SF 895

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to economic development; providing for an
international economic development zone; providing tax
incentives; requiring a report; appropriating money;
amending Minnesota Statutes 2004, sections 272.02, by
adding a subdivision; 290.01, subdivisions 19b, 29;
290.06, subdivision 2c, by adding a subdivision;
290.067, subdivision 1; 290.0671, subdivision 1;
290.091, subdivision 2; 290.0921, subdivision 3;
290.0922, subdivisions 2, 3; 297A.68, by adding a
subdivision; proposing coding for new law in Minnesota
Statutes, chapter 469.

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

Section 1.

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

new text begin Subd. 68. new text end

new text begin International economic development zone
property. new text end

new text begin (a) Improvements to real property, and personal
property, classified under section 273.13, subdivision 24, and
located within an international economic development zone
designated under section 469.322, are exempt from ad valorem
taxes levied under chapter 275, if the occupant of the property
is a qualified business, as defined in section 469.321.
new text end

new text begin (b) The exemption applies beginning for the first
assessment year after designation of the international economic
development zone. The exemption applies to each assessment year
that begins during the duration of the international economic
development zone and to property occupied by July 1 of the
assessment year by a qualified business. This exemption does
not apply to:
new text end

new text begin (1) the levy under section 475.61 or similar levy
provisions under any other law to pay general obligation bonds;
or
new text end

new text begin (2) a levy under section 126C.17, if the levy was approved
by the voters before the designation of the zone.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning for
property taxes assessed in 2006, payable in 2007.
new text end

Sec. 2.

Minnesota Statutes 2004, 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) 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 included in federal taxable income,
postservice benefits for youth community service under section
124D.42 for volunteer service under United States Code, title
42, sections 12601 to 12604;

(7) to the extent not deducted 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
allowable as a deduction for the taxable year under section
170(a) of the Internal Revenue Code over $500;

(8) 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;

(9) 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;

(10) in each of the five tax years immediately following
the tax year in which an addition is required under subdivision
19a, clause (7), 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), 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; deleted text begin and
deleted text end

(11) job opportunity building zone income as provided under
section 469.316 new text begin ; and
new text end

new text begin (12) international economic development zone income as
provided under section 469.325 new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2004, section 290.01,
subdivision 29, is amended to read:

Subd. 29.

Taxable income.

The term "taxable income"
means:

(1) for individuals, estates, and trusts, the same as
taxable net income;

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095;

(ii) the dividends received deduction under section 290.21,
subdivision 4;

(iii) the exemption for operating in a job opportunity
building zone under section 469.317; deleted text begin and
deleted text end

(iv) the exemption for operating in a biotechnology and
health sciences industry zone under section 469.337 new text begin ; and
new text end

new text begin (v) the exemption for operating in an international
economic development zone under section 469.326 new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 4.

Minnesota Statutes 2004, section 290.06,
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), and
(6), and reduced by the subtraction under section 290.01,
subdivision 19b, deleted text begin clause deleted text end new text begin clauses new text end (11) new text begin and (12) new text end , and the Minnesota
assignable portion of the subtraction for United States
government interest under section 290.01, subdivision 19b,
clause (1), 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), and (6), and reduced
by the amounts specified in section 290.01, subdivision 19b,
clauses (1) deleted text begin and deleted text end new text begin , new text end (11) new text begin , and (12) new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

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

new text begin Subd. 32. new text end

new text begin International economic development zone job
credit. new text end

new text begin A taxpayer that is a qualified business, as defined in
section 469.321, subdivision 6, is allowed a credit as
determined under section 469.327 against the tax imposed by this
chapter.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 6.

Minnesota Statutes 2004, section 290.067,
subdivision 1, is amended to read:

Subdivision 1.

Amount of credit.

(a) A taxpayer may take
as a credit against the tax due from the taxpayer and a spouse,
if any, under this chapter an amount equal to the dependent care
credit for which the taxpayer is eligible pursuant to the
provisions of section 21 of the Internal Revenue Code subject to
the limitations provided in subdivision 2 except that in
determining whether the child qualified as a dependent, income
received as a Minnesota family investment program grant or
allowance to or on behalf of the child must not be taken into
account in determining whether the child received more than half
of the child's support from the taxpayer, and the provisions of
section 32(b)(1)(D) of the Internal Revenue Code do not apply.

(b) If a child who has not attained the age of six years at
the close of the taxable year is cared for at a licensed family
day care home operated by the child's parent, the taxpayer is
deemed to have paid employment-related expenses. If the child
is 16 months old or younger at the close of the taxable year,
the amount of expenses deemed to have been paid equals the
maximum limit for one qualified individual under section 21(c)
and (d) of the Internal Revenue Code. If the child is older
than 16 months of age but has not attained the age of six years
at the close of the taxable year, the amount of expenses deemed
to have been paid equals the amount the licensee would charge
for the care of a child of the same age for the same number of
hours of care.

(c) If a married couple:

(1) has a child who has not attained the age of one year at
the close of the taxable year;

(2) files a joint tax return for the taxable year; and

(3) does not participate in a dependent care assistance
program as defined in section 129 of the Internal Revenue Code,
in lieu of the actual employment related expenses paid for that
child under paragraph (a) or the deemed amount under paragraph
(b), the lesser of (i) the combined earned income of the couple
or (ii) the amount of the maximum limit for one qualified
individual under section 21(c) and (d) of the Internal Revenue
Code will be deemed to be the employment related expense paid
for that child. The earned income limitation of section 21(d)
of the Internal Revenue Code shall not apply to this deemed
amount. These deemed amounts apply regardless of whether any
employment-related expenses have been paid.

(d) If the taxpayer is not required and does not file a
federal individual income tax return for the tax year, no credit
is allowed for any amount paid to any person unless:

(1) the name, address, and taxpayer identification number
of the person are included on the return claiming the credit; or

(2) if the person is an organization described in section
501(c)(3) of the Internal Revenue Code and exempt from tax under
section 501(a) of the Internal Revenue Code, the name and
address of the person are included on the return claiming the
credit.

In the case of a failure to provide the information required
under the preceding sentence, the preceding sentence does not
apply if it is shown that the taxpayer exercised due diligence
in attempting to provide the information required.

In the case of a nonresident, part-year resident, or a
person who has earned income not subject to tax under this
chapter including earned income excluded pursuant to section
290.01, subdivision 19b, deleted text begin clause deleted text end new text begin clauses new text end (11) new text begin and (12) new text end , the
credit determined under section 21 of the Internal Revenue Code
must be allocated based on the ratio by which the earned income
of the claimant and the claimant's spouse from Minnesota sources
bears to the total earned income of the claimant and the
claimant's spouse.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2004, section 290.0671,
subdivision 1, is amended to read:

Subdivision 1.

Credit allowed.

(a) An individual is
allowed a credit against the tax imposed by this chapter equal
to a percentage of earned income. To receive a credit, a
taxpayer must be eligible for a credit under section 32 of the
Internal Revenue Code.

(b) For individuals with no qualifying children, the credit
equals 1.9125 percent of the first $4,620 of earned income. The
credit is reduced by 1.9125 percent of earned income or modified
adjusted gross income, whichever is greater, in excess of
$5,770, but in no case is the credit less than zero.

(c) For individuals with one qualifying child, the credit
equals 8.5 percent of the first $6,920 of earned income and 8.5
percent of earned income over $12,080 but less than $13,450.
The credit is reduced by 5.73 percent of earned income or
modified adjusted gross income, whichever is greater, in excess
of $15,080, but in no case is the credit less than zero.

(d) For individuals with two or more qualifying children,
the credit equals ten percent of the first $9,720 of earned
income and 20 percent of earned income over $14,860 but less
than $16,800. The credit is reduced by 10.3 percent of earned
income or modified adjusted gross income, whichever is greater,
in excess of $17,890, but in no case is the credit less than
zero.

(e) For a nonresident or part-year resident, the credit
must be allocated based on the percentage calculated under
section 290.06, subdivision 2c, paragraph (e).

(f) For a person who was a resident for the entire tax year
and has earned income not subject to tax under this chapter,
including income excluded under section 290.01, subdivision 19b,
clause (11) new text begin or (12) new text end , the credit must be allocated based on the
ratio of federal adjusted gross income reduced by the earned
income not subject to tax under this chapter over federal
adjusted gross income.

(g) For tax years beginning after December 31, 2001, and
before December 31, 2004, the $5,770 in paragraph (b), the
$15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each
increased by $1,000 for married taxpayers filing joint returns.

(h) For tax years beginning after December 31, 2004, and
before December 31, 2007, the $5,770 in paragraph (b), the
$15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each
increased by $2,000 for married taxpayers filing joint returns.

(i) For tax years beginning after December 31, 2007, and
before December 31, 2010, the $5,770 in paragraph (b), the
$15,080 in paragraph (c), and the $17,890 in paragraph (d),
after being adjusted for inflation under subdivision 7, are each
increased by $3,000 for married taxpayers filing joint returns.
For tax years beginning after December 31, 2008, the $3,000 is
adjusted annually for inflation under subdivision 7.

(j) The commissioner shall construct tables showing the
amount of the credit at various income levels and make them
available to taxpayers. The tables shall follow the schedule
contained in this subdivision, except that the commissioner may
graduate the transition between income brackets.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2004, 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 to the extent that the deduction
exceeds 1.0 percent of adjusted gross income, as defined in
section 62 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, clause (7);

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 (10) deleted text begin and deleted text end new text begin ,
new text end (11) new text begin , and (12) 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, 2005.
new text end

Sec. 9.

Minnesota Statutes 2004, section 290.0921,
subdivision 3, is amended to read:

Subd. 3.

Alternative minimum taxable income.

"Alternative minimum taxable income" is Minnesota net income as
defined in section 290.01, subdivision 19, and includes the
adjustments and tax preference items in sections 56, 57, 58, and
59(d), (e), (f), and (h) of the Internal Revenue Code. If a
corporation files a separate company Minnesota tax return, the
minimum tax must be computed on a separate company basis. If a
corporation is part of a tax group filing a unitary return, the
minimum tax must be computed on a unitary basis. The following
adjustments must be made.

(1) For purposes of the depreciation adjustments under
section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code,
the basis for depreciable property placed in service in a
taxable year beginning before January 1, 1990, is the adjusted
basis for federal income tax purposes, including any
modification made in a taxable year under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c).

For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, or Minnesota Statutes 1986, section 290.09,
subdivision 7, paragraph (c), not previously deducted is a
depreciation allowance in the first taxable year after December
31, 2000.

(2) The portion of the depreciation deduction allowed for
federal income tax purposes under section 168(k) of the Internal
Revenue Code that is required as an addition under section
290.01, subdivision 19c, clause (16), is disallowed in
determining alternative minimum taxable income.

(3) The subtraction for depreciation allowed under section
290.01, subdivision 19d, clause (19), is allowed as a
depreciation deduction in determining alternative minimum
taxable income.

(4) The alternative tax net operating loss deduction under
sections 56(a)(4) and 56(d) of the Internal Revenue Code does
not apply.

(5) The special rule for certain dividends under section
56(g)(4)(C)(ii) of the Internal Revenue Code does not apply.

(6) The special rule for dividends from section 936
companies under section 56(g)(4)(C)(iii) does not apply.

(7) The tax preference for depletion under section 57(a)(1)
of the Internal Revenue Code does not apply.

(8) The tax preference for intangible drilling costs under
section 57(a)(2) of the Internal Revenue Code must be calculated
without regard to subparagraph (E) and the subtraction under
section 290.01, subdivision 19d, clause (4).

(9) The tax preference for tax exempt interest under
section 57(a)(5) of the Internal Revenue Code does not apply.

(10) The tax preference for charitable contributions of
appreciated property under section 57(a)(6) of the Internal
Revenue Code does not apply.

(11) For purposes of calculating the tax preference for
accelerated depreciation or amortization on certain property
placed in service before January 1, 1987, under section 57(a)(7)
of the Internal Revenue Code, the deduction allowable for the
taxable year is the deduction allowed under section 290.01,
subdivision 19e.

For taxable years beginning after December 31, 2000, the
amount of any remaining modification made under section 290.01,
subdivision 19e, not previously deducted is a depreciation or
amortization allowance in the first taxable year after December
31, 2004.

(12) For purposes of calculating the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code, the term "alternative minimum taxable income" as
it is used in section 56(g) of the Internal Revenue Code, means
alternative minimum taxable income as defined in this
subdivision, determined without regard to the adjustment for
adjusted current earnings in section 56(g) of the Internal
Revenue Code.

(13) For purposes of determining the amount of adjusted
current earnings under section 56(g)(3) of the Internal Revenue
Code, no adjustment shall be made under section 56(g)(4) of the
Internal Revenue Code with respect to (i) the amount of foreign
dividend gross-up subtracted as provided in section 290.01,
subdivision 19d, clause (1), (ii) the amount of refunds of
income, excise, or franchise taxes subtracted as provided in
section 290.01, subdivision 19d, clause (10), or (iii) the
amount of royalties, fees or other like income subtracted as
provided in section 290.01, subdivision 19d, clause (11).

(14) Alternative minimum taxable income excludes the income
from operating in a job opportunity building zone as provided
under section 469.317.

(15) Alternative minimum taxable income excludes the income
from operating in a biotechnology and health sciences industry
zone as provided under section 469.337.

new text begin (16) Alternative minimum taxable income excludes the income
from operating in an international economic development zone as
provided under section 469.326.
new text end

Items of tax preference must not be reduced below zero as a
result of the modifications in this subdivision.

new text begin EFFECTIVE DATE. new text end

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

Sec. 10.

Minnesota Statutes 2004, section 290.0922,
subdivision 2, is amended to read:

Subd. 2.

Exemptions.

The following entities are exempt
from the tax imposed by this section:

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

(3) regulated investment companies or a fund thereof; and

(4) entities having a valid election in effect under
section 860D(b) of the Internal Revenue Code;

(5) town and farmers' mutual insurance companies;

(6) cooperatives organized under chapter 308A that provide
housing exclusively to persons age 55 and over and are
classified as homesteads under section 273.124, subdivision 3;
deleted text begin and
deleted text end

(7) an entity, if for the taxable year all of its property
is located in a job opportunity building zone designated under
section 469.314 and all of its payroll is a job opportunity
building zone payroll under section 469.310 new text begin ; and
new text end

new text begin (8) an entity, if for the taxable year all of its property
is located in an international economic development zone
designated under section 469.322, and all of its payroll is an
international economic development zone payroll under section
469.321 new text end .

Entities not specifically exempted by this subdivision are
subject to tax under this section, notwithstanding section
290.05.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2004, section 290.0922,
subdivision 3, is amended to read:

Subd. 3.

Definitions.

(a) "Minnesota sales or receipts"
means the total sales apportioned to Minnesota pursuant to
section 290.191, subdivision 5, the total receipts attributed to
Minnesota pursuant to section 290.191, subdivisions 6 to 8,
and/or the total sales or receipts apportioned or attributed to
Minnesota pursuant to any other apportionment formula applicable
to the taxpayer.

(b) "Minnesota property" means total Minnesota tangible
property as provided in section 290.191, subdivisions 9 to 11,
any other tangible property located in Minnesota, but does not
include property located in a job opportunity building zone
designated under section 469.314 new text begin , new text end or property of a qualified
business located in a biotechnology and health sciences industry
zone designated under section 469.334 new text begin , or property located in an
international economic development zone designated under section
469.322 new text end . Intangible property shall not be included in Minnesota
property for purposes of this section. Taxpayers who do not
utilize tangible property to apportion income shall nevertheless
include Minnesota property for purposes of this section. On a
return for a short taxable year, the amount of Minnesota
property owned, as determined under section 290.191, shall be
included in Minnesota property based on a fraction in which the
numerator is the number of days in the short taxable year and
the denominator is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as
provided in section 290.191, subdivision 12, but does not
include job opportunity building zone payrolls under section
469.310, subdivision 8, or biotechnology and health sciences
industry zone deleted text begin payroll deleted text end new text begin payrolls new text end under section 469.330,
subdivision 8 new text begin , or international economic development zone
payrolls under section 469.321, subdivision 10 new text end . Taxpayers who
do not utilize payrolls to apportion income shall nevertheless
include Minnesota payrolls for purposes of this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2004, section 297A.68, is
amended by adding a subdivision to read:

new text begin Subd. 40. new text end

new text begin International economic development zones. new text end

new text begin (a)
Purchases of tangible personal property or taxable services by a
qualified business, as defined in section 469.321, are exempt if
the property or services are primarily used or consumed in an
international economic development zone designated under section
469.322.
new text end

new text begin (b) Purchase and use of construction materials and supplies
for construction of improvements to real property in an
international economic development zone are exempt if the
improvements after completion of construction are to be used in
the conduct of a qualified business, as defined in section
469.321. This exemption applies regardless of whether the
purchases are made by the business or a contractor.
new text end

new text begin (c) The exemptions under this subdivision apply to a local
sales and use tax, regardless of whether the local tax is
imposed on sales taxable under this chapter or in another law,
ordinance, or charter provision.
new text end

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

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales made
on or after the day following final enactment.
new text end

Sec. 13.

new text begin [469.321] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 469.321
to 469.328, the following terms have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Foreign trade zone. new text end

new text begin "Foreign trade zone" means
a foreign trade zone designated pursuant to United States Code,
title 19, section 81a, for the right to use the powers provided
in United States Code, title 19, sections 81a to 81u, or a
subzone authorized by the foreign trade zone.
new text end

new text begin Subd. 3. new text end

new text begin Foreign trade zone authority. new text end

new text begin "Foreign trade
zone authority" means the Greater Metropolitan Area Foreign
Trade Zone Commission number 119, a joint powers authority
created by the county of Hennepin, the cities of Minneapolis,
Bloomington, Rosemount, and the Metropolitan Airports
Commission, under the authority of section 469.059, 469.101, or
471.59, and which may, notwithstanding section 471.59, include
as members any political subdivisions of public corporations
that are or become members of the Greater Metropolitan Area
Foreign Trade Zone Commission, regardless of whether the
subdivisions or corporations have the power or authority
individually to establish or operate a foreign trade zone.
new text end

new text begin Subd. 4. new text end

new text begin International economic development zone. new text end

new text begin An
"international economic development zone" or "zone" is a zone so
designated under section 469.322.
new text end

new text begin Subd. 5. new text end

new text begin Person. new text end

new text begin "Person" includes an individual,
corporation, partnership, limited liability company,
association, or any other entity.
new text end

new text begin Subd. 6. new text end

new text begin Qualified business. new text end

new text begin (a) "Qualified business"
means a person carrying on a trade or business at a place of
business located within an international economic development
zone that is:
new text end

new text begin (1) engaged in the furtherance of international export or
import of goods; and
new text end

new text begin (2) certified by the foreign trade zone authority as a
trade or business that furthers the purpose of developing
international distribution capacity and capability.
new text end

new text begin (b) A person that relocates a trade or business from within
Minnesota but outside an international economic development zone
into an international economic development zone is not a
qualified business, unless the business:
new text end

new text begin (1)(i) increases full-time employment in the first full
year of operation within the international economic development
zone by at least 20 percent measured relative to the operations
that were relocated; or
new text end

new text begin (ii) makes a capital investment in the property located
within a zone equal to at least ten percent of the gross
revenues of the operations that were relocated in the
immediately proceeding taxable year; and
new text end

new text begin (2) enters a binding written agreement with the foreign
trade zone authority that:
new text end

new text begin (i) pledges that the business will meet the requirements of
clause (1);
new text end

new text begin (ii) provides for repayment of all tax benefits enumerated
under section 469.324 to the business under the procedures in
section 469.328, if the requirements of clause (1) are not met;
and
new text end

new text begin (iii) contains any other terms the foreign trade zone
authority determines appropriate.
new text end

new text begin Clause (1) of this paragraph does not apply to a freight
forwarder.
new text end

new text begin (c) A qualified business must pay each employee total
compensation, including benefits not mandated by law, that on an
annualized basis is equal to at least 110 percent of the federal
poverty guidelines for a family of four.
new text end

new text begin (d) A qualified business must enter into an agreement with
the authority that provides that, as a condition of qualifying
for the tax incentives described in section 469.324, the
business will, at the site of its operation within the zone,
remain neutral to labor union organizing activity, provide union
representatives access to employees during nonwork hours, and
recognize a labor union as a bargaining agent under the National
Labor Relations Act upon presentation of representation cards
signed by a majority of the employees of the qualified business
within the zone.
new text end

new text begin Subd. 7. new text end

new text begin Regional distribution center. new text end

new text begin A "regional
distribution center" is a distribution center developed within a
foreign trade zone. The regional distribution center must have
as its primary purpose to facilitate gathering of freight for
the purpose of centralizing the functions necessary for the
shipment of freight in international commerce, including, but
not limited to, security and customs functions.
new text end

new text begin Subd. 8. new text end

new text begin Relocate. new text end

new text begin (a) "Relocate" means that a trade or
business:
new text end

new text begin (1) ceases one or more operations or functions at another
location in an international economic development zone; or
new text end

new text begin (2) reduces employment at another location in Minnesota
during a period starting one year before and ending one year
after it begins operations in an international economic
development zone and its employees in the international economic
development zone are engaged in the same line of business as the
employees at the location where it reduced employment.
new text end

new text begin (b) "Relocate" does not include an expansion by a business
that establishes a new facility that does not replace or
supplant an existing operation or employment, in whole or in
part.
new text end

new text begin Subd. 9. new text end

new text begin International economic development zone
percentage or zone percentage. new text end

new text begin "International economic
development zone percentage" or "zone percentage" means the
following fraction reduced to a percentage:
new text end

new text begin (1) the numerator of the fraction is:
new text end

new text begin (i) the ratio of the taxpayer's property factor under
section 290.191 located in the zone for the taxable year over
the property factor numerator determined under section 290.191,
plus
new text end

new text begin (ii) the ratio of the taxpayer's international economic
development zone payroll factor under subdivision 10 over the
payroll factor numerator determined under section 290.191; and
new text end

new text begin (2) the denominator of the fraction is two.
new text end

new text begin When calculating the zone percentage for a business that is
part of a unitary business as defined under section 290.17,
subdivision 4, the denominator of the payroll and property
factors is the Minnesota payroll and property of the unitary
business as reported on the combined report under section
290.17, subdivision 4, paragraph (j).
new text end

new text begin Subd. 10. new text end

new text begin International economic development zone payroll
factor. new text end

new text begin "International economic development zone payroll
factor" or "international economic development zone payroll" is
that portion of the payroll factor under section 290.191 that
represents:
new text end

new text begin (1) wages or salaries paid to an individual for services
performed in an international economic development zone; or
new text end

new text begin (2) wages or salaries paid to individuals working from
offices within an international economic development zone, if
their employment requires them to work outside the zone and the
work is incidental to the work performed by the individual
within the zone.
new text end

new text begin Subd. 11. new text end

new text begin Freight forwarder. new text end

new text begin "Freight forwarder" is a
business that, for compensation, ensures that goods produced or
sold by another business move from point of origin to point of
destination.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 14.

new text begin [469.322] DESIGNATION OF INTERNATIONAL ECONOMIC
DEVELOPMENT ZONE.
new text end

new text begin (a) An area designated as a foreign trade zone may be
designated by the foreign trade zone authority as an
international economic development zone if within the zone a
regional distribution center is being developed pursuant to
section 469.323. The zone must be not less than 500 acres and
not more than 1,000 acres in size.
new text end

new text begin (b) In making the designation, the foreign trade zone
authority, in consultation with the Minnesota Department of
Transportation and the Metropolitan Council, shall consider
access to major transportation routes, consistency with current
state transportation and air cargo planning, adequacy of the
size of the site, access to airport facilities, present and
future capacity at the designated airport, the capability to
meet integrated present and future air cargo, security, and
inspection services, and access to other infrastructure and
financial incentives. The border of the international economic
development zone must be no more than 60 miles distant or 90
minutes drive time from the border of the Minneapolis-St. Paul
International Airport.
new text end

new text begin (c) Prior to a final site designation, the foreign trade
zone authority, in consultation with the applicant, must conduct
a transportation impact study based on the regional model and
utilizing traffic forecasting and assignments. The results must
be used to evaluate the effects of the proposed use on the
transportation system and identify any needed improvements. If
the site is in the metropolitan area the study must also
evaluate the effect of the transportation impacts on the
Metropolitan Transportation System plan as well as the
comprehensive plans of the municipalities that would be
affected. The cost of the study must be paid by the applicant.
new text end

new text begin (d) Final zone designation must be made by January 1, 2007.
new text end

new text begin (e) Duration of the zone is a 12-year period beginning on
June 30, 2007.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

new text begin [469.323] FOREIGN TRADE ZONE AUTHORITY POWERS.
new text end

new text begin Subdivision 1. new text end

new text begin Development of regional distribution
center. new text end

new text begin The foreign trade zone authority shall be responsible
for creating a development plan for the regional distribution
center. The regional distribution center must be developed with
the purpose of expanding, on a regional basis, international
distribution capacity and capability. The foreign trade zone
authority shall consult with municipalities that have indicated
to the authority an interest in locating the international
economic development zone within their boundaries and a
willingness to establish a tax increment financing district
coterminous with the boundaries of the zone, as well as
interested businesses, potential financiers, and appropriate
state and federal agencies.
new text end

new text begin Subd. 2. new text end

new text begin Business plan. new text end

new text begin Before designation of an
international economic development zone under section 469.322,
the governing body of the foreign trade zone authority shall
prepare a business plan. The plan must include an analysis of
the economic feasibility of the regional distribution center
once it becomes operational and of the operations of freight
forwarders and other businesses that choose to locate within the
boundaries of the zone. The analysis must provide profitability
models that:
new text end

new text begin (1) include the benefits of the incentives;
new text end

new text begin (2) estimate the amount of time needed to achieve
profitability; and
new text end

new text begin (3) analyze the length of time incentives will be necessary
to the economic viability of the regional distribution center.
new text end

new text begin If the governing body of the foreign trade authority
determines that the models do not establish the economic
feasibility of the project, the regional distribution center
does not meet the development requirements of this section and
section 469.322.
new text end

new text begin Subd. 3. new text end

new text begin Port authority powers. new text end

new text begin The governing body of
the foreign trade zone authority may establish a port authority
that has the same powers as a port authority established under
section 469.049. If the foreign trade zone authority
establishes a port authority, the governing body of the foreign
trade zone authority shall exercise all powers granted to a city
by sections 469.048 to 469.068 or other law.
new text end

new text begin Subd. 4. new text end

new text begin Business subsidy law. new text end

new text begin Tax exemptions, job
credits, and tax increment financing provided under this section
are business subsidies for the purpose of sections 116J.993 to
116J.995.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

new text begin [469.324] TAX INCENTIVES IN INTERNATIONAL
ECONOMIC DEVELOPMENT ZONE.
new text end

new text begin Subdivision 1. new text end

new text begin Availability. new text end

new text begin Qualified businesses that
operate in an international economic development zone,
individuals who invest in a regional distribution center or
qualified businesses that operate in an international economic
development zone, and property located in an international
economic development zone qualify for:
new text end

new text begin (1) exemption from individual income taxes as provided
under section 469.325;
new text end

new text begin (2) exemption from corporate franchise taxes as provided
under section 469.326;
new text end

new text begin (3) exemption from the state sales and use tax and any
local sales and use taxes on qualifying purchases as provided in
section 297A.68, subdivision 40;
new text end

new text begin (4) exemption from the property tax as provided in section
272.02, subdivision 68;
new text end

new text begin (5) the jobs credit allowed under section 469.327; and
new text end

new text begin (6) tax increment financing as provided in this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Duration. new text end

new text begin (a) Except as provided in paragraph
(b), the tax incentives described in subdivision 1, clauses (1),
(2), and (5), are available for no more than 12 consecutive
taxable years for any taxpayer that claims them. The tax
incentives described in subdivision 1, clause (3), are available
for each taxpayer that claims them for taxes otherwise payable
on transactions during a period of 12 years from the date when
the first exemption is claimed by that taxpayer under each
exemption. The property tax exemption described under
subdivision 1, clause (4), is available for any parcel of
property for 12 consecutive taxes payable years. No exemptions
described in subdivision 1, clauses (1) to (5), are available
after December 31, 2021.
new text end

new text begin (b) For taxpayers that are freight forwarders, the
durations provided under paragraph (a) are reduced to six years.
new text end

Sec. 17.

new text begin [469.325] INDIVIDUAL INCOME TAX EXEMPTION.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin An individual operating a
trade or business in an international economic development zone,
and an individual making a qualifying investment in a qualified
business operating in an international economic development zone
qualifies for the exemptions from taxes imposed under chapter
290, as provided in this section. The exemptions provided under
this section apply only to the extent that the income otherwise
would be taxable under chapter 290. Subtractions under this
section from federal taxable income, alternative minimum taxable
income, or any other base subject to tax are limited to the
amount that otherwise would be included in the tax base absent
the exemption under this section. This section applies only to
taxable years beginning during the duration of the zone.
new text end

new text begin Subd. 2. new text end

new text begin Rents. new text end

new text begin An individual is exempt from the taxes
imposed under chapter 290 on net rents derived from real or
tangible personal property located in a zone for a taxable year
in which the zone was designated an international economic
development zone. If tangible personal property was used both
within and outside of the zone, the exemption amount for the net
rental income must be multiplied by a fraction, the numerator of
which is the number of days the property was used in the zone
and the denominator of which is the total days.
new text end

new text begin Subd. 3. new text end

new text begin Business income. new text end

new text begin An individual is exempt from
the taxes imposed under chapter 290 on net income from the
operation of a qualified business in an international economic
development zone. If the trade or business is carried on within
and without the zone and the individual is not a resident of
Minnesota, the exemption must be apportioned based on the zone
percentage for the taxable year. If the trade or business is
carried on within and without the zone and the individual is a
resident of Minnesota, the exemption must be apportioned based
on the zone percentage for the taxable year, except the ratios
under section 469.321, subdivision 9, clause (1), items (i) and
(ii), must use the denominators of the property and payroll
factors determined under section 290.191. No subtraction is
allowed under this section in excess of 20 percent of the sum of
the international economic development zone payroll and the
adjusted basis of the property at the time that the property is
first used in the international economic development zone by the
business.
new text end

new text begin Subd. 4. new text end

new text begin Capital gains. new text end

new text begin (a) An individual is exempt from
the taxes imposed under chapter 290 on:
new text end

new text begin (1) net gain derived on a sale or exchange of real property
located in the international economic development zone and used
by a qualified business. If the property was held by the
individual during a period when the zone was not designated, the
gain must be prorated based on the percentage of time, measured
in calendar days, that the real property was held by the
individual during the period the zone designation was in effect
to the total period of time the real property was held by the
individual;
new text end

new text begin (2) net gain derived on a sale or exchange of tangible
personal property used by a qualified business in the
international economic development zone. If the property was
held by the individual during a period when the zone was not
designated, the gain must be prorated based on the percentage of
time, measured in calendar days, that the property was held by
the individual during the period the zone designation was in
effect to the total period of time the property was held by the
individual. If the tangible personal property was used outside
of the zone during the period of the zone's designation, the
exemption must be multiplied by a fraction, the numerator of
which is the number of days the property was used in the zone
during the time of the designation and the denominator of which
is the total days the property was held during the time of the
designation; and
new text end

new text begin (3) net gain derived on a sale of an ownership interest in
a qualified business operating in the international economic
development zone, meeting the requirements of paragraph (b).
The exemption on the gain must be multiplied by the zone
percentage of the business for the taxable year prior to the
sale.
new text end

new text begin (b) A qualified business meets the requirements of
paragraph (a), clause (3), if it is a corporation, an S
corporation, or a partnership, and for the taxable year its
international economic development zone percentage exceeds 25
percent. For purposes of paragraph (a), clause (3), the zone
percentage must be calculated by modifying the ratios under
section 469.321, subdivision 9, clause (1), items (i) and (ii),
to use the denominators of the property and payroll factors
determined under section 290.191. Upon the request of an
individual holding an ownership interest in the entity, the
entity must certify to the owner, in writing, the international
economic development zone percentage needed to determine the
exemption.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

new text begin [469.326] CORPORATE FRANCHISE TAX EXEMPTION.
new text end

new text begin (a) A qualified business is exempt from taxation under
section 290.02, the alternative minimum tax under section
290.0921, and the minimum fee under section 290.0922, on the
portion of its income attributable to operations within the
international economic development zone. This exemption is
determined as follows:
new text end

new text begin (1) for purposes of the tax imposed under section 290.02,
by multiplying its taxable net income by its zone percentage and
subtracting the result in determining taxable income;
new text end

new text begin (2) for purposes of the alternative minimum tax under
section 290.0921, by multiplying its alternative minimum taxable
income by its zone percentage and reducing alternative minimum
taxable income by this amount; and
new text end

new text begin (3) for purposes of the minimum fee under section 290.0922,
by excluding property and payroll in the zone from the
computations of the fee or by exempting the entity under section
290.0922, subdivision 2, clause (8).
new text end

new text begin (b) No subtraction is allowed under this section in excess
of 20 percent of the sum of the corporation's international
economic development zone payroll and the adjusted basis of the
property at the time that the property is first used in the
international economic development zone by the corporation.
new text end

new text begin (c) This section applies only to taxable years beginning
during the duration of the international economic development
zone.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

new text begin [469.327] JOBS CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Credit allowed. new text end

new text begin A qualified business is
allowed a credit against the taxes imposed under chapter 290.
The credit equals seven percent of the:
new text end

new text begin (1) lesser of:
new text end

new text begin (i) zone payroll for the taxable year, less the zone
payroll for the base year; or
new text end

new text begin (ii) total Minnesota payroll for the taxable year, less
total Minnesota payroll for the base year; minus
new text end

new text begin (2) $30,000 multiplied by the number of full-time
equivalent employees that the qualified business employs in the
international economic development zone for the taxable year,
minus the number of full-time equivalent employees the business
employed in the zone in the base year, but not less than zero.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (b) "Base year" means the taxable year beginning during the
calendar year prior to the calendar year in which the zone
designation took effect.
new text end

new text begin (c) "Full-time equivalent employees" means the equivalent
of annualized expected hours of work equal to 2,080 hours.
new text end

new text begin (d) "Minnesota payroll" means the wages or salaries
attributed to Minnesota under section 290.191, subdivision 12,
for the qualified business or the unitary business of which the
qualified business is a part, whichever is greater.
new text end

new text begin (e) "Zone payroll" means wages or salaries used to
determine the zone payroll factor for the qualified business,
less the amount of compensation attributable to any employee
that exceeds $100,000.
new text end

new text begin Subd. 3. new text end

new text begin Inflation adjustment. new text end

new text begin For taxable years
beginning after December 31, 2006, the dollar amounts in
subdivision 1, clause (2), and subdivision 2, paragraph (e), are
annually adjusted for inflation. The commissioner of revenue
shall adjust the amounts by the percentage determined under
section 290.06, subdivision 2d, for the taxable year.
new text end

new text begin Subd. 4. new text end

new text begin Refundable. new text end

new text begin If the amount of the credit exceeds
the liability for tax under chapter 290, the commissioner of
revenue shall refund the excess to the qualified business.
new text end

new text begin Subd. 5. new text end

new text begin Appropriation. new text end

new text begin An amount sufficient to pay the
refunds authorized by this section is 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 taxable
years beginning after December 31, 2005.
new text end

Sec. 20.

new text begin [469.328] REPAYMENT OF TAX BENEFITS.
new text end

new text begin Subdivision 1. new text end

new text begin Repayment obligation. new text end

new text begin A person must repay
the amount of the tax reduction received under section 469.324,
subdivision 1, clauses (1) to (5), or refund received under
section 469.327, during the two years immediately before it
ceased to operate in the zone, if the person ceased to operate
its facility located within the zone or otherwise ceases to be
or is not a qualified business.
new text end

new text begin Subd. 2. new text end

new text begin Disposition of repayment. new text end

new text begin The repayment must be
paid to the state to the extent it represents a state tax
reduction and to the county to the extent it represents a
property tax reduction. Any amount repaid to the state must be
deposited in the general fund. Any amount repaid to the county
for the property tax exemption must be distributed to the local
governments with authority to levy taxes in the zone in the same
manner provided for distribution of payment of delinquent
property taxes. Any repayment of local sales or use taxes must
be repaid to the jurisdiction imposing the local sales or use
tax.
new text end

new text begin Subd. 3. new text end

new text begin Repayment procedures. new text end

new text begin (a) For the repayment of
taxes imposed under chapter 290 or 297A or local taxes collected
pursuant to section 297A.99, a person must file an amended
return with the commissioner of revenue and pay any taxes
required to be repaid within 30 days after ceasing to be a
qualified business. The amount required to be repaid is
determined by calculating the tax for the period for which
repayment is required without regard to the tax reductions
allowed under section 469.324.
new text end

new text begin (b) For the repayment of property taxes, the county auditor
shall prepare a tax statement for the person, applying the
applicable tax extension rates for each payable year and provide
a copy to the business. The person must pay the taxes to the
county treasurer within 30 days after receipt of the tax
statement. The taxpayer may appeal the valuation and
determination of the property tax to the tax court within 30
days after receipt of the tax statement.
new text end

new text begin (c) The provisions of chapters 270 and 289A relating to the
commissioner of revenue's authority to audit, assess, and
collect the tax and to hear appeals are applicable to the
repayment required under paragraph (a). The commissioner may
impose civil penalties as provided in chapter 289A, and the
additional tax and penalties are subject to interest at the rate
provided in section 270.75, from 30 days after ceasing to do
business in the zone until the date the tax is paid.
new text end

new text begin (d) If a property tax is not repaid under paragraph (b),
the county treasurer shall add the amount required to be repaid
to the property taxes assessed against the property for payment
in the year following the year in which the treasurer discovers
that the person ceased to operate in the international economic
development zone.
new text end

new text begin (e) For determining the tax required to be repaid, a tax
reduction is deemed to have been received on the date that the
tax would have been due if the person had not been entitled to
the tax reduction.
new text end

new text begin (f) The commissioner of revenue may assess the repayment of
taxes under paragraph (c) at any time within two years after the
person ceases to be a qualified business, or within any period
of limitations for the assessment of tax under section 289A.38,
whichever is later.
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. 21. new text begin DEPARTMENT OF EMPLOYMENT AND ECONOMIC
DEVELOPMENT STUDY; INTERNATIONAL AIR FREIGHT.
new text end

new text begin The commissioner of employment and economic development
must study and analyze the issue of whether the state would
benefit from more than one international economic development
zone as defined in Minnesota Statutes, section 469.321. The
commissioner shall solicit input on the issue from businesses,
communities, and economic development organizations. The
commissioner must report the results of the study and analysis
to the committees of the legislature having jurisdiction over
economic development issues by December 1, 2005, along with any
legislative recommendations.
new text end