SF 2869

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; making policy, technical, administrative, and clarifying
changes to various taxes and fees and related provisions; changing provisions
relating to government data practices and debt collection; providing for
compliance with job opportunity building zone requirements; amending
Minnesota Statutes 2006, sections 13.51, subdivision 3; 13.585, subdivision
5; 16D.02, subdivisions 3, 6; 16D.04, subdivision 2; 163.051, subdivision 5;
270A.08, subdivision 1; 270C.33, subdivision 5; 270C.56, subdivision 1; 272.02,
subdivisions 13, 20, 21, 27, 31, 38, 49; 272.03, subdivision 3, by adding a
subdivision; 273.11, subdivision 8; 273.124, subdivisions 6, 13, 21; 273.128,
subdivision 1; 273.13, subdivisions 22, 23, 25, 33; 274.01, subdivision 3;
274.014, subdivision 3; 276.04, subdivision 2; 287.20, subdivisions 3a, 9, by
adding a subdivision; 289A.18, subdivision 1; 289A.55, by adding a subdivision;
289A.60, by adding a subdivision; 290.01, subdivision 6b; 290.068, subdivision
3; 290.07, subdivision 1; 290.21, subdivision 4; 290.92, subdivision 26; 290B.04,
subdivision 1; 295.50, subdivision 4; 295.52, subdivision 4; 295.53, subdivision
4a; 296A.07, subdivision 4; 296A.08, subdivision 3; 296A.16, subdivision 2;
297A.61, subdivisions 22, 29; 297A.665; 297A.67, subdivision 7; 297A.995,
subdivision 10, by adding subdivisions; 297B.01, subdivision 7; 297B.03;
297F.01, subdivision 8; 297F.21, subdivision 1; 297G.01, subdivision 9;
297H.09; 297I.05, subdivision 12; 469.040, subdivision 4; 469.174, subdivision
10b; 469.177, subdivision 1c; 469.319; 477A.03, subdivision 2a; Minnesota
Statutes 2007 Supplement, sections 115A.1314, subdivision 2; 273.1231,
subdivision 7, by adding a subdivision; 273.1232, subdivision 1; 273.1233,
subdivisions 1, 3; 273.1234; 273.1235, subdivisions 1, 3; proposing coding for
new law in Minnesota Statutes, chapters 273; 469; repealing Minnesota Statutes
2006, section 477A.014, subdivision 5; Minnesota Statutes 2007 Supplement,
section 477A.014, subdivision 4; Minnesota Rules, parts 8031.0100, subpart
3; 8093.2100.

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

ARTICLE 1

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1.

Minnesota Statutes 2006, section 289A.18, subdivision 1, is amended to
read:

Subdivision 1.

Individual income, fiduciary income, corporate franchise, and
entertainment taxes; partnership and S corporation returns; information returns;
mining company returns.

The returns required to be made under sections 289A.08 and
289A.12 must be filed at the following times:

(1) returns made on the basis of the calendar year must be filed on April 15 following
the close of the calendar year, except that returns of corporations must be filed on March
15 following the close of the calendar year;

(2) returns made on the basis of the fiscal year must be filed on the 15th day of the
fourth month following the close of the fiscal year, except that returns of corporations
must be filed on the 15th day of the third month following the close of the fiscal year;

(3) returns for a fractional part of a year must be filed on the 15th day of the fourth
month following the end of the month in which falls the last day of the period for which
the return is made, except that the returns of corporations must be filed on the 15th day of
the third month following the end of the tax year new text begin ; or, in the case of a corporation which is
a member of a unitary group, the return of the corporation must be filed on the 15th day of
the third month following the end of the tax year new text end of the unitary group in which falls the
last day of the period for which the return is made;

(4) in the case of a final return of a decedent for a fractional part of a year, the return
must be filed on the 15th day of the fourth month following the close of the 12-month
period that began with the first day of that fractional part of a year;

(5) in the case of the return of a cooperative association, returns must be filed on or
before the 15th day of the ninth month following the close of the taxable year;

(6) if a corporation has been divested from a unitary group and files a return for
a fractional part of a year in which it was a member of a unitary business that files a
combined report under section deleted text begin 290.34 deleted text end new text begin 290.17 new text end , subdivision deleted text begin 2 deleted text end new text begin 4 new text end , the divested corporation's
return must be filed on the 15th day of the third month following the close of the common
accounting period that includes the fractional year;

(7) returns of entertainment entities must be filed on April 15 following the close of
the calendar year;

(8) returns required to be filed under section 289A.08, subdivision 4, must be filed
on the 15th day of the fifth month following the close of the taxable year;

(9) returns of mining companies must be filed on May 1 following the close of the
calendar year; and

(10) returns required to be filed with the commissioner under section 289A.12,
subdivision 2, 4 to 10, or 14, must be filed within 30 days after being demanded by the
commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
except that the change in clause (6) is effective for taxable years beginning after December
31, 2007.
new text end

Sec. 2.

Minnesota Statutes 2006, section 290.01, subdivision 6b, is amended to read:

Subd. 6b.

Foreign operating corporation.

The term "foreign operating
corporation," when applied to a corporation, means a domestic corporation with the
following characteristics:

(1) it is part of a unitary business at least one member of which is taxable in this state;

(2) it is not a foreign sales corporation under section 922 of the Internal Revenue
Code, as amended through December 31, 1999, for the taxable year;

(3)(i) the average of the percentages of its property and payrolls, including the pro
rata share of its unitary partnerships' property and payrolls, assigned to locations outside
the United States, where the United States includes the District of Columbia and excludes
the commonwealth of Puerto Rico and possessions of the United States, as determined
under section 290.191 or 290.20, is 80 percent or more; or (ii) it has in effect a valid
election under section 936 of the Internal Revenue Code; and

(4) it has new text begin a minimum of new text end $1,000,000 of payroll and $2,000,000 of property, as
determined under section 290.191 or 290.20, that are located outside the United States. If
the domestic corporation does not have payroll as determined under section 290.191 or
290.20, but it or its partnerships have paid $1,000,000 for work, performed directly for the
domestic corporation or the partnerships, outside the United States, then paragraph (3)(i)
shall not require payrolls to be included in the average calculation.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 290.068, subdivision 3, is amended to read:

Subd. 3.

Limitation; carryover.

(a)(1) The credit for the taxable year shall not
exceed the liability for tax. "Liability for tax" for purposes of this section means the tax
imposed under deleted text begin this chapter deleted text end new text begin section 290.06, subdivision 1, new text end for the taxable year reduced by
the sum of the nonrefundable credits allowed under this chapter.

(2) In the case of a corporation which is a partner in a partnership, the credit allowed
for the taxable year shall not exceed the lesser of the amount determined under clause (1)
for the taxable year or an amount (separately computed with respect to the corporation's
interest in the trade or business or entity) equal to the amount of tax attributable to that
portion of taxable income which is allocable or apportionable to the corporation's interest
in the trade or business or entity.

(b) If the amount of the credit determined under this section for any taxable year
exceeds the limitation under clause (a), the excess shall be a research credit carryover to
each of the 15 succeeding taxable years. The entire amount of the excess unused credit for
the taxable year shall be carried first to the earliest of the taxable years to which the credit
may be carried and then to each successive year to which the credit may be carried. The
amount of the unused credit which may be added under this clause shall not exceed the
taxpayer's liability for tax less the research credit for the taxable year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 4.

Minnesota Statutes 2006, section 290.07, subdivision 1, is amended to read:

Subdivision 1.

Annual accounting period.

Net income and taxable net income
shall be computed upon the basis of the taxpayer's annual accounting period. If a taxpayer
has no annual accounting period, or has one other than a fiscal year, as heretofore defined,
the net income and taxable net income shall be computed on the basis of the calendar year.
Taxpayers shall employ the same accounting period on which they report, or would be
required to report, their net income under the Internal Revenue Code. The commissioner
shall provide by rule for the determination of the accounting period for taxpayers who
file a combined report under section deleted text begin 290.34 deleted text end new text begin 290.17 new text end , subdivision deleted text begin 2 deleted text end new text begin 4 new text end , when members of
the group use different accounting periods for federal income tax purposes. Unless the
taxpayer changes its accounting period for federal purposes, the due date of the return
is not changed.

A taxpayer may change accounting periods only with the consent of the
commissioner. In case of any such change, the taxpayer shall pay a tax for the period
not included in either the taxpayer's former or newly adopted taxable year, computed as
provided in section 290.32.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 5.

Minnesota Statutes 2006, section 290.21, subdivision 4, is amended to read:

Subd. 4.

Dividends received from another corporation.

(a)(1) Eighty percent
of dividends received by a corporation during the taxable year from another corporation,
in which the recipient owns 20 percent or more of the stock, by vote and value, not
including stock described in section 1504(a)(4) of the Internal Revenue Code when the
corporate stock with respect to which dividends are paid does not constitute the stock in
trade of the taxpayer or would not be included in the inventory of the taxpayer, or does not
constitute property held by the taxpayer primarily for sale to customers in the ordinary
course of the taxpayer's trade or business, or when the trade or business of the taxpayer
does not consist principally of the holding of the stocks and the collection of the income
and gains therefrom; and

(2)(i) the remaining 20 percent of dividends if the dividends received are the stock in
an affiliated company transferred in an overall plan of reorganization and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989;

(ii) the remaining 20 percent of dividends if the dividends are received from a
corporation which is subject to tax under section 290.36 and which is a member of an
affiliated group of corporations as defined by the Internal Revenue Code and the dividend
is eliminated in consolidation under Treasury Department Regulation 1.1502-14(a), as
amended through December 31, 1989, or is deducted under an election under section
243(b) of the Internal Revenue Code; or

(iii) the remaining 20 percent of the dividends if the dividends are received from a
property and casualty insurer as defined under section 60A.60, subdivision 8, which is a
member of an affiliated group of corporations as defined by the Internal Revenue Code
and either: (A) the dividend is eliminated in consolidation under Treasury Regulation
1.1502-14(a), as amended through December 31, 1989; or (B) the dividend is deducted
under an election under section 243(b) of the Internal Revenue Code.

(b) Seventy percent of dividends received by a corporation during the taxable year
from another corporation in which the recipient owns less than 20 percent of the stock,
by vote or value, not including stock described in section 1504(a)(4) of the Internal
Revenue Code when the corporate stock with respect to which dividends are paid does not
constitute the stock in trade of the taxpayer, or does not constitute property held by the
taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or
business, or when the trade or business of the taxpayer does not consist principally of the
holding of the stocks and the collection of income and gain therefrom.

(c) The dividend deduction provided in this subdivision shall be allowed only with
respect to dividends that are included in a corporation's Minnesota taxable net income
for the taxable year.

The dividend deduction provided in this subdivision does not apply to a dividend
from a corporation which, for the taxable year of the corporation in which the distribution
is made or for the next preceding taxable year of the corporation, is a corporation exempt
from tax under section 501 of the Internal Revenue Code.

The dividend deduction provided in this subdivision applies to the amount of
regulated investment company dividends only to the extent determined under section
854(b) of the Internal Revenue Code.

The dividend deduction provided in this subdivision shall not be allowed with
respect to any dividend for which a deduction is not allowed under the provisions of
section 246(c) of the Internal Revenue Code.

(d) If dividends received by a corporation that does not have nexus with Minnesota
under the provisions of Public Law 86-272 are included as income on the return of
an affiliated corporation permitted or required to file a combined report under section new text begin
290.17, subdivision 4 or new text end 290.34, subdivision 2, then for purposes of this subdivision the
determination as to whether the trade or business of the corporation consists principally
of the holding of stocks and the collection of income and gains therefrom shall be made
with reference to the trade or business of the affiliated corporation having a nexus with
Minnesota.

(e) The deduction provided by this subdivision does not apply if the dividends are
paid by a FSC as defined in section 922 of the Internal Revenue Code.

(f) If one or more of the members of the unitary group whose income is included on
the combined report received a dividend, the deduction under this subdivision for each
member of the unitary business required to file a return under this chapter is the product
of: (1) 100 percent of the dividends received by members of the group; (2) the percentage
allowed pursuant to paragraph (a) or (b); and (3) the percentage of the taxpayer's business
income apportionable to this state for the taxable year under section 290.191 or 290.20.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 6.

Minnesota Statutes 2006, section 290.92, subdivision 26, is amended to read:

Subd. 26.

Extension of withholding to certain payments where identifying
number not furnished or inaccurate.

(a) If, in the case of any reportable payment, (1)
the payee fails to furnish the payee's Social Security account number to the payor, deleted text begin or deleted text end
(2) new text begin the payee is subject to federal backup withholding on the reportable payment under
section 3406 of the Internal Revenue Code, or (3) new text end the commissioner notifies the payor that
the Social Security account number furnished by the payee is incorrect, then the payor
shall deduct and withhold from the payment a tax equal to the amount of the payment
multiplied by the highest rate used in determining the income tax liability of an individual
under section 290.06, subdivision 2c.

(b)(1) In the case of any failure described in clause (a)(1), clause (a) shall apply to
any reportable payment made by the payor during the period during which the Social
Security account number has not been furnished.

(2) In any case where there is a notification described in clause (a) deleted text begin (2) deleted text end new text begin (3) new text end , clause (a)
shall apply to any reportable payment made by the payor (i) after the close of the 30th
day after the day on which the payor received the notification, and (ii) before the payee
furnishes another Social Security account number.

(3)(i) Unless the payor elects not to have this subparagraph apply with respect to
the payee, clause (a) shall also apply to any reportable payment made after the close of
the period described in paragraph (1) or (2) (as the case may be) and before the 30th
day after the close of the period.

(ii) If the payor elects the application of this subparagraph with respect to the payee,
clause (a) shall also apply to any reportable payment made during the 30-day period
described in paragraph (2).

(iii) The payor may elect a period shorter than the grace period set forth in
subparagraph (i) or (ii) as the case may be.

(c) The provisions of section 3406 of the Internal Revenue Code shall apply and
shall govern when withholding shall be required and the definition of terms. The term
"reportable payment" shall include only those payments for personal services. No tax
shall be deducted or withheld under this subdivision with respect to any amount for
which withholding is otherwise required under this section. For purposes of this section,
payments which are subject to withholding under this subdivision shall be treated as if
they were wages paid by an employer to an employee and amounts deducted and withheld
under this subdivision shall be treated as if deducted and withheld under subdivision 2a.

(d) Whenever the commissioner notifies a payor under this subdivision that the
Social Security account number furnished by any payee is incorrect, the commissioner
shall at the same time furnish a copy of the notice to the payor, and the payor shall
promptly furnish the copy to the payee. If the commissioner notifies a payor under this
subdivision that the Social Security account number furnished by any payee is incorrect
and the payee subsequently furnishes another Social Security account number to the
payor, the payor shall promptly notify the commissioner of the other Social Security
account number furnished.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for payments made after December
31, 2008.
new text end

Sec. 7. new text begin RULE CHANGE.
new text end

new text begin The commissioner of revenue shall amend Minnesota Rules, part 8019.0405, subpart
2, item A, so that subpart 2, item A, also includes a citation to Minnesota Statutes, section
290.17, subdivision 4, paragraph (j), for the requirement that two or more corporations
that are part of a unitary business file a combined income report. The commissioner of
revenue must use Minnesota Statutes, section 14.389, in adopting the amendment.
new text end

Sec. 8. new text begin REPEALER.
new text end

new text begin Minnesota Rules, part 8031.0100, subpart 3, new text end new text begin is repealed effective the day following
final enactment.
new text end

new text begin Minnesota Rules, part 8093.2100, new text end new text begin is repealed effective the day following final
enactment.
new text end

ARTICLE 2

SALES AND USE TAXES

Section 1.

Minnesota Statutes 2006, section 289A.55, is amended by adding a
subdivision to read:

new text begin Subd. 10. new text end

new text begin Relief for purchasers. new text end

new text begin A purchaser that meets the requirements of section
297A.995, subdivision 11, is relieved from the imposition of interest on tax and penalty.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2008.
new text end

Sec. 2.

Minnesota Statutes 2006, section 289A.60, is amended by adding a subdivision
to read:

new text begin Subd. 28. new text end

new text begin Relief for purchasers. new text end

new text begin A purchaser that meets the requirements of
section 297A.995, subdivision 11, is relieved from the imposition of penalty.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2008.
new text end

Sec. 3.

Minnesota Statutes 2006, section 297A.61, subdivision 22, is amended to read:

Subd. 22.

Internal Revenue Code.

Unless specifically provided otherwise,
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through
December 31, deleted text begin 2000 deleted text end new text begin 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. 4.

Minnesota Statutes 2006, section 297A.61, subdivision 29, is amended to read:

Subd. 29.

State.

Unless specifically provided otherwise, "state" means any state of
the United States new text begin , the Commonwealth of Puerto Rico, new text end and the District of Columbia.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2006, section 297A.665, is amended to read:

297A.665 PRESUMPTION OF TAX; BURDEN OF PROOF.

(a) For the purpose of the proper administration of this chapter and to prevent
evasion of the tax, until the contrary is established, it is presumed that:

(1) all gross receipts are subject to the tax; and

(2) all retail sales for delivery in Minnesota are for storage, use, or other consumption
in Minnesota.

(b) The burden of proving that a sale is not a taxable retail sale is on the seller.
However, the seller may take from the purchaser at the time of the sale a fully completed
exemption certificate which conclusively relieves the seller from collecting and remitting
the tax. This relief from liability does not apply to a seller who fraudulently fails to collect
the tax or solicits purchasers to participate in the unlawful claim of an exemption. If a
seller claiming that certain sales are exempt is not in possession of the required exemption
certificates within 60 days after receiving written notice from the commissioner that the
certificates are required, deductions claimed by the seller that required delivery of the
certificates must be disallowed. If the certificates are delivered to the commissioner within
the 60-day period, the commissioner may verify the reason or basis for the exemption
claimed in the certificates before allowing any deductions. A deduction must not be
granted on the basis of certificates delivered to the commissioner after the 60-day period.

new text begin (c) A certified service provider, as defined in section 297A.995, subdivision 2, is
relieved of liability under this section to the extent a seller who is its client is relieved of
liability.
new text end

deleted text begin (c) deleted text end new text begin (d) new text end A purchaser of tangible personal property or any items listed in section
297A.63 that are shipped or brought to Minnesota by the purchaser has the burden
of proving that the property was not purchased from a retailer for storage, use, or
consumption in Minnesota.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after December 31, 2007.
new text end

Sec. 6.

Minnesota Statutes 2006, section 297A.67, subdivision 7, is amended to read:

Subd. 7.

Drugs; medical devices.

(a) Sales of the following drugs and medical
devices new text begin for human use new text end are exempt:

(1) drugs deleted text begin for human use deleted text end , including over-the-counter drugs;

(2) single-use finger-pricking devices for the extraction of blood and other single-use
devices and single-use diagnostic agents used in diagnosing, monitoring, or treating
diabetes;

(3) insulin and medical oxygen for human use, regardless of whether prescribed
or sold over the counter;

(4) prosthetic devices;

(5) durable medical equipment for home use only;

(6) mobility enhancing equipment; and

(7) prescription corrective eyeglasses.

(b) For purposes of this subdivision:

(1) "Drug" means a compound, substance, or preparation, and any component of
a compound, substance, or preparation, other than food and food ingredients, dietary
supplements, or alcoholic beverages that is:

(i) recognized in the official United States Pharmacopoeia, official Homeopathic
Pharmacopoeia of the United States, or official National Formulary, and supplement
to any of them;

(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention
of disease; or

(iii) intended to affect the structure or any function of the body.

(2) "Durable medical equipment" means equipment, including repair and
replacement parts, but not including mobility enhancing equipment, that:

(i) can withstand repeated use;

(ii) is primarily and customarily used to serve a medical purpose;

(iii) generally is not useful to a person in the absence of illness or injury; and

(iv) is not worn in or on the body.

new text begin For purposes of this clause, "repair and replacement parts" includes all components
or attachments used in conjunction with the durable medical equipment, but does not
include repair and replacement parts which are for single patient use only.
new text end

(3) "Mobility enhancing equipment" means equipment, including repair and
replacement parts, but not including durable medical equipment, that:

(i) is primarily and customarily used to provide or increase the ability to move from
one place to another and that is appropriate for use either in a home or a motor vehicle;

(ii) is not generally used by persons with normal mobility; and

(iii) does not include any motor vehicle or equipment on a motor vehicle normally
provided by a motor vehicle manufacturer.

(4) "Over-the-counter drug" means a drug that contains a label that identifies the
product as a drug as required by Code of Federal Regulations, title 21, section 201.66. The
label must include a "drug facts" panel or a statement of the active ingredients with a list of
those ingredients contained in the compound, substance, or preparation. Over-the-counter
drugs do not include grooming and hygiene products, regardless of whether they otherwise
meet the definition. "Grooming and hygiene products" are soaps, cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.

(5) "Prescribed" and "prescription" means a direction in the form of an order,
formula, or recipe issued in any form of oral, written, electronic, or other means of
transmission by a duly licensed health care professional.

(6) "Prosthetic device" means a replacement, corrective, or supportive device,
including repair and replacement parts, worn on or in the body to:

(i) artificially replace a missing portion of the body;

(ii) prevent or correct physical deformity or malfunction; or

(iii) support a weak or deformed portion of the body.

Prosthetic device does not include corrective eyeglasses.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 297A.995, subdivision 10, is amended to read:

Subd. 10.

Relief from certain liability.

new text begin (a) new text end Notwithstanding subdivision 9, sellers
and certified service providers are relieved from liability to the state for having charged
and collected the incorrect amount of sales or use tax resulting from the seller or certified
service provider (1) relying on erroneous data provided by deleted text begin this state deleted text end new text begin the commissioner
in the database files new text end on tax rates, boundaries, or taxing jurisdiction assignments, or (2)
relying on erroneous data provided by the state in its taxability matrix concerning the
taxability of products and services.

new text begin (b) Notwithstanding subdivision 9, sellers and certified service providers are
relieved from liability to the state for having charged and collected the incorrect amount
of sales or use tax resulting from the seller or certified service provider relying on the
certification by the commissioner as to the accuracy of a certified automated system as to
the taxability of product categories. The relief from liability provided by this paragraph
does not apply when the sellers or certified service providers have incorrectly classified
an item or transaction into a product category, unless the item or transaction within a
product category was approved by the commissioner or approved jointly by the states that
are signatories to the agreement. The sellers and certified service providers must revise a
classification within ten days after receipt of notice from the commissioner that an item or
transaction within a product category is incorrectly classified as to its taxability, or they
are not relieved from liability for the incorrect classification following the notification.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after December 31, 2007.
new text end

Sec. 8.

Minnesota Statutes 2006, section 297A.995, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Purchaser relief from certain liability. new text end

new text begin (a) Notwithstanding other
provisions in the law, a purchaser is relieved from liability resulting from having paid
the incorrect amount of sales or use tax if a purchaser, whether or not holding a direct
pay permit, or a purchaser's seller or certified service provider relied on erroneous data
provided by this state in the database files on tax rates, boundaries, taxing jurisdiction
assignments, or in the taxability matrix. After providing an address-based database for
assigning taxing jurisdictions and their associated rates, no relief for errors resulting from
the purchaser's reliance on a database using zip codes is allowed.
new text end

new text begin new text end

new text begin new text end

new text begin (b) With respect to reliance on the taxability matrix provided by this state in
paragraph (a), relief is limited to erroneous classifications in the taxability matrix for
items included within the classifications as "taxable," "exempt," "included in sales
price," "excluded from sales price," "included in the definition," and "excluded from
the definition."
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for sales and purchases made after
December 31, 2008.
new text end

Sec. 9.

Minnesota Statutes 2006, section 297A.995, is amended by adding a
subdivision to read:

new text begin Subd. 12. new text end

new text begin Database files. new text end

new text begin For purposes of this section, "database files on tax rates,
boundaries, and taxing jurisdiction assignments" and the "taxability matrix" means those
databases and the taxability matrix required under the agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for sales and purchases
made after December 31, 2007.
new text end

Sec. 10.

Minnesota Statutes 2006, section 297B.01, subdivision 7, is amended to read:

Subd. 7.

Sale, sells, selling, purchase, purchased, or acquired.

(a) "Sale," "sells,"
"selling," "purchase," "purchased," or "acquired" means any transfer of title of any motor
vehicle, whether absolutely or conditionally, for a consideration in money or by exchange
or barter for any purpose other than resale in the regular course of business.

(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
or by holding it in an effort to so lease it, and which is put to no other use by the owner
other than resale after such lease or effort to lease, shall be considered property purchased
for resale.

(c) The terms also shall include any transfer of title or ownership of a motor vehicle
by other means, for or without consideration, except that these terms shall not include:

(1) the acquisition of a motor vehicle by inheritance from or by bequest of, a
decedent who owned it;

(2) the transfer of a motor vehicle which was previously licensed in the names of
two or more joint tenants and subsequently transferred without monetary consideration to
one or more of the joint tenants;

(3) the transfer of a motor vehicle by way of gift between individuals, or gift
from a limited used vehicle dealer licensed under section 168.27, subdivision 4a, to an
individual, when the transfer is with no monetary or other consideration or expectation
of consideration and the parties to the transfer submit an affidavit to that effect at the
time the title transfer is recorded;

(4) the voluntary or involuntary transfer of a motor vehicle between a husband and
wife in a divorce proceeding; or

(5) the transfer of a motor vehicle by way of a gift to an organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code,
as amended through December 31, deleted text begin 1996 deleted text end new text begin 2007 new text end , when the motor vehicle will be used
exclusively for religious, charitable, or educational purposes.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2006, section 297B.03, is amended to read:

297B.03 EXEMPTIONS.

There is specifically exempted from the provisions of this chapter and from
computation of the amount of tax imposed by it the following:

(1) purchase or use, including use under a lease purchase agreement or installment
sales contract made pursuant to section 465.71, of any motor vehicle by the United States
and its agencies and instrumentalities and by any person described in and subject to the
conditions provided in section 297A.67, subdivision 11;

(2) purchase or use of any motor vehicle by any person who was a resident of
another state or country at the time of the purchase and who subsequently becomes a
resident of Minnesota, provided the purchase occurred more than 60 days prior to the date
such person began residing in the state of Minnesota and the motor vehicle was registered
in the person's name in the other state or country;

(3) purchase or use of any motor vehicle by any person making a valid election to be
taxed under the provisions of section 297A.90;

(4) purchase or use of any motor vehicle previously registered in the state of
Minnesota when such transfer constitutes a transfer within the meaning of section 118,
331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal
Revenue Code of 1986, as amended through December 31, deleted text begin 1999 deleted text end new text begin 2007 new text end ;

(5) purchase or use of any vehicle owned by a resident of another state and leased
to a Minnesota-based private or for-hire carrier for regular use in the transportation of
persons or property in interstate commerce provided the vehicle is titled in the state of
the owner or secured party, and that state does not impose a sales tax or sales tax on
motor vehicles used in interstate commerce;

(6) purchase or use of a motor vehicle by a private nonprofit or public educational
institution for use as an instructional aid in automotive training programs operated by the
institution. "Automotive training programs" includes motor vehicle body and mechanical
repair courses but does not include driver education programs;

(7) purchase of a motor vehicle for use as an ambulance by an ambulance service
licensed under section 144E.10;

(8) purchase of a motor vehicle by or for a public library, as defined in section
134.001, subdivision 2, as a bookmobile or library delivery vehicle;

(9) purchase of a ready-mixed concrete truck;

(10) purchase or use of a motor vehicle by a town for use exclusively for road
maintenance, including snowplows and dump trucks, but not including automobiles,
vans, or pickup trucks;

(11) purchase or use of a motor vehicle by a corporation, society, association,
foundation, or institution organized and operated exclusively for charitable, religious,
or educational purposes, except a public school, university, or library, but only if the
vehicle is:

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

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

(12) purchase of a motor vehicle for use by a transit provider exclusively to provide
transit service is exempt if the transit provider is either (i) receiving financial assistance or
reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29,
473.388, or 473.405;

(13) purchase or use of a motor vehicle by a qualified business, as defined in section
469.310, located in a job opportunity building zone, if the motor vehicle is principally
garaged in the job opportunity building zone and is primarily used as part of or in direct
support of the person's operations carried on in the job opportunity building zone. The
exemption under this clause applies to sales, if the purchase was made and delivery
received during the duration of the job opportunity building zone. The exemption under
this clause also applies to any local sales and use tax.

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

SPECIAL TAXES AND FEES

Section 1.

Minnesota Statutes 2007 Supplement, section 115A.1314, subdivision 2,
is amended to read:

Subd. 2.

Creation of account; appropriations.

(a) The electronic waste account
is established in the environmental fund. The commissioner of revenue must deposit
receipts from the fee established in subdivision 1 in the account. Any interest earned on
the account must be credited to the account. Money from other sources may be credited to
the account. Beginning in the second program year and continuing each program year
thereafter, as of the last day of each program year, the commissioner new text begin of revenue new text end shall
determine the total amount of the variable fees that were collected. new text begin By July 15, 2009, and
each July 15 thereafter, the commissioner of the Pollution Control Agency shall inform
the commissioner of revenue of the amount necessary to operate the program in the new
program year. new text end To the extent that the total fees collected by the commissioner new text begin of revenue new text end in
connection with this section deleted text begin exceeds deleted text end new text begin exceed new text end the amount the commissioner new text begin of the Pollution
Control Agency new text end determines necessary to operate the program for the new program
year, the commissioner new text begin of revenue new text end shall refund on a pro rata basis, to all manufacturers
who paid any fees for the previous program year, the amount of fees collected by the
commissioner new text begin of revenue new text end in excess of the amount necessary to operate the program for the
new program year. No individual refund is required of amounts of $100 or less for a fiscal
year. Manufacturers who report collections less than 50 percent of their obligation for the
previous program year are not eligible for a refund. new text begin Amounts not refunded pursuant to this
paragraph shall remain in the account. The commissioner of revenue shall issue refunds
by August 10. In lieu of issuing a refund, the commissioner of revenue may grant credit
against a manufacturer's variable fee due by September 1.
new text end

(b) Until June 30, 2009, money in the account is annually appropriated to the
Pollution Control Agency:

(1) for the purpose of implementing sections 115A.1312 to 115A.1330, including
transfer to the commissioner of revenue to carry out the department's duties under
section 115A.1320, subdivision 2, and transfer to the commissioner of administration for
responsibilities under section 115A.1324; and

(2) to the commissioner of the Pollution Control Agency to be distributed on a
competitive basis through contracts with counties outside the 11-county metropolitan
area, as defined in paragraph (c), and with private entities that collect for recycling
covered electronic devices in counties outside the 11-county metropolitan area, where the
collection and recycling is consistent with the respective county's solid waste plan, for
the purpose of carrying out the activities under sections 115A.1312 to 115A.1330. In
awarding competitive grants under this clause, the commissioner must give preference to
counties and private entities that are working cooperatively with manufacturers to help
them meet their recycling obligations under section 115A.1318, subdivision 1.

(c) The 11-county metropolitan area consists of the counties of Anoka, Carver,
Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright.

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 2006, section 270C.56, subdivision 1, is amended to read:

Subdivision 1.

Liability imposed.

A person who, either singly or jointly with
others, has the control of, supervision of, or responsibility for filing returns or reports,
paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a
person who is liable under any other law, is liable for the payment of taxes, penalties, and
interest arising under chapters 295, 296A, 297A, 297F, and 297G, or sections new text begin 256.9658,
new text end 290.92 and 297E.02.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for fees due after June 30, 2008.
new text end

Sec. 3.

Minnesota Statutes 2006, section 287.20, subdivision 3a, is amended to read:

Subd. 3a.

Designated transfer.

"Designated transfer" means any of the following:

(1) a transfer between (i) an entity owned by a sole owner, and (ii) that sole owner;

(2) a transfer between (i) an entity in which a husband, a wife, or both are the sole
owners, and (ii) the husband, wife, or both;

(3) a transfer between (i) an entity with multiple co-owners, and (ii) all of the
co-owners, so long as each of the co-owners maintains the same percentage ownership
interest in the transferred real property, whether directly or through ownership of a
percentage of the entity;

(4) a transfer between (i) a revocable trust, and (ii) the grantor or grantors of the
revocable trust; or

(5) a transfer of substantially all of the assets of one or more entities pursuant to a
reorganization, as defined in section 287.20, subdivision 9.

For purposes of this definition of designated transfer, an interest in an entity that is
owned, directly or indirectly, by or for another entity shall be considered as being owned
proportionately by or for the owners of the other entity under provisions similar to those
of section 267(c)(1) and (5) of the Internal Revenue Code deleted text begin of 1986, as amended through
December 31, 2004 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. 4.

Minnesota Statutes 2006, section 287.20, subdivision 9, is amended to read:

Subd. 9.

Reorganization.

"Reorganization" means the transfer of substantially all
of the assets of a corporation, a limited liability company, or a partnership not in the usual
or regular course of business if at the time of the transfer the transfer qualifies as: (i) a
corporate reorganization under section 368(a) of the Internal Revenue Code deleted text begin of 1986, as
amended through December 31, 2004 deleted text end ; or (ii) a transfer from a partnership to another
partnership when the transferee is treated as a continuation of the transferor under section
708 of the Internal Revenue Code deleted text begin of 1986, as amended through December 31, 2004 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. 5.

Minnesota Statutes 2006, section 287.20, is amended by adding a subdivision
to read:

new text begin Subd. 10. new text end

new text begin Internal Revenue Code. new text end

new text begin Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, 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. 6.

Minnesota Statutes 2006, section 295.50, subdivision 4, is amended to read:

Subd. 4.

Health care provider.

(a) "Health care provider" means:

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

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

(3) a staff model health plan company;

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

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

(b) Health care provider does not include:

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

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

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

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

new text begin (5) a person who receives all payments for patient services from health care
providers, surgical centers, or hospitals for goods and services that are taxable to the
paying health care providers, surgical centers, or hospitals, as provided under section
295.53, subdivision 1, clause (3) or (4), or from a source of funds that is exempt from tax
under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (b), clause (1) is effective the day following final
enactment. Paragraph (b), clause (5) is effective for payments received after June 30, 2008.
new text end

Sec. 7.

Minnesota Statutes 2006, section 295.52, subdivision 4, is amended to read:

Subd. 4.

Use tax; prescription drugs.

(a) A person that receives prescription
drugs for resale or use in Minnesota, other than from a wholesale drug distributor that
is subject to tax under subdivision 3, is subject to a tax equal to the price paid to the
wholesale drug distributor multiplied by the tax percentage specified in this section. new text begin When
a person manufactures the drugs, the person is subject to tax equal to the cost incurred
by the person to manufacture the drugs multiplied by the tax percentage specified in this
section. new text end Liability for the tax is incurred when prescription drugs are received or delivered
in Minnesota by the person.

(b) A person that receives prescription drugs for use in Minnesota from a nonresident
pharmacy required to be registered under section 151.19 is subject to a tax equal to
the price paid by the nonresident pharmacy to the wholesale drug distributor or the
price received by the nonresident pharmacy, whichever is lower, multiplied by the tax
percentage specified in this section. Liability for the tax is incurred when prescription
drugs are received in Minnesota by the person.

(c) A tax imposed under this subdivision does not apply to purchases by an
individual for personal consumption.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for drug purchases after June 30,
2008.
new text end

Sec. 8.

Minnesota Statutes 2006, section 295.53, subdivision 4a, is amended to read:

Subd. 4a.

Credit for research.

(a) In addition to the exemptions allowed under
subdivision 1, a hospital or health care provider may claim an annual credit against the
total amount of tax, if any, the hospital or health care provider owes for that calendar year
under sections 295.50 to 295.57. The credit shall equal 2.5 percent of revenues for patient
services used to fund expenditures for qualifying research conducted by an allowable
research program. The amount of the credit shall not exceed the tax liability of the hospital
or health care provider under sections 295.50 to 295.57.

(b) For purposes of this subdivision, the following requirements apply:

(1) expenditures must be for program costs of qualifying research conducted by
an allowable research program;

(2) an allowable research program must be a formal program of medical and health
care research conducted by an entity which is exempt under section 501(c)(3) of the
Internal Revenue Code deleted text begin of 1986 deleted text end new text begin , as amended through December 31, 2007, new text end or is owned and
operated under authority of a governmental unit;

(3) qualifying research must:

(A) be approved in writing by the governing body of the hospital or health care
provider which is taking the deduction under this subdivision;

(B) have as its purpose the development of new knowledge in basic or applied
science relating to the diagnosis and treatment of conditions affecting the human body;

(C) be subject to review by individuals with expertise in the subject matter of the
proposed study but who have no financial interest in the proposed study and are not
involved in the conduct of the proposed study; and

(D) be subject to review and supervision by an institutional review board operating
in conformity with federal regulations if the research involves human subjects or
an institutional animal care and use committee operating in conformity with federal
regulations if the research involves animal subjects. Research expenses are not exempt if
the study is a routine evaluation of health care methods or products used in a particular
setting conducted for the purpose of making a management decision. Costs of clinical
research activities paid directly for the benefit of an individual patient are excluded from
this exemption. Basic research in fields including biochemistry, molecular biology, and
physiology are also included if such programs are subject to a peer review process.

(c) No credit shall be allowed under this subdivision for any revenue received by the
hospital or health care provider in the form of a grant, gift, or otherwise, whether from a
government or nongovernment source, on which the tax liability under section 295.52 is
not imposed.

(d) The taxpayer shall apply for the credit under this section on the annual return
under section 295.55, subdivision 5.

(e) Beginning September 1, 2001, if the actual or estimated amount paid under
this section for the calendar year exceeds $2,500,000, the commissioner of finance shall
determine the rate of the research credit for the following calendar year to the nearest
one-half percent so that refunds paid under this section will most closely equal $2,500,000.
The commissioner of finance shall publish in the State Register by October 1 of each year
the rate of the credit for the following calendar year. A determination under this section
is not subject to the rulemaking provisions of chapter 14.

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 2006, section 296A.07, subdivision 4, is amended to read:

Subd. 4.

Exemptions.

The provisions of subdivision 1 do not apply to gasoline new text begin or
denatured ethanol new text end purchased by:

(1) a transit system or transit provider receiving financial assistance or
reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; deleted text begin or
deleted text end

(2) an ambulance service licensed under chapter 144E new text begin ; or
new text end

new text begin (3) a licensed distributor to be delivered to a terminal for use in blending 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 2006, section 296A.08, subdivision 3, is amended to read:

Subd. 3.

Exemptions.

The provisions of subdivisions 1 and 2 do not apply to
special fuel or alternative fuels purchased by:

(1) a transit system or transit provider receiving financial assistance or
reimbursement under section 174.24, 256B.0625, subdivision 17, or 473.384; deleted text begin or deleted text end

(2) an ambulance service licensed under chapter 144E new text begin ; or
new text end

new text begin (3) a licensed distributor to be delivered to a terminal for use in blending new text end .

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2006, section 296A.16, subdivision 2, is amended to read:

Subd. 2.

Fuel used in other vehicle; claim for refund.

Any person who buys and
uses gasoline for a qualifying purpose other than use in motor vehicles, snowmobiles
except as provided in clause (2), or motorboats, or special fuel for a qualifying purpose
other than use in licensed motor vehicles, and who paid the tax directly or indirectly
through the amount of the tax being included in the price of the gasoline or special fuel, or
otherwise, shall be reimbursed and repaid the amount of the tax paid upon filing with the
commissioner a claim for refund in the form and manner prescribed by the commissioner,
and containing the information the commissioner shall require. By signing any such claim
which is false or fraudulent, the applicant shall be subject to the penalties provided in this
chapter for knowingly making a false claim. The claim shall set forth the total amount
of the gasoline so purchased and used by the applicant other than in motor vehicles, or
special fuel purchased and used by the applicant other than in licensed motor vehicles,
and shall state when and for what purpose it was used. When a claim contains an error
in computation or preparation, the commissioner is authorized to adjust the claim in
accordance with the evidence shown on the claim or other information available to the
commissioner. The commissioner, on being satisfied that the claimant is entitled to the
payments, shall approve the claim and transmit it to the commissioner of finance. The
words "gasoline" or "special fuel" as used in this subdivision do not include aviation
gasoline or special fuel for aircraft. Gasoline or special fuel bought and used for a
"qualifying purpose" means:

(1) Gasoline or special fuel used in carrying on a trade or business, used on a farm
situated in Minnesota, and used for a farming purpose. "Farm" and "farming purpose"
have the meanings given them in section 6420(c)(2), (3), and (4) of the Internal Revenue
Code of 1986, as amended through December 31, deleted text begin 1997 deleted text end new text begin 2007 new text end .

(2) Gasoline or special fuel used for off-highway business use.

(i) "Off-highway business use" means any use off the public highway by a person in
that person's trade, business, or activity for the production of income.

(ii) Off-highway business use includes use of a passenger snowmobile off the public
highways as part of the operations of a resort as defined in section 157.15, subdivision 11;
and use of gasoline or special fuel to operate a power takeoff unit on a vehicle, but not
including fuel consumed during idling time.

(iii) Off-highway business use does not include use as a fuel in a motor vehicle
which, at the time of use, is registered or is required to be registered for highway use under
the laws of any state or foreign country; or use of a licensed motor vehicle fuel tank in lieu
of a separate storage tank for storing fuel to be used for a qualifying purpose, as defined in
this section. Fuel purchased to be used for a qualifying purpose cannot be placed in the
fuel tank of a licensed motor vehicle and must be stored in a separate supply tank.

(3) Gasoline or special fuel placed in the fuel tanks of new motor vehicles,
manufactured in Minnesota, and shipped by interstate carrier to destinations in other
states or foreign countries.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2006, section 297F.01, subdivision 8, is amended to read:

Subd. 8.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, deleted text begin 1996 deleted text end new text begin 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. 13.

Minnesota Statutes 2006, section 297F.21, subdivision 1, is amended to read:

Subdivision 1.

Contraband defined.

The following are declared to be contraband
and therefore subject to civil and criminal penalties under this chapter:

(a) Cigarette packages which do not have stamps affixed to them as provided in this
chapter, including but not limited to (i) packages with illegible stamps and packages with
stamps that are not complete or whole even if the stamps are legible, and (ii) all devices
for the vending of cigarettes in which packages as defined in item (i) are found, including
all contents contained within the devices.

(b) A device for the vending of cigarettes and all packages of cigarettes, where the
device does not afford at least partial visibility of contents. Where any package exposed
to view does not carry the stamp required by this chapter, it shall be presumed that all
packages contained in the device are unstamped and contraband.

(c) A device for the vending of cigarettes to which the commissioner or authorized
agents have been denied access for the inspection of contents. In lieu of seizure, the
commissioner or an agent may seal the device to prevent its use until inspection of
contents is permitted.

(d) A device for the vending of cigarettes which does not carry the name and address
of the owner, plainly marked and visible from the front of the machine.

(e) A device including, but not limited to, motor vehicles, trailers, snowmobiles,
airplanes, and boats used with the knowledge of the owner or of a person operating with
the consent of the owner for the storage or transportation of more than 5,000 cigarettes
which are contraband under this subdivision. When cigarettes are being transported in
the course of interstate commerce, or are in movement from either a public warehouse to
a distributor upon orders from a manufacturer or distributor, or from one distributor to
another, the cigarettes are not contraband, notwithstanding the provisions of clause (a).

(f) A device including, but not limited to, motor vehicles, trailers, snowmobiles,
airplanes, and boats used with the knowledge of the owner, or of a person operating with
the consent of the owner, for the storage or transportation of untaxed tobacco products
intended for sale in Minnesota other than those in the possession of a licensed distributor
on or before the due date for payment of the tax under section 297F.09, subdivision 2.

(g) Cigarette packages or tobacco products obtained from an unlicensed seller.

(h) Cigarette packages offered for sale or held as inventory in violation of section
297F.20, subdivision 7.

(i) Tobacco products on which the tax has not been paid by a licensed distributor.

(j) Any cigarette packages or tobacco products offered for sale or held as inventory
for which there is not an invoice from a licensed seller as required under section 297F.13,
subdivision 4.

(k) Cigarette packages which have been imported into the United States in violation
of United States Code, title 26, section 5754. All cigarettes held in violation of that section
shall be presumed to have entered the United States after December 31, 1999, in the
absence of proof to the contrary.

new text begin (l) Cigarettes and cigarette packaging which are not in compliance with fire safety
requirements of sections 299F.850 to 299F.859.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Property added in paragraph (l) of this section is contraband
effective December 1, 2008.
new text end

Sec. 14.

Minnesota Statutes 2006, section 297G.01, subdivision 9, is amended to read:

Subd. 9.

Internal Revenue Code.

Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, deleted text begin 1996 deleted text end new text begin 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.

Minnesota Statutes 2006, section 297H.09, is amended to read:

297H.09 BAD DEBTS.

The remitter of the solid waste management tax may offset against the tax payable,
with respect to any reporting period, the amount of tax imposed by this chapter previously
remitted to the commissioner of revenue which qualified as a bad debt under section
166(a) of the Internal Revenue Code, as amended through December 31, deleted text begin 1993 deleted text end new text begin 2007 new text end ,
during such reporting period, but only in proportion to the portion of such debt which
became uncollectable. This section applies only to accrual basis remitters that remit tax
before it is collected and to the extent they are unable to collect the tax.

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2006, section 297I.05, subdivision 12, is amended to read:

Subd. 12.

Other entities.

(a) A tax is imposed equal to two percent of:

(1) gross premiums less return premiums written for risks resident or located in
Minnesota by a risk retention group;

(2) gross premiums less return premiums received by an attorney in fact acting
in accordance with chapter 71A;

(3) gross premiums less return premiums received pursuant to assigned risk policies
and contracts of coverage under chapter 79;

(4) the direct funded premium received by the reinsurance association under section
79.34 from self-insurers approved under section 176.181 and political subdivisions that
self-insure; new text begin and
new text end

deleted text begin (5) gross premiums less return premiums received by a nonprofit health service plan
corporation authorized under chapter 62C; and
deleted text end

deleted text begin (6) deleted text end new text begin (5) new text end gross premiums less return premiums paid to an insurer other than a licensed
insurance company or a surplus lines licensee for coverage of risks resident or located in
Minnesota by a purchasing group or any members of the purchasing group to a broker or
agent for the purchasing group.

(b) A tax is imposed on a joint self-insurance plan operating under chapter 60F. The
rate of tax is equal to two percent of the total amount of claims paid during the fund year,
with no deduction for claims wholly or partially reimbursed through stop-loss insurance.

(c) A tax is imposed on a joint self-insurance plan operating under chapter 62H.
The rate of tax is equal to two percent of the total amount of claims paid during the
fund's fiscal year, with no deduction for claims wholly or partially reimbursed through
stop-loss insurance.

(d) A tax is imposed equal to the tax imposed under section 297I.05, subdivision 5,
on the gross premiums less return premiums on all coverages received by an accountable
provider network or agents of an accountable provider network in Minnesota, in cash or
otherwise, during the year.

new text begin EFFECTIVE DATE. new text end

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

ARTICLE 4

PROPERTY TAXES AND AIDS

Section 1.

Minnesota Statutes 2006, section 13.51, subdivision 3, is amended to read:

Subd. 3.

Data on income of individuals.

Income information on individuals
collected and maintained by political subdivisions to determine eligibility of property for
class 4d under deleted text begin section 273.126 deleted text end new text begin sections 273.128 new text end and 273.13, is private data on individuals
as defined in section 13.02, subdivision 12.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for data collected or maintained by
political subdivisions beginning the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2006, section 13.585, subdivision 5, is amended to read:

Subd. 5.

Private data on individuals.

Income information on individuals collected
and maintained by a housing agency to determine eligibility of property for class 4d
under sections and 273.13, is private data on individuals as defined in
section 13.02, subdivision 12. The data may be disclosed to the county and local assessors
responsible for determining eligibility of the property for classification 4d.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for data collected or maintained by a
housing agency beginning the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2006, section 163.051, subdivision 5, is amended to read:

Subd. 5.

Effect on road and bridge levy.

new text begin For taxes payable in the same year
that the county first receives tax revenues under this section, new text end the county auditor of each
metropolitan county shall reduce the amount of the property taxes levied pursuant to law
deleted text begin in 1973 for collection in 1974, deleted text end by the board of commissioners of such county for the
county road and bridge fund, by the deleted text begin following amount: Anoka County, $341,750; Carver
County, $86,725; Dakota County, $386,165; Hennepin County, $2,728,425; Ramsey
County, $1,276,815; Scott County, $104,805; Washington County, $227,220 deleted text end new text begin estimated
wheelage tax revenues to be received by the county in that taxes payable year new text end , and shall
spread only the balance thereof on the tax rolls for collection deleted text begin in 1972 deleted text end . The county auditor
shall also reduce the amount of such taxes levied pursuant to law deleted text begin in 1972 and any
subsequent year, deleted text end for collection in the respective ensuing years, by the amount of wheelage
taxes received by the county in the 12 months immediately preceding deleted text begin such levy deleted text end new text begin May 1 of
the year preceding the taxes payable year new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively beginning the day
following final enactment for taxes payable in 2007 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2006, section 272.02, subdivision 13, is amended to read:

Subd. 13.

Emergency shelters for victims of domestic abuse.

Property used in
a continuous program to provide emergency shelter for victims of domestic abuse is
exempt, provided the organization that owns and sponsors the shelter is exempt from
federal income taxation pursuant to section 501(c)(3) of the Internal Revenue Code
deleted text begin of 1986, as amended through December 31, 1992 deleted text end , notwithstanding the fact that the
sponsoring organization receives funding under Section 8 of the United States Housing
Act of 1937, as amended.

new text begin EFFECTIVE DATE. new text end

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

Sec. 5.

Minnesota Statutes 2006, section 272.02, subdivision 20, is amended to read:

Subd. 20.

Transitional housing facilities.

Transitional housing facilities are
exempt. "Transitional housing facility" means a facility that meets the following
requirements. (i) It provides temporary housing to individuals, couples, or families. (ii)
It has the purpose of reuniting families and enabling parents or individuals to obtain
self-sufficiency, advance their education, get job training, or become employed in jobs that
provide a living wage. (iii) It provides support services such as child care, work readiness
training, and career development counseling; and a self-sufficiency program with periodic
monitoring of each resident's progress in completing the program's goals. (iv) It provides
services to a resident of the facility for at least three months but no longer than three
years, except residents enrolled in an educational or vocational institution or job training
program. These residents may receive services during the time they are enrolled but in no
event longer than four years. (v) It is owned and operated or under lease from a unit of
government or governmental agency under a property disposition program and operated by
one or more organizations exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code deleted text begin of 1986, as amended through December 31, 1992 deleted text end . This exemption
applies notwithstanding the fact that the sponsoring organization receives financing by a
direct federal loan or federally insured loan or a loan made by the Minnesota Housing
Finance Agency under the provisions of either Title II of the National Housing Act or the
Minnesota Housing Finance Agency Law of 1971 new text begin , as amended through December 31,
2007, new text end or rules promulgated by the agency pursuant to it, and notwithstanding the fact
that the sponsoring organization receives funding under Section 8 of the United States
Housing Act of 1937, as amended new text begin through December 31, 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. 6.

Minnesota Statutes 2006, section 272.02, subdivision 21, is amended to read:

Subd. 21.

Property used to provide computing resources to University of
Minnesota.

Real and personal property, including leasehold or other personal property
interests, is exempt if it is owned and operated by a corporation of which more than 50
percent of the total voting power of the stock of the corporation is owned collectively by:
(i) the Board of Regents of the University of Minnesota, (ii) the University of Minnesota
Foundation, an organization exempt from federal income taxation under section 501(c)(3)
of the Internal Revenue Code deleted text begin of 1986, as amended through December 31, 1992 deleted text end , and (iii)
a corporation organized under chapter 317A, which by its articles of incorporation is
prohibited from providing pecuniary gain to any person or entity other than the regents
of the University of Minnesota; which property is used primarily to manage or provide
goods, services, or facilities utilizing or relating to large-scale advanced scientific
computing resources to the regents of the University of Minnesota and others.

new text begin EFFECTIVE DATE. new text end

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

Sec. 7.

Minnesota Statutes 2006, section 272.02, subdivision 27, is amended to read:

Subd. 27.

Superior National Forest; recreational property for use by disabled
veterans.

Real and personal property is exempt if it is located in the Superior National
Forest, and owned or leased and operated by a nonprofit organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code deleted text begin of
1986, as amended through December 31, 1992 deleted text end , and primarily used to provide recreational
opportunities for disabled veterans and their families.

new text begin EFFECTIVE DATE. new text end

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

Sec. 8.

Minnesota Statutes 2006, section 272.02, subdivision 31, is amended to read:

Subd. 31.

Business incubator property.

Property owned by a nonprofit charitable
organization that qualifies for tax exemption under section 501(c)(3) of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1997 deleted text end , that is intended to be
used as a business incubator in a high-unemployment county, is exempt. As used in this
subdivision, a "business incubator" is a facility used for the development of nonretail
businesses, offering access to equipment, space, services, and advice to the tenant
businesses, for the purpose of encouraging economic development, diversification, and
job creation in the area served by the organization, and "high-unemployment county" is a
county that had an average annual unemployment rate of 7.9 percent or greater in 1997.
Property that qualifies for the exemption under this subdivision is limited to no more than
two contiguous parcels and structures that do not exceed in the aggregate 40,000 square
feet. This exemption expires after taxes payable in 2011.

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 2006, section 272.02, subdivision 38, is amended to read:

Subd. 38.

Conversion to exempt or taxable uses.

(a) Any property new text begin , except
property taxed as personal property under section 273.125, that is new text end exempt from taxation on
January 2 of any year which, due to sale or other reason, loses its exemption prior to July 1
of any year, shall be placed on the current assessment rolls for that year.

The valuation shall be determined with respect to its value on January 2 of such
year. The classification shall be based upon the use to which the property was put by the
purchaser, or in the event the purchaser has not utilized the property by July 1, the intended
use of the property, determined by the county assessor, based upon all relevant facts.

(b) Property new text begin , except property taxed as personal property under section 273.125, that
is new text end subject to tax on January 2 that is acquired before July 1 of the year is exempt for that
assessment year if the property is to be used for an exempt purpose under subdivisions 2
to 8.

(c) Property which forfeits to the state for nonpayment of real estate taxes on or
before December 31 in an assessment year, shall be removed from the assessment rolls for
that assessment year. Forfeited property that is repurchased, or sold at a public or private
sale, on or before December 31 of an assessment year shall be placed on the assessment
rolls for that year's assessment.

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 2006, section 272.02, subdivision 49, is amended to read:

Subd. 49.

Agricultural historical society property.

Property is exempt from
taxation if it is owned by a nonprofit charitable or educational organization that qualifies
for exemption under section 501(c)(3) of the Internal Revenue Code deleted text begin of 1986, as amended
through December 31, 2000, deleted text end and meets the following criteria:

(1) the property is primarily used for storing and exhibiting tools, equipment, and
artifacts useful in providing an understanding of local or regional agricultural history.
Primary use is determined each year based on the number of days the property is used
solely for storage and exhibition purposes;

(2) the property is limited to a maximum of 20 acres per owner per county, but
includes the land and any taxable structures, fixtures, and equipment on the land;

(3) the property is not used for a revenue-producing activity for more than ten days
in each calendar year; and

(4) the property is not used for residential purposes on either a temporary or
permanent basis.

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2006, section 272.03, subdivision 3, is amended to read:

Subd. 3.

Construction of terms.

For the purposes of chapters 270 to 284, unless a
different meaning is indicated by the context, the words, phrases, and terms defined in
subdivisions 4 to deleted text begin 11 deleted text end new text begin 13 new text end shall have the meanings given them.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2006, section 272.03, is amended by adding a subdivision
to read:

new text begin Subd. 13. new text end

new text begin Internal Revenue Code. new text end

new text begin Unless specifically defined otherwise, "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended through December
31, 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. 13.

new text begin [273.105] INTERNAL REVENUE CODE.
new text end

new text begin Unless specifically defined otherwise, for purposes of this chapter, "Internal Revenue
Code" means the Internal Revenue Code of 1986, as amended through December 31, 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. 14.

Minnesota Statutes 2006, section 273.11, subdivision 8, is amended to read:

Subd. 8.

Limited equity cooperative apartments.

For the purposes of this
subdivision, the terms defined in this subdivision have the meanings given them.

A "limited equity cooperative" is a corporation organized under chapter 308A or
308B, which has as its primary purpose the provision of housing and related services to
its members which meets one of the following criteria with respect to the income of its
members: (1) a minimum of 75 percent of members must have incomes at or less than
90 percent of area median income, (2) a minimum of 40 percent of members must have
incomes at or less than 60 percent of area median income, or (3) a minimum of 20 percent
of members must have incomes at or less than 50 percent of area median income. For
purposes of this clause, "member income" shall mean the income of a member existing at
the time the member acquires cooperative membership, and median income shall mean
the St. Paul-Minneapolis metropolitan area median income as determined by the United
States Department of Housing and Urban Development. It must also meet the following
requirements:

(a) The articles of incorporation set the sale price of occupancy entitling cooperative
shares or memberships at no more than a transfer value determined as provided in the
articles. That value may not exceed the sum of the following:

(1) the consideration paid for the membership or shares by the first occupant of the
unit, as shown in the records of the corporation;

(2) the fair market value, as shown in the records of the corporation, of any
improvements to the real property that were installed at the sole expense of the member
with the prior approval of the board of directors;

(3) accumulated interest, or an inflation allowance not to exceed the greater of a ten
percent annual noncompounded increase on the consideration paid for the membership or
share by the first occupant of the unit, or the amount that would have been paid on that
consideration if interest had been paid on it at the rate of the percentage increase in the
revised Consumer Price Index for All Urban Consumers for the Minneapolis-St. Paul
metropolitan area prepared by the United States Department of Labor, provided that the
amount determined pursuant to this clause may not exceed $500 for each year or fraction
of a year the membership or share was owned; plus

(4) real property capital contributions shown in the records of the corporation to
have been paid by the transferor member and previous holders of the same membership,
or of separate memberships that had entitled occupancy to the unit of the member
involved. These contributions include contributions to a corporate reserve account the
use of which is restricted to real property improvements or acquisitions, contributions to
the corporation which are used for real property improvements or acquisitions, and the
amount of principal amortized by the corporation on its indebtedness due to the financing
of real property acquisition or improvement or the averaging of principal paid by the
corporation over the term of its real property-related indebtedness.

(b) The articles of incorporation require that the board of directors limit the purchase
price of stock or membership interests for new member-occupants or resident shareholders
to an amount which does not exceed the transfer value for the membership or stock as
defined in clause (a).

(c) The articles of incorporation require that the total distribution out of capital to a
member shall not exceed that transfer value.

(d) The articles of incorporation require that upon liquidation of the corporation any
assets remaining after retirement of corporate debts and distribution to members will
be conveyed to a charitable organization described in section 501(c)(3) of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1992, deleted text end or a public agency.

A "limited equity cooperative apartment" is a dwelling unit owned by a limited
equity cooperative.

"Occupancy entitling cooperative share or membership" is the ownership interest
in a cooperative organization which entitles the holder to an exclusive right to occupy a
dwelling unit owned or leased by the cooperative.

For purposes of taxation, the assessor shall value a unit owned by a limited equity
cooperative at the lesser of its market value or the value determined by capitalizing the net
operating income of a comparable apartment operated on a rental basis at the capitalization
rate used in valuing comparable buildings that are not limited equity cooperatives. If a
cooperative fails to operate in accordance with the provisions of clauses (a) to (d), the
property shall be subject to additional property taxes in the amount of the difference
between the taxes determined in accordance with this subdivision for the last ten years that
the property had been assessed pursuant to this subdivision and the amount that would
have been paid if the provisions of this subdivision had not applied to it. The additional
taxes, plus interest at the rate specified in section 549.09, shall be extended against the
property on the tax list for the current year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 15.

Minnesota Statutes 2007 Supplement, section 273.1231, subdivision 7,
is amended to read:

Subd. 7.

Reassessed market value.

"Reassessed market value" means the taxable
market value of the property established for the January 2 assessment in the year that the
disaster or destruction occurs, as adjusted by the county assessor or the commissioner of
revenue to reflect the loss in market value caused by the damage. deleted text begin As soon as practical, the
assessor or commissioner shall report the reassessed value to the county auditor. deleted text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 16.

Minnesota Statutes 2007 Supplement, section 273.1231, is amended by adding
a subdivision to read:

new text begin Subd. 8. new text end

new text begin Utility property. new text end

new text begin "Utility property" means property appraised and
classified for tax purposes by the commissioner of revenue under sections 273.33 to
273.3711.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 17.

Minnesota Statutes 2007 Supplement, section 273.1232, subdivision 1,
is amended to read:

Subdivision 1.

Reassessments required.

For the purposes of sections 273.1231
to 273.1235, the county assessor must reassess all damaged property in a disaster or
emergency area, deleted text begin and the county assessor or deleted text end new text begin except that new text end the commissioner of revenue
deleted text begin as appropriate deleted text end shall reassess all property for which an application is submitted new text begin to the
commissioner new text end under section 273.1233 or 273.1235. new text begin As soon as practical, the assessor or
commissioner of revenue must report the reassessed value to the county auditor.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 18.

Minnesota Statutes 2007 Supplement, section 273.1233, subdivision 1,
is amended to read:

Subdivision 1.

Abatement authorization.

(a) Notwithstanding section 375.192,
a county board may grant an abatement of net tax for homestead and nonhomestead
property under the provisions of this paragraph for taxes payable in the year in which
the destruction occurs if:

(1) the owner submits a written application to the county assessor as soon as
practical after the damage has occurred;

(2) the owner submits a written application to the county board as soon as practical
after the damage has occurred; and

(3) the county assessor determines that 50 percent or more of a homestead dwelling
or other building has been (i) unintentionally or accidentally destroyed, or (ii) destroyed
by arson or vandalism by someone other than the owner.

Abatements granted under this paragraph are not subject to approval by the
commissioner of revenue.

(b) Notwithstanding sections 270C.86 and 375.192, the commissioner of revenue
may grant an abatement of net tax for new text begin utility new text end property deleted text begin that the commissioner is required by
law to appraise deleted text end for taxes payable in the year in which the destruction occurs if:

(1) the owner submits a written application to the commissioner as soon as practical
after the damage has occurred;

(2) the owner forwards a copy of the written application to the county board as soon
as practical after the damage has occurred; and

(3) the commissioner determines that 50 percent or more of the property has been
(i) unintentionally or accidentally destroyed, or (ii) destroyed by arson or vandalism by
someone other than the owner.

Abatements granted under this paragraph are not subject to approval by the county
board of the county where the property is located.

new text begin EFFECTIVE DATE. new text end

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

Sec. 19.

Minnesota Statutes 2007 Supplement, section 273.1233, subdivision 3,
is amended to read:

Subd. 3.

Reimbursement, levy, and appropriation.

(a) If the destruction occurs as
a result of a disaster or emergency and the property is located in a disaster or emergency
area, the county auditor shall certify the abatements granted under this section to the
commissioner of revenue for reimbursement to each taxing jurisdiction in which the
damaged property is located. The commissioner shall make the payments to the taxing
jurisdictions containing the property, other than school districts and the state, at the time
distributions are made under section 473H.10, subdivision 3. Reimbursements to school
districts shall be made as provided in section 273.1392. No reimbursement is to be paid
to the state treasury.

(b) Local taxing authorities may levy in the following year the amount of
unreimbursed tax dollars lost as a result of the reductions granted pursuant to this
deleted text begin subdivision deleted text end new text begin section and sections 273.1234 and 273.1235 new text end outside of any statutory
restriction as to levy amount or tax rate.

(c) There is annually appropriated from the general fund to the commissioner of
revenue an amount necessary to make the payments required by this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 20.

Minnesota Statutes 2007 Supplement, section 273.1234, is amended to read:

273.1234 TAX RELIEF FOR DESTROYED PROPERTY; HOMESTEAD
AND DISASTER CREDITS.

Subdivision 1.

Credit provided.

The county auditor shall compute a credit for taxes
payable in the year following the year in which the damage or destruction occurred for
each reassessed homestead new text begin property new text end within the county that is located within a disaster
or emergency area. The credit is equal to the difference in the net tax on the property
computed using the market value of the property established for the January 2 assessment
in the year in which the damage occurred and as computed using the reassessed value.

Subd. 2.

Credit reimbursements.

The county auditor shall certify the credits
granted under this section to the commissioner of revenue for reimbursement to each
taxing jurisdiction in which the damaged property is located. The commissioner shall
make the payments to the taxing jurisdictions containing the property, other than
school districts and the state, at the time distributions are made under section 473H.10,
subdivision 3. Reimbursements to school districts shall be made as provided in section
273.1392. deleted text begin No reimbursement is to be paid to the state treasury. deleted text end

Subd. 3.

Appropriation.

There is annually appropriated from the general fund
to the commissioner of revenue an amount necessary to make the payments required
by this section.

new text begin EFFECTIVE DATE. new text end

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

Sec. 21.

Minnesota Statutes 2007 Supplement, section 273.1235, subdivision 1,
is amended to read:

Subdivision 1.

Credit provided.

The county board may grant a credit for taxes
payable in the year following the year in which the damage or destruction occurred
for: (1) homestead deleted text begin properties deleted text end new text begin property that meets all the requirements under section
273.1233, subdivision 1, paragraph (a), but new text end that deleted text begin do deleted text end new text begin does new text end not qualify for a credit under
section 273.1234 new text begin , except that an application need only be submitted by the end of the
year in which the damage occurred new text end ; and (2) nonhomestead new text begin and utility new text end property deleted text begin meeting
the requirements deleted text end new text begin that meets all the requirements new text end under section 273.1233 new text begin , subdivision 1,
paragraph (b), except that an application need only be submitted by the end of the year
in which the damage occurred 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 2007 Supplement, section 273.1235, subdivision 3,
is amended to read:

Subd. 3.

Credit reimbursements.

The county auditor shall certify the credits
granted under this section for property within a disaster or emergency area to the
commissioner of revenue for reimbursement to each taxing jurisdiction in which the
damaged property is located. The commissioner shall make the payments to the taxing
jurisdictions containing the property, other than school districts and the state, at the time
distributions are made under section 473H.10, subdivision 3. Reimbursements to school
districts shall be made as provided in section 273.1392. deleted text begin No reimbursement is to be paid
to the state treasury. deleted text end No reimbursement is to be made for credits to property not located
in a disaster or emergency 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. 23.

Minnesota Statutes 2006, section 273.124, subdivision 6, is amended to read:

Subd. 6.

Leasehold cooperatives.

When one or more dwellings or one or more
buildings which each contain several dwelling units is owned by a nonprofit corporation
subject to the provisions of chapter 317A and qualifying under section 501(c)(3) or
501(c)(4) of the Internal Revenue Code deleted text begin of 1986, as amended through December 31,
1990 deleted text end , or a limited partnership which corporation or partnership operates the property in
conjunction with a cooperative association, and has received public financing, homestead
treatment may be claimed by the cooperative association on behalf of the members of
the cooperative for each dwelling unit occupied by a member of the cooperative. The
cooperative association must provide the assessor with the Social Security numbers of
those members. To qualify for the treatment provided by this subdivision, the following
conditions must be met:

(a) the cooperative association must be organized under chapter 308A or 308B and
all voting members of the board of directors must be resident tenants of the cooperative
and must be elected by the resident tenants of the cooperative;

(b) the cooperative association must have a lease for occupancy of the property for a
term of at least 20 years, which permits the cooperative association, while not in default on
the lease, to participate materially in the management of the property, including material
participation in establishing budgets, setting rent levels, and hiring and supervising a
management agent;

(c) to the extent permitted under state or federal law, the cooperative association
must have a right under a written agreement with the owner to purchase the property if the
owner proposes to sell it; if the cooperative association does not purchase the property it is
offered for sale, the owner may not subsequently sell the property to another purchaser at
a price lower than the price at which it was offered for sale to the cooperative association
unless the cooperative association approves the sale;

(d) a minimum of 40 percent of the cooperative association's members must have
incomes at or less than 60 percent of area median gross income as determined by the
United States Secretary of Housing and Urban Development under section 142(d)(2)(B)
of the Internal Revenue Code deleted text begin of 1986, as amended through December 31, 1991 deleted text end . For
purposes of this clause, "member income" means the income of a member existing at the
time the member acquires cooperative membership;

(e) if a limited partnership owns the property, it must include as the managing
general partner a nonprofit organization operating under the provisions of chapter 317A
and qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code deleted text begin of 1986,
as amended through December 31, 1990, deleted text end and the limited partnership agreement must
provide that the managing general partner have sufficient powers so that it materially
participates in the management and control of the limited partnership;

(f) prior to becoming a member of a leasehold cooperative described in this
subdivision, a person must have received notice that (1) describes leasehold cooperative
property in plain language, including but not limited to the effects of classification
under this subdivision on rents, property taxes and tax credits or refunds, and operating
expenses, and (2) states that copies of the articles of incorporation and bylaws of the
cooperative association, the lease between the owner and the cooperative association, a
sample sublease between the cooperative association and a tenant, and, if the owner is a
partnership, a copy of the limited partnership agreement, can be obtained upon written
request at no charge from the owner, and the owner must send or deliver the materials
within seven days after receiving any request;

(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on
which the unit became leasehold cooperative property described in this subdivision, the
notice described in paragraph (f) must have been sent by first class mail to the occupant of
the unit at least 60 days prior to the date on which the unit became leasehold cooperative
property. For purposes of the notice under this paragraph, the copies of the documents
referred to in paragraph (f) may be in proposed version, provided that any subsequent
material alteration of those documents made after the occupant has requested a copy
shall be disclosed to any occupant who has requested a copy of the document. Copies of
the articles of incorporation and certificate of limited partnership shall be filed with the
secretary of state after the expiration of the 60-day period unless the change to leasehold
cooperative status does not proceed;

(h) the county attorney of the county in which the property is located must certify to
the assessor that the property meets the requirements of this subdivision;

(i) the public financing received must be from at least one of the following sources:

(1) tax increment financing proceeds used for the acquisition or rehabilitation of the
building or interest rate write-downs relating to the acquisition of the building;

(2) government issued bonds exempt from taxes under section 103 of the Internal
Revenue Code deleted text begin of 1986, as amended through December 31, 1991 deleted text end , the proceeds of which
are used for the acquisition or rehabilitation of the building;

(3) programs under section 221(d)(3), 202, or 236, of Title II of the National
Housing Act;

(4) rental housing program funds under Section 8 of the United States Housing Act
of 1937 new text begin , as amended through December 31, 2007, new text end or the market rate family graduated
payment mortgage program funds administered by the Minnesota Housing Finance
Agency that are used for the acquisition or rehabilitation of the building;

(5) low-income housing credit under section 42 of the Internal Revenue Code deleted text begin of
1986, as amended through December 31, 1991 deleted text end ;

(6) public financing provided by a local government used for the acquisition or
rehabilitation of the building, including grants or loans from (i) federal community
development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued
under chapter 474A; or

(7) other rental housing program funds provided by the Minnesota Housing Finance
Agency for the acquisition or rehabilitation of the building;

(j) at the time of the initial request for homestead classification or of any transfer of
ownership of the property, the governing body of the municipality in which the property is
located must hold a public hearing and make the following findings:

(1) that the granting of the homestead treatment of the apartment's units will
facilitate safe, clean, affordable housing for the cooperative members that would otherwise
not be available absent the homestead designation;

(2) that the owner has presented information satisfactory to the governing body
showing that the savings garnered from the homestead designation of the units will be
used to reduce tenant's rents or provide a level of furnishing or maintenance not possible
absent the designation; and

(3) that the requirements of paragraphs (b), (d), and (i) have been met.

Homestead treatment must be afforded to units occupied by members of the
cooperative association and the units must be assessed as provided in subdivision 3,
provided that any unit not so occupied shall be classified and assessed pursuant to the
appropriate class. No more than three acres of land may, for assessment purposes,
be included with each dwelling unit that qualifies for homestead treatment under this
subdivision.

When dwelling units no longer qualify under this subdivision, the current owner
must notify the assessor within 60 days. Failure to notify the assessor within 60 days shall
result in the loss of benefits under this subdivision for taxes payable in the year that the
failure is discovered. For these purposes, "benefits under this subdivision" means the
difference in the net tax capacity of the units which no longer qualify as computed under
this subdivision and as computed under the otherwise applicable law, times the local tax
rate applicable to the building for that taxes payable year. Upon discovery of a failure to
notify, the assessor shall inform the auditor of the difference in net tax capacity for the
building or buildings in which units no longer qualify, and the auditor shall calculate the
benefits under this subdivision. Such amount, plus a penalty equal to 100 percent of that
amount, shall then be demanded of the building's owner. The property owner may appeal
the county's determination by serving copies of a petition for review with county officials
as provided in section 278.01 and filing a proof of service as provided in section 278.01
with the Minnesota Tax Court within 60 days of the date of the notice from the county.
The appeal shall be governed by the Tax Court procedures provided in chapter 271, for
cases relating to the tax laws as defined in section 271.01, subdivision 5; disregarding
sections 273.125, subdivision 5, and 278.03, but including section 278.05, subdivision 2.
If the amount of the benefits under this subdivision and penalty are not paid within 60
days, and if no appeal has been filed, the county auditor shall certify the amount of the
benefit and penalty to the succeeding year's tax list to be collected as part of the property
taxes on the affected buildings.

new text begin EFFECTIVE DATE. new text end

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

Sec. 24.

Minnesota Statutes 2006, section 273.124, subdivision 13, is amended to read:

Subd. 13.

Homestead application.

(a) A person who meets the homestead
requirements under subdivision 1 must file a homestead application with the county
assessor to initially obtain homestead classification.

(b) On or before January 2, 1993, each county assessor shall mail a homestead
application to the owner of each parcel of property within the county which was
classified as homestead for the 1992 assessment year. The format and contents of a
uniform homestead application shall be prescribed by the commissioner of revenue. The
commissioner shall consult with the chairs of the house and senate tax committees on the
contents of the homestead application form. The application must clearly inform the
taxpayer that this application must be signed by all owners who occupy the property or
by the qualifying relative and returned to the county assessor in order for the property
to continue receiving homestead treatment. The envelope containing the homestead
application shall clearly identify its contents and alert the taxpayer of its necessary
immediate response.

(c) Every property owner applying for homestead classification must furnish to the
county assessor the Social Security number of each occupant who is listed as an owner
of the property on the deed of record, the name and address of each owner who does not
occupy the property, and the name and Social Security number of each owner's spouse who
occupies the property. The application must be signed by each owner who occupies the
property and by each owner's spouse who occupies the property, or, in the case of property
that qualifies as a homestead under subdivision 1, paragraph (c), by the qualifying relative.

If a property owner occupies a homestead, the property owner's spouse may not
claim another property as a homestead unless the property owner and the property owner's
spouse file with the assessor an affidavit or other proof required by the assessor stating that
the property qualifies as a homestead under subdivision 1, paragraph (e).

Owners or spouses occupying residences owned by their spouses and previously
occupied with the other spouse, either of whom fail to include the other spouse's name
and Social Security number on the homestead application or provide the affidavits or
other proof requested, will be deemed to have elected to receive only partial homestead
treatment of their residence. The remainder of the residence will be classified as
nonhomestead residential. When an owner or spouse's name and Social Security number
appear on homestead applications for two separate residences and only one application is
signed, the owner or spouse will be deemed to have elected to homestead the residence for
which the application was signed.

The Social Security numbers new text begin , state or federal tax returns or tax return information, new text end
or affidavits or other proofs of the property owners and spouses new text begin submitted under this or
another section to support a claim for a property tax homestead classification new text end are private
data on individuals as defined by section 13.02, subdivision 12, but, notwithstanding
that section, the private data may be disclosed to the commissioner of revenue, or, for
purposes of proceeding under the Revenue Recapture Act to recover personal property
taxes owing, to the county treasurer.

(d) If residential real estate is occupied and used for purposes of a homestead by a
relative of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in
order for the property to receive homestead status, a homestead application must be filed
with the assessor. The Social Security number of each relative occupying the property and
the Social Security number of each owner who is related to an occupant of the property
shall be required on the homestead application filed under this subdivision. If a different
relative of the owner subsequently occupies the property, the owner of the property must
notify the assessor within 30 days of the change in occupancy. The Social Security number
of a relative occupying the property is private data on individuals as defined by section
13.02, subdivision 12, but may be disclosed to the commissioner of revenue.

(e) The homestead application shall also notify the property owners that the
application filed under this section will not be mailed annually and that if the property
is granted homestead status for the 1993 assessment, or any assessment year thereafter,
that same property shall remain classified as homestead until the property is sold or
transferred to another person, or the owners, the spouse of the owner, or the relatives no
longer use the property as their homestead. Upon the sale or transfer of the homestead
property, a certificate of value must be timely filed with the county auditor as provided
under section 272.115. Failure to notify the assessor within 30 days that the property has
been sold, transferred, or that the owner, the spouse of the owner, or the relative is no
longer occupying the property as a homestead, shall result in the penalty provided under
this subdivision and the property will lose its current homestead status.

(f) If the homestead application is not returned within 30 days, the county will send a
second application to the present owners of record. The notice of proposed property taxes
prepared under section 275.065, subdivision 3, shall reflect the property's classification.
Beginning with assessment year 1993 for all properties, if a homestead application has
not been filed with the county by December 15, the assessor shall classify the property
as nonhomestead for the current assessment year for taxes payable in the following year,
provided that the owner may be entitled to receive the homestead classification by proper
application under section 375.192.

(g) At the request of the commissioner, each county must give the commissioner a
list that includes the name and Social Security number of each property owner and the
property owner's spouse occupying the property, or relative of a property owner, applying
for homestead classification under this subdivision. The commissioner shall use the
information provided on the lists as appropriate under the law, including for the detection
of improper claims by owners, or relatives of owners, under chapter 290A.

(h) If the commissioner finds that a property owner may be claiming a fraudulent
homestead, the commissioner shall notify the appropriate counties. Within 90 days of
the notification, the county assessor shall investigate to determine if the homestead
classification was properly claimed. If the property owner does not qualify, the county
assessor shall notify the county auditor who will determine the amount of homestead
benefits that had been improperly allowed. For the purpose of this section, "homestead
benefits" means the tax reduction resulting from the classification as a homestead under
section 273.13, the taconite homestead credit under section 273.135, the residential
homestead and agricultural homestead credits under section 273.1384, and the
supplemental homestead credit under section 273.1391.

The county auditor shall send a notice to the person who owned the affected property
at the time the homestead application related to the improper homestead was filed,
demanding reimbursement of the homestead benefits plus a penalty equal to 100 percent
of the homestead benefits. The person notified may appeal the county's determination
by serving copies of a petition for review with county officials as provided in section
278.01 and filing proof of service as provided in section 278.01 with the Minnesota Tax
Court within 60 days of the date of the notice from the county. Procedurally, the appeal
is governed by the provisions in chapter 271 which apply to the appeal of a property tax
assessment or levy, but without requiring any prepayment of the amount in controversy. If
the amount of homestead benefits and penalty is not paid within 60 days, and if no appeal
has been filed, the county auditor shall certify the amount of taxes and penalty to the county
treasurer. The county treasurer will add interest to the unpaid homestead benefits and
penalty amounts at the rate provided in section 279.03 for real property taxes becoming
delinquent in the calendar year during which the amount remains unpaid. Interest may be
assessed for the period beginning 60 days after demand for payment was made.

If the person notified is the current owner of the property, the treasurer may add the
total amount of homestead benefits, penalty, interest, and costs to the ad valorem taxes
otherwise payable on the property by including the amounts on the property tax statements
under section 276.04, subdivision 3. The amounts added under this paragraph to the ad
valorem taxes shall include interest accrued through December 31 of the year preceding
the taxes payable year for which the amounts are first added. These amounts, when added
to the property tax statement, become subject to all the laws for the enforcement of real or
personal property taxes for that year, and for any subsequent year.

If the person notified is not the current owner of the property, the treasurer may
collect the amounts due under the Revenue Recapture Act in chapter 270A, or use any of
the powers granted in sections 277.20 and 277.21 without exclusion, to enforce payment
of the homestead benefits, penalty, interest, and costs, as if those amounts were delinquent
tax obligations of the person who owned the property at the time the application related
to the improperly allowed homestead was filed. The treasurer may relieve a prior owner
of personal liability for the homestead benefits, penalty, interest, and costs, and instead
extend those amounts on the tax lists against the property as provided in this paragraph
to the extent that the current owner agrees in writing. On all demands, billings, property
tax statements, and related correspondence, the county must list and state separately the
amounts of homestead benefits, penalty, interest and costs being demanded, billed or
assessed.

(i) Any amount of homestead benefits recovered by the county from the property
owner shall be distributed to the county, city or town, and school district where the
property is located in the same proportion that each taxing district's levy was to the total
of the three taxing districts' levy for the current year. Any amount recovered attributable
to taconite homestead credit shall be transmitted to the St. Louis County auditor to be
deposited in the taconite property tax relief account. Any amount recovered that is
attributable to supplemental homestead credit is to be transmitted to the commissioner of
revenue for deposit in the general fund of the state treasury. The total amount of penalty
collected must be deposited in the county general fund.

(j) If a property owner has applied for more than one homestead and the county
assessors cannot determine which property should be classified as homestead, the county
assessors will refer the information to the commissioner. The commissioner shall make
the determination and notify the counties within 60 days.

(k) In addition to lists of homestead properties, the commissioner may ask the
counties to furnish lists of all properties and the record owners. The Social Security
numbers and federal identification numbers that are maintained by a county or city
assessor for property tax administration purposes, and that may appear on the lists retain
their classification as private or nonpublic data; but may be viewed, accessed, and used by
the county auditor or treasurer of the same county for the limited purpose of assisting the
commissioner in the preparation of microdata samples under section 270C.12.

(l) On or before April 30 each year beginning in 2007, each county must provide the
commissioner with the following data for each parcel of homestead property by electronic
means as defined in section 289A.02, subdivision 8:

(i) the property identification number assigned to the parcel for purposes of taxes
payable in the current year;

(ii) the name and Social Security number of each property owner and property
owner's spouse, as shown on the tax rolls for the current and the prior assessment year;

(iii) the classification of the property under section 273.13 for taxes payable in the
current year and in the prior year;

(iv) an indication of whether the property was classified as a homestead for taxes
payable in the current year or for taxes payable in the prior year because of occupancy by
a relative of the owner or by a spouse of a relative;

(v) the property taxes payable as defined in section 290A.03, subdivision 13, for the
current year and the prior year;

(vi) the market value of improvements to the property first assessed for tax purposes
for taxes payable in the current year;

(vii) the assessor's estimated market value assigned to the property for taxes payable
in the current year and the prior year;

(viii) the taxable market value assigned to the property for taxes payable in the
current year and the prior year;

(ix) whether there are delinquent property taxes owing on the homestead;

(x) the unique taxing district in which the property is located; and

(xi) such other information as the commissioner decides is necessary.

The commissioner shall use the information provided on the lists as appropriate
under the law, including for the detection of improper claims by owners, or relatives
of owners, under chapter 290A.

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 2006, section 273.124, subdivision 21, is amended to read:

Subd. 21.

Trust property; homestead.

Real property held by a trustee under a trust
is eligible for classification as homestead property if:

(1) the grantor or surviving spouse of the grantor of the trust occupies and uses the
property as a homestead;

(2) a relative or surviving relative of the grantor who meets the requirements of
subdivision 1, paragraph (c), in the case of residential real estate; or subdivision 1,
paragraph (d), in the case of agricultural property, occupies and uses the property as
a homestead;

(3) a family farm corporation, joint farm venture, limited liability company, or
partnership operating a family farm new text begin in which the grantor or the grantor's surviving spouse
is a shareholder, member, or partner new text end rents the property deleted text begin held by a trustee under a trust deleted text end , and
deleted text begin the grantor, the spouse of the grantor, or the son or daughter of the grantor, who is also deleted text end a
shareholder, member, or partner of the corporation, joint farm venture, limited liability
company, or partnership occupies and uses the property as a homestead, or is actively
farming the property on behalf of the corporation, joint farm venture, limited liability
company, or partnership; or

(4) a person who has received homestead classification for property taxes payable in
2000 on the basis of an unqualified legal right under the terms of the trust agreement to
occupy the property as that person's homestead and who continues to use the property as
a homestead or a person who received the homestead classification for taxes payable in
2005 under clause (3) who does not qualify under clause (3) for taxes payable in 2006
or thereafter but who continues to qualify under clause (3) as it existed for taxes payable
in 2005.

For purposes of this subdivision, "grantor" is defined as the person creating or
establishing a testamentary, inter Vivos, revocable or irrevocable trust by written
instrument or through the exercise of a power of appointment.

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 2006, section 273.128, subdivision 1, is amended to read:

Subdivision 1.

Requirement.

Low-income rental property classified as class 4d
under section 273.13, subdivision 25, is entitled to valuation under this section if at least 75
percent of the units in the rental housing property meet any of the following qualifications:

(1) the units are subject to a housing assistance payments contract under Section 8 of
the United States Housing Act of 1937, as amended new text begin through December 31, 2007 new text end ;

(2) the units are rent-restricted and income-restricted units of a qualified low-income
housing project receiving tax credits under section 42(g) of the Internal Revenue Code
deleted text begin of 1986, as amended deleted text end ;

(3) the units are financed by the Rural Housing Service of the United States
Department of Agriculture and receive payments under the rental assistance program
pursuant to section 521(a) of the Housing Act of 1949, as amended; or

(4) the units are subject to rent and income restrictions under the terms of financial
assistance provided to the rental housing property by the federal government or the state
of Minnesota as evidenced by a document recorded against the property.

The restrictions must require assisted units to be occupied by residents whose
household income at the time of initial occupancy does not exceed 60 percent of the
greater of area or state median income, adjusted for family size, as determined by the
United States Department of Housing and Urban Development. The restriction must also
require the rents for assisted units to not exceed 30 percent of 60 percent of the greater of
area or state median income, adjusted for family size, as determined by the United States
Department of Housing and Urban Development.

new text begin EFFECTIVE DATE. new text end

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

Sec. 27.

Minnesota Statutes 2006, section 273.13, subdivision 22, is amended to read:

Subd. 22.

Class 1.

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

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

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

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

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

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

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

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

(3) any person who is permanently and totally disabled new text begin or by the disabled person
and the disabled person's spouse new text end .

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 28.

Minnesota Statutes 2006, section 273.13, subdivision 23, is amended to read:

Subd. 23.

Class 2.

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

(b) Class 2b property is (1) new text begin unplatted new text end real estate, rural in character deleted text begin and used
exclusively for growing trees for timber, lumber, and wood and wood products; (2) real
estate that is not improved with a structure and is used exclusively for growing trees
for timber, lumber, and wood and wood products, if the owner has participated or is
participating in a cost-sharing program for afforestation, reforestation, or timber stand
improvement on that particular property, administered or coordinated by the commissioner
of natural resources; (3) deleted text end new text begin that consists of at least ten acres, including land used for growing
trees for timber, lumber, and wood and wood products, but not including land used for
agricultural purposes, provided that the presence of a minor, ancillary, and nonresidential
structure does not disqualify property from classification under this clause, (2) new text end real estate
that is nonhomestead agricultural land; or deleted text begin (4) deleted text end new text begin (3) new text end a landing area or public access area
of a privately owned public use airport. Class 2b property has a net class rate of one
percent of market value.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(1) wholesale and retail sales;

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

(3) warehousing or storage of processed goods; and

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

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

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

(g) To qualify for classification under paragraph (b), clause deleted text begin (4) deleted text end new text begin (3) new text end , a privately
owned public use airport must be licensed as a public airport under section 360.018. For
purposes of paragraph (b), clause deleted text begin (4) deleted text end new text begin (3) new text end , "landing area" means that part of a privately
owned public use airport properly cleared, regularly maintained, and made available to the
public for use by aircraft and includes runways, taxiways, aprons, and sites upon which
are situated landing or navigational aids. A landing area also includes land underlying
both the primary surface and the approach surfaces that comply with all of the following:

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

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

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

The land contained in a landing area under paragraph (b), clause deleted text begin (4) deleted text end new text begin (3) new text end , must be described
and certified by the commissioner of transportation. The certification is effective until
it is modified, or until the airport or landing area no longer meets the requirements of
paragraph (b), clause deleted text begin (4) deleted text end new text begin (3) new text end . For purposes of paragraph (b), clause deleted text begin (4) deleted text end new text begin (3) new text end , "public access
area" means property used as an aircraft parking ramp, apron, or storage hangar, or an
arrival and departure building in connection with the airport.

new text begin EFFECTIVE DATE. new text end

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

Sec. 29.

Minnesota Statutes 2006, section 273.13, subdivision 25, is amended to read:

Subd. 25.

Class 4.

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

(b) Class 4b includes:

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

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

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

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

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

(c) Class 4bb includes:

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

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

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

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

(d) Class 4c property includes:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(i) the land abuts a public airport; and

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

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

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

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

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

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

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

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

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

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

new text begin EFFECTIVE DATE. new text end

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

Sec. 30.

Minnesota Statutes 2006, section 273.13, subdivision 33, is amended to read:

Subd. 33.

Classification of unimproved property.

(a) All real property that is not
improved with a structure must be classified according to its current use.

(b) new text begin Except as provided in subdivision 23, paragraph (b), clause (1), new text end real property that
is not improved with a structure and for which there is no identifiable current use must be
classified according to its highest and best use permitted under the local zoning ordinance.
If the ordinance permits more than one use, the land must be classified according to the
highest and best use permitted under the ordinance. If no such ordinance exists, the
assessor shall consider the most likely potential use of the unimproved land based upon
the use made of surrounding land or land in proximity to the unimproved land.

new text begin EFFECTIVE DATE. new text end

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

Sec. 31.

Minnesota Statutes 2006, section 274.01, subdivision 3, is amended to read:

Subd. 3.

Local board duties transferred to county.

The town board of any town
or the governing body of any home rule charter or statutory city may transfer its powers
and duties under subdivision 1 to the county board, and no longer perform the function
of a local board. Before the town board or the governing body of a city transfers the
powers and duties to the county board, the town board or city's governing body shall give
public notice of the meeting at which the proposal for transfer is to be considered. The
public notice shall follow the procedure contained in section 13D.04, subdivision 2. A
transfer of duties as permitted under this subdivision must be communicated to the county
assessor, in writing, before December 1 of any year to be effective for the following
year's assessment. This transfer of duties to the county may either be permanent or for a
specified number of years, provided that the transfer cannot be for less than three years.
Its length must be stated in writing. A town or city may renew its option to transfer. deleted text begin The
option to transfer duties under this subdivision is only available to a town or city whose
assessment is done by the county. 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. 32.

Minnesota Statutes 2006, section 274.014, subdivision 3, is amended to read:

Subd. 3.

Proof of compliance; transfer of duties.

(a) Any city or town that
conducts local boards of appeal and equalization meetings must provide proof to the
county assessor by December 1, 2006, and each year thereafter, that it is in compliance
with the requirements of subdivision 2. Beginning in 2006, this notice must also verify
that there was a quorum of voting members at each meeting of the board of appeal
and equalization in the current year. A city or town that does not comply with these
requirements is deemed to have transferred its board of appeal and equalization powers
to the county beginning with the following year's assessment and continuing unless the
powers are reinstated under paragraph (c).

(b) The county shall notify the taxpayers when the board of appeal and equalization
for a city or town has been transferred to the county under this subdivision and, prior to
the meeting time of the county board of equalization, the county shall make available to
those taxpayers a procedure for a review of the assessments, including, but not limited to,
open book meetings. This alternate review process shall take place in April and May.

(c) A local board whose powers are transferred to the county under this subdivision
may be reinstated by resolution of the governing body of the city or town and upon proof
of compliance with the requirements of subdivision 2. The resolution and proofs must be
provided to the county assessor by December 1 in order to be effective for the following
year's assessment.

new text begin (d) A local board whose powers are transferred to the county under this subdivision
may continue to employ a local assessor and is not deemed to have transferred its powers
to make assessments.
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. 33.

Minnesota Statutes 2006, 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. The 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, calculated by adding the property's total property tax to
the sum of the aids enumerated in clause (4);

(4) a total of the following aids:

(i) education aids payable under chapters 122A, 123A, 123B, 124D, 125A, 126C,
and 127A;

(ii) local government aids for cities, towns, and counties under sections 477A.011 to
477A.04; and

(iii) disparity reduction aid under section 273.1398;

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

(6) any credits received under sections 273.119; ;
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

(7) 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.

The commissioner of revenue shall certify to the county auditor the actual or
estimated aids enumerated in paragraph (c), clause (4), that local governments will receive
in the following year. The commissioner must certify this amount by January 1 of each
year.

new text begin EFFECTIVE DATE. new text end

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

Sec. 34.

Minnesota Statutes 2006, section 290B.04, subdivision 1, is amended to read:

Subdivision 1.

Initial application.

(a) A taxpayer meeting the program
qualifications under section 290B.03 may apply to the commissioner of revenue for the
deferral of taxes. Applications are due on or before July 1 for deferral of any of the
following year's property taxes. A taxpayer may apply in the year in which the taxpayer
becomes 65 years old, provided that no deferral of property taxes will be made until the
calendar year after the taxpayer becomes 65 years old. The application, which shall be
prescribed by the commissioner of revenue, shall include the following items and any
other information which the commissioner deems necessary:

(1) the name, address, and Social Security number of the owner or owners;

(2) a copy of the property tax statement for the current payable year for the
homesteaded property;

(3) the initial year of ownership and occupancy as a homestead;

(4) the owner's household income for the previous calendar year; and

(5) information on any mortgage loans or other amounts secured by mortgages or
other liens against the property, for which purpose the commissioner may require the
applicant to provide a copy of the mortgage note, the mortgage, or a statement of the
balance owing on the mortgage loan provided by the mortgage holder. The commissioner
may require the appropriate documents in connection with obtaining and confirming
information on unpaid amounts secured by other liens.

The application must state that program participation is voluntary. The application
must also state that the deferred amount depends directly on the applicant's household
income, and that program participation includes authorization for the annual deferred
amount, the cumulative deferral and interest that appear on each year's notice prepared by
the county under subdivision 6, is public data.

The application must state that program participants may claim the property tax
refund based on the full amount of property taxes eligible for the refund, including any
deferred amounts. The application must also state that property tax refunds will be used to
offset any deferral and interest under this program, and that any other amounts subject to
revenue recapture under section 270A.03, subdivision 7, will also be used to offset any
deferral and interest under this program.

(b) As part of the initial application process, the commissioner may require the
applicant to obtain at the applicant's own cost and submit:

(1) if the property is registered property under chapter 508 or 508A, a copy of the
original certificate of title in the possession of the county registrar of titles (sometimes
referred to as "condition of register"); or

(2) if the property is abstract property, a report prepared by a licensed abstracter
showing the last deed and any unsatisfied mortgages, liens, judgments, and state and
federal tax lien notices which were recorded on or after the date of that last deed with
respect to the property or to the applicant.

The certificate or report under clauses (1) and (2) need not include references to
any documents filed or recorded more than 40 years prior to the date of the certification
or report. The certification or report must be as of a date not more than 30 days prior
to submission of the application.

The commissioner may also require the county recorder or county registrar of the
county where the property is located to provide copies of recorded documents related to
the applicant or the property, for which the recorder or registrar shall not charge a fee. The
commissioner may use any information available to determine or verify eligibility under
this section. new text begin The household income from the application is private data on individuals as
defined in section 13.02, subdivision 12.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for data collected or maintained by
the commissioner of revenue beginning the day following final enactment.
new text end

Sec. 35.

Minnesota Statutes 2006, 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 subject to the requirements of Section 5 of
the United States Housing Act of 1937, 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
subject to the requirements of Section 5 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 deleted text begin 273.126 deleted text end new text begin 273.128 new text end , and for that
purpose the total number of units in the facility must be taken into account.

new text begin EFFECTIVE DATE. new text end

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

Sec. 36.

Minnesota Statutes 2006, section 469.174, subdivision 10b, is amended to
read:

Subd. 10b.

Qualified disaster area.

A "qualified disaster area" is an area that
meets the following requirements:

(1) parcels consisting of 70 percent of the area of the district were occupied by
buildings, streets, utilities, paved or gravel parking lots, or other similar structures
immediately before the disaster or emergency;

(2) the area of the district was subject to a disaster or emergency, as defined in
section deleted text begin 273.123, subdivision 1 deleted text end new text begin 273.1231, subdivision 2 new text end , within the 18-month period
ending on the day the request for certification of the district is made; and

(3) 50 percent or more of the buildings in the area have suffered substantial damage
as a result of the disaster or emergency.

new text begin EFFECTIVE DATE. new text end

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

Sec. 37.

Minnesota Statutes 2006, section 469.177, subdivision 1c, is amended to read:

Subd. 1c.

Original net tax capacity adjustments; presidential disaster area.

(a)
The provisions of this subdivision apply to a district located in a disaster area, as described
in section deleted text begin 273.123, subdivision 1, paragraph (b) deleted text end new text begin 273.1231, subdivision 3, paragraph (a) new text end ,
clause (1), and are effective for taxes payable in the first calendar year beginning at least
four months after the date of the determination.

(b) For a district certified before the date of the disaster area determination as
provided in section deleted text begin 273.123, subdivision 1, paragraph (b) deleted text end new text begin 273.1231, subdivision 3,
paragraph (a) new text end , clause (1), upon the request of the municipality, the county auditor shall
reduce the original net tax capacity of the district by the reduction in the net tax capacity
of properties in the district that is attributable to the physical effects of the disaster, but not
below zero. The assessor shall determine the amount of the reduction in market value that
is attributable to the physical effects of the disaster to be used by the county auditor in
computing the reduction in net tax capacity.

(c) For a district that does not qualify under paragraph (b) and for which the request
for certification is made in the same calendar year as the disaster area determination,
upon the request of the municipality, the assessor shall determine the reduction in market
value of properties in the district that is attributable to the physical effects of the disaster.
The county auditor shall use the reduced market value in certifying the original net tax
capacity of the 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. 38.

Minnesota Statutes 2006, section 477A.03, subdivision 2a, is amended to read:

Subd. 2a.

Cities.

deleted text begin For aids payable in 2004, the total aids paid under section
477A.013, subdivision 9, are limited to $429,000,000. For aids payable in 2005, the
total aids paid under section 477A.013, subdivision 9, are limited to $437,052,000. deleted text end For
aids payable in deleted text begin 2006 deleted text end new text begin 2009 new text end and thereafter, the total aids paid under section 477A.013,
subdivision 9, is limited to deleted text begin $485,052,000 deleted text end new text begin $484,177,200 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid payable in 2009 and thereafter.
new text end

Sec. 39. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, section 477A.014, subdivision 5, new text end new text begin and new text end new text begin Minnesota Statutes
2007 Supplement, section 477A.014, subdivision 4, 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 aid payable in 2009 and thereafter.
new text end

ARTICLE 5

JOB OPPORTUNITY BUILDING ZONES

Section 1.

Minnesota Statutes 2006, section 469.319, is amended to read:

469.319 REPAYMENT OF TAX BENEFITS new text begin BY BUSINESSES THAT NO
LONGER OPERATE IN A ZONE new text end .

Subdivision 1.

Repayment obligation.

A business must repay the deleted text begin amount of the deleted text end
total tax deleted text begin reduction deleted text end new text begin benefits new text end listed in section 469.315 deleted text begin and any refund under section 469.318
in excess of tax liability, deleted text end received during the two years immediately before it new text begin (1) new text end ceased to
deleted text begin operate in the zone, if the business:
deleted text end

deleted text begin (1) received tax reductions authorized by section 469.315; and
deleted text end

deleted text begin (2)(i) did not meet the goals specified in an agreement entered into with the applicant
that states any obligation the qualified business must fulfill in order to be eligible for tax
benefits. The commissioner of employment and economic development may extend for
up to one year the period for meeting any goals provided in an agreement. The applicant
may extend the period for meeting other goals by documenting in writing the reason
for the extension and attaching a copy of the document to its next annual report to the
commissioner of employment and economic development; or
deleted text end

deleted text begin (ii) ceased to operate its facility located within the job opportunity building zone deleted text end
new text begin perform a substantial level of activities described in the business subsidy agreement, new text end or
new text begin (2) new text end otherwise deleted text begin ceases deleted text end new text begin ceased new text end to be deleted text begin or is not deleted text end a qualified business new text begin , other than those subject to
the provisions of section 469.3191 new text end .

new text begin Subd. 1a. new text end

new text begin Repayment obligation of businesses not operating in zone. new text end

new text begin Persons
that receive benefits without operating a business in a zone are subject to repayment
under this section if the business for which those benefits relate is subject to repayment
under this section. Such persons are deemed to have ceased performing in the zone on
the same day that the qualified business for which the benefits relate becomes subject to
repayment under subdivision 1.
new text end

Subd. 2.

Definitions.

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

(b) "Business" means any person deleted text begin who deleted text end new text begin that new text end received tax benefits enumerated in
section 469.315.

(c) "Commissioner" means the commissioner of revenue.

new text begin (d) "Persons that receive benefits without operating a business in a zone" means
persons that claim benefits under section 469.316, subdivision 2 or 4, as well as persons
that own property leased by a qualified business and eligible for benefits under section
272.02, subdivision 64, or 297A.68, subdivision 37, paragraph (b).
new text end

Subd. 3.

Disposition of repayment.

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 deleted text begin local governments deleted text end new text begin taxing authorities new text end 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 taxes must be repaid to new text begin the commissioner for distribution to new text end the
city or county imposing the local sales tax.

Subd. 4.

Repayment procedures.

(a) For the repayment of taxes imposed under
chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
file an amended return with the commissioner of revenue and pay any taxes required
to be repaid within 30 days after deleted text begin ceasing to do business in the zone deleted text end new text begin becoming subject
to repayment under this section new text end . The amount required to be repaid is determined by
calculating the tax for the period or periods for which repayment is required without
regard to the exemptions and credits allowed under section 469.315.

(b) For the repayment of taxes imposed under chapter 297B, a business must pay any
taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner
of revenue, within 30 days after deleted text begin ceasing to do business in the zone deleted text end new text begin becoming subject
to repayment under this section new text end .

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

(d) The provisions of chapters 270C and 289A relating to the commissioner's
authority to audit, assess, and collect the tax and to hear appeals are applicable to the
repayment required under paragraphs (a) and (b). 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 270C.40, from 30 days after deleted text begin ceasing to do business
in the job opportunity building zone deleted text end new text begin becoming subject to repayment under this section new text end
until the date the tax is paid.

(e) If a property tax is not repaid under paragraph (c), 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 deleted text begin treasurer discovers that the business
ceased to operate in the job opportunity building zone deleted text end new text begin auditor provided the statement
under paragraph (c) new text end .

(f) For determining the tax required to be repaid, a deleted text begin tax deleted text end reduction new text begin of a state or local
sales or use tax new text end is deemed to have been received on the date that the deleted text begin tax would have
been due if the taxpayer had not been entitled to the exemption or on the date a refund
was issued for a refundable tax credit. deleted text end new text begin good or service was purchased or first put to a
taxable use. In the case of an income tax or franchise tax, including the credit payable
under section 469.318, a reduction of tax is deemed to have been received for the two
most recent tax years that have ended prior to the date that the business became subject to
repayment under this section. In the case of a property tax, a reduction of tax is deemed to
have been received for the taxes payable in the year that the business became subject to
repayment under this section and for the taxes payable in the prior year.
new text end

(g) The commissioner may assess the repayment of taxes under paragraph (d)
any time within two years after the business deleted text begin ceases to operate in the job opportunity
building zone deleted text end new text begin becomes subject to repayment under subdivision 1 new text end , or within any period of
limitations for the assessment of tax under section 289A.38, whichever period is later. new text begin The
county auditor may send the statement under paragraph (c) any time within three years
after the business becomes subject to repayment under subdivision 1.
new text end

new text begin (h) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business becomes subject to
repayment under this section nor for any year thereafter. Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the property became subject to repayment under this section nor for any year
thereafter. A business is not eligible for any sales tax benefits beginning with goods
or services purchased or first put to a taxable use on the day that the business becomes
subject to repayment under this section.
new text end

Subd. 5.

Waiver authority.

new text begin (a) new text end The commissioner may waive all or part of a
repayment new text begin required under subdivision 1 new text end , if the commissioner, in consultation with
the commissioner of employment and economic development and appropriate officials
from the local government units in which the qualified business is located, determines
that requiring repayment of the tax is not in the best interest of the state or the local
government units and the business ceased operating as a result of circumstances beyond
its control including, but not limited to:

(1) a natural disaster;

(2) unforeseen industry trends; or

(3) loss of a major supplier or customer.

new text begin (b)(1) The commissioner shall waive repayment required under subdivision 1a if
the commissioner has waived repayment by the operating business under subdivision 1,
unless the person that received benefits without having to operate a business in the zone
was a contributing factor in the qualified business becoming subject to repayment under
subdivision 1;
new text end

new text begin (2) the commissioner shall waive the repayment required under subdivision 1a, even
if the repayment has not been waived for the operating business if:
new text end

new text begin (i) the person that received benefits without having to operate a business in the zone
and the business that operated in the zone are not related parties as defined in section
267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and
new text end

new text begin (ii) actions of the person were not a contributing factor in the qualified business
becoming subject to repayment under subdivision 1.
new text end

Subd. 6.

Reconciliation.

Where this section is inconsistent with section 116J.994,
subdivision 3, paragraph (e), or 6, or any other provisions of sections 116J.993 to
116J.995, this section prevails.

new text begin EFFECTIVE DATE. new text end

new text begin The amendment to subdivision 4, paragraph (c), of this
section is effective the day following final enactment. The amendment to subdivision 4,
paragraph (f), is effective January 1, 2008, and applies to all businesses that become
subject to this section in 2008 and thereafter. The rest of this section is effective
retroactively from January 1, 2004, except that for violations that occur before the day
following final enactment, this section does not apply if the business has repaid the
benefits or the commissioner has granted a waiver.
new text end

Sec. 2.

new text begin [469.3191] BREACH OF AGREEMENTS BY BUSINESSES THAT
CONTINUE TO OPERATE IN ZONE.
new text end

new text begin (a) A "business in violation of its business subsidy agreement but not subject to
section 469.319" means a business that is operating in violation of the business subsidy
agreement but maintains a level of operations in the zone that does not subject it to the
repayment provisions of section 469.319, subdivision 1, clause (1).
new text end

new text begin (b) A business described in paragraph (a) that does not sign a new or amended
business subsidy agreement, as authorized under paragraph (h), is subject to repayment
of benefits under section 469.319 from the day that it ceases to perform in the zone a
substantial level of activities described in the business subsidy agreement.
new text end

new text begin (c) A business described in paragraph (a) ceases being a qualified business after the
last day that it has to meet the goals stated in the agreement.
new text end

new text begin (d) A business is not entitled to any income tax or franchise tax benefits, including
refundable credits, for any part of the year in which the business is no longer a qualified
business under paragraph (c), and thereafter. A business is not eligible for sales tax
benefits beginning with goods or services purchased or put to a taxable use on the day that
it is no longer a qualified business under paragraph (c). Property is not exempt from tax
under section 272.02, subdivision 64, for any taxes payable in the year following the year
in which the business is no longer a qualified business under paragraph (c), and thereafter.
new text end

new text begin (e) A business described in paragraph (a) that wants to resume eligibility for benefits
under section 469.315 must request that the commissioner of employment and economic
development determine the length of time that the business is ineligible for benefits. The
commissioner shall determine the length of ineligibility by applying the proportionate
level of performance under the agreement to the total duration of the zone as measured
from the date that the business subsidy agreement was executed. The length of time
must not be less than one full year for each tax benefit listed in section 469.315. The
commissioner of employment and economic development and the appropriate local
government officials shall consult with the commissioner of revenue to ensure that the
period of ineligibility includes at least one full year of benefits for each tax.
new text end

new text begin (f) The length of ineligibility determined under paragraph (e) must be applied by
reducing the zone duration for the property by the duration of the ineligibility.
new text end

new text begin (g) The zone duration of property that has been adjusted under paragraph (f) must
not be altered again to permit the business additional benefits under section 469.315.
new text end

new text begin (h) A business described in paragraph (a) becomes eligible for benefits available
under section 469.315 by entering into a new or amended business subsidy agreement
with the appropriate local government unit. The new or amended agreement must cover
a period beginning from the date of ineligibility under the original business subsidy
agreement, through the zone duration determined by the commissioner under paragraph
(f). No exemption of property taxes under section 272.02, subdivision 64, is available
under the new or amended agreement for property taxes due or paid before the date of
the final execution of the new or amended agreement, but unpaid taxes due after that
date need not be paid.
new text end

new text begin (i) A business that violates the terms of an agreement authorized under paragraph
(h) is permanently barred from seeking benefits under section 469.315 and is subject to
the repayment provisions under section 469.319 effective from the day that the business
ceases to operate as a qualified business in the zone under the second agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively from January 1, 2004.
For violations that occur before the day following final enactment, this section does not
apply if the business has repaid the benefits or the commissioner has granted a waiver.
new text end

Sec. 3.

new text begin [469.3192] PROHIBITION AGAINST AMENDMENTS TO BUSINESS
SUBSIDY AGREEMENT.
new text end

new text begin Except as authorized under section 469.3191, under no circumstance shall terms
of any agreement required as a condition for eligibility for benefits listed under section
469.315 be amended to change job creation, job retention, or wage goals included in
the agreement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
and applies to all agreements executed before, on, or after the effective date.
new text end

Sec. 4.

new text begin [469.3193] CERTIFICATION OF CONTINUING ELIGIBILITY FOR
JOBZ BENEFITS.
new text end

new text begin (a) By December 1 of each year, every qualified business must certify to the
commissioner, on a form prescribed by the commissioner, whether it is in compliance with
any agreement required as a condition for eligibility for benefits listed under section
469.315. A business that fails to submit the certification, or any business, including
those still operating in the zone, that submits a certification that the commissioner later
determines materially misrepresents the business's compliance with the agreement, is
subject to the repayment provisions under section 469.319 from January 1 of the year in
which the report is due or the date that the business became subject to section 469.319,
whichever is earlier. Any such business is permanently barred from obtaining benefits
under section 469.315. For purposes of this section, the bar applies to an entity and
also applies to any individuals or entities that have an ownership interest of at least 20
percent of the entity.
new text end

new text begin (b) Before the sanctions under paragraph (a) apply to a business that fails to submit
the certification, the commissioner shall send notice to the business, demanding that the
certification be submitted within 30 days and advising the business of the consequences
for failing to do so. The commissioner shall notify the commissioner of revenue and the
appropriate job opportunity subzone administrator whenever notice is sent to a business
under this paragraph.
new text end

new text begin (c) The certification required under this section is public.
new text end

new text begin (d) The commissioner shall promptly notify the commissioner of revenue of all
businesses that certify that they are not in compliance with the terms of their business
subsidy agreement and all businesses that fail to file the certification.
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 6

MISCELLANEOUS

Section 1.

Minnesota Statutes 2006, section 16D.02, subdivision 3, is amended to read:

Subd. 3.

Debt.

"Debt" means an amount owed to the state directly, or through a
state agency, on account of a fee, duty, lease, direct loan, loan insured or guaranteed by
the state, rent, service, sale of real or personal property, overpayment, fine, assessment,
penalty, restitution, damages, interest, tax, bail bond, forfeiture, reimbursement, liability
owed, an assignment to the state including assignments under section 256.741, the Social
Security Act, or other state or federal law, recovery of costs incurred by the state, or any
other source of indebtedness to the state. Debt also includes amounts owed to individuals
as a result of civil, criminal, or administrative action brought by the state or a state agency
pursuant to its statutory authority or for which the state or state agency acts in a fiduciary
capacity in providing collection services in accordance with the regulations adopted under
the Social Security Act at Code of Federal Regulations, title 45, section 302.33. new text begin When the
commissioner provides collection services pursuant to a debt qualification plan, new text end debt also
includes an amount owed to the courts new text begin , local government units, Minnesota state colleges
and universities governed by the Board of Trustees of the Minnesota State Colleges and
Universities, new text end or University of Minnesota deleted text begin for which the commissioner provides collection
services pursuant to contract 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. 2.

Minnesota Statutes 2006, section 16D.02, subdivision 6, is amended to read:

Subd. 6.

Referring agency.

"Referring agency" means a state agency new text begin , local
government unit, Minnesota state colleges and universities governed by the Board of
Trustees of the Minnesota State Colleges and Universities, University of Minnesota, new text end or
a court new text begin , new text end that has entered into a debt qualification plan with the commissioner to refer
debts to the commissioner for collection.

new text begin EFFECTIVE DATE. new text end

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

Sec. 3.

Minnesota Statutes 2006, section 16D.04, subdivision 2, is amended to read:

Subd. 2.

Agency participation.

(a) A referring agency may, at its option, refer debts
to the commissioner for collection. deleted text begin The ultimate responsibility for the debt, including the
reporting of the debt to the commissioner of finance and the decision with regard to the
continuing collection and uncollectibility of the debt, remains with the referring agency. deleted text end new text begin
Decisions with regard to continuing collection and the uncollectibility of referred debts
shall be made by the commissioner who shall then notify the commissioner of finance and
the referring agency. A decision by the commissioner that a referred debt is uncollectible
does not prevent the referring agency from taking additional collection action.
new text end

(b) When a debt owed to a state agency becomes 121 days past due, the state agency
must refer the debt to the commissioner for collection. This requirement does not apply
if there is a dispute over the amount or validity of the debt, if the debt is the subject of
legal action or administrative proceedings, or the agency determines that the debtor is
adhering to acceptable payment arrangements. The commissioner, in consultation with the
commissioner of finance, may provide that certain types of debt need not be referred to the
commissioner for collection under this paragraph. Methods and procedures for referral
must follow internal guidelines prepared by the commissioner of finance.

(c) If the referring agency is a court, the court must furnish a debtor's Social Security
number to the commissioner when the court refers the debt.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for debts referred after December
31, 2008.
new text end

Sec. 4.

Minnesota Statutes 2006, section 270A.08, subdivision 1, is amended to read:

Subdivision 1.

Notice to debtor.

Not later than five days after the claimant agency
has sent notification to the department pursuant to section 270A.07, subdivision 1, the
claimant agency shall send a written notification to the debtor asserting the right of the
claimant agency to the refund or any part thereof. If the notice is returned to the claimant
agency as undeliverable, or the claimant agency has reason to believe the debtor did
not receive the notice, the claimant agency shall obtain the deleted text begin current deleted text end new text begin last known new text end address
of the debtor from the commissioner and resend the corrected notice. new text begin If a debt has been
referred to the commissioner for collection under chapter 16D, notice is sufficient if the
commissioner sends the notice by regular mail to the debtor's last known address as shown
in the records of the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for debts referred after December
31, 2008.
new text end

Sec. 5.

Minnesota Statutes 2006, section 270C.33, subdivision 5, is amended to read:

Subd. 5.

Prohibition against collection during appeal period of an order.

No
collection action can be taken on an order of assessment, new text begin or any other order imposing a
liability, new text end including the filing of liens under section 270C.63, and no late payment penalties
may be imposed when a return has been filed for the tax type and period upon which the
order is based, during the appeal period of an order. The appeal period of an order ends:
(1) 60 days after the order has been mailed to the taxpayer by the commissioner; (2) if an
administrative appeal is filed under section 270C.35, 60 days after determination of the
administrative appeal; (3) if an appeal to Tax Court is filed under chapter 271, when the
decision of the Tax Court is made; or (4) if an appeal to Tax Court is filed and the appeal is
based upon a constitutional challenge to the tax, 60 days after final determination of the
appeal. This subdivision does not apply to a jeopardy assessment under section 270C.36,
or a jeopardy collection under section 270C.36.

new text begin EFFECTIVE DATE. new text end

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