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HF 848

1st Unofficial Engrossment - 89th Legislature (2015 - 2016) Posted on 05/04/2015 05:46pm

KEY: stricken = removed, old language.
underscored = added, new language.
1.1A bill for an act
1.2relating to financing of state and local government; making changes to individual
1.3income and corporate franchise, property, sales and use, estate, mineral, tobacco,
1.4special, local, and other taxes and tax-related provisions; providing for and
1.5expanding credits; modifying local government aids; modifying exclusions,
1.6exemptions, and levy deadlines; modifying sales and use tax exemptions;
1.7changing sales, use, and excise tax remittances; modifying certain local sales and
1.8use taxes; modifying income tax credits; modifying the payment in lieu of tax
1.9provisions; clarifying estate tax provisions; providing for and modifying certain
1.10local development projects; modifying electric generation machinery valuation;
1.11clarifying tax increment financing rules; modifying property tax interest rates;
1.12modifying valuation and taxation of railroad property; modifying the Sustainable
1.13Forest Incentive Act; modifying Iron Range fiscal disparities program; modifying
1.14certain county levy authority; allocating additional tax reductions for border
1.15cities; modifying the distribution of taconite production and occupation taxes;
1.16modifying and providing provisions for public finance; making conforming,
1.17policy, and technical changes to tax provisions; requiring reports; appropriating
1.18money;amending Minnesota Statutes 2014, sections 13.51, subdivision 2;
1.1916A.152, subdivisions 2, 8; 16D.08, subdivision 2; 69.021, subdivision 5;
1.20126C.01, subdivision 3; 126C.40, subdivision 1; 136A.129, subdivision 3;
1.21138.053; 216B.1621, subdivision 2; 216B.164, subdivision 2a; 216B.2424,
1.22subdivision 5; 270.071, subdivisions 2, 7, 8, by adding a subdivision; 270.072,
1.23subdivisions 2, 3, by adding a subdivision; 270.12, by adding a subdivision;
1.24270.80, subdivisions 1, 2, 3, 4, by adding subdivisions; 270.81, subdivisions 1,
1.253, by adding a subdivision; 270.82; 270.83, subdivisions 1, 2; 270.84; 270.86;
1.26270.87; 270A.03, subdivision 5; 270B.14, subdivision 1; 270C.03, subdivision
1.271; 270C.30; 270C.33, subdivisions 5, 8; 270C.34, subdivision 2; 270C.347,
1.28subdivision 1; 270C.35, subdivision 3, by adding a subdivision; 270C.38,
1.29subdivision 1; 270C.445, by adding a subdivision; 270C.446, subdivision
1.305; 270C.72, subdivision 4; 270C.89, subdivision 1; 271.06, subdivisions 2,
1.317; 271.08, subdivision 1; 271.21, subdivision 2; 272.02, subdivisions 9, 10;
1.32272.0211, subdivision 1; 272.025, subdivision 1; 272.029, subdivisions 2, 4,
1.33by adding a subdivision; 272.0295, subdivision 4; 272.115, subdivision 2;
1.34273.032; 273.061, subdivision 7; 273.08; 273.121, by adding a subdivision;
1.35273.124, subdivision 13; 273.13, subdivisions 23, 24; 273.1392; 273.1393;
1.36273.33, subdivisions 1, 2; 273.37, subdivision 1; 273.371; 273.372, subdivisions
1.372, 4, by adding subdivisions; 274.01, subdivision 1; 274.13, subdivision 1;
1.38274.135, subdivision 3; 275.025, subdivisions 1, 3; 275.065, subdivisions 1, 3;
1.39275.066; 275.07, subdivision 1; 275.62, subdivision 2; 276.04, subdivision 2;
2.1276A.06, subdivisions 3, 5; 278.01, subdivision 1; 279.01, subdivision 1; 279.37,
2.2subdivision 2; 282.01, subdivisions 1a, 1d, 4; 282.261, subdivision 2; 287.2205;
2.3289A.02, subdivision 7, as amended; 289A.08, subdivisions 11, 16, by adding
2.4a subdivision; 289A.09, subdivisions 1, 2; 289A.11, subdivision 1; 289A.12,
2.5subdivision 14; 289A.20, subdivision 4; 289A.38, subdivision 6; 289A.50,
2.6subdivision 7; 289A.60, subdivisions 15, 28; 290.01, subdivisions 4a, 7, 19,
2.7as amended, 19b, 19c, 19d, 31, as amended, by adding a subdivision; 290.06,
2.8by adding subdivisions; 290.0671, subdivisions 1, 6a; 290.0672, subdivision
2.91; 290.0674, subdivisions 1, 2; 290.068, subdivisions 1, 2, 3, 6a, by adding
2.10a subdivision; 290.091, subdivision 3; 290.0921, subdivision 3; 290.0922,
2.11subdivision 2; 290.17, subdivision 4; 290.191, subdivision 5; 290.21, subdivision
2.124; 290A.03, subdivisions 13, 15, as amended; 290A.04, subdivision 2h; 290A.19;
2.13290B.03, subdivision 1; 290B.04, subdivision 1; 290C.01; 290C.02, subdivisions
2.141, 3, 6; 290C.03; 290C.04; 290C.05; 290C.055; 290C.07; 290C.08, subdivision
2.151; 290C.10; 290C.11; 290C.13, subdivisions 3, 6; 291.005, subdivision 1;
2.16291.03, subdivision 10, by adding a subdivision; 291.031; 295.54, subdivision 2;
2.17295.55, subdivision 6; 296A.01, subdivisions 12, 33, 42, by adding subdivisions;
2.18296A.02, by adding a subdivision; 296A.07, subdivisions 1, 4; 296A.08,
2.19subdivision 2; 296A.09, subdivisions 1, 3, 5, 6; 296A.15, subdivisions 1, 4;
2.20296A.17, subdivisions 1, 2, 3; 296A.18, subdivisions 1, 8; 296A.19, subdivision
2.211; 296A.22, subdivision 9; 296A.26; 297A.62, subdivision 3; 297A.67,
2.22subdivision 7a, by adding subdivisions; 297A.68, subdivisions 5, 35a; 297A.70,
2.23subdivisions 4, 14, by adding a subdivision; 297A.82, subdivision 4a; 297A.994,
2.24subdivision 4; 297D.02; 297E.02, subdivisions 3, 7; 297E.04, subdivision
2.251; 297E.05, subdivision 4; 297E.06, subdivision 1; 297F.05, subdivision 3;
2.26297F.09, subdivisions 1, 10; 297F.23; 297G.09, subdivisions 1, 9; 297G.22;
2.27297H.04, subdivision 2; 297H.06, subdivision 2; 297I.05, subdivision 2; 297I.10,
2.28subdivisions 1, 3; 297I.30, by adding a subdivision; 297I.60, subdivision 2;
2.29298.01, subdivisions 3b, 4c; 298.17; 298.227; 298.24, subdivision 1, by adding
2.30a subdivision; 298.28, subdivisions 3, 7a; 366.095, subdivision 1; 383B.117,
2.31subdivision 2; 410.32; 412.301; 469.034, subdivision 2; 469.101, subdivision
2.321; 469.169, by adding a subdivision; 469.174, subdivision 12; 469.175,
2.33subdivision 3; 469.176, subdivision 4c; 469.1761, by adding a subdivision;
2.34469.1763, subdivisions 1, 2, 3; 469.178, subdivision 7; 469.190, subdivisions
2.351, 7; 469.194, subdivision 1; 469.319, subdivision 5; 469.40, subdivision
2.3611, as amended; 469.43, by adding a subdivision; 469.45, subdivisions 1, 2;
2.37469.47, subdivision 4, as amended; 473H.09; 475.58, subdivision 3b; 475.60,
2.38subdivision 2; 477A.0124, subdivision 4; 477A.013, subdivision 1, by adding a
2.39subdivision; 477A.014, subdivision 1; 477A.015; 477A.017, subdivisions 2, 3;
2.40477A.03, subdivisions 2a, 2b, 2c; 477A.12, subdivisions 1, 2; 477A.13; 477A.15;
2.41477A.19, by adding subdivisions; 477A.20; 524.3-916; 559.202, subdivision 2;
2.42Laws 1980, chapter 511, sections 1, subdivision 2, as amended; 2, as amended;
2.43Laws 1991, chapter 291, article 8, section 27, subdivisions 3, as amended, 4,
2.44as amended, 5, 6; Laws 1996, chapter 471, article 3, section 51; Laws 2001,
2.45First Special Session chapter 5, article 3, section 86; Laws 2006, chapter 257,
2.46section 2, as amended; Laws 2008, chapter 366, article 7, section 20; Laws 2013,
2.47chapter 143, article 8, sections 22, as amended; 23, as amended; Laws 2014,
2.48chapter 308, article 1, section 14, subdivision 2; article 7, section 7; proposing
2.49coding for new law in Minnesota Statutes, chapters 103C; 116J; 270C; 273; 290;
2.50290B; 290C; 293; 383B; 465; 477A; repealing Minnesota Statutes 2014, sections
2.513.192; 270.81, subdivision 4; 270.83, subdivision 3; 272.02, subdivisions 23, 29,
2.5233, 41, 44, 45, 47, 52, 54, 55, 56, 68, 69, 70, 71, 80, 84, 89, 92, 93, 96, 99;
2.53272.0211; 273.111, subdivision 9a; 275.025, subdivision 4; 281.22; 290C.02,
2.54subdivisions 5, 9; 469.194, subdivisions 2, 4; Minnesota Rules, parts 8092.2000;
2.558106.0100, subparts 1, 2, 3, 4, 5, 6, 7, 8, 10, 12, 13, 14, 17, 17a, 18, 19, 20,
2.5621; 8106.0300, subparts 1, 3; 8106.0400; 8106.0500; 8106.0600; 8106.0700;
2.578106.0800; 8106.9900; 8125.1300, subpart 3.
3.1BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

3.2ARTICLE 1
3.3INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES

3.4    Section 1. Minnesota Statutes 2014, section 16D.08, subdivision 2, is amended to read:
3.5    Subd. 2. Powers. (a) In addition to the collection remedies available to private
3.6collection agencies in this state, the commissioner, with legal assistance from the attorney
3.7general, may utilize any statutory authority granted to a referring agency for purposes of
3.8collecting debt owed to that referring agency. The commissioner may also use the tax
3.9collection remedies in sections 270C.03, subdivision 1, clause (8) (9), 270C.31, 270C.32,
3.10270C.52 , subdivisions 2 and 3, 270C.63, 270C.65, and 270C.67 to 270C.72. A debtor
3.11may take advantage of any administrative or appeal rights contained in the listed sections.
3.12For administrative and appeal rights for nontax debts, references to administrative
3.13appeals or to the taxpayer rights advocate shall be construed to be references to the case
3.14reviewer, references to Tax Court shall be construed to mean district court, and offers
3.15in compromise shall be submitted to the referring agency. A debtor who qualifies for
3.16cancellation of collection costs under section 16D.11, subdivision 3, clause (1), can apply
3.17to the commissioner for reduction or release of a continuous wage levy, if the debtor
3.18establishes that the debtor needs all or a portion of the wages being levied upon to pay
3.19for essential living expenses, such as food, clothing, shelter, medical care, or expenses
3.20necessary for maintaining employment. The commissioner's determination not to reduce
3.21or release a continuous wage levy is appealable to district court. The word "tax" or "taxes"
3.22when used in the tax collection statutes listed in this subdivision also means debts referred
3.23under this chapter.
3.24(b) Before using the tax collection remedies listed in this subdivision, notice and
3.25demand for payment of the amount due must be given to the person liable for the payment
3.26or collection of the debt at least 30 days prior to the use of the remedies. The notice must
3.27be sent to the person's last known address and must include a brief statement that sets forth
3.28in simple and nontechnical terms the amount and source of the debt, the nature of the
3.29available collection remedies, and remedies available to the debtor.
3.30EFFECTIVE DATE.This section is effective the day following final enactment.

3.31    Sec. 2. Minnesota Statutes 2014, section 136A.129, subdivision 3, is amended to read:
4.1    Subd. 3. Program components. (a) An intern must be an eligible student who has
4.2been admitted to a major program that is related to the intern experience as determined
4.3by the eligible institution.
4.4(b) To participate in the program, an eligible institution must:
4.5(1) enter into written agreements with eligible employers to provide internships that
4.6are at least eight weeks long and located in greater Minnesota; and
4.7(2) provide academic credit for the successful completion of the internship or ensure
4.8that it fulfills requirements necessary to complete a vocational technical education program.
4.9(c) To participate in the program, an eligible employer must enter into a written
4.10agreement with an eligible institution specifying that the intern:
4.11(1) would not have been hired without the tax credit described in subdivision 4;
4.12(2) did not work for the employer in the same or a similar job prior to entering
4.13the agreement;
4.14(3) (2) does not replace an existing employee;
4.15(4) (3) has not previously participated in the program;
4.16(5) (4) will be employed at a location in greater Minnesota;
4.17(6) (5) will be paid at least minimum wage for a minimum of 16 hours per week
4.18for a period of at least eight weeks; and
4.19(7) (6) will be supervised and evaluated by the employer.
4.20(d) The written agreement between the eligible institution and the eligible employer
4.21must certify a credit amount to the employer, not to exceed $2,000 per intern. The total
4.22dollar amount of credits that an eligible institution certifies to eligible employers in a
4.23calendar year may not exceed the amount of its allocation under subdivision 4.
4.24(e) Participating eligible institutions and eligible employers must report annually to
4.25the office. The report must include at least the following:
4.26(1) the number of interns hired;
4.27(2) the number of hours and weeks worked by interns; and
4.28(3) the compensation paid to interns.
4.29(f) An internship required to complete an academic program does not qualify for the
4.30greater Minnesota internship program under this section.
4.31EFFECTIVE DATE.This section is effective for taxable years beginning after
4.32December 31, 2014.

4.33    Sec. 3. Minnesota Statutes 2014, section 270C.03, subdivision 1, is amended to read:
4.34    Subdivision 1. Powers and duties. The commissioner shall have and exercise
4.35the following powers and duties:
5.1    (1) administer and enforce the assessment and collection of taxes;
5.2    (2) make determinations, corrections, and assessments with respect to taxes,
5.3including interest, additions to taxes, and assessable penalties;
5.4    (3) disallow the tax effects of a transaction governed under chapter 290 that does not
5.5have economic substance;
5.6    (3) (4) use statistical or other sampling techniques consistent with generally accepted
5.7auditing standards in examining returns or records and making assessments;
5.8    (4) (5) investigate the tax laws of other states and countries, and formulate and
5.9submit to the legislature such legislation as the commissioner may deem expedient
5.10to prevent evasions of state revenue laws and to secure just and equal taxation and
5.11improvement in the system of state revenue laws;
5.12    (5) (6) consult and confer with the governor upon the subject of taxation, the
5.13administration of the laws in regard thereto, and the progress of the work of the
5.14department, and furnish the governor, from time to time, such assistance and information
5.15as the governor may require relating to tax matters;
5.16    (6) (7) execute and administer any agreement with the secretary of the treasury or the
5.17Bureau of Alcohol, Tobacco, Firearms and Explosives in the Department of Justice of the
5.18United States or a representative of another state regarding the exchange of information
5.19and administration of the state revenue laws;
5.20    (7) (8) require town, city, county, and other public officers to report information
5.21as to the collection of taxes received from licenses and other sources, and such other
5.22information as may be needful in the work of the commissioner, in such form as the
5.23commissioner may prescribe;
5.24    (8) (9) authorize the use of unmarked motor vehicles to conduct seizures or criminal
5.25investigations pursuant to the commissioner's authority;
5.26    (9) (10) authorize the participation in audits performed by the Multistate Tax
5.27Commission. For the purposes of chapter 270B, the Multistate Tax Commission will be
5.28considered to be a state for the purposes of auditing corporate sales, excise, and income
5.29tax returns;
5.30    (10) (11) maintain toll-free telephone access for taxpayer assistance for calls from
5.31locations within the state; and
5.32    (11) (12) exercise other powers and authority and perform other duties required of or
5.33imposed upon the commissioner by law.
5.34EFFECTIVE DATE.This section is effective for taxable years beginning after
5.35December 31, 2015.

6.1    Sec. 4. [270C.331] ECONOMIC SUBSTANCE.
6.2    Subdivision 1. Economic substance. (a) For the purposes of disallowing the
6.3tax effects of a transaction that does not have substance pursuant to section 270C.03,
6.4subdivision 1, clause (3), a transaction shall be treated as having economic substance
6.5only if:
6.6(1) the transaction changes in a meaningful way, apart from tax effects, the taxpayer's
6.7economic position; and
6.8(2) the taxpayer has a substantial purpose, apart from tax effects, for entering into
6.9the transaction.
6.10(b) In determining whether the requirements of paragraph (a), clauses (1) and (2),
6.11are met, the potential for profit of a transaction shall be taken into account only if the
6.12present value of the reasonable expected pretax profit from the transaction is substantial in
6.13relation to the present value of the expected net tax benefits that would be allowed if the
6.14transaction was respected. Fees and other transaction expenses shall be taken into account
6.15as expenses in determining pretax profit.
6.16(c) For the purposes of paragraph (a), clause (2), achieving a financial accounting
6.17benefit shall not be taken into account as a purpose for entering into a transaction if the
6.18origin of such financial accounting benefit is a reduction of federal, state, or local tax.
6.19    Subd. 2. Apart from tax effects. For purposes of this section, "apart from tax
6.20effects" means without regard to the state and local tax effects arising from the application
6.21of the laws of any state or local unit of government to the form of the transaction, the
6.22federal tax effects, or both.
6.23    Subd. 3. Transaction. For purposes of this section and section 270C.03, subdivision
6.241, clause (3), "transaction" includes a series of transactions.
6.25    Subd. 4. Personal transactions of individuals. In the case of an individual,
6.26subdivision 1 shall only apply to transactions entered into in connection with the trade or
6.27business activity engaged in for the production of income.
6.28    Subd. 5. Commissioner to issue guidance. (a) The commissioner shall promulgate
6.29guidance on how the provisions of this section will be applied. The guidance must
6.30include, at a minimum, types of transactions that will not be challenged as not having
6.31economic substance, and types of transactions that would be challenged as not having
6.32economic substance.
6.33(b) The commissioner shall promulgate rules setting forth how the requirements
6.34of subdivision 1, paragraphs (a) and (b), would be determined, including definitions of
6.35relevant terms used in this section that the commissioner would apply in determining
6.36whether a transaction has economic substance.
7.1(c) The commissioner shall establish and publish a formal departmental procedure
7.2for uniform application of this section.
7.3EFFECTIVE DATE.This section is effective for taxable years beginning after
7.4December 31, 2015, except that subdivision 5 is effective the day following final enactment.

7.5    Sec. 5. Minnesota Statutes 2014, section 289A.02, subdivision 7, as amended by Laws
7.62015, chapter 1, section 1, is amended to read:
7.7    Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal
7.8Revenue Code" means the Internal Revenue Code of 1986, as amended through December
7.931, 2014 April 1, 2015.
7.10EFFECTIVE DATE.This section is effective for taxable years beginning after
7.11December 31, 2014.

7.12    Sec. 6. Minnesota Statutes 2014, section 290.01, subdivision 4a, is amended to read:
7.13    Subd. 4a. Financial institution. (a) "Financial institution" means:
7.14(1) a holding company any corporation or other business entity registered (i) under
7.15state law as a bank holding company; (ii) under the federal Bank Holding Company Act
7.16of 1956, as amended; or (iii) as a savings and loan holding company under the federal
7.17National Housing Act, as amended;
7.18(2) any regulated financial corporation; or a national bank organized and existing
7.19as a national bank association pursuant to the provisions of United States Code, title
7.2012, chapter 2;
7.21(3) any other corporation organized under the laws of the United States or organized
7.22under the laws of this state or any other state or country that is carrying on the business of
7.23a financial institution. a savings association or federal savings bank as defined in United
7.24States Code, title 12, section 1813(b)(1);
7.25(4) any bank or thrift institution incorporated or organized under the laws of any state;
7.26(5) any corporation organized under United States Code, title 12, sections 611 to 631;
7.27(6) any agency or branch of a foreign depository as defined under United States
7.28Code, title 12, section 3101;
7.29(7) any corporation or other business entity that is more than 50 percent owned,
7.30directly or indirectly, by any person or business entity described in clauses (1) to (6), other
7.31than an insurance company taxable under chapter 297I;
7.32(8) a corporation or other business entity that derives more than 50 percent of its
7.33total gross income for financial accounting purposes from finance leases. For the purposes
8.1of this clause, "gross income" is the average from the current tax year and immediately
8.2preceding two years and excludes gross income from incidental or occasional transactions.
8.3For purposes of this clause, "finance lease" means any lease transaction which is the
8.4functional equivalent of an extension of credit, and that transfers substantially all of the
8.5benefits and risks incident to the ownership of property, including any direct financing
8.6lease or leverage lease that meets the criteria of Financial Accounting Standards Board
8.7Statement No. 13, accounting for leases, or any other lease that is accounted for as
8.8financing by a lessor under generally accepted accounting principles; or
8.9(9) any other person or business entity, other than an insurance company taxable under
8.10chapter 297I, which derives more than 50 percent of its gross income from activities that an
8.11entity described in clauses (2) to (6), or (8), is authorized to transact. For the purposes of
8.12this clause, gross income does not include income from nonrecurring, extraordinary items.
8.13(b) "Holding company" means any corporation registered under the Federal Bank
8.14Holding Company Act of 1956, as amended, or registered as a savings and loan holding
8.15company under the Federal National Housing Act, as amended, or a federal savings
8.16bank holding company. The commissioner is authorized to exclude any person from the
8.17application of paragraph (a), clause (9), if the person proves by clear and convincing
8.18evidence that the person's income-producing activity is not in substantial competition with
8.19any person described in paragraph (a), clauses (2) to (6), or (8).
8.20(c) "Regulated financial corporation" means an institution, the deposits or accounts
8.21of which are insured under the Federal Deposit Insurance Act or by the Federal Savings
8.22and Loan Insurance Corporation, any institution which is a member of a Federal Home
8.23Loan Bank, any other bank or thrift institution incorporated or organized under the laws of
8.24any state or any foreign country which is engaged in the business of receiving deposits,
8.25any corporation organized under the provisions of United States Code, title 12, sections
8.26611 to 631 (Edge Act Corporations), and any agency of a foreign depository as defined in
8.27United States Code, title 12, section 3101.
8.28(d) "Business of a financial institution" means:
8.29(1) the business that any corporation organized under the authority of the United
8.30States or organized under the laws of this state or any other state or country does or has
8.31authority to do which is substantially similar to the business which a corporation may be
8.32created to do under chapters 46 to 55 or any business which a corporation is authorized
8.33to do by those laws; or
8.34(2) the business that any corporation organized under the authority of the United
8.35States or organized under the laws of this state or any other state or country does or has
8.36authority to do if the corporation derives more than 50 percent of its gross income from
9.1lending activities (including discounting obligations) in substantial competition with the
9.2businesses described in clause (1). For purposes of this clause, the computation of the gross
9.3income of a corporation does not include income from nonrecurring, extraordinary items.
9.4EFFECTIVE DATE.This section is effective for taxable years beginning after
9.5December 31, 2014.

9.6    Sec. 7. Minnesota Statutes 2014, section 290.01, subdivision 7, is amended to read:
9.7    Subd. 7. Resident. (a) The term "resident" means any individual domiciled
9.8in Minnesota, except that an individual is not a "resident" for the period of time that
9.9the individual is a "qualified individual" as defined in section 911(d)(1) of the Internal
9.10Revenue Code, if the qualified individual notifies the county within three months of
9.11moving out of the country that homestead status be revoked for the Minnesota residence
9.12of the qualified individual, and the property is not classified as a homestead while the
9.13individual remains a qualified individual.
9.14(b) "Resident" also means any individual domiciled outside the state who maintains
9.15a place of abode in the state and spends in the aggregate more than one-half of the tax
9.16year in Minnesota, unless:
9.17(1) the individual or the spouse of the individual is in the armed forces of the United
9.18States; or
9.19(2) the individual is covered under the reciprocity provisions in section 290.081.
9.20For purposes of this subdivision, presence within the state for any part of a calendar
9.21day constitutes a day spent in the state. Individuals shall keep adequate records to
9.22substantiate the days spent outside the state, except that a day spent in Minnesota for the
9.23primary purpose of receiving medical treatment by the taxpayer, or the spouse, child, or
9.24parent of the taxpayer, is not treated as a day spent in Minnesota. "Medical treatment"
9.25means treatment as defined in section 213(d)(1)(A) of the Internal Revenue Code.
9.26The term "abode" means a dwelling maintained by an individual, whether or not
9.27owned by the individual and whether or not occupied by the individual, and includes a
9.28dwelling place owned or leased by the individual's spouse.
9.29(c) In determining where an individual is domiciled, neither the commissioner nor
9.30any court shall consider:
9.31(1) charitable contributions made by an the individual within or without the state in
9.32determining if the individual is domiciled in Minnesota;
9.33(2) the location of the individual's attorney, certified public accountant, or financial
9.34advisor; or
10.1(3) the place of business of a financial institution at which the individual applies for
10.2any new type of credit or at which the individual opens or maintains any type of account.
10.3(d) For purposes of this subdivision, the following terms have the meanings given
10.4them:
10.5(1) "financial advisor" means an individual, financial institution, or other firm
10.6engaged in the business of providing services related to trust and estate administration;
10.7financial advice and budgeting; investment selection or allocation; or purchase of life,
10.8disability, long-term care, annuities, or similar insurance products; and includes certified
10.9financial planners, registered investment advisors, securities broker-dealers, associated
10.10persons and representatives of registered investment advisors and securities broker-dealers,
10.11agents licensed to sell life insurance or annuities, and similar regulated products; and
10.12(2) "financial institution" means a financial institution as that term is defined in
10.13section 47.015, subdivision 1, a state or nationally chartered credit union, and a registered
10.14broker-dealer under the Securities and Exchange Act of 1934.
10.15EFFECTIVE DATE.Changes to paragraph (b) are effective for taxable years
10.16beginning after December 31, 2014. Changes to paragraphs (c) and (d) are effective the
10.17day following final enactment, but apply to any case for which an appeal, petition, or
10.18complaint has been filed in tax court or district court on or after April 28, 2015.

10.19    Sec. 8. Minnesota Statutes 2014, section 290.01, subdivision 19, as amended by Laws
10.202015, chapter 1, section 2, is amended to read:
10.21    Subd. 19. Net income. The term "net income" means the federal taxable income,
10.22as defined in section 63 of the Internal Revenue Code of 1986, as amended through the
10.23date named in this subdivision, incorporating the federal effective dates of changes to the
10.24Internal Revenue Code and any elections made by the taxpayer in accordance with the
10.25Internal Revenue Code in determining federal taxable income for federal income tax
10.26purposes, and with the modifications provided in subdivisions 19a to 19f.
10.27    In the case of a regulated investment company or a fund thereof, as defined in section
10.28851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment
10.29company taxable income as defined in section 852(b)(2) of the Internal Revenue Code,
10.30except that:
10.31    (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal
10.32Revenue Code does not apply;
10.33    (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal
10.34Revenue Code must be applied by allowing a deduction for capital gain dividends and
11.1exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal
11.2Revenue Code; and
11.3    (3) the deduction for dividends paid must also be applied in the amount of any
11.4undistributed capital gains which the regulated investment company elects to have treated
11.5as provided in section 852(b)(3)(D) of the Internal Revenue Code.
11.6    The net income of a real estate investment trust as defined and limited by section
11.7856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust
11.8taxable income as defined in section 857(b)(2) of the Internal Revenue Code.
11.9    The net income of a designated settlement fund as defined in section 468B(d) of
11.10the Internal Revenue Code means the gross income as defined in section 468B(b) of the
11.11Internal Revenue Code.
11.12    The Internal Revenue Code of 1986, as amended through December 31, 2014 April
11.131, 2015, shall be in effect for taxable years beginning after December 31, 1996.
11.14    Except as otherwise provided, references to the Internal Revenue Code in
11.15subdivisions 19 to 19f mean the code in effect for purposes of determining net income for
11.16the applicable year.
11.17EFFECTIVE DATE.This section is effective the day following final enactment,
11.18except the changes incorporated by federal changes are effective retroactively at the same
11.19time the changes were effective for federal purposes.

11.20    Sec. 9. Minnesota Statutes 2014, section 290.01, is amended by adding a subdivision
11.21to read:
11.22    Subd. 19i. Accelerated recognition of certain installment sale gains. (a) For the
11.23purposes of this subdivision, the following definitions apply:
11.24(1) "realized" means realized as defined by section 1001(b) of the Internal Revenue
11.25Code;
11.26(2) "installment sale" means any installment sale under section 453 of the Internal
11.27Revenue Code, and any other sale which is reported utilizing a method of accounting
11.28authorized under subchapter E of the Internal Revenue Code, which allows taxpayers to
11.29delay reporting or recognition of a realized gain until a future year; and
11.30(3) "allocable amount" means the full amount to be apportioned to Minnesota under
11.31section 290.191, or the full amount to be assigned under section 290.17.
11.32(b) In the case of a nonresident individual or a person who becomes a nonresident
11.33individual during the tax year, net income includes the allocable amount realized upon a
11.34sale of the assets of, or the sale of any interest in, an S corporation or partnership which
11.35operated in Minnesota during the taxable year of sale, including any income or gain to be
12.1recognized in future years pursuant to an installment sale method of reporting under the
12.2Internal Revenue Code.
12.3(c) An individual who becomes a nonresident of Minnesota in any year after an
12.4installment sale is required to recognize the full amount of any income or gain not
12.5recognized in a prior year on the individual's final Minnesota resident tax return.
12.6(d) Notwithstanding paragraphs (b) and (c), taxpayers may elect to defer the
12.7recognition of installment sale gains by making an election under this paragraph. The
12.8election must be filed on a form prescribed by the commissioner and must be filed by
12.9the due date of the individual tax return, including any extension. Electing taxpayers
12.10are required to:
12.11(1) file Minnesota tax returns in all subsequent years when gains from the installment
12.12sale are recognized and reported to the Internal Revenue Service;
12.13(2) allocate gains to the state of Minnesota as though the gains were incurred in the
12.14year of sale under section 290.191 or 290.17; and
12.15(3) include all relevant federal tax documents reporting the installment sale with
12.16subsequent Minnesota tax returns.
12.17(e) Income or gain recognized for Minnesota purposes under paragraphs (b) and (c)
12.18and subjected to tax, is excluded from net income in future years.
12.19EFFECTIVE DATE.This section is effective for taxable years beginning after
12.20December 31, 2014.

12.21    Sec. 10. Minnesota Statutes 2014, section 290.01, subdivision 31, as amended by Laws
12.222015, chapter 1, section 3, is amended to read:
12.23    Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal
12.24Revenue Code" means the Internal Revenue Code of 1986, as amended through December
12.2531, 2014 April 1, 2015. Internal Revenue Code also includes any uncodified provision in
12.26federal law that relates to provisions of the Internal Revenue Code that are incorporated
12.27into Minnesota law. When used in this chapter, the reference to "subtitle A, chapter 1,
12.28subchapter N, part 1, of the Internal Revenue Code" is to the Internal Revenue Code as
12.29amended through March 18, 2010.
12.30EFFECTIVE DATE.This section is effective the day following final enactment,
12.31except the changes incorporated by federal changes are effective retroactively at the same
12.32time the changes were effective for federal purposes.

13.1    Sec. 11. Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision
13.2to read:
13.3    Subd. 37. Refundable film production credit. (a) A taxpayer is allowed a
13.4credit against the taxes due under this chapter equal to 25 percent of film production
13.5and postproduction expenditures made in Minnesota that are directly attributable to film
13.6production in Minnesota.
13.7(b) For purposes of this subdivision, "film" has the meaning given in section 116U.26.
13.8    (c) Expenditures that qualify for the credit under this subdivision must be
13.9"production costs" as that term is defined in section 116U.26 and must be subject to
13.10taxation in Minnesota.
13.11    (d) If the amount of the credit under this subdivision exceeds the taxpayer's tax
13.12liability under this chapter for the taxable year, the amount of the excess must be refunded
13.13to the taxpayer. The amount necessary to pay the refunds under this subdivision is
13.14appropriated annually from the general fund to the commissioner of revenue.
13.15EFFECTIVE DATE.This section is effective for taxable years beginning after
13.16December 31, 2015.

13.17    Sec. 12. Minnesota Statutes 2014, section 290.0671, subdivision 1, is amended to read:
13.18    Subdivision 1. Credit allowed. (a) An individual who is a resident of Minnesota is
13.19allowed a credit against the tax imposed by this chapter equal to a percentage of earned
13.20income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the
13.21Internal Revenue Code.
13.22(b) For individuals with no qualifying children, the credit equals 2.10 percent of the
13.23first $6,180 of earned income. The credit is reduced by 2.01 percent of earned income
13.24or adjusted gross income, whichever is greater, in excess of $8,130, but in no case is
13.25the credit less than zero.
13.26(c) For individuals with one qualifying child, the credit equals 9.35 percent of the
13.27first $11,120 of earned income. The credit is reduced by 6.02 percent of earned income
13.28or adjusted gross income, whichever is greater, in excess of $21,190, but in no case is
13.29the credit less than zero.
13.30(d) For individuals with two or more qualifying children, the credit equals 11 percent
13.31of the first $18,240 of earned income. The credit is reduced by 10.82 percent of earned
13.32income or adjusted gross income, whichever is greater, in excess of $25,130, but in no
13.33case is the credit less than zero.
13.34(e) For a nonresident or part-year resident, the credit must be allocated based on the
13.35percentage calculated under section 290.06, subdivision 2c, paragraph (e).
14.1(f) For a person who was a resident for the entire tax year and has earned income
14.2not subject to tax under this chapter, including income excluded under section 290.01,
14.3subdivision 19b
, clause (9), the credit must be allocated based on the ratio of federal
14.4adjusted gross income reduced by the earned income not subject to tax under this chapter
14.5over federal adjusted gross income. For purposes of this paragraph, the subtractions
14.6for military pay under section 290.01, subdivision 19b, clauses (10) and (11), are not
14.7considered "earned income not subject to tax under this chapter."
14.8For the purposes of this paragraph, the exclusion of combat pay under section 112
14.9of the Internal Revenue Code is not considered "earned income not subject to tax under
14.10this chapter."
14.11(g) For tax years beginning after December 31, 2007, and before December 31,
14.122010, and for tax years beginning after December 31, 2017, the $8,130 in paragraph (b),
14.13the $21,190 in paragraph (c), and the $25,130 in paragraph (d), after being adjusted for
14.14inflation under subdivision 7, are each increased by $3,000 for married taxpayers filing joint
14.15returns. For tax years beginning after December 31, 2008, the commissioner shall annually
14.16adjust the $3,000 by the percentage determined pursuant to the provisions of section 1(f)
14.17of the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2007" shall be
14.18substituted for the word "1992." For 2009, the commissioner shall then determine the
14.19percent change from the 12 months ending on August 31, 2007, to the 12 months ending on
14.20August 31, 2008, and in each subsequent year, from the 12 months ending on August 31,
14.212007, to the 12 months ending on August 31 of the year preceding the taxable year. The
14.22earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
14.23amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
14.24commissioner under this subdivision is not a rule under the Administrative Procedure Act.
14.25(h)(1) For tax years beginning after December 31, 2012, and before January 1, 2014,
14.26the $5,770 in paragraph (b), the $15,080 in paragraph (c), and the $17,890 in paragraph (d),
14.27after being adjusted for inflation under subdivision 7, are increased by $5,340 for married
14.28taxpayers filing joint returns; and (2) for tax years beginning after December 31, 2013, and
14.29before January 1, 2018, the $8,130 in paragraph (b), the $21,190 in paragraph (c), and the
14.30$25,130 in paragraph (d), after being adjusted for inflation under subdivision 7, are each
14.31increased by $5,000 for married taxpayers filing joint returns. For tax years beginning
14.32after December 31, 2010, and before January 1, 2012, and for tax years beginning after
14.33December 31, 2013, and before January 1, 2018, the commissioner shall annually adjust
14.34the $5,000 by the percentage determined pursuant to the provisions of section 1(f) of
14.35the Internal Revenue Code, except that in section 1(f)(3)(B), the word "2008" shall be
14.36substituted for the word "1992." For 2011, the commissioner shall then determine the
15.1percent change from the 12 months ending on August 31, 2008, to the 12 months ending on
15.2August 31, 2010, and in each subsequent year, from the 12 months ending on August 31,
15.32008, to the 12 months ending on August 31 of the year preceding the taxable year. The
15.4earned income thresholds as adjusted for inflation must be rounded to the nearest $10. If the
15.5amount ends in $5, the amount is rounded up to the nearest $10. The determination of the
15.6commissioner under this subdivision is not a rule under the Administrative Procedure Act.
15.7(i) The commissioner shall construct tables showing the amount of the credit at
15.8various income levels and make them available to taxpayers. The tables shall follow
15.9the schedule contained in this subdivision, except that the commissioner may graduate
15.10the transition between income brackets.
15.11EFFECTIVE DATE.This section is effective for taxable years beginning after
15.12December 31, 2014.

15.13    Sec. 13. Minnesota Statutes 2014, section 290.0671, subdivision 6a, is amended to read:
15.14    Subd. 6a. TANF appropriation for working family credit expansion. (a) On
15.15an annual basis the commissioner of revenue, with the assistance of the commissioner
15.16of human services, shall calculate the value of the refundable portion of the Minnesota
15.17Working Family Credit provided under this section that qualifies for payment with funds
15.18from the federal Temporary Assistance for Needy Families (TANF) block grant. Of this
15.19total amount, the commissioner of revenue shall estimate the portion entailed by the
15.20expansion of the credit rates provided in Laws 2000, chapter 490, article 4, section 17,
15.21for individuals with qualifying children over the rates provided in Laws 1999, chapter
15.22243, article 2, section 12.
15.23(b) An amount sufficient to pay the refunds entailed by the expansion of the credit
15.24rates provided in Laws 2000, chapter 490, article 4, section 17, for individuals with
15.25qualifying children over the rates provided in Laws 1999, chapter 243, article 2, section
15.2612, as estimated in paragraph (a), is appropriated to the commissioner of human services
15.27from the federal Temporary Assistance for Needy Families (TANF) block grant funds, for
15.28transfer to the commissioner of revenue for deposit in the general fund.
15.29EFFECTIVE DATE.This section is effective only for transfers in fiscal year 2015.

15.30    Sec. 14. Minnesota Statutes 2014, section 290.0674, subdivision 1, is amended to read:
15.31    Subdivision 1. Credit allowed. An individual is allowed a credit against the
15.32tax imposed by this chapter in an amount equal to 75 percent of the amount paid for
16.1education-related expenses for a qualifying child in kindergarten preschool through grade
16.212. For purposes of this section, "education-related expenses" means:
16.3(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision
16.410
, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers
16.5Association, and who is not a lineal ancestor or sibling of the dependent for instruction
16.6outside the regular school day or school year, including tutoring, driver's education
16.7offered as part of school curriculum, regardless of whether it is taken from a public or
16.8private entity or summer camps, in grade or age appropriate curricula that supplement
16.9curricula and instruction available during the regular school year, that assists a dependent
16.10to improve knowledge of core curriculum areas or to expand knowledge and skills under
16.11the required academic standards under section 120B.021, subdivision 1, and the elective
16.12standard under section 120B.022, subdivision 1, clause (2), and that do not include the
16.13teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
16.14tenets, doctrines, or worship;
16.15(2) expenses for textbooks, including books and other instructional materials and
16.16equipment purchased or leased for use in preschool, elementary, and secondary schools
16.17in teaching only those subjects legally and commonly taught in public elementary and
16.18secondary schools in this state. "Textbooks" does not include instructional books and
16.19materials used in the teaching of religious tenets, doctrines, or worship, the purpose of
16.20which is to instill such tenets, doctrines, or worship, nor does it include books or materials
16.21for extracurricular activities including sporting events, musical or dramatic events, speech
16.22activities, driver's education, or similar programs;
16.23(3) a maximum expense of $200 per family for personal computer hardware,
16.24excluding single purpose processors, and educational software that assists a dependent to
16.25improve knowledge of core curriculum areas or to expand knowledge and skills under
16.26the required academic standards under section 120B.021, subdivision 1, and the elective
16.27standard under section 120B.022, subdivision 1, clause (2), purchased for use in the
16.28taxpayer's home and not used in a trade or business regardless of whether the computer is
16.29required by the dependent's school; and
16.30(4) the amount paid to others for transportation of a qualifying child attending an a
16.31preschool, elementary, or secondary school situated in Minnesota, North Dakota, South
16.32Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state's
16.33compulsory attendance laws, which is not operated for profit, and which adheres to the
16.34provisions of the Civil Rights Act of 1964 and chapter 363A.
16.35For purposes of this section, "qualifying child" has the meaning given in section
16.3632(c)(3) of the Internal Revenue Code who is at least four years old when the expenses
17.1are incurred. "Preschool" means the Head Start program under section 119A.50 or a
17.2school district prekindergarten program.
17.3EFFECTIVE DATE.This section is effective for taxable years beginning after
17.4December 31, 2014.

17.5    Sec. 15. Minnesota Statutes 2014, section 290.0674, subdivision 2, is amended to read:
17.6    Subd. 2. Limitations. (a) For claimants with income not greater than $33,500
17.7$45,000, the maximum credit allowed for a family is $1,000 multiplied by the number
17.8of qualifying children in kindergarten preschool through grade 12 in the family. The
17.9maximum credit for families with one qualifying child in kindergarten preschool through
17.10grade 12 is reduced by $1 for each $4 of household income over $33,500 $45,000, and
17.11the maximum credit for families with two or more qualifying children in kindergarten
17.12through grade 12 is reduced by $2 for each $4 of household income over $33,500 $45,000,
17.13but in no case is the credit less than zero.
17.14For purposes of this section "income" has the meaning given in section 290.067,
17.15subdivision 2a
. In the case of a married claimant, a credit is not allowed unless a joint
17.16income tax return is filed.
17.17(b) For a nonresident or part-year resident, the credit determined under subdivision 1
17.18and the maximum credit amount in paragraph (a) must be allocated using the percentage
17.19calculated in section 290.06, subdivision 2c, paragraph (e).
17.20EFFECTIVE DATE.This section is effective for taxable years beginning after
17.21December 31, 2014.

17.22    Sec. 16. Minnesota Statutes 2014, section 290.068, subdivision 1, is amended to read:
17.23    Subdivision 1. Credit allowed. Subject to the requirements in subdivision 8, a
17.24corporation, partners in a partnership, or shareholders in a corporation treated as an "S"
17.25corporation under section 290.9725 are individual, trust, or estate is allowed a credit
17.26against the tax computed under this chapter for the taxable year equal to:
17.27    (a) ten percent of the first $2,000,000 of the excess (if any) of
17.28    (1) the qualified research expenses for the taxable year, over
17.29    (2) the base amount; and
17.30    (b) 2.5 percent on all of such excess expenses over $2,000,000.
17.31EFFECTIVE DATE.This section is effective for taxable years beginning after
17.32December 31, 2014.

18.1    Sec. 17. Minnesota Statutes 2014, section 290.068, subdivision 2, is amended to read:
18.2    Subd. 2. Definitions. For purposes of this section, the following terms have the
18.3meanings given.
18.4    (a) "Qualified research expenses" means (i) qualified research expenses and basic
18.5research payments as defined in section 41(b) and (e) of the Internal Revenue Code, except
18.6it does not include expenses incurred for qualified research or basic research conducted
18.7outside the state of Minnesota pursuant to section 41(d) and (e) of the Internal Revenue
18.8Code; and (ii) contributions to a nonprofit corporation established and operated pursuant
18.9to the provisions of chapter 317A for the purpose of promoting the establishment and
18.10expansion of business in this state, provided the contributions are invested by the nonprofit
18.11corporation for the purpose of providing funds for small, technologically innovative
18.12enterprises in Minnesota during the early stages of their development.
18.13    (b) "Qualified research" means qualified research as defined in section 41(d) of the
18.14Internal Revenue Code, except that the term does not include qualified research conducted
18.15outside the state of Minnesota.
18.16    (c) "Base amount" means base amount as defined in section 41(c) of the Internal
18.17Revenue Code, except that the average annual gross receipts must be calculated using
18.18Minnesota sales or receipts under section 290.191 and the definitions contained in clauses
18.19(a) and (b) shall apply. If there are inadequate records or the records are unavailable to
18.20compute or verify the base percentage, a fixed base percentage of 16 percent must be used.
18.21EFFECTIVE DATE.This section is effective for taxable years beginning after
18.22December 31, 2014.

18.23    Sec. 18. Minnesota Statutes 2014, section 290.068, subdivision 3, is amended to read:
18.24    Subd. 3. Limitation; carryover. (a) Except as provided in subdivision 6a,
18.25paragraph (b), the credit for a taxable year beginning before January 1, 2010, and after
18.26December 31, 2012, shall not exceed the liability for tax. "Liability for tax" for purposes
18.27of this section means the sum of the tax imposed under section 290.06, subdivisions 1 and
18.282c
, for the taxable year reduced by the sum of the nonrefundable credits allowed under
18.29this chapter, on all of the entities required to be included on the combined report of the
18.30unitary business. If the amount of the credit allowed exceeds the liability for tax of the
18.31taxpayer, but is allowed as a result of the liability for tax of other members of the unitary
18.32group for the taxable year, the taxpayer must allocate the excess as a research credit
18.33to another member of the unitary group.
18.34    (b) In the case of a corporation which is a partner in a partnership, the credit allowed
18.35for the taxable year shall not exceed the lesser of the amount determined under paragraph
19.1(a) for the taxable year or an amount (separately computed with respect to the corporation's
19.2interest in the trade or business or entity) equal to the amount of tax attributable to that
19.3portion of taxable income which is allocable or apportionable to the corporation's interest
19.4in the trade or business or entity.
19.5    (c) If the amount of the credit determined under this section for any taxable year
19.6exceeds the limitation under paragraph (a) or (b), including amounts allowed as a refund
19.7under subdivision 6a, paragraph (b), or allocated to other members of the unitary group,
19.8the excess shall be a research credit carryover to each of the 15 succeeding taxable years.
19.9The entire amount of the excess unused credit for the taxable year shall be carried first
19.10to the earliest of the taxable years to which the credit may be carried and then to each
19.11successive year to which the credit may be carried. The amount of the unused credit
19.12which may be added under this clause shall not exceed the taxpayer's liability for tax
19.13less the research credit for the taxable year.
19.14EFFECTIVE DATE.This section is effective for taxable years beginning after
19.15December 31, 2014.

19.16    Sec. 19. Minnesota Statutes 2014, section 290.068, subdivision 6a, is amended to read:
19.17    Subd. 6a. Credit to be refundable. (a) If the amount of credit allowed in this
19.18section for qualified research expenses incurred in taxable years beginning after December
19.1931, 2009, and before January 1, 2013, exceeds the taxpayer's tax liability under this
19.20chapter, the commissioner shall refund the excess amount. The credit allowed for qualified
19.21research expenses incurred in taxable years beginning after December 31, 2009, and before
19.22January 1, 2013, must be used before any research credit earned under subdivision 3.
19.23(b) If the first $15,000 of the credit allowed in this section for qualified research
19.24expenses incurred in taxable years beginning after December 31, 2014, exceeds the
19.25taxpayer's tax liability under this chapter, the commissioner shall refund the excess
19.26amount. The $15,000 limit must be applied at the corporation, partnership, or other entity
19.27level, including sole proprietorships. The credit allowed for qualified research expenses
19.28incurred in taxable years beginning before January 1, 2015, must be used before any
19.29research credit earned under subdivision 3.
19.30EFFECTIVE DATE.This section is effective for taxable years beginning after
19.31December 31, 2014.

19.32    Sec. 20. Minnesota Statutes 2014, section 290.068, is amended by adding a subdivision
19.33to read:
20.1    Subd. 8. Application and certification requirement for sole proprietors. (a) A
20.2taxpayer who is a sole proprietor claiming a credit under this section must submit an
20.3application to the commissioner for determination that the expenses for which the credit is
20.4claimed are qualified research expenses. The application must be submitted by September
20.515 of the calendar year following the taxable year in which the qualified research
20.6expenses were incurred. The application must be in a form and manner prescribed by the
20.7commissioner and must contain information sufficient to verify that the expenses for
20.8which the credit is claimed under this section are qualified research expenses.
20.9(b) The commissioner must notify the sole proprietor of the determination of the
20.10application under paragraph (a) no later than 60 days after the application is received.
20.11(c) Upon approving an application for credit under paragraph (a), the commissioner
20.12must issue a credit certificate to the sole proprietor that verifies eligibility for the credit
20.13and states the amount of credit and the taxable year to which the credit applies.
20.14(d) The sole proprietor must claim the credit under this section in the return for the
20.15taxable year immediately following the taxable year to which the credit applies. The
20.16return must contain a copy of the credit certificate issued under paragraph (c).
20.17(e) A credit must not be issued under this section unless the commissioner has
20.18received the certification required under paragraph (c).
20.19EFFECTIVE DATE.This section is effective for taxable years beginning after
20.20December 31, 2014.

20.21    Sec. 21. [290.0693] MINNESOTA COLLEGE SAVINGS PLAN CREDIT.
20.22    Subdivision 1. Definitions. For purposes of this section, the terms "Minnesota
20.23college savings plan," "account," "nonqualified distribution," and "plan administrator"
20.24have the meanings given them in chapter 136G.
20.25    Subd. 2. Credit allowed. (a) A credit of up to $500 is allowed against the tax
20.26imposed by this chapter, subject to the limitations in paragraph (b).
20.27(b) The credit allowed must be calculated by applying the following rates to the
20.28amount contributed to a Minnesota college savings plan, as established in chapter 136G,
20.29in a taxable year:
20.30(1) 200 percent for individual filers and married couples filing a joint return who
20.31have federal adjusted gross income of not more than 150 percent of the federal poverty
20.32guideline for a household size of four;
20.33(2) 100 percent for individual filers and married couples filing a joint return who
20.34have federal adjusted gross income over 150 percent, but not more than 200 percent of
20.35the federal poverty guideline for a household size of four;
21.1(3) 50 percent for individual filers who have federal adjusted gross income over
21.2200 percent of the federal poverty guideline for a household size of four, but not more
21.3than $80,000; and
21.4(4) 50 percent for married couples filing a joint return who have federal adjusted
21.5gross income over 200 percent of the federal poverty guideline for a household size of
21.6four, except that the credit is reduced by $1 for every $160 over $80,000 in federal
21.7adjusted gross income.
21.8(c) For a nonresident or a part-year resident, the credit under this subdivision
21.9must be allocated based on the percentage calculated under section 290.06, subdivision
21.102c, paragraph (e).
21.11(d) The $80,000 in paragraph (b), clauses (3) and (4), used to calculate the credit and
21.12phaseout must be adjusted for inflation. The commissioner shall adjust by the percentage
21.13determined pursuant to the provisions of section 1(f) of the Internal Revenue Code, except
21.14that in section 1(f)(3)(B) the word "2014" shall be substituted for the word "1992." For
21.152016, the commissioner shall then determine the percent change from the 12 months ending
21.16on August 31, 2014, to the 12 months ending on August 31, 2015, and in each subsequent
21.17year, from the 12 months ending on August 31, 2014, to the 12 months ending on August
21.1831 of the year preceding the taxable year. The earned income thresholds as adjusted for
21.19inflation must be rounded to the nearest $10 amount. If the amount ends in $5, the amount
21.20is rounded up to the nearest $10 amount. The determination of the commissioner under this
21.21subdivision is not a rule under the Administrative Procedure Act including section 14.386.
21.22    Subd. 3. Credit transfer. (a) The credit allowed under this section must be
21.23calculated after applying all other credits to the taxpayer's tax liability. If the amount of
21.24credit that the taxpayer is eligible to receive under this section exceeds the taxpayer's tax
21.25liability after applying all other credits, the commissioner shall transfer the excess amount
21.26pursuant to the requirements of paragraph (b).
21.27(b) The commissioner shall transfer the excess amount calculated under paragraph
21.28(a) to the plan administrator to be deposited to the taxpayer's Minnesota college savings
21.29plan account. If the taxpayer made contributions to more than one account, the credit
21.30amount must be allocated based on the contributions to each account as a percentage
21.31of the total contributions to all accounts.
21.32    Subd. 4. Verification of contribution amounts. The commissioner of the Office of
21.33Higher Education must provide sufficient information to the commissioner of revenue to
21.34verify the taxpayer's annual contribution amounts to an account.
22.1    Subd. 5. Recapture of credit. In the case of a nonqualified distribution, the
22.2taxpayer is liable to the commissioner for the lesser of: ten percent of the amount of the
22.3nonqualified distribution, or the sum of credits received under this section for all years.
22.4    Subd. 6. Appropriation. An amount sufficient to pay the refunds required by this
22.5section is appropriated to the commissioner from the general fund.
22.6EFFECTIVE DATE.This section is effective for taxable years beginning after
22.7December 31, 2015.

22.8    Sec. 22. [290.0694] VETERANS JOBS TAX CREDIT.
22.9    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
22.10have the meanings given.
22.11(b)(1) "Qualified employee" means an employee as defined in section 290.92,
22.12subdivision 1, who meets the following criteria:
22.13(i) the employee is a resident of Minnesota on the date of hire;
22.14(ii) the employee is paid wages as defined in section 290.92, subdivision 1; and
22.15(iii) the employee's wages are attributable to Minnesota under section 290.191,
22.16subdivision 12;
22.17(2) "Qualified employee" does not include:
22.18(i) any employee who bears any of the relationships to the employer described in
22.19subparagraphs (A) to (G) of section 152(d)(2) of the Internal Revenue Code;
22.20(ii) if the employer is a corporation, an employee who owns, directly or indirectly,
22.21more than 50 percent in value of the outstanding stock of the corporation, or if the
22.22employer is an entity other than a corporation, an employee who owns, directly or
22.23indirectly, more than 50 percent of the capital and profits interests in the entity, as
22.24determined with the application of section 267(c) of the Internal Revenue Code; or
22.25(iii) if the employer is an estate or trust, any employee who is a fiduciary of the estate
22.26or trust, or is an individual who bears any of the relationships described in subparagraphs
22.27(A) to (G) of section 152(d)(2) of the Internal Revenue Code to a grantor, beneficiary,
22.28or fiduciary of the estate or trust.
22.29(c) "Qualified employer" means: (i) an employer that hired an unemployed veteran
22.30as a qualified employee; and (ii) an employer not eligible to receive a grant under the
22.31veterans jobs grant program in section 31.
22.32(d) "Unemployed veteran" is a veteran who was unemployed on the date of hire.
22.33(e) "Veteran" has the meaning given in section 197.447.
22.34(f) "Date of hire" means the day that the qualified employee begins performing
22.35services as an employee of the qualified employer.
23.1    Subd. 2. Credit for hiring unemployed veterans. A qualified employer who
23.2is required to file a return under section 289A.08, subdivision 1, 2, or 3, and hires an
23.3unemployed veteran as a qualified employee, is allowed a credit against the tax imposed
23.4by this chapter equal to ten percent of the wages paid to the qualified employee during the
23.5taxable year, but the amount of the credit shall not exceed $2,500. The credit is limited
23.6to the liability for tax under this chapter for the taxable year. A qualified employer is
23.7not eligible for the credit if the qualified employer currently employs or has previously
23.8employed the qualified veteran.
23.9    Subd. 3. Appropriation. An amount sufficient to pay the refunds required by this
23.10section is appropriated to the commissioner from the general fund.
23.11    Subd. 4. Flow-through entities. Credits granted to a partnership, limited liability
23.12company taxed as a partnership, S corporation, or multiple owners of a business are passed
23.13through to the partners, members, shareholders, or owners, respectively, pro rata to each
23.14partner, member, shareholder, or owner based on their share of the entity's assets or as
23.15specially allocated in their organizational documents, as of the last day of the taxable year.
23.16EFFECTIVE DATE.This section is effective for taxable years beginning after
23.17December 31, 2015.

23.18    Sec. 23. [290.0695] EMPLOYEE CREDIT FOR CERTAIN
23.19EMPLOYER-PROVIDED FITNESS FACILITY EXPENSES.
23.20    Subdivision 1. Credit allowed. (a) A taxpayer is allowed a credit against the tax
23.21imposed by this chapter, subject to the requirements of this section. The credit shall not
23.22exceed the taxpayer's tax liability. For married taxpayers filing a joint return, the credit is
23.23$60. For all other taxpayers, the credit is $30.
23.24(b) The credit is allowed to an employee whose employer either:
23.25(1) pays a portion of any fees, dues, or membership expenses on behalf of the
23.26employee to a fitness facility; or
23.27(2) reimburses the employee for direct payment of fees, dues, or membership
23.28expenses made by the employee to a fitness facility.
23.29(c) The credit under this section is only allowed to individuals who use the fitness
23.30facility for the preservation, maintenance, encouragement, or development of physical
23.31fitness an average of four days per month, but if the fitness facility is used fewer than three
23.32days per month, the credit is not allowed. The commissioner shall prescribe the form and
23.33manner in which eligibility for the credit is determined.
23.34(d) For purposes of this section, "fitness facility" means a facility located in the state:
24.1(1) that provides instruction in a program of physical exercise; offers facilities for
24.2the preservation, maintenance, encouragement, or development of physical fitness; or is
24.3the site of such a program of a state or local government;
24.4(2) that is not a private club owned and operated by its members;
24.5(3) that does not offer golf, hunting, sailing, or horseback riding facilities;
24.6(4) whose fitness facility is not incidental to its overall function and purpose;
24.7(5) that is compliant with antidiscrimination laws under chapter 363A and applicable
24.8federal antidiscrimination laws; and
24.9(6) is located off the employer's premises.
24.10    Subd. 2. Limitation. The credit under this section applies only if the employer's
24.11payment of fees, dues, or membership expenses to a fitness facility is available on
24.12substantially the same terms to each member of a group of employees defined under a
24.13reasonable classification by the employer, but no classification may include only highly
24.14compensated employees, as defined under section 414(q) of the Internal Revenue Code, or
24.15any other group that includes only executives, directors, or other managerial employees.
24.16    Subd. 3. Nonresidents and part-year residents; flow-through entities. For a
24.17nonresident or part-year resident, the credit must be allocated based on the percentage
24.18calculated under section 290.06, subdivision 2c, paragraph (e).
24.19EFFECTIVE DATE.This section is effective for taxable years beginning after
24.20December 31, 2014.

24.21    Sec. 24. Minnesota Statutes 2014, section 290.17, subdivision 4, is amended to read:
24.22    Subd. 4. Unitary business principle. (a) If a trade or business conducted wholly
24.23within this state or partly within and partly without this state is part of a unitary business,
24.24the entire income of the unitary business is subject to apportionment pursuant to section
24.25290.191 . Notwithstanding subdivision 2, paragraph (c), none of the income of a unitary
24.26business is considered to be derived from any particular source and none may be allocated
24.27to a particular place except as provided by the applicable apportionment formula. The
24.28provisions of this subdivision do not apply to business income subject to subdivision 5,
24.29income of an insurance company, or income of an investment company determined under
24.30section 290.36.
24.31(b) The term "unitary business" means business activities or operations which
24.32result in a flow of value between them. The term may be applied within a single legal
24.33entity or between multiple entities and without regard to whether each entity is a sole
24.34proprietorship, a corporation, a partnership or a trust.
25.1(c) Unity is presumed whenever there is unity of ownership, operation, and use,
25.2evidenced by centralized management or executive force, centralized purchasing,
25.3advertising, accounting, or other controlled interaction, but the absence of these
25.4centralized activities will not necessarily evidence a nonunitary business. Unity is also
25.5presumed when business activities or operations are of mutual benefit, dependent upon or
25.6contributory to one another, either individually or as a group.
25.7(d) Where a business operation conducted in Minnesota is owned by a business
25.8entity that carries on business activity outside the state different in kind from that
25.9conducted within this state, and the other business is conducted entirely outside the state, it
25.10is presumed that the two business operations are unitary in nature, interrelated, connected,
25.11and interdependent unless it can be shown to the contrary.
25.12(e) Unity of ownership does not exist when two or more corporations are involved
25.13unless more than 50 percent of the voting stock of each corporation is directly or indirectly
25.14owned by a common owner or by common owners, either corporate or noncorporate, or
25.15by one or more of the member corporations of the group. For this purpose, the term
25.16"voting stock" shall include membership interests of mutual insurance holding companies
25.17formed under section 66A.40.
25.18(f) The net income and apportionment factors under section 290.191 or 290.20 of
25.19foreign corporations and other foreign entities which are part of a unitary business shall
25.20not be included in the net income or the apportionment factors of the unitary business;
25.21except that the income and apportionment factors of a foreign entity, other than an entity
25.22treated as a C corporation for federal income tax purposes, that are included in the federal
25.23taxable income, as defined in section 63 of the Internal Revenue Code as amended through
25.24the date named in section 290.01, subdivision 19, of a domestic corporation, domestic
25.25entity, or individual must be included in determining net income and the factors to be used
25.26in the apportionment of net income pursuant to section 290.191 or 290.20. A foreign
25.27corporation or other foreign entity which is not included on a combined report and which
25.28is required to file a return under this chapter shall file on a separate return basis.
25.29(g) For purposes of determining the net income of a unitary business and the factors
25.30to be used in the apportionment of net income pursuant to section 290.191 or 290.20, there
25.31must be included only the income and apportionment factors of domestic corporations
25.32or other domestic entities that are determined to be part of the unitary business pursuant
25.33to this subdivision, notwithstanding that foreign corporations or other foreign entities
25.34might be included in the unitary business; except that the income and apportionment
25.35factors of a foreign entity, other than an entity treated as a C corporation for federal
25.36income tax purposes, that is included in the federal taxable income, as defined in section
26.163 of the Internal Revenue Code as amended through the date named in section 290.01,
26.2subdivision 19
, of a domestic corporation, domestic entity, or individual must be included
26.3in determining net income and the factors to be used in the apportionment of net income
26.4pursuant to section 290.191 or 290.20.
26.5(h) Each corporation or other entity, except a sole proprietorship, that is part of a
26.6unitary business must file combined reports as the commissioner determines. On the
26.7reports, all intercompany transactions between entities included pursuant to paragraph
26.8(g) must be eliminated and the entire net income of the unitary business determined in
26.9accordance with this subdivision is apportioned among the entities by using each entity's
26.10Minnesota factors for apportionment purposes in the numerators of the apportionment
26.11formula and the total factors for apportionment purposes of all entities included pursuant
26.12to paragraph (g) in the denominators of the apportionment formula. Except as otherwise
26.13provided by paragraph (f), all sales of the unitary business made within this state pursuant
26.14to section 290.191 or 290.20 must be included on the combined report of a corporation or
26.15other entity that is a member of the unitary business and is subject to the jurisdiction of
26.16this state to impose tax under this chapter.
26.17(i) If a corporation has been divested from a unitary business and is included in a
26.18combined report for a fractional part of the common accounting period of the combined
26.19report:
26.20(1) its income includable in the combined report is its income incurred for that part
26.21of the year determined by proration or separate accounting; and
26.22(2) its sales, property, and payroll included in the apportionment formula must
26.23be prorated or accounted for separately.
26.24(j) For purposes of this subdivision, "insurance company" means any company that is:
26.25(1) licensed to engage in the business of insurance in Minnesota pursuant to chapter
26.2660A; or
26.27(2) domiciled and licensed to engage in the business of insurance in another state
26.28or country that imposes retaliatory taxes, and that does not grant, on a reciprocal basis,
26.29exemption from such retaliatory taxes to insurance companies or their agents domiciled
26.30in Minnesota.
26.31(k) For the purposes of this subdivision, "retaliatory taxes" means taxes imposed on
26.32insurance companies organized in another state or country that result from the fact that an
26.33insurance company organized in the taxing jurisdiction and doing business in the other
26.34jurisdiction is subject to taxes, fines, deposits, penalties, licenses, or fees in an amount
26.35exceeding that imposed by the taxing jurisdiction upon an insurance company organized in
26.36the other state or country and doing business to the same extent in the taxing jurisdiction.
27.1EFFECTIVE DATE.This section is effective for taxable years beginning after
27.2December 31, 2014.

27.3    Sec. 25. Minnesota Statutes 2014, section 290.191, subdivision 5, is amended to read:
27.4    Subd. 5. Determination of sales factor. For purposes of this section, the following
27.5rules apply in determining the sales factor.
27.6    (a) The sales factor includes all sales, gross earnings, or receipts received in the
27.7ordinary course of the business, except that the following types of income are not included
27.8in the sales factor:
27.9    (1) interest;
27.10    (2) dividends;
27.11    (3) sales of capital assets as defined in section 1221 of the Internal Revenue Code;
27.12    (4) sales of property used in the trade or business, except sales of leased property of
27.13a type which is regularly sold as well as leased; and
27.14    (5) sales of debt instruments as defined in section 1275(a)(1) of the Internal Revenue
27.15Code or sales of stock.; and
27.16    (6) sales of derivatives including, but not limited to, swaps, options, futures, and
27.17forwards.
27.18    (b) Sales of tangible personal property are made within this state if the property is
27.19received by a purchaser at a point within this state, regardless of the f.o.b. point, other
27.20conditions of the sale, or the ultimate destination of the property.
27.21    (c) Tangible personal property delivered to a common or contract carrier or foreign
27.22vessel for delivery to a purchaser in another state or nation is a sale in that state or nation,
27.23regardless of f.o.b. point or other conditions of the sale.
27.24    (d) Notwithstanding paragraphs (b) and (c), when intoxicating liquor, wine,
27.25fermented malt beverages, cigarettes, or tobacco products are sold to a purchaser who is
27.26licensed by a state or political subdivision to resell this property only within the state of
27.27ultimate destination, the sale is made in that state.
27.28    (e) Sales made by or through a corporation that is qualified as a domestic
27.29international sales corporation under section 992 of the Internal Revenue Code are not
27.30considered to have been made within this state.
27.31    (f) Sales, rents, royalties, and other income in connection with real property is
27.32attributed to the state in which the property is located.
27.33    (g) Receipts from the lease or rental of tangible personal property, including finance
27.34leases and true leases, must be attributed to this state if the property is located in this
27.35state and to other states if the property is not located in this state. Receipts from the
28.1lease or rental of moving property including, but not limited to, motor vehicles, rolling
28.2stock, aircraft, vessels, or mobile equipment are included in the numerator of the receipts
28.3factor to the extent that the property is used in this state. The extent of the use of moving
28.4property is determined as follows:
28.5    (1) A motor vehicle is used wholly in the state in which it is registered.
28.6    (2) The extent that rolling stock is used in this state is determined by multiplying
28.7the receipts from the lease or rental of the rolling stock by a fraction, the numerator of
28.8which is the miles traveled within this state by the leased or rented rolling stock and the
28.9denominator of which is the total miles traveled by the leased or rented rolling stock.
28.10    (3) The extent that an aircraft is used in this state is determined by multiplying the
28.11receipts from the lease or rental of the aircraft by a fraction, the numerator of which is
28.12the number of landings of the aircraft in this state and the denominator of which is the
28.13total number of landings of the aircraft.
28.14    (4) The extent that a vessel, mobile equipment, or other mobile property is used in
28.15the state is determined by multiplying the receipts from the lease or rental of the property
28.16by a fraction, the numerator of which is the number of days during the taxable year the
28.17property was in this state and the denominator of which is the total days in the taxable year.
28.18    (h) Royalties and other income received for the use of or for the privilege of using
28.19intangible property, including patents, know-how, formulas, designs, processes, patterns,
28.20copyrights, trade names, service names, franchises, licenses, contracts, customer lists, or
28.21similar items, must be attributed to the state in which the property is used by the purchaser.
28.22If the property is used in more than one state, the royalties or other income must be
28.23apportioned to this state pro rata according to the portion of use in this state. If the portion
28.24of use in this state cannot be determined, the royalties or other income must be excluded
28.25from both the numerator and the denominator. Intangible property is used in this state if
28.26the purchaser uses the intangible property or the rights therein in the regular course of its
28.27business operations in this state, regardless of the location of the purchaser's customers.
28.28    (i) Sales of intangible property are made within the state in which the property is
28.29used by the purchaser. If the property is used in more than one state, the sales must be
28.30apportioned to this state pro rata according to the portion of use in this state. If the
28.31portion of use in this state cannot be determined, the sale must be excluded from both the
28.32numerator and the denominator of the sales factor. Intangible property is used in this
28.33state if the purchaser used the intangible property in the regular course of its business
28.34operations in this state.
28.35    (j) Receipts from the performance of services must be attributed to the state where
28.36the services are received. For the purposes of this section, receipts from the performance
29.1of services provided to a corporation, partnership, or trust may only be attributed to a
29.2state where it has a fixed place of doing business. If the state where the services are
29.3received is not readily determinable or is a state where the corporation, partnership, or
29.4trust receiving the service does not have a fixed place of doing business, the services
29.5shall be deemed to be received at the location of the office of the customer from which
29.6the services were ordered in the regular course of the customer's trade or business. If the
29.7ordering office cannot be determined, the services shall be deemed to be received at the
29.8office of the customer to which the services are billed. Receipts received as compensation
29.9by a nonresident individual for the performance of services as a member of a board of
29.10directors, or similar body, are attributed to Minnesota based on the ratio of the time spent
29.11in Minnesota providing services as a member of that board divided by the time spent
29.12everywhere providing services as a member of that board.
29.13    (k) For the purposes of this subdivision and subdivision 6, paragraph (l), receipts
29.14from management, distribution, or administrative services performed by a corporation
29.15or trust for a fund of a corporation or trust regulated under United States Code, title 15,
29.16sections 80a-1 through 80a-64, must be attributed to the state where the shareholder of
29.17the fund resides. Under this paragraph, receipts for services attributed to shareholders are
29.18determined on the basis of the ratio of: (1) the average of the outstanding shares in the
29.19fund owned by shareholders residing within Minnesota at the beginning and end of each
29.20year; and (2) the average of the total number of outstanding shares in the fund at the
29.21beginning and end of each year. Residence of the shareholder, in the case of an individual,
29.22is determined by the mailing address furnished by the shareholder to the fund. Residence
29.23of the shareholder, when the shares are held by an insurance company as a depositor for
29.24the insurance company policyholders, is the mailing address of the policyholders. In
29.25the case of an insurance company holding the shares as a depositor for the insurance
29.26company policyholders, if the mailing address of the policyholders cannot be determined
29.27by the taxpayer, the receipts must be excluded from both the numerator and denominator.
29.28Residence of other shareholders is the mailing address of the shareholder.
29.29EFFECTIVE DATE.Paragraph (a) is effective for taxable years beginning after
29.30December 31, 2014. Paragraph (j) is effective the day following final enactment and
29.31applies retroactively to all open taxable years and returns.

29.32    Sec. 26. Minnesota Statutes 2014, section 290.21, subdivision 4, is amended to read:
29.33    Subd. 4. Dividends received from another corporation. (a)(1) Eighty percent
29.34of dividends received by a corporation during the taxable year from another corporation,
29.35in which the recipient owns 20 percent or more of the stock, by vote and value, not
30.1including stock described in section 1504(a)(4) of the Internal Revenue Code when the
30.2corporate stock with respect to which dividends are paid does not constitute the stock in
30.3trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
30.4constitute property held by the taxpayer primarily for sale to customers in the ordinary
30.5course of the taxpayer's trade or business, or when the trade or business of the taxpayer
30.6does not consist principally of the holding of the stocks and the collection of the income
30.7and gains therefrom; and
30.8    (2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
30.9an affiliated company transferred in an overall plan of reorganization and the dividend
30.10is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
30.11amended through December 31, 1989;
30.12    (ii) the remaining 20 percent of dividends if the dividends are received from a
30.13corporation which is subject to tax under section 290.36 and which is a member of an
30.14affiliated group of corporations as defined by the Internal Revenue Code and the dividend
30.15is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
30.16amended through December 31, 1989, or is deducted under an election under section
30.17243(b) of the Internal Revenue Code; or
30.18    (iii) the remaining 20 percent of the dividends if the dividends are received from a
30.19property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
30.20member of an affiliated group of corporations as defined by the Internal Revenue Code
30.21and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
30.221.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
30.23under an election under section 243(b) of the Internal Revenue Code.
30.24    (b) Seventy percent of dividends received by a corporation during the taxable year
30.25from another corporation in which the recipient owns less than 20 percent of the stock,
30.26by vote or value, not including stock described in section 1504(a)(4) of the Internal
30.27Revenue Code when the corporate stock with respect to which dividends are paid does not
30.28constitute the stock in trade of the taxpayer, or does not constitute property held by the
30.29taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
30.30business, or when the trade or business of the taxpayer does not consist principally of the
30.31holding of the stocks and the collection of income and gain therefrom.
30.32    (c) The dividend deduction provided in this subdivision shall be allowed only with
30.33respect to dividends that are included in a corporation's Minnesota taxable net income
30.34for the taxable year.
30.35    The dividend deduction provided in this subdivision does not apply to a dividend
30.36from a corporation which, for the taxable year of the corporation in which the distribution
31.1is made or for the next preceding taxable year of the corporation, is a corporation exempt
31.2from tax under section 501 of the Internal Revenue Code.
31.3The dividend deduction provided in this subdivision does not apply to a dividend
31.4received from a real estate investment trust as defined in section 856 of the Internal
31.5Revenue Code.
31.6    The dividend deduction provided in this subdivision applies to the amount of
31.7regulated investment company dividends only to the extent determined under section
31.8854(b) of the Internal Revenue Code.
31.9    The dividend deduction provided in this subdivision shall not be allowed with
31.10respect to any dividend for which a deduction is not allowed under the provisions of
31.11section 246(c) or 246A of the Internal Revenue Code.
31.12    (d) If dividends received by a corporation that does not have nexus with Minnesota
31.13under the provisions of Public Law 86-272 are included as income on the return of
31.14an affiliated corporation permitted or required to file a combined report under section
31.15290.17, subdivision 4 , or 290.34, subdivision 2, then for purposes of this subdivision the
31.16determination as to whether the trade or business of the corporation consists principally
31.17of the holding of stocks and the collection of income and gains therefrom shall be made
31.18with reference to the trade or business of the affiliated corporation having a nexus with
31.19Minnesota.
31.20    (e) The deduction provided by this subdivision does not apply if the dividends are
31.21paid by a FSC as defined in section 922 of the Internal Revenue Code.
31.22    (f) If one or more of the members of the unitary group whose income is included on
31.23the combined report received a dividend, the deduction under this subdivision for each
31.24member of the unitary business required to file a return under this chapter is the product
31.25of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
31.26allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
31.27income apportionable to this state for the taxable year under section 290.191 or 290.20.
31.28EFFECTIVE DATE.This section is effective for taxable years beginning after
31.29December 31, 2014.

31.30    Sec. 27. Minnesota Statutes 2014, section 290A.03, subdivision 15, as amended by
31.31Laws 2015, chapter 1, section 4, is amended to read:
31.32    Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal
31.33Revenue Code of 1986, as amended through December 31, 2014 April 1, 2015.
32.1EFFECTIVE DATE.This section is effective for property tax refunds based on
32.2property taxes payable after December 31, 2015, and rent paid after December 31, 2014.

32.3    Sec. 28. Minnesota Statutes 2014, section 291.005, subdivision 1, is amended to read:
32.4    Subdivision 1. Scope. Unless the context otherwise clearly requires, the following
32.5terms used in this chapter shall have the following meanings:
32.6    (1) "Commissioner" means the commissioner of revenue or any person to whom the
32.7commissioner has delegated functions under this chapter.
32.8    (2) "Federal gross estate" means the gross estate of a decedent as required to be valued
32.9and otherwise determined for federal estate tax purposes under the Internal Revenue Code,
32.10increased by the value of any property in which the decedent had a qualifying income
32.11interest for life and for which an election was made under section 291.03, subdivision 1d,
32.12for Minnesota estate tax purposes, but was not made for federal estate tax purposes.
32.13    (3) "Internal Revenue Code" means the United States Internal Revenue Code of
32.141986, as amended through March 26, 2014.
32.15    (4) "Minnesota gross estate" means the federal gross estate of a decedent after
32.16(a) excluding therefrom any property included in the estate which has its situs outside
32.17Minnesota, and (b) including any property omitted from the federal gross estate which
32.18is includable in the estate, has its situs in Minnesota, and was not disclosed to federal
32.19taxing authorities.
32.20    (5) "Nonresident decedent" means an individual whose domicile at the time of
32.21death was not in Minnesota.
32.22    (6) "Personal representative" means the executor, administrator or other person
32.23appointed by the court to administer and dispose of the property of the decedent. If there
32.24is no executor, administrator or other person appointed, qualified, and acting within this
32.25state, then any person in actual or constructive possession of any property having a situs in
32.26this state which is included in the federal gross estate of the decedent shall be deemed
32.27to be a personal representative to the extent of the property and the Minnesota estate tax
32.28due with respect to the property.
32.29    (7) "Resident decedent" means an individual whose domicile at the time of death
32.30was in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and
32.31(d), apply to determinations of domicile under this chapter.
32.32    (8) "Situs of property" means, with respect to:
32.33    (i) real property, the state or country in which it is located;
32.34    (ii) tangible personal property, the state or country in which it was normally kept
32.35or located at the time of the decedent's death or for a gift of tangible personal property
33.1within three years of death, the state or country in which it was normally kept or located
33.2when the gift was executed;
33.3    (iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue
33.4Code, owned by a nonresident decedent and that is normally kept or located in this state
33.5because it is on loan to an organization, qualifying as exempt from taxation under section
33.6501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is
33.7deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and
33.8    (iv) intangible personal property, the state or country in which the decedent was
33.9domiciled at death or for a gift of intangible personal property within three years of death,
33.10the state or country in which the decedent was domiciled when the gift was executed.
33.11    For a nonresident decedent with an ownership interest in a pass-through entity with
33.12assets that include real or tangible personal property, situs of the real or tangible personal
33.13property, including qualified works of art, is determined as if the pass-through entity does
33.14not exist and the real or tangible personal property is personally owned by the decedent.
33.15If the pass-through entity is owned by a person or persons in addition to the decedent,
33.16ownership of the property is attributed to the decedent in proportion to the decedent's
33.17capital ownership share of the pass-through entity.
33.18(9) "Pass-through entity" includes the following:
33.19(i) an entity electing S corporation status under section 1362 of the Internal Revenue
33.20Code;
33.21(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;
33.22(iii) a single-member limited liability company or similar entity, regardless of
33.23whether it is taxed as an association or is disregarded for federal income tax purposes
33.24under Code of Federal Regulations, title 26, section 301.7701-3; or
33.25(iv) a trust to the extent the property is includible in the decedent's federal gross
33.26estate; but excludes
33.27    (v) an entity whose ownership interest securities are traded on an exchange regulated
33.28by the Securities and Exchange Commission as a national securities exchange under
33.29section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.
33.30EFFECTIVE DATE.This section is effective for estates of decedents dying after
33.31December 31, 2014.

33.32    Sec. 29. Minnesota Statutes 2014, section 291.03, is amended by adding a subdivision
33.33to read:
33.34    Subd. 12. Certain dispositions to government entities. Notwithstanding any
33.35provision of this section, no taxpayer shall be disqualified for the subtraction provided
34.1under section 291.016, subdivision 3, nor shall any taxpayer be liable for the recapture tax
34.2provided in subdivision 11, solely because the state, any local government unit, or any
34.3other entity that has the power of eminent domain acquires title or possession of the land
34.4for a public purpose within the three-year holding period.
34.5EFFECTIVE DATE.This section is effective retroactively for estates of decedents
34.6dying after June 30, 2011.

34.7    Sec. 30. REPORT OF FREE ELECTRONIC FILING FOR INDIVIDUAL
34.8INCOME TAX RETURNS.
34.9(a) By March 16, 2016, the commissioner of revenue must provide a written
34.10report to the chairs and ranking minority members of the legislative committees with
34.11jurisdiction over taxes regarding free electronic filing options for individual income tax
34.12filing, including a vendor-based solution. The report must include responses from a
34.13commissioner's request for information to consumer-based tax filing software vendors.
34.14The request for information may include, but is not limited to, seeking information on
34.15the following aspects of a free electronic filing solution:
34.16(1) costs, on a per return basis, that would be charged to the state of Minnesota to
34.17provide an electronic individual income tax return preparation, submission, and payment
34.18remittance process;
34.19(2) vendor capability to provide customer service and issue resolution to taxpayers
34.20using the software;
34.21(3) vendor capability to provide and maintain an appropriate link between the
34.22Department of Revenue and the Internal Revenue Service Modernized Electronic Filing
34.23Program;
34.24(4) vendor security capabilities to ensure that taxpayer return information is
34.25maintained and protected as required by Minnesota Statutes, chapters 13 and 270B,
34.26Internal Revenue Service Publication 1075, and any other applicable requirements;
34.27(5) products for the free filing and submitting of both Minnesota and federal returns
34.28offered to customers and the thresholds for using those products; and
34.29(6) add-on products offered to customers and their costs.
34.30(b) The report must address the possibility of implementing free electronic filing
34.31while maintaining annual preparation of the income tax sample required under Minnesota
34.32Statutes, section 270C.12, and must include a report on how other states with income tax
34.33samples manage federal data on federal income tax returns.
34.34(c) The report required under paragraph (a) must comply with Minnesota Statutes,
34.35sections 3.195 and 3.197.
35.1EFFECTIVE DATE.This section is effective the day following final enactment.

35.2    Sec. 31. VETERANS JOBS GRANT.
35.3    Subdivision 1. Establishment. The commissioner of revenue shall establish a
35.4program to award a grant to a qualified employer for hiring an unemployed veteran as
35.5a qualified employee. A qualified employer is eligible for a grant of $2,500 for each
35.6qualified employee hired.
35.7    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
35.8the meanings given.
35.9(b) "Local government" means statutory or home rule charter cities, counties, and
35.10townships; special districts as defined under Minnesota Statutes, section 6.465; any
35.11instrumentality of a statutory or home rule charter city, county, or township as defined in
35.12Minnesota Statutes, section 471.59; and any joint powers board or organization created
35.13under Minnesota Statutes, section 471.59.
35.14(c) "Nonprofit organization" means an organization that has a current federal
35.15determination letter stating that the nonprofit organization qualifies as an exempt
35.16organization under section 501(c)(3) of the Internal Revenue Code and is exempt from tax
35.17under section 501(a) of the Internal Revenue Code.
35.18(d) "Qualified veteran employee" means any individual performing services within
35.19the state of Minnesota for an employer that is a local government or nonprofit organization;
35.20the performance of which services constitute, establish, and determine the relationship
35.21between the parties as that of employer and employee; and who meets the following criteria:
35.22(1) the employee is a resident of Minnesota on the date of hire;
35.23(2) the employee is paid wages as defined in Minnesota Statutes, section 290.92,
35.24subdivision 1;
35.25(3) the employee's wages are attributable to Minnesota under Minnesota Statutes,
35.26section 290.191, subdivision 12;
35.27(4) the employee is employed for a period of at least 6 of the 12 months immediately
35.28following the date of hire; and
35.29(5) the employee is an unemployed veteran.
35.30(e) "Qualified veteran employee" does not include any employee who, in the
35.31preceding 12 months before the employee's date of hire was, and in the calendar year in
35.32which the grant is paid, is:
35.33(1) a member of the board of the nonprofit organization employer that hired the
35.34qualified employee; or
36.1(2) an elected or appointed official of the local government that hired the qualified
36.2employee.
36.3(f) "Qualified employer" means: (i) a local government or nonprofit organization
36.4that hires a qualified employee; and (ii) an employer not eligible to receive the veterans
36.5jobs credit under Minnesota Statutes, section 290.0894.
36.6(g) "Unemployed veteran" is a veteran who was unemployed on the date of hire.
36.7(h) "Veteran" has the meaning given in Minnesota Statutes, section 197.447.
36.8(i) "Date of hire" means the day that the qualified veteran employee begins
36.9performing services as an employee of the qualified employer.
36.10    Subd. 3. Application. The commissioner must develop forms and procedures for
36.11soliciting and reviewing applications for grants under this section. At a minimum:
36.12(1) a local government must include a resolution of its governing body affirming the
36.13number of qualified employees hired in the year for which the grant is applied; and
36.14(2) a nonprofit organization must include a resolution of its board affirming the
36.15number of qualified employees hired in the year for which the grant is applied.
36.16    Subd. 4. Aid payment and calculation. The commissioner of revenue shall remit
36.17grants to qualified employers. The amount of the grant equals $2,500 multiplied by the
36.18number of qualified veteran employees hired by the qualified employer. A qualified
36.19employer must not claim a grant for hiring an unemployed veteran as a qualified veteran
36.20employee if the unemployed veteran is currently employed or was previously employed by
36.21the qualified employer. The commissioner of revenue shall pay the aid to the treasurer or
36.22designated treasurer of each qualified employer by July 15 of the calendar year following
36.23the year in which the qualified veteran employee was hired.
36.24EFFECTIVE DATE.This section is effective January 1, 2016.

36.25    Sec. 32. APPROPRIATION.
36.26$175,000 in fiscal year 2016 is appropriated from the general fund to the
36.27commissioner of revenue for administering the free electronic filing study provided in
36.28this article.
36.29EFFECTIVE DATE.This section is effective the day following final enactment.

36.30    Sec. 33. APPROPRIATION.
36.31The following amounts are appropriated from the general fund to the commissioner
36.32of revenue to make grants under the veteran jobs grant program provided in this article:
36.33(1) $7,600,000 in fiscal year 2016;
37.1(2) $7,200,000 in fiscal year 2017; and
37.2(3) $6,900,000 in each fiscal year thereafter.
37.3EFFECTIVE DATE.This section is effective the day following final enactment.

37.4ARTICLE 2
37.5PROPERTY TAX

37.6    Section 1. [103C.333] COUNTY LEVY AUTHORITY.
37.7Notwithstanding any other law to the contrary, a county levying a tax under section
37.8103C.331 shall not include any taxes levied under those authorities in the levy certified
37.9under section 275.07, subdivision 1, paragraph (a). A county levying under section
37.10103C.331 shall separately certify that amount, and the auditor shall extend that levy as a
37.11special taxing district levy under sections 275.066 and 275.07, subdivision 1, paragraph (b).
37.12EFFECTIVE DATE.This section is effective for certifications made in 2015 and
37.13thereafter.

37.14    Sec. 2. Minnesota Statutes 2014, section 126C.01, subdivision 3, is amended to read:
37.15    Subd. 3. Referendum market value. "Referendum market value" means the market
37.16value of all taxable property, excluding property classified as class 2, or 4c(4), or 4c(12)
37.17under section 273.13. The portion of class 2a property consisting of the house, garage, and
37.18surrounding one acre of land of an agricultural homestead is included in referendum market
37.19value. For the purposes of this subdivision, in the case of class 1a, 1b, or 2a property,
37.20"market value" means the value prior to the exclusion under section 273.13, subdivision
37.2135
. In the case of class 4c(12) property, "market value" means the market value exceeding
37.22$300,000 for taxes payable in 2016 and thereafter. Any class of property, or any portion of
37.23a class of property, that is included in the definition of referendum market value and that has
37.24a classification rate of less than one percent under section 273.13 shall have a referendum
37.25market value equal to its market value times its classification rate, multiplied by 100.
37.26EFFECTIVE DATE.This section is effective for taxes payable in 2016 and
37.27thereafter.

37.28    Sec. 3. Minnesota Statutes 2014, section 138.053, is amended to read:
37.29138.053 COUNTY HISTORICAL SOCIETY; TAX LEVY; CITIES OR
37.30TOWNS.
38.1    The governing body of any home rule charter or statutory city or town may annually
38.2appropriate from its general fund an amount not to exceed 0.02418 percent of estimated
38.3market value, derived from ad valorem taxes on property or other revenues, to be paid to
38.4the historical society of its respective city, town, or county to be used for the promotion of
38.5historical work and to aid in defraying the expenses of carrying on the historical work in the
38.6county. No city or town may appropriate any funds for the benefit of any historical society
38.7unless the society is affiliated with and approved by the Minnesota Historical Society.
38.8EFFECTIVE DATE.This section is effective the day following final enactment.

38.9    Sec. 4. Minnesota Statutes 2014, section 273.13, subdivision 23, is amended to read:
38.10    Subd. 23. Class 2. (a) An agricultural homestead consists of class 2a agricultural
38.11land that is homesteaded, along with any class 2b rural vacant land that is contiguous to
38.12the class 2a land under the same ownership. The market value of the house and garage
38.13and immediately surrounding one acre of land has the same classification rates as class
38.141a or 1b property under subdivision 22. The value of the remaining land including
38.15improvements up to the first tier valuation limit of agricultural homestead property has a
38.16classification rate of 0.5 percent of market value. The remaining property over the first tier
38.17has a classification rate of one percent of market value. For purposes of this subdivision,
38.18the "first tier valuation limit of agricultural homestead property" and "first tier" means
38.19the limit certified under section 273.11, subdivision 23.
38.20    (b) Class 2a agricultural land consists of parcels of property, or portions thereof, that
38.21are agricultural land and buildings. Class 2a property has a classification rate of one percent
38.22of market value, unless it is part of an agricultural homestead under paragraph (a). Class
38.232a property must also include any property that would otherwise be classified as 2b, but is
38.24interspersed with class 2a property, including but not limited to sloughs, wooded wind
38.25shelters, acreage abutting ditches, ravines, rock piles, land subject to a setback requirement,
38.26and other similar land that is impractical for the assessor to value separately from the rest of
38.27the property or that is unlikely to be able to be sold separately from the rest of the property.
38.28    An assessor may classify the part of a parcel described in this subdivision that is used
38.29for agricultural purposes as class 2a and the remainder in the class appropriate to its use.
38.30    (c) Class 2b rural vacant land consists of parcels of property, or portions thereof,
38.31that are unplatted real estate, rural in character and not used for agricultural purposes,
38.32including land used for growing trees for timber, lumber, and wood and wood products,
38.33that is not improved with a structure. The presence of a minor, ancillary nonresidential
38.34structure as defined by the commissioner of revenue does not disqualify the property from
38.35classification under this paragraph. Any parcel of 20 acres or more improved with a
39.1structure that is not a minor, ancillary nonresidential structure must be split-classified, and
39.2ten acres must be assigned to the split parcel containing the structure. Class 2b property
39.3has a classification rate of one percent of market value unless it is part of an agricultural
39.4homestead under paragraph (a), or qualifies as class 2c under paragraph (d).
39.5    (d) Class 2c managed forest land consists of no less than 20 and no more than
39.61,920 acres statewide per taxpayer that is being managed under a forest management
39.7plan that meets the requirements of chapter 290C, but is not enrolled in the sustainable
39.8forest resource management incentive program. It has a classification rate of .65 percent,
39.9provided that the owner of the property must apply to the assessor in order for the
39.10property to initially qualify for the reduced rate and provide the information required
39.11by the assessor to verify that the property qualifies for the reduced rate. If the assessor
39.12receives the application and information before May 1 in an assessment year, the property
39.13qualifies beginning with that assessment year. If the assessor receives the application
39.14and information after April 30 in an assessment year, the property may not qualify until
39.15the next assessment year. The commissioner of natural resources must concur that the
39.16land is qualified. The commissioner of natural resources shall annually provide county
39.17assessors verification information on a timely basis. The presence of a minor, ancillary
39.18nonresidential structure as defined by the commissioner of revenue does not disqualify the
39.19property from classification under this paragraph.
39.20    (e) Agricultural land as used in this section means:
39.21    (1) contiguous acreage of ten acres or more, used during the preceding year for
39.22agricultural purposes; or
39.23    (2) contiguous acreage used during the preceding year for an intensive livestock or
39.24poultry confinement operation, provided that land used only for pasturing or grazing
39.25does not qualify under this clause.
39.26    "Agricultural purposes" as used in this section means the raising, cultivation, drying,
39.27or storage of agricultural products for sale, or the storage of machinery or equipment used
39.28in support of agricultural production by the same farm entity. For a property to be classified
39.29as agricultural based only on the drying or storage of agricultural products, the products
39.30being dried or stored must have been produced by the same farm entity as the entity
39.31operating the drying or storage facility. "Agricultural purposes" also includes enrollment
39.32in the Reinvest in Minnesota program under sections 103F.501 to 103F.535 or the federal
39.33Conservation Reserve Program as contained in Public Law 99-198 or a similar state or
39.34federal conservation program, excluding the federal Conservation Reserve Program, if
39.35the property was classified as agricultural (i) under this subdivision for taxes payable in
39.362003 because of its enrollment in a qualifying program and the land remains enrolled or
40.1(ii) in the year prior to its enrollment. Enrollment in the federal Conservation Reserve
40.2Program, as contained in Public Law 98-198, shall be considered an agricultural purpose
40.3under this section. Agricultural classification shall not be based upon the market value of
40.4any residential structures on the parcel or contiguous parcels under the same ownership.
40.5    "Contiguous acreage," for purposes of this paragraph, means all of, or a contiguous
40.6portion of, a tax parcel as described in section 272.193, or all of, or a contiguous portion
40.7of, a set of contiguous tax parcels under that section that are owned by the same person.
40.8    (f) Agricultural land under this section also includes:
40.9    (1) contiguous acreage that is less than ten acres in size and exclusively used in the
40.10preceding year for raising or cultivating agricultural products; or
40.11    (2) contiguous acreage that contains a residence and is less than 11 acres in size, if
40.12the contiguous acreage exclusive of the house, garage, and surrounding one acre of land
40.13was used in the preceding year for one or more of the following three uses:
40.14    (i) for an intensive grain drying or storage operation, or for intensive machinery or
40.15equipment storage activities used to support agricultural activities on other parcels of
40.16property operated by the same farming entity;
40.17    (ii) as a nursery, provided that only those acres used intensively to produce nursery
40.18stock are considered agricultural land; or
40.19    (iii) for intensive market farming; for purposes of this paragraph, "market farming"
40.20means the cultivation of one or more fruits or vegetables or production of animal or other
40.21agricultural products for sale to local markets by the farmer or an organization with which
40.22the farmer is affiliated.
40.23    "Contiguous acreage," for purposes of this paragraph, means all of a tax parcel as
40.24described in section 272.193, or all of a set of contiguous tax parcels under that section
40.25that are owned by the same person.
40.26    (g) Land shall be classified as agricultural even if all or a portion of the agricultural
40.27use of that property is the leasing to, or use by another person for agricultural purposes.
40.28    Classification under this subdivision is not determinative for qualifying under
40.29section 273.111.
40.30    (h) The property classification under this section supersedes, for property tax
40.31purposes only, any locally administered agricultural policies or land use restrictions that
40.32define minimum or maximum farm acreage.
40.33    (i) The term "agricultural products" as used in this subdivision includes production
40.34for sale of:
41.1    (1) livestock, dairy animals, dairy products, poultry and poultry products, fur-bearing
41.2animals, horticultural and nursery stock, fruit of all kinds, vegetables, forage, grains,
41.3bees, and apiary products by the owner;
41.4    (2) fish bred for sale and consumption if the fish breeding occurs on land zoned
41.5for agricultural use;
41.6    (3) the commercial boarding of horses, which may include related horse training and
41.7riding instruction, if the boarding is done on property that is also used for raising pasture
41.8to graze horses or raising or cultivating other agricultural products as defined in clause (1);
41.9    (4) property which is owned and operated by nonprofit organizations used for
41.10equestrian activities, excluding racing;
41.11    (5) game birds and waterfowl bred and raised (i) on a game farm licensed under
41.12section 97A.105, provided that the annual licensing report to the Department of Natural
41.13Resources, which must be submitted annually by March 30 to the assessor, indicates
41.14that at least 500 birds were raised or used for breeding stock on the property during the
41.15preceding year and that the owner provides a copy of the owner's most recent schedule F;
41.16or (ii) for use on a shooting preserve licensed under section 97A.115;
41.17    (6) insects primarily bred to be used as food for animals;
41.18    (7) trees, grown for sale as a crop, including short rotation woody crops, and not
41.19sold for timber, lumber, wood, or wood products; and
41.20    (8) maple syrup taken from trees grown by a person licensed by the Minnesota
41.21Department of Agriculture under chapter 28A as a food processor.
41.22    (j) If a parcel used for agricultural purposes is also used for commercial or industrial
41.23purposes, including but not limited to:
41.24    (1) wholesale and retail sales;
41.25    (2) processing of raw agricultural products or other goods;
41.26    (3) warehousing or storage of processed goods; and
41.27    (4) office facilities for the support of the activities enumerated in clauses (1), (2),
41.28and (3),
41.29the assessor shall classify the part of the parcel used for agricultural purposes as class
41.301b, 2a, or 2b, whichever is appropriate, and the remainder in the class appropriate to its
41.31use. The grading, sorting, and packaging of raw agricultural products for first sale is
41.32considered an agricultural purpose. A greenhouse or other building where horticultural
41.33or nursery products are grown that is also used for the conduct of retail sales must be
41.34classified as agricultural if it is primarily used for the growing of horticultural or nursery
41.35products from seed, cuttings, or roots and occasionally as a showroom for the retail sale of
42.1those products. Use of a greenhouse or building only for the display of already grown
42.2horticultural or nursery products does not qualify as an agricultural purpose.
42.3    (k) The assessor shall determine and list separately on the records the market value
42.4of the homestead dwelling and the one acre of land on which that dwelling is located. If
42.5any farm buildings or structures are located on this homesteaded acre of land, their market
42.6value shall not be included in this separate determination.
42.7    (l) Class 2d airport landing area consists of a landing area or public access area of a
42.8privately owned public use airport. It has a classification rate of one percent of market
42.9value. To qualify for classification under this paragraph, a privately owned public use
42.10airport must be licensed as a public airport under section 360.018. For purposes of
42.11this paragraph, "landing area" means that part of a privately owned public use airport
42.12properly cleared, regularly maintained, and made available to the public for use by aircraft
42.13and includes runways, taxiways, aprons, and sites upon which are situated landing or
42.14navigational aids. A landing area also includes land underlying both the primary surface
42.15and the approach surfaces that comply with all of the following:
42.16    (i) the land is properly cleared and regularly maintained for the primary purposes of
42.17the landing, taking off, and taxiing of aircraft; but that portion of the land that contains
42.18facilities for servicing, repair, or maintenance of aircraft is not included as a landing area;
42.19    (ii) the land is part of the airport property; and
42.20    (iii) the land is not used for commercial or residential purposes.
42.21The land contained in a landing area under this paragraph must be described and certified
42.22by the commissioner of transportation. The certification is effective until it is modified,
42.23or until the airport or landing area no longer meets the requirements of this paragraph.
42.24For purposes of this paragraph, "public access area" means property used as an aircraft
42.25parking ramp, apron, or storage hangar, or an arrival and departure building in connection
42.26with the airport.
42.27    (m) Class 2e consists of land with a commercial aggregate deposit that is not actively
42.28being mined and is not otherwise classified as class 2a or 2b, provided that the land is not
42.29located in a county that has elected to opt-out of the aggregate preservation program as
42.30provided in section 273.1115, subdivision 6. It has a classification rate of one percent of
42.31market value. To qualify for classification under this paragraph, the property must be at
42.32least ten contiguous acres in size and the owner of the property must record with the
42.33county recorder of the county in which the property is located an affidavit containing:
42.34    (1) a legal description of the property;
42.35    (2) a disclosure that the property contains a commercial aggregate deposit that is not
42.36actively being mined but is present on the entire parcel enrolled;
43.1    (3) documentation that the conditional use under the county or local zoning
43.2ordinance of this property is for mining; and
43.3    (4) documentation that a permit has been issued by the local unit of government
43.4or the mining activity is allowed under local ordinance. The disclosure must include a
43.5statement from a registered professional geologist, engineer, or soil scientist delineating
43.6the deposit and certifying that it is a commercial aggregate deposit.
43.7    For purposes of this section and section 273.1115, "commercial aggregate deposit"
43.8means a deposit that will yield crushed stone or sand and gravel that is suitable for use
43.9as a construction aggregate; and "actively mined" means the removal of top soil and
43.10overburden in preparation for excavation or excavation of a commercial deposit.
43.11    (n) When any portion of the property under this subdivision or subdivision 22 begins
43.12to be actively mined, the owner must file a supplemental affidavit within 60 days from
43.13the day any aggregate is removed stating the number of acres of the property that is
43.14actively being mined. The acres actively being mined must be (1) valued and classified
43.15under subdivision 24 in the next subsequent assessment year, and (2) removed from the
43.16aggregate resource preservation property tax program under section 273.1115, if the
43.17land was enrolled in that program. Copies of the original affidavit and all supplemental
43.18affidavits must be filed with the county assessor, the local zoning administrator, and the
43.19Department of Natural Resources, Division of Land and Minerals. A supplemental
43.20affidavit must be filed each time a subsequent portion of the property is actively mined,
43.21provided that the minimum acreage change is five acres, even if the actual mining activity
43.22constitutes less than five acres.
43.23    (o) The definitions prescribed by the commissioner under paragraphs (c) and (d) are
43.24not rules and are exempt from the rulemaking provisions of chapter 14, and the provisions
43.25in section 14.386 concerning exempt rules do not apply.
43.26EFFECTIVE DATE.This section is effective beginning with assessment year 2016.

43.27    Sec. 5. Minnesota Statutes 2014, section 273.13, subdivision 24, is amended to read:
43.28    Subd. 24. Class 3. Commercial and industrial property and utility real and personal
43.29property is class 3a.
43.30(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
43.31real property has a classification rate of 1.5 1.55 percent of the first tier of market value,
43.32and 2.0 2.1 percent of the remaining market value. In the case of contiguous parcels of
43.33property owned by the same person or entity, only the value equal to the first-tier value of
43.34the contiguous parcels qualifies for the reduced classification rate, except that contiguous
43.35parcels owned by the same person or entity shall be eligible for the first-tier value
44.1classification rate on each separate business operated by the owner of the property, provided
44.2the business is housed in a separate structure. For the purposes of this subdivision, the first
44.3tier means the first $150,000 of market value. Real property owned in fee by a utility for
44.4transmission line right-of-way shall be classified at the classification rate for the higher tier.
44.5For purposes of this subdivision, parcels are considered to be contiguous even if
44.6they are separated from each other by a road, street, waterway, or other similar intervening
44.7type of property. Connections between parcels that consist of power lines or pipelines do
44.8not cause the parcels to be contiguous. Property owners who have contiguous parcels of
44.9property that constitute separate businesses that may qualify for the first-tier classification
44.10rate shall notify the assessor by July 1, for treatment beginning in the following taxes
44.11payable year.
44.12(2) All personal property that is: (i) part of an electric generation, transmission, or
44.13distribution system; or (ii) part of a pipeline system transporting or distributing water, gas,
44.14crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad
44.15operating property has a classification rate as provided under clause (1) for the first tier
44.16of market value and the remaining market value. In the case of multiple parcels in one
44.17county that are owned by one person or entity, only one first tier amount is eligible for the
44.18reduced rate.
44.19(3) The entire market value of personal property that is: (i) tools, implements, and
44.20machinery of an electric generation, transmission, or distribution system; (ii) tools,
44.21implements, and machinery of a pipeline system transporting or distributing water, gas,
44.22crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of
44.23steam or hot or chilled water for heating or cooling buildings, has a classification rate as
44.24provided under clause (1) for the remaining market value in excess of the first tier.
44.25EFFECTIVE DATE.This section is effective for taxes payable in 2016 and
44.26thereafter.

44.27    Sec. 6. Minnesota Statutes 2014, section 273.1392, is amended to read:
44.28273.1392 PAYMENT; SCHOOL DISTRICTS.
44.29The amounts of bovine tuberculosis credit reimbursements under section 273.113;
44.30conservation tax credits under section 273.119; disaster or emergency reimbursement
44.31under sections 273.1231 to 273.1235; homestead and agricultural credits under section
44.32sections 273.1384 and 273.88; aids and credits under section 273.1398; enterprise zone
44.33property credit payments under section 469.171; and metropolitan agricultural preserve
44.34reduction under section 473H.10 for school districts, shall be certified to the Department
45.1of Education by the Department of Revenue. The amounts so certified shall be paid
45.2according to section 127A.45, subdivisions 9 and 13.
45.3EFFECTIVE DATE.This section is effective for property taxes payable in 2016
45.4and thereafter.

45.5    Sec. 7. Minnesota Statutes 2014, section 273.1393, is amended to read:
45.6273.1393 COMPUTATION OF NET PROPERTY TAXES.
45.7    Notwithstanding any other provisions to the contrary, "net" property taxes are
45.8determined by subtracting the credits in the order listed from the gross tax:
45.9    (1) disaster credit as provided in sections 273.1231 to 273.1235;
45.10    (2) powerline credit as provided in section 273.42;
45.11    (3) agricultural preserves credit as provided in section 473H.10;
45.12    (4) enterprise zone credit as provided in section 469.171;
45.13    (5) disparity reduction credit;
45.14    (6) conservation tax credit as provided in section 273.119;
45.15    (7) agricultural credit as provided in section 273.1384;
45.16    (8) taconite homestead credit as provided in section 273.135;
45.17    (9) supplemental homestead credit as provided in section 273.1391; and
45.18    (10) the bovine tuberculosis zone credit, as provided in section 273.113; and
45.19    (11) the targeted agricultural land credit, as provided in section 273.88.
45.20    The combination of all property tax credits must not exceed the gross tax amount.
45.21EFFECTIVE DATE.This section is effective for property taxes payable in 2016
45.22and thereafter.

45.23    Sec. 8. [273.88] TARGETED AGRICULTURAL LAND TAX CREDIT.
45.24    Subdivision 1. Eligibility; amount of credit. (a) Property classified in whole or
45.25in part as class 2a agricultural property under section 273.13, subdivision 23, paragraph
45.26(b), in both the prior year and the current year, is eligible for a property tax credit if the
45.27gross property taxes payable on that portion of the property classified as agricultural
45.28increase by more than eight percent over the property taxes payable in the prior year on the
45.29same property and the amount of that increase is $200 or more. The amount of the credit
45.30shall equal the amount of the increase over the greater of eight percent of the prior year's
45.31property taxes payable or $200. The maximum credit allowed under this section is $2,000.
46.1(b) For purposes of this subdivision, "gross property taxes payable" means property
46.2taxes payable excluding special assessments, penalties and interest, and assessed fees upon
46.3the property determined without regard to the credit allowed under this section.
46.4(c) Agricultural property shall not be eligible for the credit under this section if: (1)
46.5the property's boundaries have changed in the current payable year; (2) an improvement
46.6was constructed upon the property; (3) valuation increases occurred relating to an
46.7incremental value increase due to a plat law provision or based upon the termination of an
46.8exclusion under section 273.11, subdivision 14a, 14b, or 14c; or (4) in the prior payable
46.9year, the property was enrolled under section 273.111, 273.113, or 273.114, or chapter
46.10473H or 40A, and that enrollment was removed for the current payable year.
46.11(d) If the amount of the credit exceeds the total of the net tax capacity-based gross
46.12property taxes on that portion of the property eligible for a credit under subdivision (a),
46.13the credit shall be limited to the net tax capacity-based gross property taxes payable on
46.14that part of the property classified under section 273.13, subdivision 23, paragraph (b).
46.15    Subd. 2. Credit reimbursement. The county auditor shall determine the tax
46.16reductions allowed under subdivision 1 within the county for each taxes payable year and
46.17certify that amount to the commissioner of revenue as part of the abstracts of tax listings
46.18submitted by the county auditors under section 275.29. Any prior year adjustments
46.19shall also be certified on the abstracts of tax lists. The commissioner shall review the
46.20certifications for accuracy and make changes as necessary, or return the certification to the
46.21county auditor for correction. The credit under this section must be used to proportionately
46.22reduce the net tax capacity-based property tax payable to each local taxing jurisdiction
46.23as provided in section 273.1393.
46.24    Subd. 3. Payment. (a) The commissioner of revenue shall reimburse each local
46.25taxing jurisdiction, other than school districts, for the tax reductions granted under
46.26subdivision 1 in two equal installments on October 31 and December 26 of the taxes
46.27payable year for which the reductions are granted, including in each payment the prior
46.28year adjustments certified on the abstracts for that taxes payable year. The reimbursements
46.29related to tax increments shall be issued in one installment each year on December 26.
46.30(b) The commissioner of revenue shall certify the total of the tax reductions
46.31granted under subdivision 1 for each taxes payable year within each school district
46.32to the commissioner of education, and the commissioner of education shall pay the
46.33reimbursement amounts to each school district as provided in section 273.1392.
46.34    Subd. 4. Appropriation. An amount sufficient to make the payments required by
46.35this section to taxing jurisdictions other than school districts is annually appropriated
46.36from the general fund to the commissioner of revenue. An amount sufficient to make the
47.1payments required under this section for school districts is annually appropriated from the
47.2general fund to the commissioner of education.
47.3EFFECTIVE DATE.This section is effective for property taxes payable in 2016
47.4and thereafter.

47.5    Sec. 9. Minnesota Statutes 2014, section 275.025, subdivision 1, is amended to read:
47.6    Subdivision 1. Levy amount. The state general levy is levied against
47.7commercial-industrial property and seasonal residential recreational property, as defined
47.8in this section. The state general levy base amount for commercial-industrial property is
47.9$592,000,000 $767,092,100 for taxes payable in 2002 2016. The state general levy base
47.10amount for seasonal residential recreational property is $34,057,500 for taxes payable in
47.112016. For taxes payable in subsequent years, the each levy base amount is increased each
47.12year by multiplying the levy base amount for the prior year by the sum of one plus the rate
47.13of increase, if any, in the implicit price deflator for government consumption expenditures
47.14and gross investment for state and local governments prepared by the Bureau of Economic
47.15Analysts of the United States Department of Commerce for the 12-month period ending
47.16March 31 of the year prior to the year the taxes are payable. The tax under this section is
47.17not treated as a local tax rate under section 469.177 and is not the levy of a governmental
47.18unit under chapters 276A and 473F.
47.19The commissioner shall increase or decrease the preliminary or final rate for a year
47.20as necessary to account for errors and tax base changes that affected a preliminary or final
47.21rate for either of the two preceding years. Adjustments are allowed to the extent that the
47.22necessary information is available to the commissioner at the time the rates for a year must
47.23be certified, and for the following reasons:
47.24(1) an erroneous report of taxable value by a local official;
47.25(2) an erroneous calculation by the commissioner; and
47.26(3) an increase or decrease in taxable value for commercial-industrial or seasonal
47.27residential recreational property reported on the abstracts of tax lists submitted under
47.28section 275.29 that was not reported on the abstracts of assessment submitted under
47.29section 270C.89 for the same year.
47.30The commissioner may, but need not, make adjustments if the total difference in the tax
47.31levied for the year would be less than $100,000.
47.32EFFECTIVE DATE.This section is effective for taxes payable in 2016 and
47.33thereafter.

48.1    Sec. 10. Minnesota Statutes 2014, section 275.025, subdivision 3, is amended to read:
48.2    Subd. 3. Seasonal residential recreational tax capacity. For the purposes of this
48.3section, "seasonal residential recreational tax capacity" means the tax capacity of tier III of
48.4class 1c under section 273.13, subdivision 22, and all class 4c(1), 4c(3)(ii), and 4c(12)
48.5property under section 273.13, subdivision 25, except that for each noncommercial class
48.64c(12) property: (i) the first $76,000 of market value of each noncommercial class 4c(12)
48.7property has a tax capacity for this purpose equal to 40 percent of its tax capacity under
48.8section 273.13; and (ii) the market value exceeding $300,000 shall be excluded for taxes
48.9payable in 2016 and thereafter.
48.10EFFECTIVE DATE.This section is effective for taxes payable in 2016 and
48.11thereafter.

48.12    Sec. 11. Minnesota Statutes 2014, section 275.065, subdivision 1, is amended to read:
48.13    Subdivision 1. Proposed levy. (a) Notwithstanding any law or charter to the
48.14contrary, on or before September 30, each county and each, home rule charter or statutory
48.15city, and special taxing district, excluding the metropolitan council and the metropolitan
48.16mosquito control commission, shall certify to the county auditor the proposed property
48.17tax levy for taxes payable in the following year. The proposed levy certification date for
48.18the metropolitan council shall be as prescribed in sections 473.249 and 473.446. The
48.19proposed levy certification date for the metropolitan mosquito control district shall be
48.20as prescribed in section 473.711.
48.21    (b) Notwithstanding any law or charter to the contrary, on or before September 15,
48.22each town and each special taxing district shall adopt and certify to the county auditor a
48.23proposed property tax levy for taxes payable in the following year. For towns, the final
48.24certified levy shall also be considered the proposed levy.
48.25    (c) On or before September 30, each school district that has not mutually agreed
48.26with its home county to extend this date shall certify to the county auditor the proposed
48.27property tax levy for taxes payable in the following year. Each school district that has
48.28agreed with its home county to delay the certification of its proposed property tax levy
48.29must certify its proposed property tax levy for the following year no later than October
48.307. The school district shall certify the proposed levy as:
48.31    (1) a specific dollar amount by school district fund, broken down between
48.32voter-approved and non-voter-approved levies and between referendum market value
48.33and tax capacity levies; or
48.34    (2) the maximum levy limitation certified by the commissioner of education
48.35according to section 126C.48, subdivision 1.
49.1    (d) If the board of estimate and taxation or any similar board that establishes
49.2maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
49.3property tax levies for funds under its jurisdiction by charter to the county auditor by the
49.4date specified in paragraph (a), the city shall be deemed to have certified its levies for
49.5those taxing jurisdictions.
49.6    (e) For purposes of this section, "special taxing district" means a special taxing
49.7district as defined in section 275.066. Intermediate school districts that levy a tax
49.8under chapter 124 or 136D, joint powers boards established under sections 123A.44 to
49.9123A.446 , and Common School Districts No. 323, Franconia, and No. 815, Prinsburg, are
49.10also special taxing districts for purposes of this section.
49.11(f) At the meeting at which a taxing authority, other than a town, adopts its proposed
49.12tax levy under this subdivision, the taxing authority shall announce the time and place
49.13of its subsequent regularly scheduled meetings at which the budget and levy will be
49.14discussed and at which the public will be allowed to speak. The time and place of those
49.15meetings must be included in the proceedings or summary of proceedings published in the
49.16official newspaper of the taxing authority under section 123B.09, 375.12, or 412.191.
49.17EFFECTIVE DATE.This section is effective beginning with proposed levy
49.18certifications for taxes payable in 2016.

49.19    Sec. 12. Minnesota Statutes 2014, section 275.065, subdivision 3, is amended to read:
49.20    Subd. 3. Notice of proposed property taxes. (a) The county auditor shall prepare
49.21and the county treasurer shall deliver after November 10 and on or before November 24
49.22each year, by first class mail to each taxpayer at the address listed on the county's current
49.23year's assessment roll, a notice of proposed property taxes. Upon written request by
49.24the taxpayer, the treasurer may send the notice in electronic form or by electronic mail
49.25instead of on paper or by ordinary mail.
49.26    (b) The commissioner of revenue shall prescribe the form of the notice.
49.27    (c) The notice must inform taxpayers that it contains the amount of property taxes
49.28each taxing authority proposes to collect for taxes payable the following year. In the case of
49.29a town, or in the case of the state general tax, the final tax amount will be its proposed tax.
49.30The notice must clearly state for each city that has a population over 500, county, school
49.31district, regional library authority established under section 134.201, and metropolitan
49.32taxing districts as defined in paragraph (i), the time and place of a meeting for each taxing
49.33authority in which the budget and levy will be discussed and public input allowed, prior to
49.34the final budget and levy determination. The taxing authorities must provide the county
49.35auditor with the information to be included in the notice on or before the time it certifies
50.1its proposed levy under subdivision 1. The public must be allowed to speak at that
50.2meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
50.3must provide a telephone number for the taxing authority that taxpayers may call if they
50.4have questions related to the notice and an address where comments will be received by
50.5mail, except that no notice required under this section shall be interpreted as requiring the
50.6printing of a personal telephone number or address as the contact information for a taxing
50.7authority. If a taxing authority does not maintain public offices where telephone calls can
50.8be received by the authority, the authority may inform the county of the lack of a public
50.9telephone number and the county shall not list a telephone number for that taxing authority.
50.10    (d) The notice must state for each parcel:
50.11    (1) the market value of the property as determined under section 273.11, and used
50.12for computing property taxes payable in the following year and for taxes payable in the
50.13current year as each appears in the records of the county assessor on November 1 of the
50.14current year; and, in the case of residential property, whether the property is classified as
50.15homestead or nonhomestead. The notice must clearly inform taxpayers of the years to
50.16which the market values apply and that the values are final values;
50.17    (2) the items listed below, shown separately by county, city or town, and state
50.18general tax, agricultural homestead credit under section 273.1384, targeted agricultural
50.19land credit under section 273.88, voter approved school levy, other local school levy, and
50.20the sum of the special taxing districts, and as a total of all taxing authorities:
50.21    (i) the actual tax for taxes payable in the current year; and
50.22    (ii) the proposed tax amount.
50.23    If the county levy under clause (2) includes an amount for a lake improvement
50.24district as defined under sections 103B.501 to 103B.581, the amount attributable for that
50.25purpose must be separately stated from the remaining county levy amount.
50.26    In the case of a town or the state general tax, the final tax shall also be its proposed
50.27tax unless the town changes its levy at a special town meeting under section 365.52. If a
50.28school district has certified under section 126C.17, subdivision 9, that a referendum will
50.29be held in the school district at the November general election, the county auditor must
50.30note next to the school district's proposed amount that a referendum is pending and that, if
50.31approved by the voters, the tax amount may be higher than shown on the notice. In the
50.32case of the city of Minneapolis, the levy for Minneapolis Park and Recreation shall be
50.33listed separately from the remaining amount of the city's levy. In the case of the city of
50.34St. Paul, the levy for the St. Paul Library Agency must be listed separately from the
50.35remaining amount of the city's levy. In the case of Ramsey County, any amount levied
50.36under section 134.07 may be listed separately from the remaining amount of the county's
51.1levy. In the case of a parcel where tax increment or the fiscal disparities areawide tax
51.2under chapter 276A or 473F applies, the proposed tax levy on the captured value or the
51.3proposed tax levy on the tax capacity subject to the areawide tax must each be stated
51.4separately and not included in the sum of the special taxing districts; and
51.5    (3) the increase or decrease between the total taxes payable in the current year and
51.6the total proposed taxes, expressed as a percentage.
51.7    For purposes of this section, the amount of the tax on homesteads qualifying under
51.8the senior citizens' property tax deferral program under chapter 290B is the total amount
51.9of property tax before subtraction of the deferred property tax amount.
51.10    (e) The notice must clearly state that the proposed or final taxes do not include
51.11the following:
51.12    (1) special assessments;
51.13    (2) levies approved by the voters after the date the proposed taxes are certified,
51.14including bond referenda and school district levy referenda;
51.15    (3) a levy limit increase approved by the voters by the first Tuesday after the first
51.16Monday in November of the levy year as provided under section 275.73;
51.17    (4) amounts necessary to pay cleanup or other costs due to a natural disaster
51.18occurring after the date the proposed taxes are certified;
51.19    (5) amounts necessary to pay tort judgments against the taxing authority that become
51.20final after the date the proposed taxes are certified; and
51.21    (6) the contamination tax imposed on properties which received market value
51.22reductions for contamination.
51.23    (f) Except as provided in subdivision 7, failure of the county auditor to prepare or
51.24the county treasurer to deliver the notice as required in this section does not invalidate the
51.25proposed or final tax levy or the taxes payable pursuant to the tax levy.
51.26    (g) If the notice the taxpayer receives under this section lists the property as
51.27nonhomestead, and satisfactory documentation is provided to the county assessor by the
51.28applicable deadline, and the property qualifies for the homestead classification in that
51.29assessment year, the assessor shall reclassify the property to homestead for taxes payable
51.30in the following year.
51.31    (h) In the case of class 4 residential property used as a residence for lease or rental
51.32periods of 30 days or more, the taxpayer must either:
51.33    (1) mail or deliver a copy of the notice of proposed property taxes to each tenant,
51.34renter, or lessee; or
51.35    (2) post a copy of the notice in a conspicuous place on the premises of the property.
52.1    The notice must be mailed or posted by the taxpayer by November 27 or within
52.2three days of receipt of the notice, whichever is later. A taxpayer may notify the county
52.3treasurer of the address of the taxpayer, agent, caretaker, or manager of the premises to
52.4which the notice must be mailed in order to fulfill the requirements of this paragraph.
52.5    (i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
52.6districts" means the following taxing districts in the seven-county metropolitan area that
52.7levy a property tax for any of the specified purposes listed below:
52.8    (1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325,
52.9473.446 , 473.521, 473.547, or 473.834;
52.10    (2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672;
52.11and
52.12    (3) Metropolitan Mosquito Control Commission under section 473.711.
52.13    For purposes of this section, any levies made by the regional rail authorities in the
52.14county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
52.15398A shall be included with the appropriate county's levy.
52.16    (j) The governing body of a county, city, or school district may, with the consent
52.17of the county board, include supplemental information with the statement of proposed
52.18property taxes about the impact of state aid increases or decreases on property tax
52.19increases or decreases and on the level of services provided in the affected jurisdiction.
52.20This supplemental information may include information for the following year, the current
52.21year, and for as many consecutive preceding years as deemed appropriate by the governing
52.22body of the county, city, or school district. It may include only information regarding:
52.23    (1) the impact of inflation as measured by the implicit price deflator for state and
52.24local government purchases;
52.25    (2) population growth and decline;
52.26    (3) state or federal government action; and
52.27    (4) other financial factors that affect the level of property taxation and local services
52.28that the governing body of the county, city, or school district may deem appropriate to
52.29include.
52.30    The information may be presented using tables, written narrative, and graphic
52.31representations and may contain instruction toward further sources of information or
52.32opportunity for comment.
52.33EFFECTIVE DATE.This section is effective for property taxes payable in 2016
52.34and thereafter.

53.1    Sec. 13. Minnesota Statutes 2014, section 275.066, is amended to read:
53.2275.066 SPECIAL TAXING DISTRICTS; DEFINITION.
53.3    For the purposes of property taxation and property tax state aids, the term "special
53.4taxing districts" includes the following entities:
53.5    (1) watershed districts under chapter 103D;
53.6    (2) sanitary districts under sections 442A.01 to 442A.29;
53.7    (3) regional sanitary sewer districts under sections 115.61 to 115.67;
53.8    (4) regional public library districts under section 134.201;
53.9    (5) park districts under chapter 398;
53.10    (6) regional railroad authorities under chapter 398A;
53.11    (7) hospital districts under sections 447.31 to 447.38;
53.12    (8) St. Cloud Metropolitan Transit Commission under sections 458A.01 to 458A.15;
53.13    (9) Duluth Transit Authority under sections 458A.21 to 458A.37;
53.14    (10) regional development commissions under sections 462.381 to 462.398;
53.15    (11) housing and redevelopment authorities under sections 469.001 to 469.047;
53.16    (12) port authorities under sections 469.048 to 469.068;
53.17    (13) economic development authorities under sections 469.090 to 469.1081;
53.18    (14) Metropolitan Council under sections 473.123 to 473.549;
53.19    (15) Metropolitan Airports Commission under sections 473.601 to 473.679;
53.20    (16) Metropolitan Mosquito Control Commission under sections 473.701 to 473.716;
53.21    (17) Morrison County Rural Development Financing Authority under Laws 1982,
53.22chapter 437, section 1;
53.23    (18) Croft Historical Park District under Laws 1984, chapter 502, article 13, section 6;
53.24    (19) East Lake County Medical Clinic District under Laws 1989, chapter 211,
53.25sections 1 to 6;
53.26    (20) Floodwood Area Ambulance District under Laws 1993, chapter 375, article
53.275, section 39;
53.28    (21) Middle Mississippi River Watershed Management Organization under sections
53.29103B.211 and 103B.241;
53.30    (22) emergency medical services special taxing districts under section 144F.01;
53.31    (23) a county levying under the authority of section 103B.241, 103B.245, or
53.32103B.251, or 103C.331;
53.33    (24) Southern St. Louis County Special Taxing District; Chris Jensen Nursing Home
53.34under Laws 2003, First Special Session chapter 21, article 4, section 12;
53.35    (25) an airport authority created under section 360.0426; and
54.1    (26) any other political subdivision of the state of Minnesota, excluding counties,
54.2school districts, cities, and towns, that has the power to adopt and certify a property tax
54.3levy to the county auditor, as determined by the commissioner of revenue.
54.4EFFECTIVE DATE.This section is effective for assessment year 2016.

54.5    Sec. 14. Minnesota Statutes 2014, section 275.07, subdivision 1, is amended to read:
54.6    Subdivision 1. Certification of levy. (a) Except as provided under paragraph (b),
54.7the taxes voted by cities, counties, school districts, and special districts shall be certified
54.8by the proper authorities to the county auditor on or before five working days after
54.9December 20 in each year. A town must certify the levy adopted by the town board to
54.10the county auditor by September 15 each year. If the town board modifies the levy at a
54.11special town meeting after September 15, the town board must recertify its levy to the
54.12county auditor on or before five working days after December 20. If a city, town, county,
54.13school district, or special district fails to certify its levy by that date, its levy shall be the
54.14amount levied by it for the preceding year.
54.15(b)(i) The taxes voted by counties under sections 103B.241, 103B.245, and
54.16103B.251, and 103C.331 shall be separately certified by the county to the county auditor
54.17on or before five working days after December 20 in each year. The taxes certified
54.18shall not be reduced by the county auditor by the aid received under section 273.1398,
54.19subdivision 3
. If a county fails to certify its levy by that date, its levy shall be the amount
54.20levied by it for the preceding year.
54.21(ii) For purposes of the proposed property tax notice under section 275.065 and
54.22the property tax statement under section 276.04, for the first year in which the county
54.23implements the provisions of this paragraph, the county auditor shall reduce the county's
54.24levy for the preceding year to reflect any amount levied for water management purposes
54.25under clause (i) included in the county's levy.
54.26EFFECTIVE DATE.This section is effective for assessment year 2016.

54.27    Sec. 15. Minnesota Statutes 2014, section 276.04, subdivision 2, is amended to read:
54.28    Subd. 2. Contents of tax statements. (a) The treasurer shall provide for the printing
54.29of the tax statements. The commissioner of revenue shall prescribe the form of the property
54.30tax statement and its contents. The tax statement must not state or imply that property tax
54.31credits are paid by the state of Minnesota. The statement must contain a tabulated statement
54.32of the dollar amount due to each taxing authority and the amount of the state tax from the
54.33parcel of real property for which a particular tax statement is prepared. The dollar amounts
55.1attributable to the county, the state tax, the voter approved school tax, the other local school
55.2tax, the township or municipality, and the total of the metropolitan special taxing districts
55.3as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated.
55.4The amounts due all other special taxing districts, if any, may be aggregated except that
55.5any levies made by the regional rail authorities in the county of Anoka, Carver, Dakota,
55.6Hennepin, Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate
55.7line directly under the appropriate county's levy. If the county levy under this paragraph
55.8includes an amount for a lake improvement district as defined under sections 103B.501
55.9to 103B.581, the amount attributable for that purpose must be separately stated from the
55.10remaining county levy amount. In the case of Ramsey County, if the county levy under this
55.11paragraph includes an amount for public library service under section 134.07, the amount
55.12attributable for that purpose may be separated from the remaining county levy amount.
55.13The amount of the tax on homesteads qualifying under the senior citizens' property tax
55.14deferral program under chapter 290B is the total amount of property tax before subtraction
55.15of the deferred property tax amount. The amount of the tax on contamination value
55.16imposed under sections 270.91 to 270.98, if any, must also be separately stated. The dollar
55.17amounts, including the dollar amount of any special assessments, may be rounded to the
55.18nearest even whole dollar. For purposes of this section whole odd-numbered dollars may
55.19be adjusted to the next higher even-numbered dollar. The amount of market value excluded
55.20under section 273.11, subdivision 16, if any, must also be listed on the tax statement.
55.21    (b) The property tax statements for manufactured homes and sectional structures
55.22taxed as personal property shall contain the same information that is required on the
55.23tax statements for real property.
55.24    (c) Real and personal property tax statements must contain the following information
55.25in the order given in this paragraph. The information must contain the current year tax
55.26information in the right column with the corresponding information for the previous year
55.27in a column on the left:
55.28    (1) the property's estimated market value under section 273.11, subdivision 1;
55.29    (2) the property's homestead market value exclusion under section 273.13,
55.30subdivision 35;
55.31    (3) the property's taxable market value under section 272.03, subdivision 15;
55.32    (4) the property's gross tax, before credits;
55.33(5) for agricultural properties, the credit under section 273.88;
55.34    (5) (6) for homestead agricultural properties, the credit under section 273.1384;
55.35    (6) (7) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
55.36273.1391 ; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
56.1credit received under section 273.135 must be separately stated and identified as "taconite
56.2tax relief"; and
56.3    (7) (8) the net tax payable in the manner required in paragraph (a).
56.4    (d) If the county uses envelopes for mailing property tax statements and if the county
56.5agrees, a taxing district may include a notice with the property tax statement notifying
56.6taxpayers when the taxing district will begin its budget deliberations for the current
56.7year, and encouraging taxpayers to attend the hearings. If the county allows notices to
56.8be included in the envelope containing the property tax statement, and if more than
56.9one taxing district relative to a given property decides to include a notice with the tax
56.10statement, the county treasurer or auditor must coordinate the process and may combine
56.11the information on a single announcement.
56.12EFFECTIVE DATE.This section is effective for property taxes payable in 2016
56.13and thereafter.

56.14    Sec. 16. Minnesota Statutes 2014, section 276A.06, subdivision 3, is amended to read:
56.15    Subd. 3. Apportionment of levy. The county auditor shall apportion the levy of
56.16each governmental unit in the county in the manner prescribed by this subdivision. The
56.17auditor shall:
56.18(1) by August 20 of 2014 and each subsequent year, determine the preliminary
56.19areawide portion of the levy for each governmental unit by multiplying the local tax
56.20rate of the governmental unit for the preceding levy year times the distribution value set
56.21forth in subdivision 2, clause (2);
56.22(2) by September 5 of each year, adjust the preliminary areawide portion of the
56.23levy for each governmental unit by the adjustment percentage, if any, determined under
56.24subdivision 5, paragraph (b);
56.25(2) (3) by September 5 of 2014 and each subsequent year, determine the areawide
56.26portion of the levy for each governmental unit by multiplying the adjusted preliminary
56.27areawide portion of the levy for each governmental unit times a fraction, the numerator of
56.28which is the difference between the sum of the adjusted preliminary areawide levies for all
56.29governmental units in the area minus the school fund allocation and the denominator is the
56.30sum of the adjusted preliminary areawide levy for all governmental units in the area; and
56.31(3) (4) by September 5 of 2014 and each subsequent year, determine the local
56.32portion of the current year's levy by subtracting the resulting amount from clause (1) (2)
56.33from the governmental unit's current year's levy.
56.34EFFECTIVE DATE.This section is effective beginning with taxes payable in 2017.

57.1    Sec. 17. Minnesota Statutes 2014, section 276A.06, subdivision 5, is amended to read:
57.2    Subd. 5. Areawide tax rate. (a) On or before August 25, 1997, and of each
57.3subsequent year, the county auditor shall certify to the administrative auditor the
57.4preliminary portion of the levy of each governmental unit determined pursuant to
57.5subdivision 3, clause (1). The administrative auditor shall then determine the areawide
57.6tax rate sufficient to yield an amount equal to the sum of the levies from the preliminary
57.7areawide net tax capacity.
57.8(b) The areawide tax rate may not deviate from the previous year's areawide rate by
57.9more than five percentage points. If the areawide tax rate determined under paragraph
57.10(a) does not fall within that range, the auditor must determine the percentage increase or
57.11reduction to each jurisdiction's distribution levy necessary so that the areawide rate falls
57.12within the range and recalculate the areawide rate accordingly.
57.13(c) On or before September 1, the administrative auditor shall certify the areawide
57.14tax rate to each of the county auditors.
57.15EFFECTIVE DATE.This section is effective beginning with taxes payable in 2017.

57.16    Sec. 18. Minnesota Statutes 2014, section 279.01, subdivision 1, is amended to read:
57.17    Subdivision 1. Due dates; penalties. (a) Except as provided in subdivisions 3 to 5,
57.18on May 16 or 21 days after the postmark date on the envelope containing the property tax
57.19statement, whichever is later, a penalty accrues and thereafter is charged upon all unpaid
57.20taxes on real estate on the current lists in the hands of the county treasurer. The penalty is
57.21at a rate of two percent on homestead property until May 31 and four percent on June 1.
57.22The penalty on nonhomestead property is at a rate of four percent until May 31 and eight
57.23percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days after
57.24the postmark date on the envelope containing the property tax statements, whichever is
57.25later, on commercial use real property used for seasonal residential recreational purposes
57.26and classified as class 1c or 4c, and on other commercial use real property classified as
57.27class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
57.28class 3a property is earned during the months of May, June, July, and August. In order for
57.29the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
57.30or 21 days after the postmark date on the envelope containing the property tax statement,
57.31whichever is later, without penalty, the owner of the property must attach an affidavit
57.32to the payment attesting to compliance with the income provision of this subdivision.
57.33Thereafter, for both homestead and nonhomestead property, on the first day of each month
57.34beginning July 1, up to and including October 1 following, an additional penalty of one
57.35percent for each month accrues and is charged on all such unpaid taxes provided that if the
58.1due date was extended beyond May 15 as the result of any delay in mailing property tax
58.2statements no additional penalty shall accrue if the tax is paid by the extended due date. If
58.3the tax is not paid by the extended due date, then all penalties that would have accrued if
58.4the due date had been May 15 shall be charged. When the taxes against any tract or lot
58.5exceed $100, one-half thereof may be paid prior to May 16 or 21 days after the postmark
58.6date on the envelope containing the property tax statement, whichever is later; and, if so
58.7paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
58.816 following, without penalty; but, if not so paid, then a penalty of two percent accrues
58.9thereon for homestead property and a penalty of four percent on nonhomestead property.
58.10Thereafter, for homestead property, on the first day of November an additional penalty of
58.11four percent accrues and on the first day of December following, an additional penalty of
58.12two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
58.13property, on the first day of November and December following, an additional penalty of
58.14four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
58.15such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
58.16containing the property tax statement, whichever is later, the same may be paid at any time
58.17prior to October 16, with accrued penalties to the date of payment added, and thereupon
58.18no penalty attaches to the remaining one-half until October 16 following.
58.19    (b) This section applies to payment of personal property taxes assessed against
58.20improvements to leased property, except as provided by section 277.01, subdivision 3.
58.21    (c) A county may provide by resolution that in the case of a property owner that has
58.22multiple tracts or parcels with aggregate taxes exceeding $100, payments may be made in
58.23installments as provided in this subdivision.
58.24    (d) The county treasurer may accept payments of more or less than the exact amount
58.25of a tax installment due. Payments must be applied first to the oldest installment that is due
58.26but which has not been fully paid. If the accepted payment is less than the amount due,
58.27payments must be applied first to the penalty accrued for the year or the installment being
58.28paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
58.29payment required as a condition for filing an appeal under section 278.03 or any other law,
58.30nor does it affect the order of payment of delinquent taxes under section 280.39.
58.31(e) No penalty under this section shall accrue if the property tax payment is delivered
58.32by mail to the county treasurer and the envelope containing the payment is postmarked
58.33within two business days of the due date prescribed under this section.
58.34EFFECTIVE DATE.This section is effective for property taxes payable in 2016
58.35and thereafter.

59.1    Sec. 19. Minnesota Statutes 2014, section 279.37, subdivision 2, is amended to read:
59.2    Subd. 2. Installment payments. (a) The owner of any such parcel, or any person to
59.3whom the right to pay taxes has been given by statute, mortgage, or other agreement, may
59.4make and file with the county auditor of the county in which the parcel is located a written
59.5offer to pay the current taxes each year before they become delinquent, or to contest
59.6the taxes under chapter 278 and agree to confess judgment for the amount provided, as
59.7determined by the county auditor. By filing the offer, the owner waives all irregularities
59.8in connection with the tax proceedings affecting the parcel and any defense or objection
59.9which the owner may have to the proceedings, and also waives the requirements of any
59.10notice of default in the payment of any installment or interest to become due pursuant to
59.11the composite judgment to be so entered. Unless the property is subject to subdivision 1a,
59.12with the offer, the owner shall (i) tender one-tenth of the amount of the delinquent taxes,
59.13costs, penalty, and interest, and (ii) tender all current year taxes and penalty due at the
59.14time the confession of judgment is entered. In the offer, the owner shall agree to pay the
59.15balance in nine equal installments, with interest as provided in section 279.03, payable
59.16annually on installments remaining unpaid from time to time, on or before December 31
59.17of each year following the year in which judgment was confessed.
59.18(b) For property which qualifies under section 279.03, subdivision 2, paragraph (b),
59.19each year the commissioner shall set the interest rate for offers made under paragraph (a)
59.20at the greater of five percent or two percent above the prime rate charged by banks during
59.21the six-month period ending on September 30 of that year, rounded to the nearest full
59.22percent, provided that the rate must not exceed the maximum annum rate specified under
59.23section 279.03, subdivision 1a. The rate of interest becomes effective on January 1 of the
59.24immediately succeeding year. The commissioner's determination under this subdivision is
59.25not a rule subject to the Administrative Procedure Act in chapter 14, including section
59.2614.386 . If a default occurs in the payments under any confessed judgment entered under
59.27this paragraph, the taxes and penalties due are subject to the interest rate specified in
59.28section 279.03.
59.29For the purposes of this subdivision:
59.30(1) the term "prime rate charged by banks" means the average predominant prime
59.31rate quoted by commercial banks to large businesses, as determined by the Board of
59.32Governors of the Federal Reserve System; and
59.33(2) "default" means the cancellation of the confession of judgment due to
59.34nonpayment of the current year tax or failure to make any installment payment required by
59.35this confessed judgment within 60 days from the date on which payment was due.
60.1(c) The interest rate established at the time judgment is confessed is fixed for the
60.2duration of the judgment. By October 15 of each year, the commissioner of revenue must
60.3determine the rate of interest as provided under paragraph (b) and, by November 1 of each
60.4year, must certify the rate to the county auditor.
60.5(d) A qualified property owner eligible to enter into a second confession of judgment
60.6may do so at the interest rate provided in paragraph (b).
60.7(e) Repurchase agreements or contracts for repurchase for properties being
60.8repurchased under section 282.261 are not eligible to receive the interest rate under
60.9paragraph (b).
60.10(f) (e) The offer must be substantially as follows:
60.11"To the court administrator of the district court of ........... county, I, .....................,
60.12am the owner of the following described parcel of real estate located in ....................
60.13county, Minnesota:
60.14.............................. Upon that real estate there are delinquent taxes for the year ........., and
60.15prior years, as follows: (here insert year of delinquency and the total amount of delinquent
60.16taxes, costs, interest, and penalty). By signing this document I offer to confess judgment
60.17in the sum of $...... and waive all irregularities in the tax proceedings affecting these
60.18taxes and any defense or objection which I may have to them, and direct judgment to be
60.19entered for the amount stated above, minus the sum of $............, to be paid with this
60.20document, which is one-tenth or one-fifth of the amount of the taxes, costs, penalty, and
60.21interest stated above. I agree to pay the balance of the judgment in nine or four equal,
60.22annual installments, with interest as provided in section 279.03, payable annually, on the
60.23installments remaining unpaid. I agree to pay the installments and interest on or before
60.24December 31 of each year following the year in which this judgment is confessed and
60.25current taxes each year before they become delinquent, or within 30 days after the entry of
60.26final judgment in proceedings to contest the taxes under chapter 278.
60.27Dated .............., ......."
60.28EFFECTIVE DATE.This section is effective for sales and repurchases occurring
60.29after June 30, 2015.

60.30    Sec. 20. Minnesota Statutes 2014, section 282.01, subdivision 4, is amended to read:
60.31    Subd. 4. Sale: method, requirements, effects. The sale authorized under
60.32subdivision 3 must be conducted by the county auditor at the county seat of the county in
60.33which the parcels lie, except that in St. Louis and Koochiching Counties, the sale may
60.34be conducted in any county facility within the county. The sale must not be for less than
61.1the appraised value except as provided in subdivision 7a. The parcels must be sold for
61.2cash only, unless the county board of the county has adopted a resolution providing for
61.3their sale on terms, in which event the resolution controls with respect to the sale. When
61.4the sale is made on terms other than for cash only (1) a payment of at least ten percent
61.5of the purchase price must be made at the time of purchase, and the balance must be
61.6paid in no more than ten equal annual installments, or (2) the payments must be made
61.7in accordance with county board policy, but in no event may the board require more
61.8than 12 installments annually, and the contract term must not be for more than ten years.
61.9Standing timber or timber products must not be removed from these lands until an amount
61.10equal to the appraised value of all standing timber or timber products on the lands at the
61.11time of purchase has been paid by the purchaser. If a parcel of land bearing standing
61.12timber or timber products is sold at public auction for more than the appraised value, the
61.13amount bid in excess of the appraised value must be allocated between the land and the
61.14timber in proportion to their respective appraised values. In that case, standing timber or
61.15timber products must not be removed from the land until the amount of the excess bid
61.16allocated to timber or timber products has been paid in addition to the appraised value of
61.17the land. The purchaser is entitled to immediate possession, subject to the provisions of
61.18any existing valid lease made in behalf of the state.
61.19For sales occurring on or after July 1, 1982, the unpaid balance of the purchase price
61.20is subject to interest at the rate determined pursuant to section 549.09. The unpaid balance
61.21of the purchase price for sales occurring after December 31, 1990, is subject to interest
61.22at the same rate as installment payments on confession of judgment for delinquent taxes
61.23determined in section 279.03, subdivision 1a 279.37, subdivision 2, paragraph (b). The
61.24interest rate is subject to change each year on the unpaid balance in the manner provided
61.25for rate changes in section 549.09 or 279.03, subdivision 1a, whichever, is applicable.
61.26Interest on the unpaid contract balance on sales occurring before July 1, 1982, is payable
61.27at the rate applicable to the sale at the time that the sale occurred.
61.28EFFECTIVE DATE.This section is effective for sales occurring after June 30, 2015.

61.29    Sec. 21. Minnesota Statutes 2014, section 282.261, subdivision 2, is amended to read:
61.30    Subd. 2. Interest rate. The unpaid balance on any repurchase contract approved
61.31by the county board is subject to interest at the same rate as installment payments on
61.32confession of judgment for delinquent taxes determined in section 279.03, subdivision 1a
61.33
279.37, subdivision 2, paragraph (b). The interest rate is subject to change each year on the
61.34unpaid balance in the manner provided for rate changes in section 279.03, subdivision 1a.
62.1EFFECTIVE DATE.This section is effective for repurchases occurring after June
62.230, 2015.

62.3    Sec. 22. Minnesota Statutes 2014, section 290A.03, subdivision 13, is amended to read:
62.4    Subd. 13. Property taxes payable. "Property taxes payable" means the property tax
62.5exclusive of special assessments, penalties, and interest payable on a claimant's homestead
62.6after deductions made under sections 273.135, 273.1384, 273.1391, 273.42, subdivision 2,
62.7and any other state paid property tax credits in any calendar year, and after any refund
62.8claimed and allowable under section 290A.04, subdivision 2h, that is first payable in
62.9the year that the property tax is payable. In the case of a claimant who makes ground
62.10lease payments, "property taxes payable" includes the amount of the payments directly
62.11attributable to the property taxes assessed against the parcel on which the house is located.
62.12No apportionment or reduction of the "property taxes payable" shall be required for the
62.13use of a portion of the claimant's homestead for a business purpose if the claimant does not
62.14deduct any business depreciation expenses for the use of a portion of the homestead, or
62.15elects to deduct expenses under section 280A of the Internal Revenue Code for a business
62.16operated in a home, in the determination of federal adjusted gross income. For homesteads
62.17which are manufactured homes as defined in section 273.125, subdivision 8, and for
62.18homesteads which are park trailers taxed as manufactured homes under section 168.012,
62.19subdivision 9
, "property taxes payable" shall also include 17 percent of the gross rent paid
62.20in the preceding year for the site on which the homestead is located. When a homestead
62.21is owned by two or more persons as joint tenants or tenants in common, such tenants
62.22shall determine between them which tenant may claim the property taxes payable on the
62.23homestead. If they are unable to agree, the matter shall be referred to the commissioner of
62.24revenue whose decision shall be final. Property taxes are considered payable in the year
62.25prescribed by law for payment of the taxes.
62.26In the case of a claim relating to "property taxes payable," the claimant must have
62.27owned and occupied the homestead on January 2 of the year in which the tax is payable
62.28and (i) the property must have been classified as homestead property pursuant to section
62.29273.124 , on or before December 15 of the assessment year to which the "property taxes
62.30payable" relate; or (ii) the claimant must provide documentation from the local assessor
62.31that application for homestead classification has been made on or before December 15
62.32of the year in which the "property taxes payable" were payable and that the assessor has
62.33approved the application.
62.34EFFECTIVE DATE.This section is effective for refunds based on rent paid after
62.35December 31, 2013, and property taxes payable after December 31, 2014.

63.1    Sec. 23. Minnesota Statutes 2014, section 290A.04, subdivision 2h, is amended to read:
63.2    Subd. 2h. Additional refund. (a) If the gross property taxes payable on a homestead
63.3increase more than 12 ten percent over the property taxes payable in the prior year on the
63.4same property that is owned and occupied by the same owner on January 2 of both years,
63.5and the amount of that increase is $100 or more, a claimant who is a homeowner shall
63.6be allowed an additional refund equal to 60 percent of the amount of the increase over
63.7the greater of 12 ten percent of the prior year's property taxes payable or $100. This
63.8subdivision shall not apply to any increase in the gross property taxes payable attributable
63.9to improvements made to the homestead after the assessment date for the prior year's
63.10taxes. This subdivision shall not apply to any increase in the gross property taxes payable
63.11attributable to the termination of valuation exclusions under section 273.11, subdivision 16.
63.12The maximum refund allowed under this subdivision is $1,000.
63.13(b) For purposes of this subdivision "gross property taxes payable" means property
63.14taxes payable determined without regard to the refund allowed under this subdivision.
63.15(c) In addition to the other proofs required by this chapter, each claimant under this
63.16subdivision shall file with the property tax refund return a copy of the property tax statement
63.17for taxes payable in the preceding year or other documents required by the commissioner.
63.18(d) Upon request, the appropriate county official shall make available the names and
63.19addresses of the property taxpayers who may be eligible for the additional property tax
63.20refund under this section. The information shall be provided on a magnetic computer
63.21disk. The county may recover its costs by charging the person requesting the information
63.22the reasonable cost for preparing the data. The information may not be used for any
63.23purpose other than for notifying the homeowner of potential eligibility and assisting the
63.24homeowner, without charge, in preparing a refund claim.
63.25EFFECTIVE DATE.This section is effective for refund claims based on taxes
63.26payable in 2016 and thereafter.

63.27    Sec. 24. Minnesota Statutes 2014, section 290B.03, subdivision 1, is amended to read:
63.28    Subdivision 1. Program qualifications. The qualifications for the senior citizens'
63.29property tax deferral program are as follows:
63.30(1) the property must be owned and occupied as a homestead by a person 65 years of
63.31age or older. In the case of a married couple, at least one of the spouses must be at least 65
63.32years old at the time the first property tax deferral is granted, regardless of whether the
63.33property is titled in the name of one spouse or both spouses, or titled in another way that
63.34permits the property to have homestead status, and the other spouse must be at least 62
63.35years of age;
64.1(2) the total household income of the qualifying homeowners, as defined in section
64.2290A.03, subdivision 5 , for the calendar year preceding the year of the initial application
64.3may not exceed $60,000;
64.4(3) the homestead must have been owned and occupied as the homestead of at least
64.5one of the qualifying homeowners for at least 15 five years prior to the year the initial
64.6application is filed;
64.7(4) there are no state or federal tax liens or judgment liens on the homesteaded
64.8property;
64.9(5) there are no mortgages or other liens on the property that secure future advances,
64.10except for those subject to credit limits that result in compliance with clause (6); and
64.11(6) the total unpaid balances of debts secured by mortgages and other liens on the
64.12property, including unpaid and delinquent special assessments and interest and any
64.13delinquent property taxes, penalties, and interest, but not including property taxes payable
64.14during the year, does not exceed 75 percent of the assessor's estimated market value for
64.15the year.
64.16EFFECTIVE DATE.This section is effective for applications for deferral of taxes
64.17payable in 2016 and thereafter.

64.18    Sec. 25. Minnesota Statutes 2014, section 290B.04, subdivision 1, is amended to read:
64.19    Subdivision 1. Initial application. (a) A taxpayer meeting the program
64.20qualifications under section 290B.03 may apply to the commissioner of revenue for the
64.21deferral of taxes. Applications are due on or before July November 1 for deferral of any
64.22of the following year's property taxes. A taxpayer may apply in the year in which the
64.23taxpayer becomes 65 years old, provided that no deferral of property taxes will be made
64.24until the calendar year after the taxpayer becomes 65 years old. The application, which
64.25shall be prescribed by the commissioner of revenue, shall include the following items and
64.26any other information which the commissioner deems necessary:
64.27    (1) the name, address, and Social Security number of the owner or owners;
64.28    (2) a copy of the property tax statement for the current payable year for the
64.29homesteaded property;
64.30    (3) the initial year of ownership and occupancy as a homestead;
64.31    (4) the owner's household income for the previous calendar year; and
64.32    (5) information on any mortgage loans or other amounts secured by mortgages or
64.33other liens against the property, for which purpose the commissioner may require the
64.34applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
64.35balance owing on the mortgage loan provided by the mortgage holder. The commissioner
65.1may require the appropriate documents in connection with obtaining and confirming
65.2information on unpaid amounts secured by other liens.
65.3    The application must state that program participation is voluntary. The application
65.4must also state that the deferred amount depends directly on the applicant's household
65.5income, and that program participation includes authorization for the annual deferred
65.6amount, the cumulative deferral and interest that appear on each year's notice prepared by
65.7the county under subdivision 6, is public data.
65.8    The application must state that program participants may claim the property tax
65.9refund based on the full amount of property taxes eligible for the refund, including any
65.10deferred amounts. The application must also state that property tax refunds will be used to
65.11offset any deferral and interest under this program, and that any other amounts subject to
65.12revenue recapture under section 270A.03, subdivision 7, will also be used to offset any
65.13deferral and interest under this program.
65.14    (b) As part of the initial application process, the commissioner may require the
65.15applicant to obtain at the applicant's own cost and submit:
65.16    (1) if the property is registered property under chapter 508 or 508A, a copy of the
65.17original certificate of title in the possession of the county registrar of titles (sometimes
65.18referred to as "condition of register"); or
65.19    (2) if the property is abstract property, a report prepared by a licensed abstracter
65.20showing the last deed and any unsatisfied mortgages, liens, judgments, and state and
65.21federal tax lien notices which were recorded on or after the date of that last deed with
65.22respect to the property or to the applicant.
65.23    The certificate or report under clauses (1) and (2) need not include references to
65.24any documents filed or recorded more than 40 years prior to the date of the certification
65.25or report. The certification or report must be as of a date not more than 30 days prior
65.26to submission of the application.
65.27    The commissioner may also require the county recorder or county registrar of the
65.28county where the property is located to provide copies of recorded documents related to
65.29the applicant or the property, for which the recorder or registrar shall not charge a fee. The
65.30commissioner may use any information available to determine or verify eligibility under
65.31this section. The household income from the application is private data on individuals as
65.32defined in section 13.02, subdivision 12.
65.33EFFECTIVE DATE.This section is effective for applications for deferral of taxes
65.34payable in 2016 and thereafter.

65.35    Sec. 26. Minnesota Statutes 2014, section 469.194, subdivision 1, is amended to read:
66.1    Subdivision 1. Authority; aggregate limit. (a) The governing body of a
66.2municipality the city of Worthington may, by resolution, issue obligations under chapter
66.3475 to acquire land or interests in land for, and to design, engineer, and construct pipeline
66.4and other facilities and infrastructure necessary to complete the Lewis and Clark Regional
66.5Water System Project.
66.6(b) The maximum amount of bonds that may be issued under this section is limited to
66.7an aggregate a principal amount of $45,000,000 $50,000,000, plus any costs of issuance and
66.8amounts to be deposited into a debt service or reserve account. The Lewis and Clark Joint
66.9Powers Board shall allocate the limit among the municipalities designated in subdivision 2.
66.10EFFECTIVE DATE.This section is effective the day following final enactment
66.11without local approval under the provisions of Minnesota Statutes, section 645.023.

66.12    Sec. 27. Minnesota Statutes 2014, section 473H.09, is amended to read:
66.13473H.09 EARLY TERMINATION.
66.14    Subdivision 1. Public emergency. Termination of an agricultural preserve earlier
66.15than a date derived through application of section 473H.08 may be permitted only in the
66.16event of a public emergency upon petition from the owner or authority to the governor.
66.17The determination of a public emergency shall be by the governor through executive order
66.18pursuant to sections 4.035 and 12.01 to 12.46. The executive order shall identify the
66.19preserve, the reasons requiring the action and the date of termination.
66.20    Subd. 2. Death of owner. (a) Within 180 days of the death of an owner, an owner's
66.21spouse, or other qualifying person, the surviving owner may elect to terminate the
66.22agricultural preserve and the covenant allowing the land to be enrolled as an agricultural
66.23preserve by notifying the authority on a form provided by the commissioner of agriculture.
66.24Termination of a covenant under this subdivision must be executed and acknowledged in
66.25the manner required by law to execute and acknowledge a deed.
66.26(b) For purposes of this subdivision, the following definitions apply:
66.27(1) "qualifying person" includes a partner, shareholder, trustee for a trust that the
66.28decedent was the settlor or a beneficiary of, or member of an entity permitted to own
66.29agricultural land and engage in farming under section 500.24 that owned the agricultural
66.30preserve; and
66.31(2) "surviving owner" includes the executor of the estate of the decedent, trustee for a
66.32trust that the decedent was the settlor or a beneficiary of, or an entity permitted to own farm
66.33land under section 500.24 of which the decedent was a partner, shareholder, or member.
67.1(c) When an agricultural preserve is terminated under this subdivision, the property
67.2is subject to additional taxes in an amount equal to 50 percent of the taxes actually
67.3levied against the property for the current taxes payable year. The additional taxes are
67.4extended against the property on the tax list for taxes payable in the current year. The
67.5additional taxes must be distributed among the jurisdictions levying taxes on the property
67.6in proportion to the current year's taxes.
67.7EFFECTIVE DATE.This section is effective July 1, 2015.

67.8    Sec. 28. Laws 1996, chapter 471, article 3, section 51, is amended to read:
67.9    Sec. 51. RECREATION LEVY FOR SAWYER BY CARLTON COUNTY.
67.10    Subdivision 1. Levy authorized. Notwithstanding other law to the contrary, the
67.11Carlton county board of commissioners may levy in and for the unorganized township of
67.12Sawyer an amount up to $1,500 $2,000 annually for recreational purposes, beginning with
67.13taxes payable in 1997 and ending with taxes payable in 2006.
67.14    Subd. 2. Effective date. This section is effective June 1, 1996, without local
67.15approval applies to taxes payable in 2015 and thereafter, and is effective the day after the
67.16Carlton County Board of Commissioners and its chief clerical officer timely complete
67.17their compliance with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

67.18    Sec. 29. BOARD OF APPEALS AND EQUALIZATION IN-PERSON
67.19TRAINING.
67.20Notwithstanding any other law to the contrary, the commissioner of revenue, in
67.21consultation with the Minnesota Association of Townships, shall offer not less than 12
67.22in-person board of appeals and equalization course trainings in 2015 and in 2016.
67.23EFFECTIVE DATE.This section is effective June 1, 2015.

67.24    Sec. 30. OPTIONAL CANCELLATION OF TAX FORFEITURE FOR CERTAIN
67.25BUILDINGS; ST. LOUIS COUNTY.
67.26    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
67.27have the meanings given.
67.28(b) "Building PIN" means a parcel identification number that is assigned to a
67.29building and does not include the land upon which the building is located; and
67.30(c) "Land PIN" means a parcel identification number that is assigned to land upon
67.31which a building associated with a building PIN is located.
68.1    Subd. 2. Optional cancellation of tax forfeiture for buildings with building PINs.
68.2Notwithstanding any law to the contrary, if any building associated with a building PIN
68.3and located in St. Louis County forfeits or has forfeited to the state of Minnesota before,
68.4on, or after the date of enactment of this section because of nonpayment of delinquent
68.5property taxes, special assessments, penalties, interest, or costs, the county auditor of St.
68.6Louis County may, with approval from the county board and the commissioner of revenue:
68.7(1) cancel the certificate of forfeiture and set aside the forfeiture without reinstating
68.8the unpaid property taxes, special assessments, penalties, interest, or costs; and
68.9(2) combine the building PIN with its associated land PIN. When this occurs, the
68.10land PIN is the only surviving parcel identification number, and includes both the building
68.11and the land upon which the building is located.
68.12    Subd. 3. Cancellation of tax forfeiture; taxation through date of cancellation.
68.13Notwithstanding any law to the contrary, if the county auditor of St. Louis County cancels
68.14a certificate of forfeiture and sets aside a forfeiture in accordance with subdivision 2,
68.15the affected building is not subject to taxation from the date of forfeiture through the
68.16date of cancellation.
68.17    Subd. 4. Appropriation. $1,000,000 in fiscal year 2016 only is appropriated from
68.18the general fund to the commissioner of revenue for a grant to St. Louis County that shall
68.19be paid on July 1, 2015. The county may only use the grant to remove any building,
68.20upon the request of the landowner, after the county has complied with the provisions of
68.21subdivision 2.
68.22EFFECTIVE DATE.This section is effective the day following final enactment.

68.23    Sec. 31. STUDY AND REPORT OF PRODUCTION BASED VALUATION OF
68.24AGRICULTURAL LAND.
68.25(a) The commissioner of agriculture and the commissioner of revenue shall conduct
68.26a study and prepare a report on the possibility of valuing agricultural land in the state for
68.27property tax purposes based on the value of agricultural commodities produced minus the
68.28cost of agricultural production.
68.29(b) The study must, to the extent practicable under the appropriation and the time
68.30available:
68.31(1) assess the availability and accuracy of data sources necessary to determine the
68.32productivity of agricultural land, the prices of agricultural commodities, and the costs of
68.33production, for all agricultural land across the state;
69.1(2) analyze the potential impacts on other types of properties and on local
69.2governments if the state were to adopt a system valuing agricultural land based on
69.3production value, including the impacts of any changes in state aids;
69.4(3) identify types of agricultural properties that are not directly used in agricultural
69.5production, and propose approaches for valuing those properties within a production
69.6value based system;
69.7(4) assign values to agricultural land based on the best currently available data, and
69.8compare the resulting values to valuations currently used for property tax purposes; to the
69.9extent possible, analyze what that relationship would be in years other than the study year;
69.10(5) analyze the potential volatility of land values under a production value based
69.11system and propose approaches for reducing the effects of agricultural land value volatility
69.12on other types of properties;
69.13(6) analyze the potential tax shifts between different types of agricultural properties
69.14under a production value based system;
69.15(7) analyze and make recommendations for how a production value based system
69.16would be administered in terms of the role of the Department of Revenue, county and
69.17local assessors, and other agencies;
69.18(8) analyze how appeals of assessments by property owners would be handled
69.19under a production value based system;
69.20(9) analyze how a production value based system would affect the green acres and
69.21metropolitan agricultural preserves programs;
69.22(10) identify other states that have adopted production based valuation systems and
69.23describe how they have been implemented, with special emphasis upon neighboring
69.24states; and
69.25(11) identify possible alternative methods of valuing agricultural land in addition to
69.26market value and production based agricultural land valuation.
69.27(c) The commissioners must seek input from the dean of the University of
69.28Minnesota College of Food, Agricultural, and Natural Resource Sciences in the design
69.29and implementation of the study.
69.30(d) The commissioners must request the involvement and participation of
69.31stakeholders including groups representing assessors and groups representing agricultural
69.32property owners.
69.33(e) The commissioners shall report the findings of the study to the committees of the
69.34house of representatives and senate having jurisdiction over taxes by February 1, 2017,
69.35and file the report as required by Minnesota Statutes, section 3.195.
70.1(f) $200,000 in fiscal year 2016 is appropriated from the general fund to the
70.2commissioner of revenue for purposes of preparing the report under this section. This is a
70.3onetime appropriation and is not added to the base.
70.4EFFECTIVE DATE.This section is effective the day following final enactment.

70.5    Sec. 32. TOWN OF TOFTE; MUNICIPAL HOUSING.
70.6(a) Notwithstanding the provisions of Laws 1988, chapter 516, and Laws 1988,
70.7chapter 719, article 19, section 27, the town of Tofte may own and operate within its
70.8boundary up to 12 units of housing for individuals over 55 years of age or families with
70.9one member of the household that is over 55 year of age.
70.10(b) The town of Tofte shall have the powers of a city under Minnesota Statutes,
70.11chapter 462C, and the powers of an authority under Minnesota Statutes, sections 469.001
70.12to 469.047, with respect to this section. Upon the approval of the town board, the town of
70.13Tofte may levy the tax described in Minnesota Statutes, section 469.033, subdivision 6.
70.14(c) Nothing in this section shall limit the power of the Cook County/Grand Marais
70.15Joint Economic Development Authority to exercise jurisdiction within the town of Tofte.
70.16The authority to undertake new projects under this section shall expire on June 30, 2016.
70.17EFFECTIVE DATE.This section is effective the day after compliance by
70.18the governing body of the town of Tofte with Minnesota Statutes, section 645.021,
70.19subdivisions 2 and 3.

70.20    Sec. 33. APPROPRIATION.
70.21$1,130,000 in fiscal year 2016 only is appropriated from the general fund to the
70.22commissioner of revenue for a grant to Hennepin County. Of this amount, $880,000 must
70.23be used for the North Branch Library EMERGE Career and Technology Center, and
70.24$250,000 must be used for the Cedar Riverside Opportunity Center.

70.25    Sec. 34. REPEALER.
70.26(a) Minnesota Statutes 2014, section 272.02, subdivision 23, is repealed.
70.27(b) Minnesota Statutes 2014, section 275.025, subdivision 4, is repealed.
70.28(c) Minnesota Statutes 2014, section 469.194, subdivisions 2 and 4, are repealed.
70.29EFFECTIVE DATE.Paragraph (a) is effective for taxes payable in 2015.
70.30Paragraph (b) is effective for taxes payable in 2016 and thereafter. Paragraph (c) is
70.31effective the day following final enactment.

71.1ARTICLE 3
71.2LOCAL DEVELOPMENT

71.3    Section 1. Minnesota Statutes 2014, section 469.1763, subdivision 1, is amended to read:
71.4    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
71.5have the meanings given.
71.6(b) "Activities" means acquisition of property, clearing of land, site preparation, soils
71.7correction, removal of hazardous waste or pollution, installation of utilities, construction
71.8of public or private improvements, and other similar activities, but only to the extent that
71.9tax increment revenues may be spent for such purposes under other law.
71.10(c) "Third party" means an entity other than (1) the person receiving the benefit
71.11of assistance financed with tax increments, or (2) the municipality or the development
71.12authority or other person substantially under the control of the municipality.
71.13(d) "Revenues derived from tax increments paid by properties in the district" means
71.14only tax increment as defined in section 469.174, subdivision 25, clause (1), and does
71.15not include tax increment as defined in section 469.174, subdivision 25, clauses (2),
71.16(3), and (4) to (5).
71.17EFFECTIVE DATE.This section is effective the day following final enactment.

71.18    Sec. 2. Minnesota Statutes 2014, section 469.1763, subdivision 2, is amended to read:
71.19    Subd. 2. Expenditures outside district. (a) For each tax increment financing
71.20district, an amount equal to at least 75 percent of the total revenue derived from tax
71.21increments paid by properties in the district must be expended on activities in the district
71.22or to pay bonds, to the extent that the proceeds of the bonds were used to finance activities
71.23in the district or to pay, or secure payment of, debt service on credit enhanced bonds.
71.24For districts, other than redevelopment districts for which the request for certification
71.25was made after June 30, 1995, the in-district percentage for purposes of the preceding
71.26sentence is 80 percent. Not more than 25 percent of the total revenue derived from tax
71.27increments paid by properties in the district may be expended, through a development fund
71.28or otherwise, on activities outside of the district but within the defined geographic area of
71.29the project except to pay, or secure payment of, debt service on credit enhanced bonds.
71.30For districts, other than redevelopment districts for which the request for certification was
71.31made after June 30, 1995, the pooling percentage for purposes of the preceding sentence is
71.3220 percent. The revenue revenues derived from tax increments for paid by properties in
71.33the district that are expended on costs under section 469.176, subdivision 4h, paragraph
72.1(b), may be deducted first before calculating the percentages that must be expended within
72.2and without the district.
72.3    (b) In the case of a housing district, a housing project, as defined in section 469.174,
72.4subdivision 11
, is an activity in the district.
72.5    (c) All administrative expenses are for activities outside of the district, except that
72.6if the only expenses for activities outside of the district under this subdivision are for
72.7the purposes described in paragraph (d), administrative expenses will be considered as
72.8expenditures for activities in the district.
72.9    (d) The authority may elect, in the tax increment financing plan for the district,
72.10to increase by up to ten percentage points the permitted amount of expenditures for
72.11activities located outside the geographic area of the district under paragraph (a). As
72.12permitted by section 469.176, subdivision 4k, the expenditures, including the permitted
72.13expenditures under paragraph (a), need not be made within the geographic area of the
72.14project. Expenditures that meet the requirements of this paragraph are legally permitted
72.15expenditures of the district, notwithstanding section 469.176, subdivisions 4b, 4c, and 4j.
72.16To qualify for the increase under this paragraph, the expenditures must:
72.17    (1) be used exclusively to assist housing that meets the requirement for a qualified
72.18low-income building, as that term is used in section 42 of the Internal Revenue Code; and
72.19    (2) not exceed the qualified basis of the housing, as defined under section 42(c) of
72.20the Internal Revenue Code, less the amount of any credit allowed under section 42 of
72.21the Internal Revenue Code; and
72.22    (3) be used to:
72.23    (i) acquire and prepare the site of the housing;
72.24    (ii) acquire, construct, or rehabilitate the housing; or
72.25    (iii) make public improvements directly related to the housing; or
72.26(4) be used to develop housing:
72.27(i) if the market value of the housing does not exceed the lesser of:
72.28(A) 150 percent of the average market value of single-family homes in that
72.29municipality; or
72.30(B) $200,000 for municipalities located in the metropolitan area, as defined in
72.31section 473.121, or $125,000 for all other municipalities; and
72.32(ii) if the expenditures are used to pay the cost of site acquisition, relocation,
72.33demolition of existing structures, site preparation, and pollution abatement on one or
72.34more parcels, if the parcel contains a residence containing one to four family dwelling
72.35units that has been vacant for six or more months and is in foreclosure as defined in
73.1section 325N.10, subdivision 7, but without regard to whether the residence is the owner's
73.2principal residence, and only after the redemption period has expired.
73.3    (e) For a district created within a biotechnology and health sciences industry zone
73.4as defined in Minnesota Statutes 2012, section 469.330, subdivision 6, or for an existing
73.5district located within such a zone, tax increment derived from such a district may be
73.6expended outside of the district but within the zone only for expenditures required for the
73.7construction of public infrastructure necessary to support the activities of the zone, land
73.8acquisition, and other redevelopment costs as defined in section 469.176, subdivision 4j.
73.9These expenditures are considered as expenditures for activities within the district. The
73.10authority provided by this paragraph expires for expenditures made after the later of (1)
73.11December 31, 2015, or (2) the end of the five-year period beginning on the date the district
73.12was certified, provided that date was before January 1, 2016.
73.13(f) The authority under paragraph (d), clause (4), expires on December 31, 2016.
73.14Increments may continue to be expended under this authority after that date, if they are
73.15used to pay bonds or binding contracts that would qualify under subdivision 3, paragraph
73.16(a), if December 31, 2016, is considered to be the last date of the five-year period after
73.17certification under that provision.
73.18EFFECTIVE DATE.This section is effective the day following final enactment.

73.19    Sec. 3. Minnesota Statutes 2014, section 469.1763, subdivision 3, is amended to read:
73.20    Subd. 3. Five-year rule. (a) Revenues derived from tax increments paid by
73.21properties in the district are considered to have been expended on an activity within the
73.22district under subdivision 2 only if one of the following occurs:
73.23(1) before or within five years after certification of the district, the revenues are
73.24actually paid to a third party with respect to the activity;
73.25(2) bonds, the proceeds of which must be used to finance the activity, are issued and
73.26sold to a third party before or within five years after certification, the revenues are spent
73.27to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
73.28reasonably expected to be spent before the end of the later of (i) the five-year period, or
73.29(ii) a reasonable temporary period within the meaning of the use of that term under section
73.30148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
73.31or replacement fund;
73.32(3) binding contracts with a third party are entered into for performance of the
73.33activity before or within five years after certification of the district and the revenues are
73.34spent under the contractual obligation;
74.1(4) costs with respect to the activity are paid before or within five years after
74.2certification of the district and the revenues are spent to reimburse a party for payment
74.3of the costs, including interest on unreimbursed costs; or
74.4(5) expenditures are made for housing purposes as permitted by subdivision 2,
74.5paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
74.6by subdivision 2, paragraph (e).
74.7(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
74.8the original refunded bonds meet the requirements of paragraph (a), clause (2).
74.9(c) For a redevelopment district or a renewal and renovation district certified after
74.10June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph (a)
74.11are extended to ten years after certification of the district. For a redevelopment district
74.12certified after April 20, 2009, and before June 30, 2012, the five-year periods described in
74.13paragraph (a) are extended to eight years after certification of the district. This extension is
74.14provided primarily to accommodate delays in development activities due to unanticipated
74.15economic circumstances.
74.16EFFECTIVE DATE.This section is effective the day following final enactment.

74.17    Sec. 4. Minnesota Statutes 2014, section 469.178, subdivision 7, is amended to read:
74.18    Subd. 7. Interfund loans. (a) The authority or municipality may advance or loan
74.19money to finance expenditures under section 469.176, subdivision 4, from its general fund
74.20or any other fund under which it has legal authority to do so.
74.21    (b) Not later than 60 days after money is transferred, advanced, or spent, whichever
74.22is earliest, the loan or advance must be authorized, by resolution of the governing body or
74.23of the authority, whichever has jurisdiction over the fund from which the advance or loan
74.24is authorized, before money is transferred, advanced, or spent, whichever is earliest.
74.25    (c) The resolution may generally grant to the municipality or the authority the power
74.26to make interfund loans under one or more tax increment financing plans or for one or
74.27more districts. The resolution may be adopted before or after the adoption of the tax
74.28increment financing plan or the creation of the tax increment financing district from which
74.29the advance or loan is to be repaid.
74.30    (d) The terms and conditions for repayment of the loan must be provided in
74.31writing and. The written terms and conditions may be in any form, but must include, at
74.32a minimum, the principal amount, the interest rate, and maximum term. Written terms
74.33may be modified or amended in writing by the municipality or the authority before the
74.34latest decertification of the tax increment financing district from which the interfund loan
74.35will be paid. The maximum rate of interest permitted to be charged is limited to the
75.1greater of the rates specified under section 270C.40 or 549.09 as of the date the loan or
75.2advance is authorized, unless the written agreement states that the maximum interest rate
75.3will fluctuate as the interest rates specified under section 270C.40 or 549.09 are from time
75.4to time adjusted. Loans or advances may be structured as draw-down or line-of-credit
75.5obligations of the lending fund.
75.6    (e) The authority shall report in the annual report submitted pursuant to section
75.7469.175, subdivision 6:
75.8    (1) the amount of any interfund loan or advance made in a calendar year; and
75.9    (2) any amendment of an interfund loan or advance made in a calendar year.
75.10EFFECTIVE DATE.This section is effective the day following final enactment
75.11and applies to all districts, regardless of when the request for certification was made.

75.12    Sec. 5. CITY OF COON RAPIDS; TAX INCREMENT FINANCING.
75.13Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision
75.141b, or any other law to the contrary, the city of Coon Rapids may collect tax increment
75.15from District 6-1 Port Riverwalk through December 31, 2038.
75.16EFFECTIVE DATE.This section is effective upon compliance by the governing
75.17bodies of the city of Coon Rapids, Anoka County, and Independent School District No.
75.1811 with the requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and
75.19645.021, subdivision 3.

75.20    Sec. 6. CITY OF COTTAGE GROVE; TAX INCREMENT FINANCING.
75.21The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that
75.22activities must be undertaken within a five-year period from the date of certification of a
75.23tax increment financing district, are considered to be met for Tax Increment Financing
75.24District No. 1-12 (Gateway North), administered by the Cottage Grove Economic
75.25Development Authority, if the activities are undertaken prior to January 1, 2017.
75.26EFFECTIVE DATE.This section is effective upon compliance by the chief clerical
75.27officer of the governing body of the city of Cottage Grove with the requirements of
75.28Minnesota Statutes, section 645.021, subdivisions 2 and 3.

75.29    Sec. 7. CITY OF RICHFIELD; EXTENSION OF DISTRICT.
75.30Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, or any other
75.31law to the contrary, the city of Richfield and the Housing and Redevelopment Authority in
75.32and for the city of Richfield may elect to extend the duration limit of the redevelopment
76.1tax increment financing district known as the Cedar Avenue Tax Increment Financing
76.2District established by Laws 2005, chapter 152, article 2, section 25, by ten years.
76.3EFFECTIVE DATE.This section is effective upon compliance by the city
76.4of Richfield, Hennepin County, and Independent School District No. 280 with the
76.5requirements of Minnesota Statutes, sections 469.1782, subdivision 2, and 645.021,
76.6subdivisions 2 and 3.

76.7    Sec. 8. CITY OF ST. PAUL; TIF AUTHORITY.
76.8    Subdivision 1. Establishment. Under the special rules in subdivision 2, the
76.9housing and redevelopment authority of the city of St. Paul may establish one or
76.10more redevelopment tax increment financing districts located wholly within the area
76.11of the former Ford Motor Company plant properties, consisting of two tax parcels,
76.1217-28-23-31-0001 and 17-28-23-13-0002, and adjacent roads and rights-of-way.
76.13    Subd. 2. Special rules. (a) If the authority establishes any tax increment district
76.14under this section, the following special rules apply:
76.15(1) the districts are deemed to meet all the requirements of Minnesota Statutes,
76.16section 469.174, subdivision 10;
76.17(2) any expenditure for, or payment of bonds issued to finance, activities within the
76.18area described in subdivision 1 is not subject to the restrictions under Minnesota Statutes,
76.19section 469.1763, for any district established under this section, except that expenditures
76.20for activities outside the area defined in subdivision 1 are subject to the percentage limits
76.21under Minnesota Statutes, section 469.1763, subdivision 2, paragraph (a); and
76.22(3) Minnesota Statutes, section 469.176, subdivision 4j, does not apply.
76.23(b) Except as otherwise provided in paragraph (a), the provisions of Minnesota
76.24Statutes, sections 469.174 to 469.1794, apply to districts established under this section.
76.25    Subd. 3. Expiration. The authority to request certification of districts under this
76.26section expires June 30, 2020, unless the city has requested certification of at least one
76.27district by that date. The authority to request certification of any district under this section
76.28expires June 30, 2030.
76.29EFFECTIVE DATE.This section is effective upon approval by the governing
76.30body of the city of St. Paul and compliance with the requirements of Minnesota Statutes,
76.31section 645.021.

77.1ARTICLE 4
77.2SALES AND USE TAXES

77.3    Section 1. Minnesota Statutes 2014, section 289A.20, subdivision 4, is amended to read:
77.4    Subd. 4. Sales and use tax. (a) The taxes imposed by chapter 297A are due and
77.5payable to the commissioner monthly on or before the 20th day of the month following the
77.6month in which the taxable event occurred, or following another reporting period as the
77.7commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
77.8(f) or (g), except that use taxes due on an annual use tax return as provided under section
77.9289A.11, subdivision 1 , are payable by April 15 following the close of the calendar year.
77.10    (b) A vendor having a liability of $250,000 or more during a fiscal year ending June
77.1130 must remit the June liability for the next year in the following manner:
77.12    (1) Two business days before June 30 of the year, the vendor must remit 81.4 80
77.13percent of the estimated June liability to the commissioner.
77.14    (2) On or before August 20 of the year, the vendor must pay any additional amount
77.15of tax not remitted in June.
77.16    (c) A vendor having a liability of:
77.17    (1) $10,000 or more, but less than $250,000 during a fiscal year ending June 30,
77.182013, and fiscal years thereafter, must remit by electronic means all liabilities on returns
77.19due for periods beginning in all subsequent calendar years on or before the 20th day of
77.20the month following the month in which the taxable event occurred, or on or before the
77.2120th day of the month following the month in which the sale is reported under section
77.22289A.18, subdivision 4 ; or
77.23(2) $250,000 or more, during a fiscal year ending June 30, 2013, and fiscal years
77.24thereafter, must remit by electronic means all liabilities in the manner provided in
77.25paragraph (a) on returns due for periods beginning in the subsequent calendar year, except
77.26for 81.4 80 percent of the estimated June liability, which is due two business days before
77.27June 30. The remaining amount of the June liability is due on August 20.
77.28(d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
77.29religious beliefs from paying electronically shall be allowed to remit the payment by mail.
77.30The filer must notify the commissioner of revenue of the intent to pay by mail before
77.31doing so on a form prescribed by the commissioner. No extra fee may be charged to a
77.32person making payment by mail under this paragraph. The payment must be postmarked
77.33at least two business days before the due date for making the payment in order to be
77.34considered paid on a timely basis.
78.1EFFECTIVE DATE.This section is effective for taxes due and payable after
78.2July 1, 2015.

78.3    Sec. 2. Minnesota Statutes 2014, section 289A.60, subdivision 15, is amended to read:
78.4    Subd. 15. Accelerated payment of June sales tax liability; penalty for
78.5underpayment. For payments made after December 31, 2013, if a vendor is required by
78.6law to submit an estimation of June sales tax liabilities and 81.4 80 percent payment by a
78.7certain date, the vendor shall pay a penalty equal to ten percent of the amount of actual
78.8June liability required to be paid in June less the amount remitted in June. The penalty
78.9must not be imposed, however, if the amount remitted in June equals the lesser of 81.4
78.1080 percent of the preceding May's liability or 81.4 80 percent of the average monthly
78.11liability for the previous calendar year.
78.12EFFECTIVE DATE.This section is effective for taxes due and payable after
78.13July 1, 2015.

78.14    Sec. 3. Minnesota Statutes 2014, section 297A.62, subdivision 3, is amended to read:
78.15    Subd. 3. Manufactured housing and park trailers; modular housing. (a) For
78.16retail sales of manufactured homes as defined in section 327.31, subdivision 6, for
78.17residential uses, the sales tax under subdivisions 1 and 1a is imposed on 65 percent of the
78.18dealer's cost of the manufactured home. For retail sales of new or used park trailers, as
78.19defined in section 168.002, subdivision 23, the sales tax under subdivisions 1 and 1a is
78.20imposed on 65 percent of the sales price of the park trailer.
78.21(b) For retail sales of a modular home, as defined in section 297A.668, subdivision
78.228, paragraph (b), for residential use, the sales tax under subdivisions 1 and 1a is imposed
78.23on 65 percent of the dealer's cost of the modular home.
78.24EFFECTIVE DATE.This section is effective for sales and purchases made after
78.25June 30, 2015.

78.26    Sec. 4. Minnesota Statutes 2014, section 297A.67, subdivision 7a, is amended to read:
78.27    Subd. 7a. Accessories and supplies. Accessories and supplies required for the
78.28effective use of durable medical equipment for home use only or purchased in a transaction
78.29covered by Medicare or, Medicaid, or other health insurance plan, that are not already
78.30exempt under subdivision 7, are exempt. Accessories and supplies for the effective use
78.31of a prosthetic device, that are not already exempt under subdivision 7, are exempt.
78.32For purposes of this subdivision "durable medical equipment," "prosthetic device,"
79.1"Medicare," and "Medicaid" have the definitions given in subdivision 7., and "other health
79.2insurance plan" means a health plan defined in section 62A.011, subdivision 3, or 62V.02,
79.3subdivision 4, or a qualified health plan defined in section 62A.011, subdivision 7.
79.4EFFECTIVE DATE.This section is effective retroactively for sales and purchases
79.5made after April 1, 2009. Any vendor who paid sales or use tax on accessories and
79.6supplies purchased in a transaction covered by a health insurance plan defined in
79.7Minnesota Statutes, section 62A.011, subdivision 3, or 62V.02, subdivision 4, or a
79.8qualified health plan defined in Minnesota Statutes, section 62A.011, subdivision 7, that
79.9are not already exempt under Minnesota Statutes, section 297A.67, subdivision 7, and
79.10that were sold after April 1, 2009, and before July 1, 2015, may apply for a refund of the
79.11sales or use tax paid in the manner provided in Minnesota Statutes, section 289A.50,
79.12subdivision 1, but only if the vendor did not collect and remit sales tax on the accessories
79.13and supplies for which a refund is claimed. Interest on the refund shall be paid at the rate
79.14in Minnesota Statutes, section 270C.405, from 90 days after the refund claim is filed with
79.15the commissioner of revenue. The amount to make the refunds is annually appropriated
79.16to the commissioner of revenue from the general fund. Refunds must not be filed until
79.17after June 30, 2015. Notwithstanding limitations on claims for refunds under Minnesota
79.18Statutes, section 289A.40, claims may be filed with the commissioner until June 30, 2016.

79.19    Sec. 5. Minnesota Statutes 2014, section 297A.67, is amended by adding a subdivision
79.20to read:
79.21    Subd. 34. Precious metal bullion. (a) Sales of precious metal bullion by registered
79.22dealers under section 80G.02 that are required to be reported under Internal Revenue
79.23Service revenue procedure 92-103 are exempt. For purposes of this subdivision, "precious
79.24metal bullion" means bullion that would qualify for the exception for certain coins and
79.25bullion under section 408(m)(3) of the Internal Revenue Code of 1986 as amended
79.26through December 31, 2014. "Precious metal bullion" does not include jewelry, certified
79.27or graded coins, numismatic coins, or works of art.
79.28(b) The intent of this subdivision is to afford the sale of precious metal bullion
79.29similar treatment as afforded the sale of stock, bullion exchange traded funds, bonds,
79.30and other investment instruments.
79.31EFFECTIVE DATE.This section is effective for sales and purchases made after
79.32June 30, 2015.

80.1    Sec. 6. Minnesota Statutes 2014, section 297A.67, is amended by adding a subdivision
80.2to read:
80.3    Subd. 35. Car seats. The sale of an infant or child car seat, including a booster seat,
80.4that meets the requirements of a child passenger restraint system under motor vehicle
80.5safety standards established by the United States Department of Transportation is exempt.
80.6EFFECTIVE DATE.This section is effective for sales and purchases made after
80.7June 30, 2015.

80.8    Sec. 7. Minnesota Statutes 2014, section 297A.68, subdivision 5, is amended to read:
80.9    Subd. 5. Capital equipment. (a) Capital equipment is exempt. The tax must be
80.10imposed and collected as if the rate under section 297A.62, subdivision 1, applied, and
80.11then refunded in the manner provided in section 297A.75.
80.12"Capital equipment" means machinery and equipment purchased or leased, and used
80.13in this state by the purchaser or lessee primarily for manufacturing, fabricating, mining,
80.14or refining tangible personal property to be sold ultimately at retail if the machinery and
80.15equipment are essential to the integrated production process of manufacturing, fabricating,
80.16mining, or refining. Capital equipment also includes machinery and equipment
80.17used primarily to electronically transmit results retrieved by a customer of an online
80.18computerized data retrieval system.
80.19(b) Capital equipment includes, but is not limited to:
80.20(1) machinery and equipment used to operate, control, or regulate the production
80.21equipment;
80.22(2) machinery and equipment used for research and development, design, quality
80.23control, and testing activities;
80.24(3) environmental control devices that are used to maintain conditions such as
80.25temperature, humidity, light, or air pressure when those conditions are essential to and are
80.26part of the production process;
80.27(4) materials and supplies used to construct and install machinery or equipment;
80.28(5) repair and replacement parts, including accessories, whether purchased as spare
80.29parts, repair parts, or as upgrades or modifications to machinery or equipment;
80.30(6) materials used for foundations that support machinery or equipment;
80.31(7) materials used to construct and install special purpose buildings used in the
80.32production process;
80.33(8) ready-mixed concrete equipment in which the ready-mixed concrete is mixed
80.34as part of the delivery process regardless if mounted on a chassis, repair parts for
80.35ready-mixed concrete trucks, and leases of ready-mixed concrete trucks; and
81.1(9) machinery or equipment used for research, development, design, or production
81.2of computer software.
81.3(c) Capital equipment does not include the following:
81.4(1) motor vehicles taxed under chapter 297B;
81.5(2) machinery or equipment used to receive or store raw materials;
81.6(3) building materials, except for materials included in paragraph (b), clauses (6)
81.7and (7);
81.8(4) machinery or equipment used for nonproduction purposes, including, but not
81.9limited to, the following: plant security, fire prevention, first aid, and hospital stations;
81.10support operations or administration; pollution control; and plant cleaning, disposal of
81.11scrap and waste, plant communications, space heating, cooling, lighting, or safety;
81.12(5) farm machinery and aquaculture production equipment as defined by section
81.13297A.61 , subdivisions 12 and 13;
81.14(6) machinery or equipment purchased and installed by a contractor as part of an
81.15improvement to real property;
81.16(7) machinery and equipment used by restaurants in the furnishing, preparing, or
81.17serving of prepared foods as defined in section 297A.61, subdivision 31;
81.18(8) machinery and equipment used to furnish the services listed in section 297A.61,
81.19subdivision 3
, paragraph (g), clause (6), items (i) to (vi) and (viii);
81.20(9) machinery or equipment used in the transportation, transmission, or distribution
81.21of petroleum, liquefied gas, natural gas, water, or steam, in, by, or through pipes, lines,
81.22tanks, mains, or other means of transporting those products. This clause does not apply to
81.23machinery or equipment used to blend petroleum or biodiesel fuel as defined in section
81.24239.77 ; or
81.25(10) any other item that is not essential to the integrated process of manufacturing,
81.26fabricating, mining, or refining.
81.27(d) For purposes of this subdivision:
81.28(1) "Equipment" means independent devices or tools separate from machinery but
81.29essential to an integrated production process, including computers and computer software,
81.30used in operating, controlling, or regulating machinery and equipment; and any subunit or
81.31assembly comprising a component of any machinery or accessory or attachment parts of
81.32machinery, such as tools, dies, jigs, patterns, and molds.
81.33(2) "Fabricating" means to make, build, create, produce, or assemble components or
81.34property to work in a new or different manner.
81.35(3) "Integrated production process" means a process or series of operations through
81.36which tangible personal property is manufactured, fabricated, mined, or refined. For
82.1purposes of this clause, (i) manufacturing begins with the removal of raw materials
82.2from inventory and ends when the last process prior to loading for shipment has been
82.3completed; (ii) fabricating begins with the removal from storage or inventory of the
82.4property to be assembled, processed, altered, or modified and ends with the creation
82.5or production of the new or changed product; (iii) mining begins with the removal of
82.6overburden from the site of the ores, minerals, stone, peat deposit, or surface materials and
82.7ends when the last process before stockpiling is completed; and (iv) refining begins with
82.8the removal from inventory or storage of a natural resource and ends with the conversion
82.9of the item to its completed form.
82.10(4) "Machinery" means mechanical, electronic, or electrical devices, including
82.11computers and computer software, that are purchased or constructed to be used for the
82.12activities set forth in paragraph (a), beginning with the removal of raw materials from
82.13inventory through completion of the product, including packaging of the product.
82.14(5) "Machinery and equipment used for pollution control" means machinery and
82.15equipment used solely to eliminate, prevent, or reduce pollution resulting from an activity
82.16described in paragraph (a).
82.17(6) "Manufacturing" means an operation or series of operations where raw materials
82.18are changed in form, composition, or condition by machinery and equipment and which
82.19results in the production of a new article of tangible personal property. For purposes of
82.20this subdivision, "manufacturing" includes the generation of electricity or steam to be
82.21sold at retail.
82.22(7) "Mining" means the extraction of minerals, ores, stone, or peat.
82.23(8) "Online data retrieval system" means a system whose cumulation of information
82.24is equally available and accessible to all its customers.
82.25(9) "Primarily" means machinery and equipment used 50 percent or more of the time
82.26in an activity described in paragraph (a).
82.27(10) "Refining" means the process of converting a natural resource to an intermediate
82.28or finished product, including the treatment of water to be sold at retail.
82.29(11) This subdivision does not apply to telecommunications equipment as provided
82.30in subdivision 35a, and does not apply to wire, cable, fiber, or poles, or conduit for
82.31telecommunications services.
82.32EFFECTIVE DATE.This section is effective for sales and purchases made after
82.33June 30, 2015.

82.34    Sec. 8. Minnesota Statutes 2014, section 297A.68, subdivision 35a, is amended to read:
83.1    Subd. 35a. Telecommunications or pay television services machinery and
83.2equipment. (a) Telecommunications or pay television services machinery and equipment
83.3purchased or leased for use directly by a telecommunications or pay television services
83.4provider primarily in the provision of telecommunications or pay television services
83.5that are ultimately to be sold at retail are exempt, regardless of whether purchased by
83.6the owner, a contractor, or a subcontractor.
83.7(b) For purposes of this subdivision, "telecommunications or pay television
83.8machinery and equipment" includes, but is not limited to:
83.9(1) machinery, equipment, and fixtures utilized in receiving, initiating,
83.10amplifying, processing, transmitting, retransmitting, recording, switching, or monitoring
83.11telecommunications or pay television services, such as computers, transformers, amplifiers,
83.12routers, bridges, repeaters, multiplexers, and other items performing comparable functions;
83.13(2) machinery, equipment, and fixtures used in the transportation of
83.14telecommunications or pay television services, such as radio transmitters and receivers,
83.15satellite equipment, microwave equipment, and other transporting media, but not wire,
83.16cable, including fiber, poles, or and conduit, but not including wire, cable, or poles;
83.17(3) ancillary machinery, equipment, and fixtures that regulate, control, protect, or
83.18enable the machinery in clauses (1) and (2) to accomplish its intended function, such as
83.19auxiliary power supply, test equipment, towers, heating, ventilating, and air conditioning
83.20equipment necessary to the operation of the telecommunications or pay television
83.21equipment; and software necessary to the operation of the telecommunications or pay
83.22television equipment; and
83.23(4) repair and replacement parts, including accessories, whether purchased as spare
83.24parts, repair parts, or as upgrades or modifications to qualified machinery or equipment.
83.25EFFECTIVE DATE.This section is effective for sales and purchases made after
83.26June 30, 2015.

83.27    Sec. 9. Minnesota Statutes 2014, section 297A.70, subdivision 4, is amended to read:
83.28    Subd. 4. Sales to nonprofit groups. (a) All sales, except those listed in paragraph
83.29(b) (c), to the following "nonprofit organizations" are exempt if the item purchased is
83.30used in the performance of their exempt function. The exemptions under this paragraph
83.31do not apply to:
83.32(1) a corporation, society, association, foundation, or institution organized and
83.33operated exclusively for charitable, religious, or educational purposes if the item
83.34purchased is used in the performance of charitable, religious, or educational functions;
83.35and veterans groups under subdivision 5;
84.1(2) any senior citizen group or association of groups that: hospitals, outpatient
84.2surgical centers, and critical access dental providers under subdivision 7, paragraphs (a)
84.3to (c), (e), and (f);
84.4(i) in general limits membership to persons who are either age 55 or older, or
84.5physically disabled;
84.6(ii) is organized and operated exclusively for pleasure, recreation, and other
84.7nonprofit purposes, not including housing, no part of the net earnings of which inures to
84.8the benefit of any private shareholders; and
84.9(iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
84.10(3) products and services under subdivision 7, paragraph (d);
84.11(4) nursing homes and boarding care homes under subdivision 18; or
84.12(5) a nonprofit organization authorized under section 465.717.
84.13    (b) For purposes of this subdivision, charitable purpose includes the maintenance of
84.14a cemetery owned by a religious organization. "nonprofit organization" means:
84.15    (1) an organization that has a current federal determination letter stating that the
84.16nonprofit organization qualifies as an exempt organization under section 501(c)(3) of the
84.17Internal Revenue Code and has obtained a Minnesota tax identification number from the
84.18Department of Revenue under section 297A.83; or
84.19    (2) any senior citizen group or association of groups that:
84.20    (i) in general, limits membership to persons who are either age 55 or older or
84.21physically disabled;
84.22    (ii) is organized and operated exclusively for pleasure, recreation, and other
84.23nonprofit purposes, not including housing, no part of the net earnings of which inures to
84.24the benefit of any private shareholders; and
84.25    (iii) is an exempt organization under section 501(c) of the Internal Revenue Code.
84.26(b) (c) This exemption does not apply to the following sales:
84.27(1) building, construction, or reconstruction materials purchased by a contractor
84.28or a subcontractor as a part of a lump-sum contract or similar type of contract with a
84.29guaranteed maximum price covering both labor and materials for use in the construction,
84.30alteration, or repair of a building or facility;
84.31(2) construction materials purchased by tax-exempt entities or their contractors to
84.32be used in constructing buildings or facilities that will not be used principally by the
84.33tax-exempt entities;
84.34(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause
84.35(2), and prepared food, candy, soft drinks, and alcoholic beverages as defined in section
85.1297A.67, subdivision 2 , except wine purchased by an established religious organization
85.2for sacramental purposes or as allowed under subdivision 9a; and
85.3(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except
85.4as provided in paragraph (c) (d).
85.5(c) (d) This exemption applies to the leasing of a motor vehicle as defined in section
85.6297B.01, subdivision 11 , only if the vehicle is:
85.7(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a
85.8passenger automobile, as defined in section 168.002, if the automobile is designed and
85.9used for carrying more than nine persons including the driver; and
85.10(2) intended to be used primarily to transport tangible personal property or
85.11individuals, other than employees, to whom the organization provides service in
85.12performing its charitable, religious, or educational purpose.
85.13(d) (e) A limited liability company also qualifies for exemption under this
85.14subdivision if (1) it consists of a sole member that would qualify for the exemption, and
85.15(2) the items purchased qualify for the exemption.
85.16EFFECTIVE DATE.This section is effective for sales and purchases made after
85.17June 30, 2015.

85.18    Sec. 10. Minnesota Statutes 2014, section 297A.70, subdivision 14, is amended to read:
85.19    Subd. 14. Fund-raising events sponsored by nonprofit groups. (a) Sales of
85.20tangible personal property or services at, and admission charges for fund-raising events
85.21sponsored by, a nonprofit organization are exempt if:
85.22(1) all gross receipts are recorded as such, in accordance with generally accepted
85.23accounting practices, on the books of the nonprofit organization; and
85.24(2) the entire proceeds, less the necessary expenses for the event, will be used solely
85.25and exclusively for charitable, religious, or educational purposes. Exempt sales include
85.26the sale of prepared food, candy, and soft drinks at the fund-raising event.
85.27(b) This exemption is limited in the following manner:
85.28(1) it does not apply to admission charges for events involving bingo or other
85.29gambling activities or to charges for use of amusement devices involving bingo or other
85.30gambling activities;
85.31(2) all gross receipts are taxable if the profits are not used solely and exclusively for
85.32charitable, religious, or educational purposes;
85.33(3) it does not apply unless the organization keeps a separate accounting record,
85.34including receipts and disbursements from each fund-raising event that documents all
85.35deductions from gross receipts with receipts and other records;
86.1(4) it does not apply to any sale made by or in the name of a nonprofit corporation as
86.2the active or passive agent of a person that is not a nonprofit corporation;
86.3(5) all gross receipts are taxable if fund-raising events exceed 24 days per year;
86.4(6) it does not apply to fund-raising events conducted on premises leased for more
86.5than five ten days but less than 30 days; and
86.6(7) it does not apply if the risk of the event is not borne by the nonprofit organization
86.7and the benefit to the nonprofit organization is less than the total amount of the state and
86.8local tax revenues forgone by this exemption.
86.9(c) For purposes of this subdivision, a "nonprofit organization" means any unit of
86.10government, corporation, society, association, foundation, or institution organized and
86.11operated for charitable, religious, educational, civic, fraternal, and senior citizens' or
86.12veterans' purposes, no part of the net earnings of which inures to the benefit of a private
86.13individual.
86.14(d) For purposes of this subdivision, "fund-raising events" means activities of
86.15limited duration, not regularly carried out in the normal course of business, that attract
86.16patrons for community, social, and entertainment purposes, such as auctions, bake sales,
86.17ice cream socials, block parties, carnivals, competitions, concerts, concession stands,
86.18craft sales, bazaars, dinners, dances, door-to-door sales of merchandise, fairs, fashion
86.19shows, festivals, galas, special event workshops, sporting activities such as marathons and
86.20tournaments, and similar events. Fund-raising events do not include the operation of a
86.21regular place of business in which services are provided or sales are made during regular
86.22hours such as bookstores, thrift stores, gift shops, restaurants, ongoing Internet sales,
86.23regularly scheduled classes, or other activities carried out in the normal course of business.
86.24EFFECTIVE DATE.This section is effective for sales and purchases made after
86.25June 30, 2015.

86.26    Sec. 11. Minnesota Statutes 2014, section 297A.70, is amended by adding a
86.27subdivision to read:
86.28    Subd. 20. Animal shelters. Sales of animals by a nonprofit animal shelter are
86.29exempt. For purposes of this subdivision, the term "nonprofit animal shelter" means
86.30a nonprofit organization that is exempt under section 297A.70, subdivision 4, and is
86.31engaged in the business of rescuing, sheltering, and finding homes for unwanted animals.
86.32EFFECTIVE DATE.This section is effective for sales and purchases made after
86.33June 30, 2015.

87.1    Sec. 12. Minnesota Statutes 2014, section 297F.05, subdivision 3, is amended to read:
87.2    Subd. 3. Rates; tobacco products. (a) Except as provided in paragraphs (b) and (c)
87.3and subdivision 3a, a tax is imposed upon all tobacco products in this state and upon any
87.4person engaged in business as a distributor, at the rate of 95 percent of the wholesale sales
87.5price of the tobacco products. The tax is imposed at the time the distributor:
87.6(1) brings, or causes to be brought, into this state from outside the state tobacco
87.7products for sale;
87.8(2) makes, manufactures, or fabricates tobacco products in this state for sale in
87.9this state; or
87.10(3) ships or transports tobacco products to retailers in this state, to be sold by those
87.11retailers.
87.12(b) Notwithstanding paragraph (a), A minimum tax equal to the greater of the tax
87.13imposed under paragraph (a) or a minimum tax equal to the rate imposed on a pack of
87.1420 cigarettes weighing not more than three pounds per thousand, as established under
87.15subdivision 1, is imposed on each container of moist snuff weighing not more than 1.2
87.16ounces. When more than one container subject to tax under this clause is packaged
87.17together, each container is subject to the minimum tax.
87.18(c) Except as provided in paragraph (b), a tax equal to the greater of the tax imposed
87.19under paragraph (a) or a minimum tax equal to the rate imposed on a pack of 20 cigarettes
87.20weighing not more than three pounds per thousand, as established under subdivision 1,
87.21times the number of ounces of moist snuff in the container, divided by 1.2, is imposed on
87.22each container of moist snuff weighing more than 1.2 ounces.
87.23For purposes of this subdivision, a "container" means the smallest a consumer-size can,
87.24package, or other container that is marketed or packaged by the manufacturer, distributor,
87.25or retailer for separate sale to a retail purchaser. When more than one container is
87.26packaged together, each container is subject to tax.
87.27EFFECTIVE DATE.This section is effective July 1, 2015.

87.28    Sec. 13. Minnesota Statutes 2014, section 297F.09, subdivision 10, is amended to read:
87.29    Subd. 10. Accelerated tax payment; cigarette or tobacco products distributor.
87.30    A cigarette or tobacco products distributor having a liability of $250,000 or more during a
87.31fiscal year ending June 30, shall remit the June liability for the next year in the following
87.32manner:
88.1    (a) Two business days before June 30 of the year, the distributor shall remit the
88.2actual May liability and 81.4 80 percent of the estimated June liability to the commissioner
88.3and file the return in the form and manner prescribed by the commissioner.
88.4    (b) On or before August 18 of the year, the distributor shall submit a return showing
88.5the actual June liability and pay any additional amount of tax not remitted in June. A
88.6penalty is imposed equal to ten percent of the amount of June liability required to be paid
88.7in June, less the amount remitted in June. However, the penalty is not imposed if the
88.8amount remitted in June equals the lesser of:
88.9    (1) 81.4 80 percent of the actual June liability; or
88.10    (2) 81.4 80 percent of the preceding May liability.
88.11EFFECTIVE DATE.This section is effective for taxes due and payable after
88.12July 1, 2015.

88.13    Sec. 14. Minnesota Statutes 2014, section 297G.09, subdivision 9, is amended to read:
88.14    Subd. 9. Accelerated tax payment; penalty. A person liable for tax under this
88.15chapter having a liability of $250,000 or more during a fiscal year ending June 30, shall
88.16remit the June liability for the next year in the following manner:
88.17    (a) Two business days before June 30 of the year, the taxpayer shall remit the actual
88.18May liability and 81.4 80 percent of the estimated June liability to the commissioner and
88.19file the return in the form and manner prescribed by the commissioner.
88.20    (b) On or before August 18 of the year, the taxpayer shall submit a return showing
88.21the actual June liability and pay any additional amount of tax not remitted in June. A
88.22penalty is imposed equal to ten percent of the amount of June liability required to be paid
88.23in June less the amount remitted in June. However, the penalty is not imposed if the
88.24amount remitted in June equals the lesser of:
88.25    (1) 81.4 80 percent of the actual June liability; or
88.26    (2) 81.4 80 percent of the preceding May liability.
88.27EFFECTIVE DATE.This section is effective for taxes due and payable after
88.28July 1, 2015.

88.29    Sec. 15. Minnesota Statutes 2014, section 297H.04, subdivision 2, is amended to read:
88.30    Subd. 2. Rate. (a) Commercial generators that generate nonmixed municipal
88.31solid waste shall pay a solid waste management tax of 60 cents per noncompacted
88.32cubic yard of periodic waste collection capacity purchased by the generator, based on
88.33the size of the container for the nonmixed municipal solid waste, the actual volume,
89.1or the weight-to-volume conversion schedule in paragraph (c). However, the tax must
89.2be calculated by the waste management service provider using the same method for
89.3calculating the waste management service fee so that both are calculated according to
89.4container capacity, actual volume, or weight.
89.5(b) Notwithstanding section 297H.02, a residential generator that generates
89.6nonmixed municipal solid waste shall pay a solid waste management tax in the same
89.7manner as provided in paragraph (a).
89.8(c) The weight-to-volume conversion schedule for:
89.9(1) construction debris as defined in section 115A.03, subdivision 7, is one ton
89.10equals 3.33 cubic yards, or $2 per ton equal to 60 cents per cubic yard. The commissioner
89.11of revenue, after consultation with the commissioner of the Pollution Control Agency,
89.12shall determine and may publish by notice a conversion schedule for construction debris;
89.13(2) industrial waste as defined in section 115A.03, subdivision 13a, is equal to
89.1460 cents per cubic yard. The commissioner of revenue after consultation with the
89.15commissioner of the Pollution Control Agency, shall determine, and may publish by
89.16notice, a conversion schedule for various industrial wastes; and
89.17(3) infectious waste as defined in section 116.76, subdivision 12, and pathological
89.18waste as defined in section 116.76, subdivision 14, is 150 pounds equals one cubic yard, or
89.1960 cents per 150 pounds.
89.20EFFECTIVE DATE.This section is effective for sales and purchases made after
89.21June 30, 2015.

89.22    Sec. 16. Minnesota Statutes 2014, section 469.190, subdivision 1, is amended to read:
89.23    Subdivision 1. Authorization. Notwithstanding section 477A.016 or any other law,
89.24a statutory or home rule charter city may by ordinance, and a town may by the affirmative
89.25vote of the electors at the annual town meeting, or at a special town meeting, impose a
89.26tax of up to three percent on the gross receipts from the furnishing for consideration of
89.27lodging at a hotel, motel, rooming house, tourist court, or resort, other than the renting or
89.28leasing of it for a continuous period of 30 days or more. A statutory or home rule charter
89.29city may by ordinance impose the tax authorized under this subdivision on the camping
89.30site receipts of a municipal campground. Regardless of whether the tax is collected locally
89.31or by the state, a tax imposed under this subdivision or under a special law applies to
89.32the entire consideration paid to obtain access to lodging, including ancillary or related
89.33services, such as services provided by accommodation intermediaries as defined in section
89.34297A.61, and similar services.
90.1EFFECTIVE DATE.This section is effective the day following final enactment. In
90.2enacting this section, the legislature confirms that Minnesota Statutes, section 469.190, its
90.3predecessor provisions, and any special laws authorizing political subdivisions to impose
90.4lodging taxes, were and are intended to apply to the entire consideration paid to obtain
90.5access to lodging, including ancillary or related services, such as services provided by
90.6accommodation intermediaries as defined in Minnesota Statutes, section 297A.61, and
90.7similar services. The provisions of this section must not be interpreted to imply a narrower
90.8construction of the tax base under lodging tax provisions of Minnesota law prior to the
90.9enactment of this section.

90.10    Sec. 17. Minnesota Statutes 2014, section 469.190, subdivision 7, is amended to read:
90.11    Subd. 7. Collection. (a) The statutory or home rule charter city may agree with the
90.12commissioner of revenue that a tax imposed pursuant to this section shall be collected
90.13by the commissioner together with the tax imposed by chapter 297A, and subject to the
90.14same interest, penalties, and other rules and that its proceeds, less the cost of collection,
90.15shall be remitted to the city.
90.16(b) If a tax under this section or under a special law is not collected by the
90.17commissioner of revenue, the local government imposing the tax may by ordinance limit
90.18the required filing and remittance of the tax by an accommodation intermediary, as
90.19defined in section 297A.61, subdivision 47, to once in every calendar year. The local
90.20government must inform the accommodation intermediary of the date when the return
90.21or remittance is due and the dates must coincide with one of the monthly dates for filing
90.22and remitting state sales tax under chapter 297A. The local government must also provide
90.23accommodation intermediaries electronically with geographic and zip code information
90.24necessary to correctly collect the tax.
90.25EFFECTIVE DATE.This section is effective the day after final enactment.

90.26    Sec. 18. Laws 1980, chapter 511, section 1, subdivision 2, as amended by Laws 1991,
90.27chapter 291, article 8, section 22, Laws 1998, chapter 389, article 8, section 25, Laws
90.282003, First Special Session chapter 21, article 8, section 11, Laws 2008, chapter 154,
90.29article 5, section 2, and Laws 2014, chapter 308, article 3, section 21, is amended to read:
90.30    Subd. 2. (a) Notwithstanding Minnesota Statutes, section 477A.016, or any other
90.31law, ordinance, or city charter provision to the contrary, the city of Duluth may, by
90.32ordinance, impose an additional sales tax of up to one and three-quarter percent on sales
90.33transactions which are described in Minnesota Statutes 2000, section 297A.01, subdivision
90.343, clause (c). The imposition of this tax shall not be subject to voter referendum under
91.1either state law or city charter provisions. When the city council determines that the taxes
91.2imposed under this paragraph at a rate of three-quarters of one percent and other sources
91.3of revenue produce revenue sufficient to pay debt service on bonds in the principal amount
91.4of $40,285,000 plus issuance and discount costs, issued for capital improvements at the
91.5Duluth Entertainment and Convention Center, which include a new arena, the rate of tax
91.6under this subdivision must be reduced by three-quarters of one percent.
91.7(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
91.8section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
91.9the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half of
91.10one percent on sales transactions which are described in Minnesota Statutes 2000, section
91.11297A.01, subdivision 3 , clause (c). This tax expires when the city council determines
91.12that the tax imposed under this paragraph, along with the tax imposed under section
91.1322, paragraph (b), has produced revenues sufficient to pay the debt service on bonds
91.14in a principal amount of no more than $18,000,000, plus issuance and discount costs,
91.15to finance capital improvements to public facilities to support tourism and recreational
91.16activities in that portion of the city west of 34th 14th Avenue West and the area south of
91.17and including Skyline Parkway.
91.18(c) The city of Duluth may sell and issue up to $18,000,000 in general obligation
91.19bonds under Minnesota Statutes, chapter 475, plus an additional amount to pay for the
91.20costs of issuance and any premiums. The proceeds may be used to finance capital
91.21improvements to public facilities that support tourism and recreational activities in the
91.22portion of the city west of 34th 14th Avenue West and the area south of and including
91.23Skyline Parkway, as described in paragraph (b). The issuance of the bonds is subject to the
91.24provisions of Minnesota Statutes, chapter 475, except no election shall be required unless
91.25required by the city charter. The bonds shall not be included in computing net debt. The
91.26revenues from the taxes that the city of Duluth may impose under paragraph (b) and under
91.27section 22, paragraph (b), may be pledged to pay principal of and interest on such bonds.
91.28EFFECTIVE DATE.This section is effective the day after the governing body of
91.29the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
91.30645.021, subdivisions 2 and 3.

91.31    Sec. 19. Laws 1980, chapter 511, section 2, as amended by Laws 1998, chapter 389,
91.32article 8, section 26, Laws 2003, First Special Session chapter 21, article 8, section 12, and
91.33Laws 2014, chapter 308, article 3, section 22, is amended to read:
91.34    Sec. 22. CITY OF DULUTH; TAX ON RECEIPTS BY HOTELS AND
91.35MOTELS.
92.1    (a) Notwithstanding Minnesota Statutes, section 477A.016, or any other law, or
92.2ordinance, or city charter provision to the contrary, the city of Duluth may, by ordinance,
92.3impose an additional tax of one percent upon the gross receipts from the sale of lodging
92.4for periods of less than 30 days in hotels and motels located in the city. The tax shall be
92.5collected in the same manner as the tax set forth in the Duluth city charter, section 54(d),
92.6paragraph one. The imposition of this tax shall not be subject to voter referendum under
92.7either state law or city charter provisions.
92.8(b) In addition to the tax in paragraph (a) and notwithstanding Minnesota Statutes,
92.9section 477A.016, or any other law, ordinance, or city charter provision to the contrary,
92.10the city of Duluth may, by ordinance, impose an additional sales tax of up to one-half
92.11of one percent on the gross receipts from the sale of lodging for periods of less than
92.1230 days in hotels and motels located in the city. This tax expires when the city council
92.13first determines that the tax imposed under this paragraph, along with the tax imposed
92.14under section 21, paragraph (b), has produced revenues sufficient to pay the debt
92.15service on bonds in a principal amount of no more than $18,000,000, plus issuance and
92.16discount costs, to finance capital improvements to public facilities to support tourism and
92.17recreational activities in that portion of the city west of 34th 14th Avenue West and the
92.18area south of and including Skyline Parkway.
92.19EFFECTIVE DATE.This section is effective the day after the governing body of
92.20the city of Duluth and its chief clerical officer comply with Minnesota Statutes, section
92.21645.021, subdivisions 2 and 3.

92.22    Sec. 20. Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended by
92.23Laws 1998, chapter 389, article 8, section 28, Laws 2008, chapter 366, article 7, section 9,
92.24and Laws 2009, chapter 88, article 4, section 14, is amended to read:
92.25    Subd. 3. Use of revenues. (a) Revenues received from taxes authorized by
92.26subdivisions 1 and 2 shall be used by the city to pay the cost of collecting the tax and to
92.27pay all or a portion of the expenses of constructing and improving facilities as part of an
92.28urban revitalization project in downtown Mankato known as Riverfront 2000. Authorized
92.29expenses include, but are not limited to, acquiring property and paying relocation expenses
92.30related to the development of Riverfront 2000 and related facilities, and securing or paying
92.31debt service on bonds or other obligations issued to finance the construction of Riverfront
92.322000 and related facilities. For purposes of this section, "Riverfront 2000 and related
92.33facilities" means a civic-convention center, an arena, a riverfront park, a technology center
92.34and related educational facilities, and all publicly owned real or personal property that
92.35the governing body of the city determines will be necessary to facilitate the use of these
93.1facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
93.2landscaping. It also includes the performing arts theatre and the Southern Minnesota
93.3Women's Hockey Exposition Center, for use by Minnesota State University, Mankato.
93.4    (b) Notwithstanding Minnesota Statutes, section 297A.99, subdivision 3, and subject
93.5to voter approval at a special or general election held on or before December 31, 2018, the
93.6city may by ordinance also use revenues from taxes authorized under subdivisions 1 and 2:
93.7    (1) up to a maximum of $29,000,000, plus associated bond costs, to pay all or a
93.8portion of the expenses of the following capital projects:
93.9    (i) improvements to regional recreational facilities including existing hockey and
93.10curling rinks, a baseball park, youth athletic fields and facilities, and the municipal
93.11swimming pool including improvements to make the pool compliant with the Americans
93.12with Disabilities Act;
93.13    (ii) improvements to flood control and the levee system;
93.14(iii) water quality improvement projects in Blue Earth and Nicollet Counties;
93.15(iv) expansion of the regional transit building and related multimodal transit
93.16improvements;
93.17(v) regional public safety and emergency communications improvements and
93.18equipment; and
93.19(vi) matching funds for improvements to publicly owned regional facilities including
93.20a historic museum, supportive housing, and a senior center; and
93.21(2) up to a maximum of $25,000,000, plus associated bond costs, to pay all or a
93.22portion of the costs of constructing the following new regional athletic facilities: ice
93.23sheets, swimming and aquatic facility, multi-use sports bubble, indoor field house, or
93.24indoor tennis courts.
93.25(c) The additional uses of revenues authorized in paragraph (b) must be presented to
93.26voters in one ballot question. The election must be held on the same date as the election to
93.27extend the North Mankato local option sales tax authorized under section 25 of this article.
93.28EFFECTIVE DATE.This section is effective the day after the governing body of
93.29the city of Mankato and its chief clerical officer timely complete their compliance with
93.30Minnesota Statutes, section 645.021, subdivisions 2 and 3.

93.31    Sec. 21. Laws 1991, chapter 291, article 8, section 27, subdivision 4, as amended by
93.32Laws 2005, First Special Session chapter 3, article 5, section 25, and Laws 2008, chapter
93.33366, article 7, section 10, is amended to read:
93.34    Subd. 4. Expiration of taxing authority and expenditure limitation. The
93.35authority granted by subdivisions 1 and 2 to the city to impose a sales tax and an excise tax
94.1shall expire on at the later of when revenues are sufficient to pay off the bonds, including
94.2interest and all other associated bond costs authorized under subdivision 5, or December
94.331, 2022, unless the additional uses under subdivision 3, paragraph (b), are authorized. If
94.4the additional uses allowed in subdivision 3, paragraph (b), are authorized, the taxes expire
94.5at the later of when revenues are sufficient to pay off the bonds, including interest and all
94.6other associated bond costs authorized under subdivision 5, or December 31, 2038. Upon
94.7expiration of the taxes, any remaining fund balance of revenues derived from the taxes
94.8shall be disbursed to the general fund of the city. The taxes imposed under subdivisions 1
94.9and 2 may expire at an earlier time if the city so determines by ordinance.
94.10EFFECTIVE DATE.This section is effective the day following final enactment
94.11without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

94.12    Sec. 22. Laws 1991, chapter 291, article 8, section 27, subdivision 5, is amended to read:
94.13    Subd. 5. Bonds. (a) The city of Mankato may issue general obligation bonds of the
94.14city in an amount not to exceed $25,000,000 for Riverfront 2000 and related facilities,
94.15without election under Minnesota Statutes, chapter 475, on the question of issuance of the
94.16bonds or a tax to pay them. The debt represented by bonds issued for Riverfront 2000
94.17and related facilities shall not be included in computing any debt limitations applicable
94.18to the city of Mankato, and the levy of taxes required by section 475.61 to pay principal
94.19of and interest on the bonds shall not be subject to any levy limitation or be included in
94.20computing or applying any levy limitation applicable to the city.
94.21    (b) The city of Mankato, subject to voter approval at the election required under
94.22subdivision 3, paragraph (b), may issue general obligation bonds of the city in an amount
94.23not to exceed $29,000,000 for the projects listed under subdivision 3, paragraph (b),
94.24clause (1), and not to exceed $25,000,000 for the projects listed under subdivision 3,
94.25paragraph (b), clause (2), without election under Minnesota Statutes, chapter 475, on the
94.26question of issuance of the bonds or a tax to pay them. The debt represented by bonds
94.27under this paragraph shall not be included in computing any debt limitations applicable
94.28to the city of Mankato, and the levy of taxes required by Minnesota Statutes, section
94.29475.61, to pay principal of and interest on the bonds, and shall not be subject to any levy
94.30limitation or be included in computing or applying any levy limitation applicable to the
94.31city. The city may use tax revenue in excess of one year's principal interest reserve for
94.32intended annual bond payments to pay all or a portion of the cost of capital improvements
94.33authorized in subdivision 3.
95.1    (c) Notwithstanding the maximum bond limits in this subdivision, the city may use
95.2tax revenue in excess of any and all annual principal and interest payment obligations for
95.3capital replacement associated with the uses authorized in subdivision 3.
95.4EFFECTIVE DATE.This section is effective the day following final enactment
95.5without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

95.6    Sec. 23. Laws 1991, chapter 291, article 8, section 27, subdivision 6, is amended to read:
95.7    Subd. 6. Reverse referendum; authorization of extensions. (a) If the Mankato city
95.8council intends to exercise the authority provided by this section, it shall pass a resolution
95.9stating the fact before July 1, 1991. The resolution must be published for two successive
95.10weeks in the official newspaper of the city or, if there is no official newspaper, in a
95.11newspaper of general circulation in the city, together with a notice fixing a date for a public
95.12hearing on the matter. The hearing must be held at least two weeks but not more than four
95.13weeks after the first publication of the resolution. Following the public hearing, the city
95.14may determine to take no further action or adopt a resolution confirming its intention to
95.15exercise the authority. That resolution must also be published in the official newspaper of
95.16the city or, if there is no official newspaper, in a newspaper of general circulation in the
95.17city. If within 30 days after publication of the resolution a petition signed by voters equal
95.18in number to ten percent of the votes cast in the city in the last general election requesting
95.19a vote on the proposed resolution is filed with the county auditor, the resolution is not
95.20effective until it has been submitted to the voters at a general or special election and a
95.21majority of votes cast on the question of approving the resolution are in the affirmative. The
95.22commissioner of revenue shall prepare a suggested form of question to be presented at the
95.23election. The referendum must be held at a special or general election before December 1,
95.241991. This subdivision applies notwithstanding any city charter provision to the contrary.
95.25    (b) If the Mankato city council wishes to extend the taxes authorized under
95.26subdivisions 1 and 2 to fund any of the projects listed in subdivision 3, paragraph (b) or
95.27(c), the city must pass a resolution extending the taxes before July 1, 2015. The tax may
95.28not be imposed unless approved by the voters.
95.29EFFECTIVE DATE.This section is effective the day following final enactment
95.30without local approval pursuant to Minnesota Statutes, section 645.023, subdivision 1.

95.31    Sec. 24. Laws 2006, chapter 257, section 2, the effective date, as amended by Laws
95.322011, First Special Session chapter 7, article 3, section 17, is amended to read:
96.1EFFECTIVE DATE.This section is effective for sales and purchases after June 30,
96.22006, and before July 1, 2015.
96.3EFFECTIVE DATE.This section is effective the day following final enactment.

96.4    Sec. 25. Laws 2008, chapter 366, article 7, section 20, is amended to read:
96.5    Sec. 20. CITY OF NORTH MANKATO; TAXES AUTHORIZED.
96.6    Subdivision 1. Sales and use tax authorized. Notwithstanding Minnesota Statutes,
96.7section 477A.016, or any other provision of law, ordinance, or city charter, pursuant to
96.8the approval of the voters on November 7, 2006, the city of North Mankato may impose
96.9by ordinance a sales and use tax of one-half of one percent for the purposes specified
96.10in subdivision 2. The provisions of Minnesota Statutes, section 297A.99, govern the
96.11imposition, administration, collection, and enforcement of the taxes authorized under
96.12this subdivision.
96.13    Subd. 2. Use of revenues. (a) Revenues received from the tax authorized by
96.14subdivision 1 must be used to pay all or part of the capital costs of the following projects:
96.15    (1) the local share of the Trunk Highway 14/County State-Aid Highway 41
96.16interchange project;
96.17    (2) development of regional parks and hiking and biking trails;
96.18    (3) expansion of the North Mankato Taylor Library;
96.19    (4) riverfront redevelopment; and
96.20    (5) lake improvement projects.
96.21    The total amount of revenues from the tax in subdivision 1 that may be used to fund
96.22these projects is $6,000,000 plus any associated bond costs.
96.23    (b) If the city extends the tax as authorized under subdivision 2a, paragraph (a), the
96.24total amount that may be used to fund these projects is increased by $9,000,000, plus
96.25associated bond costs, including interest on the bonds, minus any revenues used for the
96.26purposes listed in paragraph (c).
96.27(c) Revenues raised from the tax imposed under subdivision 1 may also be used to
96.28fund all or a portion of the costs of constructing new regional athletic facilities: ice sheets,
96.29swimming and aquatic facility, multi-use sports bubble, indoor field house, or indoor
96.30tennis courts if those facilities are constructed within the corporate boundaries of the city
96.31of North Mankato. The tax may only be used for this purpose if authorized by the voters
96.32as provided for in subdivision 2a, paragraph (b).
96.33    Subd. 2a. Authorization to extend the tax. (a) Notwithstanding section 297A.99,
96.34subdivision 3, if the North Mankato city council intends to extend the tax authorized under
96.35subdivision 1 to cover an additional $9,000,000 in bonds, plus associated bond costs,
97.1including interest on the bonds, to fund the projects in subdivision 2, paragraph (a), the
97.2city must pass a resolution extending the tax before July 1, 2015. The resolution is not
97.3effective until it has been submitted to the voters at a general or special election and a
97.4majority of votes cast on the question of approving the resolution are in the affirmative.
97.5The referendum must be held at a special or general election before December 1, 2018,
97.6and must be held on the same date as the referendum required under section 20. This
97.7subdivision applies notwithstanding any city charter provision to the contrary.
97.8(b) Notwithstanding section 297A.99, subdivision 3, and subject to voter approval
97.9at a special or general election held on or before December 1, 2018, the city may use up
97.10to $5,000,000, plus associated bond costs of the additional sales tax revenue allowed to
97.11be raised under paragraph (a), to pay all or a portion of the costs of constructing the new
97.12regional athletic facilities listed in subdivision 2, paragraph (c). The referendum required
97.13under this paragraph must be held on the same date as the referendum required under
97.14paragraph (a). The uses of revenues authorized in this paragraph and paragraph (a) must
97.15be presented to voters in one ballot question. The election must be held on the same date
97.16as the election to extend the Mankato local option sales tax authorized under section 20.
97.17    Subd. 3. Bonds. (a) The city of North Mankato, pursuant to the approval of the
97.18voters at the November 7, 2006 referendum authorizing the imposition of the taxes in
97.19this section, may issue bonds under Minnesota Statutes, chapter 475, to pay capital and
97.20administrative expenses for the projects described in subdivision 2, paragraph (a), in an
97.21amount that does not exceed $6,000,000. A separate election to approve the bonds under
97.22Minnesota Statutes, section 475.58, is not required.
97.23(b) The city of North Mankato, subject to voter approval under subdivision 2a,
97.24paragraph (a), allowing for additional revenue to be spent for the projects in subdivision 2,
97.25paragraph (a), may issue additional bonds under Minnesota Statutes, chapter 475, to pay
97.26capital and administrative expenses for those projects in an amount that does not exceed
97.27$9,000,000, plus associated bond costs, including interest on the bonds. If approved by
97.28voters as required under subdivision 2a, paragraph (b), up to $5,000,000 of the bonds, plus
97.29associated bond costs, may be used to pay capital and administrative costs for the projects
97.30listed in subdivision 2, paragraph (b), instead. A separate election to approve the bonds
97.31under Minnesota Statutes, section 475.58, is not required.
97.32    (b) (c) The debt represented by the bonds is not included in computing any debt
97.33limitation applicable to the city, and any levy of taxes under Minnesota Statutes, section
97.34475.61 , to pay principal and interest on the bonds is not subject to any levy limitation.
98.1    (d) Notwithstanding the maximum bond limits set forth above, the city may use tax
98.2revenue in excess of any and all annual principal and interest payment obligations for
98.3capital replacement associated with the uses authorized in subdivision 2.
98.4    Subd. 4. Termination of taxes. The tax imposed under subdivision 1 expires when
98.5the city council determines that the amount of revenues received from the taxes to pay for
98.6the projects under subdivision 2, paragraph (a), first equals or exceeds $6,000,000 plus the
98.7additional amount needed to pay the costs related to issuance of bonds under subdivision
98.83, including interest on the bonds, unless the tax is extended as allowed in this section.
98.9If the tax is extended as allowed under subdivision 2a, paragraphs (a) and (b), the tax
98.10expires December 31, 2038. Any funds remaining after completion of the projects and
98.11retirement or redemption of the bonds shall be placed in a capital facilities and equipment
98.12replacement fund of the city. The tax imposed under subdivision 1 may expire at an earlier
98.13time if the city so determines by ordinance.
98.14EFFECTIVE DATE.This section is effective the day after the governing body of
98.15the city of North Mankato and its chief clerical officer timely complete their compliance
98.16with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

98.17    Sec. 26. Laws 2013, chapter 143, article 8, section 22, the effective date, as amended
98.18by Laws 2014, chapter 308, article 3, section 30, is amended to read:
98.19EFFECTIVE DATE.Subdivision 7, paragraph (c), clause (2), is effective for sales
98.20and purchases made after June 30, 2013. The provisions of subdivision 7, paragraph (b),
98.21and paragraph (c), clause (8), are effective retroactively for sales and purchases made
98.22after April 1, 2009. Any vendor who paid sales or use tax on items now exempt under
98.23subdivision 7, paragraph (b), and paragraph (c), clause (8), that were sold after April 1,
98.242009, and before July 1, 2013, may apply for a refund of the sales or use tax paid in the
98.25manner provided in Minnesota Statutes, section 289A.50, subdivision 1, but only if the
98.26vendor did not collect and remit sales tax on the items for which a refund is claimed.
98.27Interest on the refund shall be paid at the rate in Minnesota Statutes, section 270C.405,
98.28from 90 days after the refund claim is filed with the commissioner of revenue. The amount
98.29to make the refunds is annually appropriated to the commissioner of revenue from the
98.30general fund. Notwithstanding limitations on claims for refunds under Minnesota Statutes,
98.31section 289A.40, claims may be filed with the commissioner until June 30, 2015 2016.
98.32EFFECTIVE DATE.This section is effective the day following final enactment.

99.1    Sec. 27. Laws 2013, chapter 143, article 8, section 23, the effective date, as amended
99.2by Laws 2014, chapter 308, article 3, section 31, is amended to read:
99.3EFFECTIVE DATE.This section is effective for sales and purchases made after
99.4June 30, 2013, except that the provision regarding accessories and supplies purchased
99.5in a transaction covered by Medicare or Medicaid that are not already exempt under
99.6Minnesota Statutes, section 297A.67, subdivision 7, and the provision defining "Medicare"
99.7and "Medicaid" are effective retroactively for sales and purchases made after April 1,
99.82009. Any vendor who paid sales or use tax on accessories and supplies purchased in a
99.9transaction covered by Medicare or Medicaid that are not already exempt under Minnesota
99.10Statutes, section 297A.67, subdivision 7, and that were sold after April 1, 2009, and before
99.11July 1, 2013, may apply for a refund of the sales or use tax paid in the manner provided in
99.12Minnesota Statutes, section 289A.50, subdivision 1, but only if the vendor did not collect
99.13and remit sales tax on the accessories and supplies for which a refund is claimed. Interest
99.14on the refund shall be paid at the rate in Minnesota Statutes, section 270C.405, from 90
99.15days after the refund claim is filed with the commissioner of revenue. The amount to make
99.16the refunds is annually appropriated to the commissioner of revenue from the general
99.17fund. Notwithstanding limitations on claims for refunds under Minnesota Statutes, section
99.18289A.40 , claims may be filed with the commissioner until June 30, 2015 2016.
99.19EFFECTIVE DATE.This section is effective retroactively for sales and purchases
99.20made after April 1, 2009.

99.21    Sec. 28. Laws 2014, chapter 308, article 7, section 7, is amended to read:
99.22    Sec. 7. CITY OF LUVERNE LOCAL SALES TAX.
99.23(a) Notwithstanding Minnesota Statutes, sections 297A.99, 297A.993, and
99.24477A.016 , or any other contrary provision of law, ordinance, or city charter, the city of
99.25Luverne may, by ordinance, impose a sales and use tax of up to one-half of one percent for
99.26the purposes specified in paragraph (b), if approved by the voters at a general election held
99.27prior to December 31, 2020. Except as otherwise provided in this section, the provisions
99.28of Minnesota Statutes, section 297A.99, subdivisions 4 to 13, govern the imposition,
99.29administration, collection, and enforcement of the tax authorized under this paragraph.
99.30(b) The proceeds of any tax imposed under paragraph (a), less refunds and costs of
99.31collection, must be first used by the city to pay debt service on bonds issued the city's
99.32local share under Minnesota Statutes, section 469.194 477A.20, to fund the Lewis and
99.33Clark Regional Water System project. Revenues collected in any calendar year in excess
99.34of the city obligation to pay for debt service on bonds issued the city's local share under
100.1Minnesota Statutes, section 469.194 477A.20, may be retained by the city and used for
100.2funding other capital projects within the city.
100.3(c) A tax imposed under paragraph (a) expires when the city's share of bonds local
100.4share issued under Minnesota Statutes, section 469.194 477A.20, to fund the Lewis and
100.5Clark Regional Water System Project has been made, or at an earlier time if approved
100.6by the city council. The tax must not terminate before the city council determines that
100.7revenues from this tax and any other revenue source the city dedicates are sufficient to
100.8pay the city city's local share of debt service on bonds issued under Minnesota Statutes,
100.9section 469.194 477A.20.
100.10EFFECTIVE DATE.This section is effective the day following final enactment.

100.11    Sec. 29. CITY OF MARSHALL; VALIDATION OF PRIOR ACT.
100.12(a) Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city
100.13of Marshall may approve Laws 2011, First Special Session chapter 7, article 4, section 14,
100.14and file its approval with the secretary of state by June 15, 2013. If approved as authorized
100.15under this paragraph, actions undertaken by the city pursuant to the approval of the voters
100.16on November 6, 2012, and otherwise in accordance with Laws 2011, First Special Session
100.17chapter 7, article 4, section 14, are validated.
100.18(b) Notwithstanding the time limit on the imposition of tax under Laws 2011, First
100.19Special Session chapter 7, article 4, section 14, and subject to local approval under
100.20paragraph (a), the city of Marshall may impose the tax on or before July 1, 2013.
100.21EFFECTIVE DATE.This section is effective the day following final enactment.

100.22ARTICLE 5
100.23PROPERTY TAX AIDS AND CREDITS

100.24    Section 1. Minnesota Statutes 2014, section 477A.0124, subdivision 4, is amended to
100.25read:
100.26    Subd. 4. County tax-base equalization aid. (a) For 2006 and subsequent years,
100.27the money appropriated to county tax-base equalization aid each calendar year, after the
100.28payment under paragraph (f), shall be apportioned among the counties according to each
100.29county's tax-base equalization aid factor.
100.30(b) A county's tax-base equalization aid factor is equal to the amount by which (i)
100.31$185 $330 times the county's population, exceeds (ii) 9.45 12 percent of the county's
100.32net tax capacity.
101.1(c) In the case of a county with a population less than 10,000, the factor determined
101.2in paragraph (b) shall be multiplied by a factor of three.
101.3(d) In the case of a county with a population greater than or equal to 10,000, but less
101.4than 12,500, the factor determined in paragraph (b) shall be multiplied by a factor of two.
101.5(e) In the case of a county with a population greater than or equal to 12,500 but less
101.6than 16,500, the factor determined in paragraph (b) shall be multiplied by a factor of 1.25.
101.7(e) (f) In the case of a county with a population greater than 500,000, the factor
101.8determined in paragraph (b) shall be multiplied by a factor of 0.25.
101.9(g) For distributions in 2016, the allocation to a county under paragraphs (a) to (f)
101.10shall not be less than 95 percent of the sum of the tax base equalization aid in 2014 plus
101.11any supplemental program aid that was distributed to the county under Laws 2014, chapter
101.12308, article 1, section 13. For distributions in 2017 and subsequent years, the allocation
101.13to a county under paragraphs (a) to (f) shall not be less than 95 percent of the tax base
101.14equalization aid of the county in the prior year.
101.15(h) Beginning with aid payable in 2017, the amount under paragraph (b), item (i),
101.16shall be increased by the ratio of the statewide net tax capacity per capita to the statewide
101.17net tax capacity per capita in the 2014 assessment year provided that in no case shall the
101.18ratio be less than one or the ratio in the prior year, whichever is greater. The amount shall
101.19be rounded to the nearest $10. The statewide taxable market value per capita shall be
101.20calculated using the most recent population available for the relevant assessment year at
101.21the time of the calculation of the aid by the commissioner under section 477A.014.
101.22(f) (i) Before the money appropriated to county base equalization aid is apportioned
101.23among the counties as provided in paragraph (a), an amount up to $73,259 is allocated
101.24annually to Anoka County and up to $59,664 is annually allocated to Washington County
101.25for the county to pay postretirement costs of health insurance premiums for court
101.26employees. The allocation under this paragraph is in addition to the allocations under
101.27paragraphs (a) to (e) (h).
101.28EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

101.29    Sec. 2. [477A.0126] REIMBURSEMENT OF COUNTY AND TRIBES FOR
101.30CERTAIN OUT-OF-HOME PLACEMENT.
101.31    Subdivision 1. Definition. When used in this section, "out-of-home placement"
101.32means 24-hour substitute care for an Indian child as defined by section 260C.007,
101.33subdivision 21, placed under the Indian Child Welfare Act (ICWA) and chapter 260C,
101.34away from the child's parent or guardian and for whom the county social services agency
101.35or county correctional agency has been assigned responsibility for the child's placement
102.1and care, which includes placement in foster care under section 260C.007, subdivision
102.218, and a correctional facility pursuant to a court order.
102.3    Subd. 2. Determination of nonfederal share of costs. (a) By January 1, 2016, each
102.4county shall report the following information to the commissioners of human services and
102.5corrections: (1) the separate amounts paid out of its social service agency and its corrections
102.6budget for out-of-home placement of children under the ICWA in calendar years 2012,
102.72013, and 2014; and (2) the number of case days associated with the expenditures from
102.8each budget. By March 15, 2016, the commissioner of human services, in consultation with
102.9the commissioner of corrections, shall certify to the commissioner of revenue and to the
102.10legislative committees responsible for local government aids and out-of-home placement
102.11funding, whether the data reported under this subdivision accurately reflects total
102.12expenditures by counties for out-of-home placement costs of children under the ICWA.
102.13(b) By January 1, 2018, and each January 1 thereafter, each county shall report to the
102.14commissioners of human services and corrections the separate amounts paid out of its
102.15social service agency and its corrections budget for out-of-home placement of children
102.16under the ICWA in the calendar years two years before the current calendar year along
102.17with the number of case days associated with the expenditures from each budget.
102.18(c) Until the commissioner of human services develops another mechanism for
102.19collecting and verifying data on out-of-home placements of children under the ICWA, and
102.20the legislature authorizes the use of that data, the data collected under this subdivision
102.21must be used to calculate payments under subdivision 3. The commissioner of human
102.22services shall certify the nonfederal out-of-home placement costs for the three prior
102.23calendar years for each county to the commissioner of revenue by June 1 of the year
102.24prior to the aid payment.
102.25    Subd. 3. Aid payments to counties. For aids payable in calendar year 2017 and
102.26thereafter, the commissioner of revenue shall reimburse each county for 100 percent of
102.27the nonfederal share of the cost of out-of-home placement of children under the ICWA
102.28provided the commissioner of human services, in consultation with the commissioner
102.29of corrections, certifies to the commissioner of revenue that accurate data is available
102.30to make the aid determination under this section. The amount of reimbursement is the
102.31county's average nonfederal share of the cost for out-of-home placement of children
102.32under the ICWA for the most recent three calendar years for which data is available.
102.33The commissioner shall pay the aid under the schedule used for local government aid
102.34payments under section 477A.015.
102.35    Subd. 4. Aid payments to tribes. (a) By January 1, 2016, and each year
102.36thereafter, each tribe must certify to the commissioner of revenue the amount of federal
103.1reimbursement received by the tribe for out-of-home placement of children under the
103.2ICWA for the immediately preceding three calendar years.
103.3(b) The amount of reimbursement to the tribe shall be the greater of: (1) five
103.4percent of the average reimbursement amount received from the federal government for
103.5out-of-home placement costs for the most recent three calendar years; or (2) $200,000.
103.6The commissioner shall pay the aid under this section under the schedule used for local
103.7government aid payments under section 477A.015.
103.8    Subd. 5. Appropriation. An amount sufficient to pay aid under this section is
103.9annually appropriated to the commissioner of revenue from the general fund.
103.10EFFECTIVE DATE.This section is effective beginning with aids payable in 2017.

103.11    Sec. 3. Minnesota Statutes 2014, section 477A.013, subdivision 1, is amended to read:
103.12    Subdivision 1. Towns and unorganized territories. In 2014 2016 and thereafter,
103.13each town and the total area of any unorganized territory within a county is eligible for
103.14a distribution under this subdivision equal to the product of (i) its agricultural property
103.15factor, (ii) its town area factor, (iii) its population factor, and (iv) 0.0045. As used in this
103.16subdivision, the following terms have the meanings given them:
103.17(1) "agricultural property factor" means the ratio of the adjusted net tax capacity of
103.18agricultural property located in a town, or unorganized territory divided by the adjusted
103.19net tax capacity of all other property located in the town or unorganized territory. The
103.20agricultural property factor cannot exceed eight;
103.21(2) "agricultural property" means property classified under section 273.13, as
103.22homestead and nonhomestead agricultural property, rural vacant land, and noncommercial
103.23seasonal recreational property;
103.24(3) "town area factor" means the most recent estimate of total acreage, not to exceed
103.2550,000 acres, located in the case of a township, or 75,000 acres in the case of unorganized
103.26territory, available as of July 1 in the aid calculation year, estimated or established by:
103.27(i) the United States Bureau of the Census;
103.28(ii) the State Land Management Information Center Minnesota Geospatial
103.29Information Office; or
103.30(iii) the secretary of state; and
103.31(4) "population factor" means the square root of the towns' town's or unorganized
103.32territory's population.
103.33If the sum of the aids payable to all towns and unorganized territories under this
103.34subdivision exceeds or is less than the limit under section 477A.03, subdivision 2c,
103.35the distribution to each town and unorganized territory must be reduced or increased
104.1proportionately so that the total amount of aids distributed under this section does not
104.2exceed the limit in section 477A.03, subdivision 2c.
104.3EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

104.4    Sec. 4. Minnesota Statutes 2014, section 477A.014, subdivision 1, is amended to read:
104.5    Subdivision 1. Calculations and payments. (a) The commissioner of revenue shall
104.6make all necessary calculations and make payments pursuant to sections 477A.013 and
104.7477A.03 directly to the affected taxing authorities annually. In addition, the commissioner
104.8shall notify the authorities of their aid amounts, as well as the computational factors used
104.9in making the calculations for their authority, and those statewide total figures that are
104.10pertinent, before August 1 of the year preceding the aid distribution year. In the case of
104.11unorganized territory, the commissioner shall notify the affected county government of
104.12the aid amount for any unorganized territory within the county and make payments of aid
104.13payable based on unorganized territory to the county government. The aid received by the
104.14county government must be spent in and for the unorganized territory.
104.15(b) For the purposes of this subdivision, aid is determined for a city or, town,
104.16or unorganized territory based on its city or, town, or unorganized territory status as
104.17of June 30 of the year preceding the aid distribution year. If the effective date for a
104.18municipal incorporation, consolidation, annexation, detachment, dissolution, or township
104.19organization is on or before June 30 of the year preceding the aid distribution year, such
104.20change in boundaries or form of government shall be recognized for aid determinations for
104.21the aid distribution year. If the effective date for a municipal incorporation, consolidation,
104.22annexation, detachment, dissolution, or township organization is after June 30 of the year
104.23preceding the aid distribution year, such change in boundaries or form of government shall
104.24not be recognized for aid determinations until the following year.
104.25(c) Changes in boundaries or form of government will only be recognized for the
104.26purposes of this subdivision, to the extent that: (1) changes in market values are included
104.27in market values reported by assessors to the commissioner, and changes in population
104.28and household size are included in their respective certifications to the commissioner as
104.29referenced in section 477A.011, or (2) an annexation information report as provided in
104.30paragraph (d) is received by the commissioner on or before July 15 of the aid calculation
104.31year. Revisions to estimates or data for use in recognizing changes in boundaries or form
104.32of government are not effective for purposes of this subdivision unless received by the
104.33commissioner on or before July 15 of the aid calculation year. Clerical errors in the
104.34certification or use of estimates and data established as of July 15 in the aid calculation
104.35year are subject to correction within the time periods allowed under subdivision 3.
105.1(d) In the case of an annexation, an annexation information report may be completed
105.2by the annexing jurisdiction and submitted to the commissioner for purposes of this
105.3subdivision if the net tax capacity of annexed area for the assessment year preceding the
105.4effective date of the annexation exceeds five percent of the city's net tax capacity for the
105.5same year. The form and contents of the annexation information report shall be prescribed
105.6by the commissioner. The commissioner shall change the net tax capacity, the population,
105.7the population decline, the commercial industrial percentage, and the transformed
105.8population for the annexing jurisdiction only if the annexation information report provides
105.9data the commissioner determines to be reliable for all of these factors used to compute city
105.10revenue need for the annexing jurisdiction. The commissioner shall adjust the pre-1940
105.11housing percentage and household size only if the entire area of an existing city or, town,
105.12or unorganized territory is annexed or consolidated and only if reliable data is available
105.13for all of these factors used to compute city revenue need for the annexing jurisdiction.
105.14EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

105.15    Sec. 5. Minnesota Statutes 2014, section 477A.015, is amended to read:
105.16477A.015 PAYMENT DATES.
105.17The commissioner of revenue shall make the payments of local government aid to
105.18affected taxing authorities in two four installments on March 15, July 20 and December 26
105.1915, September 15, and November 15 annually.
105.20When the commissioner of public safety determines that a local government has
105.21suffered financial hardship due to a natural disaster, the commissioner of public safety
105.22shall notify the commissioner of revenue, who shall make payments of aids under sections
105.23477A.011 to 477A.014, which are otherwise due on December 26 November 15, as soon
105.24as is practical after the determination is made but not before July 20.
105.25The commissioner may pay all or part of the payments of aids under sections
105.26477A.011 to 477A.014, which are due on December 26 November 15 at any time after
105.27August 15 if a local government requests such payment as being necessary for meeting its
105.28cash flow needs. For aids payable in 2013 only, a city that is located in an area deemed a
105.29disaster area during the month of April 2013, as defined in section 12A.02, subdivision 5,
105.30shall receive its December 26, 2013 payment with its July 20, 2013 payment.
105.31EFFECTIVE DATE.This section is effective for aids payable in calendar year
105.322016 and thereafter.

105.33    Sec. 6. Minnesota Statutes 2014, section 477A.017, subdivision 2, is amended to read:
106.1    Subd. 2. State auditor's duties. The state auditor shall prescribe uniform financial
106.2accounting and reporting standards in conformity with national standards to be applicable
106.3to cities and towns of more than 2,500 population and uniform reporting standards to be
106.4applicable to cities and towns of less than 2,500 population.
106.5EFFECTIVE DATE.This section applies to reporting of financial information for
106.6years ending on or after December 31, 2015.

106.7    Sec. 7. Minnesota Statutes 2014, section 477A.017, subdivision 3, is amended to read:
106.8    Subd. 3. Conformity. Other law to the contrary notwithstanding, in order to receive
106.9distributions under sections 477A.011 to 477A.03, counties and, cities, and towns must
106.10conform to the standards set in subdivision 2 in making all financial reports required to be
106.11made to the state auditor after June 30, 1984.
106.12EFFECTIVE DATE.This section applies to reporting of financial information for
106.13years ending on or after December 31, 2015.

106.14    Sec. 8. Minnesota Statutes 2014, section 477A.03, subdivision 2a, is amended to read:
106.15    Subd. 2a. Cities. For aids payable in 2014, the total aid paid under section
106.16477A.013, subdivision 9 , is $507,598,012. The total aid paid under section 477A.013,
106.17subdivision 9
, is $516,898,012 for aids payable in 2015. For aids payable in 2016 and
106.18thereafter, the total aid paid under section 477A.013, subdivision 9, is $519,398,012
106.19$540,940,079. For aids payable in 2017 and thereafter, the total aid paid under section
106.20477A.013, subdivision 9, is $564,982,145.
106.21EFFECTIVE DATE.This section is effective for aids payable in calendar year
106.222016 and thereafter.

106.23    Sec. 9. Minnesota Statutes 2014, section 477A.03, subdivision 2b, is amended to read:
106.24    Subd. 2b. Counties. (a) For aids payable in 2014 and thereafter through 2016,
106.25the total aid payable under section 477A.0124, subdivision 3, is $100,795,000. For
106.26aids payable in 2017 and thereafter, the total aid payable under section 477A.0124,
106.27subdivision 3, is $102,895,000. Each calendar year, $500,000 of this appropriation shall
106.28be retained by the commissioner of revenue to make reimbursements to the commissioner
106.29of management and budget for payments made under section 611.27. The reimbursements
106.30shall be to defray the additional costs associated with court-ordered counsel under section
106.31611.27 . Any retained amounts not used for reimbursement in a year shall be included in
107.1the next distribution of county need aid that is certified to the county auditors for the
107.2purpose of property tax reduction for the next taxes payable year.
107.3    (b) For aids payable in 2014 and thereafter 2015, the total aid under section
107.4477A.0124, subdivision 4 , is $104,909,575. For aids payable in 2016, the total aid paid
107.5under section 477A.0124 is $129,909,575. For aids payable in 2017 and thereafter,
107.6the total aid payable under section 477A.0124, subdivision 4, is $132,509,575. The
107.7commissioner of revenue shall transfer to the commissioner of management and budget
107.8$207,000 annually for the cost of preparation of local impact notes as required by section
107.93.987 , and other local government activities. The commissioner of revenue shall transfer
107.10to the commissioner of education $7,000 annually for the cost of preparation of local
107.11impact notes for school districts as required by section 3.987. The commissioner of
107.12revenue shall deduct the amounts transferred under this paragraph from the appropriation
107.13under this paragraph. The amounts transferred are appropriated to the commissioner of
107.14management and budget and the commissioner of education respectively.
107.15EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

107.16    Sec. 10. Minnesota Statutes 2014, section 477A.03, subdivision 2c, is amended to read:
107.17    Subd. 2c. Towns and unorganized territories. For aids payable in 2014 2016
107.18and thereafter, the total aids paid under section 477A.013, subdivision 1, is limited to
107.19$10,000,000 $12,000,000. For aids payable in 2015 and thereafter, the total aids paid
107.20under section 477A.013, subdivision 1, is limited to the amount certified to be paid in
107.21the previous year.
107.22EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

107.23    Sec. 11. Minnesota Statutes 2014, section 477A.12, subdivision 1, is amended to read:
107.24    Subdivision 1. Types of land; payments. The following amounts are annually
107.25appropriated to the commissioner of natural resources from the general fund for transfer
107.26to the commissioner of revenue. The commissioner of revenue shall pay the transferred
107.27funds to counties as required by sections 477A.11 to 477A.14. The amounts, based on the
107.28acreage as of July 1 of each year prior to the payment year, are:
107.29(1) $5.133 multiplied by (i) the total number of acres of acquired natural resources
107.30land or, at the county's option three-fourths of one percent of the appraised value of all
107.31acquired natural resources land in the county, whichever is greater; and (ii) the total
107.32number of acres in the county that were purchased by a federally recognized Indian tribe
107.33with funding provided under section 97A.056;
108.1(2) $5.133, multiplied by the total number of acres of transportation wetland or, at
108.2the county's option, three-fourths of one percent of the appraised value of all transportation
108.3wetland in the county, whichever is greater;
108.4(3) $5.133, multiplied by the total number of acres of wildlife management land, or,
108.5at the county's option, three-fourths of one percent of the appraised value of all wildlife
108.6management land in the county, whichever is greater;
108.7(4) 50 percent of the dollar amount as determined under clause (1), multiplied by
108.8the number of acres of military refuge land in the county;
108.9(5) $1.50 $2, multiplied by the number of acres of county-administered other natural
108.10resources land in the county;
108.11(6) $5.133, multiplied by the total number of acres of land utilization project land
108.12in the county;
108.13(7) $1.50 $2, multiplied by the number of acres of commissioner-administered other
108.14natural resources land in the county; and
108.15    (8) without regard to acreage, and notwithstanding the rules adopted under section
108.1684A.55 , $300,000 for local assessments under section 84A.55, subdivision 9, that shall be
108.17divided and distributed to the counties containing state-owned lands within a conservation
108.18area in proportion to each county's percentage of the total annual ditch assessments.; and
108.19(9) without regard to acreage, and notwithstanding the rules adopted under section
108.2084A.55, $300,000 for past unpaid local assessments under section 84A.55, subdivision 9,
108.21shall be distributed to the counties containing state-owned lands within a conservation
108.22area in proportion to each county's percentage of the total past unpaid ditch assessments.
108.23The payments shall be made for aids payable in calendar years 2015 through 2024. The
108.24payments made to counties under this paragraph shall be considered the final payment
108.25for this purpose.
108.26The commissioner of natural resources shall certify the number of acres and appraised
108.27values for wildlife management lands under clause (3) for calendar year 2013 to the
108.28commissioner of revenue by June 15, 2014. The commissioner of revenue shall make the
108.29payment for any positive difference in the 2013 payment under clause (3) by June 30, 2014.
108.30EFFECTIVE DATE.Changes to clause (1) are effective for aids payable in
108.31calendar year 2017 and thereafter. Changes to clauses (5), (7), and (9) are effective for
108.32aids payable in calendar year 2015 and thereafter.

108.33    Sec. 12. Minnesota Statutes 2014, section 477A.12, subdivision 2, is amended to read:
109.1    Subd. 2. Procedure. (a) Each county auditor shall certify to the Department of
109.2Natural Resources during July of each year prior to the payment year the number of acres
109.3of county-administered other natural resources land within the county. The Department of
109.4Natural resources may, in addition to the certification of acreage, require descriptive lists
109.5of land so certified. The commissioner of natural resources shall determine and certify to
109.6the commissioner of revenue by March 1 of the payment year:
109.7(1) the number of acres and most recent appraised value of acquired natural
109.8resources land, wildlife management land, and military refuge land within each county;
109.9(2) the number of acres of commissioner-administered natural resources land within
109.10each county;
109.11(3) the number of acres of county-administered other natural resources land within
109.12each county, based on the reports filed by each county auditor with the commissioner
109.13of natural resources; and
109.14(4) the number of acres of land utilization project land within each county; and
109.15(5) the number of acres within each county purchased by a federally recognized
109.16Indian tribe with funding provided under section 97A.056.
109.17(b) The commissioner of transportation shall determine and certify to the
109.18commissioner of revenue by March 1 of the payment year the number of acres of
109.19transportation wetland and the appraised value of the land, but only if it exceeds 500
109.20acres in a county.
109.21(c) Each auditor of a county that contains state-owned lands within a conservation
109.22area shall determine and certify to the commissioner of natural resources by May 31 of
109.23the payment year, the county's ditch assessments for state-owned lands subject to section
109.2484A.55, subdivision 9 . A joint certification for two or more counties may be submitted to
109.25the commissioner of natural resources through the Consolidated Conservation Counties
109.26Joint Powers Board. The commissioner of natural resources shall certify the ditch
109.27assessments to the commissioner of revenue by June 15 of the payment year. The
109.28commissioner of natural resources shall certify the ditch assessments under this paragraph
109.29for payment year 2013 by June 15, 2014. The commissioner of revenue shall make the
109.30payment for 2013 by June 30, 2014.
109.31(d) The commissioner of revenue shall determine the distributions provided for in this
109.32section using: (1) the number of acres and appraised values certified by the commissioner
109.33of natural resources and the commissioner of transportation by March 1 of the payment
109.34year; and (2) ditch assessments under paragraph (c), by July 15 of the payment year.
109.35EFFECTIVE DATE.This section is effective for certifications made in 2016 and
109.36thereafter.

110.1    Sec. 13. Minnesota Statutes 2014, section 477A.13, is amended to read:
110.2477A.13 TIME OF PAYMENT, DEDUCTIONS.
110.3Payments to the counties of the amounts determined under section 477A.12 must
110.4be made by the commissioner of revenue from the general fund at the time provided in
110.5section 477A.015 for the first second installment of local government aid.
110.6EFFECTIVE DATE.This section is effective for aids payable in calendar year
110.72016 and thereafter.

110.8    Sec. 14. Minnesota Statutes 2014, section 477A.15, is amended to read:
110.9477A.15 TACONITE AID REIMBURSEMENT.
110.10Any school district in which is located property which had been entitled to a reduction
110.11of tax pursuant to Minnesota Statutes 1978, section 273.135, subdivision 2, clause (c),
110.12shall receive in 1981 and subsequent years an amount equal to the amount it received in
110.131980 pursuant to Minnesota Statutes 1978, section 298.28, subdivision 1, clause (3)(b).
110.14Payments shall be made pursuant to this section and section 126C.48, subdivision 8,
110.15paragraph (5), by the commissioner of revenue to the taxing jurisdictions on the date in
110.16each calendar year when the first second installment is paid under section 477A.015.
110.17EFFECTIVE DATE.This section is effective for payments made in calendar
110.18year 2016 and thereafter.

110.19    Sec. 15. Minnesota Statutes 2014, section 477A.20, is amended to read:
110.20477A.20 DEBT SERVICE AID; LEWIS AND CLARK JOINT POWERS
110.21BOARD CITY OF WORTHINGTON.
110.22(a) The Lewis and Clark Joint Powers Board The city of Worthington is eligible to
110.23receive an aid distribution under this section equal to (1) the principal and interest payable
110.24in the succeeding calendar year for bonds issued under section 469.194 minus the sum of
110.25(2) the combined adjusted net tax capacity of Rock County and Nobles County for the
110.26assessment year prior to the aid payable year multiplied by 1.5 percent and (3) 50 percent
110.27of any federal aid received to fund the project in the calendar year the total local share. For
110.28purposes of this section, the "total local share" is as follows: the city of Worthington shall
110.29pay $300,000, the city of Luverne shall pay $100,000, Rock County shall pay $50,000, and
110.30Nobles County shall pay $50,000. Each municipality other than the city of Worthington
110.31shall pay the amount indicated to the city of Worthington by July 1 of the year following
110.32the year in which the bonds were issued and in each year thereafter until all principal
111.1and interest has been paid. If a jurisdiction fails to pay the amount as indicated, the aid
111.2reductions for that municipality under section 477A.21 shall be made. The commissioner
111.3of revenue shall add the amount of any aid reduction to the aid distribution under this
111.4section. The Board city of Worthington shall certify to the commissioner of revenue any
111.5federal aid allocated to the project for the calendar year and the principal and interest due
111.6in the succeeding calendar year by June 1 of the aid payable year. The commissioner of
111.7revenue shall calculate the aid payable under this section and certify the amount payable
111.8before July 1 of the aid distribution year. The commissioner shall pay the aid under this
111.9section to the board city of Worthington at the times specified for payments of local
111.10government aid in section 477A.015. An amount sufficient to pay the state aid authorized
111.11under this section is annually appropriated to the commissioner from the general fund.
111.12(b) The board must allocate the aid to the municipalities issuing bonds under section
111.13469.194 in proportion to their principal and interest payments.
111.14(c) If the deduction under paragraph (a), clause (3), eliminates the aid payment
111.15under this section in a calendar year, then the excess of the deduction must be carried
111.16over and used to reduce the principal and interest in the succeeding year or years used to
111.17calculate aid under paragraph (a).
111.18(d) If federal grants and aid received for the project, not deducted under paragraph
111.19(a), clause (3), exceed the total debt service payments for bonds issued under section
111.20469.194, other than payments made with state aid under this section, the joint powers
111.21board must repay any excess to the commissioner of revenue for deposit in the general
111.22fund. The repayment may not exceed the sum of state aid payments under this section and
111.23any other grants made by the state for the project.
111.24(e) (b) This section expires at the earlier of January 1, 2039, or when the bonds
111.25authorized under section 469.194 have been paid or defeased.
111.26EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

111.27    Sec. 16. [477A.21] AID REDUCTIONS.
111.28If a municipality fails to pay the amount indicated in section 477A.20, paragraph (a),
111.29the city of Worthington must notify the commissioner of revenue by July 5. The following
111.30aid reduction for that municipality must be made for that year:
111.31(1) for the city of Luverne, the aid payable under section 477A.013, subdivision
111.329, shall be reduced by $100,000;
111.33(2) for Rock County, the aid payable under section 477A.0124, subdivision 3, shall
111.34be reduced by $50,000; and
112.1(3) for Nobles County, the aid payable under section 477A.0124, subdivision 3, shall
112.2be reduced by $50,000.
112.3The amount of the aid reductions under this section shall cancel to the general fund.
112.4EFFECTIVE DATE.This section is effective for aids payable in 2016 and thereafter.

112.5    Sec. 17. Laws 2001, First Special Session chapter 5, article 3, section 86, is amended
112.6to read:
112.7    Sec. 86. RED RIVER WATERSHED MANAGEMENT BOARD; PAYMENT
112.8IN LIEU OF TAXES.
112.9    (a) The Red River watershed management board may spend money from its general
112.10fund to compensate counties and townships for lost tax revenue from land that becomes
112.11tax exempt after it is acquired by the board or a member watershed district for flood
112.12damage reduction project. The amount that may be paid under this section to a county
112.13or township must not exceed the tax that was payable to that taxing jurisdiction on the
112.14land in the last taxes payable year before the land became exempt due to the acquisition,
112.15not to exceed $4 $5.133 per acre, multiplied by 20. This total amount may be paid in one
112.16payment, or in equal annual installments over a period that does not exceed 20 years. A
112.17member watershed district of the Red River management board may spend money from its
112.18construction fund for the purposes described in this section.
112.19    (b) For the purposes of this section, "Red River watershed management board"
112.20refers to the board established by Laws 1976, chapter 162, section 1, as amended by Laws
112.211982, chapter 474, section 1, Laws 1983, chapter 338, section 1, Laws 1989 First Special
112.22Session chapter 1, article 5, section 45, Laws 1991, chapter 167, section 1, and Laws
112.231998, chapter 389, article 3, section 29.
112.24EFFECTIVE DATE.This section is effective for aids payable in calendar year
112.252015 and thereafter.

112.26    Sec. 18. 2013 CITY AID PENALTY FORGIVENESS; CITY OF OSLO.
112.27Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of
112.28Oslo shall receive the portion of its aid payment for calendar year 2013 under Minnesota
112.29Statutes, section 477A.013, that was withheld under Minnesota Statutes, section
112.30477A.017, subdivision 3, provided that the state auditor certifies to the commissioner
112.31of revenue that it received audited financial statements from the city for calendar year
112.322012 by December 31, 2013. The commissioner of revenue shall make a payment of
112.33$37,473.50 with the first payment of aids under Minnesota Statutes, section 477A.015.
113.1$37,473.50 is appropriated from the general fund to the commissioner of revenue in fiscal
113.2year 2016 to make this payment.
113.3EFFECTIVE DATE.This section is effective the day following final enactment.

113.4    Sec. 19. 2014 AID PENALTY FORGIVENESS.
113.5(a) Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the cities
113.6of Dundee, Jeffers, and Woodstock shall receive all of its calendar year 2014 aid payment
113.7that was withheld under Minnesota Statutes, section 477A.017, subdivision 3, provided
113.8that the state auditor certifies to the commissioner of revenue that the city complied with
113.9all reporting requirements under Minnesota Statutes, section 477A.017, subdivision 3, for
113.10calendar years 2013 and 2014 by June 1, 2015.
113.11(b) The commissioner of revenue shall make payment to each city no later than June
113.1230, 2015. Up to $101,570 of the fiscal year 2015 appropriation for local government aid is
113.13available for the payment under this section.
113.14EFFECTIVE DATE.This section is effective the day following final enactment.

113.15ARTICLE 6
113.16WORKFORCE HOUSING

113.17    Section 1. [116J.549] WORKFORCE HOUSING TAX CREDIT.
113.18    Subdivision 1. Definitions. (a) For the purposes of this section, the following terms
113.19have the meanings given.
113.20(b) "City" means a statutory or home rule charter city.
113.21(c) "Eligible project area" means an area that meets the following criteria:
113.22(1) a census block with a population density over 200 persons per square mile
113.23according to the most recent United States census data available;
113.24(2) located in a city with a population greater than 1,000;
113.25(3) having a median number of full-time jobs of at least 500 for the last five years;
113.26(4) the average vacancy rate for rental housing located in the municipality and in
113.27any statutory or home rule charter city located within 15 miles or less of the boundaries
113.28of the municipality has been four percent or less for at least the immediately preceding
113.29two-year period;
113.30(5) located in an area served by a joint county-city economic development authority
113.31or located in an area outside the following counties: Anoka, Benton, Carver, Chisago,
113.32Dakota, Hennepin, Isanti, Olmsted, Ramsey, Scott, Sherburne, Stearns, Washington,
113.33and Wright; and
114.1(6) fewer than four market rate residential rental units per 1,000 residents were
114.2constructed in the city in the last ten years without government financing, grants, or other
114.3subsidies, other than subsidies under this section or section 469.175, subdivision 3.
114.4(d) "Joint county-city economic development authority" means an economic
114.5development authority, formed under Laws 1988, chapter 516, section 1, as a joint
114.6partnership between a city and county and excluding those established by the county only.
114.7(e) "Market rate residential rental properties" means properties that are rented at
114.8market value and excludes: (1) properties constructed with financial assistance requiring
114.9the property to be occupied by residents that meet income limits under federal or state
114.10law of initial occupancy; and (2) properties constructed with federal, state, or local flood
114.11recovery assistance, regardless of whether that assistance imposed income limits as a
114.12condition of receiving assistance.
114.13(f) "Officer" means a person elected or appointed by the board of directors to
114.14manage the daily operations of a business.
114.15(g) "Principal" means a person having authority to act on behalf of a business.
114.16(h) "Qualified investment" means a cash investment or the fair market value
114.17equivalent for common stock, land, a partnership or membership interest, preferred
114.18stock, debt with mandatory conversion to equity, or an equivalent ownership interest as
114.19determined by the commissioner that is made in a qualified workforce housing project.
114.20(i) "Qualified project investor" means an investor who has been certified by the
114.21commissioner under subdivision 2.
114.22(j) "Qualifying workforce housing project" means a project:
114.23(1) for market rate residential rental properties with a minimum of three dwelling
114.24units;
114.25(2) with a cost per unit of no more than $150,000 and no less than $75,000;
114.26(3) located in an eligible project area;
114.27(4) that has more than 50 percent nonstate funding proposed to fund the project; and
114.28(5) that has been designated by the commissioner as a qualifying workforce housing
114.29project.
114.30    Subd. 2. Qualified project investor tax credits. (a) A credit of up to $1,000,000 is
114.31allowed against the tax imposed under chapter 290 for a taxpayer that makes a qualified
114.32investment in a qualified workforce housing project equal to 33 percent of the amount of
114.33the qualified investment.
114.34(b) The credit under this subdivision is allowed in the taxable year that the qualified
114.35workforce housing project has housing units that are certified for occupancy by the
114.36Department of Labor and Industry or a city inspector.
115.1(c) The commissioner must not allocate more than $5,000,000 in credits to qualified
115.2project investors for taxable years beginning after December 31, 2015, and before January
115.31, 2017, and must not allocate more than $7,000,000 in credits to qualified project
115.4investors for taxable years beginning after December 31, 2016, and before January 1,
115.52022. The commissioner must not allocate more than 33 percent of qualified project
115.6investor tax credits to the same qualified workforce housing project.
115.7(d) Applications for tax credits for a taxable year must be made available by
115.8the commissioner by November 1 of the prior calendar year. The commissioner must
115.9make every effort to provide applications and relevant data to applicants in a simple,
115.10concise manner using plain language. Tax credits must be allocated to qualified project
115.11investors in the order that the tax credit request applications are filed, except where
115.12the commissioner determines the investment is circumventing the spirit of the law or
115.13where little or no local economic growth would occur as a result of the investment. The
115.14commissioner must approve or reject a tax credit request application within 15 days of
115.15receiving the application. The investment specified in the application must be made within
115.1660 days of the allocation of the credit. If the investment is not made within 60 days, the
115.17credit allocation is canceled. A qualified project investor who fails to invest as specified in
115.18the application must notify the commissioner immediately and no later than five business
115.19days after the expiration of the 60-day investment period. The commissioner may require
115.20an application fee for the applications submitted under this subdivision.
115.21(e) All tax credit request applications filed with the department on the same day
115.22must be treated as having been filed contemporaneously. If two or more qualified project
115.23investors file tax credit request applications on the same day, and the aggregate amount of
115.24credit allocation claims exceeds the aggregate limit of credits under this section or the lesser
115.25amount of credits that remain unallocated on that day, then the credits must be allocated
115.26among the qualified project investors who filed on that day on a pro rata basis with respect
115.27to the amounts claimed. The pro rata allocation for any one qualified project investor is the
115.28product obtained by multiplying a fraction, the numerator of which is the amount of the
115.29credit allocation claim filed on behalf of a qualified project investor and the denominator
115.30of which is the total of all credit allocation claims filed on behalf of all applicants on that
115.31day, by the amount of credits that remain unallocated on that day for the taxable year.
115.32(f) If a credit allocation has been granted to the qualified project investor and the
115.33qualified project investor has made the investment specified in the application as required
115.34under paragraph (d), the commissioner must issue a credit certificate to the taxpayer
115.35designated in the application. The credit certificate must state the amount of the credit.
116.1The commissioner must notify the commissioner of revenue of credit certificates issued
116.2under this subdivision.
116.3(g) The commissioner of revenue shall prescribe the manner in which the credit
116.4may be issued or claimed.
116.5    Subd. 3. Transfer and revocation of credits. (a) A tax credit under this section
116.6is not transferable to any other taxpayer. Credits passed through to partners, members,
116.7shareholders, or owners are not considered transfers for purposes of this subdivision.
116.8(b) If the commissioner discovers that a qualified project investor did not meet the
116.9eligibility requirements for the tax credits under this section after the credits have been
116.10allocated, the commissioner may determine that credit allocated is revoked and must be
116.11repaid by the investor. The commissioner must notify the commissioner of revenue of
116.12every credit revoked and subject to full or partial repayment under this section.
116.13    Subd. 4. Reporting. Beginning in 2017, the commissioner must annually report
116.14by March 15 to the chairs and ranking minority members of the committees in the senate
116.15and house of representatives with jurisdiction over taxes and economic development, in
116.16compliance with sections 3.195 and 3.197, on tax credits issued under this section. The
116.17report must include:
116.18(1) information about the availability of workforce housing in greater Minnesota;
116.19(2) information from employers and communities in greater Minnesota about
116.20whether or not workforce housing needs are being met;
116.21(3) which projects have been funded by the workforce housing tax credit and
116.22whether previously funded projects have created economic growth;
116.23(4) any suggested legislation to accelerate construction of workforce housing;
116.24(5) the number and amount of tax credits issued and the identity of the recipients;
116.25(6) the number and amount of tax credits revoked under subdivision 3;
116.26(7) the location, total cost of, and expected rent to be received as a result of
116.27qualifying workforce housing projects funded under this section; and
116.28(8) any other relevant information needed to evaluate the effect of the workforce
116.29housing tax credits.
116.30EFFECTIVE DATE.This section is effective for taxable years beginning after
116.31December 31, 2015.

116.32    Sec. 2. Minnesota Statutes 2014, section 290.06, is amended by adding a subdivision
116.33to read:
117.1    Subd. 38. Workforce housing tax credit. (a) A taxpayer is allowed a credit against
117.2the tax under this chapter equal to the amount certified by the commissioner of employment
117.3and economic development under section 116J.549 to the taxpayer for the taxable year.
117.4(b) Credits allowed to a partnership, limited liability company taxed as a partnership,
117.5corporation, or multiple owners of property are passed through to the partners, members,
117.6shareholders, or owners, respectively, pro rata to each partner, member, shareholder, or
117.7owner based on that person's share of the entity's income for the taxable year.
117.8(c) If the amount of the credit that the taxpayer is eligible to receive under this
117.9subdivision exceeds the liability for tax under this chapter, the commissioner shall
117.10refund the excess to the taxpayer. For purposes of this subdivision, "liability for tax"
117.11means the tax imposed under this chapter for the taxable year reduced by the sum of the
117.12nonrefundable credits allowed under this chapter.
117.13EFFECTIVE DATE.This section is effective for taxable years beginning after
117.14December 31, 2015.

117.15    Sec. 3. Minnesota Statutes 2014, section 469.174, subdivision 12, is amended to read:
117.16    Subd. 12. Economic development district. "Economic development district"
117.17means a type of tax increment financing district which consists of any project, or portions
117.18of a project, which the authority finds to be in the public interest because:
117.19(1) it will discourage commerce, industry, or manufacturing from moving their
117.20operations to another state or municipality; or
117.21(2) it will result in increased employment in the state; or
117.22(3) it will result in preservation and enhancement of the tax base of the state; or
117.23(4) it satisfies the requirements of a workforce housing project under section
117.24469.176, subdivision 4c, paragraph (d).
117.25EFFECTIVE DATE.This section is effective for districts for which the request for
117.26certification is made after June 30, 2015.

117.27    Sec. 4. Minnesota Statutes 2014, section 469.175, subdivision 3, is amended to read:
117.28    Subd. 3. Municipality approval. (a) A county auditor shall not certify the original
117.29net tax capacity of a tax increment financing district until the tax increment financing plan
117.30proposed for that district has been approved by the municipality in which the district
117.31is located. If an authority that proposes to establish a tax increment financing district
117.32and the municipality are not the same, the authority shall apply to the municipality in
117.33which the district is proposed to be located and shall obtain the approval of its tax
118.1increment financing plan by the municipality before the authority may use tax increment
118.2financing. The municipality shall approve the tax increment financing plan only after a
118.3public hearing thereon after published notice in a newspaper of general circulation in the
118.4municipality at least once not less than ten days nor more than 30 days prior to the date
118.5of the hearing. The published notice must include a map of the area of the district from
118.6which increments may be collected and, if the project area includes additional area, a map
118.7of the project area in which the increments may be expended. The hearing may be held
118.8before or after the approval or creation of the project or it may be held in conjunction with
118.9a hearing to approve the project.
118.10    (b) Before or at the time of approval of the tax increment financing plan, the
118.11municipality shall make the following findings, and shall set forth in writing the reasons
118.12and supporting facts for each determination:
118.13    (1) that the proposed tax increment financing district is a redevelopment district, a
118.14renewal or renovation district, a housing district, a soils condition district, or an economic
118.15development district; if the proposed district is a redevelopment district or a renewal or
118.16renovation district, the reasons and supporting facts for the determination that the district
118.17meets the criteria of section 469.174, subdivision 10, paragraph (a), clauses (1) and (2), or
118.18subdivision 10a, must be documented in writing and retained and made available to the
118.19public by the authority until the district has been terminated;
118.20    (2) that, in the opinion of the municipality:
118.21    (i) the proposed development or redevelopment would not reasonably be expected to
118.22occur solely through private investment within the reasonably foreseeable future; and
118.23    (ii) the increased market value of the site that could reasonably be expected to occur
118.24without the use of tax increment financing would be less than the increase in the market
118.25value estimated to result from the proposed development after subtracting the present
118.26value of the projected tax increments for the maximum duration of the district permitted
118.27by the plan. The requirements of this item do not apply if the district is a housing district;
118.28    (3) that the tax increment financing plan conforms to the general plan for the
118.29development or redevelopment of the municipality as a whole;
118.30    (4) that the tax increment financing plan will afford maximum opportunity,
118.31consistent with the sound needs of the municipality as a whole, for the development or
118.32redevelopment of the project by private enterprise;
118.33    (5) that the municipality elects the method of tax increment computation set forth in
118.34section 469.177, subdivision 3, paragraph (b), if applicable.
118.35    (c) When the municipality and the authority are not the same, the municipality shall
118.36approve or disapprove the tax increment financing plan within 60 days of submission by the
119.1authority. When the municipality and the authority are not the same, the municipality may
119.2not amend or modify a tax increment financing plan except as proposed by the authority
119.3pursuant to subdivision 4. Once approved, the determination of the authority to undertake
119.4the project through the use of tax increment financing and the resolution of the governing
119.5body shall be conclusive of the findings therein and of the public need for the financing.
119.6    (d) For a district that is subject to the requirements of paragraph (b), clause (2),
119.7item (ii), the municipality's statement of reasons and supporting facts must include all of
119.8the following:
119.9    (1) an estimate of the amount by which the market value of the site will increase
119.10without the use of tax increment financing;
119.11    (2) an estimate of the increase in the market value that will result from the
119.12development or redevelopment to be assisted with tax increment financing; and
119.13    (3) the present value of the projected tax increments for the maximum duration of
119.14the district permitted by the tax increment financing plan.
119.15    (e) For purposes of this subdivision, "site" means the parcels on which the
119.16development or redevelopment to be assisted with tax increment financing will be located.
119.17(f) Before or at the time of approval of the tax increment financing plan for a district
119.18to be used to fund a workforce housing project under section 469.176, subdivision 4c,
119.19paragraph (d), the municipality shall make the following findings and shall set forth in
119.20writing the reasons and supporting facts for each determination:
119.21(1) the city has a population greater than 1,000;
119.22(2) having a median number of full-time jobs of at least 500 for the last five years;
119.23(3) located in a census block with a population density over 200 persons per square
119.24mile, according to the most recent United States census data available;
119.25(4) located in an area served by a joint county-city economic development authority
119.26or outside the following counties: Anoka, Benton, Carver, Chisago, Dakota, Hennepin,
119.27Isanti, Olmsted, Ramsey, Scott, Sherburne, Stearns, Washington, and Wright;
119.28(5) the average vacancy rate for rental housing located in the municipality, and in
119.29any statutory or home rule charter city located within 15 miles or less of the boundaries
119.30of the municipality, has been four percent or less for at least the immediately preceding
119.31two-year period;
119.32(6) at least one business located in the municipality, or within 15 miles of the
119.33municipality, that employs a minimum of 20 full-time equivalent employees in aggregate
119.34has provided a written statement to the municipality indicating that the lack of available
119.35rental housing has impeded their ability to recruit and hire employees;
120.1(7) fewer than four market rate residential rental units per 1,000 residents were
120.2constructed in the city in the last ten years without government financing, grants, or other
120.3subsidies, other than subsidies under this section; and
120.4(8) the municipality and the development authority intend to use increments from
120.5the district for the development of market rate residential rental properties and includes
120.6new modular homes or new manufactured homes, new manufactured homes on leased
120.7land, or in a manufacturer's home park to serve employees or businesses located in the
120.8municipality or surrounding area.
120.9For purposes of this section: (1) "joint county-city economic development authority"
120.10means an economic development authority, formed under Laws 1988, chapter 516, section
120.111, as a joint partnership between a city and county and excluding those established by the
120.12county only; and (2) "market rate residential rental properties" means properties that are
120.13rented at market value and excludes: (i) properties constructed with financial assistance
120.14requiring the property to be occupied by residents that meet income limits under federal or
120.15state law of initial occupancy; and (ii) properties constructed with federal, state, or local
120.16flood recovery assistance, regardless of whether that assistance imposed income limits as a
120.17condition of receiving assistance.
120.18The authority to request certification of districts under this section expires June
120.1930, 2020.
120.20EFFECTIVE DATE.This section is effective for districts for which the request for
120.21certification is made after June 30, 2015.

120.22    Sec. 5. Minnesota Statutes 2014, section 469.176, subdivision 4c, is amended to read:
120.23    Subd. 4c. Economic development districts. (a) Revenue derived from tax increment
120.24from an economic development district may not be used to provide improvements, loans,
120.25subsidies, grants, interest rate subsidies, or assistance in any form to developments
120.26consisting of buildings and ancillary facilities, if more than 15 percent of the buildings and
120.27facilities (determined on the basis of square footage) are used for a purpose other than:
120.28    (1) the manufacturing or production of tangible personal property, including
120.29processing resulting in the change in condition of the property;
120.30    (2) warehousing, storage, and distribution of tangible personal property, excluding
120.31retail sales;
120.32    (3) research and development related to the activities listed in clause (1) or (2);
120.33    (4) telemarketing if that activity is the exclusive use of the property;
120.34    (5) tourism facilities; or
120.35    (6) space necessary for and related to the activities listed in clauses (1) to (5); or
121.1    (7) a workforce housing project that satisfies the requirements of paragraph (d).
121.2    (b) Notwithstanding the provisions of this subdivision, revenues derived from tax
121.3increment from an economic development district may be used to provide improvements,
121.4loans, subsidies, grants, interest rate subsidies, or assistance in any form for up to 15,000
121.5square feet of any separately owned commercial facility located within the municipal
121.6jurisdiction of a small city, if the revenues derived from increments are spent only to
121.7assist the facility directly or for administrative expenses, the assistance is necessary to
121.8develop the facility, and all of the increments, except those for administrative expenses,
121.9are spent only for activities within the district.
121.10    (c) A city is a small city for purposes of this subdivision if the city was a small city
121.11in the year in which the request for certification was made and applies for the rest of
121.12the duration of the district, regardless of whether the city qualifies or ceases to qualify
121.13as a small city.
121.14(d) A project qualifies as a workforce housing project under this subdivision if
121.15increments from the district are used exclusively to assist in the acquisition of property;
121.16construction of improvements; and provision of loans or subsidies, grants, interest
121.17rate subsidies, public infrastructure, and related financing costs for rental housing
121.18developments in the municipality, and if the governing body of the municipality made the
121.19findings for the project required by section 469.175, subdivision 3, paragraph (f).
121.20EFFECTIVE DATE.This section is effective for districts for which the request for
121.21certification is made after June 30, 2015.

121.22    Sec. 6. Minnesota Statutes 2014, section 469.1761, is amended by adding a subdivision
121.23to read:
121.24    Subd. 5. Income limits; Minnesota Housing Finance Agency challenge program.
121.25For a project receiving a loan or grant from the Minnesota Housing Finance Agency
121.26challenge program under section 462A.33, the income limits under section 462A.33 are
121.27substituted for the applicable income limits under subdivision 2 or 3 for the project.
121.28EFFECTIVE DATE.This section is effective for districts for which the request for
121.29certification is made after June 30, 2015.

122.1ARTICLE 7
122.2MINERALS

122.3    Section 1. Minnesota Statutes 2014, section 298.17, is amended to read:
122.4298.17 OCCUPATION TAXES TO BE APPORTIONED.
122.5(a) All occupation taxes paid by persons, copartnerships, companies, joint stock
122.6companies, corporations, and associations, however or for whatever purpose organized,
122.7engaged in the business of mining or producing iron ore or other ores, when collected
122.8shall be apportioned and distributed in accordance with the Constitution of the state of
122.9Minnesota, article X, section 3, in the manner following: 90 percent shall be deposited
122.10in the state treasury and credited to the general fund of which four-ninths shall be used
122.11for the support of elementary and secondary schools; and ten percent of the proceeds of
122.12the tax imposed by this section shall be deposited in the state treasury and credited to the
122.13general fund for the general support of the university.
122.14(b) Of the money apportioned to the general fund by this section: (1) there
122.15is annually appropriated and credited to the mining environmental and regulatory
122.16account in the special revenue fund an amount equal to the greater of $1,500,000 or
122.17that which would have been generated by a 2-1/2 cent tax imposed by section 298.24
122.18on each taxable ton produced in the preceding calendar year. Money in the mining
122.19environmental and regulatory account is appropriated annually to the commissioner of
122.20natural resources to fund agency staff to work on environmental issues and provide
122.21regulatory services for ferrous and nonferrous mining operations in this state. Payment to
122.22the mining environmental and regulatory account shall be made by on July 1 annually.
122.23The commissioner of natural resources shall execute an interagency agreement with
122.24the Pollution Control Agency to assist with the provision of environmental regulatory
122.25services such as monitoring and permitting required for ferrous and nonferrous mining
122.26operations; (2) there is annually appropriated and credited to the Iron Range Resources and
122.27Rehabilitation Board account in the special revenue fund an amount equal to that which
122.28would have been generated by a 1.5 cent tax imposed by section 298.24 on each taxable
122.29ton produced in the preceding calendar year, to be expended for the purposes of section
122.30298.22 ; and (3) there is annually appropriated and credited to the Iron Range Resources
122.31and Rehabilitation Board account in the special revenue fund for transfer to the Iron Range
122.32school consolidation and cooperatively operated school account under section 298.28,
122.33subdivision 7a
, an amount equal to that which would have been generated by a six cent tax
122.34imposed by section 298.24 on each taxable ton produced in the preceding calendar year.
122.35Payment to the Iron Range Resources and Rehabilitation Board account shall be made by
123.1May 15 on July 1 annually; and (4) there is annually appropriated and credited to the Iron
123.2Range Resources and Rehabilitation Board account in the special revenue fund for transfer
123.3to the energy efficiency and mining protection account under section 298.227, paragraph
123.4(d), an amount equal to that which would have been generated by a 15 cent tax imposed
123.5by section 298.24 on each taxable ton produced in the preceding year. Payment to the Iron
123.6Range Resources and Rehabilitation Board account shall be made on July 1 annually.
123.7(c) The money appropriated pursuant to paragraph (b), clause (2), shall be used (i)
123.8to provide environmental development grants to local governments located within any
123.9county in region 3 as defined in governor's executive order number 60, issued on June
123.1012, 1970, which does not contain a municipality qualifying pursuant to section 273.134,
123.11paragraph (b)
, or (ii) to provide economic development loans or grants to businesses
123.12located within any such county, provided that the county board or an advisory group
123.13appointed by the county board to provide recommendations on economic development
123.14shall make recommendations to the Iron Range Resources and Rehabilitation Board
123.15regarding the loans. Payment to the Iron Range Resources and Rehabilitation Board
123.16account shall be made by May 15 on July 1 annually.
123.17(d) Of the money allocated to Koochiching County, one-third must be paid to the
123.18Koochiching County Economic Development Commission.
123.19EFFECTIVE DATE.This section is effective beginning with the 2015 production
123.20year.

123.21    Sec. 2. Minnesota Statutes 2014, section 298.227, is amended to read:
123.22298.227 TACONITE ECONOMIC DEVELOPMENT FUND.
123.23    (a) An amount equal to that distributed pursuant to each taconite producer's taxable
123.24production and qualifying sales under section 298.28, subdivision 9a, shall be held by
123.25the Iron Range Resources and Rehabilitation Board in a separate taconite economic
123.26development fund for each taconite and direct reduced ore producer. Money from the
123.27fund for each producer shall be released by the commissioner after review by a joint
123.28committee consisting of an equal number of representatives of the salaried employees and
123.29the nonsalaried production and maintenance employees of that producer. The District 11
123.30director of the United States Steelworkers of America, on advice of each local employee
123.31president, shall select the employee members. In nonorganized operations, the employee
123.32committee shall be elected by the nonsalaried production and maintenance employees.
123.33The review must be completed no later than six months after the producer presents a
123.34proposal for expenditure of the funds to the committee. The funds held pursuant to this
124.1section may be released only for workforce development and associated public facility
124.2improvement, or for acquisition of plant and stationary mining equipment and facilities
124.3for the producer or for research and development in Minnesota on new mining, or
124.4taconite, iron, or steel production technology, but only if the producer provides a matching
124.5expenditure equal to the amount of the distribution to be used for the same purpose
124.6beginning with distributions in 2014. Effective for proposals for expenditures of money
124.7from the fund beginning May 26, 2007, the commissioner may not release the funds
124.8before the next scheduled meeting of the board. If a proposed expenditure is not approved
124.9by the board, the funds must be deposited in the Taconite Environmental Protection Fund
124.10under sections 298.222 to 298.225. If a producer uses money which has been released
124.11from the fund prior to May 26, 2007 to procure haulage trucks, mobile equipment, or
124.12mining shovels, and the producer removes the piece of equipment from the taconite tax
124.13relief area defined in section 273.134 within ten years from the date of receipt of the
124.14money from the fund, a portion of the money granted from the fund must be repaid to
124.15the taconite economic development fund. The portion of the money to be repaid is 100
124.16percent of the grant if the equipment is removed from the taconite tax relief area within 12
124.17months after receipt of the money from the fund, declining by ten percent for each of the
124.18subsequent nine years during which the equipment remains within the taconite tax relief
124.19area. If a taconite production facility is sold after operations at the facility had ceased, any
124.20money remaining in the fund for the former producer may be released to the purchaser of
124.21the facility on the terms otherwise applicable to the former producer under this section. If
124.22a producer fails to provide matching funds for a proposed expenditure within six months
124.23after the commissioner approves release of the funds, the funds are available for release to
124.24another producer in proportion to the distribution provided and under the conditions of
124.25this section. Any portion of the fund which is not released by the commissioner within
124.26one year of its deposit in the fund shall be divided between the taconite environmental
124.27protection fund created in section 298.223 and the Douglas J. Johnson economic protection
124.28trust fund created in section 298.292 for placement in their respective special accounts.
124.29Two-thirds of the unreleased funds shall be distributed to the taconite environmental
124.30protection fund and one-third to the Douglas J. Johnson economic protection trust fund.
124.31    (b)(i) Notwithstanding the requirements of paragraph (a), setting the amount of
124.32distributions and the review process, an amount equal to ten cents per taxable ton of
124.33production in 2007, for distribution in 2008 only, that would otherwise be distributed
124.34under paragraph (a), may be used for a loan or grant for the cost of providing for a
124.35value-added wood product facility located in the taconite tax relief area and in a county
124.36that contains a city of the first class. This amount must be deducted from the distribution
125.1under paragraph (a) for which a matching expenditure by the producer is not required. The
125.2granting of the loan or grant is subject to approval by the board. If the money is provided
125.3as a loan, interest must be payable on the loan at the rate prescribed in section 298.2213,
125.4subdivision 3
. (ii) Repayments of the loan and interest, if any, must be deposited in the
125.5taconite environment protection fund under sections 298.222 to 298.225. If a loan or
125.6grant is not made under this paragraph by July 1, 2012, the amount that had been made
125.7available for the loan under this paragraph must be transferred to the taconite environment
125.8protection fund under sections 298.222 to 298.225. (iii) Money distributed in 2008 to the
125.9fund established under this section that exceeds ten cents per ton is available to qualifying
125.10producers under paragraph (a) on a pro rata basis.
125.11(c) Repayment or transfer of money to the taconite environmental protection fund
125.12under paragraph (b), item (ii), must be allocated by the Iron Range Resources and
125.13Rehabilitation Board for public works projects in house legislative districts in the same
125.14proportion as taxable tonnage of production in 2007 in each house legislative district, for
125.15distribution in 2008, bears to total taxable tonnage of production in 2007, for distribution
125.16in 2008. Notwithstanding any other law to the contrary, expenditures under this paragraph
125.17do not require approval by the governor. For purposes of this paragraph, "house legislative
125.18districts" means the legislative districts in existence on May 15, 2009.
125.19(d) An amount equal to that determined under section 298.17, paragraph (b),
125.20clause (4), shall be held by the Iron Range Resources and Rehabilitation Board in a
125.21separate energy efficiency and mining protection account within the taconite economic
125.22development fund that is hereby created for taconite and direct reduced ore producers.
125.23Funds from the account shall be released annually by the Iron Range Resources and
125.24Rehabilitation Board to each producer in direct proportion to the amount of the tax paid by
125.25that producer in the preceding year under section 298.01, as compared to the total amount
125.26of tax paid under section 298.01 in the preceding year by all producers, provided that a
125.27producer shall not be eligible for a distribution in amount greater than the amount of the
125.28tax paid in the preceding year. No expenditure under this section shall be paid unless
125.29approved by seven members of the Iron Range Resources and Rehabilitation Board.
125.30Notwithstanding any other law to the contrary, any amount allocated to the energy
125.31efficiency and mining protection account does not cancel nor is eligible for transfer to
125.32another account or fund.
125.33EFFECTIVE DATE.This section is effective beginning with the 2015 production
125.34year.

125.35    Sec. 3. Minnesota Statutes 2014, section 298.24, subdivision 1, is amended to read:
126.1    Subdivision 1. Imposed; calculation. (a) For concentrate produced in 2013, there is
126.2imposed upon taconite and iron sulphides, and upon the mining and quarrying thereof,
126.3and upon the production of iron ore concentrate therefrom, and upon the concentrate so
126.4produced, a tax of $2.56 per gross ton of merchantable iron ore concentrate produced
126.5therefrom. The tax is also imposed upon other iron-bearing material.
126.6    (b) For concentrates produced in 2014 and subsequent years, the tax rate shall be
126.7equal to the preceding year's tax rate plus an amount equal to the preceding year's tax rate
126.8multiplied by the percentage increase in the implicit price deflator from the fourth quarter
126.9of the second preceding year to the fourth quarter of the preceding year. "Implicit price
126.10deflator" means the implicit price deflator for the gross domestic product prepared by the
126.11Bureau of Economic Analysis of the United States Department of Commerce.
126.12    (c) An additional tax is imposed equal to three cents per gross ton of merchantable
126.13iron ore concentrate for each one percent that the iron content of the product exceeds 72
126.14percent, when dried at 212 degrees Fahrenheit.
126.15    (d) The tax on taconite and iron sulphides shall be imposed on the average of the
126.16production for the current year and the previous two years. The rate of the tax imposed
126.17will be the current year's tax rate. This clause shall not apply in the case of the closing
126.18of a taconite facility if the property taxes on the facility would be higher if this clause
126.19and section 298.25 were not applicable. The tax on other iron-bearing material shall be
126.20imposed on the current year production.
126.21    (e) If the tax or any part of the tax imposed by this subdivision is held to be
126.22unconstitutional, a tax of $2.56 per gross ton of merchantable iron ore concentrate
126.23produced shall be imposed.
126.24    (f) Consistent with the intent of this subdivision to impose a tax based upon the
126.25weight of merchantable iron ore concentrate, the commissioner of revenue may indirectly
126.26determine the weight of merchantable iron ore concentrate included in fluxed pellets by
126.27subtracting the weight of the limestone, dolomite, or olivine derivatives or other basic
126.28flux additives included in the pellets from the weight of the pellets. For purposes of this
126.29paragraph, "fluxed pellets" are pellets produced in a process in which limestone, dolomite,
126.30olivine, or other basic flux additives are combined with merchantable iron ore concentrate.
126.31No subtraction from the weight of the pellets shall be allowed for binders, mineral and
126.32chemical additives other than basic flux additives, or moisture.
126.33    (g)(1) Notwithstanding any other provision of this subdivision, for the first two years
126.34of a plant's commercial production of direct reduced ore from ore mined in this state, no
126.35tax is imposed under this section. As used in this paragraph, "commercial production" is
126.36production of more than 50,000 tons of direct reduced ore in the current year or in any prior
127.1year, "noncommercial production" is production of 50,000 tons or less of direct reduced ore
127.2in any year, and "direct reduced ore" is ore that results in a product that has an iron content
127.3of at least 75 percent. For the third year of a plant's commercial production of direct
127.4reduced ore, the rate to be applied to direct reduced ore is 25 percent of the rate otherwise
127.5determined under this subdivision. For the fourth commercial production year, the rate is
127.650 percent of the rate otherwise determined under this subdivision; for the fifth commercial
127.7production year, the rate is 75 percent of the rate otherwise determined under this
127.8subdivision; and for all subsequent commercial production years, the full rate is imposed.
127.9    (2) Subject to clause (1), production of direct reduced ore in this state is subject to
127.10the tax imposed by this section, but if that production is not produced by a producer of
127.11taconite, iron sulfides, or other iron-bearing material, the production of taconite, iron
127.12sulfides, or other iron-bearing material, that is consumed in the production of direct
127.13reduced iron in this state is not subject to the tax imposed by this section on taconite,
127.14iron sulfides, or other iron-bearing material.
127.15    (3) Notwithstanding any other provision of this subdivision, no tax is imposed
127.16on direct reduced ore under this section during the facility's noncommercial production
127.17of direct reduced ore. The taconite or iron sulphides consumed in the noncommercial
127.18production of direct reduced ore is subject to the tax imposed by this section on taconite
127.19and iron sulphides. Three-year average production of direct reduced ore does not
127.20include production of direct reduced ore in any noncommercial year. Three-year average
127.21production for a direct reduced ore facility that has noncommercial production is the
127.22average of the commercial production of direct reduced ore for the current year and the
127.23previous two commercial years.
127.24    (4) This paragraph applies only to plants for which all environmental permits have
127.25been obtained and construction has begun before July 1, 2008 2020.
127.26EFFECTIVE DATE.This section is effective for taxes based on concentrate
127.27produced in 2015 and thereafter.

127.28    Sec. 4. Minnesota Statutes 2014, section 298.24, is amended by adding a subdivision
127.29to read:
127.30    Subd. 5. TEDF; deposits redirected. (a) For concentrates produced by a plant
127.31subject to a reimbursement agreement dated September 9, 2008, by and among Itasca
127.32County, Essar Global Limited, and Minnesota Steel Industries LLC, the provisions of
127.33sections 298.227 and 298.28, subdivision 9a, do not apply to the plant's production.
128.1(b) All amounts not deposited in the taconite economic development fund as a
128.2result of paragraph (a) must be deposited in the Douglas J. Johnson economic protection
128.3trust fund created under section 298.292.
128.4(c) The provisions of this subdivision expire upon certification by the commissioner
128.5of employment and economic development that all requirements of the reimbursement
128.6agreement, as specified in paragraph (a), are satisfied.
128.7EFFECTIVE DATE.This section is effective the day following final enactment.

128.8    Sec. 5. Minnesota Statutes 2014, section 298.28, subdivision 3, is amended to read:
128.9    Subd. 3. Cities; towns. (a) 12.5 cents per taxable ton, less any amount distributed
128.10under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid
128.11account to be distributed as provided in section 298.282.
128.12    (b) An amount must be allocated to towns or cities that is annually certified by
128.13the county auditor of a county containing a taconite tax relief area as defined in section
128.14273.134, paragraph (b) , within which there is (1) an organized township if, as of January
128.152, 1982, more than 75 percent of the assessed valuation of the township consists of iron
128.16ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation
128.17of the city consists of iron ore.
128.18    (c) The amount allocated under paragraph (b) will be the portion of a township's or
128.19city's certified levy equal to the proportion of (1) the difference between 50 percent of
128.20January 2, 1982, assessed value in the case of a township and 50 percent of the January 2,
128.211980, assessed value in the case of a city and its current assessed value to (2) the sum of
128.22its current assessed value plus the difference determined in (1), provided that the amount
128.23distributed shall not exceed $55 per capita in the case of a township or $75 per capita in
128.24the case of a city. For purposes of this limitation, population will be determined according
128.25to the 1980 decennial census conducted by the United States Bureau of the Census. If the
128.26current assessed value of the township exceeds 50 percent of the township's January 2,
128.271982, assessed value, or if the current assessed value of the city exceeds 50 percent of the
128.28city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this
128.29paragraph, "assessed value," when used in reference to years other than 1980 or 1982,
128.30means the appropriate net tax capacities multiplied by 10.2.
128.31    (d) In addition to other distributions under this subdivision, three cents per taxable
128.32ton for distributions in 2009 must be allocated for distribution to (1) towns that are entirely
128.33located within the taconite tax relief area defined in section 273.134, paragraph (b); and
128.34(2) the following unorganized territories located in St. Louis County: 56-17; 58-22; 59-16;
128.3559-21; 60-18; and 60-19. For distribution in 2010 through 2014 and for distribution in
129.12018 and subsequent years, the three-cent amount must be annually increased in the
129.2same proportion as the increase in the implicit price deflator as provided in section
129.3298.24, subdivision 1 . The amount available under this paragraph will be to towns shall
129.4be distributed to eligible towns on a per capita basis, provided that no town may receive
129.5more than $50,000 in any year under this paragraph. Any amount of the distribution that
129.6exceeds the $50,000 limitation for a town under this paragraph must be redistributed on
129.7a per capita basis among the other eligible towns, to whose distributions do not exceed
129.8$50,000. The amount available to unorganized territories in St. Louis County may be held
129.9by the county and combined for public infrastructure projects.
129.10EFFECTIVE DATE.This section is effective beginning with the 2015 production
129.11year.

129.12    Sec. 6. Minnesota Statutes 2014, section 298.28, subdivision 7a, is amended to read:
129.13    Subd. 7a. Iron Range school consolidation and cooperatively operated school
129.14account. The following amounts must be allocated to the Iron Range Resources and
129.15Rehabilitation Board to be deposited in the Iron Range school consolidation and
129.16cooperatively operated school account that is hereby created:
129.17(1)(i) for distributions in 2015 through 2023, ten cents per taxable ton of the tax
129.18imposed under section 298.24; and (ii) for distributions beginning in 2024, five cents per
129.19taxable ton of the tax imposed under section 298.24;
129.20(2) the amount as determined under section 298.17, paragraph (b), clause (3);
129.21(3)(i) for distributions in 2015, an amount equal to two-thirds of the increased tax
129.22proceeds attributable to the increase in the implicit price deflator as provided in section
129.23298.24, subdivision 1 , with the remaining one-third to be distributed to the Douglas J.
129.24Johnson economic protection trust fund;
129.25(ii) for distributions in 2016, an amount equal to two-thirds of the sum of the
129.26increased tax proceeds attributable to the increase in the implicit price deflator as provided
129.27in section 298.24, subdivision 1, for distribution years 2015 and 2016, with the remaining
129.28one-third to be distributed to the Douglas J. Johnson economic protection trust fund; and
129.29(iii) for distributions in 2017 and thereafter, an amount equal to two-thirds of the
129.30sum of the increased tax proceeds attributable to the increase in the implicit price deflator
129.31as provided in section 298.24, subdivision 1, for distribution years 2015, 2016, and
129.322017, with the remaining one-third to be distributed to the Douglas J. Johnson economic
129.33protection trust fund; and
129.34(4) any other amount as provided by law.
130.1Expenditures from this account shall be made only to provide disbursements to
130.2assist school districts with the payment of bonds that were issued for qualified school
130.3projects, or for any other school disbursement as approved by the Iron Range Resources
130.4and Rehabilitation Board. For purposes of this section, "qualified school projects" means
130.5school projects within the taconite assistance area as defined in section 273.1341, that were
130.6(1) approved, by referendum, after April 3, 2006; and (2) approved by the commissioner
130.7of education pursuant to section 123B.71.
130.8Beginning in fiscal year 2019, the disbursement to school districts for payments for
130.9bonds issued under section 123A.482, subdivision 9, must be increased each year to
130.10offset any reduction in debt service equalization aid that the school district qualifies for in
130.11that year, under section 123B.53, subdivision 6, compared with the amount the school
130.12district qualified for in fiscal year 2018.
130.13No expenditure under this section shall be made unless approved by seven members
130.14of the Iron Range Resources and Rehabilitation Board.
130.15EFFECTIVE DATE.This section is effective for distributions beginning in 2016
130.16and thereafter.

130.17ARTICLE 8
130.18ELECTRIC GENERATION MACHINERY

130.19    Section 1. Minnesota Statutes 2014, section 216B.1621, subdivision 2, is amended to
130.20read:
130.21    Subd. 2. Commission approval. (a) The commission shall approve an agreement
130.22under this section upon finding that:
130.23(1) the proposed electric service power generation facility could reasonably be
130.24expected to qualify for a market value exclusion under section 272.0211;
130.25(2) (1) the public utility has a contractual option to purchase electric power from
130.26the proposed facility; and
130.27(3) (2) the public utility can use the output from the proposed facility to meet its
130.28future need for power as demonstrated in the most recent resource plan filed with and
130.29approved by the commission under section 216B.2422.
130.30(b) Sections 216B.03, 216B.05, 216B.06, 216B.07, 216B.16, 216B.162, and
130.31216B.23 do not apply to an agreement under this section.
130.32EFFECTIVE DATE.This section is effective beginning with assessment year
130.332016 and thereafter.

131.1    Sec. 2. Minnesota Statutes 2014, section 216B.164, subdivision 2a, is amended to read:
131.2    Subd. 2a. Definitions. (a) For the purposes of this section, the following terms
131.3have the meanings given them.
131.4(b) "Aggregated meter" means a meter located on the premises of a customer's
131.5owned or leased property that is contiguous with property containing the customer's
131.6designated meter.
131.7(c) "Capacity" means the number of megawatts alternating current (AC) at the point
131.8of interconnection between a distributed generation facility and a utility's electric system.
131.9(d) "Cogeneration" means a combined process whereby electrical and useful thermal
131.10energy are produced simultaneously.
131.11(e) "Contiguous property" means property owned or leased by the customer sharing
131.12a common border, without regard to interruptions in contiguity caused by easements,
131.13public thoroughfares, transportation rights-of-way, or utility rights-of-way.
131.14(f) "Customer" means the person who is named on the utility electric bill for the
131.15premises.
131.16(g) "Designated meter" means a meter that is physically attached to the customer's
131.17facility that the customer-generator designates as the first meter to which net metered
131.18credits are to be applied as the primary meter for billing purposes when the customer is
131.19serviced by more than one meter.
131.20(h) "Distributed generation" means a facility that:
131.21(1) has a capacity of ten megawatts or less;
131.22(2) is interconnected with a utility's distribution system, over which the commission
131.23has jurisdiction; and
131.24(3) generates electricity from natural gas, renewable fuel, or a similarly clean fuel,
131.25and may include waste heat, cogeneration, or fuel cell technology.
131.26(i) "High-efficiency distributed generation" means a distributed energy facility that
131.27has a minimum efficiency of 40 percent, as calculated under Minnesota Statutes 2014,
131.28section 272.0211, subdivision 1.
131.29(j) "Net metered facility" means an electric generation facility constructed for the
131.30purpose of offsetting energy use through the use of renewable energy or high-efficiency
131.31distributed generation sources.
131.32(k) "Renewable energy" has the meaning given in section 216B.2411, subdivision 2.
131.33(l) "Standby charge" means a charge imposed by an electric utility upon a distributed
131.34generation facility for the recovery of costs for the provision of standby services, as
131.35provided for in a utility's tariffs approved by the commission, necessary to make electricity
131.36service available to the distributed generation facility.
132.1EFFECTIVE DATE.This section is effective beginning with assessment year
132.22016 and thereafter.

132.3    Sec. 3. Minnesota Statutes 2014, section 216B.2424, subdivision 5, is amended to read:
132.4    Subd. 5. Mandate. (a) A public utility, as defined in section 216B.02, subdivision 4,
132.5that operates a nuclear-powered electric generating plant within this state must construct
132.6and operate, purchase, or contract to construct and operate (1) by December 31, 1998,
132.750 megawatts of electric energy installed capacity generated by farm-grown closed-loop
132.8biomass scheduled to be operational by December 31, 2001; and (2) by December 31,
132.91998, an additional 75 megawatts of installed capacity so generated scheduled to be
132.10operational by December 31, 2002.
132.11(b) Of the 125 megawatts of biomass electricity installed capacity required under
132.12this subdivision, no more than 55 megawatts of this capacity may be provided by a facility
132.13that uses poultry litter as its primary fuel source and any such facility:
132.14(1) need not use biomass that complies with the definition in subdivision 1;
132.15(2) must enter into a contract with the public utility for such capacity, that has an
132.16average purchase price per megawatt hour over the life of the contract that is equal to or
132.17less than the average purchase price per megawatt hour over the life of the contract in
132.18contracts approved by the Public Utilities Commission before April 1, 2000, to satisfy
132.19the mandate of this section, and file that contract with the Public Utilities Commission
132.20prior to September 1, 2000; and
132.21(3) must schedule such capacity to be operational by December 31, 2002.
132.22(c) Of the total 125 megawatts of biomass electric energy installed capacity required
132.23under this section, no more than 75 megawatts may be provided by a single project.
132.24(d) Of the 75 megawatts of biomass electric energy installed capacity required under
132.25paragraph (a), clause (2), no more than 33 megawatts of this capacity may be provided by
132.26a St. Paul district heating and cooling system cogeneration facility utilizing waste wood
132.27as a primary fuel source. The St. Paul district heating and cooling system cogeneration
132.28facility need not use biomass that complies with the definition in subdivision 1.
132.29(e) The public utility must accept and consider on an equal basis with other biomass
132.30proposals:
132.31(1) a proposal to satisfy the requirements of this section that includes a project that
132.32exceeds the megawatt capacity requirements of either paragraph (a), clause (1) or (2), and
132.33that proposes to sell the excess capacity to the public utility or to other purchasers; and
132.34(2) a proposal for a new facility to satisfy more than ten but not more than 20
132.35megawatts of the electrical generation requirements by a small business-sponsored
133.1independent power producer facility to be located within the northern quarter of the state,
133.2which means the area located north of Constitutional Route No. 8 as described in section
133.3161.114, subdivision 2 , and that utilizes biomass residue wood, sawdust, bark, chipped
133.4wood, or brush to generate electricity. A facility described in this clause is not required
133.5to utilize biomass complying with the definition in subdivision 1, but must be under
133.6construction by December 31, 2005.
133.7(f) If a public utility files a contract with the commission for electric energy installed
133.8capacity that uses poultry litter as its primary fuel source, the commission must do a
133.9preliminary review of the contract to determine if it meets the purchase price criteria
133.10provided in paragraph (b), clause (2). The commission shall perform its review and advise
133.11the parties of its determination within 30 days of filing of such a contract by a public
133.12utility. A public utility may submit by September 1, 2000, a revised contract to address the
133.13commission's preliminary determination.
133.14(g) The commission shall finally approve, modify, or disapprove no later than July
133.151, 2001, all contracts submitted by a public utility as of September 1, 2000, to meet the
133.16mandate set forth in this subdivision.
133.17(h) If a public utility subject to this section exercises an option to increase the
133.18generating capacity of a project in a contract approved by the commission prior to April
133.1925, 2000, to satisfy the mandate in this subdivision, the public utility must notify the
133.20commission by September 1, 2000, that it has exercised the option and include in the
133.21notice the amount of additional megawatts to be generated under the option exercised.
133.22Any review by the commission of the project after exercise of such an option shall be
133.23based on the same criteria used to review the existing contract.
133.24(i) A facility specified in this subdivision qualifies for exemption from property
133.25taxation under section 272.02, subdivision 45.
133.26EFFECTIVE DATE.This section is effective beginning with assessment year
133.272016 and thereafter.

133.28    Sec. 4. Minnesota Statutes 2014, section 272.02, subdivision 9, is amended to read:
133.29    Subd. 9. Personal property; exceptions. Except for the taxable personal property
133.30enumerated below, all personal property and the property described in section 272.03,
133.31subdivision 1
, paragraphs (c) and (d), shall be exempt.
133.32The following personal property shall be taxable:
133.33(a) personal property which is part of an electric generating, transmission, or
133.34distribution system or a pipeline system transporting or distributing water, gas, crude
134.1oil, or petroleum products or mains and pipes used in the distribution of steam or hot or
134.2chilled water for heating or cooling buildings and structures;
134.3(b) railroad docks and wharves which are part of the operating property of a railroad
134.4company as defined in section 270.80;
134.5(c) personal property defined in section 272.03, subdivision 2, clause (3);
134.6(d) leasehold or other personal property interests which are taxed pursuant to section
134.7272.01, subdivision 2 ; 273.124, subdivision 7; or 273.19, subdivision 1; or any other law
134.8providing the property is taxable as if the lessee or user were the fee owner;
134.9(e) manufactured homes and sectional structures, including storage sheds, decks,
134.10and similar removable improvements constructed on the site of a manufactured home,
134.11sectional structure, park trailer or travel trailer as provided in section 273.125, subdivision
134.128
, paragraph (f); and
134.13(f) flight property as defined in section 270.071.
134.14EFFECTIVE DATE.This section is effective beginning with assessment year
134.152016 and thereafter.

134.16    Sec. 5. Minnesota Statutes 2014, section 272.02, subdivision 10, is amended to read:
134.17    Subd. 10. Personal property used for pollution control. Personal property used
134.18primarily for the abatement and control of air, water, or land pollution is exempt to the
134.19extent that it is so used, and real property is exempt if it is used primarily for abatement
134.20and control of air, water, or land pollution as part of an agricultural operation, as a part
134.21of a centralized treatment and recovery facility operating under a permit issued by the
134.22Minnesota Pollution Control Agency pursuant to chapters 115 and 116 and Minnesota
134.23Rules, parts 7001.0500 to 7001.0730, and 7045.0020 to 7045.1260, as a wastewater
134.24treatment facility and for the treatment, recovery, and stabilization of metals, oils,
134.25chemicals, water, sludges, or inorganic materials from hazardous industrial wastes, or as
134.26part of an electric generation system. For purposes of this subdivision, personal property
134.27includes ponderous machinery and equipment used in a business or production activity
134.28that at common law is considered real property. The real or personal property of an
134.29electric generation system is not eligible for an exemption under this section.
134.30Any taxpayer requesting exemption of all or a portion of any real property or any
134.31equipment or device, or part thereof, operated primarily for the control or abatement of
134.32air, water, or land pollution shall file an application with the commissioner of revenue.
134.33The commissioner shall develop an electronic means to notify interested parties when
134.34electric power generation facilities have filed an application. The Minnesota Pollution
135.1Control Agency shall upon request of the commissioner furnish information and advice to
135.2the commissioner.
135.3The information and advice furnished by the Minnesota Pollution Control
135.4Agency must include statements as to whether the equipment, device, or real property
135.5meets a standard, rule, criteria, guideline, policy, or order of the Minnesota Pollution
135.6Control Agency, and whether the equipment, device, or real property is installed or
135.7operated in accordance with it. On determining that property qualifies for exemption,
135.8the commissioner shall issue an order exempting the property from taxation. The
135.9commissioner shall develop an electronic means to notify interested parties when
135.10the commissioner has issued an order exempting property from taxation under this
135.11subdivision. The equipment, device, or real property shall continue to be exempt from
135.12taxation as long as the order issued by the commissioner remains in effect.
135.13EFFECTIVE DATE.This section is effective for assessment year 2016 and
135.14thereafter.

135.15    Sec. 6. [273.129] ELECTRIC GENERATION MACHINERY; VALUATION.
135.16    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
135.17having the meanings given.
135.18(b) "Biomass generating system" means any device used to produce energy by the
135.19direct combustion of carbon-based organisms.
135.20(c) "Coal generating system" means any device whose primary purpose is the
135.21production of electricity derived by the direct combustion of coal to produce steam.
135.22(d) "Electric generation machinery" means all personal property of an electric
135.23generation system, excluding solar energy generating systems and wind energy conversion
135.24systems, used for the purpose of generating electricity.
135.25(e) "Generation capacity" means the generation rate per megawatt as follows:
135.26(1) $0 for hydroelectric generating systems;
135.27(2) $5,000 for machinery used to generate electricity from biomass, natural gas, or
135.28nuclear fuel generation systems; and
135.29(3) $10,000 for machinery used to generate electricity from a coal or oil generation
135.30system or any other fossil fuel.
135.31(f) "Generation rate" means the rate per kilowatt hour as follows:
135.32(1) $.05 for hydroelectric generating systems;
135.33(2) $.0525 for machinery used to generate electricity from biomass, natural gas, or
135.34nuclear fuel generation systems; and
136.1(3) $.055 for machinery used to generate electricity from a coal or oil generation
136.2system or any other fossil fuel.
136.3(g) "Hydroelectric generating system" means any device whose primary purpose is
136.4the production of electricity derived from flowing water.
136.5(h) "Nameplate capacity" means the maximum rated output of a generator, prime
136.6mover, or other electric power production equipment under specific conditions designated
136.7by the manufacturer.
136.8(i) "Natural gas generating system" means any device whose primary purpose is the
136.9production of electricity derived from natural gas.
136.10(j) "Nuclear fuel generating system" means any device whose primary purpose is
136.11the production of electricity generated by the use of the thermal energy released from the
136.12fission of nuclear fuel in a reactor.
136.13(k) "Oil generating system" means any device whose primary purpose is the
136.14production of electricity derived by direct combustion of oil to produce steam.
136.15(l) "Primary fuel source" means the fuel source that is dominantly used by a facility
136.16in the production of electricity.
136.17(m) "Spent fuel" means fuel that has been irradiated in a nuclear reactor to the point
136.18where it is no longer useful in sustaining a nuclear reaction.
136.19(n) "Spent fuel tax base" means $150,000,000 per facility plus $100,000 per ton of
136.20spent fuel of a nuclear generating facility.
136.21    Subd. 2. Rates; adjustment. The generation and capacity rates as provided in
136.22subdivision 1, paragraphs (e) and (f), shall be increased annually by an amount equal to the
136.23percentage change in the retail price of electricity for the residential sector in Minnesota
136.24for the prior year as reported by the U.S. Energy Information Administration.
136.25    Subd. 3. Electric generation tax base. (a) The commissioner shall annually
136.26calculate the electric generation tax base under this section. An electric generating system
136.27with a capacity of one megawatt or less as determined under subdivision 4 shall be
136.28exempt from the provisions of this section. The commissioner shall calculate the electric
136.29generation tax base using the applicable capacity and generation rate based on the electric
136.30generation system's primary fuel source.
136.31(b) The electric generation tax base for property described in subdivision 1 is equal
136.32to the sum of: (1) its nameplate capacity multiplied by its generation capacity rate; (2)
136.33the average of its electric energy production as reported to the commissioner of revenue
136.34for the immediately preceding five years, multiplied by its generation rate; and (3) its
136.35spent fuel tax base. For electric generating systems that have been operational for less
136.36than the immediately preceding five years, the average of its electric energy production
137.1shall be the average of its electric energy production for the time period since the facility
137.2commenced operation.
137.3(c) For purposes of a levy based on market value, the electric generation tax base
137.4shall become part of the jurisdiction's market value tax base. For all levies based on net
137.5tax capacity, the electric generation tax base multiplied by two percent shall be added
137.6to the jurisdiction's net tax capacity base.
137.7    Subd. 4. Electric generating systems; size. The total capacity of an electric
137.8generating system, pursuant to this section, shall be determined by combining all
137.9generators of each fuel type within each facility, based on the information reported to the
137.10commissioner of revenue as required under subdivision 5.
137.11    Subd. 5. Generating systems; reports. An owner of an electric generating system
137.12shall file a report with the commissioner of revenue annually on or before February 1
137.13detailing: (1) the amount of electricity that was produced by each generator in the previous
137.14calendar year as reported to the U.S. Energy Information Administration; and (2) the
137.15location, length, and capacity of all transmission and distribution lines. The commissioner
137.16shall prescribe the form of the report. The report must contain the information required by
137.17the commissioner to determine the electric generation tax base. If an owner of an electric
137.18generating system fails to file the report by the due date, the commissioner of revenue
137.19shall determine the electric generation tax base based upon the nameplate capacity of the
137.20system multiplied by a capacity factor of 100 percent.
137.21EFFECTIVE DATE.This section is effective for assessment year 2016.

137.22    Sec. 7. Minnesota Statutes 2014, section 273.13, subdivision 24, is amended to read:
137.23    Subd. 24. Class 3. Commercial and industrial property and utility real and personal
137.24property is class 3a.
137.25(1) Except as otherwise provided, each parcel of commercial, industrial, or utility
137.26real property has a classification rate of 1.5 percent of the first tier of market value, and 2.0
137.27percent of the remaining market value. In the case of contiguous parcels of property owned
137.28by the same person or entity, only the value equal to the first-tier value of the contiguous
137.29parcels qualifies for the reduced classification rate, except that contiguous parcels owned
137.30by the same person or entity shall be eligible for the first-tier value classification rate on
137.31each separate business operated by the owner of the property, provided the business is
137.32housed in a separate structure. For the purposes of this subdivision, the first tier means the
137.33first $150,000 of market value. Real property owned in fee by a utility for transmission
137.34line right-of-way shall be classified at the classification rate for the higher tier.
138.1For purposes of this subdivision, parcels are considered to be contiguous even if
138.2they are separated from each other by a road, street, waterway, or other similar intervening
138.3type of property. Connections between parcels that consist of power lines or pipelines do
138.4not cause the parcels to be contiguous. Property owners who have contiguous parcels of
138.5property that constitute separate businesses that may qualify for the first-tier classification
138.6rate shall notify the assessor by July 1, for treatment beginning in the following taxes
138.7payable year.
138.8(2) All personal property that is: (i) part of an electric generation, transmission, or
138.9distribution system; or (ii) part of a pipeline system transporting or distributing water, gas,
138.10crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad
138.11operating property has a classification rate as provided under clause (1) for the first tier
138.12of market value and the remaining market value. In the case of multiple parcels in one
138.13county that are owned by one person or entity, only one first tier amount is eligible for the
138.14reduced rate.
138.15(3) The entire market value of personal property that is: (i) tools, and implements,
138.16and machinery of an electric generation, transmission, or distribution system; (ii) tools,
138.17implements, and machinery of a pipeline system transporting or distributing water, gas,
138.18crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of
138.19steam or hot or chilled water for heating or cooling buildings, has a classification rate as
138.20provided under clause (1) for the remaining market value in excess of the first tier.
138.21EFFECTIVE DATE.This section is effective beginning with assessment year 2016.

138.22    Sec. 8. Minnesota Statutes 2014, section 273.37, subdivision 1, is amended to read:
138.23    Subdivision 1. Listing and assessment where situated. (a) Personal property of
138.24electric light and power companies, and other individuals and partnerships supplying
138.25electric light and power, having a fixed situs outside of the corporate limits of cities shall
138.26be listed and assessed in the district where situated, except as otherwise provided.
138.27(b) Notwithstanding any other law to the contrary, the nonoperating property, and
138.28operating real property of electric light and power companies that is part of an electric
138.29generation system, shall be listed and assessed by the local or county assessor.
138.30EFFECTIVE DATE.This section is effective for assessment year 2016 and
138.31thereafter.

138.32    Sec. 9. [477A.21] ELECTRIC GENERATION PROPERTY TRANSITION AID.
139.1    Subdivision 1. Definitions. For the purposes of this section, "local unit" means a
139.2home rule charter or statutory city, county, or a town.
139.3    Subd. 2. Aid eligibility; payment. For aids payable in 2017 and thereafter,
139.4transition aid under this section for an eligible local unit equals: (1) the net tax capacity of
139.5all personal property of all electric generating systems as determined for assessment year
139.62015 multiplied by the 2015 local tax rate; minus (2) the net tax capacity in the current
139.7year of all electric generating systems as determined under section 273.129, multiplied by
139.8the current local tax rate. Aid to a local unit shall cease beginning in the year following
139.9the year in which the aid equals zero. Once a local unit becomes ineligible for aid under
139.10this section, it may not subsequently become eligible.
139.11The commissioner of revenue shall compute the amount of transition aid payable to
139.12each local unit under this section. On or before August 1 of each year, the commissioner
139.13shall certify the amount of transition aid computed for aids payable in the following year
139.14for each recipient local unit. The commissioner shall pay transition aid to local units
139.15annually at the time provided for the second installment of local government aid under
139.16section 477A.015.
139.17The commissioner of revenue may require counties to provide any data that the
139.18commissioner deems necessary to administer this section.
139.19    Subd. 3. Appropriation. An amount sufficient to pay transition aid under this
139.20section is annually appropriated to the commissioner of revenue from the general fund.
139.21EFFECTIVE DATE.This section is effective beginning with aids payable in 2017.

139.22    Sec. 10. REPEALER.
139.23Minnesota Statutes 2014, sections 272.02, subdivisions 29, 33, 41, 44, 45, 47, 52,
139.2454, 55, 56, 68, 69, 70, 71, 80, 84, 89, 92, 93, 96, and 99; 272.0211, are repealed.
139.25EFFECTIVE DATE.This section is effective beginning with assessment year
139.262016 and thereafter.

139.27ARTICLE 9
139.28RAILROAD RECODIFICATION

139.29    Section 1. Minnesota Statutes 2014, section 270.80, subdivision 1, is amended to read:
139.30    Subdivision 1. Applicability. The following words and phrases when used
139.31in sections 270.80 273.3712 to 270.87 273.3719, unless the context clearly indicates
139.32otherwise, have the meanings ascribed to them in this section.
140.1EFFECTIVE DATE.This section is effective for assessment year 2015 and
140.2thereafter.

140.3    Sec. 2. Minnesota Statutes 2014, section 270.80, subdivision 2, is amended to read:
140.4    Subd. 2. Railroad company. "Railroad company" means:
140.5(1) any company which as a common carrier operates a railroad or a line or lines of
140.6railway railroad situated within or partly within Minnesota; or
140.7(2) any company owning or operating, other than as a common carrier, a railway
140.8principally used for transportation of taconite concentrates from the plant at which the
140.9taconite concentrates are produced in shipping form to a point of consumption or port
140.10for shipment beyond the state; or
140.11(3) any company that produces concentrates from taconite and transports that
140.12taconite in the course of the concentrating process and before the concentrating process is
140.13completed to a concentrating plant located within the state over a railroad that is not a
140.14common carrier and shall does not use a common carrier or taconite railroad company as
140.15defined in clause (2) for the movement of the concentrate to a point of consumption or
140.16port for shipment beyond the state.
140.17EFFECTIVE DATE.This section is effective for assessment year 2015 and
140.18thereafter.

140.19    Sec. 3. Minnesota Statutes 2014, section 270.80, subdivision 3, is amended to read:
140.20    Subd. 3. Operating property. "Operating property" means all property owned
140.21or used by a railroad company in the performance of railroad transportation services,
140.22including without limitation franchises, rights-of-way, bridges, trestles, shops, docks,
140.23wharves, buildings and structures, but not limited to, road, locomotives, freight cars,
140.24and improvements on leased property. Operating property is listed and assessed by the
140.25commissioner where the property is located.
140.26EFFECTIVE DATE.This section is effective for assessment year 2015 and
140.27thereafter.

140.28    Sec. 4. Minnesota Statutes 2014, section 270.80, subdivision 4, is amended to read:
140.29    Subd. 4. Nonoperating property. "Nonoperating property" means and includes all
140.30property other than property defined in subdivision 3. Nonoperating property shall include
140.31includes real property which that is leased or rented or available for lease or rent to any
140.32person which that is not a railroad company. Vacant land shall be presumed to be available
141.1for lease or rent if it has not been used as operating property for a period of one year
141.2immediately preceding the valuation date. Nonoperating property also includes land which
141.3that is not necessary and integral to the performance of railroad transportation services
141.4and which that is not used on a regular and continual basis in the performance of these
141.5services. Nonoperating property also includes that portion of a general corporation office
141.6building and its proportionate share of land which that is not used for railway railroad
141.7operation or purpose. Nonoperating property is assessed by the local or county assessor.
141.8EFFECTIVE DATE.This section is effective for assessment year 2015 and
141.9thereafter.

141.10    Sec. 5. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
141.11to read:
141.12    Subd. 6. Company. "Company" means any corporation, limited liability company,
141.13association, partnership, trust, estate, fiduciary, public or private organization of any kind,
141.14or any other legal entity.
141.15EFFECTIVE DATE.This section is effective for assessment year 2015 and
141.16thereafter.

141.17    Sec. 6. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
141.18to read:
141.19    Subd. 7. Unit value. "Unit value" means the value of the whole integrated system
141.20of a railroad company operating as a going concern without regard to the value of its
141.21component parts.
141.22EFFECTIVE DATE.This section is effective for assessment year 2015 and
141.23thereafter.

141.24    Sec. 7. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
141.25to read:
141.26    Subd. 8. Book depreciation. "Book depreciation" means the accumulated
141.27depreciation shown by a railroad company on its books or allowed to the company by
141.28the Surface Transportation Board.
141.29EFFECTIVE DATE.This section is effective for assessment year 2015 and
141.30thereafter.

142.1    Sec. 8. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
142.2to read:
142.3    Subd. 9. Equalization. "Equalization" means the adjustment of the estimated value
142.4of railroad operating property to the apparent sales ratio of commercial and industrial
142.5property.
142.6EFFECTIVE DATE.This section is effective for assessment year 2015 and
142.7thereafter.

142.8    Sec. 9. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
142.9to read:
142.10    Subd. 10. Exempt property. "Exempt property" means property which is
142.11nontaxable for ad valorem tax purposes under Minnesota Statutes, including personal
142.12property exempt from taxation under chapter 272.
142.13EFFECTIVE DATE.This section is effective for assessment year 2015 and
142.14thereafter.

142.15    Sec. 10. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
142.16to read:
142.17    Subd. 11. Original cost. "Original cost" means the amount paid for an asset by the
142.18current owner as recorded on the railroad's books or allowed by the Surface Transportation
142.19Board.
142.20EFFECTIVE DATE.This section is effective for assessment year 2015 and
142.21thereafter.

142.22    Sec. 11. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
142.23to read:
142.24    Subd. 12. System. "System" means the total property, real and personal, of a
142.25railroad, that is used in its railroad operations.
142.26EFFECTIVE DATE.This section is effective for assessment year 2015 and
142.27thereafter.

142.28    Sec. 12. Minnesota Statutes 2014, section 270.80, is amended by adding a subdivision
142.29to read:
143.1    Subd. 14. Minnesota allocated value. "Minnesota allocated value" means the value
143.2of a railroad company's operating property that is assigned to Minnesota for tax purposes.
143.3EFFECTIVE DATE.This section is effective for assessment year 2015 and
143.4thereafter.

143.5    Sec. 13. Minnesota Statutes 2014, section 270.81, subdivision 1, is amended to read:
143.6    Subdivision 1. Valuation of operating property. The operating property of every
143.7railroad company doing business in Minnesota shall be valued by the commissioner in the
143.8manner prescribed by sections 270.80 273.3712 to 270.87 273.3719.
143.9EFFECTIVE DATE.This section is effective for assessment year 2015 and
143.10thereafter.

143.11    Sec. 14. Minnesota Statutes 2014, section 270.81, subdivision 3, is amended to read:
143.12    Subd. 3. Determination of type of property. (a) The commissioner shall have has
143.13exclusive primary jurisdiction to determine what whether railroad property is operating
143.14property and what is or nonoperating property. In making such the determination, the
143.15commissioner shall may solicit information and opinions from outside the department
143.16and afford all interested persons an opportunity to submit data or views on the subject
143.17in writing or orally.
143.18(b) Local and county assessors may submit written requests to the commissioner,
143.19asking for a determination of the nature of specific whether property owned by a
143.20railroad and located within their assessing jurisdiction is operating or nonoperating. Any
143.21determination made by the commissioner may be appealed by the assessor to the Tax Court
143.22pursuant to chapter 271. The requests must be submitted by April 1 of the assessing year.
143.23The commissioner must send the assessor a written determination by May 1. Assessors may
143.24appeal determinations made by the commissioner to the Tax Court pursuant to chapter 271.
143.25EFFECTIVE DATE.This section is effective for assessment year 2015 and
143.26thereafter.

143.27    Sec. 15. Minnesota Statutes 2014, section 270.81, is amended by adding a subdivision
143.28to read:
143.29    Subd. 6. Deduction for nonoperating and exempt property. Property that was part
143.30of the system, but is nonoperating property, or that is exempt from ad valorem taxation, is
143.31excluded from the Minnesota allocated value under section 273.3718, subdivision 1a. Only
143.32qualifying property located in Minnesota may be deducted from the Minnesota allocated
144.1value. The commissioner must deduct the market value of the property to be excluded. This
144.2must be calculated by multiplying the book value of the property by the market-to-book
144.3ratio of the unit. The company has the burden of proof to establish that property should
144.4be excluded from the Minnesota allocated value. The railroad company must submit
144.5schedules of exempt or nonoperating property as the commissioner may require. The
144.6remaining amount after this deduction is the Minnesota apportionable market value.
144.7EFFECTIVE DATE.This section is effective for assessment year 2015 and
144.8thereafter.

144.9    Sec. 16. Minnesota Statutes 2014, section 270.82, is amended to read:
144.10270.82 REPORTS OF RAILROAD COMPANIES.
144.11    Subdivision 1. Annual report required. Before March 31, every railroad company
144.12doing business in Minnesota shall annually must file with the commissioner on or before
144.13March 31 a an annual report under oath setting forth the information prescribed by the
144.14commissioner to enable the commissioner to make the valuation and equalization required
144.15by sections 270.80 273.3712 to 270.87. 273.3719. The commissioner shall prescribe the
144.16content, format, and manner of the report pursuant to section 270C.30. If a report is made
144.17by electronic means, the taxpayer's signature is defined pursuant to section 270C.304,
144.18except that a "law administered by the commissioner" includes the property tax laws.
144.19    Subd. 2. Extension of time. If the commissioner for good determines that there is
144.20reasonable cause, the commissioner may extend the time for filing the report required by
144.21subdivision 1 for up to 15 days the time for filing the report required by subdivision 1.
144.22    Subd. 3. Amended reports. A railroad company may file an amended report to
144.23correct or add information to the original report. Amended reports must be filed with
144.24the commissioner by April 30.
144.25    Subd. 4. Failure to file reports. (a) The commissioner may make the valuation
144.26provided for by sections 273.3712 to 237.3719, according to the commissioner's best
144.27judgment based on available information, if any railroad company does not:
144.28(1) make the report required by this section;
144.29(2) permit an inspection and examination of its property, records, books, accounts,
144.30or other papers when requested by the commissioner; or
144.31(3) appear before the commissioner or a person appointed under section 273.3715,
144.32when required to do so.
144.33(b) If the commissioner makes the valuation pursuant to paragraph (a), the
144.34commissioner's valuation is final. Notwithstanding any other law to the contrary,
145.1the commissioner's valuation made pursuant to this subdivision is not appealable
145.2administratively.
145.3EFFECTIVE DATE.This section is effective for assessment year 2015 and
145.4thereafter.

145.5    Sec. 17. Minnesota Statutes 2014, section 270.83, subdivision 1, is amended to read:
145.6    Subdivision 1. Powers of commissioner. The commissioner shall have has the
145.7power to examine or cause to be examined any books, papers, records, or memoranda
145.8relevant to the determination of the valuation of operating property as herein provided.
145.9The commissioner shall have the further power to may require the attendance of any
145.10person having knowledge or information in the premises concerning the valuation of the
145.11operating property, to compel the production of books, papers, records, or memoranda by
145.12persons so required to attend, to take testimony on matters material to such determination
145.13determine the valuation of operating property, and administer oaths or affirmations.
145.14EFFECTIVE DATE.This section is effective for assessment year 2015 and
145.15thereafter.

145.16    Sec. 18. Minnesota Statutes 2014, section 270.83, subdivision 2, is amended to read:
145.17    Subd. 2. Appointment of persons; subpoenas. For the purpose of making such
145.18examinations, The commissioner may appoint such persons as the commissioner may
145.19deem deems necessary to make the examinations described in subdivision 1. Such
145.20persons shall have the rights and powers of the examining of Persons appointed may
145.21examine books, papers, records or memoranda, and of subpoenaing subpoena witnesses,
145.22administering administer oaths and affirmations, and taking of take testimony, which are
145.23conferred upon the commissioner hereby. The court administrator of any court of record,
145.24upon demand of any such person appointed, shall issue a subpoena for the attendance of
145.25any witness or the production of any books, papers, records, or memoranda before such
145.26person. The commissioner may also issue subpoenas for the appearance of witnesses
145.27before the commissioner or before such persons. Disobedience of subpoenas so issued
145.28shall be punished by the district court of the district in which the subpoena is issued for a
145.29contempt of the district court. Failure to comply with a subpoena shall be punished in the
145.30same manner as contempt of the district court.
145.31EFFECTIVE DATE.This section is effective for assessment year 2015 and
145.32thereafter.

146.1    Sec. 19. Minnesota Statutes 2014, section 270.84, is amended to read:
146.2270.84 ANNUAL VALUATION OF OPERATING PROPERTY.
146.3    Subdivision 1. Annual valuation; rules. (a) Before July 1, the commissioner
146.4shall annually between March 31 and May 31 make a determination of must determine
146.5the fair market value of the operating property of every railroad company doing business
146.6in this state as of January 2 of the year in which the valuation is made. In making
146.7this determination, The commissioner shall must employ generally accepted appraisal
146.8principles and practices which may include the unit method of determining value., and
146.9approaches approved by the Western States Association of Tax Administrators, National
146.10Conference of Unit Valuation States, and the International Association of Assessing
146.11Officers.
146.12(b) The unit value of railroad property is the reconciled value considering the cost,
146.13income, and market approaches under subdivisions 1a, 1b, and 1c. Each approach must
146.14be weighted in accordance with the reliability of the information and the commissioner's
146.15judgment.
146.16    Subd. 1a. Cost approach. (a) The commissioner may use the cost approach,
146.17including but not limited to original cost less book depreciation and replacement cost
146.18less depreciation.
146.19(b) Book depreciation is allowed as a deduction from an original cost model. Book
146.20depreciation is assumed to include all forms of appraisal depreciation.
146.21(c) Explicitly calculated appraisal depreciation, including physical, functional, and
146.22external obsolescence, is allowed as a deduction from the replacement cost model.
146.23    Subd. 1b. Income approach. (a) The commissioner may use the income approach,
146.24including but not limited to direct capitalization models and yield capitalization models.
146.25(b) The yield rate is calculated using market data on selected comparable companies
146.26in the band of investment method.
146.27(1) Discounted cash flows is a yield capitalization model that calculates the present
146.28value of explicit cash flow forecasts capitalized using the yield rate, plus reversion to
146.29stable growth yield capitalization after the period of explicit forecasts.
146.30(2) Stable growth yield capitalization is a yield capitalization model that calculates
146.31the present value of anticipated future cash flows, capitalized using the yield rate and
146.32considering growth.
146.33(c) Direct capitalization is the expected net operating income for the following year,
146.34divided by the direct capitalization rate. The direct capitalization rate is calculated by
146.35using direct market observations from comparable sales or using market earning-to-price
146.36information in the band of investment method.
147.1    Subd. 1c. Market approach. The commissioner may use the market approach,
147.2including but not limited to a sales comparison model, a stock and debt model, or other
147.3market models that are available and reliable.
147.4    Subd. 2. Notice. The commissioner, after determining the fair market value of the
147.5operating property of each railroad company, shall give notice to must notify the railroad
147.6company of the valuation by first class mail, overnight delivery, or messenger service.
147.7EFFECTIVE DATE.This section is effective for assessment year 2015 and
147.8thereafter.

147.9    Sec. 20. Minnesota Statutes 2014, section 270.86, is amended to read:
147.10270.86 APPORTIONMENT AND EQUALIZATION OF VALUATION.
147.11    Subdivision 1. Apportionment of value. Upon determining After allocating to
147.12Minnesota the fair market value of the operating property of each railroad company, the
147.13commissioner shall must apportion such the value to the respective counties and to the
147.14taxing districts therein in conformity with fair and reasonable rules and standards to be
147.15established by the commissioner pursuant to notice and hearing, except as provided in
147.16section 270.81. In establishing such rules and standards the commissioner may consider
147.17(a) the physical situs of all station houses, depots, docks, wharves, and other buildings and
147.18structures with an original cost in excess of $10,000; (b) the proportion that the length and
147.19type of all the tracks used by the railroad in such county and taxing district bears to the
147.20length and type of all the track used in the state; and (c) other facts as will result in a fair
147.21and equitable apportionment of value the operating parcels in Minnesota.
147.22The apportioned market value of each company's operating parcel in Minnesota is
147.23the current original cost of each parcel as of the last assessment date plus original cost
147.24of new construction minus the original cost of property retired since the last assessment
147.25date. The total Minnesota apportionable market value of the railroad is divided by the
147.26total current original cost of the railroad in Minnesota to determine a percentage. The
147.27resulting percentage is multiplied by the current original cost of each parcel to determine
147.28the apportioned market value of each parcel.
147.29    Subd. 1a. Allocation of value. (a) After the market value of operating property has
147.30been estimated, the portion of value that is attributable to Minnesota must be determined
147.31by calculating an allocation percentage using factors relevant to the industry segment of
147.32the railroad company. The allocation percentage must be multiplied by the value of the
147.33operating property to determine the Minnesota allocated value.
147.34(b) The Minnesota allocated value is determined by averaging the following factors:
148.1(1) miles of railroad track operated in Minnesota divided by miles of railroad track
148.2operated in all states;
148.3(2) ton miles of revenue freight transported in Minnesota divided by ton miles of
148.4revenue freight transported in all states;
148.5(3) gross revenues from transportation operations within Minnesota divided by gross
148.6revenues from transportation operations in all states; and
148.7(4) cost of railroad property in Minnesota divided by cost of railroad property in
148.8all states.
148.9(c) Each of the available factors must be weighted equally.
148.10    Subd. 2. Equalized valuation. After making the apportionment provided in
148.11subdivision 1, the commissioner shall must determine the equalized valuation of the
148.12operating property in each county by applying to the apportioned value an estimated
148.13current year median sales ratio for all commercial and industrial property in that county.
148.14If the commissioner decides determines that there are insufficient sales to determine a
148.15median commercial-industrial sales ratio, an estimated current year countywide median
148.16sales ratio for all property shall must be applied to the apportioned value. No equalization
148.17shall Equalization must not be made to the market value of the operating property if the
148.18median sales ratio determined pursuant to this subdivision is within five at least 90 but less
148.19than 105 percent of the assessment ratio of the railroad operating property.
148.20EFFECTIVE DATE.This section is effective for assessment year 2015 and
148.21thereafter.

148.22    Sec. 21. Minnesota Statutes 2014, section 270.87, is amended to read:
148.23270.87 CERTIFICATION TO COUNTY ASSESSORS.
148.24After making an annual determination of the equalized fair market value of the
148.25operating property of each company in each of the respective counties, and in the taxing
148.26districts therein, The commissioner shall must certify the equalized fair market value of
148.27the operating property to the county assessor on or before June 30 August 1. The equalized
148.28fair market value of the operating property of the railroad company in the county and the
148.29taxing districts therein is the value on which taxes must be levied and collected in the
148.30same manner as on the commercial and industrial property of such county and the taxing
148.31districts therein in the counties and taxing districts. If the commissioner determines that
148.32the equalized fair market value certified on or before June 30 August 1 is in error, the
148.33commissioner may issue a corrected certification on or before August 31 October 1. The
148.34commissioner may correct errors that are merely clerical in nature until December 31.
149.1EFFECTIVE DATE.This section is effective for assessment year 2015 and
149.2thereafter.

149.3    Sec. 22. Minnesota Statutes 2014, section 272.02, subdivision 9, is amended to read:
149.4    Subd. 9. Personal property; exceptions. Except for the taxable personal property
149.5enumerated below, all personal property and the property described in section 272.03,
149.6subdivision 1
, paragraphs (c) and (d), shall be exempt.
149.7The following personal property shall be taxable:
149.8(a) personal property which is part of an electric generating, transmission, or
149.9distribution system or a pipeline system transporting or distributing water, gas, crude
149.10oil, or petroleum products or mains and pipes used in the distribution of steam or hot or
149.11chilled water for heating or cooling buildings and structures;
149.12(b) railroad docks and wharves which are part of the personal property that is part of
149.13the operating property of a railroad company as defined in section 270.80 273.3712;
149.14(c) personal property defined in section 272.03, subdivision 2, clause (3);
149.15(d) leasehold or other personal property interests which are taxed pursuant to section
149.16272.01, subdivision 2 ; 273.124, subdivision 7; or 273.19, subdivision 1; or any other law
149.17providing the property is taxable as if the lessee or user were the fee owner;
149.18(e) manufactured homes and sectional structures, including storage sheds, decks,
149.19and similar removable improvements constructed on the site of a manufactured home,
149.20sectional structure, park trailer or travel trailer as provided in section 273.125, subdivision
149.218
, paragraph (f); and
149.22(f) flight property as defined in section 270.071.
149.23EFFECTIVE DATE.This section is effective for assessment year 2015 and
149.24thereafter.

149.25    Sec. 23. SEVERABILITY.
149.26If any part of this article is found to be invalid because it is in conflict with a
149.27provision of the Minnesota Constitution or for any other reason, all other provisions
149.28of this act shall remain valid and any rights, remedies, and privileges that have been
149.29otherwise accrued by this act, shall remain in effect and may be proceeded with and
149.30concluded under the provisions of this act.

149.31    Sec. 24. REVISOR'S INSTRUCTION.
149.32The revisor of statutes shall renumber the provisions of Minnesota Statutes listed
149.33in column A to the references listed in column B. The revisor shall also make necessary
150.1cross-reference changes in Minnesota Statutes and Minnesota Rules consistent with
150.2renumbering.
150.3
Column A
Column B
150.4
270.80
273.3712
150.5
270.81
273.3713
150.6
270.82
273.3714
150.7
270.83
273.3715
150.8
270.84
273.3716
150.9
270.85
273.3717
150.10
270.86
273.3718
150.11
270.87
273.3719
150.12EFFECTIVE DATE.This section is effective for assessment year 2015 and
150.13thereafter.

150.14    Sec. 25. REPEALER.
150.15Minnesota Statutes 2014, sections 270.81, subdivision 4; and 270.83, subdivision 3,
150.16and Minnesota Rules, parts 8106.0100, subparts 1, 2, 3, 4, 5, 6, 7, 8, 10, 12, 13, 14, 17,
150.1717a, 18, 19, 20, and 21; 8106.0300, subparts 1 and 3; 8106.0400; 8106.0500; 8106.0600;
150.188106.0700; 8106.0800; and 8106.9900, are repealed.
150.19EFFECTIVE DATE.This section is effective for assessment year 2015 and
150.20thereafter.

150.21ARTICLE 10
150.22PUBLIC FINANCE

150.23    Section 1. Minnesota Statutes 2014, section 126C.40, subdivision 1, is amended to read:
150.24    Subdivision 1. To lease building or land. (a) When an independent or a special
150.25school district or a group of independent or special school districts finds it economically
150.26advantageous to rent or lease a building or land for any instructional purposes or for school
150.27storage or furniture repair, and it determines that the operating capital revenue authorized
150.28under section 126C.10, subdivision 13, is insufficient for this purpose, it may apply to seek
150.29permission from the commissioner for permission to make an additional capital expenditure
150.30levy for this purpose. An application for permission to levy under this subdivision must
150.31contain financial justification for the proposed levy, the terms and conditions of the
150.32proposed lease, and a description of the space to be leased and its proposed use.
150.33    (b) In granting permission to levy under this subdivision, the commissioner may
150.34consider the financial justification for the proposed levy, the terms and conditions
151.1of the proposed lease, and a description of the space to be leased and its proposed
151.2use. Additional information shall be provided for consideration upon request of the
151.3commissioner. The criteria for approval of applications granting permission to levy under
151.4this subdivision must include: the reasonableness of the price, the appropriateness of the
151.5space to the proposed activity, the feasibility of transporting pupils to the leased building
151.6or land, conformity of the lease to the laws and rules of the state of Minnesota, and the
151.7appropriateness of the proposed lease to the space needs and the financial condition of the
151.8district. The commissioner must not authorize a levy under this subdivision in an amount
151.9greater than the cost to the district of renting or leasing a building or land for approved
151.10purposes. The proceeds of this levy must not be used for custodial or other maintenance
151.11services. A district may not levy under this subdivision for the purpose of leasing or
151.12renting a district-owned building or site to itself.
151.13    (c) For agreements finalized after July 1, 1997, a district may not levy under this
151.14subdivision for the purpose of leasing: (1) a newly constructed building used primarily
151.15for regular kindergarten, elementary, or secondary instruction; or (2) a newly constructed
151.16building addition or additions used primarily for regular kindergarten, elementary, or
151.17secondary instruction that contains more than 20 percent of the square footage of the
151.18previously existing building.
151.19    (d) Notwithstanding paragraph (b), a district may levy under this subdivision for the
151.20purpose of leasing or renting a district-owned building or site to itself only if the amount
151.21is needed by the district to make payments required by a lease purchase agreement,
151.22installment purchase agreement, or other deferred payments agreement authorized by law,
151.23and the levy meets the requirements of paragraph (c). A levy authorized for a district by
151.24the commissioner under this paragraph may be in the amount needed by the district to
151.25make payments required by a lease purchase agreement, installment purchase agreement,
151.26or other deferred payments agreement authorized by law, provided that any agreement
151.27include a provision giving the school districts the right to terminate the agreement
151.28annually without penalty.
151.29    (e) The total levy under this subdivision for a district for any year must not exceed
151.30$212 times the adjusted pupil units for the fiscal year to which the levy is attributable.
151.31    (f) For agreements for which a review and comment have been submitted to the
151.32Department of Education after April 1, 1998, the term "instructional purpose" as used in
151.33this subdivision excludes expenditures on stadiums.
151.34    (g) The commissioner of education may authorize a school district to exceed the
151.35limit in paragraph (e) if the school district petitions the commissioner for approval. The
152.1commissioner shall grant approval to a school district to exceed the limit in paragraph (e)
152.2for not more than five years if the district meets the following criteria:
152.3    (1) the school district has been experiencing pupil enrollment growth in the
152.4preceding five years;
152.5    (2) the purpose of the increased levy is in the long-term public interest;
152.6    (3) the purpose of the increased levy promotes colocation of government services; and
152.7    (4) the purpose of the increased levy is in the long-term interest of the district by
152.8avoiding over construction of school facilities.
152.9    (h) A school district that is a member of an intermediate school district may include
152.10in its authority under this section the costs associated with leases of administrative and
152.11classroom space for intermediate school district programs. This authority must not exceed
152.12$65 times the adjusted pupil units of the member districts. This authority is in addition to
152.13any other authority authorized under this section.
152.14    (i) In addition to the allowable capital levies in paragraph (a), for taxes payable in
152.152012 to 2023, a district that is a member of the "Technology and Information Education
152.16Systems" data processing joint board, that finds it economically advantageous to enter into
152.17a lease agreement to finance improvements to a building and land for a group of school
152.18districts or special school districts for staff development purposes, may levy for its portion
152.19of lease costs attributed to the district within the total levy limit in paragraph (e). The total
152.20levy authority under this paragraph shall not exceed $632,000.
152.21(j) Notwithstanding paragraph (a), a district may levy under this subdivision for the
152.22purpose of leasing administrative space if the district can demonstrate to the satisfaction of
152.23the commissioner that the lease cost for the administrative space is no greater than the
152.24lease cost for instructional space that the district would otherwise lease. The commissioner
152.25must deny this levy authority unless the district passes a resolution stating its intent to
152.26lease instructional space under this section if the commissioner does not grant authority
152.27under this paragraph. The resolution must also certify that the lease cost for administrative
152.28space under this paragraph is no greater than the lease cost for the district's proposed
152.29instructional lease.

152.30    Sec. 2. Minnesota Statutes 2014, section 366.095, subdivision 1, is amended to read:
152.31    Subdivision 1. Certificates of indebtedness. The town board may issue certificates
152.32of indebtedness within the debt limits for a town purpose otherwise authorized by law.
152.33The certificates shall be payable in not more than ten years and be issued on the terms and
152.34in the manner as the board may determine, provided that notes issued for projects that
152.35eliminate R-22, as such projects are defined in section 240A.09, paragraph (b), clause (2),
153.1shall be payable in not more than 20 years. If the amount of the certificates to be issued
153.2exceeds 0.25 percent of the estimated market value of the town, they shall not be issued
153.3for at least ten days after publication in a newspaper of general circulation in the town of
153.4the board's resolution determining to issue them. If within that time, a petition asking for
153.5an election on the proposition signed by voters equal to ten percent of the number of voters
153.6at the last regular town election is filed with the clerk, the certificates shall not be issued
153.7until their issuance has been approved by a majority of the votes cast on the question at
153.8a regular or special election. A tax levy shall be made to pay the principal and interest
153.9on the certificates as in the case of bonds.

153.10    Sec. 3. Minnesota Statutes 2014, section 383B.117, subdivision 2, is amended to read:
153.11    Subd. 2. Equipment acquisition; capital notes. The board may, by resolution and
153.12without public referendum, issue capital notes within existing debt limits for the purpose
153.13of purchasing ambulance and other medical equipment, road construction or maintenance
153.14equipment, public safety equipment and other capital equipment having an expected
153.15useful life at least equal to the term of the notes issued. The notes shall be payable
153.16in not more than ten years and shall be issued on terms and in a manner as the board
153.17determines, provided that notes issued for projects that eliminate R-22, as such projects
153.18are defined in section 240A.09, paragraph (b), clause (2), shall be payable in not more
153.19than 20 years. The total principal amount of the notes issued for any fiscal year shall not
153.20exceed one percent of the total annual budget for that year and shall be issued solely for
153.21the purchases authorized in this subdivision. A tax levy shall be made for the payment
153.22of the principal and interest on such notes as in the case of bonds. For purposes of this
153.23subdivision, "equipment" includes computer hardware and software, whether bundled with
153.24machinery or equipment or unbundled. For purposes of this subdivision, the term "medical
153.25equipment" includes computer hardware and software and other intellectual property for
153.26use in medical diagnosis, medical procedures, research, record keeping, billing, and other
153.27hospital applications, together with application development services and training related
153.28to the use of the computer hardware and software and other intellectual property, all
153.29without regard to their useful life. For purposes of determining the amount of capital notes
153.30which the county may issue in any year, the budget of the county and Hennepin Healthcare
153.31System, Inc. shall be combined and the notes issuable under this subdivision shall be in
153.32addition to obligations issuable under section 373.01, subdivision 3.

153.33    Sec. 4. Minnesota Statutes 2014, section 410.32, is amended to read:
153.34410.32 CITIES MAY ISSUE CAPITAL NOTES FOR CAPITAL EQUIPMENT.
154.1    (a) Notwithstanding any contrary provision of other law or charter, a home rule
154.2charter city may, by resolution and without public referendum, issue capital notes subject
154.3to the city debt limit to purchase capital equipment.
154.4    (b) For purposes of this section, "capital equipment" means:
154.5    (1) public safety equipment, ambulance and other medical equipment, road
154.6construction and maintenance equipment, and other capital equipment; and
154.7    (2) computer hardware and software, whether bundled with machinery or equipment
154.8or unbundled, together with application development services and training related to the
154.9use of the computer hardware and software.
154.10    (c) The equipment or software must have an expected useful life at least as long
154.11as the term of the notes.
154.12    (d) The notes shall be payable in not more than ten years and be issued on terms and
154.13in the manner the city determines, provided that notes issued for projects that eliminate
154.14R-22, as such projects are defined in section 240A.09, paragraph (b), clause (2), shall be
154.15payable in not more than 20 years. The total principal amount of the capital notes issued
154.16in a fiscal year shall not exceed 0.03 percent of the estimated market value of taxable
154.17property in the city for that year.
154.18    (e) A tax levy shall be made for the payment of the principal and interest on the
154.19notes, in accordance with section 475.61, as in the case of bonds.
154.20    (f) Notes issued under this section shall require an affirmative vote of two-thirds of
154.21the governing body of the city.
154.22    (g) Notwithstanding a contrary provision of other law or charter, a home rule charter
154.23city may also issue capital notes subject to its debt limit in the manner and subject to the
154.24limitations applicable to statutory cities pursuant to section 412.301.

154.25    Sec. 5. Minnesota Statutes 2014, section 412.301, is amended to read:
154.26412.301 FINANCING PURCHASE OF CERTAIN EQUIPMENT.
154.27    (a) The council may issue certificates of indebtedness or capital notes subject to the
154.28city debt limits to purchase capital equipment.
154.29    (b) For purposes of this section, "capital equipment" means:
154.30    (1) public safety equipment, ambulance and other medical equipment, road
154.31construction and maintenance equipment, and other capital equipment; and
154.32    (2) computer hardware and software, whether bundled with machinery or equipment
154.33or unbundled, together with application development services and training related to the
154.34use of the computer hardware or software.
155.1    (c) The equipment or software must have an expected useful life at least as long as
155.2the terms of the certificates or notes.
155.3    (d) Such certificates or notes shall be payable in not more than ten years and shall
155.4be issued on such terms and in such manner as the council may determine, provided,
155.5however, that notes issued for projects that eliminate R-22, as such projects are defined in
155.6section 240A.09, paragraph (b), clause (2), shall be payable in not more than 20 years.
155.7    (e) If the amount of the certificates or notes to be issued to finance any such purchase
155.8exceeds 0.25 percent of the estimated market value of taxable property in the city, they
155.9shall not be issued for at least ten days after publication in the official newspaper of
155.10a council resolution determining to issue them; and if before the end of that time, a
155.11petition asking for an election on the proposition signed by voters equal to ten percent
155.12of the number of voters at the last regular municipal election is filed with the clerk, such
155.13certificates or notes shall not be issued until the proposition of their issuance has been
155.14approved by a majority of the votes cast on the question at a regular or special election.
155.15    (f) A tax levy shall be made for the payment of the principal and interest on such
155.16certificates or notes, in accordance with section 475.61, as in the case of bonds.

155.17    Sec. 6. Minnesota Statutes 2014, section 469.034, subdivision 2, is amended to read:
155.18    Subd. 2. General obligation revenue bonds. (a) An authority may pledge the
155.19general obligation of the general jurisdiction governmental unit as additional security for
155.20bonds payable from income or revenues of the project or the authority. The authority
155.21must find that the pledged revenues will equal or exceed 110 percent of the principal and
155.22interest due on the bonds for each year. The proceeds of the bonds must be used for a
155.23qualified housing development project or projects. The obligations must be issued and
155.24sold in the manner and following the procedures provided by chapter 475, except the
155.25obligations are not subject to approval by the electors, and the maturities may extend to
155.26not more than 35 years for obligations sold to finance housing for the elderly and 40 years
155.27for other obligations issued under this subdivision. The authority is the municipality for
155.28purposes of chapter 475.
155.29    (b) The principal amount of the issue must be approved by the governing body of
155.30the general jurisdiction governmental unit whose general obligation is pledged. Public
155.31hearings must be held on issuance of the obligations by both the authority and the general
155.32jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
155.33than 120 days, before the sale of the obligations.
155.34    (c) The maximum amount of general obligation bonds that may be issued and
155.35outstanding under this section equals the greater of (1) one-half of one percent of the
156.1estimated market value of the general jurisdiction governmental unit whose general
156.2obligation is pledged, or (2) $3,000,000 $5,000,000. In the case of county or multicounty
156.3general obligation bonds, the outstanding general obligation bonds of all cities in the
156.4county or counties issued under this subdivision must be added in calculating the limit
156.5under clause (1).
156.6    (d) "General jurisdiction governmental unit" means the city in which the housing
156.7development project is located. In the case of a county or multicounty authority, the
156.8county or counties may act as the general jurisdiction governmental unit. In the case of
156.9a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
156.10taxable property in each of the counties.
156.11    (e) "Qualified housing development project" means a housing development project
156.12providing housing either for the elderly or for individuals and families with incomes not
156.13greater than 80 percent of the median family income as estimated by the United States
156.14Department of Housing and Urban Development for the standard metropolitan statistical
156.15area or the nonmetropolitan county in which the project is located. The project must be
156.16owned for the term of the bonds either by the authority or by a limited partnership or other
156.17entity in which the authority or another entity under the sole control of the authority is
156.18the sole general partner and the partnership or other entity must receive (1) an allocation
156.19from the Department of Management and Budget or an entitlement issuer of tax-exempt
156.20bonding authority for the project and a preliminary determination by the Minnesota
156.21Housing Finance Agency or the applicable suballocator of tax credits that the project
156.22will qualify for four percent low-income housing tax credits or (2) a reservation of nine
156.23percent low-income housing tax credits from the Minnesota Housing Finance Agency or a
156.24suballocator of tax credits for the project. A qualified housing development project may
156.25admit nonelderly individuals and families with higher incomes if:
156.26    (1) three years have passed since initial occupancy;
156.27    (2) the authority finds the project is experiencing unanticipated vacancies resulting in
156.28insufficient revenues, because of changes in population or other unforeseen circumstances
156.29that occurred after the initial finding of adequate revenues; and
156.30    (3) the authority finds a tax levy or payment from general assets of the general
156.31jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
156.32income individuals or families are not admitted.
156.33    (f) The authority may issue bonds to refund bonds issued under this subdivision in
156.34accordance with section 475.67. The finding of the adequacy of pledged revenues required
156.35by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
157.1issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
157.2after July 1, 1992.

157.3    Sec. 7. Minnesota Statutes 2014, section 469.101, subdivision 1, is amended to read:
157.4    Subdivision 1. Establishment. An economic development authority may create
157.5and define the boundaries of economic development districts at any place or places within
157.6the city, except that the district boundaries must be contiguous, and may use the powers
157.7granted in sections 469.090 to 469.108 to carry out its purposes. First the authority must
157.8hold a public hearing on the matter. At least ten days before the hearing, the authority
157.9shall publish notice of the hearing in a daily newspaper of general circulation in the city.
157.10Also, the authority shall find that an economic development district is proper and desirable
157.11to establish and develop within the city.

157.12    Sec. 8. Minnesota Statutes 2014, section 475.58, subdivision 3b, is amended to read:
157.13    Subd. 3b. Street reconstruction and bituminous overlays. (a) A municipality may,
157.14without regard to the election requirement under subdivision 1, issue and sell obligations
157.15for street reconstruction or bituminous overlays, if the following conditions are met:
157.16    (1) the streets are reconstructed or overlaid under a street reconstruction or overlay
157.17plan that describes the street reconstruction or overlay to be financed, the estimated costs,
157.18and any planned reconstruction or overlay of other streets in the municipality over the next
157.19five years, and the plan and issuance of the obligations has been approved by a vote of
157.20all a majority of the members of the governing body present at the meeting following a
157.21public hearing for which notice has been published in the official newspaper at least ten
157.22days but not more than 28 days prior to the hearing; and
157.23    (2) if a petition requesting a vote on the issuance is signed by voters equal to
157.24five percent of the votes cast in the last municipal general election and is filed with the
157.25municipal clerk within 30 days of the public hearing, the municipality may issue the bonds
157.26only after obtaining the approval of a majority of the voters voting on the question of the
157.27issuance of the obligations. If the municipality elects not to submit the question to the
157.28voters, the municipality shall not propose the issuance of bonds under this section for the
157.29same purpose and in the same amount for a period of 365 days from the date of receipt
157.30of the petition. If the question of issuing the bonds is submitted and not approved by the
157.31voters, the provisions of section 475.58, subdivision 1a, shall apply.
157.32    (b) Obligations issued under this subdivision are subject to the debt limit of the
157.33municipality and are not excluded from net debt under section 475.51, subdivision 4.
158.1    (c) For purposes of this subdivision, street reconstruction and bituminous overlays
158.2includes utility replacement and relocation and other activities incidental to the street
158.3reconstruction, turn lanes and other improvements having a substantial public safety
158.4function, realignments, other modifications to intersect with state and county roads, and
158.5the local share of state and county road projects. For purposes of this subdivision, "street
158.6reconstruction" includes expenditures for street reconstruction that have been incurred
158.7by a municipality before approval of a street reconstruction plan, if such expenditures
158.8are included in a street reconstruction plan approved on or before the date of the public
158.9hearing under paragraph (a), clause (1), regarding issuance of bonds for such expenditures.
158.10    (d) Except in the case of turn lanes, safety improvements, realignments, intersection
158.11modifications, and the local share of state and county road projects, street reconstruction
158.12and bituminous overlays does not include the portion of project cost allocable to widening
158.13a street or adding curbs and gutters where none previously existed.

158.14    Sec. 9. Minnesota Statutes 2014, section 475.60, subdivision 2, is amended to read:
158.15    Subd. 2. Requirements waived. The requirements as to public sale shall not
158.16apply to:
158.17(1) obligations issued under the provisions of a home rule charter or of a law
158.18specifically authorizing a different method of sale, or authorizing them to be issued in such
158.19manner or on such terms and conditions as the governing body may determine;
158.20(2) obligations sold by an issuer in an amount not exceeding the total sum of
158.21$1,200,000 in any 12-month period;
158.22(3) obligations issued by a governing body other than a school board in anticipation
158.23of the collection of taxes or other revenues appropriated for expenditure in a single year, if
158.24sold in accordance with the most favorable of two or more proposals solicited privately;
158.25(4) obligations sold to any board, department, or agency of the United States of
158.26America or of the state of Minnesota, in accordance with rules or regulations promulgated
158.27by such board, department, or agency;
158.28(5) obligations issued to fund pension and retirement fund liabilities under section
158.29475.52, subdivision 6 , obligations issued with tender options under section 475.54,
158.30subdivision 5a
, crossover refunding obligations referred to in section 475.67, subdivision
158.3113
, and any issue of obligations comprised in whole or in part of obligations bearing
158.32interest at a rate or rates which vary periodically referred to in section 475.56;
158.33(6) obligations to be issued for a purpose, in a manner, and upon terms and
158.34conditions authorized by law, if the governing body of the municipality, on the advice of
159.1bond counsel or special tax counsel, determines that interest on the obligations cannot be
159.2represented to be excluded from gross income for purposes of federal income taxation;
159.3(7) obligations issued in the form of an installment purchase contract, lease purchase
159.4agreement, or other similar agreement;
159.5(8) obligations sold under a bond reinvestment program; and
159.6(9) if the municipality has retained an independent financial municipal advisor,
159.7obligations which the governing body determines shall be sold by private negotiation.

159.8ARTICLE 11
159.9SUSTAINABLE FOREST INCENTIVE ACT MODIFICATIONS

159.10    Section 1. Minnesota Statutes 2014, section 290C.01, is amended to read:
159.11290C.01 PURPOSE.
159.12It is the policy of this state to promote sustainable forest resource management on
159.13the state's public and private lands. Recognizing that The state's private forests comprise
159.14approximately one-half of the state forest land resources, that healthy and robust forest
159.15land provides significant benefits to the state of Minnesota, and that ad. These forests
159.16play a critical role in protecting water quality and soil resources, and provide extensive
159.17wildlife habitat, diverse recreational experiences, and significant forest products that
159.18support the state's economy. Ad valorem property taxes represent a significant annual
159.19cost that can discourage long-term forest management investments. In order to foster
159.20silviculture investments and retain these forests for their economic and ecological benefits,
159.21this chapter, hereafter referred to as the "Sustainable Forest Incentive Act," is enacted
159.22to encourage the state's private forest landowners to make a long-term commitment to
159.23sustainable forest management.

159.24    Sec. 2. Minnesota Statutes 2014, section 290C.02, subdivision 1, is amended to read:
159.25    Subdivision 1. Application. When used in sections 290C.01 to 290C.11 290C.13,
159.26the terms in this section have the meanings given them.
159.27EFFECTIVE DATE.This section is effective the day following final enactment.

159.28    Sec. 3. Minnesota Statutes 2014, section 290C.02, subdivision 3, is amended to read:
159.29    Subd. 3. Claimant. (a) "Claimant" means:
159.30    (1) a person, as that term is defined in section 290.01, subdivision 2, who owns
159.31forest land in Minnesota and files an application authorized by the Sustainable Forest
159.32Incentive Act;
160.1    (2) a purchaser or grantee if property enrolled in the program was sold or transferred
160.2after the original application was filed and prior to the annual incentive payment being
160.3made; or
160.4    (3) an owner of land previously covered by an auxiliary forest contract that
160.5automatically qualifies for inclusion in the Sustainable Forest Incentive Act program
160.6pursuant to section 88.49, subdivision 9a, or 88.491, subdivision 2.
160.7    The purchaser or grantee must notify the commissioner in writing of the sale or
160.8transfer of the property. Owners of land that qualifies for inclusion pursuant to section
160.988.49, subdivision 9a , or 88.491, subdivision 2, must notify the commissioner in writing
160.10of the expiration of the auxiliary forest contract or land trade with a governmental unit
160.11and submit an application to the commissioner by August 15 July 1 in order to be eligible
160.12to receive a payment by October 1 of that same year. For purposes of section 290C.11,
160.13claimant also includes any person bound by the covenant required in section 290C.04.
160.14    (b) No more than one claimant is entitled to a payment under this chapter with
160.15respect to any tract, parcel, or piece of land enrolled under this chapter that has been
160.16assigned the same parcel identification number. When enrolled forest land is owned by
160.17two or more persons, the owners must determine between them which person is eligible to
160.18claim the payments provided under sections 290C.01 to 290C.11. In the case of property
160.19sold or transferred, the former owner and the purchaser or grantee must determine between
160.20them which person is eligible to claim the payments provided under sections 290C.01 to
160.21290C.11 . The owners, transferees, or grantees must notify the commissioner in writing
160.22which person is eligible to claim the payments.
160.23EFFECTIVE DATE.This section is effective for certifications and applications
160.24due in 2016 and thereafter.

160.25    Sec. 4. Minnesota Statutes 2014, section 290C.02, subdivision 6, is amended to read:
160.26    Subd. 6. Forest land. "Forest land" means land containing a minimum of 20
160.27contiguous acres for which the owner has implemented a forest management plan that was
160.28prepared or updated within the past ten years by an approved plan writer. For purposes of
160.29this subdivision, acres are considered to be contiguous even if they are separated by a road,
160.30waterway, railroad track, or other similar intervening property. At least 50 percent of the
160.31contiguous acreage must meet the definition of forest land in section 88.01, subdivision
160.327
. For the purposes of sections 290C.01 to 290C.11, forest land does not include (i)
160.33land used for residential or agricultural purposes, (ii) land enrolled in the reinvest in
160.34Minnesota program, a state or federal conservation reserve or easement reserve program
160.35under sections 103F.501 to 103F.531, the Minnesota agricultural property tax law under
161.1section 273.111, or land subject to agricultural land preservation controls or restrictions
161.2as defined in section 40A.02 or under the Metropolitan Agricultural Preserves Act under
161.3chapter 473H, (iii) land exceeding 60,000 acres that is subject to a single conservation
161.4easement funded under section 97A.056 or a comparable permanent easement conveyed
161.5to a governmental or nonprofit entity; (iv) any land that becomes subject to a conservation
161.6easement funded under section 97A.056 or a comparable permanent easement conveyed
161.7to a governmental or nonprofit entity after May 30, 2013; or (v) (iv) land improved with a
161.8structure, pavement, sewer, campsite, or any road, other than a township road, used for
161.9purposes not prescribed in the forest management plan.
161.10EFFECTIVE DATE.This section is effective for applications made in 2016 and
161.11thereafter.

161.12    Sec. 5. Minnesota Statutes 2014, section 290C.03, is amended to read:
161.13290C.03 ELIGIBILITY REQUIREMENTS.
161.14(a) Land may be enrolled in the sustainable forest incentive program under this
161.15chapter if all of the following conditions are met:
161.16(1) the land consists of at least 20 contiguous acres and at least 50 percent of the
161.17land must meet the definition of forest land in section 88.01, subdivision 7, during the
161.18enrollment;
161.19(2) a forest management plan for the land must be prepared by an approved plan
161.20writer and implemented during the period in which the land is enrolled;
161.21(3) timber harvesting and forest management guidelines must be used in conjunction
161.22with any timber harvesting or forest management activities conducted on the land during
161.23the period in which the land is enrolled;
161.24(4) the land must be enrolled for a minimum of eight years;
161.25(5) there are no delinquent property taxes on the land; and
161.26(6) claimants enrolling more than 1,920 acres or enrolling any land that is subject
161.27to a conservation easement funded under section 97A.056, or a comparable permanent
161.28easement conveyed to a governmental or nonprofit entity in the sustainable forest incentive
161.29program must allow year-round, nonmotorized access to fish and wildlife resources and
161.30motorized access on established and maintained roads and trails, unless the road or trail is
161.31temporarily closed for safety, natural resource, or road damage reasons on enrolled land
161.32except within one-fourth mile of a permanent dwelling or during periods of high fire
161.33hazard as determined by the commissioner of natural resources;
162.1(7) the claimant has registered with the forest management plan under clause (2)
162.2with the commissioner of natural resources, who has determined that the land meets
162.3qualifications for enrollment; and
162.4(8) the land is not classified as class 2c managed forest land.
162.5(b) Claimants required to allow access under paragraph (a), clause (6), do not by
162.6that action:
162.7(1) extend any assurance that the land is safe for any purpose;
162.8(2) confer upon the person the legal status of an invitee or licensee to whom a duty
162.9of care is owed; or
162.10(3) assume responsibility for or incur liability for any injury to the person or property
162.11caused by an act or omission of the person.
162.12(c) The commissioner of natural resources shall annually provide county assessors
162.13verification information regarding plan registration under paragraph (a), clause (7), on
162.14a timely basis.
162.15(d) A minimum of three acres must be excluded from enrolled land when the land is
162.16improved with a structure that is not a minor, ancillary, nonresidential structure.
162.17(e) If land does not meet the definition of forest land in section 290C.02, subdivision
162.186, because the land is: (1) enrolled in the reinvest in Minnesota program; (2) enrolled in
162.19a state or federal conservation reserve or easement program under sections 103F.501 to
162.20103F.531; (3) subject to the Minnesota agricultural property tax under section 273.111; or
162.21(4) subject to agricultural land preservation controls or restrictions as defined in section
162.2240A.02, or the Metropolitan Agricultural Preserves Act under chapter 473H, the entire tax
162.23parcel that contains the land is not eligible to be enrolled in the program.
162.24EFFECTIVE DATE.This section is effective for certifications and applications
162.25due in 2016 and thereafter.

162.26    Sec. 6. Minnesota Statutes 2014, section 290C.04, is amended to read:
162.27290C.04 APPLICATIONS.
162.28    (a) A landowner may apply to enroll forest land for the sustainable forest incentive
162.29program under this chapter. The claimant must complete, sign, and submit an application
162.30to the commissioner by September 30 in order for the land to become eligible beginning
162.31in the next year. The application shall be on a form prescribed by the commissioner
162.32commissioners of revenue and natural resources and must include the information the
162.33commissioner deems necessary. At a minimum, the application must show the following
162.34information for the land and the claimant: (i) the claimant's Social Security number or
163.1state or federal business tax registration number and date of birth, (ii) the claimant's
163.2address, (iii) the claimant's signature, (iv) the county's parcel identification numbers for
163.3the tax parcels that completely contain the claimant's forest land that is sought to be
163.4enrolled, (v) the number of acres eligible for enrollment in the program, (vi) the approved
163.5plan writer's signature and identification number, and (vii) proof, in a form specified by the
163.6commissioner, that the claimant has executed and acknowledged in the manner required
163.7by law for a deed, and recorded, a covenant that the land is not and shall not be developed
163.8in a manner inconsistent with the requirements and conditions of this chapter, and (viii) a
163.9registration number for the forest management plan, issued by the commissioner of natural
163.10resources. The covenant shall state in writing that the covenant is binding on the claimant
163.11and the claimant's successor or assignee, and that it runs with the land for a period of not
163.12less than eight years unless the claimant requests termination of the covenant after a
163.13reduction in payments due to changes in the payment formula under section 290C.07. The
163.14commissioner shall specify the form of the covenant and provide copies upon request.
163.15The covenant must include a legal description that encompasses all the forest land that the
163.16claimant wishes to enroll under this section or the certificate of title number for that land if
163.17it is registered land. The commissioner of natural resources shall record the area eligible
163.18for enrollment into the Sustainable Forest Incentive Act as electronic geospatial data, as
163.19defined in section 16E.30, subdivision 10.
163.20(b) The commissioner shall provide a copy of the application filed by the claimant
163.21and all supporting materials to the commissioner of natural resources within 15 days of
163.22receipt or by September 1, whichever is sooner. The commissioner of natural resources
163.23must notify the commissioner whether the applicant qualifies for enrollment within 30
163.24days of receipt, and if the applicant qualifies for enrollment, the commissioner of natural
163.25resources shall specify the number of qualifying acres per tax parcel.
163.26    (b) In all cases, (c) The commissioner shall notify the claimant within 90 days after
163.27receipt of a completed application that either the land has or has not been approved for
163.28enrollment. A claimant whose application is denied may appeal the denial as provided
163.29in section 290C.13.
163.30    (c) (d) Within 90 days after the denial of an application, or within 90 days after the
163.31final resolution of any appeal related to the denial, the commissioner shall execute and
163.32acknowledge a document releasing the land from the covenant required under this chapter.
163.33The document must be mailed to the claimant and is entitled to be recorded.
163.34    (d) (e) The Social Security numbers collected from individuals under this section are
163.35private data as provided in section 13.355. The federal business tax registration number
163.36and date of birth data collected under this section are also private data on individuals or
164.1nonpublic data, as defined in section 13.02, subdivisions 9 and 12, but may be shared
164.2with county assessors for purposes of tax administration and with county treasurers for
164.3purposes of the revenue recapture under chapter 270A.
164.4EFFECTIVE DATE.This section is effective for certifications and applications
164.5due in 2016 and thereafter.

164.6    Sec. 7. Minnesota Statutes 2014, section 290C.05, is amended to read:
164.7290C.05 ANNUAL CERTIFICATION AND MONITORING.
164.8    (a) On or before July 1 May 15 of each year, beginning with the year after the
164.9original claimant has received an approved application, the commissioner shall send each
164.10claimant enrolled under the sustainable forest incentive program a certification form. For
164.11purposes of this section, the original claimant is the person that filed the first application
164.12under section 290C.04 to enroll the land in the program current property owner on record,
164.13or the person designated by the owners in the case of multiple ownership. The claimant
164.14must sign and return the certification, attesting to the commissioner by July 1 of that
164.15same year, and (1) attest that the requirements and conditions for continued enrollment
164.16in the program are currently being met, and must return the signed certification form to
164.17the commissioner by August 15 of that same year (2) provide a report in the form and
164.18manner determined by the commissioner of natural resources describing the management
164.19practices that have been carried out on the enrolled property during the prior year. If the
164.20claimant does not return an annual certification form by the due date, the provisions
164.21in section 290C.11 apply. The commissioner of natural resources will verify that the
164.22claimant meets program requirements.
164.23(b) The commissioner must provide the certification form and annual report described
164.24in paragraph (a), clause (2), to the commissioner of natural resources by August 1.
164.25(c) The commissioner of natural resources must conduct annual monitoring
164.26of a subset of claimants, excluding land also enrolled in a conservation easement
164.27program. Claimants will be selected for monitoring based on reported violations, annual
164.28certification, and random selections. Monitoring will be conducted on ten percent of
164.29claimants as of July 1 of each year. Monitoring may include, but is not limited to, a site
164.30visit by a department of natural resources or a contracted forester. The commissioner of
164.31natural resources will develop a monitoring form to record the monitoring data.
164.32EFFECTIVE DATE.Paragraphs (a) and (b) are effective for certifications and
164.33applications due in 2016 and thereafter. Paragraph (c) is effective July 1, 2018.

165.1    Sec. 8. Minnesota Statutes 2014, section 290C.055, is amended to read:
165.2290C.055 LENGTH OF COVENANT.
165.3(a) The covenant remains in effect for a minimum of eight years Claimants enrolling
165.4any land that is subject to a conservation easement funded under section 97A.056 or a
165.5comparable permanent easement conveyed to a governmental or nonprofit entity must
165.6enroll their land under a covenant with a minimum duration of eight years. All other
165.7claimants may choose to enroll their land under a covenant with a minimum duration of
165.8eight, 20, or 50 years. If land is removed the claimant requests removal from the program
165.9before it has been enrolled for four years half the number of years of the covenant's
165.10duration, the covenant remains in effect for eight years the entire duration of the covenant
165.11from the date recorded.
165.12(b) If land that has been enrolled for four years half the number of years of the
165.13covenant's minimum duration or more is removed from the program for any reason, there
165.14is a waiting period before the covenant terminates. The covenant terminates on January 1
165.15of the fifth, 11th, or 26th calendar year for the eight-, 20-, or 50-year minimum covenant,
165.16respectively, that begins after the date that:
165.17(1) the commissioner receives notification from the claimant that the claimant wishes
165.18to remove the land from the program under section 290C.10; or
165.19(2) the date that the land is removed from the program under section 290C.11.
165.20(c) Notwithstanding the other provisions of this section, the covenant is terminated:
165.21(1) at the same time that the land is removed from the program due to acquisition of
165.22title or possession for a public purpose under section 290C.10; or
165.23(2) at the request of the claimant after a reduction in payments due to changes in the
165.24payment formula under section 290C.07.
165.25EFFECTIVE DATE.This section is effective for certifications and applications in
165.262016 and thereafter.

165.27    Sec. 9. Minnesota Statutes 2014, section 290C.07, is amended to read:
165.28290C.07 CALCULATION OF INCENTIVE PAYMENT.
165.29    An approved claimant under the sustainable forest incentive program is eligible to
165.30receive an annual payment for each acre of enrolled land. The payment shall equal $7
165.31per acre for each acre enrolled in the sustainable forest incentive program a percentage of
165.32the property tax that would be paid on the land determined by using the previous year's
165.33statewide average total tax rate for all taxes levied within townships or unorganized
165.34territories, the estimated market value per acre as calculated in section 290C.06, and
166.1a class rate of one percent as follows: (1) for claimants enrolling land that is subject
166.2to a conservation easement funded under section 97A.056 or a comparable permanent
166.3easement conveyed to a governmental or nonprofit entity before May 31, 2013, under an
166.4eight-year covenant, 25 percent; (2) for claimants enrolling land that is not subject to
166.5a conservation easement under an eight-year covenant, 65 percent; (3) for claimants
166.6enrolling land that is not subject to a conservation easement under a 20-year covenant, 90
166.7percent; and (4) for claimants enrolling land that is not subject to a conservation easement
166.8under a 50-year covenant, 115 percent. The calculated payment shall not be less than the
166.9payment received in 2016 and shall not increase or decrease by more than ten percent
166.10relative to the payment received for the previous year.
166.11EFFECTIVE DATE.This section is effective for calculations made in 2016 and
166.12thereafter.

166.13    Sec. 10. Minnesota Statutes 2014, section 290C.08, subdivision 1, is amended to read:
166.14    Subdivision 1. Annual payment. An incentive payment for each acre of enrolled
166.15land will be made annually to each claimant in the amount determined under section
166.16290C.07 . By September 15 of each year, the commissioner of natural resources will
166.17certify to the commissioner the eligibility of each claimant to receive a payment. The
166.18incentive payment shall be paid by the commissioner on or before October 1 each year
166.19based on the certifications due August 15 July 1 of that year. Interest at the annual rate
166.20determined under section 270C.40 shall be included with any incentive payment not
166.21paid by the later of October 1 of the year the certification was due, or 45 days after the
166.22completed certification was returned or filed if the commissioner accepts a certification
166.23filed after August 15 July 1 of the taxes payable year as the resolution of an appeal.
166.24EFFECTIVE DATE.This section is effective for certifications and applications
166.25due in 2016 and thereafter.

166.26    Sec. 11. Minnesota Statutes 2014, section 290C.10, is amended to read:
166.27290C.10 WITHDRAWAL PROCEDURES.
166.28An approved claimant (a) The current owner of land enrolled under the sustainable
166.29forest incentive program for a minimum of four years half the number of years of the
166.30covenant's minimum duration may notify the commissioner of the intent to terminate
166.31enrollment. Within 90 days of receipt of notice to terminate enrollment, the commissioner
166.32shall inform the claimant in writing, acknowledging receipt of this notice and indicating
166.33the effective date of termination from the sustainable forest incentive program.
167.1Termination of enrollment in the sustainable forest incentive program occurs on January 1
167.2of the fifth, 11th, or 26th calendar year for the eight-, 20-, or 50-year respective minimum
167.3covenant that begins after receipt by the commissioner of the termination notice. After the
167.4commissioner issues an effective date of termination, a claimant wishing to continue the
167.5land's enrollment in the sustainable forest incentive program beyond the termination date
167.6must apply for enrollment as prescribed in section 290C.04. A claimant who withdraws
167.7a parcel of land from this program may not reenroll the parcel for a period of three
167.8years. Within 90 days after the termination date, the commissioner shall execute and
167.9acknowledge a document releasing the land from the covenant required under this chapter.
167.10The document must be mailed to the claimant and is entitled to be recorded.
167.11(b) Notwithstanding paragraph (a), on request of the claimant, the commissioner may
167.12allow early withdrawal from the Sustainable Forest Incentive Act without penalty when the
167.13state of Minnesota, any local government unit, or any other entity which has the power of
167.14eminent domain acquires title or possession to the land for a public purpose notwithstanding
167.15the provisions of this section. In the case of such an eligible acquisition under this
167.16paragraph, the commissioner shall execute and acknowledge a document releasing the
167.17land acquired by the state, local government unit, or other entity from the covenant.
167.18(c) Notwithstanding paragraph (a), on request of the claimant, the commissioner
167.19shall allow early withdrawal from the Sustainable Forest Incentive Act without penalty
167.20when the government or nonprofit entity acquires a permanent conservation easement
167.21on the enrolled property and the conservation easement is at least as restrictive as the
167.22covenant required under section 290C.04. The commissioner of natural resources must
167.23notify the commissioner of lands acquired under this paragraph that are eligible for
167.24withdrawal. In the case of an eligible easement acquisition under this paragraph, the
167.25commissioner shall execute and acknowledge a document releasing the land subject to
167.26the easement from the covenant.
167.27(d) Notwithstanding paragraph (a), on request of the claimant, the commissioner
167.28shall allow early withdrawal from the Sustainable Forest Incentive Act without penalty for
167.29land that is subject to fee or easement acquisition or lease to the state of Minnesota or a
167.30political subdivision of the state for the public purpose of a paved trail. The commissioner
167.31of natural resources must notify the commissioner of lands acquired under this paragraph
167.32that are eligible for withdrawal. In the case of an eligible fee or easement acquisition or
167.33lease under this paragraph, the commissioner shall execute and acknowledge a document
167.34releasing the land subject to fee or easement acquisition or lease by the state or political
167.35subdivision of the state.
167.36(e) All other enrolled land must remain in the program.
168.1EFFECTIVE DATE.Paragraphs (c) and (d) are effective the day following final
168.2enactment. Paragraphs (a), (b), and (e) are effective for notifications made in 2016 and
168.3thereafter.

168.4    Sec. 12. [290C.101] TRANSFER OF OWNERSHIP.
168.5    Subdivision 1. Definitions. (a) For purposes of this section, the following terms
168.6have the meanings provided.
168.7(b) "New owner" means a prospective purchaser or grantee.
168.8(c) "Owner" means a grantor or seller.
168.9    Subd. 2. Notification to commissioner. (a) An owner must notify the commissioner
168.10if the owner transfers any or all of the owner's land enrolled in the sustainable forest
168.11incentive program to one or more new owners within 60 days of the transfer of title to the
168.12property. The notification must include the legal descriptions of the transferred property,
168.13the tax parcel numbers, and the name and address of the new owner. If transfer of ownership
168.14is a result of the death of the claimant, the provisions of section 290C.12 shall apply.
168.15(b) Upon notification, the commissioner shall inform the new owner of the
168.16restrictions of the covenant required by section 290C.04 and the withdrawal procedures
168.17under section 290C.10. In order for the new owner to receive payments pursuant to this
168.18chapter, the new owner must file an application and register a new forest management plan
168.19with the commissioner of natural resources within two years from the date the title of the
168.20property was transferred to remain eligible.
168.21    Subd. 3. Termination of enrollment. The commissioner will terminate enrollment
168.22according to the procedure in section 290C.10 for failure of the new owner to register a
168.23forest management plan within the time period in subdivision 2, paragraph (b).
168.24EFFECTIVE DATE.This section is effective the day following final enactment.

168.25    Sec. 13. Minnesota Statutes 2014, section 290C.11, is amended to read:
168.26290C.11 PENALTIES FOR REMOVAL.
168.27    (a) If the commissioner determines that land enrolled in the sustainable forest
168.28incentive program is in violation of the conditions for enrollment as specified in section
168.29290C.03 , or upon notification by the commissioner of natural resources that land enrolled
168.30is in violation of the conditions for enrollment, the commissioner shall notify the claimant
168.31current owner of the land of the intent to remove all the tax parcel of the enrolled land
168.32where the violation has occurred from the sustainable forest incentive program. The
169.1penalties described under paragraph (c) shall apply. The claimant current owner has 60
169.2days to appeal this determination under the provisions of section 290C.13.
169.3    (b) If the commissioner determines the land is to be removed from the sustainable
169.4forest incentive program due to the construction or addition of an improvement to the
169.5property, the claimant owner of the tax parcel that is in violation is liable for payment
169.6to the commissioner in the amount equal to : (1) the payments received issued related to
169.7the enrolled tax parcel under this chapter for the previous four-year period in the case of
169.8an eight-year minimum covenant, ten-year period in the case of a 20-year minimum
169.9covenant, and 25-year period in the case of a 50-year minimum covenant, plus interest;
169.10and (2) 25 percent of the estimated market value of the property as reclassified under
169.11section 273.13 due to the structure being on the tax parcel, as determined by the assessor.
169.12(c) If the commissioner of natural resources determines that the land is used for
169.13purposes other than forestry purposes, the commissioner of natural resources shall notify
169.14the commissioner of revenue, who shall notify the current owner of the tax parcel that is in
169.15violation that the current owner is liable to the commissioner in an amount equal to: (1) 30
169.16percent of the estimated market value as property reclassified under section 273.13, due to
169.17the change in use, as determined by the assessor; and (2) the payments issued related to
169.18the enrolled tax parcel under this chapter for the previous four-year period in the case of
169.19an eight-year covenant, ten-year period in the case of a 20-year covenant, and 25-year
169.20period in the case of a 50-year covenant, plus interest.
169.21    (d) The claimant has 90 days to satisfy the payment for removal of land from the
169.22sustainable forest incentive program under this section. If the penalty is not paid within
169.23the 90-day period under this paragraph, the commissioner shall certify the amount to the
169.24county auditor for collection as a part of the general ad valorem real property taxes on the
169.25land in the following taxes payable year.
169.26EFFECTIVE DATE.This section is effective the day following final enactment.

169.27    Sec. 14. Minnesota Statutes 2014, section 290C.13, subdivision 6, is amended to read:
169.28    Subd. 6. Determination of appeal. On the basis of applicable law and available
169.29information, the commissioner shall determine the validity, if any, in whole or in part,
169.30of the appeal and notify the claimant of the decision. This notice must be in writing
169.31and contain the basis for the determination. The commissioner shall consult with the
169.32commissioner of natural resources when an appeal relates to the use of the property for
169.33forestry or nonforestry purposes and for appeals related to forest management plans.
169.34EFFECTIVE DATE.This section is effective the day following final enactment.

170.1    Sec. 15. SUSTAINABLE FOREST INCENTIVE ACT; TRANSITION
170.2PROVISION.
170.3(a) For lands enrolled in the Sustainable Forest Incentive Act on May 15, 2015, the
170.4owner of enrolled lands may elect through May 15, 2017, and without penalty, to change
170.5the length of a covenant, if eligible, under Minnesota Statutes, section 290C.055. The
170.6owner of enrolled land must provide notice to the Department of Revenue of its intent to
170.7change the length of its covenant.
170.8(b) For lands enrolled in the Sustainable Forest Incentive Act on May 15, 2015, the
170.9owner of enrolled land must comply with the changes made in the act by certifications due
170.10in 2017, as required under Minnesota Statutes, section 290C.05.
170.11EFFECTIVE DATE.This section is effective the day following final enactment.

170.12    Sec. 16. REPEALER.
170.13Minnesota Statutes 2014, sections 290C.02, subdivisions 5 and 9, are repealed.
170.14EFFECTIVE DATE.This section is effective the day following final enactment.

170.15ARTICLE 12
170.16MISCELLANEOUS

170.17    Section 1. Minnesota Statutes 2014, section 16A.152, subdivision 2, is amended to read:
170.18    Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general
170.19fund revenues and expenditures, the commissioner of management and budget determines
170.20that there will be a positive unrestricted budgetary general fund balance at the close of
170.21the biennium, the commissioner of management and budget must allocate money to the
170.22following accounts and purposes in priority order:
170.23    (1) the cash flow account established in subdivision 1 until that account reaches
170.24$350,000,000;
170.25    (2) the budget reserve account established in subdivision 1a until that account
170.26reaches $810,992,000 $994,339,000;
170.27    (3) the amount necessary to increase the aid payment schedule for school district
170.28aids and credits payments in section 127A.45 to not more than 90 percent rounded to the
170.29nearest tenth of a percent without exceeding the amount available and with any remaining
170.30funds deposited in the budget reserve; and
170.31    (4) the amount necessary to restore all or a portion of the net aid reductions under
170.32section 127A.441 and to reduce the property tax revenue recognition shift under section
170.33123B.75, subdivision 5 , by the same amount.
171.1    (b) The amounts necessary to meet the requirements of this section are appropriated
171.2from the general fund within two weeks after the forecast is released or, in the case of
171.3transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations
171.4schedules otherwise established in statute.
171.5    (c) The commissioner of management and budget shall certify the total dollar
171.6amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of
171.7education. The commissioner of education shall increase the aid payment percentage and
171.8reduce the property tax shift percentage by these amounts and apply those reductions to
171.9the current fiscal year and thereafter.
171.10EFFECTIVE DATE.This section is effective July 1, 2015.

171.11    Sec. 2. Minnesota Statutes 2014, section 16A.152, subdivision 8, is amended to read:
171.12    Subd. 8. Report on budget reserve percentage. (a) The commissioner of
171.13management and budget shall develop and annually review a methodology for evaluating
171.14the adequacy of the budget reserve based on the volatility of Minnesota's general fund
171.15tax structure. The review must take into consideration relevant statistical and economic
171.16literature. After completing the review, the commissioner may revise the methodology
171.17if necessary. The commissioner must use the methodology to annually estimate the
171.18percentage of the current biennium's general fund nondedicated revenues recommended
171.19as a budget reserve.
171.20    (b) By January 15 August 31 of each year, the commissioner shall report the
171.21percentage of the current biennium's general fund nondedicated revenue that is
171.22recommended as a budget reserve to the chairs and ranking minority members of the
171.23legislative committees with jurisdiction over the Department of Management and Budget
171.24senate committee on finance, the house of representatives committee on ways and means,
171.25and the senate and house of representatives committees on taxes. The report must also
171.26specify:
171.27    (1) whether the commissioner revised the recommendation as a result of significant
171.28changes in the mix of general fund taxes or the base of one or more general fund taxes;
171.29    (2) whether the commissioner revised the recommendation as a result of a revision
171.30to the methodology; and
171.31    (3) any additional appropriate information.
171.32EFFECTIVE DATE.This section is effective July 1, 2015.

171.33    Sec. 3. Minnesota Statutes 2014, section 271.08, subdivision 1, is amended to read:
172.1    Subdivision 1. Written order. The Tax Court, except in Small Claims Division,
172.2shall determine every appeal by written order containing findings of fact and the decision
172.3of the tax court. A memorandum of the grounds of the decision shall be appended. Notice
172.4of the entry of the order and of the substance of the decision shall be mailed to all parties.
172.5A motion for rehearing, which includes a motion for amended findings of fact, conclusions
172.6of law, or a new trial, must be served by the moving party within 15 30 days after mailing
172.7of the notice by the court as specified in this subdivision, and the motion must be heard
172.8within 30 60 days thereafter, unless the time for hearing is extended by the court within
172.9the 30-day 60-day period for good cause shown.
172.10EFFECTIVE DATE.This section is effective the day following final enactment.

172.11    Sec. 4. Minnesota Statutes 2014, section 271.21, subdivision 2, is amended to read:
172.12    Subd. 2. Jurisdiction. At the election of the taxpayer, the Small Claims Division
172.13shall have jurisdiction only in the following matters:
172.14(a) cases involving valuation, assessment, or taxation of real or personal property, if:
172.15(i) the issue is a denial of a current year application for the homestead classification
172.16for the taxpayer's property;
172.17(ii) only one parcel is included in the petition, the entire parcel is classified as
172.18homestead class 1a or 1b under section 273.13, and the parcel contains no more than
172.19one dwelling unit;
172.20(iii) the entire property is classified as agricultural homestead class 2a or 1b under
172.21section 273.13; or
172.22(iv) the assessor's estimated market value of the property included in the petition
172.23is less than $300,000; or
172.24(b) any case not involving valuation, assessment, or taxation of real and personal
172.25property in which the amount in controversy does not exceed $5,000 $15,000, including
172.26penalty and interest.
172.27EFFECTIVE DATE.This section is effective the day following final enactment.

172.28    Sec. 5. Minnesota Statutes 2014, section 296A.01, subdivision 12, is amended to read:
172.29    Subd. 12. Compressed natural gas or CNG. "Compressed natural gas" or "CNG"
172.30means natural gas, primarily methane, condensed under high pressure and stored in
172.31specially designed storage tanks at between 2,000 and 3,600 pounds per square inch.
172.32For purposes of this chapter, the energy content of CNG is considered to be 1,000 900
172.33BTUs per cubic foot.
173.1EFFECTIVE DATE.This section is effective for sales and purchases made after
173.2June 30, 2015.

173.3    Sec. 6. Minnesota Statutes 2014, section 296A.01, is amended by adding a subdivision
173.4to read:
173.5    Subd. 13a. Dealer of gasoline used as a substitute for aviation gasoline. "Dealer
173.6of gasoline used as a substitute for aviation gasoline" means any person who sells gasoline
173.7on the premises of an airport as defined under section 360.013, subdivision 39, to be
173.8dispensed directly into the fuel tank of an aircraft.
173.9EFFECTIVE DATE.This section is effective for sales and purchases made after
173.10June 30, 2015.

173.11    Sec. 7. Minnesota Statutes 2014, section 296A.07, subdivision 4, is amended to read:
173.12    Subd. 4. Exemptions. The provisions of subdivision 1 do not apply to gasoline or
173.13denatured ethanol purchased by:
173.14    (1) a transit system or transit provider receiving financial assistance or
173.15reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384;
173.16    (2) providers of transportation to recipients of medical assistance home and
173.17community-based services waivers enrolled in day programs, including adult day care,
173.18family adult day care, day treatment and habilitation, prevocational services, and
173.19structured day services;
173.20(3) an ambulance service licensed under chapter 144E;
173.21(4) providers of medical or dental services by a federally qualified health center,
173.22as defined under title 19 of the Social Security Act, as amended by Section 4161 of the
173.23Omnibus Budget Reconciliation Act of 1990, with a motor vehicle used exclusively as a
173.24mobile medical unit; or
173.25    (5) a licensed distributor to be delivered to a terminal for use in blending; or
173.26    (6) a dealer of gasoline used as a substitute for aviation gasoline.
173.27EFFECTIVE DATE.This section is effective for sales and purchases made after
173.28June 30, 2015.

173.29    Sec. 8. Minnesota Statutes 2014, section 296A.08, subdivision 2, is amended to read:
173.30    Subd. 2. Rate of tax. The special fuel excise tax is imposed at the following rates:
173.31    (a) Liquefied petroleum gas or propane is taxed at the rate of 18.75 cents per gallon.
173.32    (b) Liquefied natural gas is taxed at the rate of 15 cents per gallon.
174.1    (c) Compressed natural gas is taxed at the rate of $2.174 $1.974 per thousand cubic
174.2feet; or 25 cents per gasoline equivalent. For purposes of this paragraph, "gasoline
174.3equivalent," as defined by the National Conference on Weights and Measures, is 5.66
174.4pounds of natural gas or 126.67 cubic feet.
174.5    (d) All other special fuel is taxed at the same rate as the gasoline excise tax as
174.6specified in section 296A.07, subdivision 2. The tax is payable in the form and manner
174.7prescribed by the commissioner.
174.8EFFECTIVE DATE.This section is effective for sales and purchases made after
174.9June 30, 2015.

174.10    Sec. 9. Minnesota Statutes 2014, section 296A.09, subdivision 1, is amended to read:
174.11    Subdivision 1. Gasoline tax imposed. Subject to any refunds or credits there is
174.12imposed an excise tax, at the rate of five cents per gallon on all aviation gasoline received,
174.13sold, stored, or withdrawn from storage in this state and on all gasoline used as a substitute
174.14for aviation gasoline. Aviation gasoline is defined in section 296A.01, subdivision 7.
174.15EFFECTIVE DATE.This section is effective for sales and purchases made after
174.16June 30, 2015.

174.17    Sec. 10. Minnesota Statutes 2014, section 296A.09, subdivision 3, is amended to read:
174.18    Subd. 3. Exception to tax for aviation use. The provisions of subdivisions 1 and 2
174.19do not apply to gasoline used as a substitute for aviation gasoline, aviation gasoline or
174.20special fuel purchased and placed in the fuel tanks of an aircraft outside the state, even
174.21though the gasoline may be consumed within this state.
174.22EFFECTIVE DATE.This section is effective for sales and purchases made after
174.23June 30, 2015.

174.24    Sec. 11. Minnesota Statutes 2014, section 296A.09, subdivision 5, is amended to read:
174.25    Subd. 5. Tax not on consumption. The taxes imposed by subdivisions 1 and 2 are
174.26expressly declared not to be a tax upon consumption of gasoline used as a substitute for
174.27aviation gasoline, aviation gasoline or special fuel by an aircraft.
174.28EFFECTIVE DATE.This section is effective for sales and purchases made after
174.29June 30, 2015.

174.30    Sec. 12. Minnesota Statutes 2014, section 296A.09, subdivision 6, is amended to read:
175.1    Subd. 6. Exemptions. The provisions of subdivisions 1 and 2 do not apply to
175.2gasoline used as a substitute for aviation gasoline, aviation gasoline or jet fuel purchased
175.3by an ambulance service licensed under chapter 144E.
175.4EFFECTIVE DATE.This section is effective for sales and purchases made after
175.5June 30, 2015.

175.6    Sec. 13. Minnesota Statutes 2014, section 296A.15, subdivision 1, is amended to read:
175.7    Subdivision 1. Monthly gasoline report; shrinkage allowance. (a) Except
175.8as provided in paragraph (e), on or before the 23rd day of each month, every person
175.9who is required to pay a gasoline tax shall file with the commissioner a report, in the
175.10form and manner prescribed by the commissioner, showing the number of gallons of
175.11petroleum products received by the reporter during the preceding calendar month, and
175.12other information the commissioner may require. A written report is deemed to have
175.13been filed as required in this subdivision if postmarked on or before the 23rd day of the
175.14month in which the tax is payable.
175.15(b) The number of gallons of gasoline must be reported in United States standard
175.16liquid gallons, 231 cubic inches, except that the commissioner may upon written
175.17application and for cause shown permit the distributor to report the number of gallons of
175.18gasoline as corrected to a temperature of 60-degrees Fahrenheit. If the application is
175.19granted, all gasoline covered in the application and allowed by the commissioner must
175.20continue to be reported by the distributor on the adjusted basis for a period of one year
175.21from the date of the granting of the application. The number of gallons of petroleum
175.22products other than gasoline must be reported as originally invoiced. Each report must
175.23show separately the number of gallons of aviation gasoline received by the reporter during
175.24each calendar month and the number of gallons of gasoline sold to a dealer of gasoline
175.25used as a substitute for aviation fuel during each calendar month.
175.26(c) Each report must also include the amount of gasoline tax on gasoline received by
175.27the reporter during the preceding month. In computing the tax a deduction of 2.5 percent
175.28of the quantity of gasoline received by a distributor shall be made for evaporation and loss.
175.29At the time of reporting, the reporter shall submit satisfactory evidence that one-third of
175.30the 2.5 percent deduction has been credited or paid to dealers on quantities sold to them.
175.31(d) Each report shall contain a confession of judgment for the amount of the tax
175.32shown due to the extent not timely paid.
175.33(e) Under certain circumstances and with the approval of the commissioner,
175.34taxpayers may be allowed to file reports annually.
176.1EFFECTIVE DATE.This section is effective for sales and purchases made after
176.2June 30, 2015.

176.3    Sec. 14. Minnesota Statutes 2014, section 296A.15, subdivision 4, is amended to read:
176.4    Subd. 4. Failure to use or sell for intended purpose; report required. (a) Any
176.5person who buys gasoline from a dealer of gasoline used as a substitute for aviation
176.6gasoline, or buys aviation gasoline or special fuel for aircraft use and who has paid the
176.7excise taxes due directly or indirectly through the amount of the tax being included in the
176.8price, or otherwise, and uses said gasoline or special fuel in motor vehicles or knowingly
176.9sells it to any person for use in motor vehicles shall, on or before the 23rd day of the month
176.10following that in which such gasoline or special fuel was so used or sold, report the fact of
176.11the use or sale to the commissioner in the form and manner prescribed by the commissioner.
176.12(b) Any person who buys gasoline other than aviation gasoline and who has paid the
176.13motor vehicle gasoline excise tax directly or indirectly through the amount of the tax being
176.14included in the price of the gasoline, or otherwise, who knowingly sells such gasoline to any
176.15person to be used for the purpose of producing or generating power for propelling aircraft,
176.16or who receives, stores, or withdraws from storage gasoline to be used for that purpose,
176.17shall, on or before the 23rd day of the month following that in which such gasoline was so
176.18sold, stored, or withdrawn from storage, report the fact of the sale, storage, or withdrawal
176.19from storage to the commissioner in the form and manner prescribed by the commissioner.
176.20EFFECTIVE DATE.This section is effective for sales and purchases made after
176.21June 30, 2015.

176.22    Sec. 15. Minnesota Statutes 2014, section 296A.17, subdivision 1, is amended to read:
176.23    Subdivision 1. Aviation refund requirements. Any person claiming to be entitled
176.24to any refund or credit provided for in subdivision 3 shall receive the refund or credit
176.25upon filing with the commissioner a claim in such form and manner prescribed by the
176.26commissioner. The claim shall set forth, among other things, the total number of gallons
176.27of gasoline used as a substitute for aviation gasoline, aviation gasoline or special fuel
176.28for aircraft use upon which the claimant has directly or indirectly paid the excise tax
176.29provided for in this chapter, during the calendar year, which has been received, stored, or
176.30withdrawn from storage by the claimant in this state and not sold or otherwise disposed of
176.31to others. All claims for refunds under this subdivision shall be made on or before April
176.3230 following the end of the calendar year for which the refund is claimed.
177.1EFFECTIVE DATE.This section is effective for sales and purchases made after
177.2June 30, 2015.

177.3    Sec. 16. Minnesota Statutes 2014, section 296A.17, subdivision 2, is amended to read:
177.4    Subd. 2. Claim for refund; aviation tax. (a) Any person who buys gasoline used
177.5as a substitute for aviation gasoline, aviation gasoline or special fuel for aircraft use and
177.6who has paid the excise taxes directly or indirectly through the amount of the tax being
177.7included in the price, or otherwise, who does not use it in motor vehicles or receive, sell,
177.8store, or withdraw it from storage for the purpose of producing or generating power for
177.9propelling aircraft, shall be reimbursed and repaid the amount of the tax paid upon filing
177.10with the commissioner a claim in the form and manner prescribed by the commissioner.
177.11The claim shall state the total amount of the gasoline used as a substitute for aviation
177.12gasoline, aviation gasoline or special fuel for aircraft use purchased and used by the
177.13applicant, and shall state when and for what purpose it was used. On being satisfied that
177.14the claimant is entitled to payment, the commissioner shall approve the claim and transmit
177.15it to the commissioner of management and budget. The postmark on the envelope in
177.16which a written claim is mailed determines the date of filing.
177.17(b) If a claim contains an error in preparation in computation or preparation, the
177.18commissioner is authorized to adjust the claim in accordance with the evidence shown on
177.19the claim or other information available to the commissioner.
177.20(c) An applicant who files a claim that is false or fraudulent, is subject to the
177.21penalties provided in section 296A.23 for knowingly and willfully making a false claim.
177.22EFFECTIVE DATE.This section is effective for sales and purchases made after
177.23June 30, 2015.

177.24    Sec. 17. Minnesota Statutes 2014, section 296A.17, subdivision 3, is amended to read:
177.25    Subd. 3. Refund on graduated basis. Any person who has directly or indirectly
177.26paid the excise tax on gasoline used as a substitute for aviation gasoline, aviation gasoline
177.27or special fuel for aircraft use provided for by this chapter and either paid the airflight
177.28property tax under section 270.072 or is an aerial applicator with a category B, general
177.29aerial license, under section 18B.33, shall, as to all such gasoline used as a substitute for
177.30aviation gasoline, aviation gasoline and special fuel received, stored, or withdrawn from
177.31storage by the person in this state in any calendar year and not sold or otherwise disposed
177.32of to others, or intended for sale or other disposition to others, on which such tax has been
177.33so paid, be entitled to the following graduated reductions in such tax for that calendar
177.34year, to be obtained by means of the following refunds:
178.1(1) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
178.2gasoline or special fuel up to 50,000 gallons, all but five cents per gallon;
178.3(2) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
178.4gasoline or special fuel above 50,000 gallons and not more than 150,000 gallons, all
178.5but two cents per gallon;
178.6(3) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
178.7gasoline or special fuel above 150,000 gallons and not more than 200,000 gallons, all
178.8but one cent per gallon;
178.9(4) on each gallon of such gasoline used as a substitute for aviation gasoline, aviation
178.10gasoline or special fuel above 200,000, all but one-half cent per gallon.
178.11EFFECTIVE DATE.This section is effective for sales and purchases made after
178.12June 30, 2015.

178.13    Sec. 18. Minnesota Statutes 2014, section 296A.18, subdivision 1, is amended to read:
178.14    Subdivision 1. Intent; gasoline use. All gasoline received in this state and all
178.15gasoline produced in or brought into this state except aviation gasoline, gasoline sold to a
178.16dealer of gasoline used as a substitute for aviation gasoline, and marine gasoline shall be
178.17determined to be intended for use in motor vehicles in this state.
178.18EFFECTIVE DATE.This section is effective for sales and purchases made after
178.19June 30, 2015.

178.20    Sec. 19. Minnesota Statutes 2014, section 296A.18, subdivision 8, is amended to read:
178.21    Subd. 8. Airports. The revenues derived from the excise taxes on gasoline used
178.22as a substitute for aviation gasoline, aviation gasoline and on special fuel received, sold,
178.23stored, or withdrawn from storage as substitutes for aviation gasoline, shall be paid into
178.24the state treasury and credited to the state airports fund. There is hereby appropriated such
178.25sums as are needed to carry out the provisions of this subdivision.
178.26EFFECTIVE DATE.This section is effective for sales and purchases made after
178.27June 30, 2015.

178.28    Sec. 20. Minnesota Statutes 2014, section 296A.19, subdivision 1, is amended to read:
178.29    Subdivision 1. Retention. All distributors, dealers, special fuel dealers, bulk
178.30purchasers, dealers of gasoline used as a substitute for aviation gasoline, and all users of
178.31special fuel shall keep a true and accurate record of all purchases, transfers, sales, and use
179.1of petroleum products and special fuel, including copies of all sales tickets issued, in a form
179.2and manner approved by the commissioner, and shall retain all such records for 3-1/2 years.
179.3EFFECTIVE DATE.This section is effective for sales and purchases made after
179.4June 30, 2015.

179.5    Sec. 21. Minnesota Statutes 2014, section 297A.994, subdivision 4, is amended to read:
179.6    Subd. 4. General fund allocations. The commissioner must retain and deposit to
179.7the general fund the following amounts, as required by subdivision 3, clause (3):
179.8(1) for state bond debt service support beginning in calendar year 2021, and for each
179.9calendar year thereafter through calendar year 2046, periodic amounts so that not later than
179.10December 31, 2046, an aggregate amount equal to a present value of $150,000,000 has been
179.11deposited in the general fund. To determine aggregate present value, the commissioner
179.12must consult with the commissioner of management and budget regarding the present value
179.13dates, discount rate or rates, and schedules of annual amounts. The present value date or
179.14dates must be based on the date or dates bonds are sold under section 16A.965, or the date
179.15or dates other state funds, if any, are deposited into the construction fund. The discount rate
179.16or rates must be based on the true interest cost of the bonds issued under section 16A.965,
179.17or an equivalent 30-year bond index, as determined by the commissioner of management
179.18and budget. The schedule of annual amounts must be certified to the commissioner by the
179.19commissioner of management and budget and the finance officer of the city;
179.20(2) for the capital improvement reserve appropriation to the Minnesota Sports
179.21Facilities Authority beginning in calendar year 2021, and for each calendar year thereafter
179.22through calendar year 2046, an aggregate annual amount equal to the amount paid by the
179.23state for this purpose in that calendar year under section 473J.13, subdivision 4;
179.24(3) for the operating expense appropriation to the Minnesota Sports Facilities
179.25Authority beginning in calendar year 2021, and for each calendar year thereafter through
179.26calendar year 2046, an aggregate annual amount equal to the amount paid by the state for
179.27this purpose in that calendar year under section 473J.13, subdivision 2;
179.28(4) for recapture of state advances for capital improvements and operating expenses
179.29for calendar years 2016 through 2020 beginning in calendar year 2021, and for each
179.30calendar year thereafter until all amounts under this clause have been paid, proportionate
179.31amounts periodically until an aggregate amount equal to the present value of all amounts
179.32paid by the state have been deposited in the general fund. To determine the present
179.33value of the amounts paid by the state to the authority and the present value of amounts
179.34deposited to the general fund under this clause, the commissioner shall consult with the
179.35commissioner of management and budget regarding the present value dates, discount rate
180.1or rates, and schedule of annual amounts. The present value dates must be based on
180.2the dates state funds are paid to the authority, or the dates the commissioner of revenue
180.3deposits taxes for purposes of this clause to the general fund. The discount rates must be
180.4based on the reasonably equivalent cost of state funds as determined by the commissioner
180.5of management and budget. The schedule of annual amounts must be revised to reflect
180.6amounts paid under section 473J.13, subdivision 2, paragraph (b), for 2016 to 2020,
180.7and subdivision 4, paragraph (c), for 2016 to 2020, and taxes deposited to the general
180.8fund from time to time under this clause, and the schedule and revised schedules must
180.9be certified to the commissioner by the commissioner of management and budget and
180.10the finance officer of the city, and are transferred as accrued from the general fund for
180.11repayment of advances made by the state to the authority; and
180.12(5) to capture increases in taxes imposed under the special law, for the benefit of
180.13the Minnesota Sports Facilities Authority, beginning in calendar year 2013 and for each
180.14calendar year thereafter through 2046, there shall be deposited to the general fund in
180.15proportionate periodic payments in the following year, an amount equal to the following:
180.16(i) 50 percent of the difference, if any, by which the amount of the net annual taxes
180.17for the previous year exceeds the sum of the net actual taxes in calendar year 2011 plus
180.18$1,000,000, inflated at two percent per year since 2011, minus
180.19(ii) 25 percent of the difference, if any, by which the amount of the net annual taxes
180.20for the preceding year exceeds the sum of the net actual taxes in calendar year 2011 plus
180.21$3,000,000, inflated at two percent per year since 2011; and
180.22(iii) of the amounts determined under items (i) and (ii), a total of $2,700,000 shall
180.23be used to offset taxes paid by the NFL and its employees in connection with a world
180.24championship football game sponsored by the NFL played at the stadium.
180.25EFFECTIVE DATE.This section is effective the day following final enactment.

180.26    Sec. 22. [383B.83] LIMITS ON RAILROAD CONDEMNATION POWERS
180.27OVER CERTAIN GOVERNMENTAL PROPERTY INTERESTS.
180.28Notwithstanding anything to the contrary in chapter 117, sections 222.26, 222.27,
180.29and 222.36, or any other law, the powers of a foreign or domestic railroad corporation or a
180.30railroad company or a railroad interest acting as a public service corporation or a common
180.31carrier do not include the power to exercise eminent domain over a property interest of
180.32Hennepin County, the Hennepin County Housing and Redevelopment Authority, or the
180.33Hennepin County Regional Railroad Authority if the governmental power, by resolution
180.34of its governing board, determines based on specific findings that the public safety or
180.35access of first responders would be substantially and adversely affected by the exercise.
181.1EFFECTIVE DATE.This section is effective retroactively from March 2, 2015,
181.2and applies to any eminent domain action to acquire any property interest of any of the
181.3named entities.

181.4    Sec. 23. [465.95] BROADBAND SERVICE PUBLIC-PRIVATE PARTNERSHIPS.
181.5    Subdivision 1. Local authority; broadband service. (a) A local unit of government
181.6may finance, acquire, and construct broadband equipment.
181.7(b) Local units of government and broadband joint powers boards, authorized under
181.8subdivision 3, are authorized to partner or contract with a private provider or cooperative
181.9to finance, acquire and construct the broadband equipment. For purposes of this section, a
181.10"local unit of government" means a statutory city, a home rule charter city, or county.
181.11    Subd. 2. Local authority; broadband infrastructure bonding. (a) Each local
181.12unit of government may authorize the issuance of general obligation bonds to provide
181.13funds for the acquisition or betterment of its broadband infrastructure, or for refunding
181.14any outstanding bonds issued for that purpose. Bonds may only be issued by the local
181.15unit upon obtaining the approval of a majority of the electors voting on the question of
181.16issuing the obligations.
181.17(b) The proceeds of the bonds may also be used, in part, to establish a reserve as
181.18further security for the payment of the principal and interest of the bonds when due.
181.19(c) The local unit of government may pledge its full faith, credit, and taxing powers,
181.20or the proceeds of any designated tax levies, or the gross or net revenues or charges to
181.21be derived from any broadband service operated for the local unit of government, or any
181.22combination thereof. Taxes levied for the payment of the bonds and interest shall not reduce
181.23the amounts of other taxes which the local unit of government is authorized by law to levy.
181.24(d) Bonds issued under this section may be sold at public or private sale upon the terms
181.25and conditions the local unit of government determines. Except as otherwise provided, the
181.26bonds shall be issued and sold in accordance with the provisions of chapter 475.
181.27    Subd. 3. Broadband joint powers board. (a) A local unit of government may enter
181.28into an agreement under section 471.59 with other local units of government to finance,
181.29acquire, and construct broadband equipment in the territory within the jurisdiction of all
181.30participating local units of government.
181.31(b) An agreement entered into under this section may provide that:
181.32(1) each local unit of government shall issue bonds to pay their respective shares of
181.33the cost of the broadband projects;
181.34(2) one of the local units of government shall issue bonds to pay the full costs of the
181.35project and the other participating local units of government shall levy the tax authorized
182.1under this subdivision and pledge the collections of the tax to the local unit of government
182.2that issues the bonds; or
182.3(3) the joint powers board shall issue revenue bonds to pay the full costs of the
182.4project and the participating local units of government shall levy the tax authorized
182.5under this subdivision and pledge the collections of the tax to the joint powers entity for
182.6payment of the revenue bonds.
182.7Bonds may only be issued by the local unit under this subdivision upon obtaining
182.8the approval of a majority of the electors voting on the question of issuing the obligations.
182.9    Subd. 4. Exemption. Section 237.19 does not apply to broadband activities under
182.10this section.
182.11    Subd. 5. Applicability. Subdivisions 2 and 3 apply only when a local unit of
182.12government partners or enters into an agreement with a private provider or cooperative to
182.13operate and maintain broadband service and equipment.
182.14    Subd. 6. Additional authority. This section is in addition to and does not limit
182.15any other authority of a local unit of government to engage in the activities authorized
182.16by this section.
182.17EFFECTIVE DATE.This section is effective the day following final enactment.

182.18    Sec. 24. Minnesota Statutes 2014, section 469.169, is amended by adding a subdivision
182.19to read:
182.20    Subd. 20. Additional border city allocations; 2015. In addition to the tax
182.21reductions authorized in subdivisions 12 to 19, the commissioner shall allocate $2,000,000
182.22for tax reductions to border city enterprise zones in cities located on the western border of
182.23the state. The commissioner shall allocate this amount among cities on a per capita basis.
182.24Allocations made under this subdivision may be used for tax reductions under sections
182.25469.171, 469.1732, and 469.1734, or for other offsets of taxes imposed on or remitted
182.26by businesses located in the enterprise zone, but only if the municipality determines
182.27that the granting of the tax reduction or offset is necessary to retain a business within
182.28or attract a business to the zone.
182.29EFFECTIVE DATE.This section is effective July 1, 2015.

182.30    Sec. 25. Minnesota Statutes 2014, section 469.40, subdivision 11, as amended by Laws
182.312015, chapter 1, section 6, is amended to read:
182.32    Subd. 11. Public infrastructure project. (a) "Public infrastructure project" means
182.33a project financed in part or in whole with public money in order to support the medical
183.1business entity's development plans, as identified in the DMCC development plan. A
183.2public infrastructure project may:
183.3(1) acquire real property and other assets associated with the real property;
183.4(2) demolish, repair, or rehabilitate buildings;
183.5(3) remediate land and buildings as required to prepare the property for acquisition
183.6or development;
183.7(4) install, construct, or reconstruct elements of public infrastructure required to
183.8support the overall development of the destination medical center development district
183.9including, but not limited to, streets, roadways, utilities systems and related facilities,
183.10utility relocations and replacements, network and communication systems, streetscape
183.11improvements, drainage systems, sewer and water systems, subgrade structures and
183.12associated improvements, landscaping, façade construction and restoration, wayfinding
183.13and signage, and other components of community infrastructure;
183.14(5) acquire, construct or reconstruct, and equip parking facilities and other facilities
183.15to encourage intermodal transportation and public transit;
183.16(6) install, construct or reconstruct, furnish, and equip parks, cultural, and
183.17recreational facilities, facilities to promote tourism and hospitality, conferencing and
183.18conventions, and broadcast and related multimedia infrastructure;
183.19(7) make related site improvements including, without limitation, excavation,
183.20earth retention, soil stabilization and correction, and site improvements to support the
183.21destination medical center development district;
183.22(8) prepare land for private development and to sell or lease land;
183.23(9) provide costs of relocation benefits to occupants of acquired properties; and
183.24(10) construct and equip all or a portion of one or more suitable structures on land
183.25owned by the city for sale or lease to private development; provided, however, that the
183.26portion of any structure directly financed by the city as a public infrastructure project must
183.27not be sold or leased to a medical business entity.
183.28(b) A public infrastructure project is not a business subsidy under section 116J.993.
183.29(c) Public infrastructure project includes the planning, preparation, and modification
183.30of the development plan under section 469.43, and. The cost of that planning, preparation,
183.31and any modification is a capital cost of the public infrastructure project.
183.32EFFECTIVE DATE.This section is effective the day after the governing body of
183.33the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
183.34645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
183.35the laws that are amended.

184.1    Sec. 26. Minnesota Statutes 2014, section 469.43, is amended by adding a subdivision
184.2to read:
184.3    Subd. 6a. Restriction on city funds to support nonprofit economic development
184.4agency. The nonprofit economic development agency shall not require the city to pay
184.5any amounts to the nonprofit economic development agency that are unrelated to public
184.6infrastructure project costs.
184.7EFFECTIVE DATE.This section is effective the day after the governing body of
184.8the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
184.9645.021, subdivisions 2 and 3, and applies retroactively from June 22, 2013.

184.10    Sec. 27. Minnesota Statutes 2014, section 469.45, subdivision 1, is amended to read:
184.11    Subdivision 1. Rochester, other local taxes authorized. (a) Notwithstanding
184.12section 477A.016 or any other contrary provision of law, ordinance, or city charter, and in
184.13addition to any taxes the city may impose on these transactions under another statute or
184.14law, the city of Rochester may, by ordinance, impose at a rate or rates, determined by the
184.15city, any of the following taxes:
184.16(1) a tax on the gross receipts from the furnishing for consideration of lodging and
184.17related services as defined in section 297A.61, subdivision 3, paragraph (g), clause (2); the
184.18city may choose to impose a differential tax based on the number of rooms in the facility;
184.19(2) a tax on the gross receipts of food and beverages sold primarily for consumption
184.20on the premises by restaurants and places of refreshment that occur in the city of
184.21Rochester; the city may elect to impose the tax in a defined district of the city; and
184.22(3) a tax on the admission receipts to entertainment and recreational facilities, as
184.23defined by ordinance, in the city of Rochester.
184.24(b) The provisions of section 297A.99, subdivisions 4 to 13, govern the
184.25administration, collection, and enforcement of any tax imposed by the city under
184.26paragraph (a).
184.27(c) The proceeds of any taxes imposed under this subdivision, less refunds and
184.28costs of collection, must be used by the city only to meet its share of obligations for
184.29public infrastructure projects contained in the development plan and approved by the
184.30corporation, including any associated financing costs or to pay any other costs qualifying
184.31as a local matching contribution under section 469.47, subdivision 4. Any tax imposed
184.32under paragraph (a) expires at the earlier of December 31, 2049, or when the city council
184.33determines that sufficient funds have been raised from the tax plus all other local funding
184.34sources authorized in Laws 2013, chapter 143, article 10, to meet the city obligation for
185.1financing public infrastructure projects contained in the development plan and approved
185.2by the corporation, including any associated financing costs.
185.3EFFECTIVE DATE.This section is effective the day after the governing body of
185.4the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
185.5645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
185.6the laws that are amended.

185.7    Sec. 28. Minnesota Statutes 2014, section 469.45, subdivision 2, is amended to read:
185.8    Subd. 2. General sales tax authority. The city may elect to extend the existing
185.9local sales and use tax under Laws 2013, chapter 143, article 10, section 13, or to impose
185.10an additional rate of up to one quarter of one percent tax on sales and use under Laws
185.112013, chapter 143, article 10, section 11. The proceeds of any extended or additional taxes
185.12imposed under this subdivision, less refunds and costs of collection, must be used by the
185.13city only to meet its share of obligations for public infrastructure projects contained in the
185.14development plan and approved by the corporation, including all financing costs. Revenues
185.15collected in any year to meet the obligations must be used for payment of obligations or
185.16expenses for public infrastructure projects approved by the corporation or of any other
185.17costs qualifying as a local matching contribution under section 469.47, subdivision 4.
185.18EFFECTIVE DATE.This section is effective the day after the governing body of
185.19the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
185.20645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
185.21the laws that are amended.

185.22    Sec. 29. Minnesota Statutes 2014, section 469.47, subdivision 4, as amended by Laws
185.232015, chapter 1, section 10, is amended to read:
185.24    Subd. 4. General aid; local matching contribution. In order to qualify for general
185.25state infrastructure aid, the city must enter a written agreement with the commissioner that
185.26requires the city to make a qualifying local matching contribution to pay for $128,000,000
185.27of the cost of public infrastructure projects approved by the corporation, including
185.28financing costs, using funds other than state aid received under this section. Through June
185.2930, 2020, the $128,000,000 required local matching contribution is reduced by one-half of
185.30the any amounts the city pays for operating and administrative costs out of funds other
185.31than state aid received under this section for the support, administration, or operations of
185.32the corporation and the economic development agency up to a maximum amount agreed
185.33to by the board and the city. These amounts include any costs the city incurs in providing
186.1services, goods, or other support to the corporation or agency. Beginning on July 1,
186.22020, the required local matching contribution is reduced by one-half of the amounts
186.3the city pays for support, operating, and administrative costs of the corporation up to a
186.4maximum amount agreed to by the board and the city. The agreement must provide for the
186.5manner, timing, and amounts of the city contributions, including the city's commitment
186.6for each year. Notwithstanding any law to the contrary, the agreement may provide that
186.7the city contributions for public infrastructure project principal costs may be made over a
186.820-year period at a rate not greater than $1 from the city for each $2.55 from the state.
186.9The local match contribution may be provided by the city from any source identified in
186.10section 469.45 and any other local tax proceeds or other funds from the city and may
186.11include providing funds to prepare the development plan, to assist developers undertaking
186.12projects in accordance with the development plan, or by the city directly undertaking
186.13public infrastructure projects in accordance with the development plan, provided the
186.14projects have been approved by the corporation. City contributions that are in excess of
186.15this ratio carry forward and are credited toward subsequent years. The commissioner and
186.16city may agree to amend the agreement at any time in light of new information or other
186.17appropriate factors. The city may enter into arrangements with the county to pay for or
186.18otherwise meet the local matching contribution requirement. Any public infrastructure
186.19project within the area that will be in the destination medical center development district
186.20whose implementation is started or funded by the city after June 22, 2013, but before the
186.21development plan is adopted, as provided by section 469.43, subdivision 1, will be included
186.22for the purposes of determining the amount the city has contributed as required by this
186.23section and the agreement with the commissioner, subject to approval by the corporation.
186.24EFFECTIVE DATE.This section is effective the day after the governing body of
186.25the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
186.26645.021, subdivisions 2 and 3, and applies retroactively to the original effective dates of
186.27the laws that are amended.

186.28    Sec. 30. Minnesota Statutes 2014, section 524.3-916, is amended to read:
186.29524.3-916 APPORTIONMENT OF ESTATE TAXES AND
186.30GENERATION-SKIPPING TAX.
186.31(a) For purposes of this section:
186.32(1) "estate" means the gross estate of a decedent as determined for the purpose of
186.33federal estate tax or the estate tax payable to this state;
187.1(2) "decedent's generation-skipping transfers" means all generation-skipping transfers
187.2as determined for purposes of the federal generation-skipping tax which occur by reason
187.3of the decedent's death which relate to property which is included in the decedent's estate;
187.4(3) "person" means any individual, partnership, association, joint stock company,
187.5corporation, limited liability company, government, political subdivision, governmental
187.6agency, or local governmental agency;
187.7(4) "person interested in the estate" means any person entitled to receive, or who has
187.8received, from a decedent or by reason of the death of a decedent any property or interest
187.9therein included in the decedent's estate. It includes a personal representative, guardian,
187.10conservator, trustee, and custodian;
187.11(5) "state" means any state, territory, or possession of the United States, the District
187.12of Columbia, and the Commonwealth of Puerto Rico;
187.13(6) "estate tax" means the federal estate tax and the state estate tax determined by the
187.14commissioner of revenue pursuant to chapter 291 and interest and penalties imposed in
187.15addition to the tax;
187.16(7) "decedent's generation-skipping tax" means the federal generation-skipping
187.17tax imposed on the decedent's generation-skipping transfers and interest and penalties
187.18imposed in addition to the tax;
187.19(8) "fiduciary" means personal representative or trustee.
187.20(b) Unless the will or other governing instrument otherwise provides: Any tax
187.21occasioned by a decedent's death shall be apportioned as set forth in clauses (1) to (4).
187.22(1) the Estate tax taxes shall be apportioned among all persons interested in the
187.23estate. The apportionment is to be made in the proportion that the value of the interest of
187.24each person interested in the estate bears to the total value of the interests of all persons
187.25interested in the estate. The values used in determining the tax are to shall be used for
187.26that purpose; and in apportioning the tax.
187.27(2) Notwithstanding the general rule set forth in clause (1), if property is included in
187.28the decedent's gross estate pursuant to section 2044 of the Internal Revenue Code of 1986,
187.29as amended, or any similar provision of any state estate tax law, the difference between the
187.30total estate tax payable by the decedent's estate and the amount of estate tax that would
187.31have been payable by the decedent's estate if the property had not been included in the
187.32decedent's gross estate shall be apportioned ratably among the holders of interests in the
187.33property. The values used in determining the tax shall be used in apportioning the tax. The
187.34balance of the tax, if any, shall be apportioned as provided in clause (1).
187.35(3) The decedent's generation-skipping tax shall be apportioned as provided by
187.36federal law. To the extent not provided by federal law, the decedent's generation-skipping
188.1tax shall be apportioned among all persons receiving the decedent's generation-skipping
188.2transfers whose tax apportionment is not provided by federal law in the proportion that the
188.3value of the transfer to each person bears to the total value of all such transfers.
188.4(4) If the decedent's will or other written instrument directs a method of
188.5apportionment of estate tax or of the decedent's generation-skipping tax different from
188.6the method methods described in this section, the method described in the will or other
188.7written instrument controls shall control; provided, however, that:
188.8(i) unless the decedent's will or other written instrument specifically indicates an
188.9intent to waive any right of recovery under section 2207A of the Internal Revenue Code of
188.101986, as amended, estate taxes on property described in clause (2) must be apportioned
188.11under the method described in this section to property included in the decedent's estate
188.12under section 2044 of the Internal Revenue Code of 1986, as amended clause (2); and
188.13(ii) unless the decedent's will or other written instrument specifically indicates an
188.14intent to waive any right of recovery under section 2207B of the Internal Revenue Code of
188.151986, as amended, estate taxes must be apportioned under the method described in this
188.16section to on property included in the decedent's estate under section 2036 of the Internal
188.17Revenue Code of 1986, as amended, must be apportioned under the method described
188.18in clause (1).
188.19(c)(1) The court in which venue lies for the administration of the estate of a decedent,
188.20on petition for the purpose may determine the apportionment of the estate tax or of the
188.21decedent's generation-skipping tax.
188.22(2) If the court finds that it is inequitable to apportion interest and penalties in
188.23the manner provided in subsection (b), because of special circumstances, it may direct
188.24apportionment thereof in the manner it finds equitable.
188.25(3) If the court finds that the assessment of penalties and interest assessed in relation
188.26to the estate tax or the decedent's generation-skipping tax is due to delay caused by the
188.27negligence of the fiduciary, the court may charge the fiduciary with the amount of the
188.28assessed penalties and interest.
188.29(4) In any action to recover from any person interested in the estate the amount of
188.30the estate tax or of the decedent's generation-skipping tax apportioned to the person in
188.31accordance with this section the determination of the court in respect thereto shall be
188.32prima facie correct.
188.33(d)(1) The personal representative or other person in possession of the property
188.34of the decedent required to pay the estate tax or the decedent's generation-skipping tax
188.35may withhold from any property distributable to any person interested in the estate,
188.36upon its distribution, the amount of any taxes attributable to the person's interest. If the
189.1property in possession of the personal representative or other person required to pay any
189.2taxes and distributable to any person interested in the estate is insufficient to satisfy the
189.3proportionate amount of the taxes determined to be due from the person, the personal
189.4representative or other person required to pay any taxes may recover the deficiency from
189.5the person interested in the estate. If the property is not in the possession of the personal
189.6representative or the other person required to pay any taxes, the personal representative or
189.7the other person required to pay any taxes may recover from any person interested in the
189.8estate the amount of any taxes apportioned to the person in accordance with this section.
189.9(2) If property held by the personal representative or other person in possession
189.10of the property of the decedent required to pay the estate tax or the decedent's
189.11generation-skipping tax is distributed prior to final apportionment of the estate tax or
189.12the decedent's generation-skipping tax, the distributee shall provide a bond or other
189.13security for the apportionment liability in the form and amount prescribed by the personal
189.14representative or other person, as the case may be.
189.15(e)(1) In making an apportionment, allowances shall be made for any exemptions
189.16granted, any classification made of persons interested in the estate and for any deductions
189.17and credits allowed by the law imposing the tax.
189.18(2) Any exemption or deduction allowed by reason of the relationship of any person
189.19to the decedent, by reason of the purposes of the gift, or by allocation to the gift (either
189.20by election by the fiduciary or by operation of federal law), inures to the benefit of the
189.21person bearing such relationship or receiving the gift; but if an interest is subject to a prior
189.22present interest which is not allowable as a deduction, the tax apportionable against the
189.23present interest shall be paid from principal.
189.24(3) Any deduction for property previously taxed and any credit for gift taxes or
189.25death taxes of a foreign country paid by the decedent or the decedent's estate inures to the
189.26proportionate benefit of all persons liable to apportionment.
189.27(4) Any credit for inheritance, succession or estate taxes or taxes in the nature
189.28thereof applicable to property or interests includable in the estate, inures to the benefit of
189.29the persons or interests chargeable with the payment thereof to the extent proportionately
189.30that the credit reduces the tax.
189.31(5) To the extent that property passing to or in trust for a surviving spouse or any
189.32charitable, public or similar gift or devise is not an allowable deduction for purposes of
189.33the estate tax solely by reason of an estate tax imposed upon and deductible from the
189.34property, the property is not included in the computation provided for in subsection (b)(1)
189.35hereof, and to that extent no apportionment is made against the property. The sentence
189.36immediately preceding does not apply to any case if the result would be to deprive the
190.1estate of a deduction otherwise allowable under section 2053(d) of the Internal Revenue
190.2Code of 1986, as amended, of the United States, relating to deduction for state death taxes
190.3on transfers for public, charitable, or religious uses.
190.4(f) No interest in income and no estate for years or for life or other temporary interest
190.5in any property or fund is subject to apportionment as between the temporary interest
190.6and the remainder. The estate tax on the temporary interest and the estate tax, if any, on
190.7the remainder is chargeable against the corpus of the property or funds subject to the
190.8temporary interest and remainder. The decedent's generation-skipping tax is chargeable
190.9against the property which constitutes the decedent's generation-skipping transfer.
190.10(g) Neither the personal representative nor other person required to pay the tax is
190.11under any duty to institute any action to recover from any person interested in the estate
190.12the amount of the estate tax or of the decedent's generation-skipping tax apportioned to the
190.13person until the final determination of the tax. A personal representative or other person
190.14required to pay the estate tax or decedent's generation-skipping tax who institutes the
190.15action within a reasonable time after final determination of the tax is not subject to any
190.16liability or surcharge because any portion of the tax apportioned to any person interested
190.17in the estate was collectible at a time following the death of the decedent but thereafter
190.18became uncollectible. If the personal representative or other person required to pay the
190.19estate tax or decedent's generation-skipping tax cannot collect from any person interested
190.20in the estate the amount of the tax apportioned to the person, the amount not recoverable
190.21shall be equitably apportioned among the other persons interested in the estate who are
190.22subject to apportionment of the tax involved.
190.23(h) A personal representative acting in another state or a person required to pay the
190.24estate tax or decedent's generation-skipping tax domiciled in another state may institute an
190.25action in the courts of this state and may recover a proportionate amount of the federal
190.26estate tax, of an estate tax payable to another state or of a death duty due by a decedent's
190.27estate to another state, or of the decedent's generation-skipping tax, from a person
190.28interested in the estate who is either domiciled in this state or who owns property in this
190.29state subject to attachment or execution. For the purposes of the action the determination
190.30of apportionment by the court having jurisdiction of the administration of the decedent's
190.31estate in the other state is prima facie correct.

190.32    Sec. 31. ADMINISTRATIVE APPROPRIATIONS.
190.33(a) $300,000 in fiscal year 2017 is appropriated from the general fund to the
190.34commissioner of natural resources for administering this act. The funding base for this
190.35appropriation in fiscal year 2018 and thereafter is $200,000.
191.1(b) $1,000,000 in fiscal year 2016 and $700,000 in fiscal year 2017 are appropriated
191.2from the general fund to the commissioner of revenue for administering this act. The
191.3funding base for this appropriation in fiscal year 2018 and thereafter is $600,000.
191.4EFFECTIVE DATE.This section is effective the day following final enactment.

191.5    Sec. 32. APPROPRIATION CANCELLATIONS.
191.6All unspent funds, estimated to be $2,380,000, to provide the 20 percent local match
191.7funding required to obtain Federal Highway Administration emergency relief funds to
191.8repair local roads and bridges damaged by June 2014 flooding, under Laws 2015, chapter
191.92, section 3, are canceled to the general fund on June 30, 2015.

191.10    Sec. 33. DEPARTMENT OF TRANSPORTATION; APPROPRIATION.
191.11$2,380,000 is appropriated from the general fund to the commissioner of
191.12transportation in fiscal year 2016 to provide the 20 percent local match funding required to
191.13obtain Federal Highway Administration emergency relief funds to repair local roads and
191.14bridges damaged by flooding in June 2014. This is a onetime appropriation.

191.15    Sec. 34. REPEALER.
191.16(a) Minnesota Statutes 2014, section 3.192, is repealed.
191.17(b) Minnesota Rules, part 8125.1300, subpart 3, is repealed.
191.18EFFECTIVE DATE.Paragraph (a) is effective retroactively from January 1, 2014.
191.19Paragraph (b) is effective the day following final enactment.

191.20ARTICLE 13
191.21DEPARTMENT POLICY AND TECHNICAL PROVISIONS - INCOME,
191.22CORPORATE FRANCHISE, AND ESTATE TAXES

191.23    Section 1. Minnesota Statutes 2014, section 289A.08, subdivision 11, is amended to
191.24read:
191.25    Subd. 11. Information included in income tax return. (a) The return must state:
191.26    (1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the
191.27address of the taxpayer in the same name or names and same address as the taxpayer has
191.28used in making the taxpayer's income tax return to the United States;
191.29    (2) the date or dates of birth of the taxpayer or taxpayers;
191.30    (3) the Social Security number of the taxpayer, or taxpayers, if a Social Security
191.31number has been issued by the United States with respect to the taxpayers; and
192.1    (4) the amount of the taxable income of the taxpayer as it appears on the federal
192.2return for the taxable year to which the Minnesota state return applies.
192.3    (b) The taxpayer must attach to the taxpayer's Minnesota state income tax return
192.4a copy of the federal income tax return that the taxpayer has filed or is about to file for
192.5the period, unless the taxpayer is eligible to telefile the federal return and does file the
192.6Minnesota return by telefiling.
192.7EFFECTIVE DATE.This section is effective the day following final enactment.

192.8    Sec. 2. Minnesota Statutes 2014, section 289A.08, subdivision 16, is amended to read:
192.9    Subd. 16. Tax refund or return preparers; electronic filing; paper filing fee
192.10imposed. (a) A "tax refund or return preparer," as defined in section 289A.60, subdivision
192.1113
, paragraph (f), who is a tax return preparer for purposes of section 6011(e) of the
192.12Internal Revenue Code, and who reasonably expects to prepare more than ten Minnesota
192.13individual income, corporate franchise, S corporation, partnership, or fiduciary income tax
192.14returns for the prior calendar year must file all Minnesota individual income, corporate
192.15franchise, S corporation, partnership, or fiduciary income tax returns prepared for that
192.16calendar year by electronic means.
192.17(b) Paragraph (a) does not apply to a return if the taxpayer has indicated on the return
192.18that the taxpayer did not want the return filed by electronic means.
192.19(c) For each return that is not filed electronically by a tax refund or return preparer
192.20under this subdivision, including returns filed under paragraph (b), a paper filing fee
192.21of $5 is imposed upon the preparer. The fee is collected from the preparer in the same
192.22manner as income tax. The fee does not apply to returns that the commissioner requires
192.23to be filed in paper form.
192.24EFFECTIVE DATE.This section is effective for taxable years beginning after
192.25December 31, 2014.

192.26    Sec. 3. Minnesota Statutes 2014, section 289A.09, subdivision 2, is amended to read:
192.27    Subd. 2. Withholding statement. (a) A person required to deduct and withhold
192.28from an employee a tax under section 290.92, subdivision 2a or 3, or 290.923, subdivision
192.292
, or who would have been required to deduct and withhold a tax under section 290.92,
192.30subdivision 2a
or 3, or persons required to withhold tax under section 290.923, subdivision
192.312
, determined without regard to section 290.92, subdivision 19, if the employee or payee
192.32had claimed no more than one withholding exemption, or who paid wages or made
192.33payments not subject to withholding under section 290.92, subdivision 2a or 3, or 290.923,
193.1subdivision 2
, to an employee or person receiving royalty payments in excess of $600,
193.2or who has entered into a voluntary withholding agreement with a payee under section
193.3290.92, subdivision 20 , must give every employee or person receiving royalty payments in
193.4respect to the remuneration paid by the person to the employee or person receiving royalty
193.5payments during the calendar year, on or before January 31 of the succeeding year, or, if
193.6employment is terminated before the close of the calendar year, within 30 days after the
193.7date of receipt of a written request from the employee if the 30-day period ends before
193.8January 31, a written statement showing the following:
193.9    (1) name of the person;
193.10    (2) the name of the employee or payee and the employee's or payee's Social Security
193.11account number;
193.12    (3) the total amount of wages as that term is defined in section 290.92, subdivision
193.131
, paragraph (1); the total amount of remuneration subject to withholding under section
193.14290.92, subdivision 20 ; the amount of sick pay as required under section 6051(f) of the
193.15Internal Revenue Code; and the amount of royalties subject to withholding under section
193.16290.923, subdivision 2 ; and
193.17    (4) the total amount deducted and withheld as tax under section 290.92, subdivision
193.182a
or 3, or 290.923, subdivision 2.
193.19    (b) The statement required to be furnished by paragraph (a) with respect to any
193.20remuneration must be furnished at those times, must contain the information required, and
193.21must be in the form the commissioner prescribes.
193.22    (c) The commissioner may prescribe rules providing for reasonable extensions of
193.23time, not in excess of 30 days, to employers or payers required to give the statements to
193.24their employees or payees under this subdivision.
193.25    (d) A duplicate of any statement made under this subdivision and in accordance
193.26with rules prescribed by the commissioner, along with a reconciliation in the form the
193.27commissioner prescribes of the statements for the calendar year, including a reconciliation
193.28of the quarterly returns required to be filed under subdivision 1, must be filed with the
193.29commissioner on or before February 28 of the year after the payments were made.
193.30    (e) If an employer cancels the employer's Minnesota withholding account number
193.31required by section 290.92, subdivision 24, the information required by paragraph (d),
193.32must be filed with the commissioner within 30 days of the end of the quarter in which
193.33the employer cancels its account number.
193.34    (f) The employer must submit the statements required to be sent to the commissioner
193.35in the same manner required to satisfy the federal reporting requirements of section
193.366011(e) of the Internal Revenue Code and the regulations issued under it. An employer
194.1must submit statements to the commissioner required by this section by electronic means
194.2if the employer is required to send more than 25 statements to the commissioner, even
194.3though the employer is not required to submit the returns federally by electronic means.
194.4For statements issued for wages paid in 2011 and after, the threshold is ten. All statements
194.5issued for withholding required under section 290.92 are aggregated for purposes of
194.6determining whether the electronic submission threshold is met. The commissioner shall
194.7prescribe the content, format, and manner of the statement pursuant to section 270C.30.
194.8    (g) A "third-party bulk filer" as defined in section 290.92, subdivision 30, paragraph
194.9(a), clause (2), must submit the returns required by this subdivision and subdivision 1,
194.10paragraph (a), with the commissioner by electronic means.
194.11EFFECTIVE DATE.This section is effective for statements required to be sent to
194.12the commissioner after December 31, 2015.

194.13    Sec. 4. Minnesota Statutes 2014, section 289A.12, subdivision 14, is amended to read:
194.14    Subd. 14. Regulated investment companies; Reporting exempt interest and
194.15exempt-interest dividends. (a) A regulated investment company paying $10 or more in
194.16exempt-interest dividends to an individual who is a resident of Minnesota, or any person
194.17receiving $10 or more of exempt interest or exempt-interest dividends and paying as
194.18nominee to an individual who is a resident of Minnesota, must make a return indicating
194.19the amount of the exempt interest or exempt-interest dividends, the name, address, and
194.20Social Security number of the recipient, and any other information that the commissioner
194.21specifies. The return must be provided to the shareholder recipient by February 15 of the
194.22year following the year of the payment. The return provided to the shareholder recipient
194.23must include a clear statement, in the form prescribed by the commissioner, that the
194.24exempt interest or exempt-interest dividends must be included in the computation of
194.25Minnesota taxable income. By June 1 of each year, the regulated investment company
194.26payor must file a copy of the return with the commissioner.
194.27    (b) For purposes of this subdivision, the following definitions apply.
194.28    (1) "Exempt-interest dividends" mean exempt-interest dividends as defined in
194.29section 852(b)(5) of the Internal Revenue Code, but does not include the portion of
194.30exempt-interest dividends that are not required to be added to federal taxable income
194.31under section 290.01, subdivision 19a, clause (1)(ii).
194.32    (2) "Regulated investment company" means regulated investment company as
194.33defined in section 851(a) of the Internal Revenue Code or a fund of the regulated
194.34investment company as defined in section 851(g) of the Internal Revenue Code.
195.1    (3) "Exempt interest" means income on obligations of any state other than
195.2Minnesota, or a political or governmental subdivision, municipality, or governmental
195.3agency or instrumentality of any state other than Minnesota, and exempt from federal
195.4income taxes under the Internal Revenue Code or any other federal statute.
195.5EFFECTIVE DATE.This section is effective for reports required to be filed after
195.6December 31, 2015.

195.7    Sec. 5. Minnesota Statutes 2014, section 289A.60, subdivision 28, is amended to read:
195.8    Subd. 28. Preparer identification number. Any Minnesota individual income tax
195.9return or claim for refund prepared by a "tax refund or return preparer" as defined in
195.10subdivision 13, paragraph (f), shall bear the identification number the preparer is required
195.11to use federally under section 6109(a)(4) of the Internal Revenue Code. A tax refund or
195.12return preparer who prepares a Minnesota tax return for an individual income tax return,
195.13corporation, S corporation, partnership, fiduciary, or claim for refund and fails to include
195.14the required number on the return or claim is subject to a penalty of $50 for each failure.
195.15EFFECTIVE DATE.This section is effective for taxable years beginning after
195.16December 31, 2014.

195.17    Sec. 6. Minnesota Statutes 2014, section 290.01, subdivision 19b, is amended to read:
195.18    Subd. 19b. Subtractions from federal taxable income. For individuals, estates,
195.19and trusts, there shall be subtracted from federal taxable income:
195.20    (1) net interest income on obligations of any authority, commission, or
195.21instrumentality of the United States to the extent includable in taxable income for federal
195.22income tax purposes but exempt from state income tax under the laws of the United States;
195.23    (2) if included in federal taxable income, the amount of any overpayment of income
195.24tax to Minnesota or to any other state, for any previous taxable year, whether the amount
195.25is received as a refund or as a credit to another taxable year's income tax liability;
195.26    (3) the amount paid to others, less the amount used to claim the credit allowed under
195.27section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergar