HF 1298

4th Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:47am

A bill for an act
relating to the financing and operation of state and local government; making
policy, technical, administrative, enforcement, clarifying, and other changes
to income, corporate franchise, estate, property; sales, use, gross receipts,
local, solid waste, gambling, mortgage, deed, petroleum, insurance, minerals,
production, and other taxes and tax-related provisions; providing terms
and conditions relating to issuance of obligations and financing of public
improvements; making changes to tax increment financing and local government
aid provisions, conforming to certain federal provisions; providing clarification
for eligibility for property tax exemption for institutions of public charity;
modifying truth in taxation, tax preparation services, police and firefighter relief
association amortization state-aid provisions; making changes to local taxing
authorities; providing emergency debt certificates; authorizing the issuance of
local bonds; providing temporary suspension of new or increased maintenance of
effort requirements; requiring studies; appropriating money; amending Minnesota
Statutes 2008, sections 37.31, subdivision 8; 123B.10, subdivision 1; 124D.4531,
by adding a subdivision; 126C.41, subdivision 2; 126C.55, subdivision 4;
144F.01, subdivision 3; 204B.46; 270B.14, subdivision 16; 270C.12, by adding
a subdivision; 270C.445; 270C.446, subdivisions 2, 5; 270C.56, subdivisions
1, 3; 272.02, subdivisions 7, 55, 86, by adding subdivisions; 272.029,
subdivision 6; 273.11, subdivision 23; 273.111, subdivision 4, by adding a
subdivision; 273.1115, subdivision 2; 273.113, subdivisions 1, 2; 273.1231,
subdivision 8; 273.124, subdivisions 3, 3a, 21; 273.13, subdivisions 23, 25, 33;
273.33, subdivision 2; 273.37, subdivision 2; 274.13, subdivision 2; 274.135,
subdivision 3; 274.14; 274.175; 275.065, subdivisions 1, 3, 6; 275.07, by
adding a subdivision; 275.70, subdivision 5; 276.04, subdivision 2; 279.01,
subdivision 1; 279.10; 282.08; 287.04; 287.05, by adding a subdivision; 287.08;
287.22; 287.25; 289A.02, subdivision 7, as amended; 289A.08, subdivision 3;
289A.11, subdivision 1; 289A.12, by adding a subdivision; 289A.18, subdivision
1; 289A.19, subdivision 4; 289A.20, subdivision 4; 289A.31, subdivision 5;
289A.38, subdivision 7; 289A.41; 290.01, subdivisions 19, as amended, 19a, as
amended, 19b, 19c, as amended, 19d, as amended, 31, as amended; 290.06,
subdivision 2c; 290.067, subdivision 2a, as amended; 290.0671, subdivision
1; 290.0678, as added; 290.091, subdivision 2; 290A.03, subdivisions 3, as
amended, 15, as amended; 290A.10; 290A.14; 290B.03, subdivision 1; 290C.06;
290C.07; 291.005, subdivision 1, as amended; 295.56; 295.57, subdivision 5;
296A.21, subdivision 1; 297A.62, by adding a subdivision; 297A.64, subdivision
2; 297A.70, subdivisions 2, 4; 297A.71, by adding a subdivision; 297A.75,
subdivisions 1, 2; 297A.94; 297A.992, subdivision 2; 297A.993, subdivision 1;
297B.02, subdivision 1; 297E.02, subdivision 4; 297E.06, subdivision 4, by
adding a subdivision; 297E.11, subdivision 1; 297F.09, subdivision 7; 297G.09,
subdivision 6; 297H.06, subdivision 1; 297I.30, by adding a subdivision; 297I.35,
subdivision 2; 298.227; 298.28, subdivisions 2, 4, 11; 298.75, subdivision 2;
309.53, subdivision 3; 349.1641; 349.19, subdivision 9; 360.036, subdivision
2; 366.095, subdivision 1; 373.47, subdivision 1; 373.48, subdivision 1, by
adding a subdivision; 375.194, subdivision 5; 383A.75, subdivision 3; 423A.02,
subdivisions 1, 1b, 3, by adding a subdivision; 428A.03, subdivision 1; 428A.08;
428A.09; 428A.10; 428A.101; 428A.13, by adding a subdivision; 428A.14,
subdivision 1; 428A.21; 429.011, subdivision 2a; 446A.086, subdivision 8, by
adding a subdivision; 465.719, subdivision 9; 469.005, subdivision 1; 469.015,
subdivisions 1, 2, 3; 469.034, subdivision 2; 469.040, subdivisions 2, 4; 469.053,
by adding a subdivision; 469.153, subdivision 2; 469.174, subdivision 22;
469.175, subdivisions 1, 6; 469.176, subdivisions 3, 6; 469.1763, subdivision 3;
469.178, subdivision 7; 469.312, subdivision 5; 471.191, subdivision 1; 473.13,
subdivision 1; 473.39, by adding a subdivision; 473.843, subdivision 3; 474A.02,
subdivisions 2, 14; 475.58, subdivision 1; 475.67, subdivision 8; 477A.011,
subdivisions 34, 36, 42; 477A.013, subdivision 8; 645.44, subdivision 19; Laws
1971, chapter 773, section 4, as amended; Laws 1976, chapter 162, section
3, as amended; Laws 1986, chapter 396, section 4, subdivision 3; by adding
a subdivision; Laws 1986, chapter 400, section 44, as amended; Laws 1991,
chapter 291, article 8, section 27, subdivision 3, as amended; Laws 1993, chapter
375, article 9, section 46, subdivision 2, as amended, by adding a subdivision;
Laws 1996, chapter 471, article 2, section 30; Laws 1998, chapter 389, article
8, section 37, subdivision 1; Laws 2001, First Special Session chapter 5, article
3, section 8, as amended; Laws 2002, chapter 377, article 3, section 25; Laws
2006, chapter 259, article 3, section 12, subdivision 3; Laws 2008, chapter 366,
article 5, section 34; article 6, sections 9; 10; 46, subdivisions 1, 2; article 7,
sections 16, subdivision 3; 18, subdivisions 2, 3; Laws 2009, chapter 12, article
2, section 5, subdivision 2; proposing coding for new law in Minnesota Statutes,
chapters 16A; 270C; 275; 469; 475; repealing Minnesota Statutes 2008, sections
126C.21, subdivision 4; 275.065, subdivisions 5a, 6b, 6c, 8, 9, 10; 287.26;
287.27, subdivision 1; 297A.67, subdivision 24; 298.28, subdivisions 11a, 13;
Laws 1993, chapter 375, article 5, section 42, as amended; Laws 1998, chapter
407, article 8, section 12, subdivision 4; Laws 2009, chapter 37, article 1, section
31, subdivision 3; Minnesota Rules, parts 8009.3000; 8115.0200; 8115.0300;
8115.0400; 8115.0500; 8115.0600; 8115.1000; 8115.1100; 8115.1200;
8115.1300; 8115.1400; 8115.1500; 8115.1600; 8115.1700; 8115.1800;
8115.1900; 8115.2000; 8115.2100; 8115.2200; 8115.2300; 8115.2400;
8115.2500; 8115.2600; 8115.2700; 8115.2800; 8115.2900; 8115.3000;
8115.4000; 8115.4100; 8115.4200; 8115.4300; 8115.4400; 8115.4500;
8115.4600; 8115.4700; 8115.4800; 8115.4900; 8115.5000; 8115.5100;
8115.5200; 8115.5300; 8115.5400; 8115.5500; 8115.5600; 8115.5700;
8115.5800; 8115.5900; 8115.6000; 8115.6100; 8115.6200; 8115.6300;
8115.6400; 8115.9900.

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

ARTICLE 1

FEDERAL UPDATE

Section 1.

Minnesota Statutes 2008, section 289A.02, subdivision 7, as amended by
Laws 2009, chapter 12, article 1, section 1, is amended to read:

Subd. 7.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text beginDecember
31, 2008 deleted text end new text begin March 31, 2009 new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 290.01, subdivision 19, as amended by Laws
2009, chapter 12, article 1, section 2, is amended to read:

Subd. 19.

Net income.

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

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

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

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

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

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

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

The Internal Revenue Code of 1986, as amended through deleted text beginDecember 31, 2008 deleted text end new text begin March
31, 2009 new text end, shall be in effect for taxable years beginning after December 31, 1996.

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment. In
enacting this section and other provisions of this article, the legislature intends net income
to include and tax to apply to interest paid on any Build America Bond, as defined under
section 54AA of the Internal Revenue Code of 1986, notwithstanding the provisions of
section 1531 of Division B, Title I of the American Recovery and Reinvestment Act of
2009, Public Law 111-5.
new text end

Sec. 3.

Minnesota Statutes 2008, section 290.01, subdivision 19a, as amended by Laws
2009, chapter 12, article 1, section 3, is amended to read:

Subd. 19a.

Additions to federal taxable income.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008, except that clause (16) is effective for taxable years ending after
December 31, 2008.
new text end

Sec. 4.

Minnesota Statutes 2008, section 290.01, subdivision 19b, is amended to read:

Subd. 19b.

Subtractions from federal taxable income.

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

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

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

(3) the amount paid to others, less the amount used to claim the credit allowed under
section 290.0674, not to exceed $1,625 for each qualifying child in grades kindergarten
to 6 and $2,500 for each qualifying child in grades 7 to 12, for tuition, textbooks, and
transportation of each qualifying child in attending an elementary or secondary school
situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a
resident of this state may legally fulfill the state's compulsory attendance laws, which
is not operated for profit, and which adheres to the provisions of the Civil Rights Act
of 1964 and chapter 363A. For the purposes of this clause, "tuition" includes fees or
tuition as defined in section 290.0674, subdivision 1, clause (1). As used in this clause,
"textbooks" includes books and other instructional materials and equipment purchased
or leased for use in elementary and secondary schools in teaching only those subjects
legally and commonly taught in public elementary and secondary schools in this state.
Equipment expenses qualifying for deduction includes expenses as defined and limited in
section 290.0674, subdivision 1, clause (3). "Textbooks" does not include instructional
books and materials used in the teaching of religious tenets, doctrines, or worship, the
purpose of which is to instill such tenets, doctrines, or worship, nor does it include books
or materials for, or transportation to, extracurricular activities including sporting events,
musical or dramatic events, speech activities, driver's education, or similar programs. For
purposes of the subtraction provided by this clause, "qualifying child" has the meaning
given in section 32(c)(3) of the Internal Revenue Code;

(4) income as provided under section 290.0802;

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

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

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

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

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

(10) job opportunity building zone income as provided under section 469.316;

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years ending after
December 31, 2008.
new text end

Sec. 5.

Minnesota Statutes 2008, section 290.01, subdivision 19c, as amended by Laws
2009, chapter 12, article 1, section 4, is amended to read:

Subd. 19c.

Corporations; additions to federal taxable income.

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

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

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

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

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

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

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

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

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

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

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

(11) the amount of any deemed dividend from a foreign operating corporation
determined pursuant to section 290.17, subdivision 4, paragraph (g). The deemed dividend
shall be reduced by the amount of the addition to income required by clauses (20), (21),
(22), and (23);

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

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

(14) any increase in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section deleted text begin304(a)(1)-(2) deleted text end new text begin 303(b) new text end of Public Law 110-343;

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

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

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

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

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

(20) an amount equal to the interest and intangible expenses, losses, and costs paid,
accrued, or incurred by any member of the taxpayer's unitary group to or for the benefit
of a corporation that is a member of the taxpayer's unitary business group that qualifies
as a foreign operating corporation. For purposes of this clause, intangible expenses and
costs include:

(i) expenses, losses, and costs for, or related to, the direct or indirect acquisition,
use, maintenance or management, ownership, sale, exchange, or any other disposition of
intangible property;

(ii) losses incurred, directly or indirectly, from factoring transactions or discounting
transactions;

(iii) royalty, patent, technical, and copyright fees;

(iv) licensing fees; and

(v) other similar expenses and costs.

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.

This clause does not apply to any item of interest or intangible expenses or costs paid,
accrued, or incurred, directly or indirectly, to a foreign operating corporation with respect
to such item of income to the extent that the income to the foreign operating corporation
is income from sources without the United States as defined in subtitle A, chapter 1,
subchapter N, part 1, of the Internal Revenue Code;

(21) except as already included in the taxpayer's taxable income pursuant to clause
(20), any interest income and income generated from intangible property received or
accrued by a foreign operating corporation that is a member of the taxpayer's unitary
group. For purposes of this clause, income generated from intangible property includes:

(i) income related to the direct or indirect acquisition, use, maintenance or
management, ownership, sale, exchange, or any other disposition of intangible property;

(ii) income from factoring transactions or discounting transactions;

(iii) royalty, patent, technical, and copyright fees;

(iv) licensing fees; and

(v) other similar income.

For purposes of this clause, "intangible property" includes stocks, bonds, patents, patent
applications, trade names, trademarks, service marks, copyrights, mask works, trade
secrets, and similar types of intangible assets.

This clause does not apply to any item of interest or intangible income received or accrued
by a foreign operating corporation with respect to such item of income to the extent that
the income is income from sources without the United States as defined in subtitle A,
chapter 1, subchapter N, part 1, of the Internal Revenue Code;

(22) the dividends attributable to the income of a foreign operating corporation that
is a member of the taxpayer's unitary group in an amount that is equal to the dividends
paid deduction of a real estate investment trust under section 561(a) of the Internal
Revenue Code for amounts paid or accrued by the real estate investment trust to the
foreign operating corporation;

(23) the income of a foreign operating corporation that is a member of the taxpayer's
unitary group in an amount that is equal to gains derived from the sale of real or personal
property located in the United States; deleted text beginand
deleted text end

(24) the additional amount allowed as a deduction for donation of computer
technology and equipment under section 170(e)(6) of the Internal Revenue Code, to the
extent deducted from taxable income new text begin; and
new text end

new text begin (25) discharge of indebtedness income resulting from reacquisition of business
indebtedness and deferred under section 108(i) of the Internal Revenue Code new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007, except that clause (25) is effective for taxable years ending after
December 31, 2008.
new text end

Sec. 6.

Minnesota Statutes 2008, section 290.01, subdivision 19d, as amended by Laws
2009, chapter 12, article 1, section 5, is amended to read:

Subd. 19d.

Corporations; modifications decreasing federal taxable income.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(17) any decrease in subpart F income, as defined in section 952(a) of the Internal
Revenue Code, for the taxable year when subpart F income is calculated without regard to
the provisions of Division C, title III, section deleted text begin304(a)(1)-(2) deleted text end new text begin 303(b) new text end of Public Law 110-343;

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007, except that clause (20) is effective for taxable years ending after
December 31, 2008.
new text end

Sec. 7.

Minnesota Statutes 2008, section 290.01, subdivision 31, as amended by Laws
2009, chapter 12, article 1, section 7, is amended to read:

Subd. 31.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through deleted text beginDecember
31, 2008 deleted text end new text begin March 31, 2009 new text end. Internal Revenue Code also includes any uncodified provision
in federal law that relates to provisions of the Internal Revenue Code that are incorporated
into Minnesota law.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income
taxes imposed by this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
applying to their taxable net income the following schedule of rates:

(1) On the first $25,680, 5.35 percent;

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

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

Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $17,570, 5.35 percent;

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

(3) On all over $57,710, 7.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying
as a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $21,630, 5.35 percent;

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

(3) On all over $86,910, 7.85 percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the
tax of any individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not
more than $100. The amount of tax for each bracket shall be computed at the rates set
forth in this subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute
the individual's Minnesota income tax as provided in this subdivision. After the
application of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), deleted text beginand deleted text end
(13) new text begin, (16), and (17), new text end and reduced by the Minnesota assignable portion of the subtraction
for United States government interest under section 290.01, subdivision 19b, clause (1),
and the subtractions under section 290.01, subdivision 19b, clauses (9), (10), (14), (15),
deleted text begin and deleted text end (16) new text begin, and (18) new text end, after applying the allocation and assignability provisions of section
290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), (9), (12), deleted text beginand deleted text end (13) new text begin, (16), and
(17), new text end and reduced by the amounts specified in section 290.01, subdivision 19b, clauses (1),
(9), (10), (14), (15), deleted text beginand deleted text end (16) new text begin, and (18) new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years ending after
December 31, 2008.
new text end

Sec. 9.

Minnesota Statutes 2008, section 290.067, subdivision 2a, as amended by Laws
2009, chapter 12, article 1, section 8, is amended to read:

Subd. 2a.

Income.

(a) For purposes of this section, "income" means the sum of
the following:

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue
Code; and

(2) the sum of the following amounts to the extent not included in clause (1):

(i) all nontaxable income;

(ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, supplemental security income, and veterans
benefits), which was not exclusively funded by the claimant or spouse, or which was
funded exclusively by the claimant or spouse and which funding payments were excluded
from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code;

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
Code;

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;

(xv) the amount of tuition expenses required to be added to income under section
290.01, subdivision 19a, clause (12); deleted text beginand
deleted text end

(xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code new text begin; and
new text end

new text begin (xvii) unemployment compensation new text end.

In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" means federal adjusted gross income reflected in the
fiscal year ending in the next calendar year. Federal adjusted gross income may not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.

(b) "Income" does not include:

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and
102;

(2) amounts of any pension or annuity that were exclusively funded by the claimant
or spouse if the funding payments were not excluded from federal adjusted gross income
in the years when the payments were made;

(3) surplus food or other relief in kind supplied by a governmental agency;

(4) relief granted under chapter 290A;

(5) child support payments received under a temporary or final decree of dissolution
or legal separation; and

(6) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 10.

Minnesota Statutes 2008, section 290.091, subdivision 2, is amended to read:

Subd. 2.

Definitions.

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

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

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

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

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

(ii) the medical expense deduction;

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

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

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

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

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

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

less the sum of the amounts determined under the following:

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

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

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

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

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

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

(c) "Tentative minimum tax" equals 6.4 percent of alternative minimum taxable
income after subtracting the exemption amount determined under subdivision 3.

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2008.
new text end

Sec. 11.

Minnesota Statutes 2008, section 290A.03, subdivision 3, as amended by
Laws 2009, chapter 12, article 1, section 9, is amended to read:

Subd. 3.

Income.

(1) "Income" means the sum of the following:

(a) federal adjusted gross income as defined in the Internal Revenue Code; and

(b) the sum of the following amounts to the extent not included in clause (a):

(i) all nontaxable income;

(ii) the amount of a passive activity loss that is not disallowed as a result of section
469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity
loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness
of a solvent individual excluded from gross income under section 108(g) of the Internal
Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments
received under the federal Social Security Act, Supplemental Security Income, and
veterans benefits), which was not exclusively funded by the claimant or spouse, or which
was funded exclusively by the claimant or spouse and which funding payments were
excluded from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality
or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or
sick pay as a result of accident, sickness, or other disability, whether funded through
insurance or otherwise;

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account,
including a qualified voluntary employee contribution; simplified employee pension plan;
self-employed retirement plan; cash or deferred arrangement plan under section 401(k)
of the Internal Revenue Code; or deferred compensation plan under section 457 of the
Internal Revenue Code;

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section 199 of the Internal Revenue
Code;

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal
Revenue Code;

(xv) the amount of tuition expenses required to be added to income under section
290.01, subdivision 19a, clause (12); deleted text beginand
deleted text end

(xvi) the amount deducted for certain expenses of elementary and secondary school
teachers under section 62(a)(2)(D) of the Internal Revenue Code new text begin; and
new text end

new text begin (xvii) unemployment compensation new text end.

In the case of an individual who files an income tax return on a fiscal year basis, the
term "federal adjusted gross income" shall mean federal adjusted gross income reflected
in the fiscal year ending in the calendar year. Federal adjusted gross income shall not be
reduced by the amount of a net operating loss carryback or carryforward or a capital loss
carryback or carryforward allowed for the year.

(2) "Income" does not include:

(a) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and
102;

(b) amounts of any pension or annuity which was exclusively funded by the claimant
or spouse and which funding payments were not excluded from federal adjusted gross
income in the years when the payments were made;

(c) surplus food or other relief in kind supplied by a governmental agency;

(d) relief granted under this chapter;

(e) child support payments received under a temporary or final decree of dissolution
or legal separation; or

(f) restitution payments received by eligible individuals and excludable interest as
defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of
2001, Public Law 107-16.

(3) The sum of the following amounts may be subtracted from income:

(a) for the claimant's first dependent, the exemption amount multiplied by 1.4;

(b) for the claimant's second dependent, the exemption amount multiplied by 1.3;

(c) for the claimant's third dependent, the exemption amount multiplied by 1.2;

(d) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;

(e) for the claimant's fifth dependent, the exemption amount; and

(f) if the claimant or claimant's spouse was disabled or attained the age of 65
on or before December 31 of the year for which the taxes were levied or rent paid, the
exemption amount.

For purposes of this subdivision, the "exemption amount" means the exemption
amount under section 151(d) of the Internal Revenue Code for the taxable year for which
the income is reported.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on
property taxes payable after December 31, 2009, and rent paid after December 31, 2008,
and thereafter.
new text end

Sec. 12.

Minnesota Statutes 2008, section 290A.03, subdivision 15, as amended by
Laws 2009, chapter 12, article 1, section 10, is amended to read:

Subd. 15.

Internal Revenue Code.

"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended through deleted text beginDecember 31, 2008 deleted text end new text begin March 31, 2009 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property tax refunds based on
property taxes payable after December 31, 2009, and rent paid after December 31, 2008,
and thereafter.
new text end

Sec. 13.

Minnesota Statutes 2008, section 291.005, subdivision 1, as amended by Laws
2009, chapter 12, article 1, section 11, is amended to read:

Subdivision 1.

Scope.

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

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

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

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

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

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

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

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

(8) "Internal Revenue Code" means the United States Internal Revenue Code of
1986, as amended through deleted text beginDecember 31, 2008 deleted text end new text begin March 31, 2009 new text end.

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

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 2

PROPERTY TAXES

Section 1.

Minnesota Statutes 2008, section 124D.4531, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Allocation from districts participating in agreements for secondary
education or interdistrict cooperation. new text end

new text begin For purposes of this section, a district with a
career and technical program approved under this section that participates in an agreement
under section 123A.30 or 123A.32 must allocate its levy authority under this section
among participating districts.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxes payable in
2008.
new text end

Sec. 2.

Minnesota Statutes 2008, section 126C.41, subdivision 2, is amended to read:

Subd. 2.

Retired employee health benefits.

A district may levy an amount up to the
amount the district is required by the collective bargaining agreement in effect on March
30, 1992, to pay for health insurance or unreimbursed medical expenses for licensed
and nonlicensed employees who have terminated services in the employing district and
withdrawn from active teaching service or other active service, as applicable, new text begineither (1)
new text endbefore July 1, new text begin1992, or (2) before July 1, new text end1998, new text beginbut for employees retiring after June 30,
1992, and before July 1, 1998, only new text endif a sunset clause is in effect for the current collective
bargaining agreement. The total amount of the levy each year may not exceed $600,000.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2008, section 144F.01, subdivision 3, is amended to read:

Subd. 3.

Board.

The special taxing district under this section is governed by a
board made up initially of representatives of each participating political subdivision in
the proportions set out in the establishing resolution, subject to change as provided in the
district's charter, if any, or in the district's bylaws. new text beginIf a township states in its resolution that
less than the entire township will participate in the district, the partial townships shall be
represented on the board by only one member, appointed from among those townships
so participating. The method for appointment shall be governed by the bylaws of the
district's joint powers agreement. new text endEach participant's representative serves at the pleasure
of that participant's governing body new text begin or bodies new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 272.02, subdivision 7, is amended to read:

Subd. 7.

Institutions of public charity.

new text begin(a) new text endInstitutions of purely public charity new text beginthat
are exempt from federal income taxation under section 501(c)(3) of the Internal Revenue
Code new text endare exempt deleted text begin. deleted text end new text begin if they meet the requirements of this subdivision. In determining
whether real property is exempt under this subdivision, the following factors must be
considered:
new text end

new text begin (1) whether the stated purpose of the undertaking is to be helpful to others without
immediate expectation of material reward;
new text end

new text begin (2) whether the institution of public charity is supported by material donations, gifts,
or government grants for services to the public in whole or in part;
new text end

new text begin (3) whether a material number of the recipients of the charity receive benefits or
services at reduced or no cost, or whether the organization provides services to the public
that alleviate burdens or responsibilities that would otherwise be borne by the government;
new text end

new text begin (4) whether the income received, including material gifts and donations, produces a
profit to the charitable institution that is not distributed to private interests;
new text end

new text begin (5) whether the beneficiaries of the charity are restricted or unrestricted, and, if
restricted, whether the class of persons to whom the charity is made available is one
having a reasonable relationship to the charitable objectives; and
new text end

new text begin (6) whether dividends, in form or substance, or assets upon dissolution, are not
available to private interests.
new text end

new text begin A charitable organization must satisfy the factors in clauses (1) to (6) for its property
to be exempt under this subdivision, unless there is a reasonable justification for failing to
meet the factors in clause (2), (3), or (5), and the organization provides to the assessor the
factual basis for that justification. If there is reasonable justification for failing to meet
the factors in clause (2), (3), or (5), an organization is a purely public charity under this
subdivision without meeting those factors. After an exemption is properly granted under
this subdivision, it will remain in effect unless there is a material change in facts.
new text end

new text begin (b) For purposes of this subdivision, a grant is a written instrument or electronic
document defining a legal relationship between a granting agency and a grantee when
the principal purpose of the relationship is to transfer cash or something of value to the
grantee to support a public purpose authorized by law in a general manner instead of
acquiring by professional or technical contract, purchase, lease, or barter property or
services for the direct benefit or use of the granting agency.
new text end

new text begin (c) new text end In determining whether rental housing property qualifies for exemption under
this subdivision, the following are not gifts or donations to the owner of the rental housing:

(1) rent assistance provided by the government to or on behalf of tenants; and

(2) financing assistance or tax credits provided by the government to the owner on
condition that specific units or a specific quantity of units be set aside for persons or
families with certain income characteristics.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2008, section 272.02, subdivision 55, is amended to read:

Subd. 55.

Electric generation facility; personal property.

Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property which is part of
an electric generating facility that meets the requirements of this subdivision is exempt. At
the time of construction, the facility must (i) new text beginbe eligible to new text endbe designated as an innovative
energy project deleted text beginas defined in deleted text end new text begin under new text end section 216B.1694, new text begin except that, notwithstanding
anything to the contrary in section 216B.1694, a project may include gas-fired generating
facilities that are adaptable for subsequent incorporation into a facility that uses coal as
a primary fuel, provided that this exception applies only to the eligibility for exemption
under this section, new text end (ii) be within a tax relief area as defined in section 273.134, (iii) have
access to existing railroad infrastructure within less than three miles, (iv) have received by
resolution approval from the governing body of the county and township or city in which
the proposed facility is to be located for the exemption of personal property under this
subdivision, and (v) be designed to host at least 500 megawatts of electrical generation.

Construction of the first deleted text begin500 deleted text end new text begin 100 new text end megawatts of the facility must be commenced after
January 1, 2006, and before January 1, 2012. Construction of up to an additional 750
megawatts of generation must be commenced before January 1, 2015. Property eligible
for this exemption does not include electric transmission lines and interconnections or gas
pipelines and interconnections appurtenant to the property or the facility. To qualify for an
exemption under this subdivision, the owner of the electric generation facility must have
an agreement with the host county, township or city, and school district, for payment in
lieu of personal property taxes to the host county, township or city, and school district.

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 272.02, subdivision 86, is amended to read:

Subd. 86.

Apprenticeship training facilities.

All or a portion of a building used
exclusively for a state-approved apprenticeship program through the Department of
Labor and Industry is exempt if (1) it is owned deleted text beginand operated deleted text end by a nonprofit deleted text begincorporation deleted text end new text begin
organization or a nonprofit trust, and operated by a nonprofit organization or a nonprofit
trust new text end, (2) the program participants receive no compensation, and (3) it is located in the
Minneapolis and St. Paul standard metropolitan statistical area as determined by the 2000
federal census or in a city outside the Minneapolis and St. Paul standard metropolitan
statistical area that has a population of 7,500 or greater according to the most recent
federal census. new text beginUse of the property for advanced skills training of incumbent workers does
not disqualify the property for the exemption under this subdivision. new text end This exemption
deleted text begin does not include deleted text end new text begin includes up to five acres of the new text end land new text begin on which the building is located and
associated parking areas on that land. If a parking area associated with the facility is
used for the purposes of the facility and for other purposes, a portion of the parking area
shall be exempt in proportion to the square footage of the facility used for purposes of
apprenticeship training new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009, for taxes
payable in 2010, and thereafter.
new text end

Sec. 7.

Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 90. new text end

new text begin Nursing homes. new text end

new text begin A nursing home licensed under section 144A.02 or a
boarding care home certified as a nursing facility under title 19 of the Social Security
Act that is exempt from federal income taxation pursuant to section 501(c)(3) of the
Internal Revenue Code is exempt from property taxation if the nursing home or boarding
care home either:
new text end

new text begin (1) is certified to participate in the medical assistance program under title 19 of
the Social Security Act; or
new text end

new text begin (2) certifies to the commissioner of revenue that it does not discharge residents
due to the inability to pay.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 91. new text end

new text begin Railroad wye connections. new text end

new text begin Any real or personal property of a railroad
wye connection, including the track, ties, ballast, switch gear, and related improvements,
is exempt if it meets all of the following: (1) is publicly owned; (2) is funded, in whole or
in part, by state grants; (3) is located within the metropolitan area as defined in section
473.121, subdivision 2; (4) includes a single track segment that is no longer than 2,500 feet
in length; (5) connects intersecting rail lines; and (6) is constructed after January 1, 2009.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter, for taxes payable in 2010 and thereafter.
new text end

Sec. 9.

Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 92. new text end

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

new text begin (a) Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property that is part of
an electric generation facility that exceeds 150 megawatts of installed capacity, does
not exceed 780 megawatts of summer capacity, and that meets the requirements of this
subdivision, is exempt. At the start of construction, the facility must:
new text end

new text begin (1) be designed to utilize natural gas as a primary fuel;
new text end

new text begin (2) be owned by an entity other than a public utility as defined in section 216B.02,
subdivision 4;
new text end

new text begin (3) be located within five miles of two or more interstate natural gas pipelines;
new text end

new text begin (4) be located within one mile of an existing electrical transmission substation with
operating alternating current voltages of 115 kV, 345 kV, and 500 kV;
new text end

new text begin (5) be designed to provide electrical capacity, energy, and ancillary services;
new text end

new text begin (6) have satisfied all of the requirements under section 216B.243;
new text end

new text begin (7) have executed an interconnection agreement with the Midwest Independent
System Operator that does not require the acquisition of more than one mile of new
electric transmission right-of-way within the county where the facility is located, and does
not provide for any other new routes or corridors for future electric transmission lines in
the county where the facility is located;
new text end

new text begin (8) be located in a county with an essential services and transmission services
ordinance;
new text end

new text begin (9) have signed a development agreement with the county board in the county in
which the facility is located. The development agreement must be adopted by a two-thirds
vote of the county board, and must contain provisions ensuring:
new text end

new text begin (i) the facility is designed to use effluent from a wastewater treatment facility as
its preferred water source if it includes any combined-cycle units, and will not seek an
exemption from legislative approval under section 103G.265, subdivision 3, paragraph
(b); and
new text end

new text begin (ii) all processed wastewater discharge will be colocated with the outfall of a
wastewater treatment facility;
new text end

new text begin (10) have signed a development agreement with the township board in the township
in which the facility is located containing provisions ensuring that noise and visual
impacts of the facility are mitigated. The development agreement must be adopted by a
two-thirds vote of the township board; and
new text end

new text begin (11) have an agreement with the host county, township, and school district for
payment in lieu of personal property taxes to the host county, township, and school
district for a total amount not to exceed $600,000 per year for the operating life of the
facility. Any amount distributed to the school district is not subject to the deductions
under section 126C.21.
new text end

new text begin (b) Construction of the facility must begin after March 1, 2010, and before March 1,
2014. Property eligible for this exemption does not include electric transmission lines and
interconnections or gas pipelines and interconnections appurtenant to the facility.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 93. new text end

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

new text begin Notwithstanding
subdivision 9, clause (a), attached machinery and other personal property that is part of
a simple-cycle electric generation facility of more than 40 megawatts and less than 125
megawatts of installed capacity and that meets the requirements of this subdivision is
exempt. At the time of construction, the facility must:
new text end

new text begin (1) utilize natural gas as a primary fuel;
new text end

new text begin (2) be located within two miles of parallel existing 36-inch natural gas pipelines and
an existing 115-kilovolt high-voltage electric transmission line;
new text end

new text begin (3) be designed to provide peaking, emergency backup, or contingency services;
new text end

new text begin (4) satisfy a resource deficiency identified in an approved integrated resource plan
filed under section 216B.2422; and
new text end

new text begin (5) have an agreement with the host county, township, and school district for
payment in lieu of personal property taxes to the host county, township, and school district
for the operating life of the facility. Any amount distributed to the school district is not
subject to the deductions under section 126C.21.
new text end

new text begin Construction of the facility must be commenced after January 1, 2010, and
before January 1, 2014. Property eligible for this exemption does not include electric
transmission lines and interconnections or gas pipelines and interconnections appurtenant
to the property or the facility.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessments in 2011, taxes
payable in 2012, and thereafter.
new text end

Sec. 11.

Minnesota Statutes 2008, section 272.02, is amended by adding a subdivision
to read:

new text begin Subd. 94. new text end

new text begin Elderly living facility. new text end

new text begin (a) The first $5,000,000 in market value of an
elderly living facility is exempt from taxation if it meets all of the following requirements:
new text end

new text begin (1) the facility consists of no more than 75 living units;
new text end

new text begin (2) the facility is located in a city of the first class with a population of more than
350,000;
new text end

new text begin (3) the facility is owned and operated by a nonprofit corporation organized under
chapter 317A;
new text end

new text begin (4) the owner of the facility is an affiliate of entities that own and operate assisted
living and skilled nursing facilities that:
new text end

new text begin (i) are located across a street from the facility;
new text end

new text begin (ii) are adjacent to a church that is exempt from taxation under subdivision 6;
new text end

new text begin (iii) include a congregate dining program; and
new text end

new text begin (iv) provide assisted living or similar social and physical support;
new text end

new text begin (5) the residents of the facility must be:
new text end

new text begin (i) at least 62 years of age; or
new text end

new text begin (ii) handicapped;
new text end

new text begin (6) at least 30 percent of the units in the facility are occupied by persons whose
annual income does not exceed 50 percent of median family income for the area; and
new text end

new text begin (7) before the effective date of this subdivision, the facility has received approval of
street vacation and land use applications from the city in which it is to be located.
new text end

new text begin (b) In this subdivision, "affiliate" means any entity directly or indirectly controlling
or controlled by or under direct or indirect common control with an entity, and "control"
means the power to direct management and policies through membership or ownership
of voting securities.
new text end

new text begin (c) The exemption provided in this subdivision applies to taxes levied in each
year or partial year of the term of the facility's initial permanent financing or 25 years,
whichever is later.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2010.
new text end

Sec. 12.

Minnesota Statutes 2008, section 272.029, subdivision 6, is amended to read:

Subd. 6.

Distribution of revenues.

Revenues from the taxes imposed under
subdivision 5 must be part of the settlement between the county treasurer and the county
auditor under section 276.09. The revenue must be distributed by the county auditor or the
county treasurer to local taxing jurisdictions in which the wind energy conversion system
is located as follows: beginning with distributions in deleted text begin2006 deleted text end new text begin 2010, 80 percent to counties;
and 20 percent to cities and townships; and for distributions occurring in 2006 to 2009 new text end, 80
percent to counties; 14 percent to cities and townships; and six percent to school districts deleted text begin;
and for distributions occurring in 2004 and 2005 in the same proportion that each of the
local taxing jurisdiction's current year's net tax capacity based tax rate is to the current
year's total local net tax capacity based rate deleted text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 13.

Minnesota Statutes 2008, section 273.11, subdivision 23, is amended to read:

Subd. 23.

First tier valuation limit; agricultural homestead property.

(a)
deleted text begin Beginning with assessment year 2006, deleted text end The commissioner of revenue shall annually certify
the first tier limit for agricultural homestead property deleted text beginas deleted text end new text begin. For assessment year 2010, the
limit is $1,140,000. Beginning with assessment year 2011, the limit is new text end the product of (i)
deleted text begin $600,000 deleted text end new text begin the first tier limit for the preceding assessment year new text end, and (ii) the ratio of the
statewide average taxable market value of agricultural property per acre of deeded farm
land in the preceding assessment year to the statewide average taxable market value of
agricultural property per acre of deeded farm land for new text beginthe second preceding new text endassessment
year deleted text begin2004 deleted text end. The limit shall be rounded to the nearest $10,000.

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

Minnesota Statutes 2008, section 273.111, subdivision 4, is amended to read:

Subd. 4.

Determination of value.

(a) The value of any real estate described
in subdivision 3 shall upon timely application by the owner, in the manner provided
in subdivision 8, be determined solely with reference to its appropriate agricultural
classification and value notwithstanding sections 272.03, subdivision 8, and 273.11.
Furthermore, the assessor shall not consider any added values resulting from
nonagricultural factors. In order to account for the presence of nonagricultural influences
that may affect the value of agricultural land, the commissioner of revenue shall develop a
fair and uniform method of determining agricultural values for each county in the state
that are consistent with this subdivision. The commissioner shall annually assign the
resulting values to each county, and these values shall be used as the basis for determining
the agricultural value for all properties in the county qualifying for tax deferment under
this section.

(b) In the case of property qualifying for tax deferment only under subdivision 3a,
the deleted text beginvalue shall be based on the value in effect for assessment year 2008, multiplied by
the ratio of the total taxable market value of all property in the county for the current
assessment year divided by the total taxable market value of all property in the county for
assessment year 2008 deleted text end new text begin assessor shall not consider the presence of commercial, industrial,
residential, or seasonal recreational land use influences in determining the value for ad
valorem tax purposes provided that in no case shall the value exceed the value prescribed
by the commissioner of revenue for class 2a tillable property in that county new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter.
new text end

Sec. 15.

Minnesota Statutes 2008, section 273.111, is amended by adding a subdivision
to read:

new text begin Subd. 9a. new text end

new text begin Cross-compliance with agricultural chemical and water laws. new text end

new text begin (a) A
parcel of property enrolled under this section whose owner is subject to two or more final
enforcement actions for violations of chapter 18B, 18C, 18D, 103E, 103F, 103G, or 103H,
or any rule adopted under these chapters including but not limited to the agricultural
shoreland use standards in Minnesota Rules, chapter 6120, occurring on the parcel, shall
be subject to a property tax penalty as defined in this subdivision.
new text end

new text begin (b) For the purposes of this subdivision, "final enforcement action" means any
administrative, civil, or criminal penalty other than a verbal or written warning. An
enforcement action is not final until any time period for corrective action has expired,
and until the completion or expiration of any applicable review or appeal procedure or
period provided by law.
new text end

new text begin (c) The first time a final enforcement action is taken based on a violation occurring
on a parcel enrolled under this section, the owner must be notified that if a second final
enforcement action is issued, the property is subject to a property tax penalty, as defined
in this subdivision.
new text end

new text begin (d) When a second final enforcement action is taken based on a violation occurring
on a parcel enrolled under this section within three years from the first violation, the law
enforcement officer or other person enforcing the law or rule must notify the county
auditor. The auditor must then determine the property tax penalty, equal to the deferred
taxes on the parcel for the current year and the two previous years, but not to exceed the
current owner's time of ownership, and extend the penalty against the property on the tax
list for the current year, provided that no interest or penalties shall be levied on the penalty
if timely paid. The penalty levied under this subdivision is in addition to any additional
taxes levied under subdivision 9 at the time a property is withdrawn from the program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for final enforcement actions issued
after January 1, 2010, and before December 31, 2013.
new text end

Sec. 16.

Minnesota Statutes 2008, section 273.113, subdivision 1, is amended to read:

Subdivision 1.

Definition.

For the purposes of this section, the following terms
have the meanings given to them:

(1) " deleted text beginproposed deleted text end bovine tuberculosis modified accredited zone" means the modified
accredited zone deleted text beginproposed deleted text end new text begin designated new text end by the Board of Animal Health under section 35.244;
deleted text begin and
deleted text end

(2) "located within" means that the herd is kept in the area for at least a part of
calendar year new text begin2006, new text end2007 new text begin, or 2008; and
new text end

new text begin (3) "animal" means cattle, bison, goats, and farmed cervidae new text end.

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2008, section 273.113, subdivision 2, is amended to read:

Subd. 2.

Eligibility; amount of credit.

Agricultural new text beginand rural vacant new text endland classified
under section 273.13, subdivision 23, located within a deleted text beginproposed deleted text end bovine tuberculosis
modified accredited zone is eligible for a property tax credit equal to the deleted text beginproperty tax deleted text end
new text begin greater of: (1) $5 per acre new text endon the deleted text beginparcel deleted text end new text beginfirst 160 acres of the property new text endwhere the herd had
been located deleted text begin, excluding any tax attributable to residential structures. deleted text end new text begin; or (2) an amount
equal to $5 per acre times five acres times the highest number of animals tested on the
property for bovine tuberculosis in a whole-herd test as reported by the Board of Animal
Health in 2006, 2007, or 2008. The amount of the credit cannot exceed the property tax
payable on the property where the herd had been located, excluding any tax attributable
to residential structures. new text endTo begin to qualify for the tax credit, the owner shall file an
application with the county by December 1 of the levy year. The credit must be given
for each subsequent taxes payable year until the credit terminates under subdivision 4.
The assessor shall indicate the amount of the property tax reduction on the property tax
statement of each taxpayer receiving a credit under this section. The credit paid pursuant
to this section shall be deducted from the tax due on the property as provided in section
273.1393.

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2008, section 273.13, subdivision 25, is amended to read:

Subd. 25.

Class 4.

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

(b) Class 4b includes:

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

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

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

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

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

(c) Class 4bb includes:

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

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

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

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

(d) Class 4c property includes:

(1) except as provided in subdivision 22, paragraph (c), or subdivision 23, paragraph
(b), clause (1), real and personal property devoted to temporary and seasonal residential
occupancy for recreation purposes, including real and personal property devoted to
temporary and seasonal residential occupancy for recreation purposes and not devoted to
commercial purposes for more than 250 days in the year preceding the year of assessment.
For purposes of this clause, property is devoted to a commercial purpose on a specific
day if any portion of the property is used for residential occupancy, and a fee is charged
for residential occupancy. Class 4c property must contain three or more rental units. A
"rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual
camping site equipped with water and electrical hookups for recreational vehicles. Class
4c property must provide recreational activities such as renting ice fishing houses, boats
and motors, snowmobiles, downhill or cross-country ski equipment; provide marina
services, launch services, or guide services; or sell bait and fishing tackle. A camping
pad offered for rent by a property that otherwise qualifies for class 4c is also class 4c
regardless of the term of the rental agreement, as long as the use of the camping pad
does not exceed 250 days. In order for a property to be classified as class 4c, seasonal
residential recreational for commercial purposes under this clause, at least 40 percent of
the annual gross lodging receipts related to the property must be from business conducted
during 90 consecutive days and either (i) at least 60 percent of all paid bookings by
lodging guests during the year must be for periods of at least two consecutive nights; or
(ii) at least 20 percent of the annual gross receipts must be from charges for rental of fish
houses, boats and motors, snowmobiles, downhill or cross-country ski equipment, or
charges for marina services, launch services, and guide services, or the sale of bait and
fishing tackle. For purposes of this determination, a paid booking of five or more nights
shall be counted as two bookings. Class 4c also includes commercial use real property
used exclusively for recreational purposes in conjunction with class 4c property devoted
to temporary and seasonal residential occupancy for recreational purposes, up to a total of
two acres, provided the property is not devoted to commercial recreational use for more
than 250 days in the year preceding the year of assessment and is located within two
miles of the class 4c property with which it is used. Owners of real and personal property
devoted to temporary and seasonal residential occupancy for recreation purposes and all
or a portion of which was devoted to commercial purposes for not more than 250 days in
the year preceding the year of assessment desiring classification as class 4c, must submit a
declaration to the assessor designating the cabins or units occupied for 250 days or less in
the year preceding the year of assessment by January 15 of the assessment year. Those
cabins or units and a proportionate share of the land on which they are located must be
designated class 4c as otherwise provided. The remainder of the cabins or units and
a proportionate share of the land on which they are located will be designated as class
3a. The owner of property desiring designation as class 4c property must provide guest
registers or other records demonstrating that the units for which class 4c designation is
sought were not occupied for more than 250 days in the year preceding the assessment if
so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop,
(4) conference center or meeting room, and (5) other nonresidential facility operated on a
commercial basis not directly related to temporary and seasonal residential occupancy for
recreation purposes does not qualify for class 4c;

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

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

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

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

(3) real property up to a maximum of three acres of land owned and used by a
nonprofit community service oriented organization and that is not used for residential
purposes on either a temporary or permanent basis, qualifies for class 4c provided that
it meets either of the following:

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

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

For purposes of this clause,

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

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

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

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

Any portion of the property qualifying under item (i) which is used for revenue-producing
activities for more than six days in the calendar year preceding the year of assessment
shall be assessed as class 3a. The use of the property for social events open exclusively
to members and their guests for periods of less than 24 hours, when an admission is
not charged nor any revenues are received by the organization shall not be considered a
revenue-producing activity.

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

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

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

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009, taxes
payable in 2010, and thereafter.
new text end

Sec. 19.

Minnesota Statutes 2008, section 275.07, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Recertification due to unallotment. new text end

new text begin If a local government's December
aid or credit payments under sections 477A.011 to 477A.014 and section 273.1384 are
reduced due to unallotment under section 16A.152, the local government may recertify
its levy under subdivision 1, by January 15 of the year in which the levy will be paid.
The local government must report the recertified amount to the county auditor within
two business days of January 15 or the levy will remain at the amount certified under
subdivision 1. Notwithstanding subdivision 4, the county auditor shall report to the
commissioner of revenue any recertified levies under this subdivision by January 30
of the year in which the levy will be paid.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2008, section 275.70, subdivision 5, is amended to read:

Subd. 5.

Special levies.

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

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

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

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

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

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

(iv) certificates of indebtedness used to fund an insufficiency in tax receipts or
an insufficiency in other revenue sources;

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

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

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

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

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

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

(9) to pay an abatement under section 469.1815;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for levies certified in calendar year
2009 and thereafter, payable in 2010 and thereafter.
new text end

Sec. 21.

new text begin [275.77] TEMPORARY SUSPENSION OF NEW OR INCREASED
MAINTENANCE OF EFFORT AND MATCHING FUND REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have
the meanings given them:
new text end

new text begin (1) "maintenance of effort" means a requirement imposed on a political subdivision
by state law to continue providing funding of a service or program at a given or increasing
level based on its funding of the service and program in prior years;
new text end

new text begin (2) "matching fund requirement" means a requirement imposed on a political
subdivision by state law to fund a portion of a program or service but does not mean
required nonstate contributions to state capital funded projects or other nonstate
contributions required in order to receive a grant or loan the political subdivision has
requested or applied for; and
new text end

new text begin (3) "political subdivision" means a county, town, or statutory or home rule charter
city.
new text end

new text begin Subd. 2. new text end

new text begin Temporary suspension. new text end

new text begin (a) Notwithstanding any other provision of law
to the contrary, any new maintenance of effort or matching fund requirement enacted
after January 1, 2009, that will require spending by a political subdivision shall not be
effective until July 1, 2011.
new text end

new text begin (b) Notwithstanding any other provision of law to the contrary, any changes to
existing maintenance of effort or matching fund requirement enacted after January 1,
2009, that will require new spending by a political subdivision shall not be effective
until July 1, 2011.
new text end

new text begin (c) The suspension of changes to existing maintenance of effort and matching fund
requirements under paragraph (b) does not apply if the spending is required by federal law
and there would be a cost to the state budget without the change.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Minnesota Statutes 2008, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the
printing of the tax statements. The commissioner of revenue shall prescribe the form of
the property tax statement and its contents. new text beginThe tax statement must not state or imply
that property tax credits are paid by the state of Minnesota. new text endThe statement must contain
a tabulated statement of the dollar amount due to each taxing authority and the amount
of the state tax from the parcel of real property for which a particular tax statement is
prepared. The dollar amounts attributable to the county, the state tax, the voter approved
school tax, the other local school tax, the township or municipality, and the total of
the metropolitan special taxing districts as defined in section 275.065, subdivision 3,
paragraph (i), must be separately stated. The amounts due all other special taxing districts,
if any, may be aggregated except that any levies made by the regional rail authorities in the
county of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter
398A shall be listed on a separate line directly under the appropriate county's levy. If the
county levy under this paragraph includes an amount for a lake improvement district as
defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount. In the case of Ramsey
County, if the county levy under this paragraph includes an amount for public library
service under section 134.07, the amount attributable for that purpose may be separated
from the remaining county levy amount. The amount of the tax on homesteads qualifying
under the senior citizens' property tax deferral program under chapter 290B is the total
amount of property tax before subtraction of the deferred property tax amount. The
amount of the tax on contamination value imposed under sections 270.91 to 270.98, if any,
must also be separately stated. The dollar amounts, including the dollar amount of any
special assessments, may be rounded to the nearest even whole dollar. For purposes of this
section whole odd-numbered dollars may be adjusted to the next higher even-numbered
dollar. The amount of market value excluded under section 273.11, subdivision 16, if any,
must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures
taxed as personal property shall contain the same information that is required on the
tax statements for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's taxable market value after reductions under section 273.11,
subdivisions 1a and 16;

(3) the property's gross tax, before credits;

(4) for homestead residential and agricultural properties, the credits under section
273.1384;

(5) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of
credit received under section 273.135 must be separately stated and identified as "taconite
tax relief"; and

(6) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current
year, and encouraging taxpayers to attend the hearings. If the county allows notices to
be included in the envelope containing the property tax statement, and if more than
one taxing district relative to a given property decides to include a notice with the tax
statement, the county treasurer or auditor must coordinate the process and may combine
the information on a single announcement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 23.

Minnesota Statutes 2008, section 279.01, subdivision 1, is amended to read:

Subdivision 1.

Due dates; penalties.

Except as provided in subdivision 3 or 4, on
May 16 or 21 days after the postmark date on the envelope containing the property tax
statement, whichever is later, a penalty accrues and thereafter is charged upon all unpaid
taxes on real estate on the current lists in the hands of the county treasurer. The penalty is
at a rate of two percent on homestead property until May 31 and four percent on June 1.
The penalty on nonhomestead property is at a rate of four percent until May 31 and eight
percent on June 1. This penalty does not accrue until June 1 of each year, or 21 days after
the postmark date on the envelope containing the property tax statements, whichever is
later, on commercial use real property used for seasonal residential recreational purposes
and classified as class 1c or 4c, and on other commercial use real property classified as
class 3a, provided that over 60 percent of the gross income earned by the enterprise on the
class 3a property is earned during the months of May, June, July, and August. In order for
the first half of the tax due on class 3a property to be paid after May 15 and before June 1,
or 21 days after the postmark date on the envelope containing the property tax statement,
whichever is later, without penalty, the owner of the property must attach an affidavit to the
payment attesting to compliance with the income provision of this subdivision. Thereafter,
for both homestead and nonhomestead property, on the first day of each month beginning
July 1, up to and including October 1 following, an additional penalty of one percent for
each month accrues and is charged on all such unpaid taxes provided that if the due date
was extended beyond May 15 as the result of any delay in mailing property tax statements
no additional penalty shall accrue if the tax is paid by the extended due date. If the tax is
not paid by the extended due date, then all penalties that would have accrued if the due
date had been May 15 shall be charged. When the taxes against any tract or lot exceed
deleted text begin $50 deleted text end new text begin $250 new text end, one-half thereof may be paid prior to May 16 or 21 days after the postmark
date on the envelope containing the property tax statement, whichever is later; and, if so
paid, no penalty attaches; the remaining one-half may be paid at any time prior to October
16 following, without penalty; but, if not so paid, then a penalty of two percent accrues
thereon for homestead property and a penalty of four percent on nonhomestead property.
Thereafter, for homestead property, on the first day of November an additional penalty of
four percent accrues and on the first day of December following, an additional penalty of
two percent accrues and is charged on all such unpaid taxes. Thereafter, for nonhomestead
property, on the first day of November and December following, an additional penalty of
four percent for each month accrues and is charged on all such unpaid taxes. If one-half of
such taxes are not paid prior to May 16 or 21 days after the postmark date on the envelope
containing the property tax statement, whichever is later, the same may be paid at any time
prior to October 16, with accrued penalties to the date of payment added, and thereupon
no penalty attaches to the remaining one-half until October 16 following.

This section applies to payment of personal property taxes assessed against
improvements to leased property, except as provided by section 277.01, subdivision 3.

A county may provide by resolution that in the case of a property owner that has
multiple tracts or parcels with aggregate taxes exceeding deleted text begin$50 deleted text end new text begin $250 new text end, payments may be
made in installments as provided in this subdivision.

The county treasurer may accept payments of more or less than the exact amount of
a tax installment due. Payments must be applied first to the oldest installment that is due
but which has not been fully paid. If the accepted payment is less than the amount due,
payments must be applied first to the penalty accrued for the year or the installment being
paid. Acceptance of partial payment of tax does not constitute a waiver of the minimum
payment required as a condition for filing an appeal under section 278.03 or any other law,
nor does it affect the order of payment of delinquent taxes under section 280.39.

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2008, section 279.10, is amended to read:

279.10 PUBLICATION CORRECTED.

Immediately after preparing forms for printing such notice and list, and at least five
days before the first day for the publication thereof, every deleted text beginsuch deleted text end publisher shall furnish
proof of the proposed publication to the county auditor for correction. When deleted text beginsuch deleted text end new text begin the new text end copy
has been corrected, the auditor shall return deleted text beginthe same deleted text end new text begin it new text end to the printer, who shall publish it
as corrected. On the first day on which deleted text beginsuch deleted text end new text begin the new text end notice and list are published, the publisher
shall mail a copy of the newspaper containing deleted text beginthe same deleted text end new text begin the notice and list new text end to the auditor. If
during the publication of the notice and list, or within ten days after the last publication
thereof, the auditor deleted text beginshall discover deleted text end new text begin discovers new text end that deleted text beginsuch deleted text end new text begin the new text end publication deleted text beginis invalid deleted text end new text begin contains an
error new text end, the auditor shall deleted text beginforthwith deleted text end direct the publisher to deleted text beginrepublish the same as corrected deleted text end new text begin
publish the correct information new text end for an additional period of two weeks. new text beginThe auditor does
not have to direct the publisher to republish the entire list. new text endThe publisher, if not neglectful,
deleted text begin shall be deleted text end new text begin is new text end entitled to deleted text beginthe same deleted text end compensation as allowed by law for deleted text beginthe original deleted text end publication new text begin
of the corrected information new text end, but shall receive no further compensation deleted text begintherefor deleted text end if deleted text beginsuch deleted text end new text begin the
new text end republication is necessary by reason of the neglect of the publisher.

new text begin EFFECTIVE DATE. new text end

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

Sec. 25.

Minnesota Statutes 2008, section 282.08, is amended to read:

282.08 APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.

The net proceeds from the sale or rental of any parcel of forfeited land, or from the
sale of products from the forfeited land, must be apportioned by the county auditor to the
taxing districts interested in the land, as follows:

(1) the portion required to pay any amounts included in the appraised value
under section 282.01, subdivision 3, as representing increased value due to any public
improvement made after forfeiture of the parcel to the state, but not exceeding the
amount certified by the appropriate governmental authority must be apportioned to the
governmental subdivision entitled to it;

(2) the portion required to pay any amount included in the appraised value under
section 282.019, subdivision 5, representing increased value due to response actions
taken after forfeiture of the parcel to the state, but not exceeding the amount of expenses
certified by the Pollution Control Agency or the commissioner of agriculture, must be
apportioned to the agency or the commissioner of agriculture and deposited in the fund
from which the expenses were paid;

(3) the portion of the remainder required to discharge any special assessment
chargeable against the parcel for drainage or other purpose whether due or deferred at the
time of forfeiture, must be apportioned to the governmental subdivision entitled to it; and

(4) any balance must be apportioned as follows:

(i) new text begin(A) Except as provided in subitem (B), new text endthe county board may annually by
resolution set aside no more than 30 percent of the receipts remaining to be used for forest
development on tax-forfeited land and dedicated memorial forests, to be expended under
the supervision of the county board. It must be expended only on projects improving the
health and management of the forest resource.

new text begin (B) For a county that received an aid payment in calendar year 2009 under section
477A.0124, subdivision 5, paragraph (b), the county board is authorized to use some of the
money set aside under subitem (A) to replace all or a portion of the amount of aid or credit
reimbursement that the county was to receive under sections 273.1384 and 477A.0124,
but did not receive due to aid cuts or unallotment from the state. Within six months of
the actual aid or credit reimbursement loss, the county board may adopt a resolution
transferring money from this fund to the county's general fund, not to exceed the amount of
aid or credit reimbursement loss to the county. This subitem expires December 31, 2010.
new text end

(ii) The county board may annually by resolution set aside no more than 20 percent
of the receipts remaining to be used for the acquisition and maintenance of county parks
or recreational areas as defined in sections 398.31 to 398.36, to be expended under the
supervision of the county board.

(iii) Any balance remaining must be apportioned as follows: county, 40 percent;
town or city, 20 percent; and school district, 40 percent, provided, however, that in
unorganized territory that portion which would have accrued to the township must be
administered by the county board of commissioners.

new text begin EFFECTIVE DATE. new text end

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

Sec. 26.

Minnesota Statutes 2008, section 290B.03, subdivision 1, is amended to read:

Subdivision 1.

Program qualifications.

The qualifications for the senior citizens'
property tax deferral program are as follows:

(1) the property must be owned and occupied as a homestead by a person 65 years
of age or older. In the case of a married couple, deleted text beginboth deleted text end new text begin at least one new text end of the spouses must
be at least 65 years old at the time the first property tax deferral is granted, regardless
of whether the property is titled in the name of one spouse or both spouses, or titled in
another way that permits the property to have homestead status new text begin, and the other spouse
must be at least 62 years of age new text end;

(2) the total household income of the qualifying homeowners, as defined in section
290A.03, subdivision 5, for the calendar year preceding the year of the initial application
may not exceed $60,000;

(3) the homestead must have been owned and occupied as the homestead of at
least one of the qualifying homeowners for at least 15 years prior to the year the initial
application is filed;

(4) there are no state or federal tax liens or judgment liens on the homesteaded
property;

(5) there are no mortgages or other liens on the property that secure future advances,
except for those subject to credit limits that result in compliance with clause (6); and

(6) the total unpaid balances of debts secured by mortgages and other liens on the
property, including unpaid and delinquent special assessments and interest and any
delinquent property taxes, penalties, and interest, but not including property taxes payable
during the year, does not exceed 75 percent of the assessor's estimated market value for
the year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2009, and thereafter.
new text end

Sec. 27.

Minnesota Statutes 2008, section 428A.101, is amended to read:

428A.101 DEADLINE FOR SPECIAL SERVICE DISTRICT UNDER
GENERAL LAW.

The establishment of a new special service district after June 30, deleted text begin2009 deleted text end new text begin 2013 new text end, requires
enactment of a special law authorizing the establishment.

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2008, section 428A.13, is amended by adding a
subdivision to read:

new text begin Subd. 1a. new text end

new text begin Prerequisites for establishing. new text end

new text begin Prior to establishment of a housing
improvement area, the governing body of the city must:
new text end

new text begin (1) provide full disclosure of public expenditures, as well as the terms of any loans,
bonds, or other financing arrangements for housing improvement area projects; and
new text end

new text begin (2) determine whether the association or the implementing entity will contract for
the housing improvements, and ensure that any contracts made by the implementing
entity are subject to section 471.345.
new text end

Sec. 29.

Minnesota Statutes 2008, section 428A.14, subdivision 1, is amended to read:

Subdivision 1.

Authority.

Fees may be imposed by the implementing entity on the
housing units within the housing improvement area at a rate, term, or amount sufficient
to produce revenue required to provide housing improvements in the area to reimburse
the implementing entity for advances made to pay for the housing improvements or to
pay principal of, interest on, and premiums, if any, on bonds issued by the implementing
entity under section 428A.16. The fee can be imposed on the basis of the tax capacity of
the housing unit, or the total amount of square footage of the housing unit, or a method
determined by the council and specified in the resolution. new text beginIf a fee is imposed on a basis
other than the tax capacity or square footage of the housing unit, the council must make
a finding that the alternative basis for the fee is more fair and reasonable. new text endBefore the
imposition of the fees, a hearing must be held and notice must be published in the official
newspaper at least seven days before the hearing and shall be mailed at least seven days
before the hearing to any housing unit owner subject to a fee. For purposes of this section,
the notice must also include:

(1) a statement that all interested persons will be given an opportunity to be heard at
the hearing regarding a proposed housing improvement fee;

(2) the estimated cost of improvements including administrative costs to be paid for
in whole or in part by the fee imposed under the ordinance;

(3) the amount to be charged against the particular property;

(4) the right of the property owner to prepay the entire fee;

(5) the number of years the fee will be in effect; and

(6) a statement that the petition requirements of section 428A.12 have either been
met or do not apply to the proposed fee.

Within six months of the public hearing, the implementing entity may adopt a
resolution imposing a fee within the area not exceeding the amount expressed in the
notice issued under this section.

Prior to adoption of the resolution approving the fee, the condominium associations
located in the housing improvement area shall submit to the implementing entity a
financial plan prepared by an independent third party, acceptable to the implementing
entity and associations, that provides for the associations to finance maintenance and
operation of the common elements in the condominium and a long-range plan to conduct
and finance capital improvements.

Sec. 30.

Minnesota Statutes 2008, section 428A.21, is amended to read:

428A.21 DEADLINE FOR HOUSING IMPROVEMENT DISTRICTS UNDER
GENERAL LAW.

The establishment of a new housing improvement area after June 30, deleted text begin2009 deleted text end new text begin 2013 new text end,
requires enactment of a special law authorizing the establishment of the area.

new text begin EFFECTIVE DATE. new text end

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

Sec. 31.

Minnesota Statutes 2008, section 429.011, subdivision 2a, is amended to read:

Subd. 2a.

Municipality; certain counties.

"Municipality" also includes new text begin the
following:
new text end

new text begin (1) new text end a county in the case of construction, reconstruction, or improvement of a county
state-aid highway deleted text beginor deleted text end new text begin;
new text end

new text begin (2) a county in the case of construction, reconstruction, or improvement of a new text end county
highway as defined in section 160.02 including curbs and gutters and storm sewers;

new text begin (3) new text enda county exercising its powers and duties under section 444.075, subdivision
1; deleted text beginand
deleted text end

new text begin (4) new text end a county for expenses not paid for under section 403.113, subdivision 3,
paragraph (b), clause (3) new text begin; and
new text end

new text begin (5) a county in the case of the abatement of nuisances.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 32.

Minnesota Statutes 2008, section 469.040, subdivision 2, is amended to read:

Subd. 2.

Leased property, exception.

Notwithstanding the provisions of
subdivision 1, any property other than property to be operated as a parking facility that
the authority leases to private individuals or corporations for development in connection
with a redevelopment project shall have the same tax status as if the leased property were
owned by the private individuals or corporations. new text begin This subdivision does not apply to
leases by the authority to individuals or families for residential use.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section applies to housing projects and housing
development projects constructed or acquired by an authority after July 1, 1987, for
property taxes payable in 2010 and thereafter.
new text end

Sec. 33.

Minnesota Statutes 2008, section 469.040, subdivision 4, is amended to read:

Subd. 4.

Facilities funded from multiple sources.

In the metropolitan area, as
defined in section 473.121, subdivision 2, the tax treatment provided in subdivision 3
applies to that portion of any multifamily rental housing facility represented by the ratio of
(1) the number of units in the facility that are deleted text beginsubject to the requirements of deleted text end new text begin constructed
with funds provided under new text end Section 5 of the United States Housing Act of 1937, new text begin and are
receiving operating subsidy under Section 9 or rental assistance under Section 8 of the
United States Housing Act of 1937 new text end as the result of the implementation of a federal court
order or consent decree to (2) the total number of units within the facility.

The housing and redevelopment authority for the city in which the facility is located,
any public entity exercising the powers of such housing and redevelopment authority, or
the county housing and redevelopment authority for the county in which the facility is
located, shall annually certify to the assessor responsible for assessing the facility, at the
time and in the manner required by the assessor, the number of units in the facility that
are deleted text beginsubject to the requirements of deleted text end new text begin constructed with funds provided under new text end Section 5 new text begin of the
United States Housing Act of 1937, and are receiving operating subsidy under Section 9
or rental assistance under Section 8 new text end of the United States Housing Act of 1937.

Nothing in this subdivision shall prevent that portion of the facility not subject to
this subdivision from meeting the requirements of section 273.128, and for that purpose
the total number of units in the facility must be taken into account.

Sec. 34.

Minnesota Statutes 2008, section 469.053, is amended by adding a subdivision
to read:

new text begin Subd. 4a. new text end

new text begin Seaway port authority levy. new text end

new text begin A levy made under this subdivision shall
replace the mandatory city levy under subdivision 4. A seaway port authority is a special
taxing district under section 275.066 and may levy a tax in any year for the benefit of the
seaway port authority. The tax must not exceed 0.01813 percent of taxable market value.
The county auditor shall distribute the proceeds of the property tax levy to the seaway
port authority.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for property taxes levied in 2009 and
thereafter, payable in 2010 and thereafter.
new text end

Sec. 35.

new text begin [469.1816] ABATEMENTS FOR BUSINESSES WITH DISRUPTED
ACCESS.
new text end

new text begin The governing body of a home rule charter or statutory city may abate the property
taxes it has imposed, in whole or in part, on the property of a business with an estimated
market value of $250,000 or less, if access to the property has been impeded for a period
of more than three consecutive months, resulting in loss of revenue to the business, due to
a public transportation project in the vicinity of the business. If an abatement is granted,
the property taxes shall be levied on the property and shall be due and payable to the
county at the times provided under section 279.01. The city granting the abatement will
pay the property owner or lessee the amount of abatement as determined by the city.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2010 through
2014.
new text end

Sec. 36.

Minnesota Statutes 2008, section 475.58, subdivision 1, is amended to read:

Subdivision 1.

Approval by electors; exceptions.

Obligations authorized by law or
charter may be issued by any municipality upon obtaining the approval of a majority of
the electors voting on the question of issuing the obligations, but an election shall not be
required to authorize obligations issued:

(1) to pay any unpaid judgment against the municipality;

(2) for refunding obligations;

(3) for an improvement or improvement program, which obligation is payable wholly
or partly from the proceeds of special assessments levied upon property specially benefited
by the improvement or by an improvement within the improvement program, or from tax
increments, as defined in section 469.174, subdivision 25, including obligations which are
the general obligations of the municipality, if the municipality is entitled to reimbursement
in whole or in part from the proceeds of such special assessments or tax increments and
not less than 20 percent of the cost of the improvement or the improvement program is to
be assessed against benefited property or is to be paid from the proceeds of federal grant
funds or a combination thereof, or is estimated to be received from tax increments;

(4) payable wholly from the income of revenue producing conveniences;

(5) under the provisions of a home rule charter which permits the issuance of
obligations of the municipality without election;

(6) under the provisions of a law which permits the issuance of obligations of a
municipality without an election;

(7) to fund pension or retirement fund deleted text beginor postemployment benefit deleted text end liabilities new text beginof a
municipality or postemployment benefit liabilities of a school district new text endpursuant to section
475.52, subdivision 6;

(8) under a capital improvement plan under section 373.40; deleted text beginand deleted text end

(9) under sections 469.1813 to 469.1815 (property tax abatement authority bonds), if
the proceeds of the bonds are not used for a purpose prohibited under section 469.176,
subdivision 4g, paragraph (b) new text begin;
new text end

new text begin (10) to fund postemployment benefit liabilities pursuant to section 475.52,
subdivision 6, of a municipality, other than a school district, if the liabilities are limited to:
new text end

new text begin (i) satisfying the requirements of section 471.61, subdivision 2b; and
new text end

new text begin (ii) other postemployment benefits, which the municipality no longer provides to
employees hired after a date before the obligations are issued; and
new text end

new text begin (11) under section 475.755 new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
except that the changes made to clause (7) are effective for obligations sold after August
1, 2009.
new text end

Sec. 37.

new text begin [475.755] EMERGENCY DEBT CERTIFICATES.
new text end

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

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

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

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

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

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

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

new text begin (i) taxes;
new text end

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

new text begin (iii) state reimbursement payments for property tax credits; and
new text end

new text begin (iv) any other source.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 38.

Minnesota Statutes 2008, section 477A.011, subdivision 36, is amended to
read:

Subd. 36.

City aid base.

(a) Except as otherwise provided in this subdivision,
"city aid base" is zero.

(b) The city aid base for any city with a population less than 500 is increased by
$40,000 for aids payable in calendar year 1995 and thereafter, and the maximum amount
of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $40,000 for aids payable in calendar year 1995 only, provided that:

(i) the average total tax capacity rate for taxes payable in 1995 exceeds 200 percent;

(ii) the city portion of the tax capacity rate exceeds 100 percent; and

(iii) its city aid base is less than $60 per capita.

(c) The city aid base for a city is increased by $20,000 in 1998 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $20,000 in calendar year 1998 only, provided that:

(i) the city has a population in 1994 of 2,500 or more;

(ii) the city is located in a county, outside of the metropolitan area, which contains a
city of the first class;

(iii) the city's net tax capacity used in calculating its 1996 aid under section
477A.013 is less than $400 per capita; and

(iv) at least four percent of the total net tax capacity, for taxes payable in 1996, of
property located in the city is classified as railroad property.

(d) The city aid base for a city is increased by $200,000 in 1999 and thereafter and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 1999 only, provided that:

(i) the city was incorporated as a statutory city after December 1, 1993;

(ii) its city aid base does not exceed $5,600; and

(iii) the city had a population in 1996 of 5,000 or more.

(e) The city aid base for a city is increased by $150,000 for aids payable in 2000 and
thereafter, and the maximum amount of total aid it may receive under section 477A.013,
subdivision 9, paragraph (c), is also increased by $150,000 in calendar year 2000 only,
provided that:

(1) the city has a population that is greater than 1,000 and less than 2,500;

(2) its commercial and industrial percentage for aids payable in 1999 is greater
than 45 percent; and

(3) the total market value of all commercial and industrial property in the city
for assessment year 1999 is at least 15 percent less than the total market value of all
commercial and industrial property in the city for assessment year 1998.

(f) The city aid base for a city is increased by $200,000 in 2000 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $200,000 in calendar year 2000 only, provided that:

(1) the city had a population in 1997 of 2,500 or more;

(2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $650 per capita;

(3) the pre-1940 housing percentage of the city used in calculating 1999 aid under
section 477A.013 is greater than 12 percent;

(4) the 1999 local government aid of the city under section 477A.013 is less than
20 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent; and

(5) the city aid base of the city used in calculating aid under section 477A.013
is less than $7 per capita.

(g) The city aid base for a city is increased by $102,000 in 2000 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $102,000 in calendar year 2000 only, provided that:

(1) the city has a population in 1997 of 2,000 or more;

(2) the net tax capacity of the city used in calculating its 1999 aid under section
477A.013 is less than $455 per capita;

(3) the net levy of the city used in calculating 1999 aid under section 477A.013 is
greater than $195 per capita; and

(4) the 1999 local government aid of the city under section 477A.013 is less than
38 percent of the amount that the formula aid of the city would have been if the need
increase percentage was 100 percent.

(h) The city aid base for a city is increased by $32,000 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $32,000 in calendar year 2001 only, provided that:

(1) the city has a population in 1998 that is greater than 200 but less than 500;

(2) the city's revenue need used in calculating aids payable in 2000 was greater
than $200 per capita;

(3) the city net tax capacity for the city used in calculating aids available in 2000
was equal to or less than $200 per capita;

(4) the city aid base of the city used in calculating aid under section 477A.013
is less than $65 per capita; and

(5) the city's formula aid for aids payable in 2000 was greater than zero.

(i) The city aid base for a city is increased by $7,200 in 2001 and thereafter, and
the maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $7,200 in calendar year 2001 only, provided that:

(1) the city had a population in 1998 that is greater than 200 but less than 500;

(2) the city's commercial industrial percentage used in calculating aids payable in
2000 was less than ten percent;

(3) more than 25 percent of the city's population was 60 years old or older according
to the 1990 census;

(4) the city aid base of the city used in calculating aid under section 477A.013
is less than $15 per capita; and

(5) the city's formula aid for aids payable in 2000 was greater than zero.

(j) The city aid base for a city is increased by $45,000 in 2001 and thereafter and
by an additional $50,000 in calendar years 2002 to 2011, and the maximum amount of
total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is also
increased by $45,000 in calendar year 2001 only, and by $50,000 in calendar year 2002
only, provided that:

(1) the net tax capacity of the city used in calculating its 2000 aid under section
477A.013 is less than $810 per capita;

(2) the population of the city declined more than two percent between 1988 and 1998;

(3) the net levy of the city used in calculating 2000 aid under section 477A.013 is
greater than $240 per capita; and

(4) the city received less than $36 per capita in aid under section 477A.013,
subdivision 9, for aids payable in 2000.

(k) The city aid base for a city with a population of 10,000 or more which is located
outside of the seven-county metropolitan area is increased in 2002 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (b) or (c), is also increased in calendar year 2002 only, by an amount equal to
the lesser of:

(1)(i) the total population of the city, as determined by the United States Bureau of
the Census, in the 2000 census, (ii) minus 5,000, (iii) times 60; or

(2) $2,500,000.

(l) The city aid base is increased by $50,000 in 2002 and thereafter, and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9,
paragraph (c), is also increased by $50,000 in calendar year 2002 only, provided that:

(1) the city is located in the seven-county metropolitan area;

(2) its population in 2000 is between 10,000 and 20,000; and

(3) its commercial industrial percentage, as calculated for city aid payable in 2001,
was greater than 25 percent.

(m) The city aid base for a city is increased by $150,000 in calendar years 2002 to
2011 and by an additional $75,000 in calendar years 2009 to 2014 and the maximum
amount of total aid it may receive under section 477A.013, subdivision 9, paragraph (c), is
also increased by $150,000 in calendar year 2002 only and by $75,000 in calendar year
2009 only, provided that:

(1) the city had a population of at least 3,000 but no more than 4,000 in 1999;

(2) its home county is located within the seven-county metropolitan area;

(3) its pre-1940 housing percentage is less than 15 percent; and

(4) its city net tax capacity per capita for taxes payable in 2000 is less than $900
per capita.

(n) The city aid base for a city is increased by $200,000 beginning in calendar
year 2003 and the maximum amount of total aid it may receive under section 477A.013,
subdivision 9, paragraph (c), is also increased by $200,000 in calendar year 2003 only,
provided that the city qualified for an increase in homestead and agricultural credit aid
under Laws 1995, chapter 264, article 8, section 18.

(o) The city aid base for a city is increased by $200,000 in 2004 only and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
also increased by $200,000 in calendar year 2004 only, if the city is the site of a nuclear
dry cask storage facility.

(p) The city aid base for a city is increased by $10,000 in 2004 and thereafter and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $10,000 in calendar year 2004 only, if the city was included in a federal major disaster
designation issued on April 1, 1998, and its pre-1940 housing stock was decreased by
more than 40 percent between 1990 and 2000.

(q) The city aid base for a city is increased by $30,000 in 2009 and thereafter and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $25,000 in calendar year 2006 only if the city had a population in 2003 of at least 1,000
and has a state park for which the city provides rescue services and which comprised at
least 14 percent of the total geographic area included within the city boundaries in 2000.

(r) The city aid base for a city is increased by $80,000 in 2009 and thereafter and
the minimum and maximum amount of total aid it may receive under section 477A.013,
subdivision 9, is also increased by $80,000 in calendar year 2009 only, if:

(1) as of May 1, 2006, at least 25 percent of the tax capacity of the city is proposed
to be placed in trust status as tax-exempt Indian land;

(2) the placement of the land is being challenged administratively or in court; and

(3) due to the challenge, the land proposed to be placed in trust is still on the tax
rolls as of May 1, 2006.

(s) The city aid base for a city is increased by $100,000 in 2007 and thereafter and
the minimum and maximum total amount of aid it may receive under this section is also
increased in calendar year 2007 only, provided that:

(1) the city has a 2004 estimated population greater than 200 but less than 2,000;

(2) its city net tax capacity for aids payable in 2006 was less than $300 per capita;

(3) the ratio of its pay 2005 tax levy compared to its city net tax capacity for aids
payable in 2006 was greater than 110 percent; and

(4) it is located in a county where at least 15,000 acres of land are classified as
tax-exempt Indian reservations according to the 2004 abstract of tax-exempt property.

(t) The city aid base for a city is increased by $30,000 in 2009 only, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $30,000 in calendar year 2009, only if the city had a population in 2005 of less than
3,000 and the city's boundaries as of 2007 were formed by the consolidation of two cities
and one township in 2002.

(u) The city aid base for a city is increased by $100,000 in 2009 and thereafter, and
the maximum total aid it may receive under section 477A.013, subdivision 9, is also
increased by $100,000 in calendar year 2009 only, if the city had a city net tax capacity for
aids payable in 2007 of less than $150 per capita and the city experienced flooding on
March 14, 2007, that resulted in evacuation of at least 40 homes.

(v) The city aid base for a city is increased by $100,000 in 2009 to 2013, and the
maximum total aid it may receive under section 477A.013, subdivision 9, is also increased
by $100,000 in calendar year 2009 only, if the city:

(1) is located outside of the Minneapolis-St. Paul standard metropolitan statistical
area;

(2) has a 2005 population greater than 7,000 but less than 8,000; and

(3) has a 2005 net tax capacity per capita of less than $500.

(w) The city aid base is increased by $25,000 in calendar years 2009 to 2013 and the
maximum amount of total aid it may receive under section 477A.013, subdivision 9, is
increased by $25,000 in calendar year 2009 only, provided that:

(1) the city is located in the seven-county metropolitan area;

(2) its population in 2006 is less than 200; and

(3) the percentage of its housing stock built before 1940, according to the 2000
United States Census, is greater than 40 percent.

(x) The city aid base is increased by $90,000 in calendar year 2009 only and the
minimum and maximum total amount of aid it may receive under section 477A.013,
subdivision 9, is also increased by $90,000 in calendar year 2009 only, provided that the
city is located in the seven-county metropolitan area, has a 2006 population between 5,000
and 7,000 and has a 1997 population of over 7,000.

new text begin (y) In calendar year 2010 only, the city aid base for a city is increased by $225,000 if
it was eligible for a $450,000 payment in calendar year 2008 under Minnesota Statutes
2006, section 477A.011, subdivision 36, paragraph (e), and the second half of the payment
under that paragraph in December 2008 was canceled due to the governor's unallotment.
The payment under this paragraph is not subject to any aid reductions under section
477A.0133 or any future unallotment of the city aid under section 16A.152.
new text end

new text begin (z) The city aid base and the maximum total aid the city may receive under section
477A.013, subdivision 9, is increased by $25,000 in calendar year 2010 only if:
new text end

new text begin (1) the city is a first class city in the seven-county metropolitan area with a
population below 300,000; and
new text end

new text begin (2) the city has made an equivalent grant to its local growers' association to
reimburse up to $1,000 each for membership fees and retail leases for members of the
association who farm in and around Dakota County and who incurred crop damage as a
result of the hail storm in that area on July 10, 2008.
new text end

new text begin The payment under this paragraph is not subject to any aid reductions under section
477A.0133 or any future unallotment of the city aid under section 16A.152.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in calendar year
2010 and thereafter.
new text end

Sec. 39.

Laws 1976, chapter 162, section 3, as amended by Laws 1991, chapter 167,
section 3, is amended to read:

Sec. 3. COOPERATION.

The Red River watershed management board may cooperate with water management
and flood control authorities in Minnesota, North Dakota, South Dakota, and the province
of Manitoba and may enter into contracts, compacts and agreements which may be
necessary to insure integration of its projects, to control the effects of flooding or to assure
the beneficial use of water in the Red River basin. new text begin The Red River Watershed Management
Board may conduct its meetings at a public facility within the Red River basin, or within
the jurisdiction of an authority with which the Red River Watershed Management Board is
authorized to cooperate.
new text end

Sec. 40.

Laws 2001, First Special Session chapter 5, article 3, section 8, the effective
date, as amended by Laws 2005, chapter 151, article 3, section 19, and Laws 2006, chapter
259, article 4, section 20, is amended to read:

EFFECTIVE DATE. This section is effective for taxes levied in 2002, payable in
2003 deleted text begin, through taxes levied in 2011, payable in 2012 deleted text end new text begin and thereafter new text end.

Sec. 41.

Laws 2008, chapter 366, article 6, section 9, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter new text begin on land platted after May 18, 2008 new text end.

Sec. 42.

Laws 2008, chapter 366, article 6, section 10, the effective date, is amended to
read:

EFFECTIVE DATE.

This section is effective for taxes payable in 2010 and
thereafter new text begin on land platted after May 18, 2008 new text end.

Sec. 43.

Laws 2009, chapter 12, article 2, section 5, subdivision 2, is amended to read:

Subd. 2.

Requirements.

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

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

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

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

(4) there are no delinquent property taxes on the land.

Real estate may not be enrolled for valuation and deferment under this section
and Minnesota Statutes, sections 273.111, 273.112, or 273.117, or Minnesota Statutes,
chapter 290C, concurrently.

deleted text begin No more than 50 percent of the total acreage of an agricultural homestead may be
deleted text end deleted text begin class 2b property enrolled in this program.
deleted text end

Sec. 44. new text beginCOUNTY AID PAYMENT.
new text end

new text begin The county program aid payable to Beltrami County under Minnesota Statutes,
section 477A.0124, must be increased in calendar year 2009 only by $500,000, to be
distributed by the county to the governing body of the Red Lake Band of Chippewa
Indians. The money must be used by the band for the cost of implementing the Fostering
Connections to Success and Increasing Adoptions Act of 2008, Public Law 110-351.
$500,000 is appropriated from the general fund to the commissioner of revenue for the
purpose of this section, and this amount is not subject to unallotment under Minnesota
Statutes, section 16A.152.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aids payable in 2009.
new text end

Sec. 45. new text beginMINNEAPOLIS CONVENTION CENTER; LEASE; PROPERTY TAX
EXEMPTION.
new text end

new text begin Notwithstanding Minnesota Statutes, section 272.01, subdivision 2, or 273.19, real
or personal property subject to a lease or use agreement between the city of Minneapolis
and a private entity for purposes of providing food and beverage services within the
Minneapolis Convention Center is exempt from property taxation.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2009 and
thereafter, for taxes payable in 2010 and thereafter.
new text end

Sec. 46. new text beginCLOQUET AREA FIRE AND AMBULANCE SPECIAL TAXING
DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Agreement. new text end

new text begin The city of Cloquet and Perch Lake Township, by
resolution of each of their governing bodies, may establish the Cloquet Area Fire and
Ambulance Taxing District for the purpose of providing fire and ambulance services
throughout the district. In this section, "municipality" means home rule charter and
statutory cities, towns, and Indian tribes. The district may exercise all the powers relating
to fire and ambulance services of the municipalities that receive fire and ambulance
services from the district. Any other municipality that is contiguous to a municipality that
is a member of the district may join the district with the agreement of the municipalities
that comprise the district at the time of its application to join.
new text end

new text begin Subd. 2. new text end

new text begin Board. new text end

new text begin The Cloquet Area Fire and Ambulance Taxing District Board is
governed by a board made up initially of one or more elected officials of the governing
body of each participating municipality in the proportions set out in the establishing
resolution, subject to change as provided in the district's charter, if any, or in the district's
bylaws. Each municipality's representatives serve at the pleasure of that municipality's
governing body.
new text end

new text begin Subd. 3. new text end

new text begin Tax. new text end

new text begin The district board may impose a property tax on taxable property
in the district. This tax shall be imposed at a rate that does not exceed 0.2835 percent of
taxable market value for taxes payable in 2010. The board shall annually determine the
separate amounts of the levy that are attributable to the cost of providing fire services and
the cost of providing ambulance services. Costs for the provision of ambulance services
shall be levied against taxable property within the area of the district that receive the
services. Costs for the provision of fire services shall be levied against taxable property
within the area of the district that receive the services.
new text end

new text begin When an additional municipality becomes a member of the district, the additional
cost of providing ambulance and fire services to that municipality will be determined by
the board and added to the maximum levy amount.
new text end

new text begin Each county auditor of a county that contains a municipality subject to the tax under
this section must collect the tax and pay it to the Fire and Ambulance Special Taxing
District. The district may also impose other fees or charges as allowed by law for the
provision of fire and ambulance services.
new text end

new text begin Subd. 4. new text end

new text begin Public indebtedness. new text end

new text begin The district may incur debt in the manner provided
for a municipality by Minnesota Statutes, chapter 475, when necessary to accomplish
its duties.
new text end

new text begin Subd. 5. new text end

new text begin Withdrawal. new text end

new text begin Notice of intent to withdraw from participation in the district
may be given only in the month of January, with a minimum of twelve months notice of
intent to withdraw. Withdrawal becomes effective for taxes levied in the year when the
notice is given. The district and its members may develop and agree upon continuing
obligations after withdrawal of a municipality.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective in Cloquet and Perch Lake Township
the day after compliance with Minnesota Statutes, section 645.021, subdivision 3, by the
governing body of each.
new text end

Sec. 47. new text beginPROPERTY TAX TREATMENT OF HORSE BREEDING AND HORSE
BOARDING PROPERTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Study. new text end

new text begin In order to provide for the uniform assessment and
classification for property tax purposes of real property used for horse breeding and
horse boarding activities, the commissioner of revenue, in consultation with the
commissioner of agriculture, shall study the treatment of such properties under current
law. The commissioner must report by February 1, 2010, to the chairs and ranking
minority members of the taxes committees of the senate and the house of representatives,
summarizing the current treatment and making recommendations for needed or useful
law changes.
new text end

new text begin Subd. 2. new text end

new text begin Appeals to the commissioner. new text end

new text begin A person who has a right, title, interest, or
lien in or upon property that had been classified as agricultural for property tax purposes
for taxes payable in 2009 based on the use of the land for breeding or boarding horses,
may appeal the classification of the land for taxes payable in 2010 to the commissioner
of revenue if the use of the land has not substantially changed. The appeal must be in
written form, and must be received by the commissioner before September 1, 2009. The
commissioner must resolve the appeal by issuance of a written order accompanied by a
statement of the commissioner's reasons for the order, on or before December 31, 2009.
When the commissioner issues an order, a copy must be sent to both the appellant and the
county assessor. The order is appealable in tax court only by the owner or taxpayer, and
only within 60 days of issuance.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 48. new text beginPROPOSAL FOR REFORM OF LOCAL GOVERNMENT FUNDING
OF HUMAN SERVICES.
new text end

new text begin (a) The commissioner of human services, in consultation with county representatives
designated by the Association of Minnesota Counties, the Minnesota Inter-County
Association, and the Minnesota Association of County Social Service Administrators;
representatives from organizations that represent people who receive these services; and
the commissioner of the department of revenue shall develop a proposal for establishing
and transitioning from current maintenance of effort and matching fund requirements to a
new consolidated local county property tax contribution across all mandated health and
human services and report it to the governor and the chairs and ranking minority members
of the house or representative and senate committees with jurisdiction over the policy
areas of property taxes and health and human services funding by February 1, 2010.
The report shall be made electronically, with paper copies available upon request. The
following criteria shall be considered in designing the new system:
new text end

new text begin (1) providing a funding mechanism that is relatively simple to predict and administer
at both the state and local levels;
new text end

new text begin (2) providing application across programs;
new text end

new text begin (3) maintaining current services, adjusted for fluctuations in demand for services;
new text end

new text begin (4) clarifying property tax impacts of funding decisions;
new text end

new text begin (5) ensuring that all eligible citizens have equal access to mandated services; and
new text end

new text begin (6) enabling the service system to maximally focus county staff time on service
delivery.
new text end

new text begin (b) Efforts to control state and county costs and service utilization rates shall focus
on eligibility, level of difficulty, and other programmatic priorities.
new text end

new text begin (c) The new system must be designed and implemented in a way that:
new text end

new text begin (1) ensures that counties have the resources available to continue to serve clients
at the current level;
new text end

new text begin (2) ensure the ability to earn federal match funds;
new text end

new text begin (3) provide for as much stability as possible in overall property tax demands after
full implementation;
new text end

new text begin (4) provide that increased county contributions shall be in a form that clearly
indicates the impact on local property taxes at both the state and county level; and
new text end

new text begin (5) provide for mechanisms that mitigate property tax increases in a county in any
given year.
new text end

new text begin (d) Any group formed as a result of this section expires February 15, 2010.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 49. new text beginTAX ABATEMENT; NEWLY CONSTRUCTED RESIDENTIAL
STRUCTURES IN FLOOD-DAMAGED CITIES.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin A residential structure qualifies for a tax abatement
under this section if:
new text end

new text begin (1) the structure is located in a city that is eligible to designate a development zone
under Minnesota Statutes, section 469.1731;
new text end

new text begin (2) the structure is located in a county designated as an emergency area under
presidential declaration FEMA-3304-EM;
new text end

new text begin (3) the structure is located on property classified as class 1a, 1b, 2a, 4a, 4b, 4bb, or
4d under Minnesota Statutes, section 273.13;
new text end

new text begin (4) no part of the structure was in existence prior to January 1, 2009, unless (i) the
structure is located on property classified as 1a, 1b, 2a, 4b, or 4bb; (ii) a building permit
was issued and construction commenced in 2008; and (iii) as of March 26, 2009, the
property was owned by the original builder, was not subject to any form of purchase
contract or agreement, and had never been occupied; and
new text end

new text begin (5) construction of the structure is commenced prior to December 31, 2010. For the
purposes of this clause, construction is deemed to have been commenced if a proper
building permit has been issued and the mandatory footing or foundation inspection has
been completed.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin Application for the abatement authorized under this section
must be filed by January 2 of the year following the year in which construction began,
except that those qualifying structures for which construction commenced in 2008 must
file an application no later than January 2, 2010, for assessment years 2010 and 2011. The
application must be filed with the assessor of the county or city in which the property is
located on a form prescribed by the commissioner of revenue.
new text end

new text begin Subd. 3. new text end

new text begin Tax abated. new text end

new text begin (a) For a property qualifying under subdivision 1 and
classified as either 1a, 1b, 2a, 4b, or 4bb, the tax attributable to (1) $200,000 of market
value, or (2) the entire market value of the structure, whichever is less, shall be abated.
For a property qualifying under subdivision 1 and classified as class 4a or 4d, the tax
attributable to (1) $20,000 of market value per residential unit, or (2) the entire market
value of the structure, whichever is less, shall be abated.
new text end

new text begin (b) The abatement under paragraph (a) shall be in effect for two taxes payable years,
corresponding to the two assessment years after construction has begun. The abatement
shall not apply to any special assessments that have been levied against the property.
new text end

new text begin Subd. 4. new text end

new text begin Reimbursement. new text end

new text begin By May 1 of each taxes payable year in which an
abatement has been authorized under this section, the auditor shall report the amount of
taxes abated for each jurisdiction within the county to the commissioner of revenue, on a
form prescribed by the commissioner. On or before September 1 of each taxes payable
year in which an abatement has been authorized under this section, the commissioner of
revenue shall reimburse each local jurisdiction for the amount of taxes abated for the
year under this section.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin The amount necessary to make the reimbursements
required under this section is annually appropriated to the commissioner of revenue from
the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment years 2010 to 2012,
for taxes payable in 2011 to 2013.
new text end

Sec. 50. new text beginREPORT BY ADMINISTRATIVE AUDITOR.
new text end

new text begin The administrative auditor selected pursuant to Minnesota Statutes, section
473F.03, with the cooperation of the county auditors in the area defined by Minnesota
Statutes, section 473F.02, subdivision 2, shall study the feasibility of basing fiscal
disparities calculations on current year tax rates rather than previous year tax rates,
and report the results of the study to the chairs and ranking minority members of the
house of representatives and senate tax committees by February 1, 2011. The study shall
specifically address any complications that arise from the inclusion of the referendum
market value levy in the fiscal disparities calculations. The report should include any
recommendations for amendments to Minnesota Statutes, chapter 473F, that would be
necessary to implement the change.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 51. new text beginSTUDY OF RIPARIAN BUFFER AREAS.
new text end

new text begin The drainage working group, facilitated by the Board of Water and Soil Resources,
must study the condition of riparian buffer areas across the state, and report on the extent
to which the buffer areas are being maintained in a natural state, and the extent to which
the buffer areas are being used in a way that risks environmental damage to public waters.
The working group must make a report to the chairs and ranking minority members of the
house of representatives and senate tax committees by March 1, 2010, on the condition of
buffer areas, along with recommendations, if deemed necessary, for policy options such
as tax incentives and any other types of incentives that might be necessary to promote
the preservation of buffer areas.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 52. new text beginSTUDY OF POLLUTION CONTROL EXEMPTION.
new text end

new text begin The commissioner of revenue, in consultation with the commissioner of the
Pollution Control Agency, must study the process used to determine the eligibility of
personal property located at an electric generating facility for the property tax exemption
provided under Minnesota Statutes, section 272.02, subdivision 10. The study must
include a review of the process used, and must compile information on the location, value,
and tax impact of the exemptions provided to date, as well as an assessment of the efficacy
of the equipment in reducing pollution. The results of the study must be presented to the
chairs and ranking minority members of the committees on taxes of the senate and the
house of representatives by January 15, 2010.
new text end

Sec. 53. new text beginPURPOSE; COMMISSIONER OF REVENUE GUIDANCE.
new text end

new text begin The purpose of section 4 is not to contract or expand the definition of "institutions
of purely public charity" but to provide clear standards that can be applied uniformly to
determine eligibility for exemption from property taxation. To carry out this purpose and
to promote uniformity in application of the provisions of section 4, the commissioner of
revenue shall prepare a bulletin providing guidance to assessors as to the commissioner's
interpretation of section 4. The bulletin may include a discussion of court decisions that
provide background to and context for the provisions in section 4, as the commissioner
deems appropriate. This guidance must include examples of facts or circumstances that
satisfy the requirement of "a reasonable justification for failing to meet the factors in clause
(2), (3), or (5)" under section 4, paragraph (a). Assessors shall give due consideration to
the bulletin in assessing property requesting an exemption as an institution of purely public
charity. The commissioner shall distribute the bulletin to all assessors by July 1, 2010.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 54. new text begin REPEALER.
new text end

new text begin Laws 1993, chapter 375, article 5, section 42, as amended by Laws 2002, chapter
377, article 10, section 30, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 3

TRUTH IN TAXATION

Section 1.

Minnesota Statutes 2008, section 123B.10, subdivision 1, is amended to read:

Subdivision 1.

Budgets; form of notification.

(a) Every board must publish revenue
and expenditure budgets for the current year and the actual revenues, expenditures, fund
balances for the prior year and projected fund balances for the current year in a form
prescribed by the commissioner within one week of the acceptance of the final audit by
the board, or November 30, whichever is earlier. The forms prescribed must be designed
so that year to year comparisons of revenue, expenditures and fund balances can be made.

(b) A school board annually must notify the public of its revenue, expenditures, fund
balances, and other relevant budget information. The board must deleted text begininclude the budget
information required by this section in the materials provided as a part of its truth in
taxation hearing, deleted text end post the materials in a conspicuous place on the district's official Web
site, including a link to the district's school report card on the Department of Education's
Web site, and publish the information in a qualified newspaper of general circulation
in the district.

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 275.065, subdivision 1, is amended to read:

Subdivision 1.

Proposed levy.

(a) Notwithstanding any law or charter to the
contrary, on or before September 15, each taxing authority, other than a school district,
shall adopt a proposed budget and shall certify to the county auditor the proposed or, in
the case of a town, the final property tax levy for taxes payable in the following year.

(b) On or before September 30, each school district that has not mutually agreed
with its home county to extend this date shall certify to the county auditor the proposed
property tax levy for taxes payable in the following year. Each school district that has
agreed with its home county to delay the certification of its proposed property tax levy
must certify its proposed property tax levy for the following year no later than October
7. The school district shall certify the proposed levy as:

(1) a specific dollar amount by school district fund, broken down between
voter-approved and non-voter-approved levies and between referendum market value
and tax capacity levies; or

(2) the maximum levy limitation certified by the commissioner of education
according to section 126C.48, subdivision 1.

(c) If the board of estimate and taxation or any similar board that establishes
maximum tax levies for taxing jurisdictions within a first class city certifies the maximum
property tax levies for funds under its jurisdiction by charter to the county auditor by
September 15, the city shall be deemed to have certified its levies for those taxing
jurisdictions.

(d) For purposes of this section, "taxing authority" includes all home rule and
statutory cities, towns, counties, school districts, and special taxing districts as defined
in section 275.066. Intermediate school districts that levy a tax under chapter 124 or
136D, joint powers boards established under sections 123A.44 to 123A.446, and Common
School Districts No. 323, Franconia, and No. 815, Prinsburg, are also special taxing
districts for purposes of this section.

new text begin (e) At the meeting at which the taxing authority, other than a town, adopts its
proposed tax levy under paragraph (a) or (b), the taxing authority shall announce the time
and place of its subsequent regularly scheduled meetings at which the budget and levy will
be discussed and at which the public will be allowed to speak. The time and place of those
meetings must be included in the proceedings or summary of proceedings published in the
official newspaper of the taxing authority under sections 123B.09, 375.12, or 412.191.
new text end

Sec. 3.

Minnesota Statutes 2008, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

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

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

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

(d) The notice must state for each parcel:

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

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

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

(ii) the proposed tax amount.

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

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

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

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

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

(1) special assessments;

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

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

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

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

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

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

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

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

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

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

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

(i) For purposes of this subdivision, subdivisions 5a and 6, "metropolitan special
taxing districts" means the following taxing districts in the seven-county metropolitan area
that levy a property tax for any of the specified purposes listed below:

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

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

(3) Metropolitan Mosquito Control Commission under section 473.711.

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

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

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

(2) population growth and decline;

(3) state or federal government action; and

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2008, section 275.065, subdivision 6, is amended to read:

Subd. 6.

deleted text beginPublic hearing; deleted text end Adoption of budget and levy.

deleted text begin (a) For purposes of this
section, the following terms shall have the meanings given:
deleted text end

deleted text begin (1) "Initial hearing" means the first and primary hearing held to discuss the taxing
authority's proposed budget and proposed property tax levy for taxes payable in the
following year, or, for school districts, the current budget and the proposed property tax
levy for taxes payable in the following year.
deleted text end

deleted text begin (2) "Continuation hearing" means a hearing held to complete the initial hearing, if
the initial hearing is not completed on its scheduled date.
deleted text end

deleted text begin (3) "Subsequent hearing" means the hearing held to adopt the taxing authority's final
property tax levy, and, in the case of taxing authorities other than school districts, the final
budget, for taxes payable in the following year.
deleted text end

deleted text begin (b) Between November 29 and December 20, the governing bodies of a city that has a
population over 500, county, metropolitan special taxing districts as defined in subdivision
3, paragraph (i), and regional library districts shall each hold an initial public hearing
to discuss and seek public comment on its final budget and property tax levy for taxes
payable in the following year, and the governing body of the school district shall hold an
initial public hearing to review its current budget and proposed property tax levy for taxes
payable in the following year. The metropolitan special taxing districts shall be required to
hold only a single joint initial public hearing, the location of which will be determined by
the affected metropolitan agencies. A city, county, metropolitan special taxing district as
defined in subdivision 3, paragraph (i), regional library district established under section
134.201, or school district is not required to hold a public hearing under this subdivision
unless its proposed property tax levy for taxes payable in the following year, as certified
under subdivision 1, has increased over its final property tax levy for taxes payable in the
current year by a percentage that is greater than the percentage increase in the implicit
price deflator for government consumption expenditures and gross investment for state
and local governments prepared by the Bureau of Economic Analysts of the United States
Department of Commerce for the 12-month period ending March 31 of the current year.
deleted text end

deleted text begin (c) The initial hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No initial hearing may be held on a Sunday.
deleted text end

deleted text begin (d) At the initial hearing under this subdivision, the percentage increase in property
taxes proposed by the taxing authority, if any, and the specific purposes for which property
tax revenues are being increased must be discussed. During the discussion, the governing
body shall hear comments regarding a proposed increase and explain the reasons for the
proposed increase. The public shall be allowed to speak and to ask questions. At the public
hearing, the school district must also provide and discuss information on the distribution
of its revenues by revenue source, and the distribution of its spending by program area.
deleted text end

deleted text begin (e) If the initial hearing is not completed on its scheduled date, the taxing authority
must announce, prior to adjournment of the hearing, the date, time, and place for the
continuation of the hearing. The continuation hearing must be held at least five business
days but no more than 14 business days after the initial hearing. A continuation hearing
may not be held later than December 20 except as provided in paragraphs (f) and (g).
A continuation hearing must be held after 5:00 p.m. if scheduled on a day other than
Saturday. No continuation hearing may be held on a Sunday.
deleted text end

deleted text begin (f) The governing body of a county shall hold its initial hearing on the first Thursday
in December each year, and may hold additional initial hearings on other dates before
December 20 if necessary for the convenience of county residents. If the county needs a
continuation of its hearing, the continuation hearing shall be held on the third Tuesday
in December. If the third Tuesday in December falls on December 21, the county's
continuation hearing shall be held on Monday, December 20.
deleted text end

deleted text begin (g) The metropolitan special taxing districts shall hold a joint initial public hearing
on the first Wednesday of December. A continuation hearing, if necessary, shall be held on
the second Wednesday of December even if that second Wednesday is after December 10.
deleted text end

deleted text begin (h) The county auditor shall provide for the coordination of initial and continuation
hearing dates for all school districts and cities within the county to prevent conflicts under
clauses (i) and (j).
deleted text end

deleted text begin (i) By August 10, each school board and the board of the regional library district
shall certify to the county auditors of the counties in which the school district or regional
library district is located the dates on which it elects to hold its initial hearing and any
continuation hearing. If a school board or regional library district does not certify these
dates by August 10, the auditor will assign the initial and continuation hearing dates. The
dates elected or assigned must not conflict with the initial and continuation hearing dates
of the county or the metropolitan special taxing districts.
deleted text end

deleted text begin (j) By August 20, the county auditor shall notify the clerks of the cities within the
county of the dates on which school districts and regional library districts have elected to
hold their initial and continuation hearings. At the time a city certifies its proposed levy
under subdivision 1 it shall certify the dates on which it elects to hold its initial hearing and
any continuation hearing. Until September 15, the first and second Mondays of December
are reserved for the use of the cities. If a city does not certify its hearing dates by
September 15, the auditor shall assign the initial and continuation hearing dates. The dates
elected or assigned for the initial hearing must not conflict with the initial hearing dates
of the county, metropolitan special taxing districts, regional library districts, or school
districts within which the city is located. To the extent possible, the dates of the city's
continuation hearing should not conflict with the continuation hearing dates of the county,
metropolitan special taxing districts, regional library districts, or school districts within
which the city is located. This paragraph does not apply to cities of 500 population or less.
deleted text end

deleted text begin (k) The county initial hearing date and the city, metropolitan special taxing district,
regional library district, and school district initial hearing dates must be designated on
the notices required under subdivision 3. The continuation hearing dates need not be
stated on the notices.
deleted text end

deleted text begin (l) At a subsequent hearing, each county, school district, city over 500 population,
and metropolitan special taxing district may amend its proposed property tax levy
and must adopt a final property tax levy. Each county, city over 500 population, and
metropolitan special taxing district may also amend its proposed budget and must adopt a
final budget at the subsequent hearing. The final property tax levy must be adopted prior
to adopting the final budget. A school district is not required to adopt its final budget at the
subsequent hearing. The subsequent hearing of a taxing authority must be held on a date
subsequent to the date of the taxing authority's initial public hearing. If a continuation
hearing is held, the subsequent hearing must be held either immediately following the
continuation hearing or on a date subsequent to the continuation hearing. The subsequent
hearing may be held at a regularly scheduled board or council meeting or at a special
meeting scheduled for the purposes of the subsequent hearing. The subsequent hearing
of a taxing authority does not have to be coordinated by the county auditor to prevent a
conflict with an initial hearing, a continuation hearing, or a subsequent hearing of any
other taxing authority. All subsequent hearings must be held prior to five working days
after December 20 of the levy year. The date, time, and place of the subsequent hearing
must be announced at the initial public hearing or at the continuation hearing.
deleted text end

deleted text begin (m) deleted text end new text begin (a) new text end The property tax levy certified under section 275.07 by a city of any
population, county, metropolitan special taxing district, regional library district, or school
district must not exceed the proposed levy determined under subdivision 1, except by an
amount up to the sum of the following amounts:

(1) the amount of a school district levy whose voters approved a referendum to
increase taxes under section 123B.63, subdivision 3, or 126C.17, subdivision 9, after
the proposed levy was certified;

(2) the amount of a city or county levy approved by the voters after the proposed
levy was certified;

(3) the amount of a levy to pay principal and interest on bonds approved by the
voters under section 475.58 after the proposed levy was certified;

(4) the amount of a levy to pay costs due to a natural disaster occurring after the
proposed levy was certified, if that amount is approved by the commissioner of revenue
under subdivision 6a;

(5) the amount of a levy to pay tort judgments against a taxing authority that become
final after the proposed levy was certified, if the amount is approved by the commissioner
of revenue under subdivision 6a;

(6) the amount of an increase in levy limits certified to the taxing authority by the
commissioner of education or the commissioner of revenue after the proposed levy was
certified; deleted text beginand
deleted text end

(7) the amount required under section 126C.55 deleted text begin. deleted text end new text begin;
new text end

new text begin (8) the levy to pay emergency debt certificates under section 475.755 authorized and
issued after the proposed levy was certified; and
new text end

new text begin (9) the amount of unallotment under section 16A.152 that was recertified under
section 275.07, subdivision 6.
new text end

deleted text begin (n) deleted text end new text begin (b) new text end This subdivision does not apply to towns and special taxing districts other
than regional library districts and metropolitan special taxing districts.

deleted text begin (o) deleted text end new text begin (c) new text end Notwithstanding the requirements of this section, the employer is required to
meet and negotiate over employee compensation as provided for in chapter 179A.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2008, section 375.194, subdivision 5, is amended to read:

Subd. 5.

Determination of county tax rate.

The eligible county's proposed and
final tax rates shall be determined by dividing the certified levy by the total taxable net tax
capacity, without regard to any abatements granted under this section. deleted text beginThe county board
shall make available the estimated amount of the abatement at the public hearing under
section 275.065, subdivision 6. deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 383A.75, subdivision 3, is amended to read:

Subd. 3.

Duties.

The committee is authorized to and shall meet from time to time
to make appropriate recommendations for the efficient and effective use of property tax
dollars raised by the jurisdictions for programs, buildings, and operations. In addition,
the committee shall:

(1) identify trends and factors likely to be driving budget outcomes over the next
five years with recommendations for how the jurisdictions should manage those trends
and factors to increase efficiency and effectiveness;

(2) agree, by October 1 of each year, on the appropriate level of overall property tax
levy for the three jurisdictions and publicly report such to the governing bodies of each
jurisdiction for ratification or modification by resolution; new text begin and
new text end

(3) deleted text beginplan for the joint truth-in-taxation hearings under section 275.065, subdivision
8; and
deleted text end

deleted text begin (4) deleted text end identify, by December 31 of each year, areas of the budget to be targeted in the
coming year for joint review to improve services or achieve efficiencies.

In carrying out its duties, the committee shall consult with public employees of
each jurisdiction and with other stakeholders of the city, county, and school district, as
appropriate.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2008, section 446A.086, subdivision 8, is amended to read:

Subd. 8.

Tax levy for repayment.

(a) With the approval of the authority, a
governmental unit may levy in the year the state makes a payment under this section an
amount up to the amount necessary to provide funds for the repayment of the amount paid
by the state plus interest through the date of estimated repayment by the governmental
unit. The proceeds of this levy may be used only for this purpose unless they exceed the
amount actually due. Any excess must be used to repay other state payments made under
this section or must be deposited in the debt redemption fund of the governmental unit.
The amount of aids to be reduced to repay the state are decreased by the amount levied.

(b) If the state is not repaid in full for a payment made under this section by
November 30 of the calendar year following the year in which the state makes the
payment, the authority shall require the governmental unit to certify a property tax levy in
an amount up to the amount necessary to provide funds for repayment of the amount paid
by the state plus interest through the date of estimated repayment by the governmental unit.
To prevent undue hardship, the authority may allow the governmental unit to certify the
levy over a five-year period. The proceeds of the levy may be used only for this purpose
unless they are in excess of the amount actually due, in which case the excess must be used
to repay other state payments made under this section or must be deposited in the debt
redemption fund of the governmental unit. If the authority orders the governmental unit to
levy, the amount of aids reduced to repay the state are decreased by the amount levied.

deleted text begin (c) A levy under this subdivision is an increase in the levy limits of the governmental
unit for purposes of section 275.065, subdivision 6, and must be explained as a specific
increase at the meeting required under that provision.
deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2008, section 465.719, subdivision 9, is amended to read:

Subd. 9.

Application of other laws.

A corporation created by a political subdivision
under this section must comply with every law that applies to the political subdivision,
as if the corporation is a part of the political subdivision, unless the resolution ratifying
creation of the corporation specifically exempts the corporation from part or all of a law.
If the resolution exempts the corporation from part or all of a law, the resolution must
make a detailed and specific finding as to why the corporation cannot fulfill its purpose if
the corporation is subject to that law. A corporation may not be exempted from chapter
13D, the Minnesota Open Meeting Law, sections 138.163 to 138.25, governing records
management, or chapter 13, the Minnesota Government Data Practices Act. Any affected
or interested person may bring an action in district court to void the resolution on the
grounds that the findings are not sufficiently detailed and specific, or that the corporation
can fulfill its purpose if it is subject to the law from which the resolution exempts the
corporation. Laws that apply to a political subdivision that also apply to a corporation
created by a political subdivision under this subdivision include, but are not limited to:

(1) chapter 13D, the Minnesota Open Meeting Law;

(2) chapter 13, the Minnesota Government Data Practices Act;

(3) section 471.345, the Uniform Municipal Contracting Law;

(4) sections 43A.17, limiting the compensation of employees based on the governor's
salary; 471.991 to 471.999, providing for equitable pay; and 465.72 and 465.722,
governing severance pay;

(5) deleted text beginsection 275.065, providing for truth-in-taxation hearings. If any tax revenues of
the political subdivision will be appropriated to the corporation, the corporation's annual
operating and capital budgets must be included in the truth-in-taxation hearing of the
political subdivision that created the corporation;
deleted text end

deleted text begin (6) deleted text end if the corporation issues debt, its debt is included in the political subdivision's
debt limit if it would be included if issued by the political subdivision, and issuance of the
debt is subject to the election and other requirements of chapter 475 and section 471.69;

deleted text begin (7) deleted text end new text begin (6) new text end section 471.895, prohibiting acceptance of gifts from interested parties, and
sections 471.87 to 471.89, relating to interests in contracts;

deleted text begin (8) deleted text end new text begin (7) new text end chapter 466, relating to municipal tort liability;

deleted text begin (9) deleted text end new text begin (8) new text end chapter 118A, requiring deposit insurance or bond or pledged collateral for
deposits;

deleted text begin (10) deleted text end new text begin (9) new text end chapter 118A, restricting investments;

deleted text begin (11) deleted text end new text begin (10) new text end section 471.346, requiring ownership of vehicles to be identified;

deleted text begin (12) deleted text end new text begin (11) new text end sections 471.38 to 471.41, requiring claims to be in writing, itemized, and
approved by the governing board before payment can be made; and

deleted text begin (13) deleted text end new text begin (12) new text end the corporation cannot make advances of pay, make or guarantee loans to
employees, or provide in-kind benefits unless authorized by law.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2008, section 473.13, subdivision 1, is amended to read:

Subdivision 1.

Budget.

(a) On or before December 20 of each year new text begin, new text end the council deleted text begin,
after the public hearing required in section 275.065, deleted text end shall adopt a final budget covering its
anticipated receipts and disbursements for the ensuing year and shall decide upon the total
amount necessary to be raised from ad valorem tax levies to meet its budget. The budget
shall state in detail the expenditures for each program to be undertaken, including the
expenses for salaries, consultant services, overhead, travel, printing, and other items. The
budget shall state in detail the capital expenditures of the council for the budget year, based
on a five-year capital program adopted by the council and transmitted to the legislature.
After adoption of the budget and no later than five working days after December 20, the
council shall certify to the auditor of each metropolitan county the share of the tax to be
levied within that county, which must be an amount bearing the same proportion to the
total levy agreed on by the council as the net tax capacity of the county bears to the net tax
capacity of the metropolitan area. The maximum amount of any levy made for the purpose
of this chapter may not exceed the limits set by the statute authorizing the levy.

(b) Each even-numbered year the council shall prepare for its transit programs a
financial plan for the succeeding three calendar years, in half-year segments. The financial
plan must contain schedules of user charges and any changes in user charges planned or
anticipated by the council during the period of the plan. The financial plan must contain a
proposed request for state financial assistance for the succeeding biennium.

(c) In addition, the budget must show for each year:

(1) the estimated operating revenues from all sources including funds on hand at the
beginning of the year, and estimated expenditures for costs of operation, administration,
maintenance, and debt service;

(2) capital improvement funds estimated to be on hand at the beginning of the year
and estimated to be received during the year from all sources and estimated cost of capital
improvements to be paid out or expended during the year, all in such detail and form as
the council may prescribe; and

(3) the estimated source and use of pass-through funds.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, section 275.065, subdivisions 5a, 6b, 6c, 8, 9, and 10, new text end new text begin are
repealed.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 4

SALES AND USE TAXES

Section 1.

new text begin [270C.085] NOTIFICATION REQUIREMENTS; SALES AND USE
TAXES.
new text end

new text begin The commissioner of revenue shall establish a means of electronically notifying
persons holding a sales tax permit under section 297A.84 of any statutory change in
chapter 297A and any issuance or change in any administrative rule, revenue notice, or
sales tax fact sheet or other written information provided by the department explaining the
interpretation or administration of the tax imposed under that chapter. The notification
must indicate the basic subject of the statute, rule, fact sheet, or other material and provide
an electronic link to the material. Any person holding a sales tax permit that provides
an electronic address to the department must receive these notifications unless they
specifically request electronically, or in writing, to be removed from the notification list.
This requirement does not replace traditional means of notifying the general public or
persons without access to electronic communications of changes in the sales tax law. The
electronic notification must begin no later than December 31, 2009.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 2.

Minnesota Statutes 2008, section 289A.11, subdivision 1, is amended to read:

Subdivision 1.

Return required.

new text begin(a) new text endExcept as provided in section 289A.18,
subdivision 4, for the month in which taxes imposed by chapter 297A are payable, or for
which a return is due, a return for the preceding reporting period must be filed with the
commissioner in the form and manner the commissioner prescribes. A person making
sales at retail at two or more places of business may file a consolidated return subject to
rules prescribed by the commissioner. In computing the dollar amount of items on the
return, the amounts are rounded off to the nearest whole dollar, disregarding amounts less
than 50 cents and increasing amounts of 50 cents to 99 cents to the next highest dollar.

new text begin (b) new text endNotwithstanding this subdivision, a person who is not required to hold a sales tax
permit under chapter 297A and who makes annual purchases, for use in a trade or business,
of less than $18,500, or a person who is not required to hold a sales tax permit and who
makes purchases for personal use, that are subject to the use tax imposed by section
297A.63, may file an annual use tax return on a form prescribed by the commissioner. If a
person who qualifies for an annual use tax reporting period is required to obtain a sales tax
permit or makes use tax purchases, for use in a trade or business, in excess of $18,500
during the calendar year, the reporting period must be considered ended at the end of the
month in which the permit is applied for or the purchase in excess of $18,500 is made and
a return must be filed for the preceding reporting period.

new text begin (c) Notwithstanding paragraph (a), a person prohibited by the person's religious
beliefs from using electronics shall be allowed to file by mail, without any additional fees.
The filer must notify the commissioner of revenue of the intent to file by mail on a form
prescribed by the commissioner. A return filed under this paragraph must be postmarked
no later than the day the return is due in order to be considered filed on a timely basis.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for returns filed after June 30, 2009.
new text end

Sec. 3.

Minnesota Statutes 2008, section 289A.20, subdivision 4, is amended to read:

Subd. 4.

Sales and use tax.

(a) The taxes imposed by chapter 297A are due and
payable to the commissioner monthly on or before the 20th day of the month following the
month in which the taxable event occurred, or following another reporting period as the
commissioner prescribes or as allowed under section 289A.18, subdivision 4, paragraph
(f) or (g), except that use taxes due on an annual use tax return as provided under section
289A.11, subdivision 1, are payable by April 15 following the close of the calendar year.

(b) A vendor having a liability of $120,000 or more during a fiscal year ending June
30 must remit the June liability for the next year in the following manner:

(1) Two business days before June 30 of the year, the vendor must remit 90 percent
of the estimated June liability to the commissioner.

(2) On or before August 20 of the year, the vendor must pay any additional amount
of tax not remitted in June.

(c) A vendor having a liability of:

(1) $20,000 or more in the fiscal year ending June 30, 2005; or

(2) $10,000 or more in the fiscal year ending June 30, 2006, and fiscal years
thereafter,

must remit all liabilities on returns due for periods beginning in the subsequent calendar
year by electronic means on or before the 20th day of the month following the month in
which the taxable event occurred, or on or before the 20th day of the month following the
month in which the sale is reported under section 289A.18, subdivision 4, except for 90
percent of the estimated June liability, which is due two business days before June 30. The
remaining amount of the June liability is due on August 20.

new text begin (d) Notwithstanding paragraph (b) or (c), a person prohibited by the person's
religious beliefs from paying electronically shall be allowed to remit the payment by mail.
The filer must notify the commissioner of revenue of the intent to pay by mail before
doing so on a form prescribed by the commissioner. No extra fee may be charged to a
person making payment by mail under this paragraph. The payment must be postmarked
at least two business days before the due date for making the payment in order to be
considered paid on a timely basis.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments remitted after June
30, 2009.
new text end

Sec. 4.

Minnesota Statutes 2008, section 297A.62, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Constitutionally required sales tax increase. new text end

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

Sec. 5.

Minnesota Statutes 2008, section 297A.64, subdivision 2, is amended to read:

Subd. 2.

Fee imposed.

new text begin(a) new text endA fee equal to five percent of the sales price is imposed
on leases or rentals of vehicles subject to the tax under subdivision 1. The lessor on the
invoice to the customer may designate the fee as "a fee imposed by the State of Minnesota
for the registration of rental cars."

new text begin (b) The provisions of this subdivision do not apply to the vehicles of a nonprofit
corporation or similar entity, consisting of individual or group members who pay the
organization for the use of a motor vehicle, if the organization:
new text end

new text begin (1) owns or leases a fleet of vehicles of the type subject to the tax under subdivision 1
that are available to its members for use, priced on the basis of intervals of one hour or less;
new text end

new text begin (2) parks its vehicles at unstaffed, self-service locations that are accessible at any
time of the day;
new text end

new text begin (3) maintains its vehicles, insures its vehicles on behalf of its members, and
purchases fuel for its fleet; and
new text end

new text begin (4) does not charge usage rates that decline on a per unit basis, whether specified
based on distance or time.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2008, section 297A.71, is amended by adding a subdivision
to read:

new text begin Subd. 41. new text end

new text begin Construction materials; meat processing facility. new text end

new text begin Materials and
supplies used or consumed in, and equipment incorporated into, the construction or
improvement of a meat processing facility are exempt. This facility must be constructed to
replace a meat processing facility destroyed in a fire in April 2009, that employed more
than 200 employees at the time of the destruction. The tax must be imposed and collected
as if the rate under section 297A.62, subdivision 1, applied and then refunded after June
30, 2011, in the manner provided in section 297A.75.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
April 30, 2009.
new text end

Sec. 7.

Minnesota Statutes 2008, section 297A.75, subdivision 1, is amended to read:

Subdivision 1.

Tax collected.

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

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

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

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

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

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

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

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

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

deleted text begin (9) deleted text end new text begin (8) new text end materials and supplies for qualified low-income housing under section
297A.71, subdivision 23;

deleted text begin (10) deleted text end new text begin (9) new text end materials, supplies, and equipment for municipal electric utility facilities
under section 297A.71, subdivision 35;

deleted text begin (11) deleted text end new text begin (10) new text end equipment and materials used for the generation, transmission, and
distribution of electrical energy and an aerial camera package exempt under section
297A.68, subdivision 37;

deleted text begin (12) deleted text end new text begin (11) new text end tangible personal property and taxable services and construction materials,
supplies, and equipment exempt under section 297A.68, subdivision 41;

deleted text begin (13) deleted text end new text begin (12) new text end commuter rail vehicle and repair parts under section 297A.70, subdivision
3, clause (11); deleted text beginand
deleted text end

deleted text begin (14) deleted text end new text begin (13) new text end materials, supplies, and equipment for construction or improvement of
projects and facilities under section 297A.71, subdivision 40 deleted text begin. deleted text end new text begin; and
new text end

new text begin (14) materials, supplies, and equipment for construction or improvement of a meat
processing facility exempt under section 297A.71, subdivision 41.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
April 30, 2009.
new text end

Sec. 8.

Minnesota Statutes 2008, section 297A.75, subdivision 2, is amended to read:

Subd. 2.

Refund; eligible persons.

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

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

(2) for subdivision 1, clauses (4) deleted text begin, deleted text end new text begin and new text end (7), deleted text beginand (8), deleted text end the applicant must be the
governmental subdivision;

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

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

(5) for subdivision 1, clause deleted text begin(9) deleted text end new text begin (8) new text end, the owner of the qualified low-income housing
project;

(6) for subdivision 1, clause deleted text begin(10) deleted text end new text begin (9) new text end, the applicant must be a municipal electric
utility or a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses deleted text begin(11) deleted text end new text begin (10) new text end deleted text beginand (12) deleted text end new text begin, (11), and (14) new text end, the owner of the
qualifying business; and

(8) for subdivision 1, clauses deleted text begin(13) deleted text end new text begin (12) new text end and deleted text begin(14) deleted text end new text begin (13) new text end, the applicant must be the
governmental entity that owns or contracts for the project or facility.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
April 30, 2009.
new text end

Sec. 9.

Minnesota Statutes 2008, section 297A.94, is amended to read:

297A.94 DEPOSIT OF REVENUES.

(a) Except as provided in this section, the commissioner shall deposit the revenues,
including interest and penalties, derived from the taxes imposed by this chapter in the state
treasury and credit them to the general fund.

(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic
account in the special revenue fund if:

(1) the taxes are derived from sales and use of property and services purchased for
the construction and operation of an agricultural resource project; and

(2) the purchase was made on or after the date on which a conditional commitment
was made for a loan guaranty for the project under section 41A.04, subdivision 3.

The commissioner of finance shall certify to the commissioner the date on which the
project received the conditional commitment. The amount deposited in the loan guaranty
account must be reduced by any refunds and by the costs incurred by the Department of
Revenue to administer and enforce the assessment and collection of the taxes.

(c) The commissioner shall deposit the revenues, including interest and penalties,
derived from the taxes imposed on sales and purchases included in section 297A.61,
subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them
as follows:

(1) first to the general obligation special tax bond debt service account in each fiscal
year the amount required by section 16A.661, subdivision 3, paragraph (b); and

(2) after the requirements of clause (1) have been met, the balance to the general
fund.

(d) The commissioner shall deposit the revenues, including interest and penalties,
collected under section 297A.64, subdivision 5, in the state treasury and credit them to the
general fund. By July 15 of each year the commissioner shall transfer to the highway user
tax distribution fund an amount equal to the excess fees collected under section 297A.64,
subdivision 5, for the previous calendar year.

(e) For fiscal year 2001, 97 percent; for fiscal years 2002 and 2003, 87 percent; and
for fiscal year 2004 and thereafter, 72.43 percent of the revenues, including interest and
penalties, transmitted to the commissioner under section 297A.65, must be deposited by
the commissioner in the state treasury as follows:

(1) 50 percent of the receipts must be deposited in the heritage enhancement account
in the game and fish fund, and may be spent only on activities that improve, enhance, or
protect fish and wildlife resources, including conservation, restoration, and enhancement
of land, water, and other natural resources of the state;

(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only for state parks and trails;

(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and
may be spent only on metropolitan park and trail grants;

(4) three percent of the receipts must be deposited in the natural resources fund, and
may be spent only on local trail grants; and

(5) two percent of the receipts must be deposited in the natural resources fund,
and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and
Conservatory, and the Duluth Zoo.

(f) The revenue dedicated under paragraph (e) may not be used as a substitute
for traditional sources of funding for the purposes specified, but the dedicated revenue
shall supplement traditional sources of funding for those purposes. Land acquired with
money deposited in the game and fish fund under paragraph (e) must be open to public
hunting and fishing during the open season, except that in aquatic management areas or
on lands where angling easements have been acquired, fishing may be prohibited during
certain times of the year and hunting may be prohibited. At least 87 percent of the money
deposited in the game and fish fund for improvement, enhancement, or protection of fish
and wildlife resources under paragraph (e) must be allocated for field operations.

new text begin (g) The revenues deposited under paragraphs (a) to (f) do not include the revenues,
including interest and penalties, generated by the sales tax imposed under section
297A.62, subdivision 1a, which must be deposited as provided under the Minnesota
Constitution, article XI, section 15.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2008, section 297B.02, subdivision 1, is amended to read:

Subdivision 1.

Rate.

There is imposed an excise tax deleted text beginat the rate provided in chapter
297A deleted text end new text begin of 6.5 percent new text end on the purchase price of any motor vehicle purchased or acquired,
either in or outside of the state of Minnesota, which is required to be registered under
the laws of this state.

The excise tax is also imposed on the purchase price of motor vehicles purchased
or acquired on Indian reservations when the tribal council has entered into a sales tax on
motor vehicles refund agreement with the state of Minnesota.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
June 30, 2009.
new text end

Sec. 11.

Laws 1986, chapter 396, section 4, subdivision 3, is amended to read:

Subd. 3.

Use of property.

Revenues received from the tax may only be used:

(1) to pay costs of collection;

(2) to pay or secure the payment of any principal of, premium or interest on bonds
issued in accordance with this act;

(3) to pay costs to acquire, design, equip, construct, improve, maintain, operate,
administer, or promote the convention center or related facilities, including financing
costs related to them;

(4) to pay reasonable and appropriate costs determined by the city to replace housing
removed from the site; deleted text beginand deleted text end

(5) to maintain reserves for the foregoing purposes deemed reasonable and
appropriate by the city deleted text begin. deleted text end new text begin; and
new text end

new text begin (6) to fund projects under subdivision 4.
new text end

deleted text begin In the event of any amendment to chapter 297A enacted subsequent to the effective date
of this act which exempts sales or uses which were taxable under chapter 297A on the
effective date of this act, the city may by ordinance extend the tax authorized hereby to
any such sales or uses provided that the city council shall have determined that such
extension is necessary to provide revenues for the uses to which taxes may be applied
under this section and further provided that, in the estimation of the city council, the
aggregate annual collections following such extension will not exceed the aggregate
annual collections which would have been generated if chapter 297A, as in effect on the
effective date of this act, were then in effect. Any revenue bonds issued in accordance
with this act may, with the consent of the city council, contain a covenant that the tax will
be so extended to the extent necessary to pay principal and interest on the bonds when due.
deleted text end

Money for replacement housing shall be made available by the city only for new
construction, conversion of nonresidential buildings, and for rehabilitation of vacant
residential structures, only if all of the units in the newly constructed building, converted
nonresidential building, or rehabilitated residential structure are to be used for replacement
housing.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Laws 1986, chapter 396, section 4, is amended by adding a subdivision to read:

new text begin Subd. 4. new text end

new text begin Minneapolis downtown and neighborhood projects. new text end

new text begin (a) For revenues
collected in calendar years 2009 and 2010, to the extent that revenues from the tax
authorized in subdivision 1 exceeds the amount needed to fund the purposes in subdivision
3, the city may use the excess revenue to fund any city services. The total amount used in
both years for this purpose may not exceed the total amount of aid and credit reductions
under Minnesota Statutes, sections 273.1384 and 477A.011 to 477A.014 in calendar years
2008, 2009, and 2010 due to a governor's unallotment or due to statutory reductions.
new text end

new text begin (b) Beginning with revenues collected in calendar year 2011, to the extent that
revenues from the tax authorized in subdivision 1 exceeds the amount needed to fund the
purposes in subdivision 3, the city may use the excess revenue in any year to fund capital
projects to further residential, cultural, commercial, and economic development in both
downtown Minneapolis and the Minneapolis neighborhoods.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance of the governing
body of the city of Minneapolis with Minnesota Statutes, section 645.021, subdivisions
2 and 3.
new text end

Sec. 13.

Laws 1986, chapter 400, section 44, as amended by Laws 1995, chapter 264,
article 2, section 39, is amended to read:

Sec. 44. DOWNTOWN TAXING AREA.

If a bill is enacted into law in the 1986 legislative session which authorizes the city
of Minneapolis to issue bonds and expend certain funds including taxes to finance the
acquisition and betterment of a convention center and related facilities, which authorizes
certain taxes to be levied in a downtown taxing area, then, notwithstanding the provisions
of that law "downtown taxing area" shall mean the geographic area bounded by the
portion of the Mississippi River between I-35W and Washington Avenue, the portion
of Washington Avenue between the river and I-35W, the portion of I-35W between
Washington Avenue and 8th Street South, the portion of 8th Street South between I-35W
and Portland Avenue South, the portion of Portland Avenue South between 8th Street
South and I-94, the portion of I-94 from the intersection of Portland Avenue South to
the intersection of I-94 and the Burlington Northern Railroad tracks, the portion of the
Burlington Northern Railroad tracks from I-94 to Main Street and including Nicollet
Island, and the portion of Main Street to Hennepin Avenue and the portion of Hennepin
Avenue between Main Street and 2nd Street S.E., and the portion of 2nd Street S.E.
between Main Street and Bank Street, and the portion of Bank Street between 2nd Street
S.E. and University Avenue S.E., and the portion of University Avenue S.E. between Bank
Street and I-35W, and by I-35W from University Avenue S.E., to the river. The downtown
taxing area excludes the area bounded on the south and west by Oak Grove Street, on the
east by Spruce Place, and on the north by West 15th Street. new text begin The downtown taxing area also
excludes any property located in a zone that is contained in chapter 546 of the Minneapolis
Zoning Code of Ordinances on which a restaurant with a wine license is operated.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made after July 31, 2012,
provided that the proceeds of the tax collected between July 1, 2009, and July 31, 2012,
by a restaurant with a wine license that is excluded from the downtown taxing area by
this section, when collected by the commissioner of revenue, shall be deposited in the
general fund of the state treasury.
new text end

Sec. 14.

Laws 1991, chapter 291, article 8, section 27, subdivision 3, as amended
by Laws 1998, chapter 389, article 8, section 28, and Laws 2008, chapter 366, article
7, section 9, is amended to read:

Subd. 3.

Use of revenues.

Revenues received from taxes authorized by subdivisions
1 and 2 shall be used by the city to pay the cost of collecting the tax and to pay all or
a portion of the expenses of constructing and improving facilities as part of an urban
revitalization project in downtown Mankato known as Riverfront 2000. Authorized
expenses include, but are not limited to, acquiring property and paying relocation expenses
related to the development of Riverfront 2000 and related facilities, and securing or paying
debt service on bonds or other obligations issued to finance the construction of Riverfront
2000 and related facilities. For purposes of this section, "Riverfront 2000 and related
facilities" means a civic-convention center, an arena, a riverfront park, a technology center
and related educational facilities, and all publicly owned real or personal property that
the governing body of the city determines will be necessary to facilitate the use of these
facilities, including but not limited to parking, skyways, pedestrian bridges, lighting, and
landscaping. It also includes the performing arts theatre and the Southern Minnesota
Women's Hockey Exposition Center, deleted text beginattached to the Mankato Civic Center deleted text end for use by
Minnesota State University, Mankato.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Laws 1993, chapter 375, article 9, section 46, subdivision 2, as amended by
Laws 1997, chapter 231, article 7, section 40, and Laws 1998, chapter 389, article 8,
section 30, and Laws 2003, First Special Session chapter 21, article 8, section 13, and
Laws 2005, First Special Session chapter 3, article 5, section 26, is amended to read:

Subd. 2.

Use of revenues.

Revenues received from the tax authorized by
subdivision 1 may only be used by the city to pay the cost of collecting the tax, and to pay
for the following projects or to secure or pay any principal, premium, or interest on bonds
issued in accordance with subdivision 3 for the following projects.

(a) To pay all or a portion of the capital expenses of construction, equipment and
acquisition costs for the expansion and remodeling of the St. Paul Civic Center complex,
including the demolition of the existing arena and the construction and equipping of a
new arena.

(b) Except as provided in paragraphs (e) and (f), the remainder of the funds must be
spent for:

(1) capital projects to further residential, cultural, commercial, and economic
development in both downtown St. Paul and St. Paul neighborhoods; and

(2) capital and operating expenses of cultural organizations in the city, provided
that the amount spent under this clause must equal ten percent of the total amount spent
under this paragraph in any year.

(c) The amount apportioned under paragraph (b) shall be no less than 60 percent
of the revenues derived from the tax each year, except to the extent that a portion of that
amount is required to pay debt service on (1) bonds issued for the purposes of paragraph (a)
prior to March 1, 1998; or (2) bonds issued for the purposes of paragraph (a) after March 1,
1998, but only if the city council determines that 40 percent of the revenues derived from
the tax together with other revenues pledged to the payment of the bonds, including the
proceeds of definitive bonds, is expected to exceed the annual debt service on the bonds.

(d) If in any year more than 40 percent of the revenue derived from the tax authorized
by subdivision 1 is used to pay debt service on the bonds issued for the purposes of
paragraph (a) and to fund a reserve for the bonds, the amount of the debt service payment
that exceeds 40 percent of the revenue must be determined for that year. In any year when
40 percent of the revenue produced by the sales tax exceeds the amount required to pay
debt service on the bonds and to fund a reserve for the bonds under paragraph (a), the
amount of the excess must be made available for capital projects to further residential,
cultural, commercial, and economic development in the neighborhoods and downtown
until the cumulative amounts determined for all years under the preceding sentence have
been made available under this sentence. The amount made available as reimbursement in
the preceding sentence is not included in the 60 percent determined under paragraph (c).

(e) In each of calendar years 2006 deleted text begin, 2007, 2008, and 2009 deleted text end new text begin to 2014 new text end, revenue not to
exceed $3,500,000 may be used to pay the principal of bonds issued for capital projects of
the city. After December 31, deleted text begin2009 deleted text end new text begin 2014 new text end, revenue from the tax imposed under subdivision
1 may not be used for this purpose.

(f) By January 15 of each year, the mayor and the city council must report to the
legislature on the use of sales tax revenues during the preceding one-year period.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Laws 1993, chapter 375, article 9, section 46, is amended by adding a
subdivision to read:

new text begin Subd. 2a. new text end

new text begin Unexpended funds and interest. new text end

new text begin Any interest from loan repayments
or returned funds from revenues apportioned under subdivision 2, paragraph (b), clause
(1), must be made available only for projects qualifying under subdivision 2, paragraph
(b), clause (1).
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Laws 1996, chapter 471, article 2, section 30, is amended to read:

Sec. 30. CITY OF LITTLE FALLS; TAX AUTHORIZED.

Subdivision 1.

Sales of food; tax.

The city of Little Falls may by ordinance impose
a tax of one-half percent on the gross receipts from the retail sale of food and nonalcoholic
beverages sold by the operator of a restaurant or place of refreshment within the city. The
tax imposed may be effective at any time after July 1, 1996.

new text begin Subd. 1a. new text end

new text begin Sale of alcoholic beverages. new text end

new text begin The city of Little Falls may also by
ordinance impose the tax in subdivision 1 on the sales of alcoholic beverages sold by the
operator of a restaurant or place of refreshment in the city. Notwithstanding subdivision
5, and regardless of when the city imposes the tax under this subdivision, this tax will
expire when the tax in subdivision 1 expires.
new text end

Subd. 2.

Definitions.

For purposes of this section:

(1) "restaurant" means every building or other structure or enclosure, or any part
thereof and all buildings in connection, kept, used or maintained as, or held out to the
public to be an enclosure where meals or lunches are served or prepared for service
elsewhere, except schools;

(2) "place of refreshment" means every building, structure, vehicle, sidewalk cart or
any part thereof, used as, maintained as, or advertised as, or held out to be a place where
confectionery, ice cream, or drinks of various kinds are made, sold, or served at retail,
excepting schools and school sponsored events; and

(3) "operator" means the person who is the proprietor of the restaurant, or place of
refreshment, whether in the capacity of owner, lessee, subleases, licensee, or an other
capacity.

Subd. 3.

Use of proceeds.

The ordinance adopted by the city shall provide for
distribution of the proceeds of the tax. The proceeds of the tax must be used for tourism
purposes, including operating and maintaining the activities and programs of the tourism
and convention bureau.

Subd. 4.

Enforcement, collection, and administration of taxes.

The tax imposed
under this section shall be enforced, administered, and collected by the city of Little Falls
provided that the city may contract with the commissioner of revenue to perform audits of
the tax on behalf of the city. The commissioner shall charge the city an amount that equals
the direct and indirect costs incurred by the department that are necessary to audit the tax.

Subd. 5.

Expiration of taxing authority.

The tax imposed under deleted text beginthis section shall
expire 15 deleted text end new text begin subdivision 1 expires 30 new text end years after it first becomes effective.

Subd. 6.

Effective date.

This section is effective the day following compliance by
the governing body of the city of Little Falls with Minnesota Statutes, section 645.021,
subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following compliance by
the governing body of the city of Little Falls with Minnesota Statutes, section 645.021,
subdivisions 2 and 3.
new text end

Sec. 18.

Laws 1998, chapter 389, article 8, section 37, subdivision 1, is amended to
read:

Subdivision 1.

Requirement.

Expenditures of revenues from the sales tax imposed
by the city of St. Paul that are dedicated to neighborhood investments may be made only
after review of the proposals for expenditures by the citizen review panel described in this
section. new text beginThe panel must ensure that the application process for all proposals is open, fair,
and competitive. All proposals must be reviewed by the panel prior to presentation of the
proposal to the city council. new text endThe panel must evaluate the proposals and provide a report
to the city council that makes recommendations regarding the proposed expenditures
in rank order.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Laws 2002, chapter 377, article 3, section 25, is amended to read:

Sec. 25. ROCHESTER LODGING TAX.

Subdivision 1.

Authorization.

Notwithstanding Minnesota Statutes, section
469.190 or 477A.016, or any other law, the city of Rochester may impose an additional
tax of one percent on the gross receipts from the furnishing for consideration of lodging at
a hotel, motel, rooming house, tourist court, or resort, other than the renting or leasing of it
for a continuous period of 30 days or more.

new text begin Subd. 1a. new text end

new text begin Authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section 469.190 or
477A.016, or any other law, and in addition to the tax authorized by subdivision 1, the city
of Rochester may impose an additional tax of one percent on the gross receipts from the
furnishing for consideration of lodging at a hotel, motel, rooming house, tourist court, or
resort, other than the renting or leasing of it for a continuous period of 30 days or more only
upon the approval of the city governing body of a total financial package for the project.
new text end

Subd. 2.

Disposition of proceeds.

new text begin(a) new text endThe gross proceeds from deleted text beginany deleted text end new text begin the new text end tax imposed
under subdivision 1 must be used by the city to fund a local convention or tourism bureau
for the purpose of marketing and promoting the city as a tourist or convention center.

new text begin (b) The gross proceeds from the one percent tax imposed under subdivision 1a shall
be used to pay for (1) construction, renovation, improvement, and expansion of the Mayo
Civic Center and related skyway access, lighting, parking, or landscaping; and (2) for
payment of any principal, interest, or premium on bonds issued to finance the construction,
renovation, improvement, and expansion of the Mayo Civic Center Complex.
new text end

new text begin Subd. 3. new text end

new text begin Expiration of taxing authority. new text end

new text begin The authority of the city to impose a tax
under subdivision 1a shall expire when the principal and interest on any bonds or other
obligations issued prior to December 31, 2014, to finance the construction, renovation,
improvement, and expansion of the Mayo Civic Center Complex and related skyway
access, lighting, parking, or landscaping have been paid or at an earlier time as the city
shall, by ordinance, determine.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Laws 2006, chapter 259, article 3, section 12, subdivision 3, is amended to
read:

Subd. 3.

Use of revenues.

Revenues received from the taxes authorized by
subdivisions 1 and 2 must be used to pay all or part of the capital costs of transportation
projects included in the 2004 U.S. Highway 14-Owatonna Beltline Study by the Minnesota
Department of Transportation, Steele County, and the city of Owatonna; regional parks
and trail developments; and the West Hills complex, including the firehall, and library
improvement projects; as described in the city resolution No. 4-06, Exhibit A, as adopted
by the city on January 17, 2006. new text beginNotwithstanding the specific transportation projects
described in city resolution No. 4-06, Exhibit A, the city may transfer up to $1,500,000
of the sales and use tax revenues from the Alexander Street to 39th Avenue Southwest
project to the reconstruction of 18th Street Southwest from 24th Avenue Southwest to 39th
Avenue West. new text endThe amount paid from these revenues for transportation projects may not
exceed $4,450,000 plus associated bond costs. The amount paid from these revenues for
park and trail projects may not exceed $5,400,000 plus associated bond costs. The amount
paid from these revenues for West Hills complex, fire hall, and library improvement
projects may not exceed $2,823,000 plus associated bond costs.

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Laws 2008, chapter 366, article 7, section 16, subdivision 3, is amended to
read:

Subd. 3.

Use of proceeds from authorized taxes.

The proceeds of any tax imposed
under subdivisions 1 and 2 shall be used by the city to pay all or a portion of the expenses
of operation and maintenance of the Riverfront 2000 and related facilities, including a
performing arts theatre and the Southern Minnesota Women's Hockey Exposition Center,
deleted text begin attached to the Mankato Civic Center deleted text end for use by Minnesota State University, Mankato.
Authorized expenses include securing or paying debt service on bonds or other obligations
issued to finance the construction of the facilities.

new text begin EFFECTIVE DATE. new text end

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

Sec. 22.

Laws 2008, chapter 366, article 7, section 18, subdivision 2, is amended to
read:

Subd. 2.

Use of revenues.

Revenues received from the tax authorized by
subdivision 1 must be used by Cook County to pay the costs of collecting the tax and
to pay for the following projects:

(1) construction deleted text beginand deleted text end new text begin, new text end improvements new text begin, and additions new text end to deleted text begina county deleted text end community deleted text begincenter deleted text end new text begin
centers new text end and new text beginpublic new text endrecreation deleted text beginarea deleted text end new text begin areas new text end, including, but not limited to, improvements and
additions to the deleted text beginskateboard park, hockey rink, ball fields, community center addition,
county deleted text end new text begin public new text end parking deleted text beginarea, tennis courts, and all associated improvements deleted text end new text begin areas new text end; deleted text beginand
deleted text end

(2) construction new text beginof new text endand improvements to the Grand Marais Public Library new text begin;
new text end

new text begin (3) construction and improvement of a countywide high-speed communications
infrastructure network; and
new text end

new text begin (4) construction and improvement of a district energy plant for public facilities in
Grand Marais new text end.

Authorized expenses include, but are not limited to, paying construction expenses related
to these improvements, and paying debt service on bonds or other obligations issued to
finance acquisition and construction of these improvements. The total amount of revenues
from the taxes in subdivision 1 that may be used to fund these projects is deleted text begin$14,000,000 deleted text end new text begin
$20,000,000 new text end plus any associated bond costs.

new text begin EFFECTIVE DATE. new text end

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

Sec. 23. new text beginROCHESTER FOOD AND BEVERAGE TAX.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin Notwithstanding Minnesota Statutes, section
477A.016, or any other law or charter provision, the city of Rochester may impose a tax of
one percent on the gross receipts on all sales of food and beverages by restaurants and
places of refreshment, as defined by resolution of the city, that occur in the city. For
purposes of this section, "food and beverages" include retail on-sale of intoxicating liquor
and fermented malt beverages.
new text end

new text begin Subd. 2. new text end

new text begin Use of proceeds. new text end

new text begin The proceeds of this tax shall be used for (1) paying the
cost of collection; (2) to pay for construction, renovation, improvement, and expansion
of the Mayo Civic Center Complex and related skyway access, lighting, parking, or
landscaping; and (3) for payment of any principal, interest, or premium on bonds issued
to finance the construction, renovation, improvement, and expansion of the Mayo Civic
Center Complex.
new text end

new text begin Subd. 3. new text end

new text begin Imposition of the tax. new text end

new text begin The tax under this section may only be imposed
upon approval of the city governing body of a total financing package for the project.
new text end

new text begin Subd. 4. new text end

new text begin Expiration of taxing authority. new text end

new text begin The authority granted under subdivision
1 to the city to impose a one percent tax on food and beverages shall expire when the
principal and interest on any bonds or other obligations issued prior to December 31,
2014, to finance the construction, renovation, improvement, and expansion of the Mayo
Civic Center Complex and related skyway access, lighting, parking, or landscaping have
been paid or at an earlier time as the city shall, by ordinance, determine.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day after the governing body of
the city of Rochester and its chief clerical officer comply with Minnesota Statutes, section
645.021, subdivisions 2 and 3, and upon approval of the city governing body of a total
financing package to renovate, improve, or expand the Mayo Civic Center Complex.
new text end

ARTICLE 5

LOCAL DEVELOPMENT

Section 1.

Minnesota Statutes 2008, section 373.48, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For the purpose of this section, "project" means a facility
that generates electricity from renewable energy sources listed in section 216B.1691,
subdivision 1, paragraph (a) deleted text begin, clause (1) deleted text end.

Sec. 2.

Minnesota Statutes 2008, section 373.48, is amended by adding a subdivision
to read:

new text begin Subd. 3. new text end

new text begin Joint purchase of energy and acquisition of generation projects;
financing. new text end

new text begin (a) A county may enter into agreements under section 471.59 with other
counties for joint purchase of energy or joint acquisition of interests in projects. A county
that enters into a multiyear agreement for purchase of energy or acquires an interest in
a project, including C-BED projects pursuant to section 216B.1612, subdivision 9, may
finance the estimated cost of the energy to be purchased during the term of the agreement
or the cost to the county of the interest in the project by the issuance of revenue bonds of
the county, including clean renewable energy revenue bonds, provided that the annual debt
service on all bonds issued under this section, together with the amounts to be paid by the
county in any year for the purchase of energy under agreements entered into under this
section, must not exceed the estimated revenues of the project.
new text end

new text begin (b) An agreement entered into under section 471.59 as provided by this section
may provide that:
new text end

new text begin (1) each county issues bonds to pay their respective shares of the cost of the projects;
new text end

new text begin (2) one of the counties issues bonds to pay the full costs of the project and that the
other participating counties pay any available revenues of the project and pledge the
revenues to the county that issues the bonds; or
new text end

new text begin (3) the joint powers board issues revenue bonds to pay the full costs of the project
and that the participating counties pay any available revenues of the project under this
subdivision and pledge the revenues to the joint powers entity for payment of the revenue
bonds.
new text end

Sec. 3.

Minnesota Statutes 2008, section 469.174, subdivision 22, is amended to read:

Subd. 22.

Tourism facility.

"Tourism facility" means property that:

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

(2) is located in a county in development region 2, 3, 4, deleted text beginor deleted text end 5, new text beginor 7E, new text endas defined
in section 462.385;

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

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for requests for certification made
after June 30, 2009.
new text end

Sec. 4.

Minnesota Statutes 2008, section 469.175, subdivision 1, is amended to read:

Subdivision 1.

Tax increment financing plan.

(a) A tax increment financing plan
shall contain:

(1) a statement of objectives of an authority for the improvement of a project;

(2) a statement as to deleted text beginthe development program for the project, including deleted text end the property
within the project, if any, that the authority intends to acquire, identified by parcel number,
identifiable property name, block, or other appropriate means indicating the area in which
the authority intends to acquire properties;

(3) a list of any development activities that the plan proposes to take place within
the project, deleted text beginfor which contracts have been entered into at the time of the preparation of
the plan, deleted text end new text begin for which the authority has entered into an agreement or designated a developer new text end
including the names of the parties deleted text beginto the contract deleted text end new text begin or designated developer new text end, the activity
governed by the deleted text begincontract deleted text end new text begin agreement or designation new text end, deleted text beginthe cost stated in the contract, deleted text end and the
expected date of completion of that activity;

(4) identification or description of the type of any other specific development
reasonably expected to take place within the deleted text beginproject deleted text end new text begin district new text end, and the date when the
development is likely to occur;

(5) estimates of the following:

(i) cost of the project, including administrative expenses, deleted text beginexcept that if part of the
cost of the project is paid or financed with increment from the tax increment financing
district, the tax increment financing plan for the district must contain an estimate of the
amount of the cost of the project, including administrative expenses, that deleted text end new text begin and interest as a
financing cost, which new text end will be paid or financed with tax increments from the district new text begin, but
not to exceed the estimated tax increment generated by the development activity new text end;

(ii) amount of deleted text beginbonded indebtedness to be incurred deleted text end new text begin bonds to be issued new text end;

(iii) deleted text beginsources of revenue to finance or otherwise pay public costs;
deleted text end

deleted text begin (iv) deleted text end the deleted text beginmost recent deleted text end new text beginoriginal new text endnet tax capacity of taxable real property within the tax
increment financing district and within any subdistrict;

deleted text begin (v) deleted text end new text begin(iv) new text endthe estimated captured net tax capacity of the tax increment financing district
at completion; and

deleted text begin (vi) deleted text end new text begin (v) new text end the duration of the tax increment financing district's and any subdistrict's
existence;

(6) statements of the authority's alternate estimates of the impact of tax increment
financing on the net tax capacities of all taxing jurisdictions in which the tax increment
financing district is located in whole or in part. For purposes of one statement, the
authority shall assume that the estimated captured net tax capacity would be available to
the taxing jurisdictions without creation of the district, and for purposes of the second
statement, the authority shall assume that none of the estimated captured net tax capacity
would be available to the taxing jurisdictions without creation of the district or subdistrict;

(7) identification and description of studies and analyses used to make the
determination set forth in subdivision 3, clause (2); and

(8) identification of all parcels to be included in the district or any subdistrict.

(b) The authority may specify in the tax increment financing plan the first year in
which it elects to receive increment, up to four years following the year of approval of the
district. This paragraph does not apply to an economic development district.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax increment financing plans
approved after June 30, 2009.
new text end

Sec. 5.

Minnesota Statutes 2008, section 469.175, subdivision 6, is amended to read:

Subd. 6.

Annual financial reporting.

(a) The state auditor shall develop a uniform
system of accounting and financial reporting for tax increment financing districts. The
system of accounting and financial reporting shall, as nearly as possible:

(1) provide for full disclosure of the sources and uses of deleted text beginpublic funds in deleted text end new text begin tax
increments of new text end the district;

(2) permit comparison and reconciliation with the affected local government's
accounts and financial reports;

(3) permit auditing of the funds expended on behalf of a district, including a single
district that is part of a multidistrict project or that is funded in part or whole through
the use of a development account funded with tax increments from other districts or
with other public money;

(4) be consistent with generally accepted accounting principles.

(b) The authority must annually submit to the state auditor a financial report
in compliance with paragraph (a). Copies of the report must also be provided to the
county auditor and to the governing body of the municipality, if the authority is not
the municipality. To the extent necessary to permit compliance with the requirement
of financial reporting, the county and any other appropriate local government unit or
private entity must provide the necessary records or information to the authority or the
state auditor as provided by the system of accounting and financial reporting developed
pursuant to paragraph (a). The authority must submit the annual report for a year on or
before August 1 of the next year.

(c) The annual financial report must also include the following items:

(1) the original net tax capacity of the district and any subdistrict under section
469.177, subdivision 1;

(2) the net tax capacity for the reporting period of the district and any subdistrict;

(3) the captured net tax capacity of the district;

(4) any fiscal disparity deduction from the captured net tax capacity under section
469.177, subdivision 3;

(5) the captured net tax capacity retained for tax increment financing under section
469.177, subdivision 2, paragraph (a), clause (1);

(6) any captured net tax capacity distributed among affected taxing districts under
section 469.177, subdivision 2, paragraph (a), clause (2);

(7) the type of district;

(8) the date the municipality approved the tax increment financing plan and the
date of approval of any modification of the tax increment financing plan, the approval of
which requires notice, discussion, a public hearing, and findings under subdivision 4,
paragraph (a);

(9) the date the authority first requested certification of the original net tax capacity
of the district and the date of the request for certification regarding any parcel added
to the district;

(10) the date the county auditor first certified the original net tax capacity of the
district and the date of certification of the original net tax capacity of any parcel added
to the district;

(11) the month and year in which the authority has received or anticipates it will
receive the first increment from the district;

(12) the date the district must be decertified;

(13) for the reporting period and prior years of the district, the actual amount
received from, at least, the following categories:

(i) tax increments paid by the captured net tax capacity retained for tax increment
financing under section 469.177, subdivision 2, paragraph (a), clause (1), but excluding
any excess taxes;

(ii) tax increments that are interest or other investment earnings on or from tax
increments;

(iii) tax increments that are proceeds from the sale or lease of property, tangible or
intangible, purchased by the authority with tax increments;

(iv) tax increments that are repayments of loans or other advances made by the
authority with tax increments;

(v) bond deleted text beginor loan deleted text end proceeds; new text begin and
new text end

deleted text begin (vi) special assessments;
deleted text end

deleted text begin (vii) grants;
deleted text end

deleted text begin (viii) transfers from funds not exclusively associated with the district; and
deleted text end

deleted text begin (ix) deleted text end new text begin (vi) new text end the market value homestead credit paid to the authority under section
273.1384;

(14) for the reporting period and for the prior years of the district, the actual amount
expended for, at least, the following categories:

(i) acquisition of land and buildings through condemnation or purchase;

(ii) site improvements or preparation costs;

(iii) installation of public utilities, parking facilities, streets, roads, sidewalks, or
other similar public improvements;

(iv) administrative costs, including the allocated cost of the authority; new text begin and
new text end

(v) deleted text beginpublic park facilities, facilities for social, recreational, or conference purposes, or
other similar public improvements; and deleted text end new text begin for housing districts, construction of affordable
housing;
new text end

deleted text begin (vi) transfers to funds not exclusively associated with the district;
deleted text end

(15) the amount of any payments for activities and improvements located outside of
the district that are paid for or financed with tax increments;

(16) the amount of payments of principal and interest that are made during the
reporting period on any nondefeased:

(i) general obligation tax increment financing bonds; new text begin and
new text end

(ii) other tax increment financing bonds new text begin, including pay-as-you-go contracts and
notes new text end; deleted text beginand
deleted text end

deleted text begin (iii) notes and pay-as-you-go contracts;
deleted text end

(17) the principal amount, at the end of the reporting period, of any nondefeased:

(i) general obligation tax increment financing bonds; new text begin and
new text end

(ii) other tax increment financing bonds new text begin, including pay-as-you-go contracts and
notes new text end; deleted text beginand
deleted text end

deleted text begin (iii) notes and pay-as-you-go contracts;
deleted text end

(18) the amount of principal and interest payments that are due for the current
calendar year on any nondefeased:

(i) general obligation tax increment financing bonds; new text begin and
new text end

(ii) other tax increment financing bonds new text begin, including pay-as-you-go contracts and
notes new text end; deleted text beginand
deleted text end

deleted text begin (iii) notes and pay-as-you-go contracts;
deleted text end

(19) if the fiscal disparities contribution under chapter 276A or 473F for the district
is computed under section 469.177, subdivision 3, paragraph (a), the amount of new text begintotal
new text endincreased property taxes deleted text beginimposed on other properties in the municipality that approved the
tax increment financing plan as a result of the fiscal disparities contribution; deleted text end new text begin to be paid
from outside the tax increment financing district; and
new text end

(20) deleted text beginthe estimate, if any, contained in the tax increment financing plan of the amount
of the cost of the project, including administrative expenses, that will be paid or financed
with tax increment; and
deleted text end

deleted text begin (21) deleted text end any additional information the state auditor may require.

deleted text begin (d) The commissioner of revenue shall prescribe the method of calculating the
increased property taxes under paragraph (c), clause (19), and the form of the statement
disclosing this information on the annual statement under subdivision 5.
deleted text end

deleted text begin (e) deleted text end new text begin (d) new text end The reporting requirements imposed by this subdivision apply to districts
certified before, on, and after August 1, 1979.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for tax increment financing reports
due after December 31, 2009.
new text end

Sec. 6.

Minnesota Statutes 2008, section 469.176, subdivision 3, is amended to read:

Subd. 3.

Limitation on administrative expenses.

(a) For districts for which
certification was requested before August 1, 1979, or after June 30, 1982 and before
August 1, 2001, no tax increment shall be used to pay any administrative expenses for
a project which exceed ten percent of the total estimated tax increment expenditures
authorized by the tax increment financing plan or the total tax increment expenditures
for the project, whichever is less.

(b) For districts for which certification was requested after July 31, 1979, and before
July 1, 1982, no tax increment shall be used to pay administrative expenses, as defined in
Minnesota Statutes 1980, section 273.73, for a district which exceeds five percent of the
total tax increment expenditures authorized by the tax increment financing plan or the total
estimated tax increment expenditures for the district, whichever is less.

(c) For districts for which certification was requested after July 31, 2001, no tax
increment may be used to pay any administrative expenses for a project which exceed
ten percent of total estimated tax increment expenditures authorized by the tax increment
financing plan or the total tax increments, as defined in section 469.174, subdivision 25,
clause (1), from the district, whichever is less.

new text begin (d) Increments used to pay the county's administrative expenses under subdivision
4h are not subject to the percentage limits in this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for all districts, regardless of when
the request for certification was made.
new text end

Sec. 7.

Minnesota Statutes 2008, section 469.176, subdivision 6, is amended to read:

Subd. 6.

Action required.

new text begin(a) new text endIf, after four years from the date of certification of
the original net tax capacity of the tax increment financing district pursuant to section
469.177, no demolition, rehabilitation, or renovation of property or other site preparation,
including qualified improvement of a street adjacent to a parcel but not installation
of utility service including sewer or water systems, has been commenced on a parcel
located within a tax increment financing district by the authority or by the owner of the
parcel in accordance with the tax increment financing plan, no additional tax increment
may be taken from that parcel, and the original net tax capacity of that parcel shall be
excluded from the original net tax capacity of the tax increment financing district. If the
authority or the owner of the parcel subsequently commences demolition, rehabilitation,
or renovation or other site preparation on that parcel including qualified improvement of
a street adjacent to that parcel, in accordance with the tax increment financing plan, the
authority shall certify to the county auditor that the activity has commenced, and the
county auditor shall certify the net tax capacity thereof as most recently certified by the
commissioner of revenue and add it to the original net tax capacity of the tax increment
financing district. The county auditor must enforce the provisions of this subdivision. The
authority must submit to the county auditor evidence that the required activity has taken
place for each parcel in the district. The evidence for a parcel must be submitted by
February 1 of the fifth year following the year in which the parcel was certified as included
in the district. For purposes of this subdivision, qualified improvements of a street are
limited to (1) construction or opening of a new street, (2) relocation of a street, and (3)
substantial reconstruction or rebuilding of an existing street.

new text begin (b) For districts which were certified on or after January 1, 2005, and before April
20, 2009, the four-year period under paragraph (a) is increased to six years.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for districts certified on or after
January 1, 2005.
new text end

Sec. 8.

Minnesota Statutes 2008, section 469.1763, subdivision 3, is amended to read:

Subd. 3.

Five-year rule.

(a) Revenues derived from tax increments are considered
to have been expended on an activity within the district under subdivision 2 only if one
of the following occurs:

(1) before or within five years after certification of the district, the revenues are
actually paid to a third party with respect to the activity;

(2) bonds, the proceeds of which must be used to finance the activity, are issued and
sold to a third party before or within five years after certification, the revenues are spent
to repay the bonds, and the proceeds of the bonds either are, on the date of issuance,
reasonably expected to be spent before the end of the later of (i) the five-year period, or
(ii) a reasonable temporary period within the meaning of the use of that term under section
148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve
or replacement fund;

(3) binding contracts with a third party are entered into for performance of the
activity before or within five years after certification of the district and the revenues are
spent under the contractual obligation;

(4) costs with respect to the activity are paid before or within five years after
certification of the district and the revenues are spent to reimburse a party for payment
of the costs, including interest on unreimbursed costs; or

(5) expenditures are made for housing purposes as permitted by subdivision 2,
paragraphs (b) and (d), or for public infrastructure purposes within a zone as permitted
by subdivision 2, paragraph (e).

(b) For purposes of this subdivision, bonds include subsequent refunding bonds if
the original refunded bonds meet the requirements of paragraph (a), clause (2).

new text begin (c) For a redevelopment district or a renewal and renovation district certified after
June 30, 2003, and before April 20, 2009, the five-year periods described in paragraph
(a) are extended to ten years after certification of the district. This extension is provided
primarily to accommodate delays in development activities due to unanticipated economic
circumstances.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2008, section 469.178, subdivision 7, is amended to read:

Subd. 7.

Interfund loans.

The authority or municipality may advance or loan
money to finance expenditures under section 469.176, subdivision 4, from its general
fund or any other fund under which it has legal authority to do so. The loan or advance
must be authorized, by resolution of the governing body or of the authority, whichever
has jurisdiction over the fund from which the advance or loan is deleted text beginmade deleted text end new text begin authorized new text end, before
money is transferred, advanced, or spent, whichever is earliest. The resolution may
generally grant to the authority the power to make interfund loans under one or more tax
increment financing plans or for one or more districts. The terms and conditions for
repayment of the loan must be provided in writing and include, at a minimum, the principal
amount, the interest rate, and maximum term. The maximum rate of interest permitted to
be charged is limited to the greater of the rates specified under section 270C.40 or 549.09
as of the date the loan or advance is deleted text beginmade deleted text end new text begin authorized new text end, unless the written agreement states
that the maximum interest rate will fluctuate as the interest rates specified under section
270C.40 or 549.09 are from time to time adjusted.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for interfund loans made after June
30, 2009.
new text end

Sec. 10.

Minnesota Statutes 2008, section 469.312, subdivision 5, is amended to read:

Subd. 5.

Duration limit.

(a) The maximum duration of a zone is 12 years. The
applicant may request a shorter duration. The commissioner may specify a shorter
duration, regardless of the requested duration.

(b) The duration limit under this subdivision and the duration of the zone for
purposes of allowance of tax incentives described in section 469.315 is extended by three
calendar years for each parcel of property that meets the following requirements:

(1) the qualified business operates an ethanol plant, as defined in section 41A.09, on
the site that includes the parcel; and

(2) the business subsidy agreement was executed after April 30, 2006.

new text begin (c) The duration limit under this subdivision and the duration of the zone for
purposes of allowance of tax incentives described in section 469.315 is extended by five
calendar years for each parcel of property that meets the following requirements:
new text end

new text begin (1) the parcel is located in a county with an unemployment rate that on the date that
the business subsidy agreement is executed (i) equals or exceeds ten percent or (ii) is ten
percent higher than the statewide average;
new text end

new text begin (2) the operations of the qualified business on the site include:
new text end

new text begin (i) its headquarters;
new text end

new text begin (ii) facilities for research and development; and
new text end

new text begin (iii) the manufacturing of products, used by the building, transport, consumer
products, and industrial products sectors, that reduce the use of or increase the efficiency
of the use of energy resources and that are manufactured using innovative and high
technology processes; and
new text end

new text begin (3) the business subsidy agreement is executed after July 1, 2009, and before July 1,
2011.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Laws 2008, chapter 366, article 5, section 34, is amended to read:

Sec. 34. CITY OF OAKDALE; ORIGINAL TAX CAPACITY.

(a) The provisions of this section apply to redevelopment tax increment financing
districts created by the Housing and Redevelopment Authority in and for the city of
Oakdale in the areas comprised of the parcels with the following parcel identification
numbers: (1) 3102921320053; 3102921320054; 3102921320055; 3102921320056;
3102921320057; 3102921320058; 3102921320062; 3102921320063; 3102921320059;
3102921320060; deleted text beginand deleted text end 3102921320061; deleted text beginand (2) deleted text end 3102921330005 new text begin; new text end and 3102921330004 new text begin; and
(2) 2902921330001 and 2902921330005 new text end.

(b) For a district subject to this section, the Housing and Redevelopment Authority
may, when requesting certification of the original tax capacity of the district under
Minnesota Statutes, section 469.177, elect to have the original tax capacity of the district
be certified as the tax capacity of the land.

(c) The authority to request certification of a district under this section expires on
July 1, 2013.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing
body of the city of Oakdale and compliance with Minnesota Statutes, section 645.021,
subdivision 3.
new text end

Sec. 12. new text beginCHISAGO CITY AND LINDSTROM JOINT VENTURE.
new text end

new text begin Any two or more of the cities of Chisago City and Lindstrom, their economic
development authorities, housing and redevelopment authorities, and the county of
Chisago may enter into a joint powers agreement to acquire and develop or redevelop
a business park in either city. Any party to the agreement may spend money or issue
debt for all or a part of the project, regardless of whether the project is located within its
corporate boundaries. Issuance of debt under this section is subject to Minnesota Statutes,
chapter 475, except that an election is not required. The agreement may provide for the
parties to share revenues from the project. Any party to the agreement may levy taxes
or spend its funds, as otherwise permitted by law, to pay for the project, including debt
issued to finance the project.
new text end

new text begin If the project is included in a tax increment financing district, each city and authority
that is a party to the agreement may treat the tax increment financing district as being
located within its corporate boundaries for purposes of the authority under the tax
increment financing act, Minnesota Statutes, sections 469.174 to 469.1799, to spend
increments or issue bonds for the project.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 13. new text beginCITY OF SAUK RAPIDS; TIF.
new text end

new text begin Any parcel in the city of Sauk Rapids located within Blocks 26, 27, 59, 61, and 62,
original town of Sauk Rapids Plat, is deemed to meet the requirements of Minnesota
Statutes, section 469.174, subdivision 10, paragraph (d), clause (1), if the following
conditions are met:
new text end

new text begin (1) a building on the parcel was demolished in compliance with Minnesota Statutes,
section 469.174, subdivision 10, paragraph (d), clause (2), after the authority adopted a
resolution pursuant to Minnesota Statutes, section 469.174, subdivision 10, paragraph
(d), clause (3); and
new text end

new text begin (2) the request for certification of the parcel as part of a district is filed with the
county auditor by December 31, 2012.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of Sauk Rapids with the requirements of Minnesota Statutes, section
645.021, subdivision 3.
new text end

Sec. 14. new text beginHOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF
SOUTH ST. PAUL; TAX INCREMENT FINANCING DISTRICT.
new text end

new text begin Subdivision 1. new text end

new text begin Authorization. new text end

new text begin Notwithstanding the provisions of any other law,
the Housing and Redevelopment Authority of the city of South St. Paul may establish a
redevelopment tax increment financing district comprised of the properties included in the
existing Concord Street tax increment district in the city that are exempt under Minnesota
Statutes, section 469.179, subdivision 1, and were not decertified before July 1, 2009. The
district created under this section may be certified after August 1, 2009, and terminates no
later than December 31, 2024. The Housing and Redevelopment Authority of the city of
South St. Paul may create the district under this section only if it enters into an agreement
with Dakota County to pay the county annually out of the increment from this district an
amount equal to the tax that would have been payable to the county on the captured tax
capacity of the district had the district not been created.
new text end

new text begin Subd. 2. new text end

new text begin Special rules. new text end

new text begin The requirements for qualifying a redevelopment district
under Minnesota Statutes, section 469.174, subdivision 10, do not apply to parcels located
within the district. Minnesota Statutes, section 469.176, subdivisions 4j and 4l, do not
apply to the district. The original tax capacity of the district is $354,945.
new text end

new text begin Subd. 3. new text end

new text begin Authorized expenditures. new text end

new text begin Tax increment from the district may be
expended to pay for any eligible activities authorized by Minnesota Statutes, chapter
469, within the redevelopment area that includes the district. All such expenditures are
deemed to be activities within the district under Minnesota Statutes, section 469.1763,
subdivisions 2, 3, and 4.
new text end

new text begin Subd. 4. new text end

new text begin Adjusted net tax capacity. new text end

new text begin The captured tax capacity of the district must
be included in the adjusted net tax capacity of the city, county, and school district for the
purposes of determining local government aid, education aid, and county program aid.
The county auditor shall report to the commissioner of revenue the amount of the captured
tax capacity for the district at the time the assessment abstracts are filed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance with Minnesota
Statutes, section 645.021, subdivision 3, by the governing body of the city of South St.
Paul.
new text end

Sec. 15. new text beginCITY OF MINNETONKA; TAX INCREMENT FINANCING
DISTRICT EXTENSION.
new text end

new text begin Notwithstanding the provisions of Minnesota Statutes, section 469.176, subdivision
1b, paragraph (a), clause (1), the governing bodies of the city of Minnetonka and its
economic development authority may elect to extend the maximum duration of all or
a portion the Glenhaven Tax Increment Financing District by up to seven years. The
city may make the election under this section only if it finds by resolution that when it
approved the original tax increment financing plan for the Glenhaven Tax Increment
Financing District the area of the district qualified to be certified as a redevelopment
district under Minnesota Statutes, section 469.174, subdivision 10, or that the portion of
the district it is electing to extend so qualified. The city must document this finding in the
manner provided under Minnesota Statutes, section 469.175, subdivision 3, paragraph (b),
clause (1), for a redevelopment district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance with Minnesota
Statutes, sections 469.1782, subdivision 2, and 645.021, subdivision 3.
new text end

Sec. 16. new text beginCITY OF ARDEN HILLS; SPECIAL TAX INCREMENT FINANCING
AUTHORITY.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The city of Arden Hills may establish within the
corporate boundaries of the city a redevelopment tax increment financing district subject
to the special rules under subdivision 2. The district must be located within the area
described in the TCAAP Boundary Survey dated December 12, 2007, by W. Brown Land
Surveying, Inc.
new text end

new text begin Subd. 2. new text end

new text begin Special rules. new text end

new text begin (a) If the city elects to adopt the tax increment financing
plan in subdivision 1 for the district, the following rules apply to the district:
new text end

new text begin (1) the district is deemed to meet all the requirements of Minnesota Statutes, section
469.174, subdivision 10;
new text end

new text begin (2) the five-year rule under Minnesota Statutes, section 469.1763, subdivision 3, is
extended to a ten-year period; and
new text end

new text begin (3) the duration limit under Minnesota Statutes, section 469.176, subdivision 1b,
paragraph (a), clause (4), is extended to 30 years after receipt of the first increment.
new text end

new text begin (b) Notwithstanding Minnesota Statutes, section 469.175, subdivision 1, paragraph
(b), the city may designate the first year in which it elects to receive an increment, up to six
years following the year of approval of the district. The city must make the designation
by written notice to the county auditor delivered by June 30 of the year prior to the
designated year of first receipt.
new text end

new text begin Subd. 3. new text end

new text begin Expiration. new text end

new text begin The authority to approve a tax increment financing plan to
establish a tax increment financing district under this section expires December 31, 2019.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing body
of the city of Arden Hills and upon compliance by the city with Minnesota Statutes,
sections 469.1782, subdivision 2, and 645.021, subdivision 3.
new text end

Sec. 17. new text beginSEAWAY PORT AUTHORITY OF DULUTH; TAX INCREMENT
FINANCING DISTRICT; SPECIAL RULES.
new text end

new text begin (a) If the Seaway Port Authority of Duluth adopts a tax increment financing plan and
the governing body of the city of Duluth approves the plan for the tax increment financing
district consisting of one or more parcels identified as: 010-2730-00010; 010-2730-00020;
010-2730-00040; 010-2730-00050; 010-2730-00070; 010-2730-00080; 010-2730-00090;
010-2730-00100; 010-2730-00160; 010-2730-00180; 010-2730-00200; 010-2730-01250;
010-2730-01340; 010-2730-01350; 010-2730-01490; 010-2730-01500; 010-2730-01510;
010-2730-01520; 010-2730-01530; 010-2730-01540; 010-2730-01550; 010-2730-01560;
010-2730-01570; 010-2730-01580; 010-2730-01590; 010-2730-1300; 010-2746-1330;
010-2746-1440; 010-2746-1380; 010-3300-4560; 010-3300-4565; 010-3300-04570;
010-3300-04580; 010-3300-04640; 010-3300-04645; and 010-3300-04650, the five-year
rule under Minnesota Statutes, section 469.1763, subdivision 3, that activities must be
undertaken within a five-year period from the date of certification of the tax increment
financing district, must be considered to be met if the activities are undertaken within five
years after the date all qualifying parcels are delisted from the Federal Superfund list.
new text end

new text begin (b) The requirements of Minnesota Statutes, section 469.1763, subdivision 4,
beginning in the sixth year following certification of the district requirement, will begin
in the sixth year following the date all qualifying parcels are delisted from the Federal
Superfund list.
new text end

new text begin (c) The action required under Minnesota Statutes, section 469.176 subdivision 6,
are satisfied if the action is commenced within four years after the date all qualifying
parcels are delisted from the Federal Superfund list and evidence of the action required is
submitted to the county auditor by February 1 of the fifth year following the year in which
all qualifying parcels are delisted from the Federal Superfund list.
new text end

new text begin (d) For purposes of this section, "qualifying parcels" means United States Steel
parcels listed in paragraph (a) and shown by the Minnesota Pollution Control Agency as
part of the USS Site (USEPA OU 02) that are included in the tax increment financing
district.
new text end

new text begin (e) In addition to the reporting requirements of Minnesota Statutes, section 469.175,
subdivision 5, the Seaway Port Authority of Duluth shall report the status of all parcels
listed in paragraph (a) and shown as part of the USS Site (USEPA OU 02). The status
report must show the parcel numbers, the listed or delisted status, and if delisted, the
delisting date.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing
body of the city of Duluth and compliance with Minnesota Statutes, section 645.021,
subdivision 3.
new text end

Sec. 18. new text beginCITY OF MANKATO; TAX INCREMENT FINANCING DISTRICT;
PROJECT REQUIREMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Expenditures outside district. new text end

new text begin Notwithstanding Minnesota Statutes,
section 469.1763, subdivision 2, or any other law to the contrary, the city of Mankato may
expend increments generated from its South Riverfront tax increment financing district for
construction of street and roadway improvements under the Sibley Parkway Plan, provided
the improvements are located within 500 feet or less of the boundaries of the district.
new text end

new text begin Subd. 2. new text end

new text begin Five-year rule. new text end

new text begin The five-year rule under Minnesota Statutes, section
469.1763, subdivision 3, is extended to an 11-year period for the South Riverfront tax
increment financing district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon approval by the governing
body of the city of Mankato and upon compliance by the city with Minnesota Statutes,
section 645.021, subdivision 3.
new text end

Sec. 19. new text beginCITY OF ST. LOUIS PARK; EXTENSION OF TAX INCREMENT
DISTRICT DURATION.
new text end

new text begin Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the duration
of the Elmwood Village Tax Increment Financing District is extended to 22 years after
receipt by the St. Louis Park Economic Development Authority of the first increment
from the district.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon compliance by the governing
body of the city of St. Louis Park with the requirements of Minnesota Statutes, sections
469.1782, subdivision 2, and 645.021, subdivision 3.
new text end

Sec. 20. new text beginMOUNTAIN IRON ECONOMIC DEVELOPMENT AUTHORITY;
WIND ENERGY PROJECT.
new text end

new text begin (a) The Mountain Iron economic development authority may form or become a
member of a limited liability company organized under Minnesota Statutes, chapter 322B,
for the purpose of developing a community-based energy development project pursuant
to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined
under this section is subject to the open meeting requirements established in Minnesota
Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or
distribute the electrical energy at retail or provide for end use of the electrical energy to an
off-site facility of the economic development authority or the limited liability company.
Nothing in this section modifies the exclusive service territories or exclusive right to serve
as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
new text end

new text begin (b) The authority may acquire a leasehold interest in property outside its corporate
boundaries for the purpose of developing a community-based energy development project
as provided in Minnesota Statutes, section 216B.1612.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 21. new text beginWINONA COUNTY ECONOMIC DEVELOPMENT AUTHORITY;
WIND ENERGY PROJECT.
new text end

new text begin (a) The Winona County economic development authority may form or become a
member of a limited liability company organized under Minnesota Statutes, chapter 322B,
for the purpose of developing a community-based energy development project pursuant
to Minnesota Statutes, section 216B.1612. A limited liability company formed or joined
under this section is subject to the open meeting requirements established in Minnesota
Statutes, chapter 13D. A project authorized by this section may not sell, transmit, or
distribute the electrical energy at retail or provide for end use of the electrical energy to an
off-site facility of the economic development authority or the limited liability company.
Nothing in this section modifies the exclusive service territories or exclusive right to serve
as provided in Minnesota Statutes, sections 216B.37 to 216B.43.
new text end

new text begin (b) The authority may acquire a leasehold interest in property outside its corporate
boundaries for the purpose of developing a community-based energy development project
as provided in Minnesota Statutes, section 216B.1612.
new text end

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 6

PUBLIC FINANCE

Section 1.

new text begin [16A.647] TAX CREDIT AND INTEREST SUBSIDY BONDS.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to issue. new text end

new text begin When authorized by law to issue state general
obligation bonds, the commissioner may issue all or part of the bonds as tax credit bonds
or as interest subsidy bonds or a combination of the two.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (b) "Tax credit bonds" means bonds, the interest on which is includable in the
income of the owner of the bonds for federal income tax purposes, but for which the
owner is entitled to a federal tax credit.
new text end

new text begin (c) "Interest subsidy bonds" means bonds, the interest on which is includable in the
income of the owner of the bonds for federal income tax purposes, but for which the
issuer is entitled to federal interest subsidy payments based on a percentage of the interest
payable on the interest subsidy bonds.
new text end

new text begin Subd. 3. new text end

new text begin Method of sale. new text end

new text begin Notwithstanding the provisions of section 16A.641,
subdivision 4, the commissioner may sell any series of tax credit bonds or interest
subsidy bonds at negotiated sale upon the terms and conditions and the restrictions the
commissioner prescribes, but the commissioner may contract for investment banking
and banking services only after receiving competitive proposals for the services. The
commissioner may enter into all contracts deemed necessary or desirable to accomplish
the sale in a cost-effective manner.
new text end

new text begin Subd. 4. new text end

new text begin Sinking fund. new text end

new text begin The commissioner's order authorizing the issuance of
interest subsidy bonds must establish a separate sinking fund account for the interest
subsidy bonds in the state bond fund. There is annually appropriated, as received, to each
interest subsidy bond account, in addition to amounts appropriated under section 16A.641,
the interest subsidy payments received from the federal government with respect to that
issue of interest subsidy bonds in that year.
new text end

new text begin Subd. 5. new text end

new text begin Sale. new text end

new text begin Tax credit bonds and interest subsidy bonds must be sold at a price
not less than 98 percent of their stated principal amount. No state trunk highway bond
may be sold for a price of less than par and accrued interest.
new text end

Sec. 2.

Minnesota Statutes 2008, section 37.31, subdivision 8, is amended to read:

Subd. 8.

Expiration.

The authority to issue bonds, other than bonds to refund
outstanding bonds, under this section expires July 1, deleted text begin2009 deleted text end new text begin 2015 new text end.

Sec. 3.

Minnesota Statutes 2008, section 126C.55, subdivision 4, is amended to read:

Subd. 4.

Pledge of district's full faith and credit.

If, at the request of a school
district or intermediate school district, the state has paid part or all of the principal or
interest due on a district's debt obligation on a specific date, the pledge of the full faith and
credit and unlimited taxing powers of the school district or the member districts of the
intermediate district to repay the principal and interest due on those debt obligations shall
also, without an election or the requirement of a further authorization, become a pledge of
the full faith and credit and unlimited taxing powers of the school district or the member
districts of the intermediate district to repay to the state the amount paid, with interest.
Amounts paid by the state must be repaid in the order in which the state payments were
made. new text begin Whenever the state pays under this section interest on bonds for which the issuer is
entitled to federal interest subsidy payments, the state is subrogated to the issuer's rights to
any federal interest subsidy payments relating to the interest paid by the state, unless and
until the state has been reimbursed by the issuer in full.
new text end

Sec. 4.

Minnesota Statutes 2008, section 204B.46, is amended to read:

204B.46 MAIL ELECTIONS; QUESTIONS.

A county, municipality, or school district submitting questions to the voters at a
special election may conduct an election by mail with no polling place other than the office
of the auditor or clerk. No deleted text beginmore than two questions may be submitted at a mail election
and no deleted text end offices may be voted on new text begin at a mail election new text end. Notice of the election must be given
to the county auditor at least 53 days prior to the election. This notice shall also fulfill
the requirements of Minnesota Rules, part 8210.3000. The special mail ballot procedures
must be posted at least six weeks prior to the election. No earlier than 20 or later than 14
days prior to the election, the auditor or clerk shall mail ballots by nonforwardable mail
to all voters registered in the county, municipality, or school district. Eligible voters not
registered at the time the ballots are mailed may apply for ballots pursuant to chapter 203B.

Sec. 5.

Minnesota Statutes 2008, section 360.036, subdivision 2, is amended to read:

Subd. 2.

Issuance of bonds.

(a) Bonds to be issued by a municipality under sections
360.011 to 360.076, shall be authorized and issued in the manner and within the limitation
prescribed by laws or the charter of the municipality for the issuance and authorization of
bonds for public purposes generally, except as provided in paragraphs (b) and (c).

(b) No election is required to authorize the issuance of the bonds if:

(1) a board organized under section 360.042 recommends by a resolution adopted
by a vote of not less than 60 percent of its members the issuance of bonds, and the
bonds are authorized by a resolution of the governing body of each of the municipalities
acting jointly pursuant to section 360.042, adopted by a vote of not less than 60 percent
of its members; deleted text beginor
deleted text end

(2) new text beginthe bonds are authorized by a resolution of the governing body of the
municipality, adopted by a vote of not less than 60 percent of its members; or
new text end

new text begin (3) new text endthe bonds are being issued for the purpose of financing the costs of constructing,
enlarging, or improving airports and other air navigation facilities; and

(i) the governing body estimates that passenger facility charges and other revenues
pledged to the payment thereof will be at least 20 percent of the debt service payable
on the bonds in any year;

(ii) the project will be funded in part by a new text beginstate or new text endfederal grant for airport
development; and

(iii) the principal amount of the bonds issued under this clause does not exceed 25
percent of the amount of the new text beginstate or new text endfederal grant.

(c) If the bonds are general obligations of the municipality, the levy of taxes required
by section 475.61 to pay principal and interest on the bonds is not included in computing
or applying any levy limitation applicable to the municipality.

Sec. 6.

Minnesota Statutes 2008, section 366.095, subdivision 1, is amended to read:

Subdivision 1.

Certificates of indebtedness.

The town board may issue certificates
of indebtedness within the debt limits for a town purpose otherwise authorized by law.
The certificates shall be payable in not more than deleted text beginfive deleted text end new text begin ten new text end years and be issued on the terms
and in the manner as the board may determine. If the amount of the certificates to be
issued exceeds 0.25 percent of the market value of the town, they shall not be issued for at
least ten days after publication in a newspaper of general circulation in the town of the
board's resolution determining to issue them. If within that time, a petition asking for an
election on the proposition signed by voters equal to ten percent of the number of voters
at the last regular town election is filed with the clerk, the certificates shall not be issued
until their issuance has been approved by a majority of the votes cast on the question at
a regular or special election. A tax levy shall be made to pay the principal and interest
on the certificates as in the case of bonds.

Sec. 7.

Minnesota Statutes 2008, section 373.47, subdivision 1, is amended to read:

Subdivision 1.

Authority to incur debt.

Subject to prior approval by the Statewide
Radio Board under section 403.36, the governing body of a county may finance the cost of
designing, constructing, and acquiring public safety communication system infrastructure
and equipment for use on the statewide, shared public safety radio system by issuing:

(1) capital improvement bonds under section 373.40, as if the infrastructure and
equipment qualified as a "capital improvement" within the meaning of section 373.40,
subdivision 1, paragraph (b) new text begin, bonds issued under this section are exempt from and shall
not be included in calculating the limitations in section 373.40, subdivision 4 new text end; and

(2) capital notes under the provisions of section 373.01, subdivision 3, as if the
equipment qualified as "capital equipment" within the meaning of section 373.01,
subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment,
and applies to bonds issued after May 22, 2002.
new text end

Sec. 8.

Minnesota Statutes 2008, section 428A.03, subdivision 1, is amended to read:

Subdivision 1.

Hearing.

Service charges may be imposed by the city within the
special service district at a rate or amount sufficient to produce the revenues required to
provide special services in the district. To determine the appropriate rate for a service
charge based on net tax capacity, taxable property or net tax capacity must be determined
without regard to captured or original net tax capacity under section 469.177 or to the
distribution or contribution value under section 473F.08. Service charges may not be
imposed to finance a special service if the service is ordinarily provided by the city from
its general fund revenues unless the service is provided in the district at an increased level.
In that case, a service charge may be imposed only in the amount needed to pay for the
increased level of service. A service charge may not be imposed on the receipts from the
sale of intoxicating liquor, food, or lodging. Before the imposition of service charges in a
district, for each calendar year, a hearing must be held under section 428A.02 and notice
must be given and must be mailed to any new text beginowner, new text endindividual new text begin, new text end or business organization
subject to a service charge. For purposes of this section, the notice shall also include:

(1) a statement that all interested persons will be given an opportunity to be heard at
the hearing regarding a proposed service charge;

(2) the estimated cost of improvements to be paid for in whole or in part by service
charges imposed under this section, the estimated cost of operating and maintaining
the improvements during the first year and upon completion of the improvements, the
proposed method and source of financing the improvements, and the annual cost of
operating and maintaining the improvements;

(3) the proposed rate or amount of the proposed service charge to be imposed in
the district during the calendar year and the nature and character of special services to
be rendered in the district during the calendar year in which the service charge is to be
collected; and

(4) a statement that the petition requirements of section 428A.08 have either been
met or do not apply to the proposed service charge.

Within six months of the public hearing, the city may adopt a resolution imposing
a service charge within the district not exceeding the amount or rate expressed in the
notice issued under this section.

Sec. 9.

Minnesota Statutes 2008, section 428A.08, is amended to read:

428A.08 PETITION REQUIRED.

No action may be taken under section 428A.02 new text beginor 428A.03, new text endunless owners of 25
percent or more of the land area of property that would be subject to service charges in the
proposed special service district and new text begin either: (1) new text end owners of 25 percent or more of the net tax
capacity of property that would be subject to new text begina proposed new text endservice deleted text begincharges in the proposed
special service district deleted text end new text begin charge, based on net tax capacity; or (2) owners, individuals, and
business organizations subject to 25 percent or more of a proposed service charge based
on other than net tax capacity new text end file a petition requesting a public hearing on the proposed
action with the city clerk. deleted text beginNo action may be taken under section 428A.03 to impose
a service charge based on net tax capacity unless owners of 25 percent or more of the
land area subject to a proposed service charge and owners of 25 percent or more of the
net tax capacity subject to a proposed service charge file a petition requesting a public
hearing on the proposed action with the city clerk. No action may be taken under section
428A.03 to impose any other type of service charge unless 25 percent or more of the
individual or business organizations subject to the proposed service charge file a petition
requesting a public hearing on the proposed action with the city clerk. deleted text end If the boundaries of
a proposed district are changed or the land area or net tax capacity subject to a service
charge or the individuals or business organizations subject to a service charge are changed
after the public hearing, a petition meeting the requirements of this section must be filed
with the city clerk before the ordinance establishing the district or resolution imposing
the service charge may become effective.

Sec. 10.

Minnesota Statutes 2008, section 428A.09, is amended to read:

428A.09 VETO POWER OF OWNERS.

Subdivision 1.

Notice of right to file objections.

Except as provided in section
428A.10, the effective date of any ordinance or resolution adopted under sections 428A.02
and 428A.03 must be at least 45 days after it is adopted. Within five days after adoption
of the ordinance or resolution, a summary of the ordinance or resolution must be mailed
to the owner of each parcel included in the special service district and any individual or
business organization subject to a service charge in the same manner that notice is mailed
under section 428A.02. The mailing must include a notice that owners subject to a service
charge based on net tax capacity and new text beginowners, new text endindividuals new text begin, new text end and business organizations
subject to a service charge imposed on another basis have a right to veto the ordinance
or resolution by filing the required number of objections with the city clerk before the
effective date of the ordinance or resolution and that a copy of the ordinance or resolution
is on file with the city clerk for public inspection.

Subd. 2.

Requirements for veto.

If owners of 35 percent or more of the land
area in the district subject to the service charge based on net tax capacity or owners
deleted text begin of deleted text end new text begin, individuals, and business organizations subject to new text end 35 percent or more of the deleted text beginnet tax
capacity in the district subject to the service charge based on net tax capacity deleted text end new text begin service
charges to be imposed in the district, new text end file an objection to the ordinance adopted by the city
under section 428A.02 with the city clerk before the effective date of the ordinance, the
ordinance does not become effective. If owners of 35 percent or more of the land area
subject to the service charge based on net tax capacity or owners of 35 percent or more
of the net tax capacity subject to the service charge based on net tax capacity file an
objection to the resolution adopted imposing a service charge based on net tax capacity
under section 428A.03 with the city clerk before the effective date of the resolution, the
resolution does not become effective. If deleted text begin35 percent or more of deleted text end new text begin owners, new text end individuals new text begin, new text end and
business organizations subject to deleted text begina deleted text end new text begin 35 percent or more of the new text end service deleted text begincharge deleted text end new text begin charges to
be imposed in the district new text end file an objection to the resolution adopted imposing a service
charge on a basis other than net tax capacity under section 428A.03 with the city clerk
before the effective date of the resolution, the resolution does not become effective. In the
event of a veto, no district shall be established during the current calendar year and until a
petition meeting the qualifications set forth in this subdivision for a veto has been filed.

Sec. 11.

Minnesota Statutes 2008, section 428A.10, is amended to read:

428A.10 EXCLUSION FROM PETITION REQUIREMENTS AND VETO
POWER.

The petition requirements of section 428A.08 deleted text beginand deleted text end new text begin do not apply to second or
subsequent years' action to impose service charges under section 428A.03. new text end The right of
owners and those subject to a service charge to veto a resolution in section 428A.09
deleted text begin do deleted text end new text begin does new text end not apply to second or subsequent years' applications of a service charge that
is authorized to be in effect for more than one year under a resolution that deleted text beginhas met the
petition requirements of section 428A.08 and which deleted text end has not been vetoed under section
428A.09 for the first year's application. A resolution imposing a service charge for more
than one year must not be adopted unless the notice of public hearing required by section
428A.03 and the notice mailed with the adopted resolution under section 428A.09 include
the following information:

(1) in the case of improvements, the maximum service charge to be imposed in any
year and the maximum number of years the service deleted text begincharges deleted text end new text begin charge is new text end imposed to pay
for the improvement; and

(2) in the case of operating and maintenance services, the maximum service charge
to be imposed in any year and the maximum number of years, or a statement that the
service charge will be imposed for an indefinite number of years, the service charges will
be imposed to pay for operation and maintenance services.

The resolution may provide that the maximum service charge to be imposed in any
year will increase or decrease from the maximum amount authorized in the preceding
year based on an indicator of increased cost or a percentage amount established by the
resolution.

Sec. 12.

Minnesota Statutes 2008, section 446A.086, is amended by adding a
subdivision to read:

new text begin Subd. 12. new text end

new text begin Federal interest subsidy payments. new text end

new text begin Whenever the state pays under
this section interest on bonds for which the issuer is entitled to federal interest subsidy
payments, the state is subrogated to the issuer's rights to any federal interest subsidy
payments relating to the interest paid by the state, unless and until the state has been
reimbursed by the issuer in full.
new text end

Sec. 13.

Minnesota Statutes 2008, section 469.005, subdivision 1, is amended to read:

Subdivision 1.

County and multicounty authorities.

The area of operation of a
county authority shall include all of the county for which it is created, and in case of
a multicounty authority, it shall include all of the political subdivisions for which the
multicounty authority is created; provided, that a county authority or a multicounty
authority shall not undertake any project within the boundaries of any city which has not
empowered the authority to function therein as provided in section 469.004 unless a
resolution has been adopted by the governing body of the city deleted text begin, and by any authority which
has been established in the city, deleted text end declaring that there is a need for the county or multicounty
authority to exercise its powers in the city. A resolution is not required for the operation of
a Section 8 program or a public housing scattered site project.

Sec. 14.

Minnesota Statutes 2008, section 469.015, subdivision 1, is amended to read:

Subdivision 1.

Bids; notice.

All construction work, and work of demolition or
clearing, and every purchase of equipment, supplies, or materials, necessary in carrying
out the purposes of sections 469.001 to 469.047, deleted text beginthat involve expenditure of $50,000 or
more deleted text end shall be awarded by contract new text begin as provided in section 471.345 new text end. Before receiving
bids new text beginunder section 471.345, subdivision 3, new text endthe authority shall publish, once a week for
two consecutive weeks in an official newspaper of general circulation in the community a
notice that bids will be received for that construction work, or that purchase of equipment,
supplies, or materials. The notice shall state the nature of the work and the terms and
conditions upon which the contract is to be let, naming a time and place where bids will
be received, opened and read publicly, which time shall be not less than seven days after
the date of the last publication. After the bids have been received, opened and read
publicly and recorded, the authority shall award the contract to the lowest responsible
bidder, provided that the authority reserves the right to reject any or all bids. Each
contract shall be executed in writing, and the person to whom the contract is awarded
shall give sufficient bond to the authority for its faithful performance. If no satisfactory
bid is received, the authority may readvertise. The authority may establish reasonable
qualifications to determine the fitness and responsibility of bidders and to require bidders
to meet the qualifications before bids are accepted.

Sec. 15.

Minnesota Statutes 2008, section 469.015, subdivision 2, is amended to read:

Subd. 2.

Exception; emergency.

If the authority by a vote of four-fifths of its
members shall declare that an emergency exists requiring the immediate purchase of
any equipment or material or supplies at a cost in excess of deleted text begin$50,000 but not exceeding
$75,000 deleted text end new text begin the amount provided in section 471.345 new text end, or making of emergency repairs, it shall
not be necessary to advertise for bids, but the material, equipment, or supplies may be
purchased in the open market at the lowest price obtainable, or the emergency repairs may
be contracted for or performed without securing formal competitive bids. An emergency,
for purposes of this subdivision, shall be understood to be unforeseen circumstances or
conditions which result in the placing in jeopardy of human life or property.

Sec. 16.

Minnesota Statutes 2008, section 469.015, subdivision 3, is amended to read:

Subd. 3.

Performance and payment bonds.

Performance and payment bonds shall
be required from contractors for any works of construction as provided in and subject to
all the provisions of sections 574.26 to 574.31 deleted text beginexcept for contracts entered into by an
authority for an expenditure of less than $50,000 deleted text end.

Sec. 17.

Minnesota Statutes 2008, section 469.034, subdivision 2, is amended to read:

Subd. 2.

General obligation revenue bonds.

(a) An authority may pledge the
general obligation of the general jurisdiction governmental unit as additional security for
bonds payable from income or revenues of the project or the authority. The authority
must find that the pledged revenues will equal or exceed 110 percent of the principal and
interest due on the bonds for each year. The proceeds of the bonds must be used for a
qualified housing development project or projects. The obligations must be issued and
sold in the manner and following the procedures provided by chapter 475, except the
obligations are not subject to approval by the electors, and the maturities may extend to
not more than 35 years for obligations sold to finance housing for the elderly and 40 years
for other obligations issued under this subdivision. The authority is the municipality for
purposes of chapter 475.

(b) The principal amount of the issue must be approved by the governing body of
the general jurisdiction governmental unit whose general obligation is pledged. Public
hearings must be held on issuance of the obligations by both the authority and the general
jurisdiction governmental unit. The hearings must be held at least 15 days, but not more
than 120 days, before the sale of the obligations.

(c) The maximum amount of general obligation bonds that may be issued and
outstanding under this section equals the greater of (1) one-half of one percent of
the taxable market value of the general jurisdiction governmental unit whose general
obligation is pledged, or (2) $3,000,000. In the case of county or multicounty general
obligation bonds, the outstanding general obligation bonds of all cities in the county
or counties issued under this subdivision must be added in calculating the limit under
clause (1).

(d) "General jurisdiction governmental unit" means the city in which the housing
development project is located. In the case of a county or multicounty authority, the
county or counties may act as the general jurisdiction governmental unit. In the case of
a multicounty authority, the pledge of the general obligation is a pledge of a tax on the
taxable property in each of the counties.

(e) "Qualified housing development project" means a housing development project
providing housing either for the elderly or for individuals and families with incomes not
greater than 80 percent of the median family income as estimated by the United States
Department of Housing and Urban Development for the standard metropolitan statistical
area or the nonmetropolitan county in which the project is located. The project must be
owned for the term of the bonds either by the authority or by a limited partnership or other
entity in which the authority or another entity under the sole control of the authority is the
sole general partner and the partnership or other entity must receive (1) an allocation from
the Department of Finance or an entitlement issuer of tax-exempt bonding authority for
the project and a preliminary determination by the Minnesota Housing Finance Agency
or the applicable suballocator of tax credits that the project will qualify for four percent
low-income housing tax credits or (2) a reservation of nine percent low-income housing
tax credits from the Minnesota Housing Finance Agency or a suballocator of tax credits
for the project. A qualified housing development project may admit nonelderly individuals
and families with higher incomes if:

(1) three years have passed since initial occupancy;

(2) the authority finds the project is experiencing unanticipated vacancies resulting in
insufficient revenues, because of changes in population or other unforeseen circumstances
that occurred after the initial finding of adequate revenues; and

(3) the authority finds a tax levy or payment from general assets of the general
jurisdiction governmental unit will be necessary to pay debt service on the bonds if higher
income individuals or families are not admitted.

new text begin (f) The authority may issue bonds to refund bonds issued under this subdivision in
accordance with section 475.67. The finding of the adequacy of pledged revenues required
by paragraph (a) and the public hearing required by paragraph (b) shall not apply to the
issuance of refunding bonds. This paragraph applies to refunding bonds issued on and
after July 1, 1992.
new text end

Sec. 18.

Minnesota Statutes 2008, section 469.153, subdivision 2, is amended to read:

Subd. 2.

Project.

(a) "Project" means (1) any properties, real or personal, used
or useful in connection with a revenue producing enterprise, or any combination of
two or more such enterprises engaged or to be engaged in generating, transmitting, or
distributing electricity, assembling, fabricating, manufacturing, mixing, processing,
storing, warehousing, or distributing any products of agriculture, forestry, mining, or
manufacture, or in research and development activity in this field new text begin, or in the manufacturing,
creation, or production of intangible property, including any patent, copyright, formula,
process, design, know how, format, or other similar item new text end; (2) any properties, real or
personal, used or useful in the abatement or control of noise, air, or water pollution, or in
the disposal of solid wastes, in connection with a revenue producing enterprise, or any
combination of two or more such enterprises engaged or to be engaged in any business
or industry; (3) any properties, real or personal, used or useful in connection with the
business of telephonic communications, conducted or to be conducted by a telephone
company, including toll lines, poles, cables, switching, and other electronic equipment
and administrative, data processing, garage, and research and development facilities;
(4) any properties, real or personal, used or useful in connection with a district heating
system, consisting of the use of one or more energy conversion facilities to produce hot
water or steam for distribution to homes and businesses, including cogeneration facilities,
distribution lines, service facilities, and retrofit facilities for modifying the user's heating
or water system to use the heat energy converted from the steam or hot water.

(b) "Project" also includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, or any combination of two or more
such enterprises engaged in any business.

(c) "Project" also includes any properties, real or personal, used or useful for the
promotion of tourism in the state. Properties may include hotels, motels, lodges, resorts,
recreational facilities of the type that may be acquired under section 471.191, and related
facilities.

(d) "Project" also includes any properties, real or personal, used or useful in
connection with a revenue producing enterprise, whether or not operated for profit,
engaged in providing health care services, including hospitals, nursing homes, and related
medical facilities.

(e) "Project" does not include any property to be sold or to be affixed to or consumed
in the production of property for sale, and does not include any housing facility to be
rented or used as a permanent residence.

(f) "Project" also means the activities of any revenue producing enterprise involving
the construction, fabrication, sale, or leasing of equipment or products to be used in
gathering, processing, generating, transmitting, or distributing solar, wind, geothermal,
biomass, agricultural or forestry energy crops, or other alternative energy sources for
use by any person or any residential, commercial, industrial, or governmental entity in
heating, cooling, or otherwise providing energy for a facility owned or operated by that
person or entity.

(g) "Project" also includes any properties, real or personal, used or useful in
connection with a county jail, county regional jail, community corrections facilities
authorized by chapter 401, or other law enforcement facilities, the plans for which are
approved by the commissioner of corrections; provided that the provisions of section
469.155, subdivisions 7 and 13, do not apply to those projects.

(h) "Project" also includes any real properties used or useful in furtherance of the
purpose and policy of section 469.141.

(i) "Project" also includes related facilities as defined by section 471A.02,
subdivision 11.

(j) "Project" also includes an undertaking to purchase the obligations of local
governments located in whole or in part within the boundaries of the municipality that are
issued or to be issued for public purposes.

Sec. 19.

Minnesota Statutes 2008, section 471.191, subdivision 1, is amended to read:

Subdivision 1.

Lease to nonprofit.

Any city operating a program of public
recreation and playgrounds pursuant to sections 471.15 to