Minnesota, state universities, community
colleges, technical colleges, state academies, the Perpich Minnesota Center for Arts
Education, and an instrumentality of a political subdivision that is accredited as an
optional/special function school by the North Central Association of Colleges and Schools;

(3) hospitals and nursing homes owned and operated by political subdivisions of
the state of tangible personal property and taxable services used at or by hospitals and
nursing homes;

(4) the Metropolitan Council, for its purchases of vehicles and repair parts to equip
operations provided for in section 473.4051;

(5) other states or political subdivisions of other states, if the sale would be exempt
from taxation if it occurred in that state; and

(6) sales to public libraries, public library systems, multicounty, multitype library
systems as defined in section 134.001, county law libraries under chapter 134A, state
agency libraries, the state library under section 480.09, and the Legislative Reference
Library.

(b) This exemption does not apply to the sales of the following products and services:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax exempt entities or their contractors to
be used in constructing buildings or facilities which will not be used principally by the
tax exempt entities;

(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5,
except for leases entered into by the United States or its agencies or instrumentalities; or

(4) deleted text beginmeals anddeleted text end lodging as defined under section 297A.61, subdivision 3, deleted text beginparagraphs
(d) and (g)
deleted text endnew text begin paragraph (g)new text end, clause (2), new text beginand prepared food, candy, and soft drinks, new text endexcept for
deleted text begin meals anddeleted text end lodgingnew text begin, prepared food, candy, and soft drinks new text end purchased directly by the United
States or its agencies or instrumentalities.

(c) As used in this subdivision, "school districts" means public school entities and
districts of every kind and nature organized under the laws of the state of Minnesota, and
any instrumentality of a school district, as defined in section 471.59.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2004, section 297A.70, subdivision 3, is amended to read:


Subd. 3.

Sales of certain goods and services to government.

(a) The following
sales to or use by the specified governments and political subdivisions of the state are
exempt:

(1) repair and replacement parts for emergency rescue vehicles, fire trucks, and
fire apparatus to a political subdivision;

(2) machinery and equipment, except for motor vehicles, used directly for mixed
municipal solid waste management services at a solid waste disposal facility as defined in
section 115A.03, subdivision 10;

(3) chore and homemaking services to a political subdivision of the state to be
provided to elderly or disabled individuals;

(4) telephone services to the Department of Administration that are used to provide
telecommunications services through the intertechnologies revolving fund;

(5) firefighter personal protective equipment as defined in paragraph (b), if purchased
or authorized by and for the use of an organized fire department, fire protection district, or
fire company regularly charged with the responsibility of providing fire protection to the
state or a political subdivision;

(6) bullet-resistant body armor that provides the wearer with ballistic and trauma
protection, if purchased by a law enforcement agency of the state or a political subdivision
of the state, or a licensed peace officer, as defined in section 626.84, subdivision 1;

(7) motor vehicles purchased or leased by political subdivisions of the state if the
vehicles are exempt from registration under section 168.012, subdivision 1, paragraph (b),
exempt from taxation under section 473.448, or exempt from the motor vehicle sales tax
under section 297B.03, clause (12);

(8) equipment designed to process, dewater, and recycle biosolids for wastewater
treatment facilities of political subdivisions, and materials incidental to installation of
that equipment; deleted text beginand
deleted text end

(9) sales to a town of gravel and of machinery, equipment, and accessories, except
motor vehicles, used exclusively for road and bridge maintenance, and leases by a town of
motor vehicles exempt from tax under section 297B.03, clause (10)deleted text begin.deleted text endnew text begin; andnew text end

new text begin (10) the removal of trees, bushes, or shrubs for the construction and maintenance
of roads, trails, or firebreaks when purchased by an agency of the state or a political
subdivision of the state.
new text end

(b) For purposes of this subdivision, "firefighters personal protective equipment"
means helmets, including face shields, chin straps, and neck liners; bunker coats and
pants, including pant suspenders; boots; gloves; head covers or hoods; wildfire jackets;
protective coveralls; goggles; self-contained breathing apparatus; canister filter masks;
personal alert safety systems; spanner belts; optical or thermal imaging search devices;
and all safety equipment required by the Occupational Safety and Health Administration.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
October 28, 2002, but for sales and purchases made after October 28, 2002, and before
July 15, 2005, no refunds may be claimed under Minnesota Statutes, section 289A.50, for
sales taxes collected and remitted to the state.
new text end

Sec. 20.

Minnesota Statutes 2004, section 297A.70, subdivision 4, is amended to read:


Subd. 4.

Sales to nonprofit groups.

(a) All sales, except those listed in paragraph
(b), to the following "nonprofit organizations" are exempt:

(1) a corporation, society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational purposes if the item
purchased is used in the performance of charitable, religious, or educational functions; and

(2) any senior citizen group or association of groups that:

(i) in general limits membership to persons who are either age 55 or older, or
physically disabled; and

(ii) is organized and operated exclusively for pleasure, recreation, and other
nonprofit purposes, no part of the net earnings of which inures to the benefit of any private
shareholders.

For purposes of this subdivision, charitable purpose includes the maintenance of a
cemetery owned by a religious organization.

(b) This exemption does not apply to the following sales:

(1) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a building or facility;

(2) construction materials purchased by tax-exempt entities or their contractors to
be used in constructing buildings or facilities that will not be used principally by the
tax-exempt entities; and

(3) deleted text beginmeals anddeleted text end lodging as defined under section 297A.61, subdivision 3, deleted text beginparagraphs
(d) and (g)
deleted text endnew text begin paragraph (g)new text end, clause (2)new text begin, and prepared food, candy, and soft drinksnew text end; and

(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 5, except as
provided in paragraph (c).

(c) This exemption applies to the leasing of a motor vehicle as defined in section
297B.01, subdivision 5, only if the vehicle is:

(1) a truck, as defined in section 168.011, a bus, as defined in section 168.011, or a
passenger automobile, as defined in section 168.011, if the automobile is designed and
used for carrying more than nine persons including the driver; and

(2) intended to be used primarily to transport tangible personal property or
individuals, other than employees, to whom the organization provides service in
performing its charitable, religious, or educational purpose.

(d) A limited liability company also qualifies for exemption under this subdivision if
(1) it consists of a sole member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2004, section 297A.70, subdivision 7, is amended to read:


Subd. 7.

Hospitals and outpatient surgical centers.

(a) Sales, except for those
listed in paragraph (c), to a hospital are exempt, if the items purchased are used in
providing hospital services. For purposes of this subdivision, "hospital" means a hospital
organized and operated for charitable purposes within the meaning of section 501(c)(3) of
the Internal Revenue Code, and licensed under chapter 144 or by any other jurisdiction,
and "hospital services" are services authorized or required to be performed by a "hospital"
under chapter 144.

(b) Sales, except for those listed in paragraph (c), to an outpatient surgical center
are exempt, if the items purchased are used in providing outpatient surgical services. For
purposes of this subdivision, "outpatient surgical center" means an outpatient surgical
center organized and operated for charitable purposes within the meaning of section
501(c)(3) of the Internal Revenue Code, and licensed under chapter 144 or by any other
jurisdiction. For the purposes of this subdivision, "outpatient surgical services" means:
(1) services authorized or required to be performed by an outpatient surgical center under
chapter 144; and (2) urgent care. For purposes of this subdivision, "urgent care" means
health services furnished to a person whose medical condition is sufficiently acute to
require treatment unavailable through, or inappropriate to be provided by, a clinic or
physician's office, but not so acute as to require treatment in a hospital emergency room.

(c) This exemption does not apply to the following products and services:

(1) purchases made by a clinic, physician's office, or any other medical facility not
operating as a hospital or outpatient surgical center, even though the clinic, office, or
facility may be owned and operated by a hospital or outpatient surgical center;

(2) sales under section 297A.61, subdivision 3, deleted text beginparagraphs (d) and (g)deleted text endnew text begin paragraph
(g)
new text end, clause (2)new text begin, and prepared food, candy, and soft drinksnew text end;

(3) building and construction materials used in constructing buildings or facilities
that will not be used principally by the hospital or outpatient surgical center;

(4) building, construction, or reconstruction materials purchased by a contractor
or a subcontractor as a part of a lump-sum contract or similar type of contract with a
guaranteed maximum price covering both labor and materials for use in the construction,
alteration, or repair of a hospital or outpatient surgical center; or

(5) the leasing of a motor vehicle as defined in section 297B.01, subdivision 5.

(d) A limited liability company also qualifies for exemption under this subdivision if
(1) it consists of a sole member that would qualify for the exemption, and (2) the items
purchased qualify for the exemption.

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2004, section 297A.70, subdivision 13, is amended to read:


Subd. 13.

Fund-raising sales by or for nonprofit groups.

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

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

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

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

(4) sales of deleted text begingum,deleted text end candydeleted text begin, and candy productsdeleted text end sold for fund-raising purposes by a
nonprofit organization that provides educational and social activities primarily for young
people age 18 and under.

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

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

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

(c) Sales of tangible personal property are exempt if the entire proceeds, less the
necessary expenses for obtaining the property, will be contributed to a registered combined
charitable organization described in section 309.501, to be used exclusively for charitable,
religious, or educational purposes, and the registered combined charitable organization
has given its written permission for the sale. Sales that occur over a period of more than
24 days per year are not exempt under this paragraph.

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2004, section 297A.70, subdivision 14, is amended to read:


Subd. 14.

Fund-raising events sponsored by nonprofit groups.

(a) Sales of
tangible personal property at, and admission charges for fund-raising events sponsored
by, a nonprofit organization are exempt if:

(1) all gross receipts are recorded as such, in accordance with generally accepted
accounting practices, on the books of the nonprofit organization; and

(2) the entire proceeds, less the necessary expenses for the event, will be used
solely and exclusively for charitable, religious, or educational purposes. Exempt sales
include the sale of deleted text beginfood, meals, and drinksdeleted text end new text beginprepared food, candy, and soft drinks new text endat the
fund-raising event.

(b) This exemption is limited in the following manner:

(1) it does not apply to admission charges for events involving bingo or other
gambling activities or to charges for use of amusement devices involving bingo or other
gambling activities;

(2) all gross receipts are taxable if the profits are not used solely and exclusively for
charitable, religious, or educational purposes;

(3) it does not apply unless the organization keeps a separate accounting record,
including receipts and disbursements from each fund-raising event that documents all
deductions from gross receipts with receipts and other records;

(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
the active or passive agent of a person that is not a nonprofit corporation;

(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;

(6) it does not apply to fund-raising events conducted on premises leased for more
than five days but less than 30 days; and

(7) it does not apply if the risk of the event is not borne by the nonprofit organization
and the benefit to the nonprofit organization is less than the total amount of the state and
local tax revenues foregone by this exemption.

(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
government, corporation, society, association, foundation, or institution organized and
operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
veterans' purposes, no part of the net earnings of which inures to the benefit of a private
individual.

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2004, section 297A.70, subdivision 15, is amended to read:


Subd. 15.

Statewide amateur athletic games.

Notwithstanding section 297A.61,
subdivision 3
, or any other provision of this chapter, the gross receipts from the following
sales made to or by a nonprofit corporation designated by the Minnesota Amateur Sports
Commission to conduct a series of statewide amateur athletic games and related events,
workshops, and clinics are exempt:

(1) sales of tangible personal property to or the storage, use, or other consumption of
tangible personal property by the nonprofit corporation; and

(2) sales of tangible personal property, admission charges, and sales of deleted text beginfood,
meals, and drinks
deleted text end new text beginprepared food, candy, and soft drinks new text endby the nonprofit corporation at
fund-raising events, athletic events, or athletic facilities.

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2005 Supplement, section 297A.72, subdivision 2, is
amended to read:


Subd. 2.

Content and form of exemption certificate.

An exemption certificate
must be substantially in the form prescribed by the commissioner and:

(1) be signed by the purchaser or meet the requirements of section 270C.304;

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

(3) indicate the sales tax account number, if any, issued to the purchaserdeleted text begin;deleted text endnew text begin.
new text end

deleted text begin (4) indicate the general character of the property sold by the purchaser in the regular
course of business or the activities carried on by the organization; and
deleted text end

deleted text begin (5) identify the property purchased.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 1, is
amended to read:


Subdivision 1.

Tax collected.

The tax on the gross receipts from the sale of the
following exempt items must be imposed and collected as if the sale were taxable and the
rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) capital equipment exempt under section 297A.68, subdivision 5;

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

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

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

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

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

(7) building materials for the Long Lake Conservation Center exempt under section
297A.71, subdivision 17;

(8) materials, supplies, fixtures, furnishings, and equipment for a county law
enforcement and family service center under section 297A.71, subdivision 26;

(9) materials and supplies for qualified low-income housing under section 297A.71,
subdivision 23
; deleted text beginand
deleted text end

(10) materials, supplies, and equipment for municipal electric utility facilities under
section 297A.71, subdivision 35deleted text begin.deleted text endnew text begin;
new text end

new text begin (11) equipment and materials used for the generation, transmission, and distribution
of electrical energy and an aerial camera package exempt under section 297A.68,
subdivision 37; and
new text end

new text begin (12) tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 2, is
amended to read:


Subd. 2.

Refund; eligible persons.

Upon application on forms prescribed by the
commissioner, a refund equal to the tax paid on the gross receipts of the exempt items
must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1) to (3), the applicant must be the purchaser;

(2) for subdivision 1, clauses (4), (7), and (8), the applicant must be the governmental
subdivision;

(3) for subdivision 1, clause (5), the applicant must be the recipient of the benefits
provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (6), the applicant must be the owner of the homestead
property;

(5) for subdivision 1, clause (9), the owner of the qualified low-income housing
project; deleted text beginand
deleted text end

(6) for subdivision 1, clause (10), the applicant must be a municipal electric utility or
a joint venture of municipal electric utilitiesdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (7) for subdivision 1, clauses (11) and (12), the owner of the qualifying business.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2005 Supplement, section 297A.75, subdivision 3, is
amended to read:


Subd. 3.

Application.

(a) The application must include sufficient information
to permit the commissioner to verify the tax paid. If the tax was paid by a contractor,
subcontractor, or builder, under subdivision 1, clause (4), (5), (6), (7), (8), (9), deleted text beginordeleted text end (10),
new text begin (11), or (12), new text endthe contractor, subcontractor, or builder must furnish to the refund applicant
a statement including the cost of the exempt items and the taxes paid on the items unless
otherwise specifically provided by this subdivision. The provisions of sections 289A.40
and 289A.50 apply to refunds under this section.

(b) An applicant may not file more than two applications per calendar year for
refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

new text begin EFFECTIVE DATE. new text end

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

Sec. 29.

Minnesota Statutes 2005 Supplement, section 297A.815, subdivision 1,
is amended to read:


Subdivision 1.

Motor vehicle lease price; payment.

(a) In the case of a lease of a
motor vehicle as provided in section 297A.61, subdivision 4, paragraph (k), clause (2), the
tax is imposed on the total amount to be paid by the lessee under the lease agreement. The
lessor shall collect the tax in full at the time the lease is executed or, if the tax is included
in the lease and the lease is assigned, the tax is due from the original lessor at the time the
lease is assigned. The total amount to be paid by the lessee under the lease agreement
equals the agreed-upon value of the vehicle less manufacturer's rebates, the stated residual
value of the leased vehicle, and the total value allowed for a vehicle owned by the lessee
taken in trade by the lessor, plus the price of any taxable goods and services included in
the lease and the rent charge as provided by Code of Federal Regulations, title 12, section
213.4, excluding any rent charge related to the capitalization of the tax.

(b) If the total amount paid by the lessee for use of the leased vehicle includes
amounts that are not calculated at the time the lease is executed, the tax is imposed and
must be collected by the lessor at the time the amounts are paid by the lessee. In the case
of a lease which by its terms may be renewed, the sales tax is due and payable on the
total amount to be paid during the initial term of the lease, and then for each subsequent
renewal period on the total amount to be paid during the renewal period.

(c) If a lease is canceled or rescinded on or before 90 days of its execution or if a
vehicle is returned to the manufacturer under section 325F.665, the lessor may file a claim
for a refund of the total tax paid minus the amount of tax due for the period the vehicle is
used by the lessee.

(d) If a lessee's obligation to make payments on a lease is canceled more than 90
days after its execution, a credit is allowed against sales tax or motor vehicles sales tax
due on a subsequent lease or purchase of a motor vehicle if that lease or purchase is
consummated within 30 days of the date the prior lease was canceled. The amount of the
credit is equal to (1) the sales tax paid at the inception of the lease, multiplied by (2)
the ratio of the number of full months remaining in the lease at the time of termination
compared to the term of the lease used in calculating sales tax paid at the inception of the
lease.new text begin The credit or any part of it cannot be assigned or transferred to another person.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for leases entered into after
September 30, 2005.
new text end

Sec. 30.

Minnesota Statutes 2004, section 297A.99, subdivision 7, is amended to read:


Subd. 7.

Exemptions.

(a) All goods or services that are otherwise exempt from
taxation under this chapter are exempt from a political subdivision's tax.

(b) deleted text beginThe gross receipts from the sale of tangible personal property that meets the
requirement of section 297A.68, subdivision 15, are exempt, except the qualification
test applies based on the boundaries of the political subdivision instead of the state
of Minnesota.
deleted text end

deleted text begin (c)deleted text end All mobile transportation equipment, and parts and accessories attached to or
to be attached to the equipment are exempt, if purchased by a holder of a motor carrier
direct pay permit under section 297A.90.

new text begin EFFECTIVE DATE. new text end

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

Sec. 31.

Laws 2005, First Special Session chapter 3, article 5, section 3, the effective
date, is amended to read:




EFFECTIVE DATE. This section is effective for sales and purchases made after
October 28, 2002, but for land clearing contracts entered into after October 28, 2002,
new text begin but before July 15, 2005, new text endno refunds may be claimed under Minnesota Statutes, section
289A.50, for sales taxes collected and remitted to the state on the land clearing contracts.

new text begin EFFECTIVE DATE.new text end

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

Sec. 32. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2004, section 297A.68, subdivisions 15 and 18, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Rules, parts 8130.0400, subpart 3; 8130.4800, subparts 1, 3, 4, 5, 6, 7,
and 8; 8130.5100; 8130.5400; and 8130.5800, subpart 6,
new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 7

DEPARTMENT OF REVENUE SPECIAL TAXES AND FEES

Section 1.

Minnesota Statutes 2005 Supplement, section 115B.49, subdivision 4, is
amended to read:


Subd. 4.

Registration; fees.

(a) The owner or operator of a dry cleaning facility
shall register on or before October 1 of each year with the commissioner of revenue in
a manner prescribed by the commissioner of revenue and pay a registration fee for the
facility. The amount of the fee is:

(1) $500, for facilities with a full-time equivalence of fewer than five;

(2) $1,000, for facilities with a full-time equivalence of five to ten; and

(3) $1,500, for facilities with a full-time equivalence of more than ten.

new text begin The registration fee must be paid on or before October 18 or the owner or operator
of a dry cleaning facility may elect to pay the fee in equal installments. Installment
payments must be paid on or before October 18, on or before January 18, on or before
April 18, and on or before June 18. All payments made after October 18 bear interest
at the rate specified in section 270C.40.
new text end

(b) A person who sells dry cleaning solvents for use by dry cleaning facilities in the
state shall collect and remit to the commissioner of revenue in a manner prescribed by the
commissioner of revenue, on or before the 20th day of the month following the month in
which the sales of dry cleaning solvents are made, a fee of:

(1) $3.50 for each gallon of perchloroethylene sold for use by dry cleaning facilities
in the state;

(2) 70 cents for each gallon of hydrocarbon-based dry cleaning solvent sold for use
by dry cleaning facilities in the state; and

(3) 35 cents for each gallon of other nonaqueous solvents sold for use by dry
cleaning facilities in the state.

(c) The audit, assessment, appeal, collection, enforcement, and administrative
provisions of chapters 270C and 289A apply to the fee imposed by this subdivision.
To enforce this subdivision, the commissioner of revenue may grant extensions to file
returns and pay fees, impose penalties and interest on the annual registration fee under
paragraph (a) and the monthly fee under paragraph (b), and abate penalties and interest in
the manner provided in chapters 270C and 289A. The penalties and interest imposed on
taxes under chapter 297A apply to the fees imposed under this subdivision. Disclosure
of data collected by the commissioner of revenue under this subdivision is governed by
chapter 270B.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for returns and payments due on
or after October 1, 2006.
new text end

Sec. 2.

new text begin [287.222] TRANSFER TO OBTAIN FINANCING.
new text end

new text begin The deed tax is $1.65 on a deed or other instrument that transfers real property if
the transfer is (1) to a person who is a builder or contractor, (2) intended to be temporary,
and (3) done solely to enable the builder or contractor to obtain financing to build an
improvement on the conveyed property under a contract for improvement with the grantor
that calls for the conveyed property to be reconveyed to the grantor upon completion of
and payment for the improvement. The deed tax is $1.65 on a deed or other instrument
that transfers the real property back from the builder or contractor to the grantor.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for deeds both executed and recorded
on or after July 1, 2006.
new text end

Sec. 3.

Minnesota Statutes 2004, section 295.50, subdivision 4, is amended to read:


Subd. 4.

Health care provider.

(a) "Health care provider" means:

(1) a person whose health care occupation is regulated or required to be regulated by
the state of Minnesota furnishing any or all of the following goods or services directly to a
patient or consumer: medical, surgical, optical, visual, dental, hearing, nursing services,
drugs, laboratory, diagnostic or therapeutic services;

(2) a person who provides goods and services not listed in clause (1) that qualify for
reimbursement under the medical assistance program provided under chapter 256B;

(3) a staff model health plan company;

(4) an ambulance service required to be licensed; or

(5) a person who sells or repairs hearing aids and related equipment or prescription
eyewear.

(b) Health care provider does not include:

(1) hospitals; medical supplies distributors, except as specified under paragraph
(a), clause (5); nursing homes licensed under chapter 144A or licensed in any other
jurisdiction; pharmacies; surgical centers; bus and taxicab transportation, or any other
providers of transportation services other than ambulance services required to be licensed;
supervised living facilities for persons with mental retardation or related conditions,
licensed under Minnesota Rules, parts 4665.0100 to 4665.9900; deleted text beginresidential care homes
licensed under chapter 144B;
deleted text endnew text begin housing with services establishments required to be
registered under chapter 144D;
new text end board and lodging establishments providing only custodial
services that are licensed under chapter 157 and registered under section 157.17 to
provide supportive services or health supervision services; adult foster homes as defined
in Minnesota Rules, part 9555.5105; day training and habilitation services for adults
with mental retardation and related conditions as defined in section 252.41, subdivision
3
; boarding care homes, as defined in Minnesota Rules, part 4655.0100; and adult day
care centers as defined in Minnesota Rules, part 9555.9600;

(2) home health agencies as defined in Minnesota Rules, part 9505.0175, subpart
15; a person providing personal care services and supervision of personal care services
as defined in Minnesota Rules, part 9505.0335; a person providing private duty nursing
services as defined in Minnesota Rules, part 9505.0360; and home care providers required
to be licensed under chapter 144A;

(3) a person who employs health care providers solely for the purpose of providing
patient services to its employees; and

(4) an educational institution that employs health care providers solely for the
purpose of providing patient services to its students if the institution does not receive fee
for service payments or payments for extended coverage.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2004, section 295.53, subdivision 3, is amended to read:


Subd. 3.

Separate statement of tax.

A hospital, surgical center, deleted text beginordeleted text end health care
providernew text begin, or wholesale drug distributor new text end must not state the tax obligation under section
295.52 in a deceptive or misleading manner. It must not separately state tax obligations
on bills provided to patients, consumers, or other payers when the amount received for
the services or goods is not subject to tax.

Pharmacies that separately state the tax obligations on bills provided to consumers
or to other payers who purchase legend drugs may state the tax obligation as the wholesale
price of the legend drugs multiplied by the tax percentage specified in section 295.52.
Pharmacies must not state the tax obligation based on the retail price.

Whenever the commissioner determines that a person has engaged in any act or
practice constituting a violation of this subdivision, the commissioner may bring an action
in the name of the state in the district court of the appropriate county to enjoin the act
or practice and to enforce compliance with this subdivision, or the commissioner may
refer the matter to the attorney general or the county attorney of the appropriate county.
Upon a proper showing, a permanent or temporary injunction, restraining order, or other
appropriate relief must be granted.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2004, section 297F.01, is amended by adding a subdivision
to read:


new text begin Subd. 22a. new text end

new text begin Weighted average retail price. new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective April 30, 2006.
new text end

Sec. 6.

Minnesota Statutes 2004, section 297G.01, subdivision 7, is amended to read:


Subd. 7.

Distilled spirits.

"Distilled spirits" deleted text beginisdeleted text endnew text begin means:new text end

new text begin (1) new text endintoxicating liquors, including ethyl alcohol, hydrated oxide of ethyl, spirits of
wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and
mixtures, for nonindustrial usedeleted text begin.deleted text endnew text begin;
new text end

new text begin (2) any beverage that would be classified as a flavored malt beverage except that the
alcohol contribution from flavors and other nonbeverage materials exceeds 49 percent
of the alcohol content of the product; or
new text end

new text begin (3) any beverage that would be classified as a flavored malt beverage except that the
beverage contains more than six percent alcohol by volume, and more than 1.5 percent
of the volume of the finished product consists of alcohol derived from flavors and other
nonbeverage ingredients that contain alcohol.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

Sec. 7.

Minnesota Statutes 2004, section 297G.01, is amended by adding a subdivision
to read:


new text begin Subd. 8a. new text end

new text begin Flavored malt beverage. new text end

new text begin (a) "Flavored malt beverage" means a
fermented malt beverage that:
new text end

new text begin (1) contains six percent or less alcohol by volume and derives at least 51 percent
of its alcohol content by volume from the fermentation of grain-derived carbohydrates,
as long as not more than 49 percent of the beverage's overall alcohol content is obtained
from flavors and other added nonbeverage ingredients containing alcohol; or
new text end

new text begin (2) contains more than six percent alcohol by volume that derives not more than 1.5
percent of its overall alcohol content by volume from flavors and other added nonbeverage
ingredients containing alcohol.
new text end

new text begin (b) Flavored malt beverage does not include cider or an alcoholic beverage obtained
primarily by fermentation of rice, such as sake.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

ARTICLE 8

DEPARTMENT OF REVENUE MISCELLANEOUS

Section 1.

Minnesota Statutes 2005 Supplement, section 270C.01, subdivision 4, is
amended to read:


Subd. 4.

Electronic means; electronically.

"Electronic means" and "electronically"
mean a method that is electronic, as defined in section 325L.02, paragraph (e), and that
is prescribed by the commissioner.new text begin Electronic means includes the use of a touch-tone
telephone to transmit return information in a manner prescribed by the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2005 Supplement, section 270C.304, is amended to read:


270C.304 ELECTRONICALLY FILED RETURNS; SIGNATURES.

For purposes of a law administered by the commissioner, the name of the taxpayer,
the name of the taxpayer's authorized agent, or the taxpayer's identification number,
will constitute a signature when transmitted as part of the return information on returns
filed by electronic means by the taxpayer or at the taxpayer's direction. deleted text begin"Electronic
means" includes, but is not limited to, the use of a touch-tone telephone to transmit return
information in a manner prescribed by the commissioner.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2005 Supplement, section 270C.33, subdivision 4, is
amended to read:


Subd. 4.

Orders of assessment.

(a) The commissioner may issue an order of
assessment in any of the following circumstances:

(1) the commissioner determines that the correct amount of tax is different than that
assessed on a return filed with the commissioner;

(2) no return has been filed and the commissioner determines the amount of tax
that should have been assessed;

(3) the commissioner determines that the correct amount of a refundable credit
is different than the amount claimed by a taxpayer. For purposes of this subdivision,
"refundable credit" means a refund benefit or credit due a person that is unrelated to the
person's liability for a tax. "Refundable credit" does not include estimated tax payments
or withholding taxes. An assessment for an overpayment of a refundable credit may be
collected in the same manner as a tax collected by the commissioner; deleted text beginand
deleted text end

(4) the commissioner determines the correct amount of a tax that the taxpayer is not
required to assess by a return filed with the commissionerdeleted text begin.deleted text endnew text begin; and
new text end

new text begin (5) the commissioner determines that a penalty other than a penalty for late payment
of tax, late filing of a return, or failure to pay tax by electronic means should be imposed,
and the penalty is not included on an order of assessment made under clauses (1) to (4).
new text end

(b) An order of assessment must be in writing.

(c) An order of assessment must be signed by the commissioner or a delegate, or
have their facsimile signature, if the change in tax, excluding penalties and interest,
exceeds $1,000.

(d) An order of assessment is final when made but, as applicable, is reviewable
administratively under section 270C.35, or appealable to Tax Court under chapter 271.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2005 Supplement, section 270C.57, subdivision 3, is
amended to read:


Subd. 3.

Assessmentnew text begin;new text end abatement; review.

The commissioner may assess liability
new text begin against a successor business new text endunder this section within the time prescribed for collecting
the underlying sales and withholding taxes, interest, and penalties. The assessment is
presumed to be valid, and the burden is upon the successor to show it is incorrect or
invalid. An order assessing successor liability is reviewable administratively under section
270C.35 and is appealable to Tax Court under chapter 271. The commissioner may abate
an assessment if the successor's failure to give the notice required under this section is due
to reasonable cause. The procedural and appeal provisions under section 270C.34 apply
to abatement requests under this subdivision. Collection remedies available against the
transferring business are available against the successor from the date of assessment of
successor liability.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2005 Supplement, section 270C.67, subdivision 1, is
amended to read:


Subdivision 1.

Authority.

If any tax payable to the commissioner or to the
department is not paid when due, such tax may be collected by the commissioner within
five years after the date of assessment of the tax, or if a lien has been filed, during the
period the lien is enforceable, or if the tax judgment has been filed, within the statutory
period of enforcement of a valid tax judgment, by a levy upon all property and rights
to property, including any property in the possession of law enforcement officials, of
the person liable for the payment or collection of such tax deleted text begin(except that which is exempt
from execution pursuant to section 550.37)
deleted text end or property on which there is a lien provided
in section 270C.63. For this purpose, "tax" includes any penalty, interest, and costs,
properly payable.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2005 Supplement, section 270C.67, is amended by adding a
subdivision to read:


new text begin Subd. 1a. new text end

new text begin Exempt property. new text end

new text begin A levy under this section is not enforceable against:
new text end

new text begin (1) a purchaser with respect to tangible personal property purchased at retail in
the ordinary course of the seller's trade or business, unless at the time of purchase the
purchaser intends the purchase to or knows the purchase will hinder, evade, or defeat
the collection of a tax; or
new text end

new text begin (2) the personal property listed as exempt in sections 550.37, 550.38, and 550.39.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2005 Supplement, section 271.12, is amended to read:


271.12 WHEN ORDER EFFECTIVE.

No order for refundment by the commissioner of revenue, the appropriate unit of
government, or the Tax Court shall take effect until the time for appeal therefrom or
review thereof by all parties entitled thereto has expired. Otherwise every order of the
commissioner, the appropriate unit of government, or the Tax Court shall take effect
immediately upon the filing thereof, and no appeal therefrom or review thereof shall
stay the execution thereof or extend the time for payment of any tax or other obligation
unless otherwise expressly provided by law; provided, that in case an order which has
been acted upon, in whole or in part, shall thereafter be set aside or modified upon appeal,
the determination upon appeal or review shall supersede the order appealed from and be
binding upon all parties affected thereby, and such adjustments as may be necessary
to give effect thereto shall be made accordingly; and provided further, the Tax Court
may enjoin enforcement of the order of the commissioner being appealed. If it be finally
determined upon such appeal or review that any person is entitled to refundment of any
amount which has been paid for a tax or other obligation, such amount, unless otherwise
provided by law, shall be paid to the person by the commissioner of finance, or other
proper officer, out of funds derived from taxes of the same kind, if available for the
purpose, or out of other available funds, if any, with interest at the rate specified in section
270C.405 from the date of payment of the tax, unless a different rate new text beginor date of accrual
new text end of interest is otherwise provided by law, in which case such other rate new text beginor date of accrual
new text end shall apply, upon certification by the commissioner of revenue, the appropriate unit of
government, the Tax Court or the Supreme Court.

If, within 120 days after a decision of the Tax Court becomes final, the commissioner
does not refund the overpayment determined by the court, together with interest, on
motion by the taxpayer, the Tax Court shall have jurisdiction to order the refund of
the overpayment and interest, and to award reasonable litigation costs for bringing the
motion. If any tax, assessment, or other obligation be increased upon such appeal or
review, the increase shall be added to the original amount, and may be enforced and
collected therewith.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2005 Supplement, section 289A.121, subdivision 5, is
amended to read:


Subd. 5.

Reportable transactions.

(a) For each taxable year in which a taxpayer
must make a return or a statement under Code of Federal Regulations, title 26, section
1.6011-4, for a reportable transaction, including a listed transaction, in which the taxpayer
participated in a taxable year for which a return is required under chapter 290, the taxpayer
must file a copy of the disclosure with the commissioner.

(b) Any taxpayer that is a member of a unitary business group that includes any
person that must make a disclosure statement under Code of Federal Regulations, title 26,
section 1.6011-4, must file a disclosure under this subdivision.

(c) Disclosure under this subdivision is required for any transaction entered into after
December 31, 2001, that the Internal Revenue Service determines is a listed transaction
at any time, and must be made in the manner prescribed by the commissioner. For
transactions in which the taxpayer participated for taxable years ending before December
31, 2005, disclosure must be made by the new text beginextended new text enddue date of the first return required
under chapter 290 that occurs 60 days or more after July 14, 2005. With respect to
transactions in which the taxpayer participated for taxable years ending on and after
December 31, 2005, disclosure must be made in the time and manner prescribed in Code
of Federal Regulations, title 26, section 1.6011-4(e).

(d) Notwithstanding paragraphs (a) to (c), no disclosure is required for transactions
entered into after December 31, 2001, and before January 1, 2006, if (1) the taxpayer
has filed an amended income tax return which reverses the tax benefits of the tax
shelter transaction, or (2) as a result of a federal audit the Internal Revenue Service has
determined the tax treatment of the transaction and an amended return has been filed
to reflect the federal treatment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for disclosures of reportable
transactions in which the taxpayer participated for taxable years ending before December
31, 2005.
new text end

ARTICLE 9

PUBLIC FINANCE

Section 1.

Minnesota Statutes 2004, section 103E.635, subdivision 7, is amended to
read:


Subd. 7.

Sale of definitive drainage bonds.

The board must sell and negotiate the
definitive drainage bonds deleted text beginfor at least their par value. The definitive bonds must be solddeleted text end
deleted text begin in accordance with deleted text enddeleted text beginsectiondeleted text endnew text begin according to sections 475.56 and new text end 475.60.

Sec. 2.

Minnesota Statutes 2004, section 116A.20, subdivision 3, is amended to read:


Subd. 3.

How payable.

The bonds shall be payable at such time or times, not to
exceed new text begin(1) new text end30 years from their datenew text begin or (2) 40 years or the useful life of the asset, whichever
is less, if financed or guaranteed by the United States Department of Agriculture
new text end, and bear
such rate or rates of interest not exceeding eight percent per annum, payable annually or
semiannually as the county board shall by resolution determine. The years and amounts
of principal maturities shall be such as in the opinion of the county board are warranted
by the anticipated collections of the water and sewer improvement assessments without
regard to any limitations on such maturities imposed by section 475.54.

Sec. 3.

Minnesota Statutes 2004, section 162.18, subdivision 1, is amended to read:


Subdivision 1.

Limitation on amount.

Any city having a population of 5,000 or
more may in accordance with chapter 475, except as otherwise provided herein, issue and
sell its obligations for the purpose of establishing, locating, relocating, constructing,
reconstructing, and improving municipal state-aid streets therein. In the resolution
providing for the issuance of the obligations, the governing body of the municipality
shall irrevocably pledge and appropriate to the sinking fund from which the obligations
are payable, an amount of the moneys allotted or to be allotted to the municipality from
its account in the municipal state-aid street fund sufficient to pay the principal of and the
interest on the obligations as they respectively come due. The obligations shall be issued
in amounts and on terms such that the average annual amount of principal and interest due
in all subsequent calendar years on the obligations, including any similar obligations of
the municipality which are outstanding, shall not exceed deleted text begin50deleted text endnew text begin 90 new text end percent of the amount of
deleted text begin the last annual allotment preceding the bond issue received by the municipality from the
construction account in the municipal state-aid street fund; except that the municipality
may issue general obligation bonds for said purpose, to be purchased by it for the account
of any one or more of its own funds, including debt redemption funds, in which case such
bonds shall mature in not exceeding five years from their respective dates of issue, in
principal amounts not exceeding in any calendar year, with the principal amount of all
other municipal state-aid street obligations maturing in such year, the total amount of
deleted text end the
last annual allotment preceding the bond issue received by the municipality from the
construction account in the municipal state-aid street fund. All interest on the obligations
shall be paid out of the municipality's normal maintenance account in the municipal
state-aid street fund. Any such obligations may be made general obligations, but if
moneys of the municipality other than moneys received from the municipal state-aid street
fund, are used for payment of the obligations, the moneys so used shall be restored to the
appropriate fund from the moneys next received by the municipality from the construction
or maintenance account in the municipal state-aid street fund which are not required to be
paid into a sinking fund for obligations.

Sec. 4.

Minnesota Statutes 2004, section 162.181, subdivision 1, is amended to read:


Subdivision 1.

Limitation on amount.

Except as otherwise provided herein, any
county may, in accordance with chapter 475, issue and sell its obligations, the total
amount thereof not to exceed the total of the preceding two years state-aid allotments,
for the purpose of establishing, locating, relocating, constructing, reconstructing, and
improving county state-aid highways and constructing buildings and other facilities for
maintaining county state-aid highways. In the resolution providing for the issuance of the
obligations, the county board of the county shall irrevocably pledge and appropriate to the
sinking fund from which the obligations are payable, an amount of the money allotted
or to be allotted to the county from its account in the county state-aid highway fund
sufficient to pay the principal of and the interest on the obligations as they respectively
come due. The obligations shall be issued in the amounts and on terms such that the
amount of principal and interest due in any calendar year on the obligations, including
any similar obligations of the county which are outstanding, shall not exceed deleted text begin50deleted text endnew text begin 90
new text end percent of the amount of the last annual allotment preceding the bond issue received
by the county from the construction account in the county state-aid highway fund. All
interest on the obligations shall be paid out of the county's normal maintenance account
in the county state-aid highway fund. The obligations may be made general obligations,
but if money of the county other than money received from the county state-aid highway
fund, is used for payment of the obligations, the money so used shall be restored to the
appropriate fund from the money next received by the county from the construction or
maintenance account in the county state-aid highway fund which is not required to be
paid into a sinking fund for obligations.

Sec. 5.

Minnesota Statutes 2004, section 273.032, is amended to read:


273.032 MARKET VALUE DEFINITION.

For the purpose of determining any property tax levy limitation based on market
value,deleted text begin any net debt limit based on market value, any limit on the issuance of bonds,
deleted text enddeleted text begin certificates of indebtedness, or capital notes based on market value, deleted text endany qualification
to receive state aid based on market value, or any state aid amount based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean the total taxable market value of property within the local
unit of government before any adjustments for tax increment, fiscal disparity, powerline
credit, or wind energy values, but after the limited market adjustments under section
273.11, subdivision 1a, and after the market value exclusions of certain improvements to
homestead property under section 273.11, subdivision 16. Unless otherwise provided,
"market value," "taxable market value," and "market valuation" new text beginfor purposes of this
paragraph,
new text end refer to the taxable market value for the previous assessment year.

new text begin For the purpose of determining any net debt limit based on market value, or any limit
on the issuance of bonds, certificates of indebtedness, or capital notes based on market
value, the terms "market value," "taxable market value," and "market valuation," whether
equalized or unequalized, mean the total taxable market value of property within the local
unit of government before any adjustments for tax increment, fiscal disparity, powerline
credit, or wind energy values, but after the limited market adjustments under section
273.11, subdivision 1a, and after the market value exclusions of certain improvements to
homestead property under section 273.11, subdivision 16. Unless otherwise provided,
"market value," "taxable market value," and "market valuation" for purposes of this
paragraph, mean the taxable market value as last finally equalized.
new text end

Sec. 6.

Minnesota Statutes 2004, section 373.45, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) As used in this section, the following terms have
the meanings given.

(b) "Authority" means the Minnesota Public Facilities Authority.

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

(d) "Debt obligation" means a general obligation bond issued by a county, new text begina bond to
which the general obligation of a county is pledged under section 469.034, subdivision 2,
new text end or a bond payable from a county lease obligation under section 641.24, to provide funds
for the construction of:

(1) jails;

(2) correctional facilities;

(3) law enforcement facilities;

(4) social services and human services facilities; deleted text beginor
deleted text end

(5) solid waste facilitiesnew text begin; or
new text end

new text begin (6) qualified housing development projects as defined in section 469.034, subdivision
2
new text end.

Sec. 7.

Minnesota Statutes 2004, section 469.035, is amended to read:


469.035 MANNER OF BOND ISSUANCE; SALE.

Bonds of an authority shall be authorized by its resolution. They may be issued in
one or more series and shall bear the date or dates, mature at the time or times, bear interest
at the rate or rates, be in the denomination or denominations, be in the form either coupon
or registered, carry the conversion or registration privileges, have the rank or priority, be
executed in the manner, be payable in the medium of payment at the place or places, and
be subject to the terms of redemption with or without premium, as the resolution, its trust
indenture or mortgage provides. The bonds may be sold deleted text beginat public or private sale at not
less than par
deleted text endnew text begin in the manner and for the price that the authority determines to be in the best
interest of the authority
new text end. Notwithstanding any other law, bonds issued pursuant to sections
469.001 to 469.047 shall be fully negotiable. In any suit, action, or proceedings involving
the validity or enforceability of any bonds of an authority or the security for the bonds,
any bond reciting in substance that it has been issued by the authority to aid in financing a
project shall be conclusively deemed to have been issued for that purpose, and the project
shall be conclusively deemed to have been planned, located, and carried out in accordance
with the purposes and provisions of sections 469.001 to 469.047.

In cities of the first class, the governing body of the city must approve all notes
executed with the Minnesota Housing Finance Agency pursuant to this section if the
interest rate on the note exceeds seven percent.

Sec. 8.

Minnesota Statutes 2004, section 469.103, subdivision 2, is amended to read:


Subd. 2.

Form.

The bonds of each series issued by the authority under this section
shall bear interest at a rate or rates, shall mature at the time or times within deleted text begin20deleted text endnew text begin 30 new text end years
from the date of issuance, and shall be in the form, whether payable to bearer, registrable
as to principal, or fully registrable, as determined by the authority. Section 469.102,
subdivision 6
, applies to all bonds issued under this section, and the bonds and their
coupons, if any, when payable to bearer, shall be negotiable instruments.

Sec. 9.

Minnesota Statutes 2005 Supplement, section 469.178, subdivision 7, is
amended to read:


Subd. 7.

Interfund loans.

The authority or municipality may advance or loan
money to finance expenditures under section 469.176, subdivision 4, from its general
fund or any other fund under which it has legal authority to do so. The loan or advance
must be authorized, by resolution of the governing bodynew text begin or of the authority, whichever
has jurisdiction over the fund from which the advance or loan is made
new text end, before money
is transferred, advanced, or spent, whichever is earliest. The resolution may generally
grant to the authority the power to make interfund loans under one or more tax increment
financing plans or for one or more districts. The terms and conditions for repayment of
the loan must be provided in writing and include, at a minimum, the principal amount,
the interest rate, and maximum term. The maximum rate of interest permitted to be
charged is limited to the greater of the rates specified under section 270C.40 or 549.09
as of the date or advance is made, unless the written agreement states that the maximum
interest rate will fluctuate as the interest rates specified under section 270C.40 or 549.09
are from time to time adjusted.

Sec. 10.

Minnesota Statutes 2004, section 474A.062, is amended to read:


474A.062 HESO 120-DAY ISSUANCE EXEMPTION.

The Minnesota Higher Education Services Office is exempt from the 120-day
issuance requirements in this chapter and may carry forward allocations for student loan
bonds into deleted text beginthreedeleted text endnew text begin one new text end successive calendar deleted text beginyearsdeleted text endnew text begin yearnew text end, subject to carryforward notice
requirements of section 474A.131, subdivision 2. deleted text beginThe maximum cumulative carryforward
is limited to $25,000,000.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for bond allocations made in 2006
and thereafter.
new text end

Sec. 11. new text beginCARVER COUNTY AUTHORITY NAME CHANGE.
new text end

new text begin The Carver County Housing and Redevelopment Authority created under Laws
1980, chapter 482, is renamed the Carver County Community Development Agency.
new text end

Sec. 12. new text beginCITY OF RAMSEY; GENERAL OBLIGATION BONDS.
new text end

new text begin The governing body of the city of Ramsey or a development authority established
by the city may issue general obligation bonds to pay for costs related to a project in an
area within the city consisting of the property defined as outlot L, Ramsey Town Center
Addition and lot 2, block 1, Ramsey Town Center Addition. Bonds issued under this
section are not subject to the net debt limit of the city under Minnesota Statutes, section
475.53, or any other law or charter provision.
new text end

Sec. 13. new text beginUNIFIED POOL; OFFICE OF HIGHER EDUCATION; TEMPORARY
PRIORITY.
new text end

new text begin Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph
(b), prior to October 1, 2006, only the following applications shall be awarded allocations
from the unified pool. Allocations shall be awarded in the following order of priority:
new text end

new text begin (1) applications for student loan bonds issued by or on behalf of the Office of
Higher Education;
new text end

new text begin (2) applications for residential rental project bonds;
new text end

new text begin (3) applications for small issue bonds for manufacturing projects; and
new text end

new text begin (4) applications for small issue bonds for agricultural development bond loan
projects.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

Sec. 14. new text beginUNIFIED POOL; TEMPORARY PRIORITY CHANGE.
new text end

new text begin Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph
(c), on the first Monday in October 2006, through the last Monday in November 2006,
allocations shall be awarded from the unified pool in the following order of priority:
new text end

new text begin (1) applications for mortgage bonds;
new text end

new text begin (2) applications for public facility projects funded by public facility bonds;
new text end

new text begin (3) applications for small issue bonds for manufacturing projects;
new text end

new text begin (4) applications for small issue bonds for agricultural development bond loan
projects;
new text end

new text begin (5) applications for residential rental project bonds;
new text end

new text begin (6) applications for enterprise zone facility bonds;
new text end

new text begin (7) applications for governmental bonds; and
new text end

new text begin (8) applications for redevelopment bonds.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

Sec. 15. new text beginUNIFIED POOL; OFFICE OF HIGHER EDUCATION TOTAL
ALLOCATION.
new text end

new text begin Notwithstanding Minnesota Statutes, section 474A.091, subdivision 3, paragraph (i),
the total amount of allocations for student loan bonds from the unified pool in calendar
year 2006 may not exceed 50 percent of the total in the unified pool on the day after the
last Monday in July, 2006.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end

ARTICLE 10

TAX INCREMENT FINANCING

Section 1.

Minnesota Statutes 2005 Supplement, section 469.175, subdivision 2,
is amended to read:


Subd. 2.

Consultations; comment and filing.

(a) Before formation of a tax
increment financing district, the authority shall provide the county auditor and clerk of
the school board with the proposed tax increment financing plan for the district and the
authority's estimate of the fiscal and economic implications of the proposed tax increment
financing district. The authority must provide the proposed tax increment financing plan
and the information on the fiscal and economic implications of the plan to the county
auditor and the clerk of the school district board at least 30 days before the public hearing
required by subdivision 3. The information on the fiscal and economic implications may
be included in or as part of the tax increment financing plan. The county auditor and
clerk of the school board shall provide copies to the members of the boards, as directed
by their respective boards. The 30-day requirement is waived if the boards of the county
and school district submit written comments on the proposal and any modification of the
proposal to the authority after receipt of the information.

(b) For purposes of this subdivision, "fiscal and economic implications of the
proposed tax increment financing district" includes:

(1) an estimate of the total amount of tax increment that will be generated over the
life of the district;

(2) a description of the probable impact of the district on city-provided services such
as police and fire protection, public infrastructure, and deleted text beginborrowing costsdeleted text endnew text begin the impact of
any general obligation tax increment bonds
new text end attributable to the districtnew text begin upon the ability to
issue other debt for general fund purposes
new text end;

(3) the estimated amount of tax increments over the life of the district that would
be attributable to school district levies, assuming the school district's share of the total
local tax rate for all taxing jurisdictions remained the same;

(4) the estimated amount of tax increments over the life of the district that would be
attributable to county levies, assuming the county's share of the total local tax rate for all
taxing jurisdictions remained the same; and

(5) deleted text beginanydeleted text end additional informationnew text begin regarding the size, timing, or type of development in
the district
new text end requested by the county or the school district that would enable it to determine
additional costs that will accrue to it due to the development proposed for the district.new text begin
If a county or school district has not adopted standard questions in a written policy on
information requested for fiscal and economic implications, a county or school district
must request additional information no later than 15 days after receipt of the tax increment
financing plan and the request does not require an additional 30 days of notice before
the public hearing.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for proposed tax increment financing
plans provided after June 30, 2006.
new text end

Sec. 2.

Minnesota Statutes 2004, section 469.175, subdivision 4, is amended to read:


Subd. 4.

Modification of plan.

(a) A tax increment financing plan may be modified
by an authority.

(b) The authority may make the following modifications only upon the notice and
after the discussion, public hearing, and findings required for approval of the original plan:

(1) any reduction or enlargement of geographic area of the project or tax increment
financing district that does not meet the requirements of paragraph (e);

(2) increase in amount of bonded indebtedness to be incurred;

(3) a determination to capitalize interest on the debt if that determination was not a
part of the original plandeleted text begin, or to increase or decrease the amount of interest on the debt to
be capitalized
deleted text end;

(4) increase in the portion of the captured net tax capacity to be retained by the
authority;

(5) increase in the estimate of the cost of the project, including administrative
expenses, that will be paid or financed with tax increment from the district; or

(6) designation of additional property to be acquired by the authority.

(c) If an authority changes the type of district to another type of district, this change
is not a modification but requires the authority to follow the procedure set forth in sections
469.174 to 469.179 for adoption of a new plan, including certification of the net tax
capacity of the district by the county auditor.

(d) If a redevelopment district or a renewal and renovation district is enlarged,
the reasons and supporting facts for the determination that the addition to the district
meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2),
or subdivision 10a, must be documented.

(e) The requirements of paragraph (b) do not apply if (1) the only modification is
elimination of parcels from the project or district and (2)(A) the current net tax capacity
of the parcels eliminated from the district equals or exceeds the net tax capacity of
those parcels in the district's original net tax capacity or (B) the authority agrees that,
notwithstanding section 469.177, subdivision 1, the original net tax capacity will be
reduced by no more than the current net tax capacity of the parcels eliminated from the
district. The authority must notify the county auditor of any modification that reduces or
enlarges the geographic area of a district or a project area.

(f) The geographic area of a tax increment financing district may be reduced, but
shall not be enlarged after five years following the date of certification of the original net
tax capacity by the county auditor or after August 1, 1984, for tax increment financing
districts authorized prior to August 1, 1979.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2005 Supplement, section 469.175, subdivision 5, is
amended to read:


Subd. 5.

Annual disclosure.

An annual statement showing for each district the
information required to be reported under subdivision 6, paragraph (c), clauses (1), (2),
(3), (11), (12), (18), and (19); the amounts of tax increment received and expended in the
reporting period; and any additional information the authority deems necessary must be
published in a newspaper of general circulation in the municipality that approved the
tax increment financing plan. The annual statement must inform readers that additional
information regarding each district may be obtained from the authority, and must explain
how the additional information may be requested. The authority must publish the annual
statement for a year no later than August 15 of the next year. The authority must identify
the newspaper of general circulation in the municipality to which the annual statement has
been or will be submitted for publication and provide a copy of the annual statement to the
county board, the county auditor, deleted text beginthe school board,deleted text end the state auditor, and, if the authority is
other than the municipality, the governing body of the municipality on or before August
1 of the year in which the statement must be published.

The disclosure requirements imposed by this subdivision apply to districts certified
before, on, or after August 1, 1979.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for disclosures required to be
provided after June 30, 2006.
new text end

Sec. 4.

Minnesota Statutes 2004, section 469.176, subdivision 1, is amended to read:


Subdivision 1.

Duration of tax increment financing districts.

(a) Subject to the
limitations contained in subdivisions 1a to 1f, any tax increment financing district as to
which bonds are outstanding, payment for which the tax increment and other revenues
have been pledged, shall remain in existence at least as long as the bonds continue to be
outstanding. The municipality may, at the time of approval of the initial tax increment
financing plan, provide for a shorter maximum duration limit than specified in subdivisions
1a to 1f. The specified limit applies in place of the otherwise applicable limitnew text begin, unless the
authority modifies the plan following the procedures under section 469.175, subdivision 4,
paragraph (b)
new text end.

(b) The tax increment pledged to the payment of the bonds and interest thereon may
be discharged and the tax increment financing district may be terminated if sufficient funds
have been irrevocably deposited in the debt service fund or other escrow account held in
trust for all outstanding bonds to provide for the payment of the bonds at maturity or date
of redemption and interest thereon to the maturity or redemption date.

(c) For bonds issued pursuant to section 469.178, subdivisions 2 and 3, the full
faith and credit and any taxing powers of the municipality or authority are pledged to the
payment of the bonds until the principal of and interest on the bonds has been paid in full.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2005 Supplement, section 469.1763, subdivision 2, is
amended to read:


Subd. 2.

Expenditures outside district.

(a) For each tax increment financing
district, an amount equal to at least 75 percent of the total revenue derived from tax
increments paid by properties in the district must be expended on activities in the district
or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification
was made after June 30, 1995, the in-district percentage for purposes of the preceding
sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
increments paid by properties in the district may be expended, through a development fund
or otherwise, on activities outside of the district but within the defined geographic area of
the project except to pay, or secure payment of, debt service on credit enhanced bonds.
For districts, other than redevelopment districts for which the request for certification was
made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
20 percent. The revenue derived from tax increments for the district that are expended on
costs under section 469.176, subdivision 4h, paragraph (b), may be deducted first before
calculating the percentages that must be expended within and without the district.

(b) In the case of a housing district, a housing project, as defined in section 469.174,
subdivision 11
, is an activity in the district.

(c) All administrative expenses are for activities outside of the district, except that
if the only expenses for activities outside of the district under this subdivision are for
the purposes described in paragraph (d), administrative expenses will be considered as
expenditures for activities in the district.

(d) The authority may elect, in the tax increment financing plan for the district,
to increase by up to ten percentage points the permitted amount of expenditures for
activities located outside the geographic area of the district under paragraph (a). As
permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
expenditures under paragraph (a), need not be made within the geographic area of the
project. Expenditures that meet the requirements of this paragraph are legally permitted
expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
To qualify for the increase under this paragraph, the expenditures must:

(1) be used exclusively to assist housing that meets the requirement for a qualified
low-income building, as that term is used in section 42 of the Internal Revenue Code;

(2) not exceed the qualified basis of the housing, as defined under section 42(c) of
the Internal Revenue Code, less the amount of any credit allowed under section 42 of
the Internal Revenue Code; and

(3) be used to:

(i) acquire and prepare the site of the housing;

(ii) acquire, construct, or rehabilitate the housing; or

(iii) make public improvements directly related to the housing.

(e) For a district created within a biotechnology and health sciences industry zone
as defined in section 469.330, subdivision 6, new text beginor for an existing district located within
such a zone,
new text end tax increment derived from such a district may be expended outside of
the district but within the zone only for expenditures required for the construction of
public infrastructure necessary to support the activities of the zone.new text begin Public infrastructure
expenditures are considered as expenditures for activities within the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section applies to all districts, regardless of when the
request for certification was made.
new text end

Sec. 6.

Minnesota Statutes 2004, section 469.1763, subdivision 3, is amended to read:


Subd. 3.

Five-year rule.

(a) Revenues derived from tax increments are considered
to have been expended on an activity within the district under subdivision 2 only if one
of the following occurs:

(1) before or within five years after certification of the district, the revenues are
actually paid to a third party with respect to the activity;

(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within five years after certification, the revenues are spent
to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the later of (i) the five-year period, or
(ii) a reasonable temporary period within the meaning of the use of that term under section
148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
or replacement fund;

(3) binding contracts with a third party are entered into for performance of the
activity before or within five years after certification of the district and the revenues are
spent under the contractual obligation;

(4) costs with respect to the activity are paid before or within five years after
certification of the district and the revenues are spent to reimburse a party for payment
of the costs, including interest on unreimbursed costs; or

(5) expenditures are made for housing purposes as permitted by subdivision 2,
deleted text begin paragraphdeleted text end new text beginparagraphs new text end(b)new text begin and (d), or for public infrastructure purposes within a zone as
permitted by subdivision 2, paragraph (e)
new text end.

(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
the original refunded bonds meet the requirements of paragraph (a), clause (2).

Sec. 7.

Minnesota Statutes 2004, section 469.1763, subdivision 4, is amended to read:


Subd. 4.

Use of revenues for decertification.

(a) In each year beginning with the
sixth year following certification of the district, if the applicable in-district percent of the
revenues derived from tax increments paid by properties in the district exceeds the amount
of expenditures that have been made for costs permitted under subdivision 3, an amount
equal to the difference between the in-district percent of the revenues derived from tax
increments paid by properties in the district and the amount of expenditures that have
been made for costs permitted under subdivision 3 must be used and only used to pay or
defease the following or be set aside to pay the following:

(1) outstanding bonds, as defined in subdivision 3, paragraphs (a), clause (2), and (b);

(2) contracts, as defined in subdivision 3, paragraph (a), clauses (3) and (4); deleted text beginor
deleted text end

(3) credit enhanced bonds to which the revenues derived from tax increments are
pledged, but only to the extent that revenues of the district for which the credit enhanced
bonds were issued are insufficient to pay the bonds and to the extent that the increments
from the applicable pooling percent share for the district are insufficientnew text begin; or
new text end

new text begin (4) the amount provided by the tax increment financing plan to be paid under
subdivision 2, paragraphs (b), (d), and (e)
new text end.

(b) new text beginThe district must be decertified and the pledge of tax increment discharged
new text end when the outstanding bonds have been defeased and when sufficient money has been set
aside to paynew text begin, based on the increment to be collected through the end of the calendar year,
the following amounts:
new text end

new text begin (1)new text end contractual obligations as defined in subdivision 3, paragraph (a), clauses (3) and
(4)deleted text begin, the district must be decertified and the pledge of tax increment discharged.deleted text endnew text begin;
new text end

new text begin (2) the amount specified in the tax increment financing plan for activities qualifying
under subdivision 2, paragraph (b), that have not been funded with the proceeds of bonds
qualifying under paragraph (a), clause (1); and
new text end

new text begin (3) the additional expenditures permitted by the tax increment financing plan for
housing activities under an election under subdivision 2, paragraph (d), that have not been
funded with the proceeds of bonds qualifying under paragraph (a), clause (1).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts for which the request for
certification was made after April 30, 1990.
new text end

Sec. 8.

Minnesota Statutes 2005 Supplement, section 469.1763, subdivision 6, is
amended to read:


Subd. 6.

Pooling permitted for deficits.

(a) This subdivision applies only to
districts for which the request for certification was made before August 1, 2001, and
without regard to whether the request for certification was made prior to August 1, 1979.

(b) The municipality for the district may transfer available increments from another
tax increment financing district located in the municipality, if the transfer is necessary to
eliminate a deficit in the district to which the increments are transferred. new text beginThe municipality
may transfer increments as provided by this subdivision without regard to whether the
transfer or expenditure is authorized by the tax increment financing plan for the district
from which the transfer is made.
new text endA deficit in the district for purposes of this subdivision
means the lesser of the following two amounts:

(1)(i) the amount due during the calendar year to pay preexisting obligations of
the district; minus

(ii) the total increments collected or to be collected from properties located within
the district that are available for the calendar year including amounts collected in prior
years that are currently available; plus

(iii) total increments from properties located in other districts in the municipality
including amounts collected in prior years that are available to be used to meet the
district's obligations under this section, excluding this subdivision, or other provisions of
law (but excluding a special tax under section 469.1791 and the grant program under Laws
1997, chapter 231, article 1, section 19, or Laws 2001, First Special Session chapter 5); or

(2) the reduction in increments collected from properties located in the district for
the calendar year as a result of the changes in class rates in Laws 1997, chapter 231, article
1; Laws 1998, chapter 389, article 2; and Laws 1999, chapter 243, and Laws 2001, First
Special Session chapter 5, or the elimination of the general education tax levy under
Laws 2001, First Special Session chapter 5.

The authority may compute the deficit amount under clause (1) only (without regard
to the limit under clause (2)) if the authority makes an irrevocable commitment, by
resolution, to use increments from the district to which increments are to be transferred and
any transferred increments are only used to pay preexisting obligations and administrative
expenses for the district that are required to be paid under section 469.176, subdivision
4h
, paragraph (a).

(c) A preexisting obligation means:

(1) bonds issued and sold before August 1, 2001, or bonds issued pursuant to a
binding contract requiring the issuance of bonds entered into before July 1, 2001, and
bonds issued to refund such bonds or to reimburse expenditures made in conjunction with
a signed contractual agreement entered into before August 1, 2001, to the extent that the
bonds are secured by a pledge of increments from the tax increment financing district; and

(2) binding contracts entered into before August 1, 2001, to the extent that the
contracts require payments secured by a pledge of increments from the tax increment
financing district.

(d) The municipality may require a development authority, other than a seaway port
authority, to transfer available increments including amounts collected in prior years that
are currently available for any of its tax increment financing districts in the municipality to
make up an insufficiency in another district in the municipality, regardless of whether the
district was established by the development authority or another development authority.
This authority applies notwithstanding any law to the contrary, but applies only to a
development authority that:

(1) was established by the municipality; or

(2) the governing body of which is appointed, in whole or part, by the municipality
or an officer of the municipality or which consists, in whole or part, of members of
the governing body of the municipality. The municipality may use this authority only
after it has first used all available increments of the receiving development authority to
eliminate the insufficiency and exercised any permitted action under section 469.1792,
subdivision 3
, for preexisting districts of the receiving development authority to eliminate
the insufficiency.

(e) The authority under this subdivision to spend tax increments outside of the area
of the district from which the tax increments were collected:

(1) is an exception to the restrictions under section 469.176, subdivisions 4b, 4c,
4d, 4e, 4i, and 4j
; the expenditure limits under section 469.176, subdivision 1c; and the
other provisions of this section; and the percentage restrictions under subdivision 2 must
be calculated after deducting increments spent under this subdivision from the total
increments for the district; and

(2) applies notwithstanding the provisions of the Tax Increment Financing Act in
effect for districts for which the request for certification was made before June 30, 1982,
or any other law to the contrary.

(f) If a preexisting obligation requires the development authority to pay an amount
that is limited to the increment from the district or a specific development within the
district and if the obligation requires paying a higher amount to the extent that increments
are available, the municipality may determine that the amount due under the preexisting
obligation equals the higher amount and may authorize the transfer of increments
under this subdivision to pay up to the higher amount. The existence of a guarantee of
obligations by the individual or entity that would receive the payment under this paragraph
is disregarded in the determination of eligibility to pool under this subdivision. The
authority to transfer increments under this paragraph may only be used to the extent
that the payment of all other preexisting obligations in the municipality due during the
calendar year have been satisfied.

(g) For transfers of increments made in calendar year 2005 and later, the reduction in
increments as a result of the elimination of the general education tax levy for purposes of
paragraph (b), clause (2), for a taxes payable year equals the general education tax rate
for the school district under Minnesota Statutes 2000, section 273.1382, subdivision 1,
for taxes payable in 2001, multiplied by the captured tax capacity of the district for the
current taxes payable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all districts, regardless of when
the request for certification was made, and applies retroactively to any transfer made
under subdivision 6.
new text end

Sec. 9.

Minnesota Statutes 2005 Supplement, section 469.177, subdivision 1, is
amended to read:


Subdivision 1.

Original net tax capacity.

(a) Upon or after adoption of a tax
increment financing plan, the auditor of any county in which the district is situated shall,
upon request of the authority, certify the original net tax capacity of the tax increment
financing district and that portion of the district overlying any subdistrict as described in
the tax increment financing plan and shall certify in each year thereafter the amount by
which the original net tax capacity has increased or decreased as a result of a change in tax
exempt status of property within the district and any subdistrict, reduction or enlargement
of the district or changes pursuant to subdivision 4.

(b) If the classification under section 273.13 of property located in a district changes
to a classification that has a different assessment ratio, the original net tax capacity of that
property must be redetermined at the time when its use is changed as if the property had
originally been classified in the same class in which it is classified after its use is changed.

(c) The amount to be added to the original net tax capacity of the district as a result of
previously tax exempt real property within the district becoming taxable equals the net tax
capacity of the real property as most recently assessed pursuant to section 273.18 or, if that
assessment was made more than one year prior to the date of title transfer rendering the
property taxable, the net tax capacity assessed by the assessor at the time of the transfer.
If improvements are made to tax exempt property after deleted text begincertification ofdeleted text endnew text begin the municipality
approves
new text end the district and before the parcel becomes taxable, the assessor shall, at the
request of the authority, separately assess the estimated market value of the improvements.
If the property becomes taxable, the county auditor shall add to original net tax capacity,
the net tax capacity of the parcel, excluding the separately assessed improvements. If
substantial taxable improvements were made to a parcel after certification of the district
and if the property later becomes tax exempt, in whole or part, as a result of the authority
acquiring the property through foreclosure or exercise of remedies under a lease or other
revenue agreement or as a result of tax forfeiture, the amount to be added to the original
net tax capacity of the district as a result of the property again becoming taxable is the
amount of the parcel's value that was included in original net tax capacity when the parcel
was first certified. The amount to be added to the original net tax capacity of the district
as a result of enlargements equals the net tax capacity of the added real property as most
recently certified by the commissioner of revenue as of the date of modification of the tax
increment financing plan pursuant to section 469.175, subdivision 4.

(d) If the net tax capacity of a property increases because the property no longer
qualifies under the Minnesota Agricultural Property Tax Law, section 273.111; the
Minnesota Open Space Property Tax Law, section 273.112; or the Metropolitan
Agricultural Preserves Act, chapter 473H, or because platted, unimproved property is
improved or market value is increased after approval of the plat under section 273.11,
subdivision 14
, 14a, or 14b, the increase in net tax capacity must be added to the original
net tax capacity.

(e) The amount to be subtracted from the original net tax capacity of the district
as a result of previously taxable real property within the district becoming tax exempt,
or a reduction in the geographic area of the district, shall be the amount of original net
tax capacity initially attributed to the property becoming tax exempt or being removed
from the district. If the net tax capacity of property located within the tax increment
financing district is reduced by reason of a court-ordered abatement, stipulation agreement,
voluntary abatement made by the assessor or auditor or by order of the commissioner of
revenue, the reduction shall be applied to the original net tax capacity of the district when
the property upon which the abatement is made has not been improved since the date of
certification of the district and to the captured net tax capacity of the district in each year
thereafter when the abatement relates to improvements made after the date of certification.
The county auditor may specify reasonable form and content of the request for certification
of the authority and any modification thereof pursuant to section 469.175, subdivision 4.

(f) If a parcel of property contained a substandard building that was demolished
or removed and if the authority elects to treat the parcel as occupied by a substandard
building under section 469.174, subdivision 10, paragraph (b), the auditor shall certify the
original net tax capacity of the parcel using the greater of (1) the current net tax capacity
of the parcel, or (2) the estimated market value of the parcel for the year in which the
building was demolished or removed, but applying the class rates for the current year.

(g) For a redevelopment district qualifying under section 469.174, subdivision 10,
paragraph (a), clause (4), as a qualified disaster area, the auditor shall certify the value of
the land as the original tax capacity for any parcel in the district that contains a building
that suffered substantial damage as a result of the disaster or emergency.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for improvements made to tax
exempt property made after June 30, 2006.
new text end

Sec. 10.

Minnesota Statutes 2004, section 469.1771, subdivision 2a, is amended to
read:


Subd. 2a.

Suspension of distribution of tax increment.

(a) If an authority fails to
make a disclosure or to submit a report containing the information required by section
469.175, subdivisions 5 and 6, regarding a tax increment financing district within the
time provided in section 469.175, subdivisions 5 and 6, the state auditor shall mail to
the authority a written notice that it or the municipality has failed to make the required
disclosure or to submit a required report with respect to a particular district. The state
auditor shall mail the notice on or before the third Tuesday of August of the year in which
the disclosure or report was required to be made or submitted. The notice must describe
the consequences of failing to disclose or submit a report as provided in paragraph (b).
If the state auditor has not received a copy of a disclosure or a report described in this
paragraph on or before the deleted text beginthird Tuesday of Novemberdeleted text endnew text begin first day of Octobernew text end of the year
in which the disclosure or report was required to be made or submitted, the state auditor
shall mail a written notice to the county auditor to hold the distribution of tax increment
from a particular district.

(b) Upon receiving written notice from the state auditor to hold the distribution of
tax increment, the county auditor shall hold:

(1) deleted text begin25deleted text endnew text begin 100new text end percent of the amount of tax increment that otherwise would be
distributed, if the distribution is made after the deleted text beginthird Friday in Novemberdeleted text endnew text begin first day of
October
new text end but during the year in which the disclosure or report was required to be made or
submitted; or

(2) 100 percent of the amount of tax increment that otherwise would be distributed,
if the distribution is made after December 31 of the year in which the disclosure or report
was required to be made or submitted.

(c) Upon receiving the copy of the disclosure and all of the reports described in
paragraph (a) with respect to a district regarding which the state auditor has mailed to the
county auditor a written notice to hold distribution of tax increment, the state auditor shall
mail to the county auditor a written notice lifting the hold and authorizing the county
auditor to distribute to the authority or municipality any tax increment that the county
auditor had held pursuant to paragraph (b). The state auditor shall mail the written notice
required by this paragraph within five working days after receiving the last outstanding
item. The county auditor shall distribute the tax increment to the authority or municipality
within 15 working days after receiving the written notice required by this paragraph.

(d) Notwithstanding any law to the contrary, any interest that accrues on tax
increment while it is being held by the county auditor pursuant to paragraph (b) is not tax
increment and may be retained by the county.

(e) For purposes of sections 469.176, subdivisions 1a to 1g, and 469.177, subdivision
11
, tax increment being held by the county auditor pursuant to paragraph (b) is considered
distributed to or received by the authority or municipality as of the time that it would have
been distributed or received but for paragraph (b).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for disclosures and reports required
to be filed after December 30, 2006.
new text end

Sec. 11.

Minnesota Statutes 2004, section 475.58, subdivision 1, is amended to read:


Subdivision 1.

Approval by electors; exceptions.

Obligations authorized by law or
charter may be issued by any municipality upon obtaining the approval of a majority of
the electors voting on the question of issuing the obligations, but an election shall not be
required to authorize obligations issued:

(1) to pay any unpaid judgment against the municipality;

(2) for refunding obligations;

(3) for an improvement or improvement program, which obligation is payable
wholly or partly from the proceeds of special assessments levied upon property specially
benefited by the improvement or by an improvement within the improvement program, or
deleted text begin of taxes levied upon the increased value of property within a district for the development of
which the improvement is undertaken
deleted text endnew text begin from tax increments, as defined in section 469.174,
subdivision 25
new text end, including obligations which are the general obligations of the municipality,
if the municipality is entitled to reimbursement in whole or in part from the proceeds of
such special assessments or deleted text begintaxesdeleted text endnew text begin tax incrementsnew text end and not less than 20 percent of the cost of
the improvement or the improvement program is to be assessed against benefited property
or is to be paid from the proceeds of federal grant funds or a combination thereof, or is
estimated to be received from deleted text beginsuch taxes within the districtdeleted text endnew text begin tax incrementsnew text end;

(4) payable wholly from the income of revenue producing conveniences;

(5) under the provisions of a home rule charter which permits the issuance of
obligations of the municipality without election;

(6) under the provisions of a law which permits the issuance of obligations of a
municipality without an election;

(7) to fund pension or retirement fund liabilities pursuant to section 475.52,
subdivision 6
;

(8) under a capital improvement plan under section 373.40; and

(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if
the proceeds of the bonds are not used for a purpose prohibited under section 469.176,
subdivision 4g
, paragraph (b).

new text begin EFFECTIVE DATE. new text end

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

Sec. 12. new text beginBURNSVILLE; HEART OF THE CITY TAX INCREMENT
FINANCING DISTRICT.
new text end

new text begin Notwithstanding any contrary provision of law, the five-year rule under Minnesota
Statutes, section 469.1763, subdivisions 3 and 4, is extended to ten years for tax increment
derived from the parcel described as Lot 2, Block 1, Nicollet Commons Park within tax
increment financing District No. 6 established by the city and its economic development
authority on April 15, 2002.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance with Minnesota
Statutes, section 645.021, subdivision 3.
new text end

Sec. 13. new text beginCITY OF DETROIT LAKES; REDEVELOPMENT TAX INCREMENT
FINANCING DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin At the election of the governing body of the city of
Detroit Lakes, upon adoption of the tax increment financing plan for the district described
in this section, the rules provided under this section apply to each such district.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin In this section, "district" means a redevelopment district
established by the city of Detroit Lakes or the Detroit Lakes Development Authority
within the following area:
new text end

new text begin Beginning at the intersection of Washington Avenue and the Burlington Northern
Santa Fe railroad then east to the intersection of Roosevelt Avenue then south to the
intersection of Highway 10/Frazee Street then west to the intersection of Frazee Street and
the alley that parallels Washington Avenue then north to the point of beginning.
new text end

new text begin More than one district may be created under this section.
new text end

new text begin Subd. 3. new text end

new text begin Qualification as redevelopment district; special rules. new text end

new text begin The city may
qualify the district as a redevelopment district under Minnesota Statutes, section 469.174,
subdivision 10, applying the rules under this subdivision:
new text end

new text begin (1) All buildings that are removed to facilitate the Highway 10 Realignment Project
are deemed to be "structurally substandard."
new text end

new text begin (2) The three-year limit after demolition of the buildings to request tax increment
financing certification provided in Minnesota Statutes, section 469.174, subdivision 10,
paragraph (d), clause (1), does not apply.
new text end

new text begin Subd. 4. new text end

new text begin Expiration. new text end

new text begin The authority to approve tax increment financing plans to
establish a tax increment financing redevelopment district subject to this section expires
on December 31, 2014.
new text end

new text begin Subd. 5. new text end

new text begin Effective date. new text end

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

Sec. 14. new text beginCITY OF MINNEAPOLIS; HOMELESS ASSISTANCE TAX
INCREMENT DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) "City" means the city of Minneapolis.
new text end

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

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

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

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

new text begin Subd. 2. new text end

new text begin Establishment of tax increment district. new text end

new text begin The city may create one
homeless assistance tax increment district. To establish the homeless assistance tax
increment district, the city shall adopt a homeless assistance tax increment plan and
otherwise comply with the requirements of Minnesota Statutes, section 469.175, except
that the determinations required in Minnesota Statutes, section 469.175, subdivision 3,
paragraph (b), clauses (1) and (2), items (i) and (ii), are not required.
new text end

new text begin Subd. 3. new text end

new text begin Application of tax increment law. new text end

new text begin Minnesota Statutes, sections 469.174
to 469.179, shall apply to the administration of the district, except:
new text end

new text begin (1) as this section provides otherwise; and
new text end

new text begin (2) with respect to the portion of the increment to be expended for homeless shelter
and services pursuant to subdivision 5, paragraph (b):
new text end

new text begin (i) the use for which tax increment that may be expended is as provided by
subdivision 5; and
new text end

new text begin (ii) Minnesota Statutes, sections 469.1761 and 469.1763, do not apply.
new text end

new text begin Subd. 4. new text end

new text begin Duration limitation. new text end

new text begin No tax increment generated by the district shall
be paid to the city after the expiration of 25 years from the receipt by the city of the
first increment from that district.
new text end

new text begin Subd. 5. new text end

new text begin Limitations on use of increment. new text end

new text begin (a) All increment received by the city
from the district shall be used in accordance with the homeless assistance tax increment
district plan.
new text end

new text begin (b) No less than 50 percent of the increment, after deduction of allowable
administrative expenses under Minnesota Statutes, section 469.176, subdivision 3, shall
be used to provide emergency shelter and services for homeless persons within and
outside the district.
new text end

new text begin (c) The remainder of the tax increment derived from the district shall be used for
purposes allowed under Minnesota Statutes, section 469.176, subdivision 4.
new text end

new text begin Subd. 6. new text end

new text begin Applicability of other laws. new text end

new text begin References in Minnesota Statutes to tax
increment financing districts created and tax increment generated under Minnesota
Statutes, sections 469.174 to 469.179, include the homeless assistance district and tax
increment subject to this section.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15. new text beginCITY OF FARIBAULT; TIF EXTENSION.
new text end

new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision
1b, or any other law to the contrary, the governing bodies of the city of Faribault and
its economic development authority may elect to extend the duration of tax increment
financing district No. 5-1 by two additional years through taxes payable in 2008.
Additional increments resulting from an extension authorized by this section must be
used to pay the city's bonds issued for redevelopment project No. 5 or to reimburse the
guarantor for payments made to pay the bonds. Any amounts in excess of those necessary
to pay those amounts must be returned as excess increments under Minnesota Statutes,
section 469.176, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Faribault with the requirements of Minnesota Statutes, section 645.021,
and by the governing bodies of the county, city, and school district with the requirements
of Minnesota Statutes, section 469.1782, subdivision 2.
new text end

Sec. 16. new text beginBROOKLYN PARK; TIF.
new text end

new text begin Subdivision 1. new text end

new text begin Duration limit extension. new text end

new text begin Notwithstanding Minnesota Statutes,
section 469.176, subdivision 1b, or any other law to the contrary, the governing body of
the city of Brooklyn Park may extend the duration limit of the district established under
Laws 1994, chapter 587, article 9, section 20, by up to five additional years beyond the
limit permitted under Laws 2005, chapter 152, article 3, section 29. If the city extends the
duration of the district under this authority, all of the increment received after December
31, 2006, must be deposited in the housing development account of the authority.
new text end

new text begin Subd. 2 new text end

new text begin Housing districts; authority to establish. new text end

new text begin (a) The governing body of
the city of Brooklyn Park and an authority of the city, as defined in Minnesota Statutes,
section 469.174, subdivision 2, may establish up to six housing tax increment financing
districts under the provisions of this section. To qualify under this authority, a district must
be located within the boundaries of the city and at least 75 percent of the parcels in each
district must consist of either vacant land or contain a property or properties classified
under Minnesota Statutes, section 273.13, subdivision 25, as class 4a, 4b, or 4d, that
were originally constructed before 1975.
new text end

new text begin (b) The districts are subject to all of the applicable rules under Minnesota Statutes,
sections 469.174 through 469.1799, except that for property or properties classified under
Minnesota Statutes, section 273.13, subdivision 25, as class 4a, 4b, or 4d, that were
originally constructed before 1975, the county auditor shall certify the original net tax
capacity of the parcel under Minnesota Statutes, section 469.177, subdivision 1, based
only on the net tax capacity of the value of the land.
new text end

new text begin (c) The authority to establish districts under this subdivision expires on December
31, 2011.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Brooklyn Park with the provisions of Minnesota Statutes, section
469.021, except subdivision 1 is effective only upon compliance by the governing bodies
of the county and school district with the provisions of Minnesota Statutes, section
469.1782, subdivision 2.
new text end

Sec. 17. new text begin REPEALER; DISTRIBUTION OF CERTAIN BURNSVILLE TAX
INCREMENTS.
new text end

new text begin Laws 1998, chapter 389, article 11, section 18, new text end new text begin is repealed. The balance of tax
increments derived from tax increment financing district no. 2-1 as of the effective date
of this act must be returned to the county for distribution in accordance with Minnesota
Statutes, section 469.176, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance with Minnesota
Statutes, section 645.021, subdivision 3.
new text end

ARTICLE 11

AIDS AND CREDITS

Section 1.

Minnesota Statutes 2005 Supplement, section 477A.011, subdivision 36,
is amended to read:


Subd. 36.

City aid base.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(2) $2,500,000.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

new text begin (t) The city aid base for a city is increased by $80,000 in 2007 only and the minimum
and maximum amount of total aid it may receive under section 477A.013, subdivision 9,
is also increased by $80,000 in calendar year 2007 only, if:
new text end

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2007.
new text end

Sec. 2.

Minnesota Statutes 2004, section 477A.013, subdivision 9, is amended to read:


Subd. 9.

City aid distribution.

(a) In calendar year 2002 and thereafter, each
city shall receive an aid distribution equal to the sum of (1) the city formula aid under
subdivision 8, and (2) its city aid base.

deleted text begin (b) The aid for a city in calendar year 2004 shall not exceed the amount of its aid in
calendar year 2003 after the reductions under Laws 2003, First Special Session chapter 21,
article 5.
deleted text end

deleted text begin (c)deleted text endnew text begin (b)new text end For aids payable in 2005 and thereafter, the total aid for any city shall not
exceed the sum of (1) ten percent of the city's net levy for the year prior to the aid
distribution plus (2) its total aid in the previous year. For aids payable in 2005 and
thereafter, the total aid for any city with a population of 2,500 or more may not decrease
from its total aid under this section in the previous year by an amount greater than ten
percent of its net levy in the year prior to the aid distribution.

deleted text begin (d)deleted text endnew text begin (c)new text end For aids payable in 2004 only, the total aid for a city with a population less
than 2,500 may not be less than the amount it was certified to receive in 2003 minus the
greater of (1) the reduction to this aid payment in 2003 under Laws 2003, First Special
Session chapter 21, article 5, or (2) five percent of its 2003 aid amount. For aids payable
in 2005 and thereafter, the total aid for a city with a population less than 2,500 must not be
less than the amount it was certified to receive in the previous year minus five percent
of its 2003 certified aid amount.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with aids payable in 2007.
new text end

Sec. 3. new text beginMAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT,
PROPERTY TAX REIMBURSEMENT; 2006 ONLY.
new text end

new text begin Subdivision 1. new text end

new text begin Aid appropriation. new text end

new text begin $600,000 is appropriated from the general fund
to the commissioner of revenue to be used to make payments to compensate for the loss of
property tax revenue due to the placement of land located in the city of Mahnomen that
was put in trust status by the United Stated Department of the Interior, Bureau of Indian
Affairs, during calendar year 2006. The commissioner shall pay the county of Mahnomen,
$450,000; the city of Mahnomen, $80,000; and Independent School District No. 432,
Mahnomen, $70,000. The payments shall be made on July 20, 2006.
new text end

new text begin Subd. 2. new text end

new text begin School district tax base adjustments. new text end

new text begin The Department of Revenue
must reduce the referendum market value and the adjusted net tax capacity certified
for assessment year 2005 used to calculate school levies for taxes payable in 2007
for Independent School District No. 432, Mahnomen, by the amounts of any values
attributable to property that is no longer subject to property taxation because the land has
been placed in trust in calendar year 2006 through action of the United States Department
of Interior, Bureau of Indian Affairs. The Mahnomen County auditor must certify the
reductions in value to the Department of Revenue in the form and manner specified by the
Department of Revenue.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 12

MINERALS

Section 1.

Minnesota Statutes 2004, section 298.001, is amended by adding a
subdivision to read:


new text begin Subd. 3a. new text end

new text begin Producer. new text end

new text begin "Producer" means a person engaged in the business of mining
or producing iron ore, taconite concentrate, or direct reduced ore in this state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 2.

Minnesota Statutes 2005 Supplement, section 298.01, subdivision 3, is
amended to read:


Subd. 3.

Occupation tax; other ores.

Every person engaged in the business of
mining or producing ores in this state, except iron ore or taconite concentrates, shall pay
an occupation tax to the state of Minnesota as provided in this subdivision. The tax is
determined in the same manner as the tax imposed by section 290.02, except that sections
290.05, subdivision 1, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do
not applynew text begin, and the occupation tax must be computed by applying to taxable income the
rate of 2.45 percent
new text end. A person subject to occupation tax under this section shall apportion
its net income on the basis of the percentage obtained by taking the sum of:

(1) 75 percent of the percentage which the sales made within this state in connection
with the trade or business during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;

(2) 12.5 percent of the percentage which the total tangible property used by the
taxpayer in this state in connection with the trade or business during the tax period is of
the total tangible property, wherever located, used by the taxpayer in connection with the
trade or business during the tax period; and

(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or
incurred in this state or paid in respect to labor performed in this state in connection with
the trade or business during the tax period are of the taxpayer's total payrolls paid or
incurred in connection with the trade or business during the tax period.

The tax is in addition to all other taxes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 3.

Minnesota Statutes 2004, section 298.01, subdivision 3a, is amended to read:


Subd. 3a.

Gross income.

(a) For purposes of determining a person's taxable income
under subdivision 3, gross income is determined by the amount of gross proceeds from
mining in this state under section 298.016 and includes any gain or loss recognized from
the sale or disposition of assets used in the business in this state.new text begin If more than one mineral,
metal, or energy resource referred to in section 298.016 is mined and processed at the
same mine and plant, a gross income for each mineral, metal, or energy resource must be
determined separately. The gross incomes may be combined on one occupation tax return
to arrive at the gross income of all production.
new text end

(b) In applying section 290.191, subdivision 5, transfers of ores are deemed to be
sales deleted text beginoutsidedeleted text endnew text begin innew text end this state deleted text beginif the ores are transported out of this state after the ores have
been converted to a marketable quality
deleted text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 4.

Minnesota Statutes 2004, section 298.01, subdivision 3b, is amended to read:


Subd. 3b.

Deductions.

(a) For purposes of determining taxable income under
subdivision 3, the deductions from gross income include only those expenses necessary
to convert raw ores to marketable quality. Such expenses include costs associated with
refinement but do not include expenses such as transportation, stockpiling, marketing, or
marine insurance that are incurred after marketable ores are produced, unless the expenses
are included in gross income.new text begin The allowable deductions from a mine or plant that mines
and produces more than one mineral, metal, or energy resource must be determined
separately for the purposes of computing the deduction in section 290.01, subdivision 19c,
clause (9). These deductions may be combined on one occupation tax return to arrive at
the deduction from gross income for all production.
new text end

(b) The provisions of section 290.01, subdivisions 19c, clauses (6) and (9), and 19d,
clauses (7) and (11), are not used to determine taxable income.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 5.

Minnesota Statutes 2005 Supplement, section 298.01, subdivision 4, is
amended to read:


Subd. 4.

Occupation tax; iron ore; taconite concentrates.

A person engaged in
the business of mining or producing of iron ore, taconite concentrates or direct reduced ore
in this state shall pay an occupation tax to the state of Minnesota. The tax is determined
in the same manner as the tax imposed by section 290.02, except that sections 290.05,
subdivision 1
, clause (a), 290.17, subdivision 4, and 290.191, subdivision 2, do not applynew text begin,
and the occupation tax shall be computed by applying to taxable income the rate of 2.45
percent
new text end. A person subject to occupation tax under this section shall apportion its net
income on the basis of the percentage obtained by taking the sum of:

(1) 75 percent of the percentage which the sales made within this state in connection
with the trade or business during the tax period are of the total sales wherever made in
connection with the trade or business during the tax period;

(2) 12.5 percent of the percentage which the total tangible property used by the
taxpayer in this state in connection with the trade or business during the tax period is of
the total tangible property, wherever located, used by the taxpayer in connection with the
trade or business during the tax period; and

(3) 12.5 percent of the percentage which the taxpayer's total payrolls paid or
incurred in this state or paid in respect to labor performed in this state in connection with
the trade or business during the tax period are of the taxpayer's total payrolls paid or
incurred in connection with the trade or business during the tax period.

The tax is in addition to all other taxes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 6.

Minnesota Statutes 2004, section 298.01, subdivision 4a, is amended to read:


Subd. 4a.

Gross income.

(a) For purposes of determining a person's taxable income
under subdivision 4, gross income is determined by the mine value of the ore mined in
Minnesota and includes any gain or loss recognized from the sale or disposition of assets
used in the business in this state.

(b) Mine value is the value, or selling price, of iron ore or taconite concentrates, f.o.b.
mine. The mine value is calculated by multiplying the iron unit price for the period, as
determined by the commissioner, by the tons produced and the weighted average analysis.

(c) In applying section 290.191, subdivision 5, transfers of iron ore and taconite
concentrates are deemed to be sales deleted text beginoutsidedeleted text endnew text begin innew text end this state deleted text beginif the iron ore or taconite
concentrates are transported out of this state after the raw iron ore and taconite
concentrates have been converted to a marketable quality
deleted text end.

new text begin (d) If iron ore or taconite and a mineral, metal, or energy resource referred to in
section 298.016 is mined and processed at the same mine and plant, a gross income for
each mineral, metal, or energy resource must be determined separately from the mine
value for the iron ore or taconite. The gross income may be combined on one occupation
tax return to arrive at the gross income from all production.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 7.

Minnesota Statutes 2004, section 298.01, subdivision 4b, is amended to read:


Subd. 4b.

Deductions.

For purposes of determining taxable income under
subdivision 4, the deductions from gross income include only those expenses necessary
to convert raw iron ore or taconite concentrates to marketable quality. Such expenses
include costs associated with beneficiation and refinement but do not include expenses
such as transportation, stockpiling, marketing, or marine insurance that are incurred after
marketable iron ore or taconite pellets are produced.new text begin The allowable deductions from a
mine or plant that mines and produces iron ore or taconite and one or more mineral or
metal referred to in section 298.016 must be determined separately for the purposes of
computing the deduction in section 290.01, subdivision 19c, clause (9). These deductions
may be combined on one occupation tax return to arrive at the deduction from gross
income for all production.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 8.

Minnesota Statutes 2004, section 298.01, is amended by adding a subdivision
to read:


new text begin Subd. 6. new text end

new text begin Deductions applicable to mining both taconite and other ores; ratio
applied.
new text end

new text begin If a person is engaged in the business of mining or producing both iron ores,
taconite concentrates, or direct reduced ore, and other ores from the same mine or
facility, that person must separately determine the mine value of (1) the iron ore, taconite
concentrates, and direct reduced ore, and (2) the amount of gross proceeds from mining
other ores in Minnesota. The ratio of mine value from iron ore, taconite concentrates,
and direct reduced ore to gross proceeds from mining other ores must be applied to
deductions common to both processes to determine taxable income for tax paid pursuant
to subdivisions 3 and 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax years beginning after
December 31, 2005.
new text end

Sec. 9.

Minnesota Statutes 2004, section 298.227, is amended to read:


298.227 TACONITE ECONOMIC DEVELOPMENT FUND.

An amount equal to that distributed pursuant to each taconite producer's taxable
production and qualifying sales under section 298.28, subdivision 9a, shall be held by
the Iron Range Resources and Rehabilitation Board in a separate taconite economic
development fund for each taconite and direct reduced ore producer. Money from the
fund for each producer shall be released by the commissioner after review by a joint
committee consisting of an equal number of representatives of the salaried employees and
the nonsalaried production and maintenance employees of that producer. The District 11
director of the United States Steelworkers of America, on advice of each local employee
president, shall select the employee members. In nonorganized operations, the employee
committee shall be elected by the nonsalaried production and maintenance employees.
The review must be completed no later than six months after the producer presents a
proposal for expenditure of the funds to the committee. The funds held pursuant to this
section may be released only for acquisition of equipment and facilities for the producer
or for research and development in Minnesota on new mining, or taconite, iron, or steel
production technology, but only if the producer provides a matching expenditure to be
used for the same purpose of at least 50 percent of the distribution based on 14.7 cents
per ton beginning with distributions in 2002. new text beginIf a producer uses money from the fund to
procure haulage trucks, mobile equipment, or mining shovels, and the producer removes
the piece of equipment from the taconite tax relief area defined in section 273.134 within
ten years from the date of receipt of the money from the fund, a portion of the money
granted from the fund must be repaid to the taconite economic development fund. The
portion of the money to be repaid is 100 percent of the grant if the equipment is removed
from the taconite tax relief area within 12 months after receipt of the money from the fund,
declining by ten percent for each of the subsequent nine years during which the equipment
remains within the taconite tax relief area.
new text endIf a taconite production facility is sold after
operations at the facility had ceased, any money remaining in the fund for the former
producer may be released to the purchaser of the facility on the terms otherwise applicable
to the former producer under this section. If a producer fails to provide matching funds
for a proposed expenditure within six months after the commissioner approves release
of the funds, the funds are available for release to another producer in proportion to the
distribution provided and under the conditions of this section. Any portion of the fund
which is not released by the commissioner within two years of its deposit in the fund shall
be divided between the taconite environmental protection fund created in section 298.223
and the Douglas J. Johnson economic protection trust fund created in section 298.292 for
placement in their respective special accounts. Two-thirds of the unreleased funds shall be
distributed to the taconite environmental protection fund and one-third to the Douglas J.
Johnson economic protection trust fund.

Sec. 10.

Minnesota Statutes 2004, section 298.28, subdivision 6, is amended to read:


Subd. 6.

Property tax relief.

(a) In 2002 and thereafter, 33.9 cents per taxable
ton, less any amount required to be distributed under paragraphs (b) and (c), new text beginor section
298.2961, subdivision 5,
new text end must be allocated to St. Louis County acting as the counties'
fiscal agent, to be distributed as provided in sections 273.134 to 273.136.

(b) If an electric power plant owned by and providing the primary source of power
for a taxpayer mining and concentrating taconite is located in a county other than the
county in which the mining and the concentrating processes are conducted, .1875 cent per
taxable ton of the tax imposed and collected from such taxpayer shall be paid to the county.

(c) If an electric power plant owned by and providing the primary source of power
for a taxpayer mining and concentrating taconite is located in a school district other than
a school district in which the mining and concentrating processes are conducted, .4541
cent per taxable ton of the tax imposed and collected from the taxpayer shall be paid to
the school district.

Sec. 11.

Minnesota Statutes 2004, section 298.28, subdivision 8, is amended to read:


Subd. 8.

Range Association of Municipalities and Schools.

deleted text begin.20deleted text endnew text begin .30new text end cent per
taxable ton shall be paid to the Range Association of Municipalities and Schools, for
the purpose of providing an areawide approach to problems which demand coordinated
and cooperative actions and which are common to those areas of northeast Minnesota
affected by operations involved in mining iron ore and taconite and producing concentrate
therefrom, and for the purpose of promoting the general welfare and economic
development of the cities, towns and school districts within the iron range area of
northeast Minnesota.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes paid in 2007 and subsequent
years.
new text end

Sec. 12.

Minnesota Statutes 2005 Supplement, section 298.2961, subdivision 4,
is amended to read:


Subd. 4.

Grant and loan fund.

(a) A fund is established to receive distributions
under section 298.28, subdivision 9b, and to make grants or loans as provided in this
subdivision. Any grant or loan made under this subdivision must be approved by
a majority of the members of the Iron Range Resources and Rehabilitation Board,
established under section 298.22.

(b) Distributions received in calendar year 2005 are allocated to the city of Virginia
for improvements and repairs to the city's steam heating system.

(c) Distributions received in calendar year 2006 are allocated to a project of the
public utilities commissions of the cities of Hibbing and Virginia to convert their electrical
generating plants to the use of biomass products, such as wood.

(d) Distributions received in calendar year 2007 must be paid to the city of Tower to
be used for the East Two Rivers project in or near the city of Tower.

(e) For distributions received in 2008 deleted text beginand later,deleted text end deleted text beginamounts may be allocated to joint
ventures with mining companies for reclamation of lands containing abandoned or worked
out mines to convert these lands to marketable properties for residential, recreational,
commercial, or other valuable uses
deleted text endnew text begin, the first $2,000,000 of the 2008 distribution must be
paid to St. Louis County for deposit in its county road and bridge fund to be used for
relocation of St. Louis County Road 715, commonly referred to as Pike River Road. The
remainder of the 2008 distribution and the full amount of the distributions in 2009 and
subsequent years is allocated for projects under section 298.223, subdivision 1
new text end.

Sec. 13.

Minnesota Statutes 2004, section 298.2961, is amended by adding a
subdivision to read:


new text begin Subd. 5. new text end

new text begin Public works and local economic development fund. new text end

new text begin For distributions in
2007 only, a special fund is established to receive 38.4 cents per ton that otherwise would
be allocated under section 298.28, subdivision 6. The following amounts are allocated to
St. Louis County acting as the fiscal agent for the recipients for the specific purposes:
new text end

new text begin (1) 13.4 cents per ton for the Central Iron Range Sanitary Sewer District for
construction of a combined wastewater facility;
new text end

new text begin (2) six cents per ton to the city of Eveleth to redesign and design and construct
improvements to renovate its water treatment facility;
new text end

new text begin (3) one cent per ton for the East Range Joint Powers Board to acquire land for and to
design a central wastewater collection and treatment system;
new text end

new text begin (4) 0.5 cents per ton to the city of Hoyt Lakes to repair Leeds Road;
new text end

new text begin (5) 0.7 cents per ton to the city of Virginia to extend Eighth Street South;
new text end

new text begin (6) 0.7 cents per ton to the city of Mountain Iron to repair Hoover Road;
new text end

new text begin (7) 0.9 cents per ton to the city of Gilbert for alley repairs between Michigan and
Indiana Avenues and for repayment of a loan to the Minnesota Department of Employment
and Economic Development;
new text end

new text begin (8) 0.4 cents per ton to the city of Keewatin for a new city well;
new text end

new text begin (9) 0.3 cents per ton to the city of Grand Rapids for planning for a fire and hazardous
materials center;
new text end

new text begin (10) 0.9 cents per ton to Aitkin County Growth for an economic development
project for peat harvesting;
new text end

new text begin (11) 0.4 cents per ton to the city of Nashwauk to develop a comprehensive city plan;
new text end

new text begin (12) 0.4 cents per ton to the city of Taconite for development of a city comprehensive
plan;
new text end

new text begin (13) 0.3 cents per ton to the city of Marble for water and sewer infrastructure;
new text end

new text begin (14) 0.8 cents per ton to Aitkin County for improvements to the Long Lake
Environmental Learning Center;
new text end

new text begin (15) 0.3 cents per ton to the city of Coleraine for the Coleraine Technology Center;
new text end

new text begin (16) 0.5 cents per ton to the Economic Development Authority of the city of Grand
Rapids for planning for the North Central Research and Technology Laboratory;
new text end

new text begin (17) 0.6 cents per ton to the city of Bovey for sewer and water extension;
new text end

new text begin (18) 0.3 cents per ton to the city of Calumet for infrastructure improvements; and
new text end

new text begin (19) ten cents per ton to an economic development authority in a city through which
State Highway 1 passes, or a city in Independent School District No. 2142 that has an
active mine, for an economic development project approved by the Iron Range Resources
and Rehabilitation Board.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2004, section 298.75, is amended by adding a subdivision
to read:


new text beginSubd. 10.new text end

new text begin Tax may be imposed; Sylvan Township. new text end

new text begin(a) If Cass County does not
impose a tax under this section and approves imposition of the tax under this subdivision,
the town of Sylvan in Cass County may impose the aggregate materials tax under this
section.
new text end

new text begin(b) For purposes of exercising the powers contained in this section, the "town" is
deemed to be the "county."
new text end

new text begin(c) All provisions in this section apply to the town of Sylvan, except that, in lieu
of the distribution of the tax proceeds under subdivision 7, all proceeds of the tax must
be retained by the town.
new text end

new text begin(d) If Cass County imposes an aggregate materials tax under this section, the tax
imposed by the town of Sylvan under this subdivision is repealed on the effective date
of the Cass County tax.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the town of Sylvan and its chief clerical officer comply with section 645.021, subdivisions
2 and 3.
new text end

Sec. 15.

Laws 2005, chapter 152, article 1, section 39, subdivision 1, is amended to
read:


Subdivision 1.

Issuance; purpose.

Notwithstanding any provision of Minnesota
Statutes, chapter 298, to the contrary, the commissioner of Iron Range resources and
rehabilitation deleted text beginmaydeleted text endnew text begin shallnew text end issue revenue bonds in a principal amount of $15,000,000 new text beginplus
an amount sufficient to pay costs of issuance,
new text endin one or more series, and new text beginthereafter may
issue
new text endbonds to refund those bonds. The proceeds of the bonds must be used new text beginto pay costs
of issuance and
new text endto make grants to school districts located in the taconite tax relief area
defined in Minnesota Statutes, section 273.134, or the taconite assistance area defined
in Minnesota Statutes, section 273.1341, to be used by the school districts to pay for
health, safety, and maintenance improvements deleted text beginbut only if the school district has levied the
maximum amount allowable under law for those purposes
deleted text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16. new text beginTRANSITION PROVISIONS.
new text end

new text begin Each person with an alternative minimum tax credit on December 31, 2005, pursuant
to Minnesota Statutes 2004, section 298.01, subdivision 3d or 4e, may take that credit
against occupation tax under Minnesota Statutes, section 298.01.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, section 298.01, subdivisions 3c, 3d, 4d, and 4e, new text end new text begin are
repealed effective for tax years beginning after December 31, 2005.
new text end

ARTICLE 13

MISCELLANEOUS

Section 1.

Minnesota Statutes 2005 Supplement, section 272.02, subdivision 83,
is amended to read:


Subd. 83.

International economic development zone property.

(a) Improvements
to real property, and personal property, classified under section 273.13, subdivision
24
, and located within the international economic development zone designated under
section 469.322, are exempt from ad valorem taxes levied under chapter 275, if the
improvements are:

(1) part of a regional distribution center as defined in section 469.321; or

(2) occupied by a qualified business as defined in section 469.321, that uses the
improvements primarily in freight forwarding operations.

(b) deleted text beginThe exemption applies beginning for the first assessment year after designation of
the international economic development zone.
deleted text end The exemption applies to each assessment
year that begins during the duration of the international economic development zone. To
be exempt under paragraph (a), clause (2), the property must be occupied by July 1 of the
assessment year by a qualified business that has signed the business subsidy agreement
by July 1 of the assessment year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2005 Supplement, section 289A.20, subdivision 4, is
amended to read:


Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $120,000 or more during a fiscal year ending June
30 must remit the June liability for the next year in the following manner:

(1) Two business days before June 30 of the year, the vendor must remit deleted text begin85deleted text end new text begin 78
new text end percent of the estimated June liability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.

(c) A vendor having a liability of:

(1) $20,000 or more in the fiscal year ending June 30, 2005; or

(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years
thereafter,

must remit all liabilities on returns due for periods beginning in the subsequent calendar
year by electronic means on or before the 20th day of the month following the month in
which the taxable event occurred, or on or before the 20th day of the month following the
month in which the sale is reported under section 289A.18, subdivision 4, except for deleted text begin85deleted text endnew text begin 78new text end
percent of the estimated June liability, which is due two business days before June 30. The
remaining amount of the June liability is due on August 20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales tax payments in June 2007
and thereafter.
new text end

Sec. 3.

Minnesota Statutes 2004, section 289A.60, subdivision 15, is amended to read:


Subd. 15.

Accelerated payment of June sales tax liability; penalty for
underpayment.

deleted text begin (a) For payments made after December 31, 2002, and before January 1,
2004, if a vendor is required by law to submit an estimation of June sales tax liabilities
and 75 percent payment by a certain date, the vendor shall pay a penalty equal to ten
percent of the amount of actual June liability required to be paid in June less the amount
remitted in June. The penalty must not be imposed, however, if the amount remitted in
June equals the lesser of 75 percent of the preceding May's liability or 75 percent of the
average monthly liability for the previous calendar year.
deleted text end

deleted text begin (b)deleted text end For payments made after December 31, deleted text begin2003deleted text endnew text begin 2006new text end, if a vendor is required by
law to submit an estimation of June sales tax liabilities and deleted text begin85deleted text endnew text begin 78new text end percent payment by a
certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual
June liability required to be paid in June less the amount remitted in June. The penalty
must not be imposed, however, if the amount remitted in June equals the lesser of deleted text begin85deleted text endnew text begin 78new text end
percent of the preceding May's liability or deleted text begin85deleted text endnew text begin 78new text end percent of the average monthly liability
for the previous calendar year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales tax payments in June 2007
and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2005 Supplement, section 290.0922, subdivision 2, is
amended to read:


Subd. 2.

Exemptions.

The following entities are exempt from the tax imposed
by this section:

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

(3) regulated investment companies or a fund thereof; and

(4) entities having a valid election in effect under section 860D(b) of the Internal
Revenue Code;

(5) town and farmers' mutual insurance companies;

(6) cooperatives organized under chapter 308A or 308B that provide housing
exclusively to persons age 55 and over and are classified as homesteads under section
273.124, subdivision 3;

(7) an entity, if for the taxable year all of its property is located in a job opportunity
building zone designated under section 469.314 and all of its payroll is a job opportunity
building zone payroll under section 469.310; and

(8) an entity, if for the taxable year all of its property is located in an international
economic development zone designated under section 469.322, and all of its payroll is
international economic development zone payroll under section 469.321.new text begin The exemption
under this clause applies to taxable years beginning during the duration of the international
economic development zone.
new text end

Entities not specifically exempted by this subdivision are subject to tax under this
section, notwithstanding section 290.05.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2005 Supplement, section 290.0922, subdivision 3, is
amended to read:


Subd. 3.

Definitions.

(a) "Minnesota sales or receipts" means the total sales
apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts
attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the
total sales or receipts apportioned or attributed to Minnesota pursuant to any other
apportionment formula applicable to the taxpayer.

(b) "Minnesota property" means total Minnesota tangible property as provided in
section 290.191, subdivisions 9 to 11, any other tangible property located in Minnesota,
but does not includenew text begin: (1)new text end property located in a job opportunity building zone designated
under section 469.314, deleted text beginordeleted text endnew text begin (2)new text end property of a qualified business located in a biotechnology
and health sciences industry zone designated under section 469.334, ornew text begin (3) for taxable
years beginning during the duration of the zone,
new text end property of a qualified business located
in the international economic development zone designated under section 469.322.
Intangible property shall not be included in Minnesota property for purposes of this
section. Taxpayers who do not utilize tangible property to apportion income shall
nevertheless include Minnesota property for purposes of this section. On a return for
a short taxable year, the amount of Minnesota property owned, as determined under
section 290.191, shall be included in Minnesota property based on a fraction in which the
numerator is the number of days in the short taxable year and the denominator is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section
290.191, subdivision 12, but does not includenew text begin: (1)new text end job opportunity building zone payrolls
under section 469.310, subdivision 8, deleted text beginordeleted text endnew text begin (2)new text end biotechnology and health sciences industry
zone payrolls under section 469.330, subdivision 8, ornew text begin (3) for taxable years beginning
during the duration of the zone,
new text end international economic development zone payrolls under
section 469.321, subdivision 9. Taxpayers who do not utilize payrolls to apportion income
shall nevertheless include Minnesota payrolls for purposes of this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2005 Supplement, section 297A.68, subdivision 41, is
amended to read:


Subd. 41.

International economic development zones.

(a) Purchases of tangible
personal property or taxable services by a qualified business, as defined in section 469.321,
are exempt if the property or services are primarily used or consumed in the international
economic development zone designated under section 469.322. new text beginThis exemption applies
only if the purchase is made and delivery received after the business signed the business
subsidy agreement required under chapter 469.
new text end

(b) Purchase and use of construction materials, supplies, and equipment incorporated
into the construction of improvements to real property in the international economic
development zone are exempt if the improvements after completion of construction are
to be used as a regional distribution center as defined in section 469.321 or otherwise
used in the conduct of freight forwarding activities of a qualified business as defined in
section 469.321. This exemption applies regardless of whether the purchases are made
by the business or a contractor.

(c) The exemptions under this subdivision apply to a local sales and use tax,
regardless of whether the local tax is imposed on sales taxable under this chapter or in
another law, ordinance, or charter provision.

(d) The deleted text beginexemption in paragraph (a) appliesdeleted text endnew text begin exemptions in this section applynew text end to sales
deleted text begin during the duration of the zone and after June 30, 2007, if the purchase was made and
delivery received after the business signs the business subsidy agreement required under
chapter 469
deleted text endnew text begin and purchases made after the date of final zone designation under section
469.322, paragraph (c), and before the expiration of the zone under section 469.322,
paragraph (d)
new text end.

(e) For purchases made for improvements to real property to be occupied by a
business that has not signed a business subsidy agreement at the time of the purchase, the
tax must be imposed and collected as if the rate under section 297A.62, subdivision 1,
applied, and then refunded in the manner provided in section 297A.75 deleted text beginbeginning in fiscal
year
deleted text enddeleted text begin 2008deleted text end. The taxpayer must attach to the claim for refund information sufficient for
the commissioner to be able to determine that the improvements are being occupied by
a business that has signed a business subsidy agreement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2004, section 297F.09, subdivision 10, is amended to read:


Subd. 10.

Accelerated tax payment; cigarette or tobacco products distributor.

A cigarette or tobacco products distributor having a liability of $120,000 or more during a
fiscal year ending June 30, shall remit the June liability for the next year in the following
manner:

(a) Two business days before June 30 of the year, the distributor shall remit the
actual May liability and deleted text begin85deleted text endnew text begin 78new text end percent of the estimated June liability to the commissioner
and file the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the distributor shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June, less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:

(1) deleted text begin85deleted text endnew text begin 78new text end percent of the actual June liability; or

(2) deleted text begin85deleted text endnew text begin 78new text end percent of the preceding May's liability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales tax payments in June 2007
and thereafter.
new text end

Sec. 8.

Minnesota Statutes 2004, section 297G.09, subdivision 9, is amended to read:


Subd. 9.

Accelerated tax payment; penalty.

A person liable for tax under this
chapter having a liability of $120,000 or more during a fiscal year ending June 30, shall
remit the June liability for the next year in the following manner:

(a) Two business days before June 30 of the year, the taxpayer shall remit the actual
May liability and deleted text begin85deleted text endnew text begin 78new text end percent of the estimated June liability to the commissioner and file
the return in the form and manner prescribed by the commissioner.

(b) On or before August 18 of the year, the taxpayer shall submit a return showing
the actual June liability and pay any additional amount of tax not remitted in June. A
penalty is imposed equal to ten percent of the amount of June liability required to be paid
in June less the amount remitted in June. However, the penalty is not imposed if the
amount remitted in June equals the lesser of:

(1) deleted text begin85deleted text endnew text begin 78new text end percent of the actual June liability; or

(2) deleted text begin85deleted text endnew text begin 78new text end percent of the preceding May liability.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales tax payments in June 2007
and thereafter.
new text end

Sec. 9.

new text begin [469.193] FOREIGN TRADE ZONES.
new text end

new text begin A city, county, town, or other political subdivision may apply to the board defined in
United States Code, title 19, section 81a, for the right to use the powers provided in United
States Code, title 19, sections 81a to 81u. If the right is granted, the city, county, town, or
other political subdivision may use the powers within or outside of a port district. Any
city, county, town, or other political subdivision may apply jointly with any other city,
county, town, or other political subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2004, section 469.312, subdivision 5, is amended to read:


Subd. 5.

Duration limit.

new text begin(a) new text endThe maximum duration of a zone is 12 years. The
applicant may request a shorter duration. The commissioner may specify a shorter
duration, regardless of the requested duration.

new text begin (b) The duration limit under this subdivision and the duration of the zone for
purposes of allowance of tax incentives described in section 469.315 is extended by three
calendar years for each parcel of property that meets the following requirements:
new text end

new text begin (1) the qualified business operates an ethanol plant, as defined in section 41A.09, on
the site that includes the parcel; and
new text end

new text begin (2) the business subsidy agreement was executed after April 30, 2006, and before
July 1, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2005 Supplement, section 469.322, is amended to read:


469.322 DESIGNATION OF INTERNATIONAL ECONOMIC
DEVELOPMENT ZONE.

(a) An area designated as a foreign trade zone may be designated by the foreign
trade zone authority as an international economic development zone if within the zone
a regional distribution center is being developed pursuant to section 469.323. The zone
must consist of contiguous area of not less than 500 acres and not more than 1,000 acres.
The designation authority under this section is limited to one zone.

(b) In making the designation, the foreign trade zone authority, in consultation with
the Minnesota Department of Transportation and the Metropolitan Council, shall consider
access to major transportation routes, consistency with current state transportation and
air cargo planning, adequacy of the size of the site, access to airport facilities, present
and future capacity at the designated airport, the capability to meet integrated present
and future air cargo, security, and inspection services, and access to other infrastructure
and financial incentives. The border of the international economic development zone
must be no more than 60 miles distant or 90 minutes drive time from the border of the
Minneapolis-St. Paul International Airport.

new text begin (c) Before final designation of the zone, the foreign trade zone authority, in
consultation with the applicant, must conduct a transportation impact study based on the
regional model and utilizing traffic forecasting and assignments. The results must be used
to evaluate the effects of the proposed use on the transportation system and identify any
needed improvements. If the site is in the metropolitan area the study must also evaluate
the effect of the transportation impacts on the Metropolitan Transportation System plan
as well as the comprehensive plans of the municipalities that would be affected. The
authority shall provide copies of the study to the legislature under section 3.195 and to the
chairs of the committees with jurisdiction over transportation and economic development.
The applicant must pay the cost of the study.
new text end

deleted text begin (c)deleted text end new text begin(d)new text end Final zone designation must be made by June 30, deleted text begin2006deleted text endnew text begin 2008new text end.

deleted text begin (d)deleted text end new text begin(e)new text end Duration of the zone is a 12-year period beginning on January 1, deleted text begin2007deleted text endnew text begin 2010new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2005 Supplement, section 469.323, subdivision 2, is
amended to read:


Subd. 2.

Business plan.

Before designation of an international economic
development zone under section 469.322, the governing body of the foreign trade zone
authority shall prepare a business plan. new text beginThe findings of the business plan shall be
presented to the legislature pursuant to section 3.195. Copies of the business plan shall be
provided to the chairs of committees with jurisdiction over transportation and economic
development.
new text endThe plan must include an analysis of the economic feasibility of the regional
distribution center once it becomes operational and of the operations of freight forwarders
and other businesses that choose to locate within the boundaries of the zone. The analysis
must provide profitability models that:

(1) include the benefits of the incentives;

(2) estimate the amount of time needed to achieve profitability; and

(3) analyze the length of time incentives will be necessary to the economic viability
of the regional distribution center.

If the governing body of the foreign trade authority determines that the models do
not establish the economic feasibility of the project, the regional distribution center does
not meet the development requirements of this section and section 469.322.

Sec. 13.

Minnesota Statutes 2005 Supplement, section 469.327, is amended to read:


469.327 JOBS CREDIT.

Subdivision 1.

Credit allowed.

new text begin(a) new text endA qualified business is allowed a credit against
the taxes imposed under chapter 290. The credit equals seven percent of the:

(1) lesser of:

(i) zone payroll for the taxable year, less the zone payroll for the base year; or

(ii) total Minnesota payroll for the taxable year, less total Minnesota payroll for
the base year; minus

(2) $30,000 multiplied by the number of full-time equivalent employees that the
qualified business employs in the international economic development zone for the taxable
year, minus the number of full-time equivalent employees the business employed in the
zone in the base year, but not less than zero.

new text begin (b) This section applies only to tax years beginning during the duration of the
international economic development zone.
new text end

Subd. 2.

Definitions.

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

(b) "Base year" means the taxable year beginning duringnew text begin the calendar year
immediately preceding
new text end the calendar year in which thedeleted text begin zone designation was madedeleted text endnew text begin duration
of the zone begins
new text end under section 469.322, paragraph (d).

(c) "Full-time equivalent employees" means the equivalent of annualized expected
hours of work equal to 2,080 hours.

(d) "Minnesota payroll" means the wages or salaries attributed to Minnesota under
section 290.191, subdivision 12, for the qualified business or the unitary business of which
the qualified business is a part, whichever is greater.

(e) "Zone payroll" means wages or salaries used to determine the zone payroll
factor for the qualified business, less the amount of compensation attributable to any
employee that exceeds $70,000.

Subd. 3.

Inflation adjustment.

For taxable years beginning after December 31,
deleted text begin 2006deleted text endnew text begin 2010new text end, the dollar amounts in subdivisions 1, clause (2); and 2, paragraph (e), are
annually adjusted for inflation. The commissioner of revenue shall adjust the amounts by
the percentage determined under section 290.06, subdivision 2d, for the taxable year.

Subd. 4.

Refundable.

If the amount of the credit exceeds the liability for tax under
chapter 290, the commissioner of revenue shall refund the excess to the qualified business.

Subd. 5.

Appropriation.

An amount sufficient to pay the refunds authorized by this
section is appropriated to the commissioner of revenue from the general fund.

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2004, section 473.39, is amended by adding a subdivision
to read:


new text begin Subd. 11. new text end

new text begin Obligations. new text end

new text begin After July 1, 2006, in addition to the authority in
subdivisions 1a, 1b, 1c, 1d, 1e, 1g, 1h, 1i, 1j, and 1k, the council may issue certificates of
indebtedness, bonds, or other obligations under this section in an amount not exceeding
$32,800,000 for capital expenditures as prescribed in the council's regional transit master
plan and transit capital improvement program, as adopted through May 1, 2006, and for
related costs, including the costs of issuance and sale of the obligations.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2004, section 645.44, is amended by adding a subdivision
to read:


new text begin Subd. 19. new text end

new text begin Fee and tax. new text end

new text begin (a) "Tax" means any fee, charge, exaction, or assessment
imposed by a governmental entity on an individual, person, entity, transaction, good,
service, or other thing. It excludes a price that an individual or entity chooses voluntarily
to pay in return for receipt of goods or services provided by the governmental entity.
A government good or service does not include access to or the authority to engage in
private market transactions with a nongovernmental party, such as licenses to engage in a
trade, profession, or business or to improve private property.
new text end

new text begin (b) For purposes of applying the laws of this state, a "fee," "charge," or other similar
term that satisfies the functional requirements of paragraph (a) must be treated as a tax
for all purposes, regardless of whether the statute or law names or describes it as a tax.
The provisions of this subdivision do not preempt or supersede limitations under law
that apply to fees, charges, or assessments.
new text end

new text begin (c) This subdivision is not intended to extend or limit article 4, section 18 of the
Minnesota Constitution.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Laws 2005, First Special Session chapter 3, article 10, section 23, is amended
to read:


Sec. 23. GRANTS TO QUALIFYING BUSINESSES.


$750,000 is appropriated in fiscal year 2006 from the general fund to the
commissioner of employment and economic development to be distributed to the foreign
trade zone authority to provide grants to qualified businesses as determined by the
authority, subject to Minnesota Statutes, sections 116J.993 to 116J.995, to provide
incentives for the businesses to locate their operations in an international economic
development zone. If the money is not distributed during fiscal year 2006, it remains
available for distribution under this section deleted text beginduring fiscal year 2007deleted text endnew text begin until December 31,
2010
new text end.

Sec. 17. new text beginTAX RELIEF ACCOUNT.
new text end

new text begin (a) On June 30, 2006, the commissioner of finance shall cancel to the general fund an
amount in the tax relief account under Minnesota Statutes, section 16A.1522, subdivision
4, sufficient to provide an ending general fund balance for fiscal year 2007 of zero after
taking into account the effect on the general fund of laws enacted during the 2006 regular
legislative session relative to the February 2006 forecast.
new text end

new text begin (b) On July 1, 2007, the remaining balance in the tax relief account under Minnesota
Statutes, section 16A.1522, subdivision 4, is cancelled to the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18. new text beginAPPLICATION.
new text end

new text begin Section 14 applies in the counties of Anoka, Carver, Dakota, Hennepin, Ramsey,
Scott, and Washington.
new text end